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TMI Blog2017 (9) TMI 1589X X X X Extracts X X X X X X X X Extracts X X X X ..... alse. The five companies do exist. They did subscribe to the share capital of the Petitioner. They did pay the money to the Petitioner. All the five companies are assessed to tax. These are the primary facts. The reasons to believe rely upon a letter received from the Investigation Wing and Mr. Chaudhary submits that this letter was in fact an investigation report. The report does not form part of the reasons and neither was it annexed to the reasons. Interestingly, even the counter affidavit is silent as to the material which has not been disclosed by the Petitioner. The counter affidavit merely states that the information was specific and the information would be provided to the Petitioner during the assessment proceedings. Thus, if the Revenue had any basis to show that the primary facts were incorrect, the same ought to have been set out in the reasons to believe. That has not been done in the present case. Thus, the Petitioner cannot be said to have failed to disclose fully and truly all the material facts. This being a jurisdictional issue, the assumption of jurisdiction under Sections 147 and 148 of the Act was erroneous. - Decided in favour of assessee. - W.P.(C) 1357/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AAECS3360A WBG/W/110/3 ITO WD 10(3) 6,000 600,000.00 TOTAL 20,000 2,00,00,000.00 3. On 19th November, 2010, the Petitioner further submitted the confirmation from the said five companies along with their ITRs and PAN Cards. On 26th November, 2010, the Petitioner further submitted the Auditor s Reports, Balance Sheets, Particulars of P L accounts, and Schedules of Balance Sheet and P L Account of the above named five companies. An assessment order under Section 143 (3) of the Act was passed by the AO on 20th December, 2010, after the details regarding the five companies and their confirmations were submitted. The assessment order, however, did not contain any discussion in respect of the share application money. It thus appeared that the AO accepted the information furnished by the Petitioner and raised no further doubt or queries in respect to the same. 4. On 20th March, 2015, a notice was issued under Section 148 of the Act on the ground that income had escaped assessment. Reasons to believe were extracted and furnished on 16th December, 2015, which state as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Echolac Vinimay PL. 6, Hans Pukur Lane, Kolkata (PAN AAACE5809N) 100+400 4000 20,00,000 Sugam Commondeal PL. 2, Digamber Jain Temple Road, Kolkata (PAN AAECS3360A) 100+400 6000 30,00,000 Elegance Trade Holdings PL. 6, Hans Pukur Lane, Kolkata (PAN AAACE7011L) 100+400 4000 20,00,000 1,00,00,000 Since in the light of new facts, it has been established that these companies, from whom share premium has been received by M/s Sabh Infrastructure Limited are not genuine, I am of the view that the Assessee has not disclosed fully and truly all material facts in its income tax return resulting in under assessment of income of ₹ 1,00,00,000/on account of share premium. The assessment u/s 143 in this case was completed on 20/12/2010 at assessed income of ₹ 2,15,45,860/- Hence, I have reasons to believe that an amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, there exists a higher onus upon the Revenue to discharge its burden of proving that there was non-disclosure by the Petitioner. 7. Mr. Kapoor specifically relies on various judgments including CIT v. Kelvinator of India Ltd. (2010) 187 Taxman 312 (hereafter Kelvinator ) and the judgments thereafter of this Court. He submits that on a perusal of the reasons to believe, it can be seen that the AO has merely relied upon information received from an investigation carried out by DDIT (Inv.) Unit III, Kolkata, in which a statement of Mr. Navneet Kumar Singhania was recorded on 18th March, 2014 under Section 131 of the Act. The AO came to the conclusion that the said five companies were paper companies without examining if the said statement was enquired into. He submits that the AO did not himself verify any of the facts contained in the said statement. He further submits that the reasons per se do not refer to any investigation report of the DDIT (Inv) and even if such report existed, a copy thereof, was not furnished to the Petitioner. Mr. Kapoor also took exception to the manner of communicating the reasons. The AO has written a letter extracting the reasons for expi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by this Court in Oracle India Pvt. Ltd. v. ACIT 2017 SCC OnLine Del 9360, Unitech Limited v. DCIT 2017 SCC OnLine Del 9408, BDR Builders and Developers Pvt. Ltd. v. ACIT 2017 SCC OnLine Del 9425 and in judgment dated 30th August, 2017 in W.P.(C) 5807/2014 (Swarovski India Pvt. Ltd. v. Deputy Commissioner of Income Tax). 11. Thus, it is also now well settled that the reasons to believe have to be self explanatory. The reasons cannot be thereafter supported by any extraneous material. The order disposing of the objections cannot act as a substitute for the reasons to believe and neither can any counter affidavit filed before this court in writ proceedings. 12. In the present case, the reasons to believe contained the names of the very same five companies which were initially disclosed by the Petitioner during the assessment proceedings. The number of shares subscribed to by the said companies is the same and the amount received has been disclosed by the Assessee. There is no new material which has been found or mentioned in the reasons to believe which were not contained in the information provided by the Assessee prior to the conclusion of assessment under Section 143 (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, the Court has to examine the reasons to believe to see if it satisfies the rigour of the provisions. The observations of this court in Multiplex (supra) are relevant in this respect and are set out below: 24. In our view, the question whether the Assessee could have been stated to disclosed fully and truly all material facts have to be examined in the light of facts of each case and also the reasons that led the AO to believe that income of an Assessee has escaped assessment. In a case where the primary facts have been truly disclosed and the issue is only with respect to the inference drawn, the AO would not have the jurisdiction to reopen assessment. But in cases where the primary facts as asserted by the Assessee for framing of assessment are subsequently discovered as false, the reopening of assessment may be justified . 17. In the facts of this case, the primary facts have not been shown to be false. The five companies do exist. They did subscribe to the share capital of the Petitioner. They did pay the money to the Petitioner. All the five companies are assessed to tax. These are the primary facts. The reasons to believe rely upon a letter received from t ..... 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