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TMI Blog2021 (8) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... llenged the action of the respondent in reopening of the assessment for the A.Y. 2012-13 under section 147 of the Income Tax Act, 1961 vide the notice dated 27.03.2019 issued under section 148 of the said Act thereof, as also the order dated 13.12.2019 passed by the respondent rejecting the objections filed by the petitioner against the reopening of the assessment. 3. The conspectus of the case as emerging from the record is that the petitioner had filed its return of income along with the audit report for the A.Y. 2012-13 on 31.03.2013. The assessment order in that regard was passed by the then Assessing Officer after making thorough scrutiny under section 143(3) of the said Act on 16.03.2015. The petitioner thereafter was served with the notice under section 133(6) of the said Act on 21.03.2019 (Annexure E), whereby the petitioner was called upon to furnish the information as mentioned therein in respect of the A.Y. 2012-13, however, it appears that the assessee did not respond to the said notice. The petitioner thereafter was served with the impugned notice dated 27.03.2019 (Annexure F) under section 148 of the said Act, whereby the petitioner was called upon to file the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said Act. According to him, the assessment was sought to be reopened on the basis of false allegations and incorrect facts, inasmuch as the petitioner had borrowed Rs. 1,05,00,000/- from Arihant Enterprise Ltd., which was controlled by Dhiren Shah and family, and at the relevant time, Shri Jignesh Shah had no interest in the said company as Shri Jignesh Shah took over the affairs of the said company after Shri Dhiren Shah resigned in 2015, and subsequent to the taking over by Shri Jignesh Shah, the petitioner had no transaction with Arihant Enterprise Ltd. He further submitted that the assessment could not have been reopened on the basis of the borrowed belief received by the respondent from the investigating wing units, without verifying the material. It is submitted by Mr. D.R. Patel that it is the duty of the assessee to disclose fully and truly all material facts which are primary facts, and nondisclosure of other facts which are secondary facts, could not be said to be failure on the part of the petitioner in not disclosing true and full facts. In this regard, he has relied upon the decision of Supreme Court in the case of Calcutta Discount Company Ltd. versus Income- Tax Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n nature and reliable in character, which prima facie exposed the falsity of the statement made by the assessee at the time of original assessment, had rightly assumed the jurisdiction under section 147 as he had reason to believe that the petitioner had not disclosed fully and truly all material facts at the time of original assessment. According to him, such reopening could not be said to be change of opinion by the subsequent Assessing Officer. Mr. Bhatt tried to distinguish the decisions relied upon by Mr. D.R. Patel, and submitted that the "accommodation entries" being very difficult to cull out from the books of accounts maintained in ordinary course of business of the assessee, the Assessing Officer is empowered to reopen the assessment on the receipt of the tangible and credible material falsifying the material placed by the assessee at the time of original assessment. 7. As stated hereinabove, the often posed question as to whether the Assessing Officer could have assumed the jurisdiction under Section 147/148 of the said Act on the basis of the information / material received from the investigating wings unearthing the bogus transactions or accommodation entries involvin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... four years from the end of relevant assessment year, the Assessing Officer must have reason to believe that the income chargeable to tax had escaped assessment for the assessment year under consideration, and that such escapement had occurred by reason of failure on the part of the assessee either to make a return under section 139 of the said Act or in response to a notice issued under subsection (1) of Section 142 or section 148, or to disclose fully and truly all material facts necessary for his assessment for that assessment year. 9. So far as facts of the present case are concerned, the assessment of the petitioner - assessee is sought to be reopened for the reasons recorded in the letter dated 12.11.2019 (Annexure - G). The first and formal submission made by the learned advocate Mr. D.R. Patel for the petitioner is that the Assessing Officer having framed the original assessment after thorough scrutiny under section 143(3) on 16.03.2015 and the petitioner having produced all the relevant documents i.e. the primary facts pertaining to the relevant assessment year at the time of filing original return, it could not be said that the petitioner had not made full and true disclo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made full and true disclosure of facts in the RoI. As settled by the Supreme Court in catena of decisions, the expression "reason to believe" cannot be read to mean that Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. The term "reason to believe" would mean cause or justification. This is so because the formation of believe by the Assessing Officer is within the realm of subjective satisfaction. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said that he has reason to believe that an income has escaped assessment. Beneficial reference of the judgments in the case of Assistant Commissioner of Income Tax versus Rajesh Jhaveri Stock Brokers Pvt. Ltd. reported in (2007) 291 ITR 500 (SC), in case of Income- Tax Officer, Calcutta versus M/s. Selected Dalurband Coal Co. Pvt. Ltd. reported in 1996 (217) ITR 597 (SC); in case of Raymond Woollen Mills Ltd. vs Income-Tax Officer And Ors. reported in (1999) 236 ITR 34 (SC), be made. 11. This is one of such cases, in which the Assessing Officer had received the reports from the investigating teams that the petitioner was the benef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T.O at the time of original assessment proceedings. The two situations are distinct and different. Thus, where the transaction itself on the basis of subsequent information is found to be a bogus transaction, the mere disclosure of that transaction at the time of original assessment proceedings cannot be said to be a disclosure of the "true" and "full" facts in the case and the I.-T.O would have the jurisdiction to reopen the concluded assessment in such a, case. It is correct that the assessing authority could have deferred the completion of the original assessment proceedings for further enquiry and investigation into the genuineness to the loan transaction but in our opinion his failure to do so and complete the original assessment proceedings would not take away his jurisdiction to act under S. 147 of the Act, on receipt of the information subsequently. The subsequent information on the basis of which the I.-T.O acquired reasons to believe that income chargeable to tax had escaped assessment on account of the omission of the assessee to make a full and true disclosure of the primary facts was relevant, reliable and specific. It was not at all vague or nonspecific." "26. .... ..... X X X X Extracts X X X X X X X X Extracts X X X X
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