TMI Blog2023 (1) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... essment are invalid and is nothing but fishing enquiry. Consequently, the reasons recorded are held to be invalid and notice issued u/s. 148 of the Act for the purpose of reopening stands quashed. Consequently, the assessment also stands quashed.Appeals of the assessee stand allowed. - ITA Nos. 357 & 388/CTK/2019 - - - Dated:- 17-1-2023 - S / SHRI GEORGE MATHAN , JUDICIAL MEMBER And ARUN KHODPIA , ACCOUNTANT MEMBER For the Assessee : Shri K. K. Bal , Adv For the Revenue : Shri M. K. Gautam , CIT DR ORDER Per Bench These are appeals filed by the assessee against the separate orders of the ld. CIT(A)-1, Bhubaneswar both dated 3.9.2019 in Appeal No. 0391/16-17 and No. 0390/16-17 for the assessment years 2009-10 2010-2011, respectively. Since facts are identical, they are clubbed together and are being disposed of by this common order. We take up the appeal for the assessment year 2009-10. 2. Shri K.K. Bal, ld. AR appeared for the assessee and Shri M.K. Gautam, ld. CIT DR appeared for the revenue. 3. It was submitted by ld. AR that the assessee is in the business of mining. It was the submission that original license was in the name of Shri M.S. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. 147 of the Act for the assessment year 2009-10. The Joint Commissioner of Income Tax, Range-2, Bhubaneswar is requested to accord his kind approval for issuing notice u/s. 148 to the assessee. 4. It was the submission that the reasons recorded for reopening the assessment did not quantify the value of escapement of income. It was the submission that even approximate estimate has not been mentioned by the Assessing Officer. It was the further submission that the Assessing Officer only mentions that considerable amount of taxable income has escaped assessment. It was the submission that the provisions of section 149 in fact require a quantification to be in excess of amount of Rs. 1 lakh. It was the submission that even this has not been mentioned by the Assessing Officer. It was the submission that though the Assessing Officer mentions a show cause notice in respect of penalty of Rs. 243.48 crores issued by the State Government, the assessee has replied to the show cause notice issued and no further action has been done by the State Government till today. It was the further submission that the Assessing Officer talks of unlawful mining operation but on perusal of asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of even an estimate of income that has escaped assessment. He has also placed reliance on the decision of the Hon'ble High Court of Bombay in the case of Pr. CIT vs Shodiman Investments Pvt. Ltd., 442 ITR 357 (Bom), wherein, the Hon'ble High Court has in para 13 held as follows: 3. In this case, the reasons as made available to the Respondent-Assessee as produced before the Tribunal merely indicates information received from the DIT (Investigation) about a particular entity, entering into suspicious transactions. However, that material is not further linked by any reason to come to the conclusion that the Respondent Assessee has indulged in any activity which could give rise to reason to believe on the part of the Assessing Officer that income chargeable to tax has escaped Assessment. It is for this reason that the recorded reason even does not indicate the amount which according to the Assessing Officer, has escaped Assessment. This is an evidence of a fishing enquiry and not a reasonable belief that income chargeable to tax has escaped assessment. 5. It was the submission that in these circumstances, the reopening as done by the Assessing Officer is liable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (217 ITR 597). The observations of Hon'ble Supreme Court are reproduced as under: After hearing learned counsel for the parties at length, we are of the opinion that we cannot say that the letter aforesaid does not constitute relevant material or that on that basis, the Income-tax Officer could not have reasonably formed the requisite belief. The letter shows that a joint inspection was conducted in the colliery of the respondent on January g(sic), 1967, by the officers of the Mining Department in the presence of the representatives of the assessee and according to the opinion of the officers of the Mining Department, there was under-reporting of the raising figure to the extent indicated in the said letter. The report is made by a Government Department and that too after conducting a joint inspection. It gives a reasonably specific estimate of the excessive coal-mining said to have been done by the respondent over and above the figure disclosed by it in its returns. Whether the facts stated in the letter are true or not is not the concern at this stage. It may well be that the assessee may be able to establish that the facts stated in the said letter are not true but t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o furnished and the invoices are dated 14.1.2009 to 25/9/2009 pertaining to the assessment year 2009-10. The reasons and the grounds on which the respondent authorities have arrived at the conclusion of under invoicing is also furnished in the tabular column. Based on the comparative invoices in respect of the sales effected on the same day, the authorities have arrived at the conclusion. 7. The respondents have placed on record the materials that gave them the reason to believe that there is escapement of Income. The ground for re-assessment is under-invoicing which in the opinion of this Court is sufficient reason to believe that there is escapement of income. The sufficiency of reasons cannot be gone into in a writ proceedings. The contents of the Invoices have to be ascertained which is a factual issue and to be adjudicate after hearing the assessee 8. Hence, prima-facie. no illegality can be attached to the reasoning of the assessing authority for arriving at a conclusion, that there has been under invoicing and consequent escapement of income. 