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TMI Blog2018 (2) TMI 1404X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not have led to the formation of the belief that the income of the assessee-respondent had escaped assessment because of his failure or omission to disclose fully and truly all material facts. This Court finds that the respondent No.1 has applied his mind to the record, heard and considered the facts presented in defence of the petitioner/assessee - petition dismissed. - W. P. 605 of 2017 - - - Dated:- 14-2-2018 - The Hon ble Mr. Justice Subrata Talukdar For the Petitioner : Mr. Ravi Raghavan Ms. Satabdi Chatterjee Mr. Tanmoy Chakravarty For the Respondent : Mr. R. N. Das Ms. Aishwarya Rajyashree Mr. Somnath Ganguli Ms. Manasi Mukherjee ORDER Subrata Talukdar, J. Under challenge in this writ petition is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the petitioner/assessee company is that the order does not provide reasons enough to support the formation of belief by the respondent No.1 that the utilisation/availing of the credit duty by the petitioner/assessee company falls under any of the conditions stipulated by Section 14AA(1)(a) and (b) thereof. It is submitted that the respondent No.1 acted in irregular exercise of jurisdiction conferred on him under Section 14AA(1) (supra) by mechanically referring the assessment to a special audit under the respondent No.2/the Commissionerate of Audit-I without applying his mind to the detailed written submissions filed by the petitioner before the respondent No.1. This Court is taken by Ld. Counsel for the petitioner to the order date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded to the Commissioner for fresh consideration. The Commissioner will be at liberty to afford reasonable opportunity of hearing to the petitioners prior to passing of the impugned order. Needless to say, he will pass a reasoned order. It is expected that the Commissioner will complete the entire exercise within a period of four weeks from the date of communication of this order to him. WP No. 2269 of 2005 stands disposed of. No order as to costs. Pursuant to the solemn order dated 6th December, 2016 (supra), the petitioner filed a detailed written submission which, however, has unfortunately not been considered by the respondent No.1 in the said order. Mr. Raghavan points out that the obligation to furnish reasons by the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 14AA. Thereafter, Mr. Ganguli points out, following the solemn order dated 6th December, 2016 of the Hon ble Court, the respondent No.1 took cognizance of the whole facts both presented by the petitioner/assessee company and, noticed by the previous special audit noticed by the order of 15th December, 2005. The respondent No.1 did not mince his findings while opining: a) that there was huge over utilisation of credit by the noticee (petitioner/assessee company); and b) over utilisation of credit is more evident from the later years of assessment compare to the earlier years. Arguing that no further reasons than what has been indicated by the respondent No.1 are necessary in the facts of this case, Mr. Ganguli submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee but not the sufficiency of reasons for the belief. The expression reason to believe does not mean a purely subjective satisfaction on the part of the Income-tax Officer. The reason must be held in good faith. It cannot be merely a pretence. It is open to the court to examine whether the reasons for the formation of the belief have a rational connection with or a relevant bearing on the formation of the belief and are not extraneous or irrelevant for the purpose of the section. To this limited extent, the action of the Income-tax Officer in starting proceedings in respect of income escaping assessment is open to challenge in a court of law. Next, in 2007 (291) ITR 500 (SC), in the matter of Assistant Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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