TaxTMI 
TaxTMI 
2024 (3) TMI 737
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....ce dated 31st March 2021 under section 148 of the Act stating that the officer had reasons to believe that Petitioner's income chargeable to tax for AY 2015-16 has escaped assessment within the meaning of Section 147 of the Act. After Petitioner filed its ROI once again in response to the notice, Petitioner was made available the reasons for reopening together with approval under Section 151 of the Act. As we will explain later, both reasons and the approval would indicate total non-application of mind by the Assessing Officer ("AO"), the Range Head, who recommended that a notice under Section 148 of the Act be issued and the Principal Commissioner of Income Tax ("PCIT") who expressed satisfaction that it was a fit case to issue notice under Section 148 of the Act. Petitioner filed its objections vide its Chartered Account's letter dated 8th February 2022 which came to be rejected by an order dated 24th February 2022. Both the notice dated 23rd March 2021 and the order dated 24th February 2022 are impugned in this Petition. Subsequently, a reassessment order on the reopening notice dated 23rd March 2022 has been passed which is also impugned in the petition. 3. The preliminary o....
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....has withdrawn his earlier statement. However, he has been unable to provide any documentary evidence to establish the genuineness of the supplies & purchases by his companies. From the investigation conducted till date, it appears that both these companies are bogus. The ITC availed by the recipients of their supplies has been established to be bogus, and in some cases has been reversed by the said recipients. During the post search enquiries on analysis of available bank account statements (SBI A/C 34727814821 & YES BANK 16483800001022) of M/s. Nyles Sales Agencies Pvt. Ltd. (from AY 2015-16 to AY 2017-18) it has been noticed that amounts were debited in the bank accounts immediately after credit entries. This peculiar pattern noticed in the bank accounts of M/s. Nyles Sales Agencies Pvt. Ltd. Further strengthen the finding that M/s. Nyles Sales Agencies Pvt. Ltd. have been working as a conduit in siphoning of funds from infrastructure projects and other business activities. It has also been noticed in searches conducted on different infrastructure entities by Delhi Investigation directorate that beneficiaries involved in such web of financial transactions use conduits li....
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....was made. Coming to the approval given by Mr. Anil Kumar, PCIT, he says, "In view of reasons recorded, I am satisfied that it is a fit case to issue notice under Section 148". Though on first blush we thought of giving him the benefit of doubt because he has relied on the reasons recorded which incorrectly records that no regular assessment under Section 143(3) of the Act has been made, as held by a Division Bench of this Court in German Remedies Ltd. v. Deputy Commissioner of Income Tax 2006 (152) Taxman 269 (Bom.)., while granting approval, it was obligatory on his part to verify whether there was any failure on the part of Assessee to disclose full and true relevant facts. It was also obligatory on the part of the Commissioner to consider whether or not power to reopen is being invoked within a period of four years from the end of the assessment year to which they relate. None of these aspects have been considered by him which is sufficient to justify the contention raised by Petitioner that the approval granted suffers from non-application of mind. Paragraph 24 of German Remedies Ltd. (supra) reads as under: "24 It is not in dispute that the Assessing Officer on 15-9-2....
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....ion, examine the same in the context of the facts of this case and satisfy himself whether the information received does prima facie lead to a reasonable belief that income chargeable to tax has escaped assessment. If the AO had only bothered to examine the records, he would have certainly found that in the annexure to the Form No. 3CD filed under Rule 6G(2)-statement of particulars required to be furnished under Section 44AB of the Act, Petitioner has disclosed that it had taken from Nyles an amount of Rs. 3,39,00,000/- as loan. Even the PAN number of Nyles is recorded. Even the balance sheet as on 31st March 2015 indicates under the head 'Long Term Borrowings-Unsecured Loans Rs. 3,39,00,000/-' against Nyles. Therefore, it clearly shows that the AO has acted on the satisfaction of the DG GST, Mumbai that income chargeable to tax has escaped assessment. It must also be borne in mind that a notice has been issued more than four years after the expiry of relevant assessment year and this was a case where assessment under Section 143(3) of the Act has been completed. Therefore, the AO was obliged to examine the information received in the context of the facts on record. If such an exe....
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....l material facts necessary for assessment. Thus, hit by the proviso to section 147 of the Act. However, the Assessing Officer has not applied his mind to the information received in the context of the facts on record. The impugned notice is bad-in-law, as it has not been issued by the Assessing Officer on his satisfaction that there is reason to believe, that income chargeable to tax has escaped assessment." 8. In fact, as held by this Court in Crompton Greaves Ltd. v. Assistant Commissioner of Income Tax, Circle 6(2) & Ors. 2014 SCC OnLine Bom. 2285., where there is no allegation in the reasons recorded that there was any failure on the part of Petitioner to truly and fully disclose all material facts necessary for its assessment for the relevant assessment year, on that ground alone the notice should be quashed and set aside. Though Crompton Greaves Ltd. (supra), holds that if the factum of failure to disclose can be culled down from the reasons in support of the notice seeking to reopen assessment, that will certainly not be fatal to the assumption of jurisdiction under Sections 147 and 148 of the Act, the reasons, in our view, does not indicate anything cogent or clear that ....