TMI Blog2015 (8) TMI 1354X X X X Extracts X X X X X X X X Extracts X X X X ..... been transferred out of the State after use within the State - in the proceedings under Section 31 of the Act, it was not open to the Assessing Officer to have proceeded in the manner as if he was making an initial assessment under Section 25 of the Act. But, there was no inherent lack of jurisdiction in the Assessing Officer to have proceeded in the matter not only with regard to the year 2012-13, for which the audit objection had been made but also for the other years if the reasons given in the audit objection were applicable to them also and thus initiation of proceedings under Section 31 of the Act for the other years cannot be held to be without jurisdiction. Petition allowed - matter remanded to AO to be decided afresh. - Civil Writ Jurisdiction Case Nos. 7436, 7534, 7522, 7521 of 2015 - - - Dated:- 11-8-2015 - Ramesh Kumar Datta and Sudhir Singh, JJ. D. V. Pathy, P. K. Mishra and Mrs. Manju Jha for the petitioner Lalit Kishore, Principal Additional Advocate-General and Vikash Kumar, A. C. to Principal Additional Advocate-General, for the respondents ORDER Heard learned counsel for the petitioner and learned Principal Additional Advocate General ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... going back to the year 2009-10 and it was not at all possible for the petitioner in the short period available to have produced all the necessary evidences which had to be retrieved from the computer system of the petitioner. It is urged by learned counsel that the Assessing Officer completely forgot that he was not making a current assessment under Section 25 of the Act, rather he had reopened old assessments without any objection with regard to three of the periods and thus he ought to have given ample time to the petitioner to produce the necessary documents which has not been done by him. It is also submitted by learned counsel for the petitioner that under Section 31 of the Act and imposing penalty there must be concealment, omission or failure to disclose full and correct particulars and there is nothing in the impugned orders to show that there was any concealment, omission or failure to disclose full and correct particulars on the part of the petitioner so far as returns were concerned. It is, at this stage, pointed out by learned counsel for the petitioner that in the annual return forms of ET Form-05 there was no column of inter-State sale or stock transfer as i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully and truly all material facts. Once there exist reasonable grounds for the Income-tax Officer to form the above belief, that would be sufficient to clothe him with jurisdiction to issue notice. Whether the grounds are adequate or not is not a matter for the court to investigate. The sufficiency of the grounds which induce the Income-tax Officer to act is, therefore, not a justiciable issue. It is, of course, open to the assessee to contend that the Income-tax Officer did not hold the belief that there had been such non-disclosure. The existence of the belief can be challenged by the assessee but not the sufficiency of the reasons for the belief. The expression reason to believe does not mean a purely subjective satisfaction on the part of the Income-tax Officer. The reason must be held in good faith. It cannot be merely a pretence. It is open to the court to examine whether the reasons for the formation of the belief have a rational connection with or a relevant bearing on the formation of the belief and are not extraneous or irrelevant for the purpose of the section. To this limited extent, the action of the Income-tax Officer in starting proceedings in respect of income e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were new materials which were sent out of the State. Learned Principal Additional Advocate General, on the other hand, submits that the initiation of proceedings was on the basis of audit objection of the CAG with regard to the year 2012-13 and the matter would be squarely covered by the provisions of Section 33 of the VAT Act which provides that the prescribed authority shall proceed to re-assess the dealer with respect to whose assessment or re-assessment or scrutiny, as the case may be, the objection has been raised in the manner prescribed. It is further submitted that on the basis of the grounds and reasons mentioned in the audit objection which were found proper by the Department on considering the returns for the three other periods, it was found that the matter was required to be re-assessed and accordingly proceedings under Section 31 of the Act were initiated. It is contended by learned Principal Additional Advocate General that Section 31 (1) of the Act contemplates two types of situation; one simpliciter where during any period any sale or purchase of goods liable to tax under this Act or the said Act, for any reason, has been under assessed or has escaped asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Apex Court in the case of Lukhmani Mewal Das (supra) under Section 147 of the Income Tax Act in which, as it then stood, there was provision for assessment or reassessment of Income-tax of escaped income both on the failure on the part of the assessee to make a return or to disclose full and correct particulars and material facts necessary for his assessment, as also in the case where there has been no omission or failure on the part of the assessee but the Income-tax Officer has information in his possession. Although the words used under Section 31 of the Bihar VAT Act are not the same, but the purport of Section 31 of the Act appears to be broadly on the same lines as that under Section 147 of the Act, as it then stood. The matter before the Apex Court was one where notices had been issued under Section 147 (a) of the Income Tax Act which led to the observations as have been made by the Apex Court for the same. The said observations would clearly apply to the present matter also and it would be incumbent upon the Assessing Officer to come to a conclusion that there has been concealment, omission or failure to disclose full and correct particulars of sale or purchase or i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of the materials on the record and in case any penalty was to be levied it could only be on the basis of concealment, omission or failure to disclose full and correct particulars as provided under Section 31 (1) of the Act and not merely on account of something being discovered in the returns and other materials already filed before the Department. We are also of the view that where reassessment for previous periods extending up to the period 2009-10 has been re-opened, considering that the facts and figures were available on the computer, they may not be easily accessible by the Branch Office and, moreover, other evidences may also have to be searched. If the petitioner had prayed for time for producing the same it ought to have been granted to the petitioner. Even if it is assumed that for the period 2009-10, there may have been pressure on the Assessing Officer with regard to limitation provided in the Act but for the same, it is not the petitioner who can be blamed, as it is the Department which is responsible for acting after such a long period of time. We are also unable to persuade ourselves to accept the contention of learned PAAG that the intention not to con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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