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TMI Blog2023 (7) TMI 867X X X X Extracts X X X X X X X X Extracts X X X X ..... AO did attempt to tie in the said provision with his assertion that the respondent/assessee had failed to disclose, truly and fully, all material facts concerning the AY in issue. A mistake, which can be corrected u/s 292B of the Act, should be such that if excised it does not change the tenor and scope of the documents/proceedings referred to therein i.e., the return of income, assessment, notice, summons or other proceedings, taken, furnished or made or issued or taken or purported to have been furnished or made or issued or taken against the assessee under the provisions of the Act. The reasons disclosed and placed on record do not allude to the material that was available to the AO which persuaded him to form a belief that income in the concerned AY, pertaining to SGCPL, which was otherwise chargeable to tax, had escaped assessment. The reasons did not advert to the material that was available to him and which persuaded him to form a belief that income chargeable to tax had escaped assessment. That this was a jurisdictional prerequisite is a well-established principle, as reason to suspect is qualitatively different from reason to believe. The statutory [prerequisite] conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding that the reasons recorded by the Assessing Officer for triggering proceedings under Section 147/148 of the Income Tax Act, 1961 were vague, bereft of reasons and did not establish a live link between the material available with him and formation of [the] belief that income chargeable to tax had escaped assessment? 4. Notably, in this very order, the counsel for the parties conveyed to the court that since facts obtaining in the instant appeal were pari materia with those which obtained in the connected appeals, the decision taken in this appeal would apply to the connected appeals as well. Therefore, we intend to advert to, the facts and circumstances arising in the instant appeal. Broad Facts: 5. The record of the instant appeal, broadly, reveals the following: 5.1 SGCPL had filed its Return Of Income [in short, ROI ] on 12.04.2011 concerning the aforementioned AY. In the ROI, SGCPL had declared its total income as Rs. 1,04,98,240/-. 5.2 On 04.06.2011, the said ROI was processed under Section 143(1) of the Income Tax Act, 1961 [in short, the Act ]. It appears on 19.03.2012, the appellant/revenue conducted a search and seizure action under Section 132 of the Act against what i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 142(1) of the Act was accompanied by a questionnaire with twenty-three (23) queries. The information and documents sought had to be provided, in person, by 26.02.2014, at the time set out in the notice. 6. Furthermore, a notice under Section 133(6) of the Act was also issued to TTPL, POCL and another entity, going by the name Pankaj Infotech Pvt. Ltd [hereafter referred to as, PIPL ]. Apparently, the said notices were neither returned nor was any reply received. 6.1 The record shows that via reply dated 18.03.2014, SGPCL responded to the questionnaire served upon it wherein, inter alia, it was indicated that TTPL and POCL had furnished loans to SGCPL. 6.2 The aforementioned notice issued under Section 142(1) of the Act was followed by yet another notice dated 20.03.2014, whereby the SGCPL was called upon to produce information and documents by 26.03.2014, once again, at the designated hour. 6.3 The respondent/assessee filed replies to the aforesaid notices. SGCPL filed a reply dated 26.03.2014, in which, broadly, the stand taken was that the loans reflected a long-standing credit, received from KJS Group, which, on a specific request of the lender i.e., KJS Ahluwalia, was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of law, based on material already on record and that no new facts were required to be investigated. 11. In reaching this conclusion, the Tribunal, inter alia, adverted to the decision of the Supreme Court in National Thermal Power Co. Ltd. v CIT 229 ITR 383 and the judgement of the Gujrat High Court in the matter of P.V. Doshi v CIT 113 ITR 22 (Guj) 12. Furthermore, insofar as this additional ground was concerned, the Tribunal reached the following conclusion, while perusing the reasons recorded by the AO to trigger assessment/reassessment proceedings against SGCPL: (i) That the AO had failed to apply his mind was evident from the fact that he had referred to a provision i.e., sub-clause (i) of clause (c) appended to Explanation 2 of 147(b) of the Act, when it had been removed from the statute more than two decades ago. (ii) Although the reasons recorded showed that the material on record conveyed that a search had been conducted on KJS Group and the survey action pertained to the sister concern of the respondent/assessee, no reasons were recorded which would point to the document that persuaded the AO to conclude that SGPCL s income, which was otherwise chargeable to tax, had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corded could be raised at any stage, which included the appellate stage, as it brought to the fore the absence of jurisdictional prerequisites for invoking Section 148/147 of the Act based on the record available with the Tribunal. [ See CIT v Expeditors International India (P) Ltd. (2012) 205 taxman 107 (Delhi) (Mag.), Inventors Industrial Corpn. Ltd. v CIT (1992) 194 ITR 548 (Bombay), Abdul Majid v Commissioner of Income Tax, Lucknow (2006) 153 taxman 131 (Allahabad), CIT v Trilokchand Swaroop Chand (1998) 98 taxman 82 (MP)]. 17.3 Section 292B would have no application, given the fact that the mistake made by the AO, while referring to a deleted provision, was inextricably linked to the observation made by him that SGCPL had failed to disclose truly and fully, all material facts. Analysis and Reasons: 18. Having heard the counsels for the parties and perused the record, it is quite evident that the foundation of the impugned order is its decision concerning what the Tribunal considered the absence of jurisdictional prerequisites for triggering assessment/reassessment proceeding against SGCPL. [ See Jute Corporation Of India v CIT 187 ITR 688., CIT v Expeditors International India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid provision with his assertion that the respondent/assessee had failed to disclose, truly and fully, all material facts concerning the AY in issue. 23.1 A mistake, which can be corrected under Section 292B of the Act, should be such that if excised it does not change the tenor and scope of the documents/proceedings referred to therein i.e., the return of income, assessment, notice, summons or other proceedings, taken, furnished or made or issued or taken or purported to have been furnished or made or issued or taken against the assessee under the provisions of the Act. 24. The reasons for reopening, and, thus, concluding that there had been a failure on STCPL s part to disclose, were the following: (i) Search and seizure operation 19.03.2012 conducted vis- -vis KJS group. (ii) survey action conducted on SGCPL s sister concern, SIPL. (iii) documents seized during the aforementioned survey action. (iv) information received that SGCPL had raised a loan from TTPL and POCL, which were dubious entities. 24.1 It is these observations, in the reasons recorded by the AO, which, apparently, persuaded him to issue a notice under Section 148 of the Act to SGCPL. Thus, for the sake of conveni ..... X X X X Extracts X X X X X X X X Extracts X X X X
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