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TMI Blog2024 (6) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... s 148 of the IT Act for reopening of the assessment could only be in terms of language of Section 148 of IT Act as it then existed. The language of Section 147 of the IT Act as it stood then, clearly mandates, that for reopening the assessment, there has to be existence of reason to believe available with the Assessing Officer that any income chargeable to tax has escaped assessment for a particular assessment year. Such reason to believe, has to be on the basis of information, which has subsequently been gathered or for that matter has to be in terms of Clause c of Explanation -2 to then existing Section 147 of the IT Act. The reason for this, is obvious, that a reassessment cannot be permitted, merely on the basis of change of opinion as that would denude the entire action of accepting the assessment of any finality, only on the basis of change of the AO. Thus, information and that too credible, which would permit the Assessing Officer to have reason to believe that the income chargeable to tax has escaped assessment is the very basis, for reopening of the assessment. It is necessary to note, that the loss claimed by the petitioner was already disclosed in its return filed for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner on 25/05/2018, in respect of the assessment made under Section 143(3) of the IT Act. 3. The Assessing Officer, claiming reason to believe, that the income of the petitioner had escaped assessment, the case of the petitioner was reopened under Section 147 of the IT Act and after obtaining sanction for issuance of notice under Section 151 of the IT Act of the appropriate authority, as indicated therein, a notice under Section 148 of the IT was issued to the petitioner on 31/03/2021 (pg.137). By a communication dated 06/04/2021 the petitioner asked for the reasons recorded before issuing of notice, which was supplied by the Assessing Officer on 21/04/2021 (pg. 139). In response to a grievance resolution application seeking copy of the approval for issuance of notice, the respondents by the communication dated 17/05/2021 intimated to the petitioner that since the approval for reopening of the case of the petitioner on the basis of the reasons recorded, was obtained online through ITBA, hence, no hard copy could be provided (pg. 151). On 19/05/2021, the petitioner raised an objection stating that the very basis of the reopening of the case was not available and therefore, requested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2), Mumbai and others [Writ Petition No. 1798/2022, decided on 08/03/2023] 7. Mr. Parchure, learned counsel for the respondent nos. 1 to 3 contends, that the case was reopened, on the basis of information uploaded by the ADIT (Inv) III, Nagpur on the insight portal of the Income Tax Department, which was designated under the category High Risk Transaction for the financial year 2016-17 as suspicious transaction report (STR), which transactions were to the tune of Rs. 34,42,99,351/- being credits in the bank accounts maintained by the petitioner/assessee with the Kotak Mahindra Bank and as the return submitted by the assessee of NIL after showing current year loss of Rs. 4,29,14,072/- was not corroborating with the information available on record, the Assessing Officer has sufficient reason to form a belief that the income had escaped assessment on account of which after obtaining approval under Section 151 of the IT Act a notice under Section 148 of the IT Act was issued. He further contends, that the return filed by the petitioner though was accepted by the Department, the same was without verification and scrutiny assessment as stipulated under Section 2 (40) of the IT Act. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant Bhujbal Vs. Income-tax Officer (2022) 440 ITR 359 in which it has been held that the petitioner having participated in assessment proceeding could not have approached this Court invoking its extraordinary jurisdiction under Article 226 of the Constitution of India. 8. Insofar as the objection regarding maintainability of the petition is concerned, the same has already been considered by this Court in its order dated 09/06/2023, which has turned down the said objection. 9. Insofar as the merit of the matter is concerned, as indicated above, it is not in dispute that the petitioner, who is a corporate entity, engaged in trading of modular furniture, had filed its return of income for the assessment year 2017-18 on 17/10/2017 declaring loss of Rs. 4,29,14,072/-. An intimation order under Section 143(1) of the IT Act was passed dated 25/05/2018, accepting the declared loss at Rs. 4,29,14,072/-. The respondent no. 1 issued the impugned notice dated 31/03/2021 under Section 148 of the IT Act i.e. unamended provisions of Section 147 to Section 151 as on 31/03/2021. These provisions were amended w.e.f. 01/04/2021, which are not applicable in the present case. On the request of the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of accepting the assessment of any finality, only on the basis of change of the Assessing Officer. Thus, information and that too credible, which would permit the Assessing Officer to have reason to believe that the income chargeable to tax has escaped assessment is the very basis, for reopening of the assessment. 11. At the cost of repetition, in this context, it is necessary to note, that the loss claimed by the petitioner was already disclosed in its return filed for the assessment year 2017-18, as is indicated, from the intimation under Section 143 (1) of the IT Act, dated 25/05/2018, accepting the return (Item No. 18/pg. 128). It is also necessary to note, that in the order dated 19/12/2021 (pg. 161) itself, the respondents, have categorically stated that in the AIR transaction details it is found that the assessee/petitioner has transacted to the amount of Rs. 34,42,99,351/- (cumulative credit balance) to various Banks during the financial year 2016-17 and this information was not suspicious one and the Assessing Officer had rightly applied his mind in this regard. This being the position, merely because the CBDT inspection dated 31/03/2021, directs cases from non-filer ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer in terms of the requirements of Section 143 (1) of the IT Act and therefore, the contention is clearly misconceived. 14. Chhagan Chandrakant Bhujbal (supra) relied upon by Mr. Parchure, learned Counsel for the respondent nos. 1 to 3 was a case in which the return of income was found to be on facts accepted without scrutiny leading to passing of an assessment order, consequent to which, information was received by an e-mail that the assessee had defrauded the Government by preparing bogus documents and used them as genuine documents, so as to get a plot. This information was duly assessed and found to be credible, satisfying the requirement of reason to believe , on the basis of which it was held that the reopening of the reassessment was legal and valid. The facts in the present case do not indicate receipt of any such information, which would lead to existence of a reason to believe. 15. Shrikant Phulchand Bhakkad (supra) was also a case in which the reassessment was directed on the basis of information received, on the basis of which the Assessing Officer was found to have satisfied the requirement of reason to believe and therefore, is of no assistance to Mr. Parc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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