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TMI Blog2022 (4) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessment year 2016-17 declaring his total income as Rs. 13,33,000/-. His case was selected for compulsory scrutiny based on information received regarding three suspicious transaction reports. Upon examination, it revealed that petitioner obtained bogus purchase bills of Rs. 1,73,83,410/- from M/s Shri Shyamji Rice Agrotech, M/s Navdurga Traders & M/s Shrinath Paddy Process and thereby income escaped assessment. 4. Facts of WPT No.31/2022 in brief are that petitioner is engaged in the business of running rice mill.. He submitted his return on 30.9.2016 for the assessment year 2016-17 declaring total income at Rs. 1,49,763/-. Based on information received from Income Tax Officer (Investigation) Raipur, an enquiry was conducted in which it revealed that M/s Saraswati Agro Industries credited Rs. 30,00,000/- in the account of bogus entity related to M/s Deepak Nanjyani during financial year 2015-16 and also obtained bogus purchase bills of Rs. 34,20,000/- from M/s Navdurga Traders and M/s Deepak Nanjyani. 5. Facts of WPT No.37/2022 in brief are that petitioner is engaged in the business of running rice mill. She submitted her return on 13.10.2016 for the assessment year 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 151 of the Act of 1961 was not signed by the authority concerned. Sanction / approval letter only mentions "fit case" which shows that authority granting approval has not applied mind and granted sanction in a mechanical manner. As per information of petitioners, record was not forwarded by Assessing Officer to the approving authority; unless and until entire material is forwarded, there cannot be satisfaction of authority approving proposal for issuance of notice under Section 148 of the Act of 1961. The notice issued under Section 148 of the Act of 1961 is not sustainable and it is liable to be quashed. He submits that proposal for issuance of notice was sent to the Joint Commissioner of Income Tax on 31.3.2021, sanction/approval under Section 151 of the Act of 1961 was granted on the same day, hence time of grant of sanction is having significance. In the notice impugned there is mention of date and time by authority but in the sanction/approval date and time is not mentioned. It is contended that requirement under the Act of 1961 is that sanction/approval should be prior to the date and time of issuance of notice under Section 148 of the Act of 1961. Time is relevant be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax has observed that the Joint Commissioner of Income Tax has only recorded "Yes, I am satisfied" on the format, which indicates, as if, he was to sign only on the dotted line without application of mind. The Department preferred Special Leave Petition No.11916/2015 before Hon'ble Supreme Court against the order of Division Bench of Madhya Pradesh High Court which came to be dismissed vide order dated 8.7.2015. In instant case also the Joint Commissioner of Income Tax has only mentioned "fit case" on approval which shows total non-application of mind by the authority, hence impugned notice is liable to be quashed on this count alone. He contended that notice under Section 131 of the Act of 1961 is also not issued to petitioners seeking clarification or explanation. As per direction issued by the Department vide Notification of the year 2018, the Department is required to issue notice under Section 131, only after enquiry, proceeding under Section 147 of the Act of 1961 could have been initiated by the Assessing Officer. It is for the Assessing Officer to spell out all reasons and grounds available for reopening of assessment, but the same are missing in case of petitioners. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on receiving suspicious transaction report from the Income Tax Officer (Investigation), Raipur, an enquiry was conducted in which it revealed that during financial year 2015- 16 petitioner has taken bogus purchase bills of Rs. 34,20,000/- and Rs. 30,00,000/- from M/s Navdurga Traders and M/s Deepak Nanjiyani respectively, which are bogus entities. In case of petitioner Smt. Vidhya Nagdeo (WPT No.37/2022) upon receiving suspicious transaction report from the Income Tax Officer (Investigation), Raipur, it revealed that petitioner, who is Proprietor of M/s Yash Industries, Bilaspur, took bogus purchase bills of Rs. 80,03,876/- from M/s Navdurga Traders during financial year 2015-16. Based upon aforementioned material, the Assessing Officer formed reasons to believe that income of respective petitioners escaped assessment. There was prima facie material available with Assessing Officer based upon which he recorded reasons to believe that income of assessees' escaped assessment. Hence, there is due compliance of provisions of Section 147 of the Act of 1961. She submits that submission of learned counsel for petitioners that at the time of issuance of notice under Section 148 