TaxTMI 
TaxTMI 
TaxTMI 
2019 (8) TMI 1420
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....er in the interest of justice, and (iv) This Hon'ble Court be pleased to allow this application with costs against the respondent." 2. The writ applicant seeks to challenge the legality and validity of the notice issued by the respondent under Section 148 of the Income Tax Act, 1961 (for short "the Act, 1961") for the assessment year 2012-13 for the purpose of reopening the assessment. The reasons assigned by the respondent for reopening of the assessment are as under: "Reason for reopening of the assessment for u/s147 of the Income Tax Act. 1. Brief details of the assessee: The assessee has efiled his Return of Income vide Ack No.1065559691130214 on 13.02.2014 after due date. It is seen that the assessee had declared total income of Rs. 48,500/- 2. Brief details of information collected/received by the AO: In this case, information has been received from the ITO, Wd-3(2), Jamnagar and the said information received from the Investigation, Jamnagar that the assessee has obtained accommodation entries to the extent of Rs. 1,20,00,000/- during the year under consideration. 3. Analysis of information collected/received: The accommodation entries received by assesse....
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....d for. However, assessee voluntary not come forward to explain and clarified the same. In view of the above, the provisions of clause (b) of Explanation 2 to section 147 are applicable to fact of this case and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped assessment. In this case more than four years have lapsed from the end of assessment year under consideration. Hence necessary sanction to issue notice u/s 148 will be obtained separately from Principal Commissioner of Income Tax, Jamnagar as per the provisions of section 151 of the Act." 3. The writ applicant responded to the notice, referred to above, by addressing a letter to the respondent, stating as under: "We have received copy of reasons recorded for initiating proceedings u/s. 148 of I.T Act. As per reasons for re-opening of the assessment u/s. 147, para 2,3,4,5, 7 and 8, it is stated that Rs. 1.20 crore received from Pravinkumar Jain and the same was basis for the re-opening of the assessment. It is the only reason for re-opening of the assessment. We would like to submit that the assessee has not received any loan from Pravinkumar Jain during the yea....
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....sed by A.R. of assesses dtd. 03.05.2019 on 6 points as discussed in above para has been cleared and copy of the relevant document as called for the same has been provided 6 Thereafter, a Notice U/s. 143[2] of the I.T. Act, 1961 issued on 21.05.2019 through R.P.A.D and the same was received by Virendra Doshi one of the director of company and hearing was fixed on 27.05.2019. In response to the Notice U/s. 143[2] of the I.T. Act, 1961 A.R. of assesses made an application through tapal for an adjournment stated he is going out of station hence it will not be possible to remain present on the hearing date and requested to please adjourn the matter and oblige. 7. It is pertinent to note that on the same date 23.05.2019 A.R. of assessee has again filed an objection against reopening for A.Y.2012-13. The same is reproduced as under: We have received copy of reasons recorded for initiating proceedings u/s.148 of the I.T. Act, 1961. As per reasons for reopening of the assessment u/s.147, para 2,3,4,6,7 and 8, it is stated that Rs. 1.20 crore received from Praveenkumar Jain and the same was basis for the reopening of the assessment. It is the only reason for reopening of the a....
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....assessee company has obtained accommodation entry to the extent of Rs. 1,20,00,000/ has not been recorded in books of accounts. Therefore, various details and information gathered regarding the transaction carried by assessee company and appraising of facts as mentioned in the objection treated as without any base and fact. Further, the same is consider as willful attempt to avoid the facts in your case and negligence on your part and hiding the relevant facts obtain and gathered by this office and the same has already been informed to you alongwith copy of reason provided. 9. In this connection, on this issue the declaration made in application by you, it is indicate that you had known to the fact that such transaction has been carried out during the year under consideration and you had not shown as well. On perusal of Return of income filed on 13.02.2014 after the due date declared the Returned income of Rs. 48,500/ only. Your self declaration in Return of Income by your self it self proved wrong, than no further comments are required. The Objection raised by you in application is far from the fact in your case. 10. Furthermore, it is true that you have filedoriginal ROI u/....
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....objections raised by the writ applicant to the notice under section 148, travels beyond the scope of the contents of the notice under Section 148. He submitted that there is no live link between the tangible material and the formation of the belief or the reason to believe that the income has escaped assessment. 6. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the impugned notice under Section 148 of the Act for the purpose of reopening of the assessment deserves to be quashed and set aside. 7. The principles of law, governing the subject of reopening of the assessment under Section 147 of the Act, may be summarized as under: "(i) The Court should be guided by the reasons recorded for the reassessment and not by the reasons or explanation given by the Assessing Officer at a later stage in respect of the notice of reassessment. To put it in other words, having regard to the entire scheme and the purpose of the Act, the validity of the assumption of jurisdiction under Section 147 can be tested only by reference to the reasons recorded under Section 148(2)....
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....sessing Officer to show that there was any failure to disclose fully or truly all the material facts necessary for the assessment. (ix) In order to assume jurisdiction under Section 147 where assessment has been made under sub-section (3) of section 143, two conditions are required to be satisfied; (i) The Assessing Officer must have reason to believe that the income chargeable to tax has escaped assessment; (ii) Such escapement occurred by reason of failure on the part of the assessee either (a) to make a return of income under section 139 or in response to the notice issued under sub-section (1) of Section 142 or Section 148 or (b) to disclose fully and truly all the material facts necessary for his assessment for that purpose. (x) The Assessing Officer, being a quasi judicial authority is expected to arrive at a subjective satisfaction independently on an objective criteria. (xi) While the report of the Investigation Wing might constitute the material, on the basis of which, the Assessing Officer forms the reasons to believe, the process of arriving at such satisfaction should not be a mere repetition of the report of the investigation. The reasons to believe must....
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.... the Income Tax Officer from conducting any formal inquiry under Section 133(6) of the Act before proceeding for reassessment under Section 147 of the Act. (xviii) The "full and true" disclosure of the material facts would not include that material, which is to be used for testing the veracity of the particulars mentioned in the return. All such facts would be expected to be elicited by the Assessing Officer during the course of the assessment. The disclosure required only reference to those material facts, which if not disclosed, would not allow the Assessing Officer to make the necessary inquiries. (xix) The word "information" in Section 147 means "instruction or knowledge derived from the external source concerning the facts or particulars or as to the law relating to a matter bearing on the assessment. An information anonymous is information from unknown authorship but nonetheless in a given case, it may constitute information and not less an information though anonymous. This is now a recognized and accepted source for detection of large scale tax evasion. The non-disclosure of the source of the information, by itself, may not reduce the credibility of the information. T....