TMI Blog2016 (12) TMI 1296X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment proceeding afresh from that stage. Solely on that ground and without going into the merits of the assessment orders dated 31 March, 2015, the said assessment orders are set aside. The petitioners are permitted to file objection to the Department’s communication dated 15 January, 2015 within three weeks from date. In the event they do so, the assessing officer shall consider and dispose of such objection by a reasoned order, before proceeding, if at all, with the reassessment in accordance with law and the principles of natural justice. If the petitioners do not file their objection within the time indicated above, the assessment orders dated 31 March, 2015 shall stand revived. - GA 1228 of 2015, WP 269 of 2015 - - - Dated:- 22-12-2016 - Arijit Banerjee, J. For the Petitioners : Mr. S. Basu, Sr. Adv. Mr. S Dasgupta, Adv. Mr. D. Mukherjee, Adv For the Respondents : Mr. S. B. Saraf, Adv. Mr. K. K. Maity, Adv JUDGMENT Arijit Banerjee, J. (1) In this writ application the petitioners challenge notices issued by the Income Tax Department under Section 148 read with Section 147 of the IT Act, 1961 pertaining to the assessment years 2007-08 to 2011-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 2011-12 are hereby forwarded to you for communication of the same as per direction of the Hon ble Kolkata High Court. The ITI of the department was deputed to verify the genuineness of the parties and transaction. On enquiry, it was found that there was no existence of the companies in the recorded address. As such there were sufficient reasons to believe that the introduction of share capital and premium in the assessee company was mere accommodation entries from paper companies. It may be noted that reasons to believe was only formed on the basis of enquiry. Certified copies of enquiry report submitted by the departmental ITI are enclosed herewith as Annexure A consisting of 12 pages. (7) The present writ petition was filed on or about 4 March, 2015 challenging the Section 148 notices as also the letter dated 15 January, 2015. During the pendency of the writ petition the respondent no. 1 passed five ex parte assessment orders all dated 31 March, 2015 for the assessment years 2007-08 to 2011-12 which were brought on record by the petitioner company by filing GA No. 1228 of 2015. Contention of the petitioners:- (8) The sole contention of the petitioners is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r company s assessment for the years mentioned above and such reason has been set aside by this Court. The respondents admit, once Section 148 notice is issued, no fresh reasons can be recorded. He submitted that this is a case where there has been ab initio error apparent on the face of the decision making process and gross abuse of statutory process. (11) Learned Counsel then submitted that even assuming but not admitting that fresh and valid reasons were supplied by the letter dated 15 January, 2015, even then, the petitioner company had a right to file an objection to such reasons and the respondent no. 1 would have been under a mandate to consider and pass an order rejecting or accepting such objection. The petitioner company cannot be deprived of such a right to file an objection merely because of its bona fide decision to agitate the issue of non-supply of valid/fresh reasons by way of the present writ petition. It was wholly improper on the part of the Department to pass ex parte assessment orders on 31 March, 2015 with the knowledge that the present writ petition was pending. This amounts to overreaching the Court. Further, submitted learned Counsel, that had the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing GA No. 1228 of 2015 in the month of April, 2015 that came up for hearing before this court on 8 June, 2015 and direction for affidavits was given. No interim order was passed. (15) Learned Counsel submitted that the respondent authorities have acted strictly in accordance with the order passed in the earlier writ petition and supplied the fresh reasons along with the particulars of the enquiry conducted which formed the bedrock of the recorded reasons. He submitted that the contention of the Department is not that the companies shown to be shareholders of the writ petitioner or service providers to the petitioner company are non-existent but that they are paper companies. The petitioner company has endeavoured to legitimize its unaccounted income in cash money by showing the same as share subscription money paid by paper companies and also by showing payment by the petitioner company for alleged services provided by paper companies. Mr. Saraf submitted that the procedure to be followed in the case of re-assessment has been laid down by the Hon ble Apex Court in the case of GKN Driveshafts (India) Ltd.-vs.-Income Tax Officer, (2003) 259 ITR 19, and in particular he relied on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial available on the record from which the requisite belief could be formed by the Incometax Officer and further whether that material had any rational connection or a live link for the formation of the requisite belief. It would be immaterial whether the Income-tax Officer at the time of making the original assessment could or, could not have found by further enquiry or investigation, whether the transaction was genuine or not, if on the basis of subsequent information, the Income-tax Officer arrives at a conclusion, after satisfying the twin conditions prescribed in Section 147(a) of the Act, that the assessee had not made a full and true disclosure of the material facts at the time of original assessment and therefore income chargeable to tax had escaped assessment. (18) Mr. Saraf then submitted that the Income Tax Officer is justified in trying to ascertain the source of depositors as he has tried to do in the instant case. In this connection he referred to the Division Bench decision of this Court dated 13 May, 2016 in the case of Rajmindir Estates Pvt. Ltd.-vs.-Principal Commissioner of Income Tax, Kolkata-III, Kolkata (delivered in ITAT No. 113 of 2016) wherein the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aggrieved by the result of the reassessment proceeding, it would have had a comprehensive remedy by way of a statutory appeal. In my view, the petitioners were ill-advised to file the present writ application. (21) Whether or not the reasons recorded by the assessing officer for issuing notices under Section 148 are valid and good reasons is entirely a factual issue. The assessee would have the right to urge before the assessing officer that the reasons are not justifiable and the assessing officer would have to deal with and dispose of the assessee s objection by a reasoned order. This is the proper course of action as also held by the Hon ble Apex Court in the case of GKN Driveshafts (India) Ltd. (supra). In the present case, the Writ Court cannot go into the disputed fact of whether or not the petitioner company has window-dressed its accounts by showing contributions on account of share subscription money by paper companies and by showing payments for alleged services rendered by shell companies. Such factual matters are within the exclusive domain of the assessing officer. (22) I would have simply dismissed this writ petition had ex parte assessment orders dated 31 Marc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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