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TMI Blog2024 (7) TMI 1489X X X X Extracts X X X X X X X X Extracts X X X X ..... As is evident from a reading of the order issued u/s 148A(d) AO has taken into consideration facts which would clearly be germane for the purposes of examining whether there was material to suggest that income of the petitioner had escaped assessment. We take note of the principles which would govern a challenge to the initiation of reassessment proceedings in Article 226 of the Constitution as laid down in Experion Developers P. Ltd [ 2020 (2) TMI 1061 - DELHI HIGH COURT] and Synfonia Tradelinks Pvt. Ltd [ 2021 (3) TMI 1177 - DELHI HIGH COURT] held that the expression reason in section 147 of the Act means a cause or justification . The Assessing Officer can be said to have reason to believe that income has escaped assessment, if he has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee submitted its reply on 11.03.2023, and submitted that: We had not received nor aware of any notice or email for A.Y.2019-20 DIN ITBA/INV/F/17/2022-23/1047093762(1) dt 07-10-22 and moreover The Proported information is incorrect I have no transaction with aforesaid suppliers/customer. The Proported information is incorrect I have no transaction with aforesaid suppliers/customer and to substantiate my bonafide I am enclosing you following documents as under: 1. Balance sheet for AY :2019-20 Annex-1 2. Income tax return acknowledgement AY: 2019-20 vide e- filing no. 240333321311019 Dated: 31.10.2019 Annex-2 3. GST R1 for the period FY : 2018-19 Annex-3 4. GSTR 3 B for the period FY : 2018-19 Annex-4 5. GST Certificate Annex -5 There is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils are provided related to from whom money is being received or to whom it is being paid. Copy of cash flow statement has not been provided. 7. Thus income of Rs. 48,80,48,040/- is chargeable to tax for this year and has escaped assessment. Hence, it is concluded that this is a fit case for issuing Notice u/s 148 of the I.T. Act, 1961. 8. Accordingly, it is concluded that this is a fit case for issuing notice u/s 148 of the I.T. Act. 3. When the writ petition was argued before us, learned counsel for the petitioner had reiterated the contention that it had no transaction with Fortune Graphics Limited and that the entries as appearing in GSTR-1 were made unilaterally. It was also submitted that the petitioner had not availed of any ITC bene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the observations of the Assessing Officer are based purely on conjectures and surmises, without reference to any tangible material. At this stage, we may refer to our decisions in Vedanta Ltd. v. Asst. CIT (W. P. (C) No. 13036 of 2019 dated December 20, 2019) and also in RDS Project Ltd. v. Asst. CIT (2020) 421 ITR 624 (Delhi) (W. P. (C) No. 11274 of 2019 dated October 23, 2019) wherein we have extensively examined the case law on this issue. 21. In the above judgments, we have noted the views of the Supreme Court in Asst. CIT v. Rajesh Jhaveri Stock Brokers P. Ltd. (2007) 291 ITR 500 (SC) ; (2008) 14 SCC 208 wherein it has been held that the expression reason in section 147 of the Act means a cause or justification . The Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks Pvt. Ltd v. Income Tax Officer 9. We have heard the learned counsel for the parties and perused the record. Before we proceed further, it would be helpful if we were to set forth certain well-established principles enunciated by the courts over the years vis-a-vis initiation of proceedings under section 147 of the Act. (i) The reasons which lead to the formation of opinion or belief that the assessee's income chargeable to tax has escaped assessment should be inextricably connected. In other words, the reasons for the formation of opinion should have a rational connection with the formation of the belief that there has been an escapement of income chargeable to tax (See : ITO v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC) ; (1976) 3 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. (See: section 151(1) of the Act). (v) The limitation for issuance of notice under section 148 as prescribed under section 149 of the Act commences from the date of its issuance while the time limit for passing the order of assessment, reassessment, computation and recomputation as prescribed under section 153 of the Act commences from the date of service (See : R. K. Upadhyaya v. Shanabhai P. Patel [1987] 166 ITR 163 (SC) ; (1987) 3 SCC 96). (vi) A jurisdictional error would occur, which can be corrected by a writ court, if reasons to believe are based on grounds that are either arbitrary and/or irrational. (See : Sheo Nath Singh v. Appellate Asst. CIT [1971] 82 ITR 147 (SC) ; (1972) 3 SCC 234). 7. Accordingly, and in view of the above, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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