TaxTMI 
TaxTMI 
2020 (11) TMI 609
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng cash deposit u/s. 68 of the Act. Also the confirmation of addition of Rs. 79,71,424/- made on account of suppression of income based on gross profit ratio of the total turnover of the assessee has been challenged before us. 3. We would like to proceed with the ground of the maintainability as raised by the assessee. The question arises before us as to whether the re-opening of said assessment u/s. 147/148 of the Act is in accordance with law in facts and circumstances of the case. 4. The assessee, running a business of import and trading in textile and fabric item has filed its return of income for the AY 2011-12 on 30-09-2011 declaring a total income at Rs. 34,66,719/-, which was assessed u/s. 143(3) of the Act on 27-03-2014 at total income at Rs. 1,87,52,820/-. Subsequently, the case of the assessee was selected for re-assessment u/s. 147 of the Act on the basis of the reason to believe as observed by the Ld.AO. The assessee is holding a current account ( no. 627705054214) being the transaction linked accounts. The account was triggered for large value non cash transactions. The said transaction pattern shows high amounts of cash and non-cash credits followed by immediat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....venue/Ld.AO. He further relied on the statutory provisions u/s. 147 of the Act, the proviso of which clearly stipulates the pre-conditions of re-opening of assessment after the expiry of 4 (four) years from the end of the relevant assessment year under consideration is only upon allegation made by the Revenue that the income chargeable to tax has escaped assessment by the assessee on the reason of the failure on the part of the assessee to make/file return of u/s.139 or in response to notice issued under sub section (1) of section 142 or under section 148 or to disclose fully and truly all material facts necessary for the assessment. But the reason so recorded only speaks about deposit of huge cash of Rs. 3.41 crores on different dates to be verified as also brought to our notice by the Ld. Counsel appearing for the assessee. Since the reason so recorded by the Ld.AO does not allege any of the statutory conditions as argued by the Ld. Counsel appearing for the assessee, re-opening of assessment has been claimed to be not justified and void ab intio and thus liable to be set aside. In support of his argument, he relied upon the judgment passed by the Co-ordinate Bench in the matter ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al scrutiny assessment u/s. 143(3) of the Act was completed on 27-03-2014 and notice u/s. 148 of the Act was issued on 24-03-2018 i.e much after completion/expiry of four years from the end of the relevant assessment year under consideration. In order to address as to whether the reopening of assessment is justifiable in the present facts and circumstances of the case, we need to discuss the statutory provisions in this respect as provided by the first proviso to section 147 of the Act. The proviso to section 147 of the Act reads as follow:- Provided that where an assessment under subsection( 3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under subsection (1) of section 142 or section 148 or to disclosed fully and truly all material facts necessary for his assessment, for that assessment year." 10. We find the stat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essment after expiry of four years from the end of the relevant to assessment year. 13. We have further considered the two judgments as relied upon by the Ld. DR, one of which is passed by the Hon'ble Bombay High Court in the case of Avirat Star Homes Ventures P. Ltd reported in 102 taxmann.com 60(Bom.), where information was received from investigation wing about certain companies that they were involved in giving accommodation entries of various natures to several beneficiaries and the assssee was one of them. Information supplied by investigation wing to Assessing Officer, thus formed a prima facie basis to enable Assessing Officer to form a belief of income chargeable to tax having escaped assessment as of the observation made by the Hon'ble Court. In that particular case the original assessment was done u/s. 143(1) and not u/s. 143(3) of the Act i.e. the scrutiny assessment. Thus, we find that factually this judgment is distinguishable and hence, no manner of application to the instant case. 14. The Hon'ble Gujrat High Court in the case of Peass Industrial Engineers (P) Ltd (supra) reported in 73 taxmann.com 185 as relied on by the Ld. DR has observed that where after sc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing that there was failure or there was no improper disclosure on the part of the assessee, he forms the better which is recorded and assumes jurisdiction under section 147. In the instant case, the assessments for both the assessment years were made under section 143(3). There was no dispute that the notices under section 147 were issued beyond four years from the end of the relevant assessment years. Thus, in order to initiate action under section 147 after the expiry off our years from the end of relevant assessment years, there should have been either failure or nondisclosure on the part of the assessee. From the recorded reasons it was found that the Assessing Officer was seeking to reopen the assessments since there was an 'incorrect interpretation of accounts by the Assessing Officer' and for that 'the assessee got the benefit of loss' for the assessment year 199293 which was carried forward to the subsequent years. In the instant case, it had nowhere been recorded that there was failure or improper disclosure on the part of the assessee However, the Assessing Officer sought to reopen the assessments as there was incorrect interpretation of ....