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TMI Blog2024 (5) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent. 4. Having regard to the controversy in narrow compass with the consent of the learned advocates for the respective parties, the matter is taken-up for hearing. 5. By these petitions under Article 226 of the Constitution of India, the petitioner has challenged the notice dated 30th March, 2021 issued by the respondent u/s. 148 of the Income Tax Act, 1961 (for short 'the Act') for A.Ys. 2016-17 and 2017- 6. The brief facts of the case are that the petitioner is a public limited company engaged in the business of processing and manufacturing of various edible and non-edible oil and allied products. 6.1 The petitioner company has filed its return of income for A.Y. 2016-17 declaring total income of Rs. Nil on 1st September, 2016. The case of the petitioner was selected for complete scrutiny under CASS. 6.2 The Assessing Officer during the course of regular assessment called-upon the petitioner company to provide details of party wise foreign outward remittances along with nature, purpose and source of foreign remittance vide notice dated 2nd August, 2018. In response to the notice, the petitioner furnished details along with Form 15CA containing the name of the party, amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prop. Kashif Zafar, show as that an amount of Rs. 23,99,653/- was credited on 07.02.2012 and on the date 16.10.2012 an amount of Rs. 21,83,292/- was credited against the bill amount of Rs. 20,73,474/- reflected in the above sheet with same bill ID on the same day i.e. 16.10.2012. In response to these differences, J & K bank Forex Division submitted its reply vide email dated 10.03.2021, the same is reproduced herewith for proper understanding of the differences: "This has reference to your mail dated March 10, 2021 regarding the observations pointed out by your good office in respect of various entries related to Foreign Outward and Inward Remittances. In this regard we would like to apprise your good self that the difference in the amount of a particular entry captured in Statement of Account and Remittance Sheet is on account of Actual Settlement Rate and Notional Rate respectively applied on the same transaction." On perusal of information so received, it is noticed that the assessee is one of the beneficiaries who has entered into transaction of Rs. 62,77,93,196/- in the form of inward and outward remittances wherein a survey action was carried out by the investigation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jammu & Kashmir Bank in the reply that after receiving the bill from the party / customers, bill amount is firstly calculated on the notional rate (decided by the bank from time to time) and finally at the time of realization of bill, it is calculated on the actual settlement rate/exchange rate on that day. It was submitted that the respondent Assessing Officer in spite of recording the above explanation of the Jammu & Kashmir Bank in the reasons recorded, as well as, the example given in the reply by the Jammu & Kashmir Bank, without application of mind has issued the impugned notice only because the petitioner has entered into transaction with the Jammu & Kashmir Bank. It was submitted that as per the accounting standard, when the bill discounting amount is first calculated for foreign remittance the notional rate is applied and when the actual amount is received then on realization of bill it is calculated on the actual settlement rate or exchange rate on that day. It was submitted that the petitioner has made entries in its books of accounts on the basis of the bank statement and reconciliation statement is also produced during the course of the regular assessment and the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank corporate headquarter at Srinagar on 11th June, 2019, which was after the date of assessment order dated 12th December, 2018 passed u/s. 143(3) of the Act in case of the petitioner assessee. 11. On perusal of the reasons recorded, the Jammu & Kashmir Bank has also given explanation and clarification from the Forex Department to the effect that the bank after receiving the bill from the party / customer, bill amount is firstly calculated on notional rate decided by the bank from time to time and finally at the time of realization of the bill, it is calculated on actual settlement rate/ exchange rate on that day. By giving an example of some other party, it was stated by the bank that the difference in the amount of the particular entry captured in the statement of account and remittance sheet is on account of the actual statement rate and the notional rate respectively applied on the same transaction. This has led to the respondent Assessing Officer to form a reason to believe that the transaction undertaken by the petitioner with the respondent bank has resulted into escapement of income to the tune of Rs. 62,77,93,196/- in form of inward and outward remittances. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was also reopening within four years, wherein the Hon'ble Apex Court held as under:- Para-6 thereof reads thus: "2. A short question which arises for determination in this batch of civil appeals is, whether the concept of "change of opinion" stands obliterated with effect from 1st April, 1989, i.e., after substitution of Section 147 of the Income Tax Act, 1961 by Direct Tax Laws (Amendment) Act, 1987? xxxx 6. ............prior to Direct Tax Laws (Amendment) Act, 1987, re-opening could be done under above two conditions and fulfilment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act [with effect from 1st April, 1989], they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to re-open the assessment. Therefore, post-1st April, 1989, power to reopen is much wider, However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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