9911796707
TMI Blog2024 (1) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... rly, nothing of the sort was done by the AO. At this stage, there is complete opacity with regard to the material furnished to the AO. There is no clarity as to whether the single sheet of paper, which only records the transaction in issue, was furnished to the AO. If it was, the AO perhaps came to conclusion that it was not sufficient to allege that the petitioner, in particular, had taken accommodation entry from Surendra Kumar Jain. A perusal of the reasons to believe framed by the AO is suggestive of the fact that he had not applied his own mind to the material, if any, placed before him. He appears to have simply gone by the information contained in the letter dated 16.03.2018. As a matter of fact, the AO for some strange reason did not refer to the letter dated 12.03.2013 which was enclosed with the said communication. Curiously, the reasons to believe did not refer to the most crucial documents i.e., the letters dated 12.03.2013 and 09.12.2013 which allege that the accommodation entry was received by the petitioner. We are of the view that the reassessment proceedings were triggered without the AO applying his own mind and articulating his reasons as to why he be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TGFL ]. 5. The record shows that the petitioner furnished the necessary information along with the responses lodged by it. The aforementioned aspect emerges upon examination of the questionnaire issued to the petitioner along with notice dated 27.07.2013. This notice was issued to the petitioner under Section 143(2) of the Act. The query concerning unsecured loans, to which we have made reference above, is extracted hereafter: Please furnish complete statement of unsecured loans along with confirmations and supporting. 6. As indicated above, the petitioner submitted a response to the said questionnaire along with a reply dated 13.08.2013. Insofar as the aspect of unsecured loan was concerned, the following assertions were made: 10. Details of Unsecured loans are mentioned in Schedule C of the Balance Sheet. Statement of account/ confirmations has been enclosed as Annexure E. 7. As would be evident from the assertion made by the petitioner in its reply dated 13.08.2013, the balance sheet, the statement of account and confirmations were enclosed with the reply. 8. The record also discloses [and something which is not disputed by the respondents/revenue], that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .02.2014 was framed by the AO for the AY in issue i.e., 2011-12. As regards unsecured loans, the AO made an addition of Rs. 14,14,288/-. The discussion as regards the same is contained in paragraph 6.5 of the assessment order. 14. Concededly, the respondents/revenue with regard to the same were served with two communications albeit after the assessment order had been framed. These communications are dated 16.05.2017 and 16.03.2018. Although no action was taken on the communication dated 16.05.2017, the events which followed thereafter showed that the AO decided to trigger the reassessment process. Accordingly, the impugned notice dated 29.03.2018 was issued to the petitioner under Section 148 of the Act. 15. We must state at this juncture that the communications dated 12.03.2013, 09.12.2013, 16.05.2017 and 12.03.2018, to which we have made a reference above, were placed before us at the stage of arguments after pleadings were complete. It appears that the respondents/revenue were compelled to place the said communications before us as there was a reference to the communication dated 16.03.2018 in the reasons to believe framed by the AO and in the counter-affidavit filed in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s during the pendency of this petition. List on 11.03.2019. Order dasti under signatures of the Court Master. [Emphasis is ours] 21. As indicated above, thereafter counter-affidavit and rejoinder were filed and arguments in the matter were heard, once pleadings were completed. Submissions of Counsel: 22. Submissions on behalf of the petitioner were advanced by Mr Somil Agarwal, whereas Mr Prashant Meharchandani put forth arguments on behalf of the respondents/revenue. 23. Broadly, the submissions made by Mr Agarwal veered around the following aspects: (i) The material available with the AO and the reasons to believe framed in the matter did not disclose that there was a live nexus between the material and the conclusion reached by him that income which was otherwise amenable to tax had escaped assessment. (ii) The AO had acted on borrowed satisfaction inasmuch as he had not carried out an independent assessment of the material that was made available to him by the DDIT (Inv.). (iii) A reason to suspect is qualitatively different from reason to believe. (iv) It was only after the petitioner had fairly and truly disclosed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examining the material available to it, disallowed interest amounting to Rs. 14,14,288/-. 26. We may add one more aspect that along with communications dated 12.03.2013, 09.12.2013, 16.05.2017, 23.05.2017 and 16.03.2018, a photocopy of the single sheet handwritten document has been filed, which adverts, amongst other aspects, to an entry which is suggestive of fact that Sahu Exports received Rs. 2,00,00,000/- from TGFL via the RTGS route. This entry also seems to indicate that the funds were remitted to Axis Bank, although the word bank does not appear in the sheet submitted to us. There is no reference to this particular sheet in the correspondence to which we have made a reference above. 27. We are thus unable to gather as to whether or not the sheet containing the entry was part of the material furnished by the DDIT (Inv.). On the face of it, what is written on that single sheet of paper is something which even the petitioner does not dispute i.e., that it received Rs. 2,00,00,000/- from TGFL through the banking channel. It is the stand of the petitioner that it received unsecured loans from TGFL qua which queries were raised by the AO and responses were submitted alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information contained in the letter dated 16.03.2018. 36. As a matter of fact, the AO for some strange reason did not refer to the letter dated 12.03.2013 which was enclosed with the said communication. 37. Curiously, the reasons to believe did not refer to the most crucial documents i.e., the letters dated 12.03.2013 and 09.12.2013 which allege that the accommodation entry was received by the petitioner. 38. We are of the view that the reassessment proceedings were triggered without the AO applying his own mind and articulating his reasons as to why he believed that the material available with him was indicative of the fact that the income which was otherwise chargeable to tax had escaped assessment. As correctly submitted, in law reasons to suspect are markedly different in quality and texture from reasons to believe. As demonstrated above, this was not a case of no enquiry. Enquiry was made by the AO concerning the subject loan which culminated in disallowance of interest while framing the order under Section 143(3) of the Act. Impugned notice under Section 148 of the Act was issued based on borrowed satisfaction; bereft of independent application of mind. 39. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
