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TMI Blog2021 (4) TMI 1397X X X X Extracts X X X X X X X X Extracts X X X X ..... nding his case and by availing the opportunities contemplated under the provisions of the Act. Contrarily, if the High Court takes an exception with reference to certain facts and circumstances, then there is a possibility of escape from the clutches of Tax proceedings, which is certainly not preferable. Further, the Income Tax Authorities are experts and they must be provided with an opportunity to consider the defence as well as the materials identified, by affording an opportunity to the assessee. In the present case, in proceedings which is reply to the objections for reopening of the assessment u/s 147, there is a clear finding by the Authority that "the AO had no time to verify with PHBL about the genuineness of the transactions. Write of bad debts is relating to business and is not eligible for set off against Capital Gains. Further, a finding is made that the assessee has waited for 4 years and conveniently claimed bad debts to be deducted from Capital Gains". These are all certain contra facts, which are all raised as grounds for reopening of the assessment as the Authorities have reason to believe that there was no true and full disclosure by the assessee, at the time o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 148 of the Act. The Hon'ble Division Bench of this Court made an observation that even in such cases, the Courts are empowered to adjudicate the true and correct disclosure whether made or not. If the very initiation is found to be not in consonance with the provisions of the Act, then the contention raised by the petitioner may be considered by the writ Court under Article 226 of the Constitution of India. Relying on the said judgment, the learned counsel appearing for the petitioner reiterated that the petitioner has disclosed full and true facts before the Assessing Officer at the first instance and the Department initiated proceedings for reopening of the assessment only on change of opinion and not based on any facts as revealed by the assessee at the first instance. Therefore, the writ petition is to be adjudicated on merits. 6. The learned counsel appearing for the petitioner in nutshell contended that the reasons stated for reopening of the assessment are not in consonance with the requirements contemplated under the provisions of the Act. The reasons enumerated in proceedings dated 11.08.2016 reveal that the said facts were considered by the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the claim of bad debts is restricted to the period ending 31.03.2005 which amounts to Rs. 4,07,03,328/- and such values of bad debts beyond the period from 01.04.2005 and beyond this value of Rs. 4,07,03,328/- is not entertained. 7. Relying on the said findings made by the Assessing Officer in order dated 23.12.2011, the petitioner reiterated that the same findings are extracted in order dated 11.08.2016 for reopening of the assessment year 2009-10. Thus, the initiation of proceedings under Section 147 of the Act is nothing but change of opinion and not based on any disclosure of true and full facts. Thus, it is contended that the very reason is unsustainable and not in consonance with the mandatory provisions. There is no reason to sustain the subsequent assessment order and all further actions. In support of the said arguments, the learned counsel for the petitioner solicited the attention of this Court with reference to reply to the objections decided by the Assistant Commissioner of Income Tax dated 19.09.2016. It is contended that there is no whisper about non-disclosure of full and true facts and there was no such allegation found in the order. In the absence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment may be same but certain true facts were noticed for initiation of proceedings under Section 147 of the Act. To substantiate the said contention, the learned counsel appearing for the respondent relied on the proceedings dated 19.09.2016 issued by the Assistant Commissioner of Income Tax, which is reply to the objections for reopening of the assessment under Section 147 of the Act. The learned counsel appearing for the respondent, relying on the said order, made a submission that non-disclosure of true and full facts were elaborately considered by the Competent Authority and the reasons are also furnished. The petitioner is relying on the findings regarding the claim of bad debts which was restricted to the period ending 31.03.2005 which amounts to Rs. 4,07,03,328/-. With reference to the said contention, there is a clear answer provided in paragraph No. 5 of the order dated 19.09.2016, which is reply to the objections for reopening of the assessment and the said paragraph reads as under: "5. At the outset, it has to be mentioned that there is no change of opinion as stated by the assessee. It is relevant to produce the following from order dated 23.12.2011 "Par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s narrated above and they formed an opinion that there is a reason to believe regarding escape of income. 13. This Court is of the opinion that the payment of Income Tax is the law. Provisions of Tax laws are to be interpreted in its strict sense. A constructive interpretation is imminent to ensure that the purpose and object of the tax laws are met with. 14. Certain inferences or doubts based on facts raised regarding the assessment may provide a cause for reason to believe. "The reason to believe" contemplated under the Act provides wider power to the Competent Authority to reopen the assessment in order to adjudicate the facts, which were not disclosed at the first instance by the assessee. As pointed out, the Income Tax Department, relying on the disclosures made by the assessee, passed an assessment order. That exactly is the reason for enacting provisions for reopening of the assessment. It is based on the information provided by the assessee and believing on the same, the assessment orders are passed. Only when the Department is able to receive some information or able to draw some inference from and out of the information provided and some materials are made available, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... experts and they must be provided with an opportunity to consider the defence as well as the materials identified, by affording an opportunity to the assessee. In the present case, in proceedings dated 19.09.2016 which is reply to the objections for reopening of the assessment under Section 147, there is a clear finding by the Authority that "the Assessing Officer had no time to verify with PHBL about the genuineness of the transactions. Write of bad debts is relating to business and is not eligible for set off against Capital Gains. Further, a finding is made that the assessee has waited for 4 years and conveniently claimed bad debts to be deducted from Capital Gains". These are all certain contra facts, which are all raised as grounds for reopening of the assessment as the Authorities have reason to believe that there was no true and full disclosure by the assessee, at the time of the original assessment. 17. This being the facts and circumstances, this Court is of the considered opinion that the respondents, after initiation of proceedings under Section 147 of the Act, proceeded with reassessment and the assessment order was also passed on 04.10.2016 itself. Now four years lap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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