TaxTMI 
TaxTMI 
2008 (12) TMI 9
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....e application money received by the assessee from Solo-Mio Marketing Pvt Ltd. In response to the queries raised by the Assessing Officer, the assessee submitted a reply dated 10.02.2003. A copy of the said reply has been placed as Annexure-4 at page 75 of the present paper book. On going through the said reply, we note that the petitioner had clearly disclosed the names and addresses of the directors of the assessee / petitioner company. The petitioner had also stated categorically that no loans had been accepted by it during the year under consideration and that there was an increase of Rs 64,75,000/- in the share capital of the company. It was also stated that all the share application money had come from companies which were duly registered under the Companies Act, 1956 and that each one of them was legal entity. It was also stated that the applicants had confirmed their investments through duly attested affidavits. Specifically, with regard to the investment made by Solo-Mio Marketing Pvt. Ltd, the petitioner gave the following response:- NAME AND ADDRESS OF THE INVESTOR / SHARE HOLDER M/S SOLO-MIO MARKETING PRIVATE LIMITED, L-132, SHASTRI NAGAR, DELHI ' 110 052. NO. OF SHAR....
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.... explanation and information from the assessee, the Assessing Officer framed the assessment order on 05.03.2003. In the assessment order itself, it was noted as under:- '' The details and documentary evidence of share application money pending for allotment in the previous year have been filed alongwith documentary evidence from subscribers. It has been stated that funds available with the company has been advanced to various persons and the company has earned interest income of Rs. 7,44,691/- on such advances.' 4. The Assessing Officer issued the notice under Section 148 of the said Act on 28.03.2008 beyond the period of four years. As such, the proviso to Section 147 would become applicable. Under the proviso itself, it is necessary that before any action is initiated, it must be pointed out that the assessee had failed to make a true and full disclosure of all the material facts. In the reasons recorded in writing for re-opening the case under Section 148 of the said Act, there is no allegation that the petitioner did not make a full and true disclosure of all the material facts. In fact, in our view, the reasons recorded are quite general and vague as would be apparent from a....
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....re referred to therein that the entire issue revolves around three transactions. A payment of Rs 3 lakhs received in April, 2000 from Solo-Mio Marketing Pvt. Ltd and further payments of Rs 3 lakhs and Rs 2 lakhs received by the petitioner in March, 2001 from the same Solo-Mio Marketing Pvt. Ltd. In the objections filed by the petitioner to the said reasons, the petitioner had, inter alia, explained the same by stating that all the three amounts were received towards share application money. However, the amount of Rs 3 lakhs, which was received in April, 2000, pertains to the previous year. In the year in consideration, only two payments of Rs 3 lakhs and Rs 2 lakhs had been received from Solo-Mio Marketing Pvt. Ltd towards share application money in respect of the 50,000 equity shares referred to in the petitioner's letter dated 10.02.2003 in response to the queries raised by the Assessing Officer in the course of the original assessment proceedings. According to the petitioner, there had been a complete, full and true disclosure of all the material facts and the assessment was framed by the Assessing Officer after being fully satisfied with the details and documentary evidence wit....
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....assessee company has failed to disclose fully and truly all material facts necessary for assessment year 2001-02. Under the circumstances, the Assessing Officer has initiated the proceedings u/s. 147/148 of the I.T. Act with the prior approval of the Commissioner of Income-tax, Delhi-II, New Delhi within the time prescribed under the provisions of section 149 read with section 151 of the I.T. Act, 1961. Therefore, your application vide letter dated 24/11/2008 objecting the validity of initiation of proceedings u/s. 147/148 of the I.T. Act is not acceptable and is hereby rejected. Yours faithfully, -Sd- ( Suresh Mamtani ) Income-tax Officer, Ward-4(2), New Delhi.' 7. We are of the opinion that the said order has, first of all, not dealt with any of the objections raised by the petitioner. Secondly, the order is nothing but a repetition of what is given in the purported reasons. There is no indication of any specific information with regar....
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....l facts necessary for his assessment for that assessment year. If it is also found that the petitioner had disclosed fully and truly all material facts necessary for its assessment, then no action under section 147 could have been taken after the four year period indicated above. So, the key question is whether or not the petitioner had made a full and true disclosure of all material facts ' 20. In the reasons supplied to the petitioner, there is no whisper, what to speak of any allegation, that the petitioner had failed to disclose fully and truly all material facts necessary for assessment and that because of this failure there has been an escapement of income chargeable to tax. Merely having a reason to believe that income had escaped assessment, is not sufficient to reopen assessments beyond the four year period indicated above. The escapement of income from assessment must also be occasioned by the failure on the part of the assessee to disclose material facts, fully and truly. This is a necessary condition for overcoming the bar set up by the proviso to section 147. If this condition is not satisfied, the bar would operate and no action under section 147 could be taken. We h....