TaxTMI 
TaxTMI 
2024 (3) TMI 253
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.... the information received the value of the share transaction is Rs. 29,43,22,193/-. In view of the above, I have reason to believe that income chargeable to tax has escaped assessment and, therefore, to verify the above aspect, it is necessary to reopen the case for A.Y. 2010-11. xxxxxxxxxxxxx In this case as per the CIB information you have entered into huge share transaction for A.Y. 2011-12. As per the information received the value of the share transaction is Rs. 18,11,26,743/-. In view of the above, I have reason to believe that income chargeable to tax has escaped assessment and, therefore, to verify the above aspect, it is necessary to reopen the case for A.Y. 2011-12. xxxxxxxxxxxxx In this case as per the CIB information you have entered into huge share transaction for A.Y. 2012-13. As per the information received the value of the share transaction is Rs. 66,16,51,715/-. In view of the above, I have reason to believe that income chargeable to tax has escaped assessment and, therefore, to verify the above aspect, it is necessary to reopen the case for A.Y. 2012-13. xxxxxxxxxxxxx 2. Petitioner filed de....
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....y, a reason to believe has not been formed. Mr. Chhotaray, relying upon Commissioner of Income Tax V/s. Podar Cement Pvt. Ltd. and Ors. (1997) ITR 625 (SC), submitted that the law cannot presume every situation. Relying upon Income Tax Officer V/s. Biju Patnaik 188 ITR 247, Mr. Chhotaray submitted that even if the notice or the reason to believe does not disclose the satisfaction of the requirement of Section 147 of the Act, if from the averments in the counter affidavit it is clear that the Income Tax Officer had applied his mind to the facts and after prima facie satisfying himself of the existence of two conditions reached the conclusions for reopening the assessment, it being an administrative action, the notice or order does not per se become illegal. It is open to the assessee to place all necessary material facts and the Income Tax Officer is free to consider the material and make a decision in that regard. 5 In our view, Biju Patnaik (Supra) will not help Mr. Chhotaray. This Court has, in Sun Tan Trading Co. Ltd. V/s. The Deputy Commissioner of Income Tax, Circle 1(3)(1), Mumbai and Ors. 2024 SCC Online Bom. 469 in paragraphs 20 and 22, dealt with Biju Patnaik (Supra). I....
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....and the Assessing Officer is thereafter bound to dispose of the objections by passing a speaking order. The process prescribed by the Hon'ble Apex Court also proceeds on the footing that the objections are required to be filed on the basis of the "reasons recorded" by Assessing Officer and the Assessing Officer is required to pass order justifying the reopening on the basis of the said reasons. Therefore, if the Assessing Officer is allowed to justify the reopening beyond the reasons, the whole process prescribed by the Hon'ble Apex Court will also be rendered nugatory and infructuous. 6. In the facts of this case, it is not possible to interpret the decision of the Hon'ble Apex Court in Biju Patnaik (Supra) as sought to be done by Mr. Chhotaray, i.e., to say that the validity of the reopening is to be decided on the basis of not only the reasons recorded but other material as well. If the interpretation as sought by Mr. Chhotaray is given then, it would lead to the recording of reasons being an empty formality as the Assessing Officer would always be able to justify the reopening by not only referring to the reasons but also surrounding material and circumstances. The same can ....
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....ed in the reason to believe that he is seeking some information to examine the case of assessee, to enquire about these Rs. 7,00,000/-. In the judgment of this Court in the case of Nivi Trading Limited v. Union of India and Another, it is held that "If more details are sought or some verification is proposed, that cannot be a substitute for the reasons which led AO to believe that an income chargeable to tax has escaped assessment. The principal condition for issuance of notice is to be found in Section 147 of the Act and that is on the reason to believe that, any income chargeable to tax has escaped assessment for any assessment year, then, the AO may, subject to the provisions of Sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment." In the case at hand, the AO does not say that any income chargeable to tax has escaped assessment. All that the AO desires is 'examination of certain details pertaining to the amount paid by Petitioner to Crown'. That cannot be stated to be founded on the belief that any income which is charge able to tax has escaped assessment and hence such verification is nec....