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TMI Blog2017 (8) TMI 961X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment proceedings and which material was provided by the investigation wing unearthed during the course of investigation in case of Shri Chandrakant Patel. - Decided against the assessee. - Special Civil Application No. 3279 of 2016 - - - Dated:- 22-8-2017 - MR. AKIL KURESHI AND MR. BIREN VAISHNAV, JJ. For The Petitioner : Mr JP Shah, Senior CounseL with Mr Manish J Shah, Advocate For The Respondent : Mr Nitin K Mehta, Advocate ORAL JUDGMENT ( PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. The petitioner has challenged a notice dated 27.3.2015 issued by the respondent Assessing Officer seeking to reopen the petitioner's assessment for the assessment year 2008-2009. To issue such notice, the Assessing Officer had recorded the following reasons : In this case assessment for 200809 was finalized u/s.143(3) of the I.T. Act of ₹ 2,49,57,447/as against returned income ₹ 2,45,62,500/. Total purchase sales shown by the assessee amounting to ₹ 31,29,45,78,609,60/and ₹ 31,34,42,28,043/respectively. The Dy. Director of Income tax (Inv.), Unit2( 3), Mumbai;400 038 vide his letter No. DDIT(Inv.)/U2( 3)/ IntimationAO/ 20l415 dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring such scrutiny assessment had examined all aspects. He thereafter, framed the scrutiny assessment making no additions or disallowances. The impugned notice has been issued beyond a period of four years from the end of the relevant assessment year. There was no failure on part of the assessee to disclose truly and fully all material facts. The impugned notice is therefore, bad in law. 4. Learned advocate Shri Nitin Mehta for the department opposed the petition contending that the Assessing Officer has recorded detailed reasons. At this stage, it is not necessary to examine the contentious issues threadbare since the assessee would have full opportunity to participate in the assessment proceedings. What is necessary to ascertain is whether the Assessing Officer had tangible materials at his command to form a belief that the income chargeable to tax had escaped assessment. He further pointed out that the material at the command of the Assessing Officer now, was not part of the assessment proceedings and could be unearthed only during investigation in case of entities dealing with the petitioner. This was therefore, a clear case of absence of true and full disclosures by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 291 ITR 500(SC), the Supreme Court observed that the expression reason to believe would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, he can be said to have reason to believe that income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. What is required is reason to believe but not the established fact of escapement of income. At the stage of issuance of notice, the only question is whether there was relevant material on which a reasonable person could have formed the requisite belief. Whether material would conclusively prove escapement of income was not the concern at that stage. This is so because the formation of the belief is within the realm of the subjective satisfaction of the Assessing Officer. At this stage therefore, what we have on record and emerging from the reasons recorded is that there is strong prima facie material to suggest that the purchases shown to have been made by the assessee from M/s. Shiyon Enterprises were bogus. The investigation wing of the departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions have been duly fulfilled, sufficiency of the reasons is not to be gone into by this Court. The information furnished at the time of original assessment, when by subsequent information received from the DCIT, Kolkata, itself found to be controverted, the objection to the notice of reassessment under section 147 of the Act must fail. At the costs of ingemination, it needs to be mentioned that at the time of scrutiny assessment, a specific query was raised with regard to unsecured loans and advances received from the said company namely, Basant Marketing Pvt. Ltd. based at Kolkata. These being the transactions through the cheques and drafts, there would arise no question of the Assessing Officer not accepting such version of the assessee and not treating them as genuine loans and advances. Furnishing the details of names, addresses, PANs, etc. also would lose its relevance if subsequently furnished information, which has been made basis for issuance of notice impugned, concludes that Basant Marketing Pvt. Ltd. is merely a dummy company of one Shri Arun Dalmia, which provided the accommodation entries to various beneficiaries. This Court has examined the belief of the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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