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TMI Blog2024 (12) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 is hereby quashed. We, however, leave it open to the respondents to initiate proceedings afresh, if otherwise permissible in law. - HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE DHARMESH SHARMA For the Petitioner Through: Mr. Ramesh Singh, Sr. Adv. with Mr. Sumit K. Batra, Mr. Manish Khurana, Ms. Priyanka Jindal Ms. Hage Nanya, Advs. For the Respondent Through: Mr. Vipul Agrawal, SSC with Mr. Gibran Naushad Ms. Sakshi Shairwal, JSCs. JUDGMENT YASHWANT VARMA, J. (ORAL) 1. The writ petitioner impugns the proceeding for reassessment commenced in terms of Section 148 of the Income Tax Act, 1961 [Act] and pertaining to Assessment Year [AY] 2012-13. Since the proceedings for reassessment were commenced prior to the procedure for reassessment coming to be recast by virtue of Finance Act, 2021, it was the procedure as prevalent at the relevant time which was adopted by the respondents. 2. For the purposes of considering the challenge which stands raised, we deem it apposite to take note of the following facts. The petitioner for AY 2012-13 had filed its Return of Income on 30 September 2012. The said Return was ultimately assessed in accordance with Section 143 (3) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncern. 3. After receiving the above information, discreet enquiry was conducted by the Investigation Wing. On enquiry it has been found that few flats are still lying vacant and these flats were not sold and are still with Sh. Subhash Dabas. During F.Y. 2011-12, total cash of Rs. 6,20,31,500/- was deposited in the four bank accounts of society, the source of which is unknown. It has been noted from the bank account statement of the society that funds has been transferred from the account statement of the society that funds has been transferred from the account of The Delhi Newspaper Employees CGHS to the accounts of different companies, firms concerns associated with Sh. Subhash Dabas. The society has transferred total of Rs.56 Cr. to .. the payment made to different companies and firms is as under:- S. No. Name of Company/Firm Amount 1. Rainbow Capital Ltd. 42,50,000/- 2. Tirupati Building Offices Pvt. Ltd. 20,00,000/- 3. Tirupati Construction 31,47,99,000/- 4. Tirupati Constwell Pvt. Ltd. 23,90,17,000/- Total 56,00,66,000/- 3.1 Further, following amount was also transferred by the society to the companies/firms of Sh. Subhash Dabas during F.Y.2011-12:- S. No. Name of Company/Fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been recorded above. 5.2 I have carefully considered the assessment records containing the submissions made by the assessee in response to various notices issued during the assessment/reassessment proceedings and have noted that the assessee has not fully and truly disclosed the above material facts necessary for his assessment for the year under consideration. 5.3 It is evident from the above facts that the assessee had not truly and fully disclosed material facts necessary for his assessment for the year under consideration thereby necessitating reopening u/s 147 of the Act. 5.4 It is true that the assessee has furnished copy of statement of affairs along with return of income where various information/material were disclosed. However, the requisite full and true disclosure of all material facts necessary for assessment has not been made as noted above. It is pertinent to mention here that even though the assessee has furnished details documents during assessment proceedings, the requisite material facts as noted above in the reasons for reopening were embedded in such a manner that material evidence could not be discovered by the AO and could have been discovered with due d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondents candidly admit that no amounts were received by the petitioner from DSNE CGHS individually. They allege that the money from the aforenoted entity was routed to M/s Tirupati Construction and in which the petitioner is a majority shareholder by virtue of owning 99.62% of its shares. It is on that basis that in the final order of assessment drawn pursuant to the liberty accorded by this Court, that they now seek to treat the receipt in the hands of M/s Tirupati Construction received from M/s Tirupati Constwell as deemed dividend, taxable in the hands of the writ petitioner by virtue of Section 2 (22) (e) of the Act. Basis the above, an addition of INR 7,66,19,067/- has been proposed. 7. The aforesaid recordal of facts is borne out from the following averments which are taken in paragraph 8 of the counter affidavit and which is reproduced hereinbelow: 8. It is submitted that during the course of re-assessment proceedings on careful perusal of bank statement of M/s. Delhi States Newspaper Employee Federation CGHS, Sector-19, Dwarka, New Delhi, it has been found that submission of the assessee is partially correct. It was noticed from the balance sheet of M/s. Tirupati Constwel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We had in ATS Infrastructure Limited v. Assistant Commissioner of Income Tax Circle 1 (1) Ors. 2024 SCC OnLine Del 5048, held that the formation opinion under Section 147 and the reasons which are taken into consideration for initiating action of reassessment cannot waiver or be one of changing hues. We deem it apposite to extract the following passages from our decision in ATS Infrastructure: 6. Our Court in Commissioner of Income Tax-II v. Living Media India Ltd. had pertinently observed that additional reasons cannot be provided or recorded by the Assessing Officer subsequent to the issuance of a notice under Section 148 of the Act. We deem it apposite to quote the following passage from that decision: 13. With regard to the additional reasons which were recorded subsequent to the issuance of notice under section 148 of the said Act, we have already observed that this could not have been done by the Assessing Officer. The validity of the proceedings initiated upon a notice under section 148 of the said Act would have to be judged from the stand point of the reasons which existed at the point of time when the section 148 notice was issued. The additional reasons cannot be provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at when the Assessing Officer issues a notice under section 148, at that stage the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief (Rajesh Jhaveri (supra). At that stage, an established fact of the escapement of income does not have to be proved, since it is not necessary that the Assessing Officer should have finally ascertained that income has escaped assessment. The nature of the jurisdiction of the Assessing Officer which was dealt with by the judgment of the two learned judges of the Supreme Court in Rajesh Jhaveri's case was revisited in a decision of three learned judges in CIT v. Kelvinator of India Ltd., (2010) 320 ITR 561 (SC). The Supreme Court has held that though after April 1, 1989, a wider power has been conferred upon the Assessing Officer to reopen an assessment, the power cannot be exercised on the basis of a mere change of opinion nor is it in the nature of a review. The Supreme Court has laid down the test of whether there is tangible material on the basis of which the Assessing Officer has come to the conclusion that there is an escapement of income. The Supreme Court held thus (page 564 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons in Indian securities were not liable to tax in India. The only basis on which the assessment is sought to be reopened is on the assumption that the provisions of section 115AD would stand attracted. That is on the assumption that the assessee is an FIL Though the attention of the Assessing Officer was drawn to the fact that the assessee is not an FII and that the provisions of section 115AD would not be attracted, the Assessing Officer persisted in rejecting the objections to the reopening of the assessment. In the order disposing of the objections which were raised by the assessee, the succeeding Assessing Officer has clearly attempted to improve upon the reasons which were originally communicated to the assessee. The validity of the notice reopening the assessment under section 148 has to be determined on the basis of the reasons which are disclosed to the assessee. Those reasons constitute the foundation of the action initiated by the Assessing Officer of reopening the assessment. Those reasons cannot be supplemented or improved upon subsequently. While disposing of the objections of the assessee, the Assessing Officer has purported to state that the assessee had filed only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which may have been taken into consideration for the purposes of coming to the conclusion that income had escaped assessment alone which would merit consideration. 13. Regard must also be had to the fact that the petitioner had been originally assessed under Section 143 (3) of the Act. The initiation of reassessment would have to consequently be compliant with the Proviso to Section 147 as it stood at the relevant time and which read as under: Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: [Provided further that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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