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2016 (7) TMI 515

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..... asis of the reasons recorded and the reasons recorded cannot be supplemented either by the order disposing of the objection or by filing an affidavit in that regard. In the present case, the Assessing Officer has examined the claim and not made any additions and has not discussed anything therein. However, once he has examined such claim, it is not permissible to reopen the assessment even within four years on the very same grounds. It is evident that the Assessing Officer has, therefore, formed an opinion on the issue in question though not reflected in the assessment order passed under section 143(3) of the Act. Thus, reopening of the assessment to examine the very same claim is, therefore, clearly based upon a change of opinion. The assumption of jurisdiction on the part of the Assessing Officer by issuance of notice under section 148 of the Act on a mere change of opinion is, therefore, clearly without jurisdiction. The impugned notice under section 148 of the Act, therefore, cannot be sustained. - Decided in favour of assessee. - Special Civil Application No. 20212 of 2015 - - - Dated:- 19-4-2016 - Harsha Devani And G. R. Udhwani, JJ. For the Petitioner : Mr Tushar .....

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..... tion of the court to the reasons recorded for reopening the assessment to point out that the assessment is sought to be reopened on the ground that during the assessment proceedings for assessment year 2012-13, the Assessing Officer had found that M/s Glamour Sales Pvt. Ltd., from which the petitioner had claimed to have received share capital with premium, was not available at the given address and therefore, the identity and creditworthiness of that company and genuineness of the transaction could not be established. It was submitted that during the course of assessment proceedings, the then Assessing Officer found that the petitioner had received share application money from M/s Glamour Sales Pvt. Ltd., hence, by a letter dated 26.11.2012, the Assessing Officer called for the information from M/s Glamour Sales Pvt. Ltd. under section 133(6) of the Act in respect of the transactions entered into with the petitioner during the year under consideration. In response thereto, M/s Glamour Sales Pvt. Ltd. duly furnished its reply dated 05.12.2012 wherein, it was categorically mentioned that it had applied for shares of the petitioner together with various annexures, viz., ledger copy o .....

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..... rded while rejecting the application made by the petitioner objecting to the reopening. Referring to the said order, it was submitted that it is nowhere stated therein that in the original proceedings, this issue was not gone into. It was pointed out that on the contrary, he has recorded that as no conscious consideration of the material is made and a mistake is committed, it would not create an embargo or ban on the competent authority to exercise powers under the amended section 147. Reference was made to paragraph 5(iii) of the said order, to point out that the respondent has noted the argument of the assessee that the notice under section 133(6) issued from that office, was duly served and complied with and therefore, the identity of the company is proved, but has held that the argument of the petitioner is baseless and it cannot be said that a particular company is genuine even if the investor company is having PAN, filing income tax returns, having bank account and accounts are audited. It was pointed out that in connection with the submission of the petitioner that M/s Glamour Sales Pvt. Ltd. had in pursuance of the notice under section 133(6) of the Act, submitted the detai .....

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..... rnish various details within seven days from receipt of the notice. However, no such details were made available by M/s Glamour Sales Pvt. Ltd. to prove the genuineness of the transactions with the assessee company. Hence, after recording the reasons, notice was issued to the petitioner under section 148 of the Act. It was submitted that it is the case of the petitioner company that M/s Glamour Sales Pvt. Ltd. has submitted details in pursuance of the notice issued under section 133(6) of the Act during the course of assessment proceedings for assessment year 2012-13. However, on a perusal of the case record, it appears that no such details are available therein. It was contended that while assessment was completed under section 143(3) of the Act for the year under consideration, on a verification of the assessment order, it is noticed that the Assessing Officer had not discussed the issue of share application money in the assessment order. It was submitted that in the light of the fact that the issue was not gone into at the stage of framing assessment under section 143(3) of the Act, the question of change of opinion would not arise. Reliance was placed upon the decision of Delhi .....

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..... ieve that income of the assessee to the extent of ₹ 12,50,000/- has escaped assessment within the meaning of section 147 of the Act for A.Y. 2011-12 on account of failure on part of the assessee to disclose all material facts in the return of income fully and truly and therefore, the case of the assessee needs to be reopened under section 147 of the Act. 8 In the reasons recorded, reference is made to assessment year 2011-12, which according to the Assessing Officer is a typographical error and that the actual year is assessment year 2010-11. Therefore, after recording the above reasons, the Assessing Officer has issued the notice under section 148 of the Act for reopening the assessment for assessment year 2010-11. 9 As is evident on a plain reading of the reasons recorded, according to the Assessing Officer, the assessee had claimed to have received share capital with premium from M/s Glamour Sales Pvt. Ltd. of a sum of ₹ 12,50,000/-. According to the Assessing Officer, during the assessment proceedings of assessment year 2012-13, it was unearthed that the investor company does not exist at the given address and therefore, identity and creditworthiness of tha .....

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..... therefore, appears that during the year under consideration, M/s Glamour Sales Pvt. Ltd. had duly responded to the notice under section 133(6) of the Act and was very much in existence at the address furnished by the petitioner. In the subsequent year, according to the Assessing Officer, M/s Glamour Sales Pvt. Ltd. was not found at the said address. This is based upon the fact that M/s Glamour Sales Pvt. Ltd. had not responded to the notice under section 133(6) of the Act during the course of the assessment proceedings for assessment year 2012-13. It may be noted that it is the specific case of the petitioner in the petition, which is supported by certain documents placed on record, that M/s Glamour Sales Pvt. Ltd. had responded to the notice under section 133(6) of the Act issued during the course of assessment proceedings for assessment year 2012-13. Be that as it may, even if M/s Glamour Sales Pvt. Ltd. may not have responded to the notice under section 133(6) of the Act for assessment year 2012-13, the record clearly shows that in response to such notice issued during the proceedings under section 143(3) of the Act for the year under consideration, M/s Glamour Sales Pvt. Ltd. h .....

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..... such bogus company is considered to be non-genuine and therefore, the share capital with share premium received from the so called bogus company is nothing but the assessee s own fund circulated through M/s Glamour Sales Pvt. Ltd. via its bank accounts. In this regard, it is by now well settled that the validity of the reopening has to be examined on the basis of the reasons recorded and the reasons recorded cannot be supplemented either by the order disposing of the objection or by filing an affidavit in that regard. As held by this court in the case of Dishman Pharmaceuticals Chemicals Ltd. v. Deputy Commissioner of Income Tax (OSD) (No.2) (supra), if the reopening of assessment fails, on account of non-existence of reasons for such reopening, the same cannot be sustained on other grounds. In the present case, the reopening being based upon a mere change of opinion, viz., the then Assessing Officer had gone into this very issue at the time of framing assessment under section 143(3) of the Act, the Assessing Officer cannot seek to sustain the same on the basis of further grounds stated in the order rejecting the objections. As regards the decision of the Delhi High Court in Comm .....

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