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TMI Blog2023 (11) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... nothing to the contrary has been placed on record by the respondent/revenue] as concededly, it did not bear the complete address of the petitioner/assessee. Second, the AO did not even have the list of shareholders of the petitioner/assessee, as indicated in the reason to believe . AO did not have the tangible material on record that could have persuaded him to form a belief that income, otherwise chargeable to tax, had escaped assessment. The AO did not carry forward the enquiry process once he had received communication from ITO (Nahan). As noticed above, the AO did not furnish either the letter dated 12.03.2018 received from ITO (Nahan) or the relevant intimation received from the ADIT(Inv)/Unit-4(2) New Delhi, along with the document containing reason to believe. Had the AO furnished the documents, he would have been able to reach a firmer conclusion that crossed the threshold of suspicion and conjecture. Thus we are inclined to quash the impugned notice issued to the petitioner/assessee u/s 148 - Decided in favour of assessee. - HON'BLE MR JUSTICE RAJIV SHAKDHER AND HON'BLE MR JUSTICE GIRISH KATHPALIA For the Petitioner Through: Ms Rano Jain, Advocate w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the objections on 24.09.2018. The dismissal of the objections via order dated 24.09.2018 constrained the petitioner/assessee to take recourse to the instant writ action. 11.1 Notice in the writ petition was issued on 09.10.2018. While issuing notice in this writ petition, the court restrained the respondent/revenue from passing final orders in the reassessment proceedings during the pendency of the writ petition. 12. The said interim order was made absolute, albeit during the pendency of the writ petition, on 08.02.2023. II. Submissions on behalf of Counsel: 13. Ms Rano Jain advanced arguments on behalf of the petitioner/assessee, assisted by Mr Venkatesh Chaurasia, while on behalf of the respondent/revenue, submissions were advanced by Mr Prashant Meharchandani. 14. Ms Jain made the following submissions: (i) Information based on which the AO formed 'reason to believe' that income otherwise chargeable to tax had escaped assessment had not been furnished by him to the petitioner/assessee. The reason to believe, as recorded by the AO, alludes to the communication dated 12.03.2018 received from the Income Tax Officer (Nahan) and an FIR and charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e transfer of funds to a bank account of the petitioner/assessee, the AO notes, may be in the guise of Share Capital, including Share Premium, bogus sales to M/s Para Impex Chem, or Long term loans or all . (vi) The assertion that one of the bank accounts was not disclosed by the petitioner/assessee in the original ROI is incorrect. In the document containing reason to believe , the AO alludes to the account bearing no. 0711290000020 maintained with the Pushpanjali branch of HDFC bank, which, according to him, had not been disclosed by the petitioner/assessee while filing its ROI. However, a perusal of the ROI, along with the balance sheet appended thereto, would show that a disclosure of the aforementioned bank account was made. (vii) There is nothing to suggest that the petitioner/assessee had any hand in depositing cash in the bank account of the entity going by the name Para Impex Chem, which was then transmitted to the subject bank accounts of the petitioner/assessee. In other words, no material was available with the AO suggesting that the money received by the petitioner/assessee via RTGS in the two accounts maintained with HDFC Bank represented its undisclosed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t ], which the petitioner/assessee maintained with the Pushpanjali Enclave New Delhi branch of the HDFC bank, the cumulative amount received was Rs. 15,20,000/-, in the periods spanning between 05.01.2010 and 18.02.2010. (iv) A comparison of the amounts shown against share capital, security premium, share application money, and long-term unsecured loans for AY 2010-11 and 2011-12 would indicate that a cumulative increase in the source of funds had taken place to the extent of Rs. 61,87,061/-. (v) The petitioner/assessee refuted the assertion that it had received the notice dated 20.03.2018 before the issuance of the impugned notice. A perusal of the notice dated 20.03.2018, when compared with the ROI submitted for AY 2011-12, would show that the address given in the notice dated 20.03.2018 was incomplete. (vi) The income declared in the original ROI dated 01.07.2011 and the subsequent ROI filed pursuant to the issuance of the impugned notice remained the same. The petitioner/assessee had declared an income of Rs. 9,60,199/- [Rs. 9,60,200/-] in both ROIs. Although, the original return was processed under Section 143(1) of the Act. (vii) The AO had not furnished e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 'nature' of the deposits in the two HDFC banks received by the petitioner/assessee, which is evident from the following observations made by him: may be in the guise of Share Capital, including Share Premium, bogus sales to M/s Para Impex Chem, or Long term loans or all . 17.4 Lastly, the mere increase in the source of funds from the previous AY amounting to Rs. 61,87,061/- in the form of share capital, security premium, share application money, and long-term unsecured loans without corroborating evidence, in itself, cannot be the basis of the belief that income, otherwise chargeable to tax, had escaped assessment. 17.5 It is evident that the AO had, perhaps, no tangible material available with him to form a belief that income, otherwise chargeable to tax, had escaped assessment. The phraseology used by the AO reveals that he suspected that income chargeable to tax had escaped assessment. Therefore, according to us, this approach of the AO breached the other well-established principle of law that suspicion and conjecture cannot form the basis for triggering reassessment proceedings qua an assessee. 18. In our view, the AO did not employ diligence while tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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