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TMI Blog2024 (8) TMI 425X X X X Extracts X X X X X X X X Extracts X X X X ..... ce President And Ms Astha Chandra, Judicial Member For the Assessee : Shri Jaiprakash Bairagra For the Department : Shri Ajay Kumar Keshari ORDER PER R.K. PANDA, VP : This appeal filed by the Revenue is directed against the order dated 15.09.2023 of the CIT(A), Pune 12, relating to assessment year 2011-12. The assessee has filed the Cross Objections against the appeal filed by the Revenue. For the sake of convenience, the appeal filed by the Revenue and the Cross Objections filed by the assessee were heard together and are being disposed of by this common order. 2. There is a delay of 30 days in filing of the CO before the Tribunal by the assessee, for which the assessee has filed a condonation application along with an affidavit explaining the reasons for such delay which is due to spinal problem of the Director. After considering the contents of the condonation application filed along with affidavit and after hearing the Ld. DR, the delay in filing of the CO is condoned and the CO is admitted for adjudication. 3. Facts of the case, in brief, are that the assessee is a private company, engaged in the business of trading in shares and securities. It filed its return of income on 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are self-explanatory, the AO had reason to believe that income of the assessee to the extent of Rs. 24,11,50,000/- has escaped assessment for the AY 2011-12 in terms of sec. 147 of the Act. The kind approval of the Ld. Pr.C.I.T.-1, Kolkata was obtained, in terms of Sec.151(1) of the I.T. Act, 1961 for issue of notice u/s. 148 of the I.T. Act, 1961. 5. However, the assessee did not file the return of income in response to the notice u/s 148 of the Act. Subsequently, the jurisdiction of the case was transferred from the office of the ITO 2(4), Kolkata to ACIT, Central Circle 1, Aurangabad. Notice u/s 142(1) of the Act was issued. Further notices u/s 133(6) of the Act were also issued to different entities from which the share amounts were received by the assessee company during the impugned assessment year. 6. Subsequently, the assessee vide letter dated 06.12.2018 requested the Assessing Officer to provide the reasons for reopening the assessment. The assessee was duly communicated the reasons for reopening the assessment which were reproduced in the preceding para No.4. The assessee vide letter dated 12.12.2018 objected to the reopening of the assessment proceedings u/s 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DIT (Inv.), Aurangabad in the cases of companies based at Kolkata from which the share premiums / application money was received in consequence to the search action u/s 132 of the Act. The survey party could serve the authorization only in the case of M/s. Brightstar Commosales Private Limited. This according to the Assessing Officer shows that no other company existed in the address given. Further, majority of the companies were not found on the last known address, therefore, the allegation is confirmed that these are merely paper companies. Further notices u/s 133(6) of the Act were also returned un-served with the remark no such company was found / insufficient address / not known, etc . After considering the reply given by the assessee and relying on various decisions, the Assessing Officer concluded that the share application money so received by the assessee company from the above mentioned companies is nothing but the assessee s own money. He, therefore, treated the same as unexplained cash credit u/s 68 of the Act and made addition of Rs. 24,11,47,250/- to the total income of the assessee. 9. Before the CIT(A), the assessee apart from challenging the addition on merit, chal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital receipt. As per provisions of law governing Companies and Accounting and Disclosures by Companies, Share Premium or Security Premium is considered a Capital Receipt. It has to be shown in Reserves and Surplus as an item on liabilities side of balance sheet and these Reserves can be used only for a limited manner permitted by law. The permitted use of such reserves generally results into increase in share capital or reduction of some specified liabilities on capital account. Use of Share Premium is also to keep the strength of financial structure undiluted. It is either converted into capital or reduces liabilities. Therefore, share premium cannot be considered as revenue at any stage like time of use or time of receipt. b) Share Premium-Treatment under IT Act, 1961 i) Till AY 2012-13 the share premium received by a Company was not deemed as income. ii) Deeming provisions as per Sec 56(2)(viib) (inserted w.e.f 01.04.2013) is applicable only in case of shares issued at premium by closely held Companies (subject to some exceptions). This is not applicable to I Companies listed on recognized stock exchange. In case of issue of shares at premium by listed Companies, share premium ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wards. g) The