TaxTMI 
TaxTMI 
2023 (3) TMI 486
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....in the business of trading in electronic appliances and has filed its returns on a regular basis and even for A.Y.2013-14. The respondent No. 1 by its order under section 143(3) of the Act dated 14th March 2016 accepted the returned income of the Petitioner for A.Y. 2013-14 after considering the submissions filed by the Petitioner. It filed its return of income under section 139(1) of the Act on 13.10.2016 for A.Y. 2016-17 declaring a total income of Rs. 2,85,63,750/-. The Petitioner's books of accounts were audited, and the auditor uploaded the audit report in the Form No. 3CD. On 31st March, 2021 notice under section 148 of the Act was issued to the Petitioner for the A.Y. 2016-17 with the prior approval of Respondent No. 2. Pursuant thereto, on 23rd April, 2021, the Petitioner filed its return of income. By letter dated 4th May, 2021, the Petitioner issued a letter seeking reasons recorded. On 23rd June, 2021 however, the respondent No. 1 issued a notice under section 143(2) of the Act and also supplied reasons recorded for reopening the assessment, which are summarized in the petition as follows : "(a) Information was shared on INSIGHTS PORTAL under the "verification m....
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....ned, sine qua non for the A.O. to have a "reason to believe" that income chargeable to tax has escaped assessment. In support of his contention, he relied upon the decision of the Apex Court in the case of ITO vs. Lakhmani Mewal Das (1976) 103 ITR 437(SC). He submitted that there is no new tangible material based on which the assessment was being reopened and that from the reasons recorded, one could not deduce what was the new tangible material. He submitted that the reasons categorically recorded that the information requires further verification. He apprehends that the reopening would only lead to fishing and roving enquiry conducted by the respondent No.1. He submitted that a reopening of the assessment cannot be based on conjecture, surmises and assumptions. In support of the said contention, he relied upon following judgments: (i) 375 ITR 308(Bom) Nivi Trading Limited vs. UOI. (ii) 262 Taxman 404(Bom) Jalaram Enterprises (P) Ltd. vs. ITO. (iii) 261 Taxman 110(Bom) PCIT vs. Rajesh D. Nandu. (iv) 406 ITR 326 (Guj) PCIT vs. Manzil Dineshkumar Shah. 5. He further submitted that from the information available on the "INSIGHT PORTAL" it can be....
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....red by the respondent, the Petitioner is unable to explain the same. He lastly submitted that the order has been passed by NFAC i.e. respondent No. 4 whereas the reasons are recorded by respondent No. 1, which consequently vitiates the order passed disposing the objections. In view of the above, he prayed that the petition be made absolute. 7. Mr. Suresh Kumar, learned Counsel for the respondent submits that the information on the "INSIGHT PORTAL" from the Financial Intelligence Unit of the Government of India is tangible and concrete information. He submits that new tangible information was received in relation to the suspicious transactions from the Financial Intelligence Unit and the reasons for satisfaction were recorded and approved under section 151 of the Act from the Additional CIT 5-2, Mumbai. He submitted that the impugned order dated 11th March, 2022 passed by the Faceless Assessing Officer disposing of the objections was based on facts available on the record. He submitted that since the case was reopened within four years from the end of the relevant assessment year and there was a large sum of cash transactions mentioned in the information, the same has not been sc....
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....nt proceedings are still pending, as against in the case of Asian Paints(supra), assessment was completed. In view of the above, it was urged that the petition be dismissed. CONCLUSION 9. We have heard the learned Counsel at length. We are in agreement with the contention of the Petitioner and we find that the contentions raised in the affidavit in reply are completely different from the reasons which states: "High risk transaction to be verified have been updated under the new system. In this case high risk transaction has been reported."; and "Finding of the AO: There is credible information received on the Insights portal that high risk transactions have taken place in the case of the assessee which needs to be verified" and the paragraph 5 of the affidavit in reply states as under: "... the Cash credits and subsequent debits in the current account of the assessee." We could not find any mention about the "cash credits and subsequent debits" in the reasons recorded. Moreover, as per the reasons itself the said transactions were to be verified. Hence there was a clear departure from the stand. There is no averment in the reply that would suggest t....
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....ection 151 of the Act. We have seen the details mentioned in the rejoinder by the Petitioner which shows that out of 8 accounts mentioned, only 3 accounts belong to the Petitioner and the other 5 accounts did not belong to the Petitioner. It appears that from the table at page 181 that there was no application of mind. It can also be seen from the averments in the rejoinder that although total cash deposits mentioned at page 151 is only Rs.11.52 Crores as against the figure of Rs. 103 Crores mentioned in the reasons recorded, it also appears that the cash deposit was for a period of 21st November, 2014 till 20th November, 2015 and consequently, did not fall in the year under consideration. The respondent has also not disputed that the Petitioner is operating from approximately 25 different shops of varied sizes at different locations and not only from a rented commercial premises of area between 500 to 1000 sq.ft.. 11. In the impugned order it has been stated that sufficiency of material is not required to be gone into at that stage. The decision of the Apex Court in the case of ACIT vs. Rajesh Jhaveri Stock Brokers(P) Ltd. (2007) 161 Taxman-316(SC) is vaguely relied upon. It is....