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TaxTMI 
TaxTMI 
TaxTMI 
2021 (3) TMI 526
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....he assessment under Section 147 of the Act by issuing impugned notice under Section 148 of the Act. The assessee company had requested to the Revenue to treat the original return of income filed as return filed in pursuance to the impugned notice and vide letter dated 09.04.2018, requested to provide a copy of the reasons recorded, which has been provided by letter dated 13.04.2018. The reasons recorded reads thus : Reasons for re-opening :- "2. The DDIT, (Inv.), Unit-1(1), Ahmedabad vide Letter dated 19/03/2018 shared the information of the above mentioned assessee company consequent to inquiry in the case of Gujarat Natural Resources Ltd. The said information has been received through ITO, Ward,1(1) (3), Ahmedabad. The gist of the findings forwarded is as under: 2.1 During the course of investigation in the case of Gujarat Natural Resources Ltd. (GNRL), it came to light that company had received share application money, out of which during F.Y. 2010-11, it had received a sum of Rs. 52,50,000/- from Ardent Ventures LLP (Formerly known as Ardent Ventures Pvt. Ltd). In order to carry out further investigations in the matter, summons' were issued to Ardent Ventures Pvt. Ltd., by....
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....), Ahmedabad to provide the source of investment made during the year. However, the sources of investments were not provided by the assessee. In view of this, source of investment to the tune of Rs. 52,50,000/- in Gujarat Natural Resources Ltd. stands unexplained as per I.T.Act. This being the case, the investment of Rs. 52,50,000/- made is to be treated as income from undisclosed sources of the assessee. 6. In view of the above findings, I have reasons to believe that income chargeable to tax to the extent of Rs. 52,50,000/- has escaped assessment in the case of Ardent Ventures Pvt. Ltd for the A.Y. 2011-12 within the meaning of section 147 of the I.T. Act and it is a fit case for issuing notice u/s 148 of the Act." 2.3 The writ applicant filed its objections vide its communication dated 02.05.2018 and the same came to be rejected by the Revenue vide order dated 24.07.2018. 3. Being dissatisfied with the decision to reopen the assessment, the writ applicant is here before this Court with the present writ application. 4. The case of the revenue is that, during the course of investigation in the case of Gujarat Natural Resources Ltd. (subsequently known as Lesha Energy Resource....
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.... had funds at the beginning of the year which was invested in the Gujarat Natural Resources Ltd., and such funds were the source of investment in the alleged company. Therefore, in these circumstances, it cannot be said that the sources of investment were not disclosed by the writ applicant. (iii) Relying on the case of Krupesh Ghanshyambhai Thakkar Vs. DCIT, [(2017) 77 taxmann.com 293 (Guj.)], it was contended that, reopening cannot be resorted to for a mere scrutiny or further verification of any aspect. In this regard, it was further pointed out that, the learned counsel submitted that, the respondent has not at all established as to how investment in the alleged company can be treated as undisclosed income of the writ applicant and there was some suspicion in the mind of the assessing officer with regard to escape of such income chargeable to tax in the assessee's hand and accordingly, it is evident that the respondent has initiated the proceedings for further verification of the concerned transaction, which cannot permissible in law. (v) It was pointed out that, the law is settled that the assessing officer does not get jurisdiction to reopen an assessment unless he record....
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....y for his /her assessment for that year fully and truly. If at any subsequent point of time, it is found that, either on account of an omission or failure of the assessee to file the return fully and truly all materials necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, the revenue is entitled to reopen the assessment in accordance with the procedure as prescribed by the Act. 13. A constitutional Bench of the Supreme Court in Calcutta Discount Company Ltd. Vs. Income Tax Officer, Companies District I, Calcutta and Anr., [AIR 1961 SC 372], wherein, the meaning of "true and full disclosure" has been explained. The relevant observations made in paras 8, 9, 10 and 11 of the said decision reads thus: "(8) The words used are " omission or failure to disclose fully and truly all material facts necessary for his assessment for that year ". It postulates a duty on every assessee to disclose fully and truly all material facts necessary for his assessment. What facts are material, and necessary for assessment will differ from case to case. In every assessment proceeding, the assessing authority will, for the purpose of computing or de....
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....close all of them-including particular entries in account books, particular portions of documents and documents, and other evidence, which could have been discovered by the assessing authority, from the documents and other evidence disclosed. (10) Does the duty however extend beyond the full and truthful disclosure of all primary facts ? In our opinion, the answer to this question must be in the negative. Once all the primary facts are before the assessing authority, he requires no further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else-far less the assessee--to tell the assessing authority what inferences-whether of facts or law should be drawn. Indeed, when it is remembered that people often differ as regards what inferences should be drawn from given facts, it will be meaningless to demand that the assessee must disclose what inferences-whether of facts or law-he would draw from the primary facts. (11) If from primary facts more inferences than one could be drawn, it would not be possible to say that the assessee should have drawn any p....