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2022 (9) TMI 982 - HC - Income TaxReopening of assessment u/s 147 - unexplained and undisclosed fund receipts - Issue of notice where income has escaped assessment - Applicability of provisions u/s 148A - HELD THAT - It is clear that that for the purpose of Section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means any information flagged in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time. In the facts of the case, the information is available with AO as per related information details on record containing the Investigation Report in case of one Shiv Shakti Trading Company wherein the DDIT, (Investigation), Unit-3(3), Kolkata has given details with regard to the accommodation entry given by the said Shiv Shakti Trading Company, who is stated to have received unexplained and undisclosed fund for more than Rs.37 crores for the assessment year 2015-16, which in turn has been given to Talland Data Soft Private Limited and other entities and the assessee has also received the fund from the said Talland Data Soft Private Limited as can be seen from the Entry Nos.21 and 22 of the list of the beneficiaries of the account of Talland Data Soft Private Limited available at the Page No.139 of the petition. It is apparent that the information relevant for the assessment year in accordance with the Risk Management Strategy formulated by the Board from time to time is available and therefore we are of the opinion that Assessing Officer has rightly issued the notice by rejecting the objections of the assessee by referring to such information and considering the same in detail, the impugned order passed under Section 148A(d) of the Act is passed giving cogent reasons for rejecting the objections of the assessee in accordance with the provisions of the Act. Assessing Officer has rightly treated the case to be a fit case for exercising powers of reopening of assessment. The provisions under Section 148A of the Act are duly noted and necessary conditions are satisfied which has resulted into impugned notice under Section 148 of the Act. Assessee appeal dismissed.
Issues:
1. Validity of the Impugned Order and Notice under the Income Tax Act, 1961 for A.Y. 2015-16. 2. Consideration of objections raised by the petitioner regarding the assessment and reopening of the case. 3. Compliance with the provisions of Section 148 and 148A of the Income Tax Act, 1961. 4. Justification for the issuance of the notice for reopening the assessment. Analysis: Issue 1: Validity of the Impugned Order and Notice The petitioner sought relief to quash the Impugned Order and Notice dated 26.07.2022 issued under Section 148 of the Income Tax Act, 1961 for A.Y. 2015-16. The petitioner contended that the respondent authority did not consider the objections raised, depriving the petitioner of an opportunity to address the undisclosed details. The petitioner argued that the loan received was not bogus, and the reasons provided for reopening the assessment were insufficient. The petitioner relied on previous court decisions to support their case. However, the court found that the Assessing Officer had valid reasons based on information flagged in the case of the assessee, justifying the issuance of the notice and the Impugned Order. Issue 2: Consideration of Objections The petitioner raised objections regarding the assessment and reopening of the case, emphasizing discrepancies in the amount received and challenging the validity of the transaction. The petitioner argued that the respondent authority failed to provide necessary details and did not consider the objections effectively. The court acknowledged the petitioner's submissions but ultimately upheld the Assessing Officer's decision based on available information and risk management strategies. Issue 3: Compliance with Section 148 and 148A The court referred to the provisions of Section 148, which were substituted by the Finance Act, 2021, effective from 1.4.2021. The court highlighted the requirement for prior approval and valid reasons for issuing a notice under Section 148. It emphasized the importance of information flagged in the case of the assessee in accordance with the risk management strategy formulated by the Board. The court concluded that the Assessing Officer had followed the necessary procedures and met the conditions for reopening the assessment. Issue 4: Justification for Reopening Assessment Based on the information available with the Assessing Officer, including an Investigation Report on a related entity, the court found that the case warranted reopening of the assessment. The court noted that the Assessing Officer had considered relevant information and provided cogent reasons for rejecting the objections raised by the petitioner. Consequently, the court upheld the decision to issue the notice under Section 148 of the Income Tax Act, 1961. In conclusion, the court dismissed the petition, ruling that the Assessing Officer had valid grounds for reopening the assessment, and the objections raised by the petitioner were not sufficient to challenge the Impugned Order and Notice.
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