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TMI Blog2016 (11) TMI 1395X X X X Extracts X X X X X X X X Extracts X X X X ..... .Y 2009-2010, the assessee-Ghanshyambhai A. Thakker has preferred Special Civil Application No. 14615 of 2016. 4. For the sake of convenience, Special Civil Application No. 14612 of 2016 is treated as a lead matter, and therefore, facts in Special Civil Application No. 14612 of 2016 are narrated and considered. 5. The petitioner-assessee filed return of income for the year under consideration on 2nd November 2009 declaring total income at Rs. 18,54,959/=. The same was processed under Section 143 [1] of the Act. That, beyond the period of four years from the end of relevant assessment year, by impugned notice dated 31st March 2016 issued under Section 148 of the Act, the Assessing Officer has reopened the assessment for Assessment Year 2009-2010. On an application given by the assessee, the Assessing Officer had produced the reasons recorded for reopening the assessment under Section 147 of the Act for A.Y 2009- 2010. The reasons recorded for reopening the assessment for A.Y 2009-2010 read as under :- "In this case, information received from ITO [Inv] Unit II, Ahmedabad vide letter dated 29.03.2016 that an amount of Rs. 50 lacs was transferred among the group accounts [6 account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also submitted on behalf of the assessee that before assuming the jurisdiction to reopen the assessment beyond four years, the Assessing Officer had not formed any opinion and/or had not formed any belief that any income chargeable to tax has escaped the assessment. However, it has been stated in the reasons recorded by the Assessing Officer that the assessment for AY 2009-2010 has been reopened for deep verification and to determine the taxability and accountability. It was submitted that for roving or fishing inquiry or investigation, without there being any specific finding as to escapement of income, reopening of assessment is not permissible. That, by communication dated 2nd August 2016, the Assessing Officer has disposed of the objections to the Notice issued under section 148 of the Act for AY 2009-2010. Hence, the assessee has preferred the present Special Civil Application under Article 226 of the Constitution of India challenging the impugned Notice to reopen the assessment for AY 2009-2010. 7. Shri Tushar P Hemani, learned advocate appearing on behalf of the assessee has vehemently submitted that in the facts and circumstances of the case, the Assessing Officer has m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has also stated that with respect to investment in shares of M/s. Rushil Decor, which according to the assessee was acquired from the capital and the same was duly recorded in the books of account, the same is required to be verified, for which Notice under Section 148 of the Act has been issued. It is therefore submitted that there is no reasonable belief by the Assessing Officer before issuing Notice under Section 148 of the Act that the income chargeable to tax has escaped assessment. It is further submitted by Shri Hemani that the conditions precedent for issuance of Notice under Section 148 of the Act are not satisfied and/or that the conditions precedent for reopening of the assessment under Section 147 are not satisfied, and hence, the impugned notice to reopen the assessment which has been issued beyond the period of four years deserves to be quashed and set-aside. IN support of his contentions, learned counsel for the assessee has relied upon a decision of Division Bench of this Court in case of Deep Recycling Industries v. Deputy Commissioner of Income Tax - Circle 2 [Special Civil Application No. 3611 of 2013 :: Decided on 2nd August 2016]. Learned counsel Shri Hemani ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Rushil Decor Limited was a private limited company prior to F.Y 2011-2012. It was further noticed that for the AY 2009-2010, the assessee was holding shares of the value of Rs. 28,03,922/= of M/s. Rushil Decor Limited, however, source of investment was not verified at the time of original assessment, as the return filed by the assessee was summarily accepted and order under Section 143 [1] of the Act was passed. It is therefore submitted that the Assessing Officer has rightly issued Notice under Section 148 of the Act, as the A.O has reason to believe that income chargeable to tax has escaped the assessment on account of failure on the part of the assessee to disclose the correct facts, for which no scrutiny was done. 8.2 Relying upon a decision of the Apex Court in the case of Asstt. CIT v. Rajesh Jhaveri Stock Brokers P. Limited, reported in [2007] 291 ITR 500 [SC], the Division Bench of this Court in case of Inductotherm [India] P. Limited v. M. Gopalan, Deputy Commissioner of Income-Tax, reported in [2013] 356 ITR 481 [Guj.], it is requested to dismiss the present petitions. 8.3 Relying upon the aforesaid decisions, it is submitted that if the Assessing Officer has a ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment could not be exercised. It is further observed that the Assessing Officer under the guise of power to reopen an assessment, cannot seek to undertake a fishing or roving inquiry and seek to verify the claims, as if it were a scrutiny assessment. 12.1 Similar view has been expressed by the Division Bench in case of Deep Recycling Industries v. Deputy Commissioner of Income Tax - Circle 2 [Supra] wherein it has been held and observed that for mere scrutiny, reopening of the assessment would not be permissible. It is further observed that the reopening of the assessment could be made if the Assessing Officer had formed a belief that income chargeable to tax had escaped assessment. The Court has further observed that in order to do so, the Assessing Officer must have some tangible material having live link with the escapement of the income on the basis of which he can form a bona fide belief of escapement of income chargeable to tax. It has also been observed that reopening cannot be resorted to for fishing or roving inquiry on mere suspicion that income chargeable to tax may have escaped assessment. 13. Applying the aforesaid two decisions to the facts of the present two cases ..... X X X X Extracts X X X X X X X X Extracts X X X X
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