TaxTMI 
TaxTMI 
2024 (5) TMI 1027
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.... were proposed to be initiated. It reads as below : "As per information flagged under Risk Management strategy(RMS) formulated by Central Board of Direct Taxes (CBDT), it has been noticed that you have supplied goods /services of Rs. 73968000/- during financial year 2019-20 (relevant to assessment year 2020-21) to M/s Everett Infra and Engineering Equipments Private Limited. On the basis of enquiries conducted by the Income Tax Department it has been established the M/s Everett Infra and Engineering Equipments Private Limited is not doing any actual business activities and providing accommodation entries. This company is involved in receiving and giving bogus contracts/sub-contracts and raising invoices without delivery of any actual goods/services. The company is merely working as entry/exit provider. As you have entered into the transaction with this bogus company which is involved in providing accommodation entries the supply of goods/services to this company also appears to be bogus. It leads to inference that you are also one of the participants the tax evasion mechanism of above company. The above information suggests escapement of income in your case. Please also refer t....
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....ist, at the same time, the amended provision itself obligates the assessing authority to 'consider the reply' submitted in response to the show cause notice issued under Section 148A(b) of the Act. Only on such consideration, the assessing authority may 'decide', on the strength of material available on record (including the reply of the assessee), whether it is a 'fit case' to initiate reassessment proceedings. That exercise has not been done. The order passed under Section 148A(d) of the Act is wholly non-speaking. It has been passed in a perfunctory manner with a pre-conceived notion. Therefore, the same may never be sustained as jurisdiction has not arisen to reassess the petitioner for the Assessment Year 2020-21. 7. On the other hand, learned counsel for the revenue would contend, the pre-requirement of 'reason to believe' has been done away. Therefore, the strict test of existence of such 'reason to believe'-to initiate reassessment proceedings cannot be reintroduced by reading the amended statute in the manner suggested. In his submission, insofar as show cause notice was issued to the petitioner and its reply was 'considered'....
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....ice under section 148. 148A. The Assessing Officer shall, before issuing any notice under section 148,- (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (b) provide an opportunity of being heard to the assessee, 2[***] by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in response to the show-cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 1....
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....e reassessment proceedings under Section 148 of the Act. 12. Thus, the legislature has carefully departed from the strict test of recording of 'reason to believe' and substituted the same with a lighter and more subjective 'decision' of the assessing officer that it is a 'fit case' to reassess the assessee, based on the 'suggestion' (emerging from perusal of the 'information' i.e. objective/relevant material), that income had escaped assessment at the hands of the assessee. 13. True, in reaching such 'decision', the assessing authority is obligated to consider only that material that may be relevant (and not extraneous) and the reply that may have been furnished by the assessee, at the same time, it is not the statutory law that he must record specific/objective reasons to deal with each and every objection, that may be raised. The statute only requires an overall or broad consideration of the reply furnished by the assessee, to reach a 'decision' that it is 'fit case' to initiate reassessment proceedings. To read-recording of exact reasons (to reject any objection), into the language of Section 148A of the Act would....
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....decision' is required to be made. 17. In the present facts, the 'decision' of the assessing authority to initiate reassessment proceedings in the case of the petitioner for Assessment Year 2020-21 has arisen on the 'information' received that the 'purchaser' does not exist. That is contained in the reports of the Income Tax Officer with respect to the four addresses of the 'purchaser'. No direct evidence was disclosed by the petitioner, (in his reply), - to doubt the existence of that 'information'. The 'suggestion' as to escapement of income qua sales made to the (non-existing) 'purchaser', inheres in it. Thus, the 'information' is relevant to the 'suggestion' as to 'escapement of income' at the hands of the petitioner. 18. As to the non-existence of the 'purchaser', that satisfaction further appears to have arisen on the conduct of the purchaser in not responding to any of the notices and summons issued. Third, the assessing officer has taken note, during the course of a search proceedings and upon recording of statement of a third party, it was also suggested that the 'purchaser'....