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TaxTMI 
TaxTMI 
TaxTMI 
2023 (1) TMI 282
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....eopening of its assessment for the year 2017-2018 on the ground that there are reasons to believe that its income for the relevant year has escaped assessment. 3. On petitioner's request, it was supplied with the reasons for issuing the said notice vide letter dated 24.05.2021. The said reasons stated that the petitioner had received bogus loan/sale/purchase amount of Rs.93,21,520/- (Rs.89,97,520+ Rs.3,24,000) from M/s. Sanmati Gems Private Limited as per the information received from the Deputy Director of Income Tax, Investigation, Unit-4(4), Mumbai. 4. The petitioner on receipt of the above reasons for reopening its case under Section 148 of the Act filed objections on 09.06.2021 stating that the revenue is proposing to reopen its case not for reason to believe but for reason to suspect. The petitioner also contended that it has not been provided with the necessary documents such as the account books of M/s. Sanmatri Gems Private Limited showing the alleged bogus entries in its name or the statement of Deepak Jain purported to have been recorded under Section 132(4) of the Act. The said objections were disposed of vide order dated 18.08.2021 holding that the same have no force....
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.... objections thereto. In the event the challenge to the said notice or the order is accepted and either of them are quashed, the assessment order passed on their basis would automatically fall to the ground. Therefore, for the time being presuming that there is no challenge to the re-assessment which is subsequent in nature, if we focus on the validity of the notice under Section 148 of the Act and the order dated 18.08.2021, by which the objections of the petitioner were disposed of, we find that there is no remedy under the Act for challenging the above notice and the order. Therefore, a writ petition against them is certainly maintainable subject to the scope of the judicial review. 10. Additionally, the petitioner had brought the re-assessment order to the notice of the writ court by seeking amendment so as to challenge it. The Court not only permitted the amendment but vide order dated 30.03.2022 also directed that the re-assessment shall be subject to the decision of the writ petition. Therefore, the Court was conscious of the fact that if the challenge to the notice under Section 148 of the Act and to the order disposing of the objections is accepted, the assessment would ob....
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....een made we think it proper that in addition to an order directing the Income-tax Officer not to take any action on the basis of the impugned notices a further order quashing the assessment made be also issued." 13. In view of the above decision, the case law pointed out by Shri Bissa including the recent decision of the Supreme Court in State of Madhya Pradesh & Anr. Vs. Commercial Engineers and Body Building Company Limited, 2022 0 Supreme (SC) 1053 in context with the maintainability of the writ petition as against the assessment order, are of no consequence. In all the above decisions, it has been held that when the taxing statutes provide for a complete mechanism, the said mechanism has to be followed and if there is a provision for appeal, it cannot be bypassed to invoke the writ jurisdiction against the order of assessment. The aforesaid decisions are confined to assessment orders only and where there is no challenge to any notice or any order deciding the objections thereto forming the basis for the assessment orders. The assessment orders may not be assailable in writ jurisdiction, but there is no dictum of law which provides that even the notice or order passed in pursua....
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....anism to check evasion of tax by a party alien to search and seizure. 17. Shri Kamal Kishore Bissa, learned counsel for the Revenue in defence simply reiterated the submissions made by him while raising the preliminary objections that the assessment order is not open to challenge before the writ court and that the information furnished by the Deputy Director of Income Tax, Investigation, Unit-4(4), Mumbai is sufficient to reopen the assessment. The Court in exercise of its extraordinary jurisdiction cannot go into sufficiency of the material relied upon for reopening the case, as has been held by the Supreme Court in Raymond Woollen Mills Limited vs. Income Tax Officer, Centre Circle XI, Range Bombay & Others [(2008) 14 SCC 218]. 18. The notice dated 30.03.2021 served upon the petitioner under Section 148 of the Act simply states that the officer concerned has reason to believe that its income chargeable to tax for the Assessment Year 2017-18 has escaped assessment within the meaning of Section 147 of the Act and, therefore, he is called upon to file response to the notice within 30 days. The said notice in no specific terms states about any material, on the basis of which the of....
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....nd to consider and dispose of the objections, so filed, by a speaking order, we are of the opinion that supply of the material which forms the basis for forming such opinion becomes sine qua non to enable the noticee to effectively participate in the proceedings by filing objections. 23. We are also conscious of the decision rendered in Raymond Woollen Mills Limited (supra), which provides that the sufficiency and correctness of the material cannot be considered at the stage of dealing with the validity of the notice, or the order passed on the objections thereon. Notwithstanding the above, the crucial aspect is whether the relevant material, on the basis of which an opinion is formed that the income chargeable to tax has escaped assessment, needs to be supplied to the noticee along with the reasons to believe or what would be the result if it is not made available. 24. A Division Bench of the High Court of Delhi in SABH Infrastructure Ltd. Vs. Assistant Commissioner of Income Tax, (2017) 398 ITR 198 (Delhi), observed that large number of writ petitions are coming up before the Court challenging the reopening of assessment by the Revenue under Section 147/148 of the Act and despi....
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....ion has taken a categorical stand that the respondents failed to furnish the information which formed the basis for reopening the assessment. It was not even provided with the statement of Deepak Jain, on which heavy reliance was being placed. There is no averment in the reply of the respondents anywhere that any such information or a copy of the statement was supplied to the petitioner along with the reasons to believe. 28. In view of the above, the reasons to believe, as supplied to the petitioner, on the face of it are incomplete and do not afford the petitioner due and proper opportunity to file objections against such reassessment. The non-supply of the above material is within the teeth of the directions of the Division Bench of the Delhi and Bombay High Courts. 29. The submission of Shri Bissa that reasons to believe cannot be equated with the final conclusion and as long as the Assessing Officer has sufficient material to demonstrate that he had bonafidely formed the opinion that the income chargeable to tax has escaped assessment, the requirement of law stands satisfied is of no avail as there are no two opinions on the above aspect. Sufficiency of material is one thing ....