TaxTMI 
TaxTMI 
2021 (10) TMI 797
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....espondent No.1 issued notice under section 148 on 19.03.2020 for reopening the assessment for Assessment Year 2013-14. The petitioner filed the return, in response to the notice and reasons for reopening were supplied on 26.06.2020. According to the petitioner, these reasons are misconceived and baseless. 2.3 Various objections have been raised on 25.07.2020 and the request was made to the respondent to drop the reassessment proceedings. 2.4 After about more than a year on 27.07.2021, respondent No.2 disposed of the objections and rejected the resistance by such objections in totality. It is urged and alleged that the officer did it in a hurry without dealing with the contentions of the petitioner. The impugned notice issued, thereafter, under section 148 on 19.03.2020 as also the order passed against the preliminary objections dated 27.07.2021 both are under challenge. 2.5 The prayers sought for are as follows:- "7. The Petitioner, therefore, prays that this Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, direction or order and be ....
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.... of Rs. 1 crore each from Signet Vyapaar Private Limited and Wonder Procon Private Limited, who are already taxed and hence, there is no income, which has escaped assessment as transaction is genuine, the identity of the parties is known and the creditors have the creditworthiness of providing loans. It is urged that there cannot be any addition of income and the reasons recorded are fundamentally wrong. 5.3 He further has urged that it is settled position that "there has to be a reason to believe and not a reason to suspect". Respondent No.1 does not have any reason to believe but it is acting on a mere suspicion. It can be also be seen from the basis of the order disposing the objections, which reveals that if the assessee has sufficient material of not to believe the genuineness of the transactions, it should come on the platform of assessment set by Assessing Officer and there is no escapement of income on account of alleged transaction. Thus, when the reopening is only to verify the genuineness of transaction, it is a suspicion that they are not genuine and, hence, there is no reason to believe and notice is bad. 5.4 The main emphasis is about the order of disposing of t....
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....are and according to her, this being the faceless assessement regime, she also was not communicated this aspect. 7.1 Accordingly, we had permitted the draft amendment to the petitioner, which has been carried-out, where the additional prayers sought for, are as follows : "(aa) quash and set aside the impugned assessment order dated 28.09.2021 at Annexure-H to this petition. (aaa) pending the admission, hearing and final disposal of this petition, to stay implementation and operation of the assessment order and notice of penalty at Annexure-H to this petition and stay recovery of tax for A.Y. 2013-14;" 8 In the aforementioned background, we notice that this is a challenge to the reopening of notice issued under section 148 of the Act after the period of four years in case of assessee for the relevant Assessment Year, the provisions of sections 147 and 148 deserve reproduction: "[Income escaping assessment. 147. If any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the ....
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....nt assessment year has not been made in accordance with the provisions of this Act. Explanation 2.-For the purposes of this section, where,- (i) a search is initiated section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or (ii) a survey is conducted under section 133A, other than under sub-section (2A) or sub-section (5) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 section 132A in case of any other person on or after the 1st day of April, 2021, pertains or perta....
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....7 on a statute book is to ensure that the party cannot get away by making a false or untrue statement at the time of original assessment and when any falsehood is noticed, it is not permissible for the party to say that even though it had to conveyed the lies, the hands of the Assessing Officer are tied, since he had accepted the lies. 11 In the case of Phoolchand Bajranglal vs. ITO, [1993] (203) ITR 456, there was a question of assessment beyond the period of four years. The assessee had filed confirmatory letters from the company in support of the loan transactions. It was alleged that the interest paid to the Calcutta Company though was permitted by the Assessing Officer, for nearly 05 years on the basis of same communication from the ITO based at Calcutta, the genuineness of the loan transactions had been questioned. The Managing Director admitted that the company at Calcutta was a mere name lender and no amount had been advanced during the three consecutive assessment years. When the reassessment proceedings were initiated alleging that the fresh inference was impermissible for the Assessing Officer to draw, the Court held that it was a case of acquiring fresh information s....
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....oan transactions with the petitioner are genuine for having been carried out only through cheques, prima facie vindicates that the entire exercise is based on suspicion. The entire thrust, therefore, is that issuance of notice is nothing but a fishing inquiry. 19. As discussed at length while adverting to the law, that sufficiency of reasons recorded by the Assessing Officer need not be gone into by this Court. Of course, the Assessing Officer when forms his belief on the basis of subsequent new and specific information that the income chargeable to tax has escaped assessment on account of omission on the part of the assessee to make full and true disclosure of primary facts, he may start reassessment proceedings as fresh facts revealed the non-disclosure full and true. Such facts were not previously disclosed or it can be said that if previously disclosed, they expose untruthfulness of facts revealed. 20. The Assessing Officer required jurisdiction to reopen under section 147 read with section 148 of the Act, where the information must be specific and reliable. As held by the Apex Court in the case of Phul Chand Bajrang (supra), since the belief is that of the In....