Hon'ble Bombay High Court in PCIT vs Apeak Infotech in 397 148 held as under:- Amendment to Sec 68 by the addition of proviso took place w.e.f 01.04.2013. It is not applicable to AY 2012-13. As far as pre amended Sec 68 is concerned, the same cannot be invoked in AY 2012-13 as evidence was led by the assessee before the AO w.r.t identity and capacity of investor and genuineness of investment. Therefore, the AO did not invoke Sec 68 of Act to bring share premium to tax. CIT(A) rightly held that Sec 68 cannot be invoked. h) It is pertinent to note that in AY 2011-12 the definition of income u/s 2(24) of Act did not define income as any consideration received for issue of shares in excess of its FMV. This came into effect w.e.f 01.04.2013 only and would not apply to the share premium received by Appellant during AY 2011-12. Similarly the amendment to Sec 68 by addition of proviso was made subsequent to AY 2012-13 and cannot be invoked. The Hon'ble Jurisdictional Bombay High Court in CIT vs Mis Gagandeep Infrastructure (P) Ltd. in 394 ITR 680 (Born) dated 20.03.2017 held that proviso to Sec 68 will have prospective effect only from AY 2013-14 onwards. Thus, in vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m as income of the assessee u/s 56(1) of the Act. In our considerate view, for the reasons discussed hereinabove, we do not find it necessary to apply the provisions of sec. 68 of the Act. We, therefore, direct the AO to delete the addition of Rs. 47,97,10,0001-. Reliance is also placed on recent decision of Jurisdictional Hon'ble Bombay High Court in the case of SLS Energy Pvt. Ltd. dated 27-06'-2023, Writ Petition 331 of 2016, 2023-TIOL-817-HC-MUM-IT, wherein it has been held that Receipt of share capital including share premium was on capital account and give rise to no income and hence no addition can be called for u/s 56(2)(viib) of the income tax Act, 1961 Considering the Board's Instruction No. 2/2015 vide F No. 500/15/2014APA-\ dated 29.01.2015 and respectfully following the Hon'ble High Court Bombay's decision in the case of SLS Energy Pvt. Ltd. dated 27-06-2023, Vodafone India Services Pvt. Ltd. vs Union of India Others (2014) 368 ITR 01 (Bombay HC) and Hon'ble ITAT 'G' Bench decision in the case of Green Infra Ltd. ITA No. 7762/Mum/2012 dated 23.8.2013, I am of the Opinion that Share capital with premium amount received by the appellant of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the facts and in the Ld. CIT(A) has erred by relying on the decision of Honourable High Court Bombay in M/s. Gagandeep Infrastructure P. Ltd. in 394 ITR 680 in PCIT Vs. Apeak Infotech in 397 ITR 148 and in the case of Vodafone India Services Pvt. Ltd. 12. The assessee has raised the following grounds in its Cross Objection: Grounds of cross-objections Following grounds have not decided by the learned CIT(A) as mentioned in Para 6.6 of the order: 1. The Ld. Assessing Officer erred in initiating the re-assessment proceedings after 4 years from the end of the A.Y.2011-12, as admittedly there is no failure to disclose all primary facts in the regular assessment proceedings completed under Sec.143(3)of the Act. 2. The Ld. Assessing Officer has further erred in initiating re-assessment proceedings on mere change of opinion as issues of allotment of shares and share premium were examined in the regular assessment proceedings by the Assessing Officer by issuance of notices under Sec.133(6) r/w Sec.l42(2) of the Act to respective parties. 3. The Ld. Assessing Officer further erred in re- opening the completed assessment without any tangible material before him at the time of issuing Notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d unsatisfactory and therefore, the CIT(A) was not justified in deleting the addition made by the Assessing Officer. For the above proposition, the Ld. DR relied on the following decisions: 1. Principal Commissioner of Income-tax (Central)-1 v. NRA Iron Steel (P.) Ltd (SC) 2. Shankar Industries vs CIT (Calcutta HC) 3. Nipun Builders and Developers Pvt. Ltd. (Delhi HC) 4. Kottex Industries (P.) Ltd. vs ACIT (Gujarat HC) 5. BalGopal Merchants (P.) Ltd. v. PCIT (Calcutta HC) 6. Mukesh Shaw v. ITO (Jharkhand HC) 7. B.R. Petroleum (P.) Ltd vs ITO (Madras HC) 8. Seema Jain vs ACIT, New Delhi (Delhi HC) 15. Referring to the following decisions, the Ld. DR submitted that when the notices remained un-served and the amount received through paper or nonexistent companies, the CIT(A) was not justified in deleting the addition made by the Assessing Officer: 1. Konark Structural Engineers (P.) Ltd. vs. DCIT (SC) 2. CIT Vs Nova Promoters Finlease (P) (Delhi HC) 3. CIT vs Sophia Finance Ltd. (Delhi HC) 4. Prem Castings (P.) Ltd. v. Commissioner of Income-tax (Appeals) (Allahabad HC) 5. NDR Promoters (P.) Ltd. v. PCIT (SC) 6. CIT v. Ultra Modern Exports (P.) Ltd. (Delhi HC) 7. Pratik Syntex (P.) Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w attention of the Bench to the observations of the Assessing Officer at para 1.3 of the order, according to which the information were sought for by issuing letters to various parties by invoking the provisions of section 133(6) of the Act. Replies received from those companies were placed on record. After examining those details the Assessing Officer has passed the order. Referring to the copy of the reasons recorded by the Assessing Officer which were supplied to the assessee and placed at pages 39 and 40 of the paper book, he submitted that in the reasons so recorded which is after expiry of four years from the end of the relevant assessment year, there is no mention of any allegation that the assessee failed to disclose fully and truly all material facts necessary for completion of the assessment. He submitted that this is against the proviso to section 147 of the Act. 19. Referring to the decision of the Hon ble Bombay High Court in the case of Akshar Anshul Construction LLP vs. ACIT, 264 Taxman 65, copy of which is placed at pages 144 to 151 of the paper book, he submitted that the Hon ble Bombay High Court in the said decision has held that where the Assessing Officer reope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer while completing the assessment had issued notices u/s 133(6) of the Act to all the nine shareholder companies and got their replies along with the relevant documents. Therefore, reopening of the assessment u/s 147 of the Act is nothing but change of opinion. Referring to the following decisions, he submitted that the assessment cannot be reopened due to change of opinion: a) Marico Ltd. v. ACIT (Writ Petition No.1917 of 2019, dt. 21.08.2019) b) State Bank of India v. ACIT, 96 taxmann.com 77 c) GRI Towers India Pvt. Ltd. vs. Union of India, 160 taxmann.com 215 24. Referring to the decision of the Hon'ble Supreme Court in the case of CIT vs. Kelvinator of India Ltd., 320 ITR 561 (SC), he submitted that the Hon'ble Supreme Court in the said decision has held that the Assessing Officer has power to reopen, provided there is tangible material to come to the conclusion that there is escapement of income from assessment; reasons must have a live link with formation of belief. 25. Referring to the decision of the Hon ble Bombay High Court in the case of PCIT vs. Shodiman Investments (P.) Ltd., 422 ITR 337 (Bom), he submitted that the assessment cannot be reopened on bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporation v. CIT, 103 ITR 344 (Patna) (x) DCIT v. Rohini Builders, 256 ITR 360 (Guj) (xi) Aravali Trading Co. v. ITO, 220 CTR 622 (Raj) (xii) ITO vs. Neelkanth Finbuild Ltd., 70 SOT 368 (xiii) Nemi Chand Kothari vs. CIT (2004) 264 ITR 254 (Gau) (xiv) CIT v. Shiv Dhooti Pearls Investment Ltd., 237 Taxman 104 29. He submitted that when the assessee has proved the source of the investor companies by producing their PAN, letters of confirmation, bank statements, audited balance sheet, etc. and the assessee is not required to prove the source of source, therefore, in view of the above decisions, the addition made by the Assessing Officer is not justified and the CIT(A) has rightly deleted the addition. 30. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) and the paper book filed by both the sides. We have also considered the various decisions cited before us. Before deciding the appeal of the Revenue challenging the order of CIT(A) deleting the addition of Rs. 24,11,50,000/- made by the Assessing Officer u/s 68 of the Act, we would first like to adjudicate the grounds raised by the assessee in the CO challenging the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We find the Hon ble Bombay High Court in the case of Akshar Anshul Construction LLP vs. ACIT (supra) while quashing the re-assessment proceedings on account of reasons not having any allegation of any failure on the part of the assessee to disclose fully and truly all the material facts for completion of assessment for reopening of the assessment has observed as under: 7. It is a settled position in law that where assessment has been completed by scrutiny under Section 143(3) of the Act, an assessment cannot be reopened beyond a period of four years from the end of the relevant assessment year in the absence of any failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment. This is the mandate of the first proviso to Section 147 of the Act. In the present case, it is undisputed position that the regular assessment for Assessment Year 2010-11was completed under Section S.R.JOSHI 5 of 8 wp-14302-2018 143(3) of the Act. The impugned notice has been issued on 27 th March, 2018 i.e. admittedly, beyond a period of four years from the end of the relevant Assessment Year 2010-11. Thus, the reasons in support of the impugned notice in cases w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment Year 2015-16 and it has to be read into the reasons given in support of the impugned notice. This, submission is contrary to the decision of this Court in Hindustan Lever v/s. R. B. Wadkar 268 ITR 332 - wherein this Court has held as under:- The reasons recorded by the Assessing Officer nowhere state that there was failure on the part of the assesssee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasons are required to be read as