TaxTMI 
TaxTMI 
2024 (10) TMI 541
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....f the Constitution of India, the petitioner has challenged the legality and validity of the notice dated 31.03.2021 issued under Section 148 of the Income Tax Act, 1961 (for short "the Act") for the Assessment Year 2017-18. 5. The brief facts of the case are as under: 5.1. The petitioner is engaged in a business of transportation carried out in the name of M/s.Auto Transport Co. The petitioner is also involved in the business of running a petrol pump in the name of proprietary concern namely M/s. Bansal Petroleum for the past many years. The proprietary concern was converted in to a partnership firm with effect from 01.04.2014. 5.2. The Petitioner filed return of income for the Assessment Year 2017-18 on 31.10.2017 declaring total income at Rs. 36,56,810/- along with the audited balance sheet and profit and loss account 5.3. The case of the Petitioner was selected for scrutiny and notice under section 142 (1) of the Act dated 24.10.2019 was issued calling upon the Petitioner to furnish various details including the details pertaining to the bank accounts. In response to the notice, the Petitioner furnished various details including the details of bank accounts along wit....
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....nclusively satisfied that the assessee has not disclosed truly and correctly all the relevant particulars of the above transactions and therefore the Income to the above extent has escaped assessment. 6. Basis of forming reason to believe and details of escapement of income In light of the details available on records and the above facts and findings, I have reason to believe that income chargeable to tar quantified as above has escaped the assessment. 7. Applicability of provisions of section 147/151 to the facts of the case Considering all the details and materials available on records, I am satisfied that the assessee has understated the Income in its return of income filed as per above details and therefore the income 7. chargeable to tax to the tune of Rs. 4,30,28,500/- has escaped the assessment. I have reasons to believe that this is a fit case for reopening and there is escapement of income within the meaning of Explanation 2 (2) to Section 147 of the Income Tax Act, 1961)." 5.8. The petitioner by letter dated 17.02.2022, against the reopening raised the factual and legal submissions to the effect that the survey was carried out under Section 133A of th....
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....ership firm. It was further submitted that the petitioner has provided all the details along with the objections by letter dated 17.02.2022 including the details of the cash deposited in the books of bank account of the partnership firm which was duly disclosed during the course of survey proceedings conducted by the department. 6.1. It was further submitted that the respondent Assessing Officer could not have assumed the jurisdiction on the basis of the suspicion which is reflected in the rejection order of the objection raised by the petitioner. 6.2. Learned Senior Advocate Mr. Tushar Hemani submitted that the satisfaction arrived at by the respondent Assessing Officer is not bonafide inasmuch as the information of cash deposit would not result in to escapement of the income and the impugned notice is issued only on the borrowed satisfaction, which is not tenable as per the settled legal position. 6.3. It was therefore submitted that the impugned notice being without jurisdiction is liable to be quashed and set aside. 7. On the other hand, learned Senior Standing Counsel Mr. Karan Sanghani submitted that the Assessing Officer on the basis of the information has arrive....
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....eedings in the case of the petitioner was within the four corners of law and was abiding to the principle of natural justice too. The same is also accepted by Hon'ble Gujarat High Court in case of Raju Bhupendra Desai vs ITO in SCA no. 20294 of 2019 where it was held: "It may be noted that at the time of issuing the notice under section 153C of the Act, the Assessing Officer has to satisfy himself whether the books of accounts or documents or assets seized or requisitioned by the other Assessing Officer in the proceedings under section 153A and handed over to him, had a bearing on the determination of the total income of the person to whom the notice under section 153C is issued. Such satisfaction would be in the realm of subjective satisfaction of the concerned Assessing Officer. The sufficiency or correctness of the documents or material handed over by the other Assessing Officer to him also could not be gone into by the Courts at this stage. In the case of Raymond Woolen Mills Ltd. Versus ITO reported in (1999) 236 ITR 34 (SC), it has been held that in determining whether the commencement of reassessment proceeding is valid, the Court has only to see whethe....
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....n the basis of which the AO has formed reasons to believe that income has escaped assessment and merits of the reasons itself cannot be questioned at this stage. Assessee will be given ample opportunities during the course of reassessment proceedings to substantiate his claims. The sufficiency of reason is not under consideration at the time of initiation of reopening. This issue is to be examined at a later stage during the re-assessment proceeding. Thus it is reiterated that at the stage of issue of notice, the only question of relevance is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belief by the Assessing Officer is within the realm of subjective satisfaction. Reference may be invited of the Hon'ble Court to the landmark decisions in the case of Dalurband Coal Co. Pvt. Ltd.; Raymond Woollen Mills; and Rajesh Jhaveri. 12. With respect to contentions raised in Submission 3.6, it is submitted that having regard to the materials on record it cannot be said that there is a ....
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.... much higher in comparison to income offered to tax during current year or in previous years. It may be correct that entire deposits. made may not constitute income escaping assessment but the same can only be proved by the assessee by furnishing relevant information. Without any further details about cash flow etc. and in view of other materials available on record it can be believed that assessee has under reported his income chargeable to tax during the year under consideration. Any earlier proceedings for the A.Y. under consideration does not have any impact on the present assessment proceedings. 15. With respect to contentions raised in Submission 3.9, it is submitted that the objection raised by the petitioner has already been disposed of by way of a speaking order, and communicated to the assessee vide letter dated 12.03.2022." 7.2. Referring to the above averments made on oath by the respondents, it was submitted that the petition being devoid of any merit is liable to be rejected. 8. Having heard the learned advocates for the respective parties and considering the facts of the case, it is not in dispute that the petitioner who is a partner of the partnership....