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TMI Blog2019 (2) TMI 1281X X X X Extracts X X X X X X X X Extracts X X X X ..... ping real estate. For the assessment year 2011-12, the petitioner had filed return of income which was taken in scrutiny by the Assessing Officer. The Assessing Officer passed order under Section 143(3) of the Income Tax Act, 1961 ("the Act" for short) on 29.1.2014. To reopen such assessment, the Assessing Officer issued the impugned notice. In order to do so, he had recorded following reasons: "Reasons for reopening of the assessment in case of M/s. Kalsha Builders Pvt. Ltd. for A.Y. 2011-12 u/s 147 of the Act. In this case the Assessee filled return of Income on 27.09.2011 declaring total income of Rs. 10,05,830/-/- The said return was processed u/s 143(1) on 7.1.2012 determining Total Income of Rs. 10,05,830/- and Order Passed u/S 143( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r raised following contentions:- i. The reasons do not demonstrate any live link between the material available with the Assessing Officer and his formation of belief that the income chargeable to tax had escaped assessment; ii. The entire issue on which reopening of assessment is sought, was minutely examined by the Assessing Officer during the scrutiny assessment. The impugned notice, is thus, based on change of opinion; iii. There was no failure on the part of the assessee to disclose truly and fully all material facts. The reasons also do not suggest any such failure. 4. On the other hand, learned counsel Mr. Suresh Kumar for the Department submitted that the Assessing Officer had recorded proper reasons for issuing such notice. Aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding accommodation entires and that the investment made by the said Prabahv Industries in the assessee was in the nature of assessee's unexplained cash credit. 6. It is true that during the scrutiny assessment, this issue had come up for consideration before the Assessing Officer. He had raised multiple queries under a letter dated 17.7.2013 asking inter alia for furnishing details of assessee's share capital, increase in the assessee's share capital and share premium account. The assessee had replied to such queries. After which further queries came to be raised by the Assessing Officer on 20.8.2013 in which there was specific mention of the details of a sum of Rs. 3 crore having been paid by M/s. Prabahv Industries for purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan given by the assessee was examined. Later on, however, the Assessing Officer received information suggesting that the entire transaction was bogus. When the question of validity of reopening of assessment came up for consideration before the Supreme Court, it was observed as under:- "25. From a combined review of the judgments of this Court, it follows that an Income-tax Officer acquires jurisdiction to reopen assessment under Section 147(a) read with Section 148 of the Income Tax Act, 1961 only if on the basis of specific, reliable and relevant information coming to his possession subsequently, he has reasons which he must record, to believe that by reason of omission or failure on the part of the assessee to make a true and full di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, whether the transaction was genuine or not, if one 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. The High Courts which have interpreted Burlop Dealer's case (Supra) as laying down law to the contrary fell in error and did not appreciate the import of that judgment correctly. 26. We are not persuaded to accept the argument of Mr. Sharma that the question regarding truthfulness or falsehood of the transactions reflected in the return can only be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Assessing Officer. After the assessment was completed, the Assessing Officer was supplied information collected through search action at the residence and other premises of Shirish C. Shah who was found to be the main person engaged in providing bogus accommodation entires. The material impounded during the search suggested that Prabhav Industries was entirely controlled by Shirish C. Shah which had made investment of Rs. 3 crore in assessee company. The notice issued by the Assessing Officer to Prabhav Industries under Section 133(6) remained unanswered. It was on the basis of such material, the Assessing Officer formed a belief that the said sum of Rs. 3 crore was nothing but the re-rooting of assessee's unexplained cash. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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