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TMI Blog2023 (10) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... vant to the assessment year 2011-12. Admittedly, there was no company by name M/s Nivyah Infrastructure Telecom Services Ltd in existence during that year for consideration. This clearly shows that the Assessing Officer acted on the satisfaction of the Deputy Collector of Income Tax (Investigation) that income chargeable to tax has escaped assessment. It must also be borne in mind that the impugned notice is issued beyond the period of four years from the end of the relevant assessment year in a case, where the assessment was completed u/s 143 (3) - Therefore, the Assessing Officer would have to examine the information received in the context of the facts on record. If such an exercise were to be done, it is likely that the Assessing Officer would have come to the conclusion that there was no failure to disclose truly and fully all material facts necessary for assessment. Thus, hit by the proviso to section 147 - AO has not applied his mind to the information received in the context of the facts on record. Appeal of the assessee is allowed. - SHRI RAJESH KUMAR, ACCOUNTANT MEMBER SHRI SONJOY SARMA, JUDICIAL MEMBER For the Appellant : Shri Sunil Surana, A.R Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice u/s 148 of the Act, dated 28.03.2018 on the basis of and information in his possession that the assessee had booked bogus loss of Rs. 41,12,845/- by trading in penny stock namely in the shares of M/s Nivyah Infrastructure Telecom Services Ltd. for which due approval was obtained from the higher authorities as proved in law after recording detailed reason for the same. The assessee filed the return in response to the notice u/s 148 of the act without raising any objections to the issue of notice u/s 148 or against the reasons recorded by the AO. I also find that the assessee did not cooperate during the assessment proceedings before the AO by not responding the statutory notices and show cause notice and no information or details were submitted by the assessee before the AO. In this view, if the matter the case laws cited by the assessee do not help its case. In the circumstances, I see no reason to interfere with the well-reasoned order of the AO. Hence, the grounds of appeal No. 1 and 2 are dismissed. 5. The Ld. A.R vehemently submitted before us that the appellate order passed by the Ld. CIT(A) is wrong as it has wrongly upheld the reopening of assessment on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounds of appeal raised by the assessee may be dismissed. 7. We have heard rival submissions and perused the material on record. We have also perused the reasons recorded by the AO u/s 148 of the Act and found that the AO has reopened the assessment on the basis of information received from DDIT(Inv), Unit-8(3), Mumbai stating that the assessee has traded in penny stock /shares of M/s Nivyah Infrastructure and Telecom Services Pvt. Ltd. which is BSE as per scrip code : 517534 to the tune of Rs. 32,58,390/- to bring its unaccounted income in the books through, circuitous route during AY 2011-12. It was also stated that as per the information found that all the transactions were arranged through brokers within the close group having sole purpose of providing bogus profits or loss. We note that the AO reopened the assessment by stating that on the basis of information stated above he has reasons to believe that the income chargeable to tax has escaped assessment. For the sake of ready reference, the reasons recorded are extracted below: Reasons recorded for reopening u/s 148 of the Income Tax Act, 1961. The assessee company filed the return of income for the A Y. 2011-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s extracted below: 3. For the Assessment Year 2011-12 the petitioner filed its return of income on 29.9.2012 declaring an income of Rs. 12.52 lacs (rounded off). The return was taken up for scrutiny assessment by the Assessing Officer. On 1.11.2013 the Assessing Officer passed an order under section 143 (3) of the Act enhancing the petitioner's income to Rs. 20.14 lacs. 4. Thereafter on 29.3.2018, the Assessing Officer issued the impugned notice seeking to reopen assessment for A.Y. 2011-12. The reasons in support of the impugned notice as communicated to the petitioner reads thus:- Reasons for reopening u/s 148 for A.Y. 2011-12 is provided as under : 1. The information has been received from DDIT (Inv) Unit 8 (3) Scindia House, Mumbai- 38 vide their letter dated 23-3-2018 which is received in this office on 28-03-2018. 2. The DDIT (Inv) Mumbai has received information that M/s Nivyah Infrastructure Telecom Services Ltd is a penny stock listed do in BSE with scrip code (517634) and this company has been used to facilitate introduction of unaccounted income of members of beneficiaries in the form of exempt capital gain or short term capital lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the end of the relevant year has expired in this case the requirements to initiate proceedings u/s 147 of the IT Act are reasons to believe that income for the year under consideration has escaped assessment because of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the year under consideration. It is pertinent to mention here that reasons to believe that income has escaped assessment for the year under consideration have been recorded in paragraph 2 above. 4. In this case more than four years have lapsed from the end of assessment year under consideration. Hence, necessary sanction to issue the notice u/s 148 has been obtained separately from the Pr. Commissioner of Income Tax as per the provisions of section 151 of the Act. 5. Notice u/s 148 was issued with prior approval of Pr. Commissioner of Income Tax- 6 Mumbai. 5. On receipt of above reasons on 9.8.2018, the petitioner filed its objections to the reasons in support of the impugned notice and in particular pointed out that the assessee had dealt with a company called S.V. Electricals Ltd and not with M/s Nivyah Infrastructure Telecom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eging that M/s Nivyah Infrastructure Telecom Services Ltd is a penny stock listed on the Bombay Stock Exchange and that the petitioner had dealt with the same leading to escapement of income. On receipt of information, the least that is expected of the Assessing Officer is to examine the same in the context of the facts of this case and satisfy himself whether the information received does prima facie lead to a reasonable belief that income chargeable to tax has escaped assessment. In this case, the reasons indicate that the Assessing Officer has not carried out such exercise and accepted the report of the Deputy Collector of Income Tax (Investigation) Mumbai to conclude that the petitioner had dealt with Nivyah Infrastructure and Telecom Services Ltd during the previous year relevant to the assessment year 2011-12. Admittedly, there was no company by name M/s Nivyah Infrastructure Telecom Services Ltd in existence during that year for consideration. This clearly shows that the Assessing Officer acted on the satisfaction of the Deputy Collector of Income Tax (Investigation) that income chargeable to tax has escaped assessment. It must also be borne in mind that the impugned n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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