9911796707
TMI Blog2012 (5) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Prakash Kumar, Adv. For Respondent: Mr. Deepak Chopra, sr. standing counsel with Mr. Harpreet Singh Ajmani, Adv. R.V. EASWAR, J.: This writ petition under Article 226 has been filed by the petitioner A G Holdings Pvt. Ltd. for issue of a writ of certiorari or any other writ or order quashing the impugned notice issued under Section 148 of the Income Tax Act, 1961 ("Act", for short) on 15.3.2011 for the assessment year 2004-05 and the order dated 8.11.2011 passed by the respondent herein, who is the Assessing Officer, disposing of the objections filed by the petitioner to the initiation of proceedings under Section 147 of the Act. 2. The facts giving rise to the writ petition are as follows :- The petitioner is a company. In respect of the assessment year 2004-05 it filed a return of income on 23.3.2005 declaring loss of Rs.6,097/-, along with the audited accounts. The return of income was accepted under Section 143(1) of the Act. On 15.3.2011, a notice was issued by the respondent under Section 148 of the Act on the ground that income chargeable to tax had escaped assessment for the assessment year 2004-05. In response to the notice, the petitioner filed a return decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 147 of the I.T. Act. Initiation of proceedings u/s 147 on the basis of information received from Directorate of Investigation, Jhandewalan, New Delhi has also been upheld by the Hon'ble Delhi High Court in the case of AGR Investment Ltd. v/s Addl. CIT & Another (2011) 9 taxman.com 62. Therefore this is a fit case for the issuance of notice u/s 148. Submitted for perusal and necessary sanction, as per Section 151 (2), for issuance of notice u/s 148. Sd/- ITO, W-1 (2), New Delhi Addl. CT, R-1, New Delhi" 3. On receipt of the aforesaid letter and the reasons recorded for reopening the assessment, the petitioner wrote a letter to the respondent on 6.9.2011 seeking an adjournment. Thereafter, on 8.11.2011, the petitioner filed its objections to the validity of the initiation of reassessment proceedings, in terms of the judgment of the Supreme Court in the case of GKN Driveshafts (India) Ltd. Vs. ITO (2003) 259 ITR 19. In these objections the petitioner took strong objection to the reasons recorded for reopening reassessment and contended that it had not received any accommodation entries from M/s Quality Security Services (P) Ltd., that the amount of Rs.4,50,000/- received from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat he had independently considered the information received from the investigation wing and had applied his mind before issuing the notice. It was pointed out that the return filed in March, 2005 had not been scrutinized under Section 143(3) but had only been processed under Section 143(1). It was reiterated that the reasons recorded had a live link or nexus to the prima facie belief that income chargeable to tax had escaped assessment. Several authorities were relied upon by the respondent in this letter. 5. The petitioner had moved this Court by filing the present writ petition as soon the letter written by the respondent rejecting the objections was received by it. On 29.11.2011, this Court issued notice to the standing counsel and directed him to file a counter affidavit and directed the petitioner to file a rejoinder-affidavit. It was directed that in the meantime the proceedings of re-assessment may continue but no final assessment order would be passed. On 23.3.2012 when the matter was called again, directions were issued to the ld. standing counsel to produce the record, which was available before the Assessing Officer when he recorded the reasons to believe. On 28.3.2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lars were furnished, they stood belied by the report of the investigation wing on the basis of which the notice of reopening has been issued, that the contents of the report throw considerable doubt on the veracity and truth of the particulars allegedly submitted by the petitioner along with the return, that the name of the petitioner-company has been specifically mentioned in the investigation report with particulars such as the name of the entry provider, account number of the entry provider, the bank from which entry was given, the date on which entry was given, the instrument number by which the entry number was taken and so on. It is submitted that in the light of such specific particulars submitted by the investigation wing on the basis of which the respondent had recorded reasons for reopening the assessment, it was open and legally permissible for the respondent to arrive at a prima facie belief that income chargeable to tax had escaped assessment. 8. On a careful consideration of the matter in the light of the rival contentions it appears to us that the contentions of the ld. standing counsel of the Revenue should prevail. Firstly there is nothing in the affidavit filed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iculars relating to the receipt of the share capital of Rs.4,50,000/- from M/s Quality Security Services (P) Ltd. had been furnished along with the return of income. 9. Be that as it may, even if it is assumed for the sake of argument that those particulars were furnished along with the original return of income filed on 23.3.2005, they cannot be said to be full and true, having regard to the report of the investigation wing on the basis of which the assessment has been reopened. We have already seen that in the report there is specific information that the petitioner company had received an amount of Rs.4,50,000/- from M/s Quality Security Services (P) Ltd. The report also mentions that this is an accommodation entry given by the said company to the petitioner company. The relevant bank account particulars, instrument number, etc. have all been reported. In the light of these particulars it is not possible to accept the claim that the particulars allegedly filed by the petitioner along with the return of income are full and true. The investigation report is a pointer and costs grave doubts on basis of evidence/material on the genuineness of the share contribution. We have no doub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was beyond the period of 6 years from the end of the relevant assessment year and therefore the entire reassessment proceedings are invalid. It is necessary to reproduce Section 149(1): "(1) No notice under section 148 shall be issued for the relevant assessment year, - (a) If four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) If four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year. Explanation. - In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section." The objection of the petitioner, as we understand the same, is not that the notice under Section 148 was issued after the expiry of the period of 6 years from the end of the relevant assessment year. The objection is only that the reasons recorded were provided by the respondent after a period of 6 years from the end of the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment. These reasons had never been communicated to the assessee and it was only for the first time in the course of hearing of the writ petition that they had surfaced. This court held that if the date of filing of the counter affidavit was taken as the date of communication of the reasons, then there was an unreasonable delay of more than 3 years between the date on which the assessee in that case made a request for supply of the reasons and the date on which the counter affidavit was filed. It is noteworthy that the assessee had made a request to the Assessing Officer on 11th May, 2004, whereas the counter affidavit was filed on 5th November, 2007. It was on this basis that the Division Bench of this Court held that the notice under Section 148 could not have been issued beyond a period of 6 years from the end of the assessment year which in that case was 1998-99. The last date for issue of notice was 31.3.2005. It may thus be noted that the judgment of this Court in Haryana Acrylic Manufacturing Co. (supra) turned on the peculiar facts of that case, where two sets of reasons had been recorded, by the Assessing Officer. In the first set of reasons there was no alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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