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TMI Blog2012 (1) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... of income on 27.10.2004 and the same was processed under Section 143(1) of the Act on 31.12.2004. Thereafter, on 28.3.2011 the respondent issued notice under Section 148 of the Act calling upon the petitioner to file a return of income on the ground that income chargeable to tax had escaped assessment. On receipt of the notice the petitioner wrote a letter to the Assessing Officer, who is the respondent herein, on 24.10.2011, after a period of nearly 7 months. In this letter it was requested that the return filed originally by the petitioner company may be treated as return filed in response to the notice under Section 148. The letter also contained detailed objections styled as "preliminary objections" to the reopening of the assessment. Under the head "objections on merits" raised without prejudice to the preliminary objections, the petitioner pointed out that there was no escapement of income to justify the reopening of the assessment, that the amount of Rs.3 lakhs received from a company by name M/s. Shivam Softech Ltd. was in the nature of share application money, that it was received through banking channels and that the share applicant company had sufficient creditworthines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of which the reasons were recorded under Section 148. Therefore, the matter was directed to be relisted on 16.12.2011 with a direction that the Assessing Officer shall be present along with the relevant papers before the Court on that date. It was also directed that till 16.12.2011 no assessment order shall be passed. 5. On 16.12.2011 the respondent appeared before the Court with the relevant record. The learned standing counsel for the revenue submitted that the information on the basis of which reasons were recorded under Section 148 was received from the investigation wing of the department in the form of a CD (compact disc) and a printout/hard copy of the same was produced before us in Court. It was stated on behalf of the revenue that the reasons were recorded after examining and considering the CD, which included the copy of the bank statement and the statement of Vishal Aggarwal recorded on 5.4.2005. It may be stated that Vishal Aggarwal was the director of M/s. Shivam Softech Ltd. from whom the assessee received the money. A copy of the statement of Vishal Aggarwal and the bank entry were handed over to the learned counsel for the petitioner to enable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Despite the valiant attempt made by Mr. Kaanan Kapur, the learned counsel for the assessee, to discredit the reasons recorded for reopening the assessment, we are afraid we cannot agree with his submissions. On 17.2.2011 the Assessing Officer recorded the following reasons for reopening the assessment:- "Reasons for the belief that income has escaped assessment: Return of Income was filed on 27.10.2004. DIT (Inv) during the course of investigation in the case of Mukesh Gupta group along with its close confidants Shri Rajan Jassal and Shri Surinder Pal Singh found that the group have operated multiple accounts in various branches to plough back unaccounted black money for the purpose of business or for personal needs such as purchase of assets etc. in the form of gifts, share application money, loans etc. During the course of investigations by the DIT ( Inv) it was discovered that the assessee who have unaccounted money ( hereinafter called as entry takers or beneficiaries ) and want to introduce the same in the books of accounts without paying tax approach another person (entry operator) and hand over cash (plus commission) and take cheques/DDs/Pos. The cash is deposited b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted money introduced into their business. After referring to the broad and general modus operandi adopted by the entry providers, the Assessing Officer specifically noticed from the list of entries given to him by the investigation wing that the petitioner herein has taken accommodation entry from Shivam Softech Ltd. in the amount of Rs.3 lakhs. This may be seen from the columnar table set out in the reasons recorded and quoted above. It may also be seen that the table gives the instrument number, date, name of the bank and the branch as well as account number. M/s. Shivam Softech Ltd. has been described in the table as an entry provider. The information contained in the table itself constitutes reasons to believe, prima facie, that income chargeable to tax has escaped assessment in the hands of the petitioner. It must be noticed that the information contained in the table was received by the Assessing Officer from DIT (Inv.), who was in charge of the investigation into groups that operate as entry providers or entry operators. The material before the Assessing Officer, in our opinion, is relevant and affords a live link or nexus to the formation of the prima facie belief that inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as under:- "15. The aforesaid reasons do not satisfy the requirements of Section 147 of the Act. The reasons and the information referred to is extremely scanty and vague. There is no reference to any document or statement, except Annexure, which has been quoted above. Annexure cannot be regarded as a material or evidence that prima facie shows or establishes nexus or link which discloses escapement of income. Annexure is not a pointer and does not indicate escapement of income. Further, it is apparent that the Assessing Officer did not apply his own mind to the information and examine the basis and material of the information. The Assessing Officer accepted the plea on the basis of vague information in a mechanical manner. The Commissioner also acted on the same basis by mechanically giving his approval." (emphasis supplied) The factual matrix has been noticed in paragraph 16. In paragraph 17, it is recorded as under:- "The reasons recorded by the Assessing Officer do not make reference to any statement of Mahesh Garg or Shubhash Gupta. This may not also be necessary, if the statements were on record and it is claimed and prima facie established that they were examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 148 on the prima facie belief that income chargeable to tax had escaped assessment must be upheld as valid. 10. The reasons to believe recorded in writing by the Assessing Officer in the present case have been quoted earlier. They are detailed and show application of mind. The reasons record inferences and conclusions. We wanted to examine the material or evidence on the basis of which conclusions/inferences were drawn. When the record of the Assessing Officer was produced, it was noticed that the documents/ material furnished by the Investigating Wing was not on record and, therefore the order dated 2.12.2011 was passed. Subsequently, on 16.12.2011, the Assessing Officer appeared and had stated that the information given/furnished by the Investigating Wing was in a CD. The print out thereof was furnished. Copy of the material/ evidence relating to the petitioner was furnished to the counsel for the petitioner. In these circumstances, we did not feel that there was any necessity for the respondent to file counter affidavit. 11. In the view we have taken as above, it is not considered necessary to examine the statement of Vishal Aggarwal to find out whether the a ..... 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