TMI Blog2021 (12) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... rticularly so as the question of jurisdiction has been raised by the petitioners before the AO during the assessment proceedings under the Act. In the present facts, the petitioners have participated in the proceedings before the AO. The objections to the reasons recorded by the AO in support of the impugned notice during the assessment proceedings is to point out to him the reassessment proceedings are bad as the requirement of Sections 147 and 148 are not satisfied. It would be completely different scenario where the petitioners have not participated in the proceedings before the AO and object to exercise of jurisdiction by the Assessing Officer at the very threshold and not while participating in the reassessment proceedings. In such cases, it is not a case of a party seeking identical relief by two parallel modes. The orders passed by the Assessing Officer are subject to effective, efficacious alternative remedy under the Act. Therefore, we see no reason to exercise our extra-ordinary jurisdiction in the facts of this case. - WRIT PETITION NO. 3597 OF 2019 - - - Dated:- 8-12-2021 - K.R. SHRIRAM AMIT B. BORKAR, JJ. Mr. K. Gopal a/w Mr. Jitendra Singh and Mr. Om Kan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equired under the provisions of section 151(1) of the Income Tax Act, 1961. 4. Petitioner replied to this notice with the reasons by a letter dated 10th October, 2019 objecting to the re-opening. The objections filed by petitioner was disposed by an order dated 17th October, 2019 rejecting the objections. Thereafter, petitioner, by submissions dated 5th November, 2019, complied with notice issued under Section 142(1) of the Act. On 11th December, 2019 petitioner was issued notice to show cause as to why the amount of ₹ 3,13,00,000/- being transaction effected on 10th May, 2011 and 1st October, 2011 in a particular bank account between two parties should not be added to the income under Section 69A of the Act being unexplained money. It is at that stage petitioner filed this petition and ad-interim stay was granted by an order dated 19th December, 2019. 5. We have heard Mr. Gopal, counsel for petitioner and Mr. Walve, counsel for respondents. 6. Mr. Gopal submitted that the notice dated 31st March, 2019 issued under Section 148 of the Act has not been validly issued and is without jurisdiction. Mr. Gopal submitted that (a) the reasons does not indicate what was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Article 226 of the Constitution of India and dismiss the petition and direct petitioner to participate in the assessment proceedings and if petitioner is aggrieved by the assessment order, petitioner may challenge that order as per the alternative remedy prescribed under the Act. 8. Mr. Gopal in rejoinder submitted that petitioner decided to file this petition when petitioner got to know the reasons after receiving further notice under Section 142(1) of the Act on 11th December, 2019. 9. This is a notice that has been issued after expiry of four years from the end of the relevant assessment year. There has been no scrutiny assessment done under Section 143(3) of the Act and the assessment has been processed under Section 143(1) of the Act. Therefore, proviso to Section 147 of the Act would not apply. In such a case governing test has been formulated in the judgment of the Hon ble Supreme Court in Commissioner of Income Tax vs. Kelvinator of India Ltd. [2010] 320 ITR 561 (SC) and the Hon ble Apex Court has enunciated the principle as follows: Therefore, post 1st April, 1989, power to reopen is much wider. However, one needs to give a schematic interpretation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not necessary that the material before the Court should conclusively prove or establish that income has escaped assessment. A reason to believe at the stage of reopening is all that is relevant. This aspect must be emphasized because it clearly emerges from the judgment of Rajesh Jhaveri Stock Brokers P. Ltd. [2007] 291 ITR 500 (SC). Section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word 'reason' in the phrase 'reason to believe' would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion ... At that stage, the final outcome of the proceeding is not relevant. In other words, at the initiation stage, what is required is 'reason to believe', but not established fact of escapement of income. At the stage of issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer and such power cannot be exercised casually, in a routine and perfunctory manner. The court held in the facts and circumstances of that case that the approval in that case granted suffers from non-application of mind. It was in the peculiar facts and circumstances of that case. In the case at hand, there is nothing to indicate that there was non-application of mind. Merely because information was received at 5.47 p.m. and the notice was issued by 10.49 p.m. would not mean that there has been non-application of mind. If we hold that it would be merely speculative and based on conjecture. 12. As regards Shodiman Investments (P) Ltd. (supra) relied upon by Mr. Gopal, again in the particular facts and circumstances of that case, the court concluded that the reasons do not indicate any link or nexus to connect that income chargeable to tax has escaped assessment. Moreover, in Shodiman Investments (P) Ltd. (supra) the facts were different and that was the case where assessment order had been passed under Section 143 (3) of the Act and the allegations was failure to disclose truly and fully all material facts by assessee. 13. On the submissions of Mr. Wal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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