TaxTMI 
TaxTMI 
2025 (9) TMI 1783
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....t 'the Act' ) dated 20.4.2021 and the order under Section 148A (d) of the Act dated 20.8.2022 and the notice under Section 148 of the Act dated 23.8.2022 issued pursuant to the order passed by the Hon'ble Supreme Court in case of Union of India v. Ashish Agarwal, reported in [2022] 286 Taxman 183 (SC) . 5. The brief facts of the case are as under: 5.1 The petitioner, which is a partnership firm, filed its return of income for the Assessment Year 2013-14 on 30.9.2013 declaring total income at Rs. 1,53, 68,182/- which was processed under Section 143 (1) of the Act. 5.2 The case of the petitioner was selected for scrutiny assessment and Assessment Order under 143(3) of the Act was passed on Section 17.12.2016 accepting the return income. 5.3 The petitioner, thereafter, received a notice under Section 148 of the Act dated 20.4.2021 for reopening the assessment for the A.Y. 2013-14. The said notice was issued under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act (for short 'TOLA') on the ground that there was extension of the time limit by the said Act, however, the Hon'ble Apex Court in case of Ashish Agrawal (supra) ....
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.... 10% was also deducted by the petitioner on the amount of commission paid to Dishman Pharmaceuticals and Chemicals Limited. It was, therefore, submitted that there was no transaction of loans and advances between the petitioner and any of the Companies of Dishman Group, which is alleged to have been involved in providing accommodation entry. 7.3 Learned advocate Mr. Soparkar also submitted that the name of the petitioner is not appearing in any of the information and documents which were found during the course of search in the Dishman Group. It was, therefore, submitted that there is no information with the Assessing Officer to suggest that the income chargeable to tax has escaped the assessment for the year under consideration so as to assume the jurisdiction to reopen the assessment of the petitioner for A.Y. 2013-14. In support of his submission reliance was placed on the decision of this Court in case of Filco Trade Centre (P.) Ltd. v. Deputy Commissioner of Income-Tax, reported in [2024] 169 Taxmann. Com 401 (Gujarat) 8. Per contra, learned Senior Standing Counsel Ms. Maithili Mehta for the respondent submitted that the petitioner has paid commission to the M/s. Dishman....
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....sactions with Jignesh Shah, Sanjay Tibrewal, Dahyabhai Thakkar, Umang Thakkar and Pratik Shah etc. The concerns operated by these persons, with whom transactions were made by Dishman group companies, were non-existent and dubious. Digital Data found and seized from Dishman House; More particularly the desktop of Chirag Thakkar and data maintained in pen drive at Dishman House by Valjibhai Parmar contained evidences that unaccounted cash was exchanged against the transactions of bogus loans and advances. As admitted by Sh. Bharat Padia, Executive Director of DCAL, the group had received bogus loans and advances of Rs. 671,92,06,680/- and advanced non-genuine loans and advances of Rs. 795,00,36,904/-between FY 2009-10 to FY 2019-20. On perusal of the information received it is found that Dishman Group is regularly involved in the practice of carrying out accommodation entries and Rajic Chimanlal Shah, CA is the main person who is facilitating accommodation entries in the books of Dishman Group in liaison with various accommodation entry providers. Siddhi Corporation is one of the beneficiaries who had made transaction in the form of bogus purchase/expense during F.Y....
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....ion. This gives a substantial basis for the formation of a reason to believe to initiate assessment u/s 147 of the Act." 11. Except the above observation in the reasons recorded, there is no mention of the petitioner in any of the documents and the same is not controverted by learned Senior Standing Counsel Ms. Maithili Mehta that the name of the petitioner does not appear in any of the seized material or any transaction relating to or pertaining to the petitioner is reflected in any of the seized material. Even if we take it that the name of "Bluetron" is shown by mistake instead of name of the petitioner in the reasons recorded because the amount of Rs. 59,26,227/- is correctly mentioned by the Assessing officer, then also the objection raised by the petitioner that the petitioner has not paid any loans or advances to M/s. Dishman Pharmaceuticals and Chemicals Ltd., but on the contrary, the petitioner has made payment of Rs. 59,26,227/- after deducting TDS @10% towards commission for the orders received from PGVCL and DGVCL respectively in the year under consideration. The petitioner also paid service tax on the amount of commission under the provisions of the Finance Act, 199....
