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TMI Blog2023 (8) TMI 522X X X X Extracts X X X X X X X X Extracts X X X X ..... 012-13, it becomes clear that the objections have been decided without due application of mind. As held by the Hon ble Supreme Court in GKN Driveshafts (India) Ltd [ 2002 (11) TMI 7 - SUPREME COURT] the objections as raised have to be disposed of by a speaking order that could indicate due application of mind. As stated above, there are no reasons whatsoever assigned for turning down the objections and the facts stated in the notice dated 24/3/2020 are reiterated. It is seen that alongwith the objections dated 13/9/2021 copy of the account statement for the Financial Year 2011-12 was also attached. Same has not even been referred to while disposing of the objections on 17/9/2021. In M/s. Shodiman Investments Pvt. Ltd [ 2018 (4) TMI 1287 - BOMBAY HIGH COURT] it is held that application of mind has to be indicated while forming reasons to believe that income chargeable to tax has escaped assessment. It is also to be noted that by issuing subsequent notice, the ITO has sought further information from the petitioner which information does not form the basis of the reasons assigned for re-opening the proceedings. The notice dated 24/3/2020 issued u/s 148 seeking reopening of the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm for the said Assessment Year within a period of thirty days from service of the notice. The reasons for re-opening of the proceedings under Section 147 of the Act of 1961 as indicated were that from the information received and enquiry as made, it was clear that the assessee - petitioner had made investment in the purchase of shares and had earned profit from the sale of shares. The petitioner however had not offered for taxation the amount of income earned on the sale of shares of Rs. 9,90,314/-. Thus, the petitioner had failed to disclose his true and correct total income while filing the return of income for the said year. As period of more than four years had lapsed from the end of the Assessment Year, sanction to issue notice under Section 148 of the Act of 1961 had been obtained from the Principal Commissioner of Income Tax under Section 151 of the Act of 1961. On 23/2/2021, notice under Section 142(1) of the Act of 1961 came to be issued calling upon the petitioner to furnish the details of the bank account and documents as referred to in the Annexure therein. The bank account statement of the petitioner's account maintained with the HDFC Bank for the period from 1/4/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en debited in the petitioner's profit and loss account. Same was also included in the petitioner's return by showing it as a loss. The ITO on the incorrect fact that the said amount was towards profit from the sale of shares proceeded to seek re-opening of the proceedings. Referring to the decision in Tata Sons Limited Vs. Dy. Commissioner of Income Tax and Others [Writ Petition No. 2545/2010 decided on 3/2/2022] at the Principal Seat it was submitted that since the re-opening of the assessment was based on incorrect facts, the notice for re-opening was unsustainable. Reliance in that regard was also placed on the decisions in Punia Capital Pvt. Ltd. Vs. The Assistant Commissioner of Income Tax & Ors. [Writ Petition No. 1091/2022 decided on 15/2/2023] and Ankita A. Choksey Vs. Income Tax Officer - 19 (1)(1) & Ors. [(2019) 411 ITR 207], both delivered at the Principal Seat. b] the objection raised to the notice was decided in a manner contrary to the law as laid down in GKN Driveshafts (India) Ltd. Vs. Income Tax Officer & Ors. [(2003) 1 SCC 72]. By the said decision, the Hon'ble Supreme Court has laid down that when objections are raised to the issuance of notice under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jain Vs. Principal Commissioner of Income-tax [(2022) 449 ITR 256]; ii) Commissioner of Income Tax & Ors. Vs. Chhabil Dass Agarwal [(2014) 1 SCC 603]; iii) Gian Castings (P.) Ltd. Vs. Central Board of Direct Taxes [(2022) 140 taxmann.com 319]; and iv) The State of Maharashtra & Ors. Vs. Greatship (India) Limited [Civil Appeal No. 4956/2022 decided on 20/9/2022] it was submitted that the Writ Petition did not deserve to be entertained. Without prejudice to the aforesaid, it was submitted that the re-opening of the proceedings was legal and valid since the Assessing Officer had strong reasons to believe that the amount of Rs. 9,90,314/- had escaped assessment. The objections to the re-opening had been decided after due application of mind and no fault with that adjudication could be found. Since there was no jurisdictional error, interference with the re-opening of the assessment was not warranted on the grounds urged by the petitioner. The validity of the assessment order could be determined on these very grounds in the appeal preferred by the petitioner. The Writ Petition was therefore liable to be dismissed. 7] In reply to the objection raised to the tenability of the Writ Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in that regard is without jurisdiction. If a jurisdictional issue is raised and the controversy is purely a legal one that does not involve any disputed question of fact, then the Writ Petition does not deserve to be thrown out at the threshold. The decision in M/s Magadh Sugar & Energy Ltd. (supra) has laid down the said principles in its decision dated 24/9/2021. In Chhabil Das Agarwal (supra) challenge to the order of assessment was entertained by the High Court. In that context the Hon'ble Supreme Court held that when an equally efficacious alternate remedy was available to the petitioner, the High Court ought not to have entertained the Writ Petition. In the present case, challenge is to the notice issued under Section 148 of the Act of 1961 against which no statutory remedy for challenging the same is available. 9] We may indicate that the challenge raised in the Writ Petition is to the notice issued under Section 148 of the Act of 1961 dated 24/3/2020 as well as the consequential order of assessment that has been completed vide order dated 29/9/2021. The learned Counsel for the petitioner has restricted his challenge only to the legality of the said notice dated 24/3/202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment order could not have been entertained in exercise of writ jurisdiction. Ratio of this decision therefore would not apply to the facts of the present case. 11] Coming to the challenge as raised to the notice issued under Section 148 of the Act of 1961, it is seen that pursuant to the notice dated 24/3/2020, reasons for re-opening the case under Section 147 of the Act of 1961 were furnished by the Assessing Officer. According to the Assessing Officer, the petitioner had made investment in the purchase of shares and had earned profit from the sale of shares. An amount of Rs. 9,90,314/- was stated to be credited to the bank account of the petitioner but he had not offered the said amount during the Financial Year 2012-13 pertaining to the Assessment Year 2013-14 for taxation. In this regard, when the objection raised by the petitioner is considered, it is seen that the said amount is towards loss suffered by the petitioner in commodity trading pertaining to the Financial Year 2011-12, Assessment Year 2012-13. The said amount was stated to be paid to M/s AA+ Commodities on 31/3/2012. It thus becomes clear that the said amount relates to the Assessment Year 2012-13 and not the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in GKN Driveshafts (India) Ltd. (supra), the objections as raised have to be disposed of by a speaking order that could indicate due application of mind. As stated above, there are no reasons whatsoever assigned for turning down the objections and the facts stated in the notice dated 24/3/2020 are reiterated. It is seen that alongwith the objections dated 13/9/2021 copy of the account statement for the Financial Year 2011-12 was also attached. Same has not even been referred to while disposing of the objections on 17/9/2021. In M/s. Shodiman Investments Pvt. Ltd. (supra), it is held that application of mind has to be indicated while forming reasons to believe that income chargeable to tax has escaped assessment. 14] It is also to be noted that by issuing subsequent notice, the ITO has sought further information from the petitioner which information does not form the basis of the reasons assigned for re-opening the proceedings. This is clear from the notice dated 24/8/2021. The Division Bench in Nivi Trading Limited (supra) has held that if further details are sought or some verification is proposed by the officer, same cannot be a substitute for the reasons that have led the As ..... X X X X Extracts X X X X X X X X Extracts X X X X
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