TaxTMI 
TaxTMI 
2026 (9) TMI 129
X X X X Extracts X X X X
X X X X Extracts X X X X
....rther revealed from the Ld. AO's order dated 27.12.2019 that the assessee was given a chance to establish the genuineness of the purchase transaction but the ld. AO was not satisfied with the purchase/sales bills and vouchers of agricultural commodities filed in justification of the said purchases, rather there is a detailed finding of fact on paras 4 to 9 of the Ld. AO's order indicating that the actual movement of goods was never proved and only the fact of transaction through banking channels was used by the assessee to claim that the impugned transactions were genuine. It is also mentioned by the Ld. AO in para 8 of his order that the existence of parties from whom purchases had been made, could also not be established by the assessee. 1.2 The aggrieved assessee approached the Ld. CIT(A) where it was held that the assessee had made purchases from sales to the entities controlled by Shri Ashok Kumar Gupta to the tune of Rs. 5,81,57,000/- (being purchases) and Rs. 5,94,91,966/- (being sales). It is further recorded that the physical movement of purchase and sold goods was not evidenced and the supplier's names and customers' names were also not in evidence. However, the Ld. CI....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., took us through the orders of authorities below and drew our attention to the original assessment completed u/s 143(3) of the Act (dated 29.03.2014) and pointed out that the following cryptic finding, comprising the entire assessment order, was given as under: - "The assessee e-filed the return of its income on 11.10.2013 declaring taxable income at Rs. Nil and the same was processed u/s 143(1). Action u/s 132 of the Income Tax Act was carried out by the department on 19.03.2022 in Prabhatam group of cases including the assessee at their business premises and residential premises of the directors. During the course of search various books of account and documents etc. were found and seized. Notices u/s 143(2) was issued on 21.08.2013. Notice u/s 142(1) and the questionnaire were issued on 16.09.2013 and in response thereto Shri Mukesh Aggarwal FCA and Sh. Sachin Singhal CA, AR(s) of the assessee company attended the proceedings from time to time, filed the required details and the case was discussed with him. The assessee company had no business activity during the year. After discussion with the AR(s), assessment u/s 153C of the Act is completed at Rs.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... case (supra) that in case if bogus transactions are revealed then the assessee cannot be said to have fully and truly disclosed material facts. We are also guided by the fact that the survey action took place on 30.11.2018, which is several years after the original assessment, and the facts being brought to light through such survey action are found to have been used in reopening the assessee's case. For this proposition the case of High Gain Finvest (P) Ltd. reported in 304 ITR 325 (Del) deserves to be mentioned, where in the head notes the following is mentioned as under: - "The Tribunal had erred in arriving at the conclusion that it did. The Supreme Court has said in Raymond Woollen Mills Ltd. v. ITO [1999] 236 ITR 34 that the Court is only required to see whether there is some prima facie material on the basis of which the revenue could reopen the case. The sufficiency or correctness of the material cannot be gone into at this stage. [Para 9] Applying the law laid down by the Supreme Court, what had to be considered was whether there was some material, even though of a prima facie nature, which would constitute 'information' enabling the Assessing Officer to....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... transaction had been generated. If the fact regarding the bogus entry or transaction was found to be correct, it would be difficult to say that income of Rs. 5 lakhs, the subject-matter of the bogus entry, had not escaped assessment. [Para 12] Under the circumstances, there was enough material before the Assessing Officer to initiate proceedings under section 147/148 and that the Tribunal had failed to correctly appreciate the legal position and instead of proceeding on the basis that there must be some prima facie material, the Tribunal had erroneously proceeded on the basis that the material must stand the test of proof in regular proceedings. This is not the law as laid down by the Supreme Court and, therefore, the Tribunal was not justified, in law, in holding that the initiation of proceedings under section 147/148 was bad in law. [Para 13]" It is clear from this case law that information subsequently coming in possession of the AO regarding certain transactions being allegedly bogus, have been correctly utilized for reopening the case. We are also fortified by the case of Sanand Properties (P) Ltd. reported in 488 ITR 337, order dated 12.05.2026 (SC). In this cas....
X X X X Extracts X X X X
X X X X Extracts X X X X
....809 respectively. The SPPL had submitted a copy of the AOP Agreement, alongside other documents with its letter dated 06.11.2009, in the course of scrutiny assessment for the year. On another occasion, the SPPL had submitted a copy of the AOP Agreement attached with its letter dated 01.07.2010, during the course of correspondence with respect to the AY 2008-09. 75. However, it is crucial to note that the materials on record indicate that the SPPL had not shed light on the primary fact that the income which it declared as a share of the 'profit' of the AOP, was a 35% share of the gross sale receipts of the residential units sold by the AOP. When the information gathered in the form of the impounded documents and the SPPL's director's statement came to the Revenue's knowledge, the true purport of the transaction between the SPPL and the AOP was revealed. 76. In light of the position of law as explained in Calcutta Discount (supra) and Phool Chand (supra), the mere disclosure of the existence of the AOP and the quantum of income derived by the SPPL from the AOP at the time of original assessment, does not preclude the Assessing Officer from reopen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns to believe that income chargeable to tax had escaped assessment. He may start reassessment proceedings either because some fresh facts come to light which were not previously disclosed or some information with regard to the facts previously disclosed comes into his possession which tends to expose the untruthfulness of those facts. In such situations, it is not a case of mere change of opinion or the drawing of a different inference from the same facts as were earlier available but acting on fresh information. Applying the principle as laid down by this Court in Phool Chand (supra), when fresh information was acquired in the course of the survey dated 23.12.2010 which prima facie led the Assessing Officer to believe that the true nature of the income was not profit but revenue which had escaped assessment, such reasons cannot be discarded as mere change of opinion. 83. Thus, we find that the notices for reopening of the SPPL's assessment for both, i.e. the AY 2007-08 and the AY 2008-09 respectively were a result of the Revenue acting on fresh information and not merely change of opinion." Considering the detailed discussion on the legal issues it deserves to be h....