TMI Blog2021 (10) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... lthough there is no requirement for elaborate reasons, but a speaking order needs to really speak the mind of the officer exercising the quasi judicial function, this not being an empty formality even if he has a reason to believe that the income has escaped the assessment and, therefore, the objections are not to be accepted. It becomes the bounden duty to exercise this satisfaction in clear and specific words so as to also convey to the party concerned that in his exercise of discharge of his duty as a quasi judicial authority, he has arrived at a conclusion, so far as objections are reassessed. There may not be requirement of exhaustive elaborate essay, while discussing the reasons, but the same has to be clear in conclusion, satisfying the need of the same being a speaking order. Material, which has been placed before us is the inquiry report in the case of M/s. Shubhshree Barter Pvt. Ltd. to satisfy this Court as to why the scrutiny assessment for the Assessment Year 2013-14 has been necessitated. They are presently not to be entered into because of the absence of any reason and non-compliance of the directions in GKN Driveshafts (INDIA) Ltd. [ 2002 (11) TMI 7 - SUPR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 148 on 19.03.2020 for reopening the assessment for Assessment Year 2013-14. The petitioner filed the return, in response to the notice and reasons for reopening were supplied on 26.06.2020. According to the petitioner, these reasons are misconceived and baseless. 2.3 Various objections have been raised on 25.07.2020 and the request was made to the respondent to drop the reassessment proceedings. 2.4 After about more than a year on 27.07.2021, respondent No.2 disposed of the objections and rejected the resistance by such objections in totality. It is urged and alleged that the officer did it in a hurry without dealing with the contentions of the petitioner. The impugned notice issued, thereafter, under section 148 on 19.03.2020 as also the order passed against the preliminary objections dated 27.07.2021 both are under challenge. 2.5 The prayers sought for are as follows:- 7. The Petitioner, therefore, prays that this Hon ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, direction or order and be pleased to: (a) quash and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from Signet Vyapaar Private Limited and Wonder Procon Private Limited, who are already taxed and hence, there is no income, which has escaped assessment as transaction is genuine, the identity of the parties is known and the creditors have the creditworthiness of providing loans. It is urged that there cannot be any addition of income and the reasons recorded are fundamentally wrong. 5.3 He further has urged that it is settled position that there has to be a reason to believe and not a reason to suspect . Respondent No.1 does not have any reason to believe but it is acting on a mere suspicion. It can be also be seen from the basis of the order disposing the objections, which reveals that if the assessee has sufficient material of not to believe the genuineness of the transactions, it should come on the platform of assessment set by Assessing Officer and there is no escapement of income on account of alleged transaction. Thus, when the reopening is only to verify the genuineness of transaction, it is a suspicion that they are not genuine and, hence, there is no reason to believe and notice is bad. 5.4 The main emphasis is about the order of disposing of the objections. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso was not made aware and according to her, this being the faceless assessement regime, she also was not communicated this aspect. 7.1 Accordingly, we had permitted the draft amendment to the petitioner, which has been carried-out, where the additional prayers sought for, are as follows : (aa) quash and set aside the impugned assessment order dated 28.09.2021 at Annexure-H to this petition. (aaa) pending the admission, hearing and final disposal of this petition, to stay implementation and operation of the assessment order and notice of penalty at Annexure-H to this petition and stay recovery of tax for A.Y. 2013-14; 8 In the aforementioned background, we notice that this is a challenge to the reopening of notice issued under section 148 of the Act after the period of four years in case of assessee for the relevant Assessment Year, the provisions of sections 147 and 148 deserve reproduction: [Income escaping assessment. 147. If any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the relevant assessment year has not been made in accordance with the provisions of this Act. Explanation 2 .-For the purposes of this section, where,- ( i ) a search is initiated section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or ( ii ) a survey is conducted under section 133A, other than under sub-section (2A) or sub-section (5) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or ( iii ) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or ( iv ) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 section 132A in case of any other person on or after the 1st day of April, 2021, pertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ringing of section 147 on a statute book is to ensure that the party cannot get away by making a false or untrue statement at the time of original assessment and when any falsehood is noticed, it is not permissible for the party to say that even though it had to conveyed the lies, the hands of the Assessing Officer are tied, since he had accepted the lies. 11 In the case of Phoolchand Bajranglal vs. ITO , [ 1993] (203) ITR 456 , there was a question of assessment beyond the period of four years. The assessee had filed confirmatory letters from the company in support of the loan transactions. It was alleged that the interest paid to the Calcutta Company though was permitted by the Assessing Officer, for nearly 05 years on the basis of same communication from the ITO based at Calcutta, the genuineness of the loan transactions had been questioned. The Managing Director admitted that the company at Calcutta was a mere name lender and no amount had been advanced during the three consecutive assessment years. When the reassessment proceedings were initiated alleging that the fresh inference was impermissible for the Assessing Officer to draw, the Court held that it was a case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishabh Dalmia stating on oath that the loan transactions with the petitioner are genuine for having been carried out only through cheques, prima facie vindicates that the entire exercise is based on suspicion. The entire thrust, therefore, is that issuance of notice is nothing but a fishing inquiry. 