TMI Blog2021 (7) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... writ applicant in both the cases having not been properly dealt with the by AO. The lapses is in clear violation - AO has passed the order disposing of the objections mechanically and without application of mind. The orders disposing of the objections are hereby set aside and the matters are remitted to the Assessing Officer. The Assessing officer shall take into consideration the objections raised by the writ applicants and pass a fresh speaking order in accordance with law - R/SPECIAL CIVIL APPLICATION NO. 15556 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 15557 of 2018 - - - Dated:- 11-6-2021 - HONOURABLE MR. JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE ILESH J. VORA Appearance: MR ISHAN MIHIR PATEL(6508) for the Petitioner(s) No. 1 MRS MAUNA M BHATT(174) for the Respondent(s) No. 1,2,3,4 ORAL ORDER (PER : HONOURABLE MR. JUSTICE ILESH J. VORA) 1. As common question of law and facts arise in these writ applications with respect to the same assessee for the different assessment years, both these writ applications were taken up for hearing analogously and are hereby disposed of by this common order. 2. M/s. Roquette Riddhi Siddhi Private ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t applicant filed its return of income in response to the impugned notice and requested to supply the copy of the reasons recorded for reopening and the same was supplied by the revenue vide its communication dated 10.04.2018. Thereafter, the assessee vide letter dated 04.05.2018 raised the objections and the same came to be disposed of by the revenue vide order dated 13.07.2018. The assessment for the year under consideration is sought to be reopened by the revenue mainly on the ground that the assessee company had taken bogus accommodation entries (amounting to ₹ 4,42,49,474/-) and the company which had provided accommodation entries from SCL, which is bogus company managed and controlled by Shri Vipul Bhatt and therefore, the amount has escaped assessment for the year under consideration. 5. The assessing officer before issuing the impugned Notice for the respective years, had recorded the following reasons for reopening of the assessment. In both the cases, the contents of the reasons recorded are same, therefore, for the sake convenience, reasons recorded for A.Y 2013-14 shall be taken into consideration, which reads thus: Reasons recorded:- 11. A search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seized. Further, during the search action at 1407, 14th Floor, New Jaiphalwadi, Police Colony, Tardeo, Mumbai-400034, the PAN cards of all the 347 bogus entities which are managed, controlled and operated by Mr. Vipul Bhatt for providing bogus accommodation entries were also found at this premise. All the PAN cards of all the bogus entities were seized. On perusal of the ledger account of the bogus entities/companies managed, controlled and operated by Shri Vipul Bhatt, it is seen that the assessee has taken the following bogus accommodation entries:- As the above mentioned entities in column-2 of the table, the above are bogus entities managed, controlled and operated by Mr. Vpul Bhatt for providing bogus accommodation entries, all the transactions entered into between the above mentioned entities and the assessee beneficiary are bogus accommodated entries in nature. 6. Being aggrieved by the impugned notice as well as the order disposing of the objections, the writ applicants have come up before this Court with the present writ applications. 7. We have heard Mr. S.N.Soparkar, the learned Sr. Counsel assisted by Mr. Ishan Mihir Patel, the learned counsel appeari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding the reasons, neither the AO made inquiries for his satisfaction nor he applied his mind led to formation of belief that the income has escaped assessment. Thus, reopening passed on borrowed satisfaction is not permissible in law. (vi) Referring to the reasons recorded, it was submitted that, it suffers from various infirmities and are too vague and no independent findings are being recorded by the AO. (vii) It was submitted that, reasonable belief as contemplated under Section 147 /148 of the Act must be that of an honest and reasonable person based upon reasonable ground and it should not be based on some suspicious and vague reason. Whereas, in this case, the reasons are vague and do not reveal any income having escaped assessment and furthermore, reasons recorded made it clear that, this is a case of borrowed satisfaction without any independent application of mind. 9. In view of the above contentions, learned counsel for the writ applicants prays that the impugned notices as well as the order disposing of the objections are required to be quashed and set aside and the writ applications may be allowed, as prayed for. 10. On the other hand, Mrs. Mauna Bhatt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e affairs of the bogus company and during the proceedings, the ledger account of SCL company was seized, wherein, it noticed that, the SCL had provided huge amount of accommodation entries, as referred in the reasons recorded. It is the specific stand of the assessee that, the purchase transactions for the A.Y. 2011-12, the company had entered into transactions and made part payment and in the next year i.e. 2012-13, remaining outstanding balance of the purchase being paid to SCL and thereafter, the assessee had not entered into any transaction with the SCL company. It also appears from the record that, the assessee while submitting the objections had furnished their books of accounts to show that, for the year under consideration i.e. A.Y.2013-14 and 2015-16, the assessee had not entered into any transactions. 15. We have examined the reasons recorded for reopening of assessment and order of disposing of the objections. We find that, the objections submitted by the assessee were not extensively dealt with by the authority. Relevant extract of the objections submitted by the assessee and order disposing of the objections reads as under: Objections for A.Y. 2013-14 :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been ascertained from the financial statements and other relevant documents submitted during the course of assessment proceedings, there is no failure to disclose fully and truly all material facts on the part of the assessee and the reopening of the assessment is just on the basis of the statement recorded during the search proceedings in the case of Mr. Vipul Vidur Bhatt and his other related entities namely M/s. Sampada Chemicals ltd. And without conducting independent enquiry or application of mind and therefore, the reopening of assessment is bad in law, it is to mention that in the instant case, the information for the suspicious transaction has been received and the same is complete and on the basis of the same, the reopening of the assessment has been made. On perusal of the case records of the original assessment proceedings in the case of the assessee, it is noticed that no opinion could have been formed by the AO and no discussion has been made on the impugned issues. Therefore, after recording the reasons thereof, the AO has reopened the assessment. c) As regards assessee s objection that he had not entered into any transaction with Sampada Chemicals ltd. As the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect facts the assessee had paid the entire amount during FY 2012-13 and hence there are no payments or no transactions with Sampada Chemicals Ltd. During the FY 2014-15. For the reference of your goodself, copy of ledger account of Sampada Chemicals Ltd for FY 2011-12, FY 2012-13 enclosed herewith vide Annexure 3. Please note we have not opened master date of Sampada Chemicals Ltd. As supplier for FY 2014-15 screen shot from ERP is enclosed herewith vide Annexure 3. Order disposing of the objection for A.Y 2015-16 :- 3 a) In this regard, it is to mention that in the reasons recorded for reopening the assessment, the Assessing Officer has referred to the information received and the financial years mentioned therein as well as the statutory provisions which in his view is applicable. It may be that the issue whether the provisions in question of escapement would be/would not be added back in terms of the relevant provision of the Act and for the assessment year for which the case of the assessee is reopened, but the fact remains that it could not be examined at the time of the original assessment. 16. In view of the objections against the reasons recorded for reop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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