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TMI Blog2022 (11) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... e of powers to reopen the assessment The ground of receipt of share application money from the four entities alleged to be unexplained by the Assessing Officer to proceed to exercise powers of reassessment, was the very issue considered by the Assessing Officer by calling for the relevant information in that regard in course of regular assessment undertaken for the year under consideration. As the details from record indicated, the assessee had supplied all the relevant material in the nature of accounting entries, resolution passed, names of the allottees and their addresses and PAN numbers, which had satisfied the Assessing Officer at the relevant time about the genuineness of the entities and the transactions. There was not reason to doubt the same at the subsequent juncture by seeking further inquiry on the basis of changed opinion. The exercise undertaken seeking to reopen the assessment and issue of notice under section 148 of the Act and the decision to reject the objections of the assessee, both render unacceptable in law, liable to be set aside as illegal. As a result of above reasons and discussions, the present petition deserves to be allowed. - R/SPECIAL CIVI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for re-opening were supplied to the petitioner, it was stated inter alia that the office of the Assessing Officer had received information from the investigating wing by letter dated 19.3.2018 that the petitioner company had received large funds to the tune of Rs. 2.37 crores from different persons and entities. It was stated that upon analysing the details received, it was found that the petitioner company had received share application money from total eight persons during the financial year 2010-2011 relevant to Assessment Year 2011-2012. It was further stated that out of eight persons, four persons lacked creditworthiness and their whereabouts were not found. 3.3 The details regarding the said four persons/entities were mentioned thus, (i) From Milan Grafitech Pvt. Ltd., the petitioner company had received Rs. 2,62,50,000/- towards share application money and though summons was issued, information was not furnished in that regard by the petitioner, (ii) similarly Rs. 52,50,000/- was the amount of share application money received by the petitioner from one Ardent Ventures Pvt. Ltd.. In this case, it was stated the summons was not served as the house was locked and the neighbo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner made the following submissions, (i) The issue with regard to allotment of share was explained in course of original assessment proceedings. The petitioner had supplied all the details called for by the Assessing Officer, and the assessment order dated 28.2.2014 was passed. The Assessing Officer had been acting on the basis of change of opinion only. (ii) The reopening of the assessment was initiated after the scrutiny assessment section 143(3) of the Act, which was over prior to four years. In another words, the reassessment was proposed beyond four years, which cast burden on the Assessing Officer to prove that there was omission on part of the petitioner to disclose fully and truly all material facts necessary for assessment. (iii) The notice for reassessment was in the nature of fishing inquiry on the basis of the information from the investigation wing. The Assessing Officer himself for the reasons recorded stated that source of amount invested are required to be verified . Therefore, he wanted to make a roving inquiry. (iv) While total amount of Rs. 7 crores received from the companies in lieu of allotment of shares which were later termed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een formation of belief, and that no details were available with regard to the creditworthiness and genuineness of transactions. 4.2 Learned senior advocate for the respondent next submitted that the issue under consideration was never examined by the Assessing Officer in course of the scrutiny assessment. It was harped that the Assessing Officer did not form any opinion on the issue under consideration. He submitted that concept of change of opinion could be applied only when the Assessing Officer had raised the queries and the same was answered by the assessee satisfactorily. It was submitted that on the contrary the assessee had failed to supply the share application forms of all the applicants and the details in the nature of names etc.. were not furnished. It was further submitted that even otherwise as per explanation-1 to the Proviso of section 147 of the Act, mere production of Books of Accounts or other documents from which material evidence could have been discovered by the Assessing Officer, would not necessarily amount to disclosure within the meaning of the Proviso. 4.3 Learned senior advocate for the respondent relied on the decision of the supreme court in Phoo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrants and 5714285 equity shares of Rs. 10/- each to holder of optionally fully convertiblwe deobentures on conversion of such debentures aggregating to 14285285 euqity sahres during the year and their detials enclosed as an Annexure- I. All equity shares allotted during the year are issued at premium of Rs. 25/- per share. 4. Share Premium : The company has received Share Premium of Rs. 25/- per share on allotment of 14285285 equaty shares aggregating to Rs. 357132125/- during the year and there is opening balance of of Rs. 76201320/- in share premium account thus Closing balance of share Premium comes to Rs. 433333445/-. Issue price of share warrants and optionally convertible debentures was determined as per SEBI Guidelines on Preferential basis. We are submitting board resolution, members resolution and certificate regarding pricing for your perusal 5.1.1 In the list of allottees submitted with the said reply, names of the said entities (i) Milan Grafitech Pvt. Ltd., (ii) Ardent Ventures Pvt. Ltd., (iii) Shivance Esatae Pvt. Ltd. and (iv) Infinium Natural Resources Investment Pvt. Ltd. were mentioned alongwith other allottees of share together with details of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment and all the information detailed above, were supplied by the assessee. 5.4 It is trite principle that powers under section 147 read with section 148 of the Act to reopen the concluded assessment cannot be exercised merely because the Assessing Officer develops a change of opinion on his part. When the issue and aspect on the basis of which the reassessment was sought to be acted upon, were considered in course of the regular assessment and the details were supplied by the assessee in that regard, the entire onus would shift on the department to examine the details in light of the income tax law to be applied to ensure that those details were properly offered for tax. When such material was considered and the assessment was concluded resulting into assessment order, reopening was not permissible in law on the basis of similar or same information. There has to be tangible material becoming specifically available with the Assessing Officer to justify exercise of powers to reopen, of which there was a total dearth in the present case. 5.5 In Commissioner of Income Tax vs. Kelvinator of India Ltd. [(2010) 320 ATR 561 O(SC)], the supreme court observed that concept of ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in Kalpataru Sthapatya Pvt. Ltd. vs. Income Tax Officer Ward being Special Civil Appreciation No. 16872 of 2011 decided on 28.09.2012 (2012 AIJEL_HC 228944), in which it was observed thus in para 7, The nature of duty on the part of the assessee to disclose the necessary facts, and the Assessing Officer's enjoinment towards the facts disclosed are thus well settled in law. Applying the primary facts disclosed, the assessing officer may draw inferences. He may deduce certain other facts from the facts disclosed. He may even call for certain additional facts as may be required by him for the purpose of his assessment for the assessee. The task of the assessing officer is to apply those facts in accordance with legal provisions of assessment. The petitioner was not expected to disclose the facts in a manner so as to indicate how those facts will fit in for his claim. It really explain the process of assessment to be undertaken by the Assessing Officer on the basis of facts before him. 5.5.4 Equally the principle applicable is that the purported exercise of powers to reopen the concluded assessment, the Assessing Officer is not permitted to just proceed to re-verify ..... X X X X Extracts X X X X X X X X Extracts X X X X
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