TaxTMI 
TaxTMI 
2025 (3) TMI 2222
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....e and not intentional hence it may be condoned. 3. The Ld. D.R did not raise objection in condoning the delay. On perusal of the condonation petition the delay is hereby condoned. 4. Brief facts of the case of the assessee are that the assessee M/s Prerna Agency pvt. Ltd. derived income from share trading, filed its return of income for AY 2013-14, and assessment u/s 143(3) of the Act was completed on 29.02.2016. Subsequently on an information received from investigation wing that M/s Prerna Agency Pvt. Ltd. was found one of the beneficiaries of the accommodation entry conducted through shell companies and received an amount aggregating to Rs. 90,00,000/- during the FY 201213 from one of the shell companies M/s Rashidhan Traders Pvt. Ltd. On receipt of information, details available on the record has been examined that reveals escapement of income, accordingly, after recording proper reason and after obtaining approval from competent authority, proceedings u/s 147 was initiated and notice u/s 148 of the Act dated 31.03.2021 was issued. In response to the notice the assessee has uploaded its return of income declaring net total income of Rs. 33,91,930/-. Notice u/s 143(2) was ....
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....isions: i) Sheo Nath Singh vs. AACIT (1971) 82 ITR 147 (SC) ii) ITO vs. Lakhmani Mewal Das [1976] 103 ITR 437 (SC) iii) New Delhi Television Ltd. vs. DCIT [2020] 424 ITR 607 (SC) iv) CIT vs. Kamdhenu Steels & Alloys Ltd. [2014]361 ITR 220(Delhi) 7. Contrary to that the Ld. D.R supports the impugned order. 8. Upon hearing the submission of the counsel of the respective parties, we have perused the facts of the case and order passed by the lower authorities. The first contention of the ld. Counsel of the assessee with regard to reopening of assessment. According to him, reasons as supplied are vague and there is no connection or link between the reasons or escapement of income. It is not in dispute that the reopening of assessment was based on the allegation that the assessee had received a loan of Rs. 90,00,000/- from Rashidhan traders Pvt. Ltd. The AO has suspected the loan transaction to be an accommodation entry. The reasons recorded has been supplied to the assessee and the assessee objected the same by filing petition, relevant portion as recorded in the reasons are as follows: "It was noted that Mr. Tapan Ghorai (PAN: AMZPG 36....
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....bank, the statement of which is hereby annexed for the period FY 201213 and FY 2013-14. 3. With respect to point no. 4 and 5, we would humbly like to submit that the Directors of the said company were professionally acquainted and apart from the said loan taken, we had no other relationships with the said company. 4. With respect to point no. 6, we would humbly like to submit that since we were no directly associated with the said company other than the loan taken, we are unaware about the financial activities of the said company. 5. With respect to point no. 7, we would humbly like to submit that the assessee has taken a loan for FY 2012-13, in the ordinary course of business needs, which was duly repaid over the years along with interest, the details of which are annexed herewith for your kind perusal and records. With respect to your honours contentions regarding the information from the Investigation Wing and that the assessee being beneficiary of the credit entries, we would humbly like to submit that the assessee cannot be treated as the beneficiary in the instant case as the entire sum has been repaid in due course along with applicable ma....
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....any corelation between these entities and the assessee. There is no evidence to establish any connection between these individuals and Rashidhan Traders pvt. Ltd. There was no recording of what was the failure of the assessee when it is a fact that in the present case reopening was beyond four years and the assessment was completed u/s 143(3) of the Act. 13. Now look at the cited judgment of the assessee and find that in a case of Sheo Nath Singh (supra), Supreme Court has held that: "............... There can be no manner of doubt that the words ' reasons to believe' suggests that the belief must be that of an honest and reasonable person based upon reasonable grounds that the Income tax Officer may act on direct or in the circumstantial evidence but not on mere suspicion, gossip or remour. The Income Tax Officer would be acting without jurisdiction if the reason for his belief that the conditions are satisfied does not exist or is not material or relevant to the belief required by the section. The court can always examine this aspect though the declaration or sufficiency of reasons for the belief cannot be investigated by the Court." 20. The Apex Court in the....
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.... 268 ITR 332 wherein this Court has held as under:- The reasons recorded by the Assessing Officer nowhere state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasons are required to be read as they were recorded by the Assessing Officer. No substitution or declaration is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing Officer to reach the conclusions as to whether there was failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the concerned assessment year. It is for the record in black and white. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. The reasons are the manifestation of the mind of the Assessing Officer The reasons recorded should be self-exp....