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....puty Commissioner of Income-Tax (Supra) has held as under: "9.4 We are, therefore, in a helpless situation as we cannot refer to any other information which is made available to us while examining the legality and validity of the impugned notices under Section 148 of the Act other than the reasons recorded as held by this Court in case of Kantibhai Dharamshibhai Narola (supra), wherein, this Court has laid down the following aspects with regard to the law of reopening of assessment under Section 147 of the Act which is well settled legal propositions wherein, it is held as under:- 32. The law as regards the reopening of the assessment under Section 147 of the Act, 1961 is well-settled. (i) The Court should be guided by the reasons recorded for the reassessment and not by the reasons or explanation given by the Assessing Officer at a later stage in respect of the notice of reassessment. To put it in other words, having regard to the entire scheme and the purpose of the Act, the validity of the assumption of jurisdiction under Section 147 can be tested only by reference to the reasons recorded under Section 148(2) of the Act and the Assessing Officer is not....
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....ssing Officer to show that there was any failure to disclose fully or truly all the material facts necessary for the assessment. (ix) In order to assume jurisdiction under Section 147 where assessment has been made under sub-section (3) of section 143, two conditions are required to be satisfied; (i) The Assessing Officer must have reason to believe that the income chargeable to tax has escaped assessment; (ii) Such escapement occurred by reason of failure on the part of the assessee either (a) to make a return of income under section 139 or in response to the notice issued under sub-section (1) of Section 142 or Section 148 or (b) to disclose fully and truly all the material facts necessary for his assessment for that purpose. (x) The Assessing Officer, being a quasi judicial authority is expected to arrive at a subjective satisfaction independently on an objective criteria. (xi) While the report of the Investigation Wing might constitute the material, on the basis of which, the Assessing Officer forms the reasons to believe, the process of arriving at such satisfaction should not be a mere repetition of the report of the investigation.....
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....e been assessed at a low rate. However, nothing would preclude the Income Tax Officer from conducting any formal inquiry under Section 133(6) of the Act before proceeding for reassessment under Section 147 of the Act. (xviii) The "full and true" disclosure of the material facts would not include that material, which is to be used for testing the veracity of the particulars mentioned in the return. All such facts would be expected to be elicited by the Assessing Officer during the course of the assessment. The disclosure required only reference to those material facts, which if not disclosed, would not allow the Assessing Officer to make the necessary inquiries. (xix) The word "information" in Section 147 means "instruction or knowledge derived from the external source concerning the facts or particulars or as to the law relating to a matter bearing on the assessment. An information anonymous is information from unknown authorship but nonetheless in a given case, it may constitute information and not less an information though anonymous. This is now a recognized and accepted source for detection of large scale tax evasion. The non-disclosure of the source of the in....
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....urce, there cannot be any reassessment. It is also established principle of law that if a particular authority has been designated to record his/her satisfaction on any particular issue, then it is that authority alone who should apply his/her independent mind to record his/her satisfaction and further mandatory condition is that the satisfaction recorded should be 'independent' and not 'borrowed' or 'dictated' satisfaction. Law in this regard is now well-settled. 36. The Supreme Court in the case of Anirudh Sinhji Karan Sinhji Jadeja vs. State of Gujarat reported in [1995] 5 SCC 302 as well has held that if a statutory authority has been vested with the jurisdiction, it has to exercise it according to its own discretion. If discretion is exercised under the direction or in compliance with some higher authorities instruction, then it will be a case of failure to exercise discretion altogether. The cases reopened on the basis of information received from the other departments are also governed by the aforesaid principle of making an independent inquiry and recording of satisfaction by the Assessing Officer issuing notice under Section 148 of the Act.....