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TMI Blog2021 (3) TMI 526X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to note that, the explanation 1 to Section 147 of the Act clearly says that, the production before the assessing officer of account books or other evidence could with due diligence have been discovered by the assessing officer will not amount to disclosure. In view of the aforesaid discussions and considering the facts and circumstances of the case, we hold that, in absence of primary facts with regard to the sources of investment, the assessing officer has rightly recorded that the assessee has not furnished the details with regard to the sources of investment and therefore, there is a cause or justification for him to believe that, the unexplained investment chargeable to tax has escaped assessment. Thus, in the overall view of the matter, it cannot be said that, there was no tangible material before the assessing officer to re-open the assessment and that he has proceeded mechanically based only on the information received from the Investigation DDIT (Inv.) I, Ahmedabad and therefore, the impugned notice is without jurisdiction and contrary to Section 147 of the Act. - Decided in favour of assessee. - R/Special Civil Application No. 16129 of 2018 - - - Dated:- 1-3-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment is made out of tax paid money. The summons could not be served in the known address in spite of several attempts. Therefore the source of money invested in GNRL is not proved and it is not ascertainable whether ti is out of tax paid money. Thereafter, as per directions of Pr. DIT (Investigation), the DDIT has shared the above information with a request to take necessary action as per relevant provisions of Income Tax Act, 1961. 3. The above information and data available on record are carefully considered. The refund income of the assessee company is ₹ 23,936/-. During the year, investment in utilized equities has increased by ₹ 57,12,700/- the compared to the previous year. As per the information received from the investigation wing, it is seen that assessee has introduced share application money in GNRL to the tune of ₹ 52,50,000/-. The details of investment are not available on records. 4. A non-statutory letter was issued to -assessee on 21.03.2018 by ITO, Ward 1(1) (3), Ahmedabad to submit the details of transaction made with Gujarat Natural Resources Ltd. during the F.Y. 2010-11 along with supporting documents to prove the same. It was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the decision to reopen the assessment, the writ applicant is here before this Court with the present writ application. 4. The case of the revenue is that, during the course of investigation in the case of Gujarat Natural Resources Ltd. (subsequently known as Lesha Energy Resources Ltd.), it came to the notice that, the Gujarat Natural Resources Ltd., had received ₹ 52,50,000/- towards share application money from the assessee during F.Y. 2010-11. The assessee was thereafter requested to submit all the details of investments along with sources of investment. The assessee failed to provide the details of source of the investment and such investment of ₹ 52,50,000/- remains unexplained and needs to be treated as undisclosed income and and accordingly, the revenue is of the view that, the income of ₹ 52,50,000/- chargeable to tax has escaped assessment in the hands of the assessee. 5. The assessee had submitted its objections against re-opening of the assessment, wherein, it was submitted that, the assessee has disclosed all the income liable to be offered and to be brought to tax in its return of income and further submitted that, the transactions in questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and and accordingly, it is evident that the respondent has initiated the proceedings for further verification of the concerned transaction, which cannot permissible in law. (v) It was pointed out that, the law is settled that the assessing officer does not get jurisdiction to reopen an assessment unless he records his over independent satisfaction to the effect that, income chargeable to tax has actually escaped assessment. In the present case, no satisfaction has been recorded by the respondent as the Assessing officer has merely relied upon the information received from the office of the DDIT (Inv.), Unit I, Ahmedabad for the purpose of reopening of the assessment. 8. In view of the aforesaid contentions, the learned counsel appearing for the writ applicant submits that, the impugned notice is bad, illegal, contrary to law and is required to be quashed and set aside, 9. On the other hand, Mr. Varun Patel, the learned Standing Counsel appearing for the Revenue submitted that, having regard to the reasons recorded for re-opening of the assessment, the Assessing Officer has clearly recorded that there is a failure on the part of the assessee to disclose its income fully and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary for his assessment for that year . It postulates a duty on every assessee to disclose fully and truly all material facts necessary for his assessment. What facts are material, and necessary for assessment will differ from case to case. In every assessment proceeding, the assessing authority will, for the purpose of computing or determining the proper tax due from an assessee, require to know all the facts which help him in coming to the correct conclusion. From the primary facts in his Possession, whether on disclosure by the assessee, or discovered by him on the basis of the facts disclosed, or otherwise-the assessing authority has to draw inferences as regards certain other facts; and ultimately, from the primary facts and the further facts inferred from them, the authority has to draw the proper legal inferences, and ascertain on a correct interpretation of the taxing enactment, the proper tax leviable. Thus, when a question arises whether certain income received by an assessee is capital receipt, or revenue receipt, the assessing authority has to find out what primary facts have been proved, what other facts can be inferred from them, and taking all these together, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffer as regards what inferences should be drawn from given facts, it will be meaningless to demand that the assessee must disclose what inferences-whether of facts or law-he would draw from the primary facts. (11) If from primary facts more inferences than one could be drawn, it would not be possible to say that the assessee should have drawn any particular inference and communicated it to the assessing authority. How could an assessee be charged with failure to communicate an inference, which he might or might not have drawn ? 14. A careful analysis of the above judgment, it is settled that it is duty of the assessee to disclose fully and truly all material facts which it term as primary facts and non disclosure of other facts may be termed as secondary fact is not necessary. In light of the settled principles as propounded by the Constitutional Bench, we shall now deal with the facts of the present case. 15. We take the notice of the fact that, after receiving the impugned notice dated 28.03.2018, the assessee company vide letter dated 09.04.2018, requested to treat the original return of income as its return of income in response to the notice and also filed a copy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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