Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2019 (3) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (3) TMI 334 - HC - Income TaxReopening of assessment u/s 147 - Deemed dividend addition u/s 2(22)(e) - loan received by the assessee during the relevant accounting period from one M/s Rupani Spinning Mills Private Limited - scrutiny assessment conducted - shareholding pattern reference - audit party report relied upon - HELD THAT:- Since the very AO in the immediately preceding assessment year, had examined the loan transaction between the petitioner and the said M/s Rupani Spinning Mills Private Limited with special focus of Section 2(22)(e) by separate order passed today in Writ Petition [2019 (3) TMI 320 - BOMBAY HIGH COURT] we had occasion to examine these documents in the context of the petitioner's challenge to the notice of reopening of assessment of the said assessment year. In the scrutiny assessment, the Assessing Officer in the said assessment year had at length collected materials in the context of the possible applicability of Section 2(22)(e). We have no hesitation to come to the conclusion that this issue was duly scrutinized by the Assessing Officer in the original scrutiny assessment. The perusal of the original file would clearly show that the audit party had brought to the notice of the Assessing Officer the possibility of invoking Section 2(22)(e) of the Act in relation to the loan transaction in question. The AO under a detailed reply dated 9th June, 2015 had opposed any such invocation of Section 2(22)(e) of the Act. He had given reasons why in his opinion Section 2(22) (e) of the Act was inapplicable. Despite this, upon further insistence by the audit party, impugned notice came to be issued. It is well settled through series of judgments that the decision to reopen the assessment must be on the basis of the belief found by the Assessing Officer. It may be open for the audit party to bring the relevant aspect to the notice of the Assessing Officer. However, thereafter it must be the independent decision of the Assessing Officer to reopen the assessment upon formation of his belief that income chargeable to tax had escaped assessment. See CIT Vs. Ranjan N. Aswani (2018 (3) TMI 315 - BOMBAY HIGH COURT) - decided in favour of assessee.
|