they were recorded by the Assessing Officer. No substitution or declaration is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing Officer to reach the conclusions as to whether there was failure on the part of the assessere to disclose fully and truly all material facts necessary for his assessment for the concerned assessment year. It is for the record in black and white. The reasons recorded should be clear and unambiguous and sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 148 in November, 1998 seeking to reassess same income as fees for technical services Whether law prevailing on date of issue of impugned notice would apply to instant case, and since new section 147 had come into force with effect from 1-4-1989, provisions of that section were applicable Held, yes Whether since admittedly there was no failure on part of petitioner to make return or to disclose fully and truly all material facts necessary for assessment, proviso to new section, which bars issue of notice under section 148 after expiry of four years from end of relevant assessment year, squarely applied to fact of instant case and, therefore, impugned notice was barred by limitation Held, yes Whether since notice under section 148 was without jurisdiction, there was no merit in plea that petitioner was to be relegated to alternative remedy Held, yes. 34. We find the Hon ble Bombay High Court in the case of Multiscreen Media (P.) Ltd. vs. Union of India (2010) 324 ITR 48 (Bom) has observed as under: 10) In dealing with the merits of the rival contentions, it must at the outset be noted that during the course of the proceedings under section 143(3), the Assessing Officer was duly a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished in the notice for reassessment would at the highest indicate that according to the Assistant Commissioner of Income Tax, allocation of expenses as between the petitioner and the foreign principal ought to have been originally considered by the Assessing Officer when the order of assessment was passed under section 143(3). That however would not give a valid reason to reopen the assessment beyond a period of four years, even assuming that the Assessing Officer had erred in not doing so, unless there was a failure on the part of the assessee to fully and truly disclose all material facts necessary for assessment. Absent the existence of the jurisdictional condition precedent, assessment cannot be reopened beyond a period of four years after the expiry of the relevant assessment year, as has been done in the present case. In the circumstances, the notice for reassessment is liable to be quashed and set aside solely on the ground that the Revenue has failed to establish the existence of the jurisdictional condition precedent to the exercise of the power to reopen an assessment beyond a period of four years of the expiry of the relevant assessment year. 13) The petition would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ular Ltd. v/s. Deputy Commissioner of Income Tax 301 ITR 407 has expressly negatived on identical contention on behalf of the Revenue. The Court held that once all the material was placed before the Assessing Officer and he chose not to refer to to the deduction/ claim which was being allowed in the assessment order, it could not be contended that the Assessing Officer had not applied his mind while passing the assessment order. Moreover in this case, it is evident from the letter dated 6 th August, 2007 addressed by the Assessing Officer to the Petitioner containing the reasons recorded for issuing the impugned notice also record the fact that during the regular assessment proceedings, the Petitioner has been asked to furnish details in support of the claim for exemption under Section 80IA/IB of the Act. The letter further records that the details sought for were furnished and it is now observed that there has been a disproportionate distribution of expenses between various units belonging to the Petitioner for claiming deduction under Section 80IA/IB of the Act. This is a further indication of the fact that the Assessing Officer had during the regular assessment proceedings for A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmissions are not acceptable to the Revenue, then the occasion to decide a lis would arise i.e. adjudication. However, where the Revenue accepts the view propounded by the assessee in response to the Revenue s query, the Assessing Officer has certainly to form an opinion whether or not the stand taken by the assessee is acceptable. Therefore, it must follow that where queries have been raised during the assessment proceedings and the assessee has responded to the same, then the non-discussion of the same or non-rejection of the response of the assessee, would necessarily mean that the Assessing Officer has formed an opinion accepting the view of the Assessee. Thus an opinion is formed during the regular Assessment proceedings, bars the Assessing Officer to reopen the same only on account of a different view. 12. Thus we find that the reasons in support of the impugned notice is the