TMI Blog2008 (12) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... s preferred by the petitioner / assessee. 2. We have heard the learned counsel for the parties. The facts are that the original assessment was framed under Section 143(3) of the said Act on 05.03.2003. In the course of the assessment proceedings, the Assessing Officer had raised certain queries, inter alia, with regard to the share application money received by the assessee from Solo-Mio Marketing Pvt Ltd. In response to the queries raised by the Assessing Officer, the assessee submitted a reply dated 10.02.2003. A copy of the said reply has been placed as Annexure-4 at page 75 of the present paper book. On going through the said reply, we note that the petitioner had clearly disclosed the names and addresses of the directors of the assessee / petitioner company. The petitioner had also stated categorically that no loans had been accepted by it during the year under consideration and that there was an increase of Rs 64,75,000/- in the share capital of the company. It was also stated that all the share application money had come from companies which were duly registered under the Companies Act, 1956 and that each one of them was legal entity. It was also stated that the applicants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 2001-02. The affidavit also disclosed that the payments towards the share application money were made through two separate cheques, details of which were given in the said affidavit. The PAN number of the investor company, i.e., Solo-Mio Marketing Pvt. Ltd was also clearly disclosed in the said affidavit. After having received this explanation and information from the assessee, the Assessing Officer framed the assessment order on 05.03.2003. In the assessment order itself, it was noted as under:- '' The details and documentary evidence of share application money pending for allotment in the previous year have been filed alongwith documentary evidence from subscribers. It has been stated that funds available with the company has been advanced to various persons and the company has earned interest income of Rs. 7,44,691/- on such advances.' 4. The Assessing Officer issued the notice under Section 148 of the said Act on 28.03.2008 beyond the period of four years. As such, the proviso to Section 147 would become applicable. Under the proviso itself, it is necessary that before any action is initiated, it must be pointed out that the assessee had failed to make a true a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3946 436482 436483 DATE ON WHICH ENTRY TAKEN 11-Apr-2000 13-Mar-2001 13-Mar-2001 NAME OF ACCOUNT HOLDER OF ENTRY GIVING ACCOUNT SOLO-MIO MARKETING P. LTD. SOLO-MIO MARKETING P. LTD. SOLO-MIO MARKETING P. LTD. BANK FROM WHICH ENTRY GIVEN BOI BOI BOI BRANCH OF ENTRY GIVING BANK KAROL BAGH KAROL BAGH KAROL BAGH A/C NO. ENTRY GIVING ACCOUNT 11266 CD 11266 CD 11266 CD 5. It is apparent from the reasons recorded and the Annexure referred to therein that the entire issue revolves around three transactions. A payment of Rs 3 lakhs received in April, 2000 from Solo-Mio Marketing Pvt. Ltd and further payments of Rs 3 lakhs and Rs 2 lakhs received by the petitioner in March, 2001 from the same Solo-Mio Marketing Pvt. Ltd. In the objections filed by the petitioner to the said reasons, the petitioner had, inter alia, explained the same by stating that all the three amounts were received towards share application money. However, the amount of Rs 3 lakhs, which was received in April, 2000, pertains to the previous year. In the year in consideration, only two paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.2,00,000/- was received from M/s. Solo Mio Marketing Pvt. Ltd. Ch. No.436483 dated 13/03/2001 drawn on Bank of India, Karol Bagh, New Delhi Bank A/c. No.11266 CD which was deposited in the A/c. of M/s JSRS Udyog Ltd. in O.B.C. Bank, Ghaziabad (UP). During the course of investigation made by the Investigation Wing has found these entries are bogus / sham transactions and informed the concerned Assessing Officer for necessary action in the matter. Therefore, the Assessing Officer has reason to believe that the income chargeable to tax has escaped assessment as the assessee company has failed to disclose fully and truly all material facts necessary for assessment year 2001-02. Under the circumstances, the Assessing Officer has initiated the proceedings u/s. 147/148 of the I.T. Act with the prior approval of the Commissioner of Income-tax, Delhi-II, New Delhi within the time prescribed under the provisions of section 149 read with section 151 of the I.T. Act, 1961. Therefore, your application vide letter dated 24/11/2008 objecting the validity of initiation of proceedings u/s. 147/148 of the I.T. Act is not acceptable and is hereby rejected. Yours faithfully, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sub-section (1) of section 142 or section 148. This is clearly not the case here because the petitioner did file the return. Since there was no failure to make the return, the escapement of income cannot be attributed to such failure. This leaves us with the escapement of income chargeable to tax which arises out of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year. If it is also found that the petitioner had disclosed fully and truly all material facts necessary for its assessment, then no action under section 147 could have been taken after the four year period indicated above. So, the key question is whether or not the petitioner had made a full and true disclosure of all material facts ' 20. In the reasons supplied to the petitioner, there is no whisper, what to speak of any allegation, that the petitioner had failed to disclose fully and truly all material facts necessary for assessment and that because of this failure there has been an escapement of income chargeable to tax. Merely having a reason to believe that income had escaped assessment, is not sufficient to reopen assessments ..... X X X X Extracts X X X X X X X X Extracts X X X X
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