3. The argument of the ld. AR of the assessee that the A.O. had erred in issuing the notice u/s. 148 of the Act pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended that there had been no due compliance with the provisions of section 151(2) of the said Act since the Commissioner of Income tax had failed to arrive at a bona fide satisfaction or record the same. Here again, the issue has to be considered from the point of view of what the facts establish in substance. Now, facts indicate that the proposal for reopening the assessment with reasons indicated hereinbefore was placed before the Commissioner of Income- tax. Obviously he applied his mind as is indicated by his endorsement: Yes, I am satisfied. If the Commissioner records his satisfaction in a positive maru(sic)er, as aforesaid, and there being no other material before us to show that notwithstanding such a record the Commissioner never applied his mind but merely signed on a dotted line without application of his mind, we are unable to accept the contention that the Commissioner never arrived at a bona fide satisfaction in recording the same. This objection raised by Mr. Banarjee, therefore, must fail and is overruled. We are in respectful agreement with the judgment. 44. Mrs. suri relied upon judgment of the supreme court in Chhugamal Rajpal's case (79 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was sought for could not be assailed. Even an appellate authority is not required to give reasons when it agrees with the finding unless statute or rules so requires. We are supported in our view by the Judgment of the Apex Court in R.P. Bhatt vs. Union of India AIR 1986 SC 1040. In R.p. Bhatt (supra) the Apex court relied on judgment rendered by a Constitutional Bench in the case of Som Datt Datta v. Union of India AIR 1969 SC 414 wherein their lordships held as follows: Apart from any requirement imposed by the statute or statutory rule either expressly or by necessary implication, there is no legal obligation that the statutory tribunal should give reasons for its decision. There is also no general principle or any rule of natural justice that a statutory tribunal should always and in every case give reasons in support of its decision. 23. In view of the aforesaid discussion the questions No. 1 and 2 are answered in the negative and in favour of the revenue. The Delhi High Court in the case of Esperion Developers (p.) Ltd. vs. ACIT (115 taxmann.com 338) held that where necessary sanction to issue notice under section 148 was obtained from Pr. Commissioner as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns. The merely receipt of information from another source would not be a ground to challenge the initiation of proceedings. The only requirement would be the satisfaction of the AO regarding and based on the said information. The issue of borrowed satisfaction and issuance of notice on the direction of a higher authority is not there. The data qua the petitioner was analysed by the AO and thereafter, notice was issued. The reliance on the concluding lines of the information received from Ahmedabad to contend that it contained a direction to initiate proceedings is ill founded. It was only a suggestion to the concerned AO. 9. The Hon'ble Supreme Court in the case of Raymond Woollen Mills Ltd. vs. ITO (236 ITR 34) held as under: In this case, we do not have to give a final decision as to whether there is suppression of material facts by the assessee or not. We have only to see whether there was prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. We are of the view that the court cannot strike down the reopening of the case in the facts of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of the supreme Court reported in phool chand Bajrang Lal vs. ITO [1993] 203 ITR 456 as following: one of the purposes of section 147 appears to us to be to ensure that a party cannot get away by willfully making a false or untrue statement at the time of original assessment and when that falsity comes to notice, to turn around and say 'you accepted my lie, now your hands are tied and you can do nothing'. It would be a travesty of justice to allow the assessee that latitude. (p. 478) As reliable evidence has come to the possession of the officer as he claims, the background for a reassessment has been set. It is for the assessee to utilize the opportunity offered. 6. In the aforesaid circumstances, I am not interfering in the proceedings now. I also record the statement of the counsel for the revenue that in case there is a reassessment and fresh orders coercive steps will not be straightaway resorted to. The original petition is, therefore, dismissed. In view of above facts, the appeal filed by the assessee is required to be dismissed. 7. Ld. CIT DR has relied on the decision of the Hon'ble Supreme Court in the case of ITO vs Selected Dalu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of the decision relied upon by ld. CIT DR in the case of Selected Dalurband Coal Co.(P) Ltd(supra) shows that the reopening in that case was on the basis of a letter from the Mining Department giving reasonably specific estimate of the excessive coal mining said to have been done by the assessee. In the present case, there is no such letter from the Mining Department. The information which is being relied upon by the Assessing Officer for the purpose of reopening and mentioned in the reasons recorded is a letter from the Director of Income Tax (Investigation), Bhubaneswar addressed to the Commissioner of Income Tax referring Shah Commission Report, wherein, the said figures are mentioned. A perusal of the letter of the Director of Income Tax (Investigation), Bhubaneswar to the Commissioner of Income Tax, Bhubaneswar dated 18.12.2014 when compared with the reasons recorded shows that the reasons recorded are identical to the letter issued by the Director of Income Tax (Investigation) to the Commissioner of Income Tax, Bhubaneswar. Thus, the figures adopted by the AO in the reasons recorded are nothing but the figures adopted out of the Shah Commission report by the DIT (Inv) and c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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