TMI Blog2023 (3) TMI 486X X X X Extracts X X X X X X X X Extracts X X X X ..... various places cannot be doubted be considered suspicious transactions. In our view, there is no prima facie case made out that income has escaped assessment. The Petitioner has fully and truly disclosed all the material facts and there is no specific averment to show what material fact was required to be disclosed by the Petitioner that is not disclosed. The ratio of the Judgment in the case of Lakhmani Mewal Das [ 1976 (3) TMI 1 - SUPREME COURT] that the reasons for formation of the belief must have rational connection with or relevant barring on formation of belief is squarely applicable to the present case. The decision of the Apex Court in the case of ACIT vs. Rajesh Jhaveri Stock Brokers(P) Ltd. ( 2007 (5) TMI 197 - SUPREME COURT ) is vaguely relied upon. There is no reason provided as to why the debit and credit transaction had no mention in the recorded reasons nor was there meaningful averment with regard to the nature of transaction. It is pertinent to note that whilst the order has been passed by NFAC the reasons are recorded by respondent No. 1 to which there is no explanation in the affidavit in reply. In our view the response in the impugned order as to the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he officer is recorded which says that there is credible information received on the Insights portal that high risk transactions have taken place in the case of the assessee which needs to be verified. 3. In response thereto, on 6th July, 2021, the Petitioner filed detailed objections. Further objections were filed by a letter dated 17th July, 2021. Since there was no progress on the disposal of the objections, the Petitioner uploaded online response on 18th February, 2022, whereby the Petitioner requested disposal of the objections raised by the letters dated 6th July, 2021 and 17th July, 2021. Thereafter, on 28th February, 2022, second reminder letter was filed. On 11th March, 2022 impugned order was passed disposing the Petitioner s objections to the proposed reassessment. Immediately, thereafter, a notice under section 142(1) of the Act was issued to the Petitioner calling upon them to provide certain details. In response to the notice, the Petitioner filed letter on 15th March, 2022 raising grievance that the notice only gave one working days time to file a reply. The Petitioner apprehending arbitrary and huge demands, filed this petition. 4. Mr. Dharan Gandhi the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken no efforts to verify the records of the Petitioner, the actions were without any due diligence and therefore, contrary to the law. He placed reliance on the following decisions in support of his contention. (I) Chhuganmal Rajpal vs. SP Chaliha (1971) 79 ITR 603(SC). (ii) PCIT vs. Shodiman Investments (P) Ltd. 93 taxmann.com 153(Bom). (iii) Nu Power Renewables (P) Ltd. vs. DCIT 94 taxmann.com 29(Bom). (iv) South Yarra Holdings vs. ITO 263 Taxman 594(Bom). 6. He relied upon the decision of this Hon ble Court in the case of Hindustan Lever Ltd. vs. R.B. Wadkar 268 ITR 332(Bom) to contend that in the present case, the reasons were absolutely silent about the nature of transaction/account and consequently, were vague and unambiguous and unsubstantiated information. He further submitted that a copy of the sanction or approval by the PCIT was not furnished to the Petitioner and consequently one could conclude that either there is no such approval or the same is sanctioned without any application of mind. He further submitted that the notice under section 143(2) of the Act dated 23rd June, 2021 is in contravention of the Judgment of the Apex Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approval of the Additional CIT under section 151 of the Act and consequently, the notice was issued under section 143(3) of the Act is not in violation of the Supreme Court Judgment in the case of GKN Driveshafts (India) Ltd.(Supra). He submitted that the information on the INSIGHT PORTAL clearly mentioned that the assessee has indulged in large sums of cash debit/credits and that by itself is sufficient reason for reopening of assessment as it can be construed as new tangible material. He submitted that by reassessment further verification and enquiry was permissible. He submitted that the assessment was reopened for verification of high risk transactions which are in the nature of large cash transactions. He submitted that as per the Faceless Assessment Scheme, cases are reopened under section 147 of the Act by the Jurisdictional Assessing Officer and thereafter cases are transferred to the Faceless Assessing Officer (FAO). 8. The learned Counsel distinguished the case of ITO vs. Lakhmani Mewal Das(supra) on the ground that in that case reopening proceeding was initiated after four years whereas in the present case, reopening was done before 4 years and based on new and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 362 ITR 402 (Bom) Aroni Commercials Ltd. vs. DCIT. (iii) 439 ITR 582 (Bom) Peninsula Land Ltd. vs. ACIT. (iv) 438 ITR 139 (Bom) First Source Solutions Ltd. vs. Asstt. CIT. 10. Having perused the reasons and the information, we find no new tangible material as contended by the respondents. Debits and Credits can in no way disclose the nature of transactions or lead to an inference of income escaped assessment. The respondents have not taken any ground of extrapolation. The debits and credits cannot be a ground for further enquiry and verification and the same is impermissible. We find no live link or nexus between the information received and the income escaping assessment. The Petitioner is carrying on a retail business of electronic appliances. Usually, appliances would be supplied to clients wherever required and payment would be received in cash upon delivery. Therefore, the cash deposits from various places cannot be doubted be considered suspicious transactions. In our view, there is no prima facie case made out that income has escaped assessment. The Petitioner has fully and truly disclosed all the material facts and there is no specific averment to sho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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