TMI Blog2021 (4) TMI 1226X X X X Extracts X X X X X X X X Extracts X X X X ..... loaded in view of assessee's application for the rectification, it was found that there was huge mismatch in receipts appearing in 26AS vis-a-vis receipts credited in P L Account. Assessing Officer has reason to believe that the income of the assessee as escaped assessment and decided to reopen the assessment. This apart, the Assessing officer relied on the MB Shah Commission, set up by the Government of India to enquire into the cases of illegal mining in the State of Odisha. The petitioner/assessee was a raising contractor, employed by one KJS Ahulwalia, who was a lessee found in the Shah Commission report. For all these reasons, the Assessing officer has reason to believe for reopening of assessment. The respondents have placed on record the materials and informations and evidences that gave them reason to believe that there is escapement of income. The grounds placed before this Court for reopening of assessment is sufficient reason to believe that there is escapement of income and the sufficiency of the reasons cannot be gone into by the High Court in a writ proceedings under Article 226 of the Constitution of India. The contents of the breakup details, evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010 and a revised demand was issued to the petitioner, reducing the total demand to the tune of ₹ 38,05,14,782/-, Subsequently, the Department passed an order under Section 143(3), wherein again TDS was given only to the extent of ₹ 8,51,06,508/-. On 20.07.2011, the petitioner filed another rectification petition before the Learned Deputy Commissioner of Income Tax (DCIT) to rectify the order passed under Section 154 for Assessment Year 2008-09, it was submitted by the petitioner that since the TDS amount of ₹ 55,65,195/- had not been taken into account, interest levied under Section 234B would be reduced and hence, no tax was payable to the petitioner. 3. The respondent Department on 20.02.2015, issued a notice under Section 148 of the Income tax Act, to reopen the petitioner's income tax assessment for the Assessment Year 2008-09. It is contended that the said notice was issued beyond four years and after the end of relevant Assessment Year. On 21.04.2015, the petitioner wrote a letter to the DCIT, seeking the reason for reopening of the impugned Assessment Year. On 12.10.2015, the reasons were furnished by the DCIT for reopening. The petitioner has stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n provides that the Assessing officer may assess, or reassess such income (believed to have escaped assessment) and also any other income chargeable to tax, which has escaped assessment and which comes to the notice of the Assessing Officer. Subsequently in the course of the proceedings under Section 147 of the Act. Explanations 1 to 3rd proviso is abundantly clear to indicate that mere production before the Assessing officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure. The records do no show any opinion formed by the Assessing Officer during the course of original assessment proceedings on the issues, which have been mentioned in the reasons recorded for reopening of the assessment under Section 147. In fact, no opinion had been formed by the Assessing Officer during the course of the original assessment on the issues under consideration. Thus, it is to be construed as new material traced out for the purpose of reopening of assessment. The respondents reiterated that the informations, which is stated to be available cannot be stated to be fully and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there is a huge mismatch in receipts appearing in 26AS vis-a-vis receipts credited in P L Account. Thus, the Assessing Officer had tangible material to reopen the income tax assessment and the same was legally done as per the provisions of Section 147 of the Income Tax Act by issuing a notice under Section 148 of the Income Tax Act. 9. Further, the Assessing officer came into possession of certain other information which also lead to the 'belief' that income chargeable to tax had escaped assessment. As per the MB Shah Commission's report (Annexure-D to Report-I of Volume -I) has tabulated the list of 146 lessees who were involved illegal and excess production of iron ore during 2000-01 to 2009- 10. It is reported that the State Government of Odisha issued show cause notices to various parties for recovery of mineral value. KJS Ahulwalia, one of the lessese who employed assesee as raising contractor, has been issued for recovery of ₹ 2022,00,72,213/- for the above said period. The notice has been issued for excess production which was produced illegally and not disclosed to appropriate authorities. Since assessee is doing extraction work for the lessee, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and as a raising contractor, he has performed his job and submitted the materials, which all are true and full for the purpose of assessment. Thus, the impugned order is liable to be scrapped. 14. The learned Senior counsel mainly raised objections regarding the alleged mismatch with reference to the discrepancies identified for forming an opinion in the matter of escaped income. Mere reference made with Form 26AS, would not be the sufficient factor for the purpose of reopening of assessment as the petitioner themselves filed an application for rectification under Section 154 of the Act and therefore, they have made true and full disclosure. Thus, the very reason to believe as contemplated has not been met with and in fact, it amounts to change of opinion by the competent authority. As far as the MB Shah Commission report is concerned, the illegal mining to a larger scale was identified and the petitioner is no way connected and he being a raising contractor of one of the lessee namely KJS Ahulwalia, he has submitted his income for the purpose of assessment and thus, the other reasons stated is also incorrect and the same would not constitute any reason to believe for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicate and pass reassessment orders. 17. Considering the arguments, this Court is of the considered opinion that the scope of Section 147 of the Income Tax Act are unambiguous. Reopening of Assessment under Section 147 within four years and beyond four years, but within 6 years are well enumerated in the provision itself. Thus, the case of the petitioner falls under the category of beyond four years, but within six years as the Assessing officer found that the disclosure made by the assessee was not full and true and the petitioner has not submitted all material facts necessary for the assessment for the relevant year. This apart, in the present case, the respondents have culled out certain factors, based on the rectification application filed by the petitioner under Section 154 of the Act. Mismatching found with reference to Form 26AS, also a ground to reason to believe. The Assessing Officer having found discrepancies and amount involved are mismatching and there are huge difference with reference to the income disclosed and the income escaped from assessment, then the proceedings under Section 147 of the Income Tax Act was initiated and 148 Notice was issued and reasons for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 131843 Nil 6 Sunflag Iron Steel Ltd 5102596 105113 Nil 7 Tata Sponge Iron Limited 722341 16369 Nil Total 17,81,04,653 40,24,852 20. In the case of Jayaram Paper Mills Limited, Vs. Commissioner of Income Tax, reported in [2010] 191 Taxman 38 (Madras) , it is held as follows: 6. It is now well settled that the term escaped assessment includes both non-assessment and under assessment. (see Tax Officer-cum-Regional Transport Officer vs. Durg Transport Company (Pvt) Ltd --1975 (4) SCC 43 and CIT vs. Sun Engineering Works (P) Ltd- 1992(4) SCC 363). In a long line of decisions, the Supreme Court has held that this court, under Article 226 of the Constitution, has power to set aside a notice under section 147 of the Income Tax Act, 1961, if the conditions precedent for the exercise of the jurisdiction do not exist. 21. Thus, it is sufficient if there are certain additional materials available, which ..... 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