9911796707
TMI Blog2024 (3) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable bank statements of Nyles it has been noticed that amounts were debited in the bank accounts immediately after credit entries. Assessee company was one of the beneficiary entities who made transaction of Rs. 3,39,00,000/- with Nyles. The fact is Assessee did have financial transactions with Nyles but Assessee had taken a loan from Nyles and not made any payment to Nyles or supplied any goods to Nyles. In the order disposing objections, the AO simply says that Assessee had made transaction with Nyles and that was enough to issue the notice for reassessment. The least that was expected of the AO is, on receipt of information, 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. If the AO had only bothered to examine the records, he would have certainly found that in the annexure to the Form No. 3CD filed under Rule 6G(2)-statement of particulars required to be furnished under Section 44AB of the Act, Petitioner has disclosed that it had taken from Nyles an amount as loan. Even the PAN number of Nyles is recorded. Even the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has escaped assessment within the meaning of Section 147 of the Act. After Petitioner filed its ROI once again in response to the notice, Petitioner was made available the reasons for reopening together with approval under Section 151 of the Act. As we will explain later, both reasons and the approval would indicate total non-application of mind by the Assessing Officer ( AO ), the Range Head, who recommended that a notice under Section 148 of the Act be issued and the Principal Commissioner of Income Tax ( PCIT ) who expressed satisfaction that it was a fit case to issue notice under Section 148 of the Act. Petitioner filed its objections vide its Chartered Account s letter dated 8th February 2022 which came to be rejected by an order dated 24th February 2022. Both the notice dated 23rd March 2021 and the order dated 24th February 2022 are impugned in this Petition. Subsequently, a reassessment order on the reopening notice dated 23rd March 2022 has been passed which is also impugned in the petition. 3. The preliminary objection that Mr. Suresh Kumar raised was in view of the reassessment order dated 23rd March 2022, Petitioner should be directed to exhaust the alternative remedy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, it appears that both these companies are bogus. The ITC availed by the recipients of their supplies has been established to be bogus, and in some cases has been reversed by the said recipients. During the post search enquiries on analysis of available bank account statements (SBI A/C 34727814821 YES BANK 16483800001022) of M/s. Nyles Sales Agencies Pvt. Ltd. (from AY 2015-16 to AY 2017-18) it has been noticed that amounts were debited in the bank accounts immediately after credit entries. This peculiar pattern noticed in the bank accounts of M/s. Nyles Sales Agencies Pvt. Ltd. Further strengthen the finding that M/s. Nyles Sales Agencies Pvt. Ltd. have been working as a conduit in siphoning of funds from infrastructure projects and other business activities. It has also been noticed in searches conducted on different infrastructure entities by Delhi Investigation directorate that beneficiaries involved in such web of financial transactions use conduits like M/s. Nyles Sales Agencies Pvt. Ltd. to route the funds to get cash back in lieu of bank transfers or to book bogus expenses in their books of accounts. The assessee company M/s. Feng Shui Realtors Pvt. Ltd. is one of the bene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reasons recorded which incorrectly records that no regular assessment under Section 143(3) of the Act has been made, as held by a Division Bench of this Court in German Remedies Ltd. v. Deputy Commissioner of Income Tax 2006 (152) Taxman 269 (Bom.)., while granting approval, it was obligatory on his part to verify whether there was any failure on the part of Assessee to disclose full and true relevant facts. It was also obligatory on the part of the Commissioner to consider whether or not power to reopen is being invoked within a period of four years from the end of the assessment year to which they relate. None of these aspects have been considered by him which is sufficient to justify the contention raised by Petitioner that the approval granted suffers from non-application of mind. Paragraph 24 of German Remedies Ltd. (supra) reads as under: 24 It is not in dispute that the Assessing Officer on 15-9-2003 had himself carried file to the Commissioner of Income tax and on the very same day, rather same moment in the presence of the Assessing Officer, the Commissioner of Income tax granted approval. As a matter of fact, while granting approval it was obligatory on his part to veri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in the annexure to the Form No. 3CD filed under Rule 6G(2)-statement of particulars required to be furnished under Section 44AB of the Act, Petitioner has disclosed that it had taken from Nyles an amount of Rs. 3,39,00,000/- as loan. Even the PAN number of Nyles is recorded. Even the balance sheet as on 31st March 2015 indicates under the head Long Term Borrowings-Unsecured Loans Rs. 3,39,00,000/- against Nyles. Therefore, it clearly shows that the AO has acted on the satisfaction of the DG GST, Mumbai that income chargeable to tax has escaped assessment. It must also be borne in mind that a notice has been issued more than four years after the expiry of relevant assessment year and this was a case where assessment under Section 143(3) of the Act has been completed. Therefore, the AO was obliged 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 AO would have come to the conclusion that there was no failure to disclose truly and fully all material facts necessary for assessment. The entire proceedings in this case would also be hit by proviso to Section 147 of the Act which bars any reopening af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfaction that there is reason to believe, that income chargeable to tax has escaped assessment. 8. In fact, as held by this Court in Crompton Greaves Ltd. v. Assistant Commissioner of Income Tax, Circle 6(2) Ors. 2014 SCC OnLine Bom. 2285., where there is no allegation in the reasons recorded that there was any failure on the part of Petitioner to truly and fully disclose all material facts necessary for its assessment for the relevant assessment year, on that ground alone the notice should be quashed and set aside. Though Crompton Greaves Ltd. (supra), holds that if the factum of failure to disclose can be culled down from the reasons in support of the notice seeking to reopen assessment, that will certainly not be fatal to the assumption of jurisdiction under Sections 147 and 148 of the Act, the reasons, in our view, does not indicate anything cogent or clear that in fact there was failure on the part of Assessee to disclose truly and fully all material facts necessary for its assessment. 9. For the reasons noted above, the impugned notice is bad in law as it has not been issued by the AO on his satisfaction that there is reason to believe that income chargeable to tax has escape ..... X X X X Extracts X X X X X X X X Extracts X X X X
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