TaxTMI 
TaxTMI 
2021 (7) TMI 349
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....e Income Tax Act, 1961 (the 'Act') proposing re-assessment for the Assessment Year (AY) 2012-13. The Petitioner also challenges the order dated 26th June, 2019 passed by Opp. Party No.1 rejecting the Petitioner's objection to the reopening of the assessment and the consequential notice dated 26th July, 2019 issued under Section 142(1) of the Act, calling for accounts, documents, etc. in connection with the reassessment proceedings for the aforementioned AY 2012-13. 3. The background facts are that the Petitioner filed income tax returns for the AY 2012-13 electronically on 28th September, 2012 disclosing a total income of Rs. 34,80,490/-. The Petitioner's tax returns were subjected to scrutiny under CASS, for which statutory notices unde....
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....posite Party Nos.1 and 2 filed their reply on 25th February, 2020 and the Petitioner filed a rejoinder thereto. 9. Mr. Sandeep Kumar Jena, learned counsel for the Petitioner submitted that the reopening was based on a mere change of opinion of Opposite Party No.1 and, therefore, was bad in law. He placed reliance on the decision of the Delhi High Court in Principal Commissioner of Income-Tax v. Meenakshi Overseas Pvt. Ltd., [2017] 395 ITR 677 (Del) and of the Bombay High Court in The Pr. Commissioner of Income Tax-5 v. M/s. Shodiman Investments Pvt. Ltd. (2020) 422 ITR 339 (Bom). 10. It was further submitted that, in similar circumstances the reopening of assessment was quashed by the Bombay High Court in GKN Sinter Metals Ltd. v. Ram....
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.... ITR 362 (SC). 12. The above submissions have been considered. The reasons for reopening of the assessment, as disclosed by the Department in its communication dated 17th May, 2019 inter alia state how the DTIT Investigating Unit-1, Kolkata in its letter dated 15th January, 2019 passed on information in the case of beneficiaries identified in the "Banka Group of Cases". Apparently a search and seizure/survey operation was conducted in the case of the Banka Group on 21st May, 2018. It was found that there were various paper/shell companies controlled by one Mr. Mukesh Banka for the purpose of providing accommodation entries in the nature of unsecured loans or in other forms. It appears that the Petitioner firm was one of the beneficiaries....
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....on for the AO to have known of the transactions involving the Petitioner and the shell companies controlled by Mr. Mukesh Banka. As pointed out in Rajesh Jhaveri Stock Brokers Pvt. Ltd. v. ITO (supra): "Section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word 'reason' in the phrase 'reason to believe' would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing....
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.... application of mind by the AO to the tangible material which forms the basis of the reasons to believe that income has escaped the assessment. 17. It was then contended by Mr. Jena, learned counsel for the Petitioner that, despite the Petitioner asking for copies of the statement of Mr. Mukesh Banka and seeking cross-examination, this was denied to him and, therefore, there was violation of the principle of natural justice. In support of his submission, Mr. Jena referred to the objections filed by the Petitioner to the reopening of the assessment, where, in para-4, inter alia, it is stated as under: "Therefore it is now necessary for the assessee to provide with a copy of the statement given by Sri Mukesh Banka during th....