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TMI Blog2017 (2) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... above, when it has been found that the reasons / grounds on which the assessment is sought to be reopened were already gone into in detail by the learned Assessing Officer while framing the scrutiny assessment and after raising the specific queries with respect to increase in the share capital, with respect to share application money and the income of the assessee from the trading in fabrics, only thereafter when the learned Assessing Officer framed the assessment, the impugned reassessment proceeding is not permissible. - SPECIAL CIVIL APPLICATION NO. 15748 of 2016 - - - Dated:- 9-1-2017 - M.R. SHAH AND MR. B.N. KARIA, JJ FOR THE PETITIONER : MR TEJ SHAH, ADVOCATE FOR THE RESPONDENT : MR NITIN K MEHTA, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] RULE. Shri Nitin Mehta, learned Advocate waives service of notice of Rule on behalf of the respondent. In the facts and circumstances of the case and with the consent of learned Advocates appearing for respective parties, present petition is taken up for final hearing today. [2.0] By way of this petition under Article 226 of the Constitution of India, the petitioner assessee has p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company vide resolution dated 09.03.2011, allotted 16,50,00 equity shares of ₹ 10 each for cash at a premium of ₹ 90 per equity share aggregating to ₹ 16.50 crore to six persons as detailed below: Sr. No. Name of allottee Address No. of shares Amount received 1 Chirayush Agro Marketing Pvt Ltd Shop No.5, Rizvi Nagar Coop Housing Society, SV Road, Santacruz (W), Mumbai-54 5,00,000 5,00,00,000 2 Pawantar Agro Agencies Pvt Ltd Shop No.5, Rizvi Nagar Coop Housing Society, SV Road, Santacruz (W), Mumbai-54 3,00,000 3,00,00,000 3 Param Commodities Pvt Ltd Shop No.5, Rizvi Nagar Coop Housing Society, SV Road, Santacruz (W), Mumbai-54 3,00,000 3,00,00,000 4 Parmarth Agro Marketing Pvt Ltd Shop No.5, Rizvi Nagar Coop Housing Society, SV Road, Santacruz (W), Mumbai-54 3,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chanantala road, Howrah Burnpur Power Pvt Ltd Drishti Suppliers Pvt Ltd Quest Financial Services Pvt Ltd 5,50,00,000 Wonderland Paper Suppliers Pvt Ltd 27, Netaji Subhash Road, Bally, Howrah Fastner Machinery Pvt Ltd 3,00,00,000 Cyrus Infocomm Pvt Ltd No.17, Ground Floor, Prabhat Center, Belapur, Navi Mumbai CottTex Fabrics Pvt Ltd 50,00,000 Anurodh Infrastructure Pvt Ltd 319,21, Jessore Road, Kolkata Pears Mercantiles Pvt Ltd 5,00,00,000 Fairdeal Vincom Pvt Ltd Total 30,15,00,000 Further, it was noticed from the website of MCA that Quest Financial Pvt Ltd (CIN U 65910AP1990PTC011212) which has paid Rs.seven crore as share application, has paid up share capital of only ₹ 18,000 and has its registered office at Room No.24, Unity House, Abids, Hydrabad. Its last AGM, date of balance sheet and name of directors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar under consideration, the business of the assessee was trading in fabrics and it was a typographical error in the P L Accounts and by mistake it was stated to be paper purchase . Therefore, it was requested to drop the reassessment proceedings. [3.3] That by communication dated 25.07.2016, the learned Assessing Officer has disposed of the said objections and has not agreed with the objections raised by the assessee. Hence, the petitioner assessee has preferred the present Special Civil Application challenging the impugned reassessment proceedings. [4.0] Shri Tej Shah, learned Advocate appearing on behalf of the petitioner assessee has vehemently submitted that the impugned reassessment proceedings is bad in law. [4.1] It is submitted that the impugned reassessment proceedings are merely on change of opinion by the subsequent Assessing Officer. It is submitted that from the reasons recorded it can be said that the learned Assessing Officer has sought to reopen the assessment for AY 2011-12 on three grounds / reasons i.e. (1) increase in share capital; (2) share application money and (3) with respect to the expenditure incurred / income from sales being sales of shirt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ening is within the period of four years and therefore, when the learned Assessing Officer has formed a reasonable belief considering the material on record that the income chargeable to tax has escaped assessment, the learned Assessing Officer is justified in reopening the assessment in AY 2011-12. Making above submissions and relying upon the decision of the Division Bench of this Court in the case of Praful Chunilal Patel vs M.J. Makwana, Assistant CIT reported in (1999)236 ITR 832 , it is requested to dismiss the present petition. [6.0] Heard learned Advocates appearing on behalf of the respective parties at length. At the outset it is required to be noted that in the present case the assessment for AY 2011-12 is sought to be reopened for the reasons reproduced hereinabove. It is true that the assessment is sought to be reopened within a period of four years. However, it is a specific case on behalf of the assessee that while framing the scrutiny assessment under Section 143(3) of the IT Act, the grounds / reasons on which the assessment is sought to be reopened were already gone into in detail by the learned Assessing Officer, specific queries were raised by the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment under Section 143(3) of the IT Act is not permissible. [6.1] Now, so far as the reliance placed upon the decision of the Division Bench of this Court in the case of Praful Chunilal Patel (Supra) is concerned, it is required to be noted that as such the said decision has been considered by this Court in subsequent decisions and it is observed and held that the said decision cannot be said to be a decision on an absolute proposition of law that in all the cases where the reopening is within the period of four years, the same is permissible. Even otherwise on facts the said decision shall not be applicable to the facts of the case on hand. In the case before the Division Bench of this Court, it was found that the Assessing Officer subsequently found a glaring mistake for which the assessment was sought to be reopened. The Division Bench observed that though all the necessary materials were furnished by the assessee, when the Assessing Officer has subsequently found a mistake, the reopening is permissible within a period of four years. In the present case, as observed hereinabove, it is not the case on behalf of the assessee that merely because all the material was produ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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