TaxTMI 
TaxTMI 
2024 (2) TMI 1609
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....ct, 1956. The petitioner filed return of income for the Assessment Year 2012-13 on 16.8.2012, declaring total income at Rs. 64,61,780/- and the same was processed under Section 143(1) of the Act. 3.2 The respondent issued notice dated 30.3.2019 under Section 148 of the Act seeking, inter-alia, to reopen the assessment for the year under consideration. 3.3 In response thereof, the petitioner filed return of income and requested the respondent to supply the copy of reasons recorded for reopening. Vide letter dated 28.8.2019, the petitioner was supplied with copy of reasons recorded for reopening. The reasons recorded by the respondent are as under : "6. Basis of forming reason to believe and nature and quantum of escapement of income: As the bona fides and credit worthiness of M/s. DLS Exports Pvt. Ltd and other shell companies through whom the funds have been routed to the assessee M/s. Vikram Knittex Pvt. Ltd to the tune of Rs. 36,00,000/- is not established, the genuineness of the source of the funds received by the assessee from the aforesaid bogus paper/shell companies is also not established. I therefore have reasons to believe that income of the assesse....
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....at the revenue authorities, while recording the reasons, did not mention about any information with regard to any shell company from which the petitioner is alleged to have received so called accommodation entry of Rs. 36,00,000/- nor has provided any details with regard to the accommodation entry. Thus, according to learned Senior Advocate Mr. Tushar Hemani, the reasons are vague and hence, notice based on such reasons, would be without jurisdiction and cannot be permitted to be proceeded further in the eye of law. (3) Learned Senior Advocate Mr. Tushar Hemani further submitted that during the year under consideration, the petitioner has not at all entered into any transaction either with M/s. DLS Export Pvt. Ltd. or any of the so called shell companies, as alleged in the reasons recorded for reopening. Accordingly, the reasons recorded by the revenue authorities are not justified and thus, the reopening of assessment on such reasons does not arise. (4) Learned Senior Advocate Mr. Tushar Hemani further submitted that the notice under Section 148 of the Act can only be issued if the Assessing Officer has reason to believe that income chargeable to tax has escaped ....
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....ing. The names of the various proprietorship concerns and shell companies in the chain formed by the accommodation entry operators are discussed in the reasons recorded for reopening of the case of the assessee and thereby, it cannot be said that the reasons recorded are vague in nature. (3) Learned advocate Mr. Sanghani further submitted that at the stage of issuance of notice, the only question is whether there was a relevant material on which a reasonable belief could have formed a reasonable belief and whether the material would conclusively prove the escapement is not the concern at this stage. (4) Learned advocate Mr. Sanghani further submitted that recording of reasons for reopening proceedings is only the initial stage and no the final verdict on the issue of assessment of income. Learned advocate further submitted that only after verification of details, documents and explanation, a final decision can be taken on exact quantification of the income escaping assessment. In the present case, the reasons clearly mention the modus operandi through which the assessee obtained accommodation entries. The reasons also clearly mention the name of the companies thro....
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.... in fact, is a mandatory requirement of procedural law. (ii) The concept of reasoned judgment has become an indispensable part of basic rule of law and, in fact, is a mandatory requirement of procedural law. (iv) Insistence for recording of reasons is intended to subserve the wider principle that justice must not only be done but it must also seen to have been done. The reasons are requirement for ensuring judicial accountability. (v) Reasons reflect candidness on part of decision maker. The decision making process becomes transparent by virtue of reasons. In absence,, it is impossible to know whether the person deciding the issue is faithful to the doctrine of precedent or to the principles of incrementalism. (vi) Reasons in support of decisions must be cogent, clear and succinct. A pretense of reasons or "rubber-stamp reasons" cannot be equated with a valid decision-making process. (vii) Reasons also facilitate the process of judicial review by superior courts. 7. In light of the above discussion highlighting the indispensability of reasons in the order passed by any authority administrative, quasi judicial or judicial, when i....