very issue in respect of which the Assessing Officer has raised the query dated 25 September 2017 during the assessment proceedings and the Petitioner had responded to the same by its letters dated 10 December 2017 and 21 December 2017 justifying its stand. The non-rejection of the explanation in the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which were submitted and the Assessing Officer completed the assessment accepting loss Rs. 87,362/-. Subsequently, the case of the assessee was reopened on the ground that the assessee is a new company incorporated on 15.03.2007 only. It is not clear that how can a newly incorporated company with no proven track record command such a huge share premium in the open market that too at 1284.2 times of the face value of a share. The intrinsic value of shares is in fact much less than what it has got. The assessee objected to the reasons recorded which were rejected by the Assessing Officer. The assessee therefore, filed a Writ Petition before the Hon ble High Court challenging the validity of re-assessment. The Hon ble High Court quashed the re-assessment holding that the assessment was reopened on account of mere change of opinion which is not in accordance with law. The relevant observations of the Hon ble High Court read as under: 4. It is petitioner's case that the return of income having been thoroughly scrutinised and an order under section 143 of the Act having been passed, there is no fresh material for reopening and assessment proceedings are initiated on the same set of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on a mere change of opinion. Respondent no.1 has no power of review by engaging in a roving or fishing inquiry under the Act. (d) The charge of tax under the Act is on income. The receipt of share premium on the issue of fresh shares is on capital account and constitutes a capital receipt, which is not chargeable to tax under the Act. There is no provision under the Act to tax the receipt of share premium for the assessment year under consideration. As held in Vodafone India Services (P) Ltd. Vs. Union of India the amount received on issue of shares is admittedly a capital account transaction not separately brought within the definition of income during the relevant period. Thus, capital account transaction not falling within the statutory explanation cannot be brought to tax. As held in SLS Energy (P) Ltd. Vs. Income Tax Officer 2 where a similar situation was considered and the Division Bench of this court came to a conclusion that there was neither any basis for the AO in his reason to believe that income had escaped assessment or there was been any tangible material, which would have otherwise given jurisdiction to reopen the assessment. What is tangible material, the Divis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not the basis on which the reasons to believe has been arrived at. It is settled law that the reasons to believe cannot be improved upon. In the affidavit in reply opposing the petition also there are no specific denials. FINDINGS 7 Petitioner's case can be split into three parts:- a) The AO having raised the queries during the course of scrutiny assessment regarding share premium charged and petitioner having explained vide its replies, the issue of share premium, was the subject of consideration during the assessment proceedings even though, it has not been discussed in the assessment order and therefore, re-opening on the same issue of share premium is based on change of opinion. b) Whether the reasons to believe that income has escaped assessment for exercising power under Section 147 of the Act has to be that of the AO and not based on dictates of superior officers. Since admittedly, it is based on dictates of superior officers respondent no.1 has himself not formed any belief that any income has escaped assessment. c) Whether the receipt of share premium by issuing fresh shares is on the capital account and constitutes a capital receipt which is not chargeable to tax und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment proceedings the petitioner had by a letter dated 9 July 2010 pointed out that they were engaged in the business of financing trading and investment in shares and securities. Further, by a letter dated 8 September 2010 during the course of assessment proceedings on a specific query made by the Assessing Officer, the petitioner has disclosed in detail as to why its profit on sale of investments should not be taxed as business profits but charged to tax under the head capital gain. In support of its contention the petitioner had also relied upon CBDT Circular No.4/2007 dated 15 June 2007. (The reasons for reopening furnished by the Assessing Officer also places reliance upon CBDT Circular dated 15 June 2007). It would therefore, be noticed that the very ground on which the notice dated 28 March 2013 seeks to reopen the assessment for assessment year 2008-09 was considered by the Assessing Officer while originally passing assessment order dated 12 October 2010. This by itself demonstrates the fact that notice dated 28 March 2013 