AI Drafter 
TaxTMI 
TaxTMI 
2022 (11) TMI 737
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....er consideration had escaped assessment within the meaning of section 147 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). The further prayer is to set aside order dated 5.10.2018 passed by the Assessing Officer whereby the objections raised by the petitioner to the re-opening of the assessment came to be disposed of and rejected. 3. Noticing the attendant facts, the petitioner, a limited company, engaged in the business of trading in oil products, filed its return of income for the assessment year 2011-2012 on 30.09.2011 declaring total income of Rs. 5,02,820/-. The Assessing Officer issued notice under section 143(2) dated 2.8.2012 and thereafter noticed under section 142(1) dated 1.7.2013 placing certain questionnaires, to which the petitioner submitted reply furnishing details and information by its letter dated 10.7.2013. The assessment order under section 143(3) came to be passed on 28.2.2014. 3.1 It was thereafter that the petitioner received notice dated 26.3.2018 under section 148 of the Act. The petitioner filed its response and requested the Assessing Officer to supply reasons recorded for reopening of the assessment. The reasons were provided by....
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...., but no details in the above regard were furnished. It was recorded therefore that the petitioner had not fully and truly disclosed materiel facts in respect of the source of funds received, which according to the Assessment Officer was necessary for assessment for the year under consideration and thereby, it constituted the facts for the purpose of reopening of the assessment. It was stated that total amount of share application money Rs. 4,50,54,625/- had escaped assessment in the Assessment Year 2011-2012. 3.6 The petitioner filed its objections against the re-opening. In the communication raising objections to the re-opening, it was inter alia pointed out that notice under section 148 of the Act was issue beyond four years from the end of the relevant Assessment Year, that is 2011- 2012. Therefore, the Proviso to section 147 would apply. It was submitted that there was no failure on the part of the petitioner in disclosing fully and truly all material facts necessary for the assessment when the original assessment took place in respect of the year under consideration. It was the case of the assessee that during the original assessment proceedings, the details relating to al....
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.... in-built test to check whether power exercised for reassessment was properly exercised or was abuse of powers. The decision of the Division Bench of this court in Orient News Prints Ltd. vs. Deputy Commissioner of Income Tax, Circle 3(1) [(2017) 393 ITR 527 (Gujarat) was pressed into service to further the submissions about impermisibility of fishing inquiry 4.1 On the other hand, learned senior advocate for the respondent relied on the contents of the affidavit-in-reply filed on behalf of the respondent to canvass the contentions on that basis. It was submitted that information was received from the investigating wing of the department on 19.3.2018 that the petitioner assessee company had received share application money form eight persons/entities out of which four parties named (i) Milan Grafitech Pvt. Ltd., (ii) Ardent Ventures Pvt. Ltd., (iii) Shivance Esatae Pvt. Ltd. and (iv) Infinium Natural Resources Investment Pvt. Ltd. had no creditworthiness and their whereabouts were not known. It was submitted that the assessing officer based its findings in view of the said information available and formed reasons to believe that income chargeable to tax to the extent of Rs. 4,50....
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....g was held to be justified. 5. It would be relevant to notice the information collected by the Assessing Officer in course of the regular assessment for the year under consideration which culminated into order dated 28.2.2014 under section 143(3) of the Act. In respect of the assessment conducted for the assessment year 2011-2012, notice dated 1.7.2013 was issued by the income tax authorities, in which the petitioner company was asked to furnish the complete details. The balance sheet reflected additional subscribed capital of Rs. 14,28,52,850/-. In that light the assessee was called upon to furnish the details in that regard including the names and addresses of the persons, their PAN number, number of shares applied for, face value of the shares, premium if any, total amount, mode of payment received of all share holders. 5.1 In response to the aforesaid notice dated 1.7.2013, the queries raised were answered by the petitioner by its communication dated 7.10.2013, the relevant part thereof is extracted herein, "2. Shareholding Pattern : We are submitting shareholding pattern as submitted to Stock Exchange as required under Clause 35 of Listing Agreement as on 31.03.....
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....nsidered the the issue of shares to eight companies, which included all the aforementioned four entities. The copy of the share premium account reflected the amount towards Preferential Share Warrant, and towards Optionally Fully Convertible Debentures. 5.2 Thus, the assessee had furnished all material information truly and fully. The assessment was sought to be reopened after four years. Based on all the above information made available to the Assessing Officer, the order of assessment for the year under consideration was passed on 28.2.2014 wherein in para No.2, it was recorded thus, which indeed reflected application of mind by the Assessing Officer to the material produced by the assessee in course of the assessment, "In response to the notices issued, Shri Pankaj K. Shah, C.A. attended on bhealf of the assesswee from time to time and furnished the details/evidences as called for which are perused and placed on record. The case was discussed with the A. R. Present." 5.3 Now, in view of the facts emanating regarding the information collected by the Assessing Officer and supplied by the petitioner-assessee in course of the regular assessment, the case turns out to ....
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....ve arbitrary powers to the Assessing Officer to re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to re-open. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to re-assess. But re-assessment has to be based on fulfillment of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer." 5.5.1 This court in Garden Silk Mills Ltd. vs. CIT (No.2) [(1996) 222 ITR 68 (Guj.)] reiterated the view that powers to reopen the assessment could not have the basis of the same facts and that change of opinion on the part of the Assessing Officer would not provide a ground to reopen the concluded assessment. 5.5.2 In the Proviso to section 147 the phrase "material facts" occurs, which connotes primary facts necessary for assessment in relation to the year of assessment. The said expression "mat....
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....missioner of Income Tax, Circle 3(1) vs. Orient News Prints Ltd. [(2018) 100 taxmann.com 69 (SC)]. 5.5.6 The decisive facts in Phool Chand Bajrangla (supra), are absent in the present case, which were that the asseessee was found to have been willfully made a false and untrue statement at the time of original assessment. It was observed that when the falsity came to the notice to the Assessing Officer, it was not permissible for the assessee to turn around to bind the hands of the Assessing Officer not to reopen the case. Such is not the case here. Similarly in, Kottex Industries (P.) Ltd. (supra) the assessee companies were actually found to be non-existent companies. There is no such finding or material available in the present case. 6. Recollecting the relevant facts and aspects of this case as highlighted above, the ground of receipt of share application money from the four entities alleged to be unexplained by the Assessing Officer to proceed to exercise powers of reassessment, was the very issue considered by the Assessing Officer by calling for the relevant information in that regard in course of regular assessment undertaken for the year under consideration. As the de....