19. As discussed at length while adverting to the law, that sufficiency of reasons recorded by the Assessing Officer need not be gone into by this Court. Of course, the Assessing Officer when forms his belief on the basis of subsequent new and specific information that the income chargeable to tax has escaped assessment on account of omission on the part of the assessee to make full and true disclosure of primary facts, he may start reassessment proceedings as fresh facts revealed the non-disclosure full and true. Such facts were not previously disclosed or it can be said that if previously disclosed, they expose untruthfulness of facts revealed. 20. The Assessing Officer required jurisdiction to reopen under section 147 read with section 148 of the Act, where the information must be specific and reliable. As held by the Apex Court in the case of Phul Chand Bajrang (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lmia, which provided the accommodation entries to various beneficiaries. 14 Adverting to the facts on hands, as could be noticed from the chronology of events, the reasons recorded are as follows: 2. Brief details of information collected/received by the AO and Analysis of Information collected/received: The information received from ADIT (Inv.), Unit-1(3), Kolkata that enquiry was conducted in the case of M/s. Shubhshree Barter Pvt. Ltd. During the course of enquiry, it revealed that M/s. Barter Pvt. Ltd. Maintained an account no.912020028827335 in Axis Bank, Airport Branch, Kolkata declared profile of the customer is trade in shares and securities. The account was opened on 04-06-2012. Sudden surge of high value transaction was noticed from 31-12-2012. Multiple high value RTGS credit was noticed regularly from entities such as Tree House Education and Accessories Pvt. Ltd. Amounting to ₹ 2.49 crores which followed by frequent transfer in favour of Wonder Procon Pvt. Ltd and RTGS debit in favour of entities such as Tejaswini Tradecom Pvt. Ltd, Afsons Indian Pvt. Ltd. Motive Vincom Pvtl.Ltd. Credit received in the account is immediately moved out from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ATA 2012-13 3,04,00,000 3 AMBO AGRO PRODUCTS LTD AAECA5908Q CIRCLE- 8(1),KOLKATA 2012-13 10,00,000 4 ANANDRATHI SHARE STOCK BROKERS LTD AAACN3405F CENTRAL CIRCLE 5(1), MUMBAI 2012-13 1,38,00,028 5 CAMPBELL ADVERTISING PVT AABCC0332P CENTRAL CIRCLE-6,DELHI 2012-13 1,00,00,000 6 EMKAY GLOBAL FINANCIAL SERVICES LTD AAACE0994L CIRCLE-4(1) (1),MUMBAI 2012-13 49,70,181 7 PETAL VINIMAY PVT.LTD {ANTHER VINIMAY PVT. LTD1 AABCP6775B CIRCLE 8(1), KOLKATA 2012-13 42,00,000 8 POWER PALAZZO PVT.LTD AAECP5699R CIRCLE3(1)(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 147 of the I.T. Act. 5. Basis of forming reason to believe and details of escapement of income As discussed in para-2, 3 4 above. 14.1 According to the Assessing Officer there is no order under section 143(3) of the Act and only return of income has been processed under section 143 of the Act and as four years have elapsed, on initiating the proceedings under section 147, he has formed a reason to believe that the income has escaped the assessment. 15 Objections have been raised on 25.07.2020. The detailed objections have been raised for initiating all reassessment proceedings. These are required to be dealt with in accordance with law, as it is not an ordeal but a substantive requirement. 15.1 While disposing the objections, he writes thus: In connection with the scrutiny assessment in your case for the A.Y.2013-14, Vide your letter dated 27.07.2020, you have simply objected the reopening of the assessment u/s. 148 of the Income Tax Act, 1961. However, prejudiced to the same, it is stated that, the case was reopened on the basis of tangible information wherein conclusive evidence was gathered that you have escaped income chargeable to tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The assessing officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the assessing officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the assessing officer has to dispose of the objections, if filed, by passing a speaking Order before proceeding with the assessment in respect of the abovesaid five assessment years. 15.5 The Court directed the Assessing Officer to dispose of the objections raised by the petitioner by passing a speaking order before proceeding with the assessment in respect of the Assessment Year for which the notice had been issued and communicate the outcome of the same. 16 This Court in the case of Divya Jyoti Diamonds (P.) Ltd. (supra) noticed that the assessee had raised various objections and requested the Revenue to drop the reassessment proceedings. The objections raised by the assessee, since were not properly dealt with by the Assessing Officer and whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Pradesh and another in the case of Criminal Appeal No.876 of 2021 and allied matters on 07.09.2021, where, of course, the findings and the directions were in relation to the judgement, but broadly the same would apply to any judicial/quasi-judicial order passed in any judicial proceedings. 18.2 Apt would be to reproduce the relevant part of the said decision:- 9.4 The judgment replicates the individuality of the judge and therefore it is indispensable that it should be written with care and caution. The reasoning in the judgment should be intelligible and logical. Clarity and precision should be the goal. All conclusions should be supported by reasons duly recorded. The findings and directions should be precise and specific. Writing judgments is an art, though it involves skilful application of law and logic. We are conscious of the fact that the judges may be overburdened with the pending cases and the arrears, but at the same time, quality can never be sacrificed for quantity. Unless judgment is not in a precise manner, it would not have a sweeping impact. There are some judgments that eventually get overruled because of lack of clarity. Therefore, whenever ..... X X X X Extracts X X X X X X X X Extracts X X X X
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