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority has mentioned 'yes, fit'. Proper reasons are recorded in terms of Section 147 of the Act of 1961 and further proper approval/ sanction was accorded by authority competent, as required under Section 151 of the Act of 1961 before issuance of notice under Section 148 of the Act of 1961. Hence, petitioners are not entitled for any relief as claimed in these petitions and the same are liable to be dismissed. She places her reliance in cases of Kalyanji Mavji & Co. v. CIT reported in (1976) 1 SCC 985; M/S. Phool Chand Bajrang Lal vs Income-Tax Officer reported in (1993) 4 SCC 77; ACIT vs. Rajesh Jhaveri reported in (2008) 14 SCC 208; Raymond Woollen Mills Ltd. vs. ITO, Centre Circle XI, Range Bombay & ors reported in (2008) 14 SCC 218. 9. In reply, learned counsel for petitioners would submit that in WPT No.37/2022 copy of approval/sanction granted under Section 151 of the Act of 1961 was provided only on 16.2.2022. He also pointed out that in all these writ petitions, application was forwarded to the National Faceless Assessment Centre, New Delhi for not providing relevant material/ information/ documents and information. With respect to certain information sought by pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect to manner in which sanction/ approval is granted, as is appearing in sanction order. In view of aforementioned facts of case, submission of learned counsel for petitioners that notice under Section 148 of the Act of 1961 is issued without there being any sanction/approval from the competent authority is not sustainable and it is hereby repelled. 13. Ruling of the Bombay High Court in Svitzer Hazira's case (supra) on which heavy reliance is placed by learned counsel for petitioners is of no help to petitioners being based on different facts. In that case, time of issuance of notice as also time of granting sanction is specifically mentioned in the document. Considering both the documents, the Court held that notice under Section 148 of the Act of 1961 was issued prior to grant of sanction/approval by competent authority. Time mentioned in sanction / approval is 15 minutes after the time of issuance of notice under Section 148 of the Act of 1961. In these circumstances, Division Bench of Bombay High Court has passed the order. 14. Another submission of learned counsel for petitioners is that there was no proper application of mind by authority granting approval/sanction. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for re-opening of assessment. Perusal of reasons assigned prima facie shows that Assessing Officer based on information of suspicious transactions report from the Income Tax Officer (Investigation) has verified transactions. Notice under Section131A of the Act of 1961 was also issued and statements were recorded including of one Sushil Kumar Maurya. Based on statements, Assessing Officer recorded that petitioners obtained bogus purchase bills during relevant period. Hon'ble Supreme Court in case of M/s Phoolchand Bajrang Lal vs. Income Tax Officer reported in (1993) 4 SCC 77 has observed that Assessing Officer can start re-assessment proceeding when fresh facts come to light which were not previously disclosed. Relevant part of judgment is quoted below for ready reference:- "From a combined review of the judgements of this Court, it follows that an Income-tax Officer acquires jurisdiction to reopen assessment under Section 147 (a) read with Section 148 of the Income Tax 1961 only if on the basis of specific, reliable and relevant information coming to his possession subsequently, he has reasons which he must record, to believe that by reason of omission or failure on the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on the merits of the case. The questions of fact and law are left open to be investigated and decided by the assessing authority. The appellant will be entitled to take all the points before the assessing authority. The appeals are dismissed. There will be no order as to costs." 18. Hon'ble Supreme Court in above rulings has held that at the stage of issuance of notice for re-opening of assessment, the Court is only require to see whether there is prima facie material available on the basis of which department can reopen case and not sufficiency or correctness of material to be considered. Petitioners are having opportunity to reply to notice under Section 148 of the Act of 1961, participate in proceedings and raise all grounds available to them in accordance with law. At this stage, this Court is only required to see whether there is prima facie material before the Assessing Officer to initiate proceedings and other requirements under the law, precondition i.e. of taking approval/sanction under Section 151 of the Act of 1961, before issuance of notice under Section 148 of the Act of 1961 is followed or not. 19. Next submission of learned counsel for petitioners is that a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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