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TMI Blog2024 (7) TMI 1489X X X X Extracts X X X X X X X X Extracts X X X X ..... Show Cause Notice under Section 148A(b) of the Act dated 04 March 2023 is not disputed by the petitioner. The reassessment proceedings have come to be initiated pursuant to the material gathered with respect to Shri Dinesh Chand (Proprietor of M/s Manvee Traders) and the allegation that the firms of the aforenoted person were used for the purposes of generation of false invoices and in order for various beneficiaries, including the petitioner to avail of Input Tax Credit ['ITC']. 2. From a reading of the order ultimately passed under Section 148A(d) of the Act, we find that while considering the objections which were raised, the Assessing Officer has found as under:- '6. In response to the Notice u/s 148A(b) dated 04.03.2023, assessee su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties from whom these purchases have been made. Further there are no sales made during the period. Therefore purchases are being made but revenues are not being booked indicating that these purchases are bogus. No explanation is provided as to why there is a huge addition to stock and why stock is not converted to sales. * Further, from the information available with this office, M/s Fortune Graphics Ltd (PAN: AAACF1861B) has reported total Purchases of Rs. 48,80,48,040/- under GSTR-1 with the assessee, M/s Kordient Ventures Private Limited. Therefore, the contention of assesse is not acceptable. * Assessee has failed to provide the details of purchases, invoices and bank statements. Only a blurred sheet of Allahabad bank account has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of examining whether there was material to suggest that income of the petitioner had escaped assessment. 6. We take note of the following principles which would govern a challenge to the initiation of reassessment proceedings in Article 226 of the Constitution as laid down in Experion Developers P. Ltd v. Assistant Commissioner of Income Tax & Ors [2020 SCC Online Del 2588] and Synfonia Tradelinks Pvt. Ltd v. Income-tax Officer & Anr [2021 SCC Online Del 2692] 'Experion Developers P. Ltd v. Assistant Commissioner of Income Tax & Ors 20. In the light of the above judicial principles, the crux lies in the recorded reasons which shed light on the mind of the Assessing Officer and having perused the same in the instant case, we are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... G. S. Engineering and Construction Corporation v. Deputy DIT (International Taxation) (2013) 357 ITR 335 (Delhi)). The scope of judicial review under article 226 of the Constitution of India has also now been well recognized. In a nutshell, the courts have applied the test of reasonableness, holding that the recorded reasons to believe must suggest and disclose that the belief is that of an honest and reasonable person, based on reasonable grounds. The discretion vested under the scheme of the Act has also prompted the courts to put a cautionary note in several judgments that while exercising judicial review, although the court can examine whether the "reasons to believe" satisfy the conditions, however, the declaration or sufficiency of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer should have nexus with the formation of belief that the taxable income of the assessee escaped assessment; the link being the reasons recorded, in that behalf, by the Assessing Officer. (iii) The Assessing Officer is mandatorily obliged to record reasons before issuing notice to the assessee under section 148(1) of the Act. This is evident from the bare perusal of sub-section (2) of section 148 of the Act. (iv) No notice can be issued under section 148 of the Act by the Assessing Officer after the expiry of four years from the end of the relevant assessment year unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner arrives at a satisfaction based on the reasons recorded by the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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