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....on entries to various beneficiaries." 14 Adverting to the facts on hands, as could be noticed from the chronology of events, the reasons recorded are as follows: "2. Brief details of information collected/received by the AO and Analysis of Information collected/received: The information received from ADIT (Inv.), Unit-1(3), Kolkata that enquiry was conducted in the case of M/s. Shubhshree Barter Pvt. Ltd. During the course of enquiry, it revealed that M/s. Barter Pvt. Ltd. Maintained an account no.912020028827335 in Axis Bank, Airport Branch, Kolkata declared profile of the customer is trade in shares and securities. The account was opened on 04-06-2012. Sudden surge of high value transaction was noticed from 31-12-2012. Multiple high value RTGS credit was noticed regularly from entities such as Tree House Education and Accessories Pvt. Ltd. Amounting to Rs. 2.49 crores which followed by frequent transfer in favour of Wonder Procon Pvt. Ltd and RTGS debit in favour of entities such as Tejaswini Tradecom Pvt. Ltd, Afsons Indian Pvt. Ltd. Motive Vincom Pvtl.Ltd. Credit received in the account is immediately moved out from the account keeping minimal balance most ....
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.... CENTRAL CIRCLE-6,DELHI 2012-13 1,00,00,000 6 EMKAY GLOBAL FINANCIAL SERVICES LTD AAACE0994L CIRCLE-4(1) (1),MUMBAI 2012-13 49,70,181 7 PETAL VINIMAY PVT.LTD {ANTHER VINIMAY PVT. LTD1 AABCP6775B CIRCLE 8(1), KOLKATA 2012-13 42,00,000 8 POWER PALAZZO PVT.LTD AAECP5699R CIRCLE3(1)(1), AHMEDABAD 2012-13 40,00,000 9 RAJSHREE FLAVOURS PVT LTD. AAACR7917G WARD, 21(1), DELHI 2012-13 60,00,000 10 RASHMI METALIK LTD AACC7183E CENTRAL CIRCLE-2(2),KOLKATA 2012-13 75,00,000 11 SHILP REALITY PVT.LTD AAPCS8117C WARD-4(1) (3), AHMEDABAD 2012-13 1,00,00,000 From the above, it is clear that during the F.Y.2012-13, the aforementioned companies/concerns have brought unaccounted money in the books via money laundering through banking channel. Further, it is evident from the above that the assessee i.e. Shilp Reality Pvt.Ltd. Is also one of the beneficiaries in whose account the fund of Rs. 1,00,00,000/- has been transferred to its bank account through various entities. Since in this case only return of income has been filed and no assessment has been made u/s. 143(3), the genuines....
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....012-13. Genuineness of the transactions will be found out only during the assessment or after the assessment is completed. There is sufficient reason to believe that the income has escaped assessment and that the reasons for reopening of the assessment are correctly recorded and the reassessment proceedings are rightly initiated. Thus in view of the above, the objection raised is hereby rejected. Further, if the assessee has sufficient materials on hand to prove the genuineness of the said transactions, then the assessee should come to the platform of assessment set by the assessing officer to prove that there is no escapement of income on account of the alleged transactions. Hence, there is no case for the assessee at this stage to object the reopening process, which is done strictly in accordance with the law. In view of the above, the objection raised by you is hereby disposed of. The assessment proceedings are therefore, valid and further, this is to intimate you to comply with the requirement of documents and evidences as required during the assessment proceedings for the A.Y. 2013-14. The reason for reopening in your case is already provided to you ....
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....hout application of his mind, the Court remanded the matter back to the Assessing Officer for afresh decision. The Court took note of the decision of GKN Driveshafts (INDIA) Ltd.(supra) as also the decision of the Delhi High Court in the case of SABH Infrastructure Ltd. vs. Asstt. CIT, [2017] 398 ITR 198(Delhi), where it has held while considering the assessee's objection to the reopening the assessment that the assessment is not a mechanical ritual. It is a quasi judicial function and the order disposing the objection should deal with each objection and give a proper reason for conclusion. Order should reflect proper application of mind. 17 As is quite clear from what has been mentioned hereinabove that at Annexure-F what all the respondent Assessing Officer has opined that the case is reopened on the basis of tangible information and the conclusive evidence has been gathered that the assessee has escaped the income chargeable to tax during the Financial Year 2012-13 and the Assessment Year 2013-14. According to him, genuineness of the transaction will be found out only during the assessment or after the assessment is completed. There is a sufficient reason to believe that the ....
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.... facts; on submissions made on behalf of the rival parties; discussion on law points and thereafter reasoning and thereafter the ultimate conclusion and the findings and thereafter the operative portion of the order. There must be a clarity on the final relief granted. A party to the 15 litigation must know what actually he has got by way of final relief. The aforesaid aspects are to be borne in mind while writing the judgment, which would reduce the burden of the appellate court too. We have come across many judgments which lack clarity on facts, reasoning and the findings and many a times it is very difficult to appreciate what the learned judge wants to convey through the judgment and because of that, matters are required to be remanded for fresh consideration. Therefore, it is desirable that the judgment should have a clarity, both on facts and law and on submissions, findings, reasonings and the ultimate relief granted." 19 Material, which has been placed before us is the inquiry report in the case of M/s. Shubhshree Barter Pvt. Ltd. to satisfy this Court as to why the scrutiny assessment for the Assessment Year 2013-14 has been necessitated. They are presently not to be en....