TMI Blog2019 (5) TMI 1447X X X X Extracts X X X X X X X X Extracts X X X X ..... uage of Section 147 that there was a failure by the Assessee to disclose fully and truly all material facts necessary for the assessment. The Court is, therefore, satisfied that the jurisdictional requirement of the first proviso to Section 147 proviso has not been satisfied in the present case. Assessee is right in his submission about the mistakes committed even in the proforma accompanying the reasons recorded which notes that the exercise was being undertaken in terms of clause (b) to Explanation 2 to Section 147 which would mean that the original assessment was under Section 143 (1) of the Act. The fact is that the original assessment was under Section 143 (3) of the Act. This perhaps explains why the reasons recorded for re-opening the assessment does not advert to what transpired during the original assessment and in particular the questionnaires issued to the Assessee by the AO specifically on the issue of the loan from PACL. The learned counsel for the Assessee is justified in his submission that this also reflects non-application of mind by the AO, and the superior officer who approved the re-opening, to the relevant materials. Notice for reopening quashed - Decided in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 2nd February, 2013 the Petitioner submitted details of the deployment of funds along with copies of the ledger accounts, showing loans and advances, along with ledger account of PACL. According to the Petitioner direct enquiries under Section 133(6) were made by the AO from PACL during the assessment proceedings. Original assessment order 4. The AO passed an assessment order dated 28th March, 2013 for the AY in question accepting the Petitioner s return as filed. The order was a short one and reads as under: A search and seizure operation u/s 132 of the IT Act was carried out at the business premises of M/s Best group at H-8, Best Plaza, Netaji Subhash Place, Pitampura, New Delhi as well as on residential premises of the directors and their family members on 28th March, 2011. The group is carrying out the activities of real estate development and related services. The group is managed by Sh. Harjeet Singh, Sh. Anu Aggarwal and others M/s Best Cyber City (India) Private Limited is one of the companies of this group. Case of the assessee company was centralized with Central Circle-11, New Delhi. A notice under section 142(1) was issued on 11-10-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents in which transactions are squared up on daily basis or a day after day basis. From statement of one Shri Annu Aggarwal, Director of Assessee it was clear that it had done no business activities ever since its incorporation and had no income for investment. It was further stated that the assessee had no business office premises either on rent basis or ownership basis. It had no fixed moveable assets and no staff to carry on day to day activities. It was then noted that Shri Aggarwal admitted not knowing the names of the Directors and Top Management officers of PACL which was well known for giving and taking accommodating entries. The name of PACL had been mentioned by one Shri Praveen Aggarwal a well known entry operator of Kolkata who had made a statement to that effect on 12th November, 2012 during search and seizure operation conducted at his group of companies. 8. For the above reasons, the AO recorded that he had reason to believe that ₹ 40 crores received by the Assessee from PACL had escaped income for AY 2011-2012. In Para 4.1 the AO concluded that the Assessee had received unexplained investment amounting ₹ 40 crores during the AY in question, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led in the present case. 13. Mr. Kapoor placed reliance on the decisions of this Court and the Supreme Court in CIT v. Kelvinator of India Ltd. (2010) 320 ITR 561, Haryana Acrylic Manufacturing Co. v. CIT (2009) 308 ITR 38 (Del), Sabh Infrastructure Ltd. v. ACIT 398 ITR 198 (Del) and Yum! Restaurants Asia Private Ltd v. Deputy Director of Income Tax 397 ITR 665 (Del). Submissions of the Revenue 14. Mr. Zoheb Hossain, learned Senior standing counsel for the Revenue on the other hand submitted that the assessment order did not reflect any discussion on the aspect of the unsecured loan obtained by the Assessee from PACL during the AY in question. It was a cryptic order and, therefore, couldn t be said to reflect any opinion of the AO on the issue. He placed reliance on the decision in Income Tax Officer Ward No. 16(2) vs. M/s TechSpan India Private Ltd. (2018) 6 SCC 685 as well as S.K.Enginnering Company Private Limited vs. Commissioner of Income Tax (Amritsar) 2001 10 SCC 189 to urge that where the original assessment order was a cryptic one it could not be said that the re-opening was based on a mere change of opinion. 15. Mr. Hoss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held Thus, it is also now well settled that the reasons to believe have to be self explanatory. The reasons cannot be thereafter supported by any extraneous material. The order disposing of the objections cannot act as a substitute for the reasons to believe and neither can any counter affidavit filed before this court in writ proceedings. 18. As far as the present case is concerned, it is seen that the detailed questionnaire was first issued on 23rd October, 2012 by the AO during the course of the original assessment proceedings under Section 143 (3) of the Act. The AO had called for copies of all the bank accounts, the details of the sources of funds credited to the bank accounts and the application of the funds debited in such accounts. A reference was made to the search and seizure operations undertaken on 28th March, 2012 in which cash was found from plot No. H-8, Netaji Subhash Palace, New Delhi. On 30th October, 2012 the Petitioner gave a point-wise reply including the Auditors report and the balance sheets, profit and loss account etc. By a separate letter dated 6th November, 2012 the Petitioner give further clarifications on certain other points place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th reference to the subject captioned above, the Assessee seeks to submit as follows in response to the questionnaires issued u/s 142(1): Reply to Point No. 6 With regard to the query in relation to ₹ 40Cr received by the Assessee Company, it is stated that the Assessee Company has received ₹ 40 Cr in AY 2011-12 as an advance for development of IT park, from M/s PACL, as highlighted in the bank statement and bank book enclosed herewith for your ready reference. Availing the deployment of funds, the amounts were temporarily advanced to following parties whose debit balance on 31.03.2011 was as under: Name of the Party Amount (Rs.) Best City Developers (I) Pvt. Ltd. 7,20,00,000/- Dr. Best International Projects Pvt. Ltd. 15,48,00,000/- Dr. Best Realtech (I) Pvt. Ltd. 12,30,00,000/- Dr. Harjeet Singh Arora 90,00,000/- Dr. Parasmani Buil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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