under Section 148 of the Act seeking to reopen assessment for A.Y. 2008-09 is based on mere change of opinion. However, according to Mr. Chhotaray, le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee had issued paid up capital of Rs. 77,00,000/- and Charged Security Premium at Rs. 6,79,32,00,000/- during the year under consideration. According to the AO an analysis of the details and information of the balance sheet shows that Share Premium and value of the shares cannot be justified on the basis of 'intrinsic valuation of shares' and 'Net Asset Value Method', i.e., Share Premium charged is found excessive as the worth of the company is not found in that extent. Hence, there was no justification for issue of shares at such a huge premium. In that case also, petitioner had argued that the very basis for reopening was misconceived inasmuch as, the receipt of premium on issuance of shares was not 'receipt of income', but was a 'capital receipt', and, therefore, could never become the basis for reopening on the ground that income had escaped assessment. It was argued that the definition of income as then prevailed did not include capital receipts. It was also sub- mitted that there was no tangible material with the AO which would give him reasons to believe that income has escaped assessment and that the AO was in fact trying to conduct a rovi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at in Vodafone India Services ( P.)Ltd.'s case (supra) it stands concluded that receipt of share capital including the premium was on capital account and gave rise to no income. The amendments incorporated in the definition of income under section 2(24)(xvi) and Section 56(2)(viib) of the Act were amendments which were to apply only from 01st April, 2013 i.e. assessment year 2013-14. The amendment to Section 68 by incorporation of the first Meera Jadhav 15/18 203-wp-804-15(judgment).doc proviso also came into effect by virtue of the Finance Act, 2012 w.e.f. 1st April, 2019 and was to apply for the assessment year 2013-14 and onwards, and, therefore, since the amendments were not applicable to the assessment year in question i.e. 2010-11, there would be no basis for the assessing officer's reason to believe that income had escaped assessment for the said assessment year. From the record it can also be seen that the preference shares allotted to M/s. Pony Infrastructure Contractors Ltd. (formerly known as M/s. Dynamix Balwas Infrastructure Pvt. Ltd.) was assessed under section 143(3) of the Act and an order of assessment dated 22nd February, 2013 was passed. 28. Reassessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dments which were to apply only from 1st April, 2013, i.e., assessment year 2013-14. The amendment to Section 68 of the Act by incorporation of the first proviso also came into effect by virtue of the Finance Act, 2012 w.e.f. 1st April, 2019 and was to apply for the assessment year 2013-14 and onwards. Therefore, since the amendments were not applicable to the assessment year in question, i.e., 2009-10, there would be no basis for the AO to form a reason to believe that income had escaped assessment for the said assessment year. 13 Moreover, if one considers the reasons recorded, the AO simply says how a company with no proven track record incorporated on 15 th March 2007 command such a huge share premium. The AO has not bothered to read the balance sheet or the valuation report. AO's reason to believe, therefore, is purely hypothetical and a matter of conjecture. That cannot be a tangible material for arriving at reason to believe escapement of income. In view thereof, the jurisdictional requirement of Section 147 of the Act also is not fulfilled and hence, the proposed reopening is without jurisdiction. 14 Further, as held in Shodiman Investments (P) Ltd. (Supra) there is cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as escaped Assessment. This is an evidence of a fishing enquiry and not a reasonable belief that income chargeable to tax has escaped assessment. 14. Further, the reasons clearly shows that the Assessing Officer has not applied his mind to the information received by him from the DDIT (Inv.). The Assessing Officer has merely issued a re-opening notice on the basis of intimation regarding re-opening notice from the Meera Jadhav 18/18 203-wp-804-15(judgment).doc DDIT (Inv.) This is clearly in breach of the settled position in law that re- opening notice has to be issued by the Assessing Office on his own satisfaction and not on borrowed satisfaction. (emphasis supplied) 15 In the circumstances, the Rule is made absolute in terms of prayer clause (a) which reads as under: (a) this Hon'ble Court may be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction under Article 226 of the Constitution of India calling for the records of the Petitioner's case and after examining the legality and validity thereof quash and set aside the undated notice (received on 29th March 2014) (Exhibit A) issued by respondents und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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