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Touchstone Lending Pvt. Ltd. @ Aristro Financial Services Pvt. Ltd. Versus Assistant Commissioner of Income Tax, Circle 8 (2) , Kolkata & Others

2018 (1) TMI 543 - CALCUTTA HIGH COURT

Reopening of assessment - Held that:- Having heard the parties and considering the materials placed, this Court is satisfied that complete disclosure sought to be labored by the learned Counsel for the petitioners in an assessment proceeding under Section 147 is not the sole duty of the revenue / respondents alone but, equally, lies at the door step of the petitioners/ assessee company. This Court is also satisfied that the reasons for harbouring the belief of the income having escaped assessmen .....

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Adv. Mr.Niladri Kharra, Adv. For the Respondent : Mr.Soumitra Mukherjee, Adv. ORDER The Court: Parties are represented in the order of their names as printed above in the cause title. Mr. Ananda Sen, learned counsel appearing for the writ petitioners submits that the writ petition is maintainable on the single ground that the conclusion of the Assessment Officer (A.O.) that he has reasons to believe that an income chargeable to tax of the petitioners / assessee company has escaped assessment for .....

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to file a return in the prescribed form for the said A.Y. 2010‐ 2011 for the purpose of the reassessment. On behalf of the petitioners /assessee company the notice under Section 148(Supra) was replied to on 6th of April, 2017 with a copy of the return along with the acknowledgement for the A.Y. 2010‐2011 and, the petitioners sought further reasons from the A.O. with regard to the conclusion arrived at under Section 148 connected to the income chargeable to tax having escaped the ass .....

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etter of 7th August, 2017 relying copiously on case law, which is also produced today, in support of the proposition that the conclusion regarding escaping of assessment to tax must be backed by sufficient reasons provided by the A.O. himself. The letter of 7th August, 2017 was in turn replied to by the revenue/respondents by a communication dated 22nd August, 2017 indicating therein the reasons for non‐acceptability of objection filed by the petitioners/assessee company and, reiterating t .....

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ection 147 must be backed by sufficient reasons of the A.O. himself. Such reasons are not required to be gathered or /calculated from any other source/department and, till the petitioners are in possession of such sufficient reasons of the A.O., the procedure under Section 147 of the IT Act, 1961 cannot be carried further. On behalf of the revenue/respondents Mr.Mukherjee, learned counsel makes the relevant point that the reassessment procedure following a notice under Section 148 based on Secti .....

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t /wings of the same Income Tax department cannot be said to be of a nature which does not contribute to the belief of an A.O. that such income has escaped assessment. Mr. Mukherjee also relies upon the authority of Commissioner of Income Tax & Ors. vs. Chhabil Dass Agarwal reported in The Supreme Court of India ‐ Civil Appeal No.6704 of 2013 (@ Special Leave Petition (Civil) No.23898 of 2011) to highlight that a rule of alternative remedy is not a mechanical one and, in the reassessme .....

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an assessment proceeding under Section 147 (Supra) is not the sole duty of the revenue / respondents alone but, equally, lies at the door step of the petitioners/ assessee company. This Court is also satisfied that the reasons for harbouring the belief of the income having escaped assessment have been clarified in the reply dated 26th /27th July, 2017 and, the process of answering the evidence in detail can start only after the reassessment exercise takes place on the basis of the required disc .....

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hich the assessee can uncover but does not. If there is such a fact, it is the duty of the assesee to disclose it. The evidence which is produced by the assessee discloses only primary facts, but to interpret the evidence, certain other facts may be necessary. Thus, questions of statues, agency, the benami nature of transactions, the nature of trading and like matters may not appear from the evidence produced, unless disclosed. It if be merely a question of interpretation of evidence by an Incom .....

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nd true disclosure which would entitle action under section 34 of the Act. The following example explains the meaning. Taking the present case, I set below two statements, one involving full disclosure and a contention, and the other, only a contention with a material fact suppressed: (1). We are a trading company and our business is according to our memorandum of association to acquire, hold, exchange, sell and deal in shares, stocks, etc. These sales, however, were not business sales but only .....

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re was full and true disclosure. In the present case, the question whether the transactions were casual transactions of changing investments or regular trading in stocks and shares involves not merely an inference, because the inference depends upon the fact that the appellant company was formed to trade in stocks and shares. It was open to the appellant company to contend that in spite of its business, a particular transaction was this and not that. But, if the appellant company was an investme .....

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