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TMI Blog2017 (1) TMI 1041X X X X Extracts X X X X X X X X Extracts X X X X ..... ter, the Assessing Officer has issued impugned notice under Section 148 of the Act to reopen the assessment for AY 201011 alleging inter alia that the income chargeable to tax for AY 201011 has escaped assessment within the meaning of Section 147 of the Act. That at the request of the assessee, the Assessing Officer has supplied the reasons recorded to reopen the assessment. That on receipt of the reasons recorded to reopen the assessment, the assessee submitted objection vide his communication dated 14.09.2016. It was submitted by the assessee that reassessment has been made on the basis of conjectures and surmises. It was also further submitted by the assessee that the assessee had no connection or relation with Shri Pravinkumar Jain and therefore, their submission cannot be relied upon. It was also contended on behalf of the assessee that the reasons for reassessment outside information and therefore, it cannot be said to be opinion of the Assessing Officer for the escapement of the income. That thereafter, the Assessing Officer has passed an order overreaching the objection. Hence, petitionerassessee has preferred present Special Civil Application under Article 226 of the Const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted by Shri Vora, learned advocate for the petitioner that there is no tangible material with the Assessing Officer to prima facie come to the conclusion that there is an escapement of income chargeable to tax. It is submitted that in the present case the Assessing Officer while framing the original assessment, accepted the return of income filed by the assessee in toto and did not doubt any transaction. It is submitted that therefore, the impugned notice under Section 148 of the Act to reopen the assessment for AY 201011 cannot be sustained and same deserves to be quashed and set aside. 4.6. Shri Vora, learned advocate for the petitioner has heavily relied upon the decision of the Delhi High Court in the case of Commissioner of Income Tax, Central 1 vs. Indo Arab Air Services reported in (2015) 64 Taxmann. Com 257(Delhi). Making above submissions and relying upon the decision, it is requested to allow the present petition. 5.0. Present petition is vehemently opposed by Ms. Mauna Bhatt, learned advocate for the revenue. 5.1. It is submitted that as such at the time of issuance of notice, learned counsel for the petitioner pressed only one ground i.e. with respect to non co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upta vs. Income Tax Officer reported in 366 ITR 186 (Guj) has requested to dismiss the present petition. 5.4. Ms. Bhatt, learned advocate for the revenue has also relied upon the decision of the Division Bench of this Court in the case of Dishman Pharmaceuticals and Chemicals Limited vs. Deputy Commissioner of Income Tax (OSD) (No.1) reported in 346 ITR 228 on how reasons to be recorded. She has also produced before the Court the xerox copy of the relevant file and information received by the Assessing Officer from Shri Pravinkumar Jain on the basis of which the Assessing Officer has issued the impugned notice by forming an opinion that income chargeable to tax as escaped assessment. Making above submissions, it is requested to dismiss the present petition. 6.0. Heard the learned advocates for the respective parties at length. At the outset, it is required to be noted that in the present petition the impugned notice under Section 148 of the Income Tax Act has been issued within the period of four years. Therefore, considering Section 147 of the Income Tax Act that on the basis of prima facie material available on record if the Assessing Officer has reason to believe that amount c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment is under Section 143(1) of the Act. The petitioner assessee is alleged to be the beneficiary of the accommodation entry given by Shri Pravinkumar Jain group concerns, therefore, the same are required to be verified in detail. Under the circumstances and in the facts and circumstances of the case, it cannot be said that there is non application of mind on the part of the assessee while issuing impugned notice under Section 148 of the Act. 7.1. In the case of Rajesh Jhaveri Stock Brokers Pvt Ltd (supra), the Hon'ble Supreme Court has observed that in case where assessment were finalized under Section 143(1) of the Income Tax Act, failure to take steps under Section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings when intimation under Section 143(1) has been issued. In the said decision in para 16 to 18, the Hon'ble Supreme Court has further observed and held as under: 16. Section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word reason in the phrase reason to believe would mean c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s precedent to be satisfied before the Assessing Officer could have jurisdiction to issue notice under section 148 read with section 147(a) But under the substituted section 147 existence of only the first condition suffices. In other words if the Assessing Officer for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. It is however to be noted that both the conditions must be fulfilled if the case falls within the ambit of the proviso to section 147. The case at hand is covered by the main provision and not the proviso. 18. So long as the ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under section 147 and failure to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings even when intimation under section 143(1) had been issued. 7.2. At this stage, decision of the Division Bench of this Court in the case of Yogendrakumar Gupta (supra) is required to be referred to and consider. In the case before the Division Bench on the basis of information from CBI that loans accepted as genuine in original asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... believe but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belief is within the realm of subjective satisfaction of the Assessing Officer. 7.2.2. In the case of Raymond Woolen Mills Ltd. v. Incometax Officer and others, reported in 236 ITR 34, the Court held that in determining whether commencement of reassessment proceedings was valid, it has only to be seen whether there was prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at such stage. 7.3. Considering the aforesaid decisions of the Hon'ble Apex Court as well as decision of the Division Bench of this Court and applying the same to the facts of the case on hand, it cannot be said that there was no material before the Assessing Officer to reopen the assessment. In the present case also the reassessment proceedings have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ometax evasion. The said entities included Basant Marketing Pvt. Ltd. also. From the analysis of details furnished and the beneficiaries reflected, which are spread across the country, the CIT, Koklata, suspected the accommodation entry related to the assessment year 200607 as well, this information has been provided to Director General of Incometax, Kolkata, who in turn, communicated to the Chief Commissioner of Incometax, Ahmedabad. Further revelation of investigation as could be noticed from the record examined (file) deserves no reflection in this petition. Insistence on the part of the petitioner to provide any further material forming the part of investigation carried out against Dalmias also needs to meet with negation, as the law requires supply of information on which Assessing Officer recorded her satisfaction, without necessitating supply of any specific documents. The proceedings initiated under section 147 of the Act would not be rendered void on nonsupply of such document for which confidentiality is claimed at this stage, following the decision of the Delhi High Court in case of Acorus Unitech Wireless (P.) Ltd. (supra). Assumption of jurisdiction on the part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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