TaxTMI 
TaxTMI 
2026 (4) TMI 1191
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....od of 4 years from the end of A.Y. 2013-14, and since there was already an assessment done in the Petitioner's case under Section 143(3), no notice could have been issued unless there was a failure on the part of the Petitioner to disclose fully and truly all material facts necessary for its assessment. This proposition is canvassed on the basis of the 1st proviso to Section 147 as it stood prior to 1st April 2021. 4. The facts of the present case lie in a very narrow compass. For A.Y. 2013-14, the Petitioner filed its Return of Income on 1st October 2013. The Petitioner's Return of Income for A.Y. 2013-14 was originally selected for scrutiny by issuing a Notice under Section 143(2) of the IT Act. During the course of the said original assessment proceedings, the Assessing Officer called upon the Petitioner to file details of "unsecured loans" availed of by the Petitioner during A.Y. 2013-14. In response to the said Notice, vide its letter dated 22nd March 2016, the Petitioner filed the confirmation of the lenders as mentioned in the said letter. Thereafter, the said original assessment was concluded in the case of the Petitioner by passing an Assessment Order dated 23rd March 2....
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....r. According to the Petitioner, the aforesaid order disposing of the objections in fact now seeks to improve upon the reasons recorded for reopening the assessment, and which is impermissible in law. This is apart from the fact that according to the Petitioner, even in the order disposing of the objections, the details of the "unsecured loans" which were classified as accommodation entries/bogus entries were not furnished to the Petitioner. 8. It appears that thereafter, vide order dated 17th February 2022 passed under Section 127 of the IT Act, the case of the Petitioner was transferred to Respondent No.4. Respondent No.4, thereafter, issued a notice dated 10th March 2022 under Section 142(1) calling for various details of unsecured loans availed of by the Petitioner for A.Y. 2013-14. It is in this notice, for the first time, that Respondent No.4 mentioned the name of the lenders along with amounts, which according to the Petitioner are also incorrect. Further, Respondent No.4 gave a new reason for treating the "unsecured loans" as unexplained cash credit under Section 68 of the IT Act, namely, that the lenders at Serial Nos.1 to 5 were based in Kolkata and operated by one Shri....
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....10th December 2020 during which it was found that M/s. Akshar Properties (the Petitioner) had taken unsecured loans from various parties based in Kolkata and Mumbai. This information was flagged in this case in accordance with the risk management strategy formulated by the Board. By virtue of having obtained accommodation entries of unsecured loans of Rs. 5,20,71,836/- the unaccounted income of the Petitioner had been routed under the guise of unsecured loans. In other words, after examining all these facts, the Respondents have independently arrived at the opinion that income of the Petitioner has escaped assessment and therefore reopening of the assessment was found necessary. According to the Revenue, the reopening of the assessment is based on a proper application of mind and independent satisfaction. The reopening proceedings are not based on a change of opinion or reappraisal of the same material. In these circumstances, it is the case of the Revenue that no case is made out for entertaining the above Writ Petition challenging the Notice issued under Section 148, and the same be dismissed with costs. 11. We have heard the learned counsel for the parties and also perused th....
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....(1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year." 12. The reasons for reopening the assessment of the Petitioner for A.Y. 2013-14 have been set out in the notice dated 28th June 2021 issued under Section 143(2) read with Section 147 of the IT Act (Exhibit 'E' at page 29 of the Paper Book). The reasons for reopening as set out in the said notice are as under:- "1. Reasons for reopening:- The DDIT (Inv.), 4(1), Thane has informed that a survey u/s 133A was conducted in the case of Akshar Group on 10.12.2020. During the survey, it has been identified that the assessee has taken unsecured loans of Rs. 5,20,71,836/- from shell companies providing accommodation entries. On verification of ITR for A.Y. 2013-14, it is seen that there is substantial increase of unsecured loan amounting to Rs. 16,40,62,152/- during the year. During the survey proceedings, it has been identified that assessee has taken bogus unsecured loans of Rs. 5,20,71,836/-. Thus, the assessee has brought its unaccounted money in the books of account through accommodation entry of unsecured loans. Hence....
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....ing Officer, in the original scrutiny proceedings, passed an Assessment Order under Section 143(3) and did not make any addition to the income of the Petitioner. In other words, the Assessing Officer treated the unsecured loans as genuine and not as bogus unsecured loans as is now sought to be alleged in the reasons recorded for reopening the assessment. 15. It is true that further reasons have been given not only in the order disposing of the objections of the Petitioner but also in the notice issued under Section 142(1) dated 10th March 2022, and which notice was issued by Respondent No.4 after the transfer of proceedings under Section 147 of the IT Act. However, reasons for reopening cannot be improved upon as the matter progresses. This is wholly impermissible in law. If one needs any precedent to support the aforesaid proposition, it would be apposite to refer to the decision of this Court in the case of Hindustan Lever Ltd. V/S R. B. Wadkar [(2004) 137 Taxman 479 (Bombay): (2004) 268 ITR 332 (Bombay)]. In this decision, this Court has in no uncertain term held that the reasons recorded by the Assessing Officer are required to be read as they were recorded by the Assessing ....
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.... disclose his mind. The reasons are the manifestation of the mind of the Assessing Officer. The reasons recorded should be self-explanatory and should not keep the assessee guessing for the reasons. Reasons provide the link between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Officer, in the event of challenge to the reasons, must be able to justify the same based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. The reasons recorded by the Assessing Officer cannot be supplemented by filing an affidavit or making an oral submission, otherwise, the reasons which were lacking in the material particulars would get supplemented, by the time the matter reaches the court on the strength of the affidavit or oral submissions advanced." 16. Once this is the law laid down by this Court, we have to examine the reasons recorded by the Assessing Officer ....