TaxTMI 
TaxTMI 
2024 (9) TMI 872
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....sed by the petitioner to the impugned notice. 5. The brief facts of the case are as under: 5.1. The petitioner is a company registered under the provisions of the Companies Act, 1956. The petitioner filed the revised return of income relevant to the Assessment Year 2014-15 on 01.12.2014 declaring loss of Rs.5,73,00,618/-. 5.2. The case of the petitioner was selected for scrutiny and notice under Section 143(2) was issued for the year under consideration. 5.3. The Assessing Officer referred the case of the petitioner by order dated 28.12.2016 for a special audit under Section 142(2A) of the Act. 5.4. A report of the special auditor dated 22.06.2017 was presented to the Jurisdictional Assessment Officer and based on such report the assessment order dated 05.02.2018 was passed under Section 143(3) of the Act where by the total income of the petitioner was assessed at Rs.28,728,540/-. 5.5. The impugned notice was issued by the respondent on 27.03.2021, the petitioner filed return of income on 24.11.2021 in response to the impugned notice and requested for reasons recorded. The respondent along with the notice under Section 142(1) of the Act dated 10.12.2021 provided the reasons r....
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.... of Rs. 626,97,60,495/- against the sale of commodities. But the assessee has failed to deliver the commodities and also defaulted in repayment of the said amount received by it. The trades done by the assessee to the tune of Rs. 626,97,60,495/- remained unsettled. Therefore, there was no actual sale made by the assessee and by making such bogus sales, the assessee had benefitted to the tune of Rs. 626,97,60,495/-. On perusal of the income tax return filed of the assessee for AY 2014- 15, this amount is not visible in outstanding liabilities. The assessee failed to give treatment to the outstanding amount at NSEL and delivery of goods purchased at NSEL in his books of accounts. Thus, it is concluded that income to the extent of Rs.626,97,60,495/- has escaped taxation in the hands of the assessee. 1. Therefore, I have reason to believe that income chargeable to tax to the tune of Rs.626,97,60,495/- has escaped assessment in the hands of the assessee with in the meaning of section 147 of the IT Act and hence I am satisfied that it is a fit case for reopening the assessment under section 147 of the IT Act." 5.6. The petitioner thereafter filed objections on 17.01.2022 against the p....
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....y the Special Auditor in the Special Audit Report by noting that as per the audited financial statement, the management has disclosed outstanding payable of Rs. 474.17 crore related to NSEL transactions, however, as per the information provided by the assessee Company, the total payables towards NSEL dues on March,31,2013 was 626.98 crores but at the same time after receiving reply from the assessee, the special auditor has confirmed that there was no transaction for the Financial Year 2013-14 relevant to A.Y. 2014-15 pertaining to NSEL and there was no opening stock lying with the petitioner company and there was no transaction of purchase or sale for the year under consideration and therefore the question of impact of any difference in the value of stock on profit & loss account of the petitioner company would not arise. 9. It was therefore submitted that as the special audit report was considered by the Assessing Officer in the scrutiny assessment and no addition was made on that basis and hence, the impugned notice for reopening issued by the respondent Assessing Officer is contrary to the facts on record because in absence of any sale or purchase transaction of NSEL for the y....
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....the trades done by the assessee to the tune of the said amount remained unsettled and there was no actual sale done by the assessee and by making such bogus sales the assessee had benefited and accordingly there was an escapement of income. It was submitted that on perusal of the return filed by the assessee for A.Y. 2014-15, the said amount is not found visible in outstanding liability and therefore the assessee has failed to give treatment to the outstanding amount payable at NSEL and delivery of the goods purchased at NSEL in the books of accounts. It was therefore submitted that the NSEL has filed suit against the petitioner claiming a recovery of more than Rs.969 Crore and considering this there was clear case of escapement of income. It was therefore submitted that this petition may be dismissed. 14. It was submitted that the impugned notice for reopening is issued as the information received by the respondent Assessing Officer was embedded in such a manner in the facts disclosed by the petitioner, the same could not be verified during the regular assessment. Reliance was placed on the reports of the Principal Chief Commissioner of the Income Tax and the NSEL to point out th....
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....itioner for transactions carried out in earlier years amounting to Rs.969.89 Crore is outstanding, and considering that outstanding amount payable by the petitioner to NSEL was determined during the F.Y. 2013-14, the impugned notice is issued for the alleged escapement of income of Rs.626,97,60,495/-. 19. In the reasons recorded as reproduced herein above, it is observed by the assessing officer that on perusal and analysis of information, he is having reason to believe that aforesaid amount was outstanding to be payable by the petitioner as for termination of liability of the NSEL on 31.07.2013 and therefore said outstanding income is nothing but the escapement of income. Such belief by the assessing officer is therefore without considering the facts on record to the effect that there is no sale or purchase transaction carried by the petitioner company on NSEL during the F.Y. 2013 - 14 relevant to A.Y. year 2014 - 15 and therefore, there was no question of any income arising in the hands of petitioner assesses resulting into escapement thereof. Therefore, it is apparent that the assumption of jurisdiction by Assessing Officer to reopen the assessment for A.Y. 2014-15 is without a....