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2021 (8) TMI 379 - HC - Income TaxReopening of assessment u/s 147 - tangible material with the respondent authority for recording satisfaction and reopening the assessment for the year under consideration - HELD THAT:- The function of the assessing authority at this stage is to administer the statute and what is required is a reason to believe and not to establish fact of escapement of income and therefore, looking to the scope of Section 147 as also sections 148 to 152 of the Act, even if scrutiny assessment has been undertaken, if substantial new material is found in the form of information on the basis of which the assessing authority can form a belief that the income of the petitioner has escaped assessment, it is always open for the assessing authority to reopen the assessment. In the case on hand AO has reason to believe that the petitioner company was providing accommodation entries for the shell/paper companies meaning thereby, bogus companies/concerns. The reasons for the formation of the belief by the AO in the instant case, appear to have a rational connection with or relevant bearing on the formation of belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts. Accordingly, no interference is called for at the hands of this Court in this petition under Article 226 of the Constitution of India. The learned senior advocate for the petitioner has relied upon the decision in GKN Driveshafts (India) Ltd. [2002 (11) TMI 7 - SUPREME COURT]. There cannot be any other view than what is taken in the said decision, however, in the case on hand, when the department has not considered the objections raised by the petitioner for the reason that the petitioner company has failed to disclose fully and truly all the material facts necessary for his assessment for the year under consideration and when the AO has reason to believe that income chargeable to tax has escaped assessment, we are of the view that the above decision would be of no avail to the petitioner.
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