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TMI Blog2024 (2) TMI 1506X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Year 2011-12 is sought to be reopened. 3. Brief facts of the case are as under : 3.1 The petitioner - assessee submitted a return of income for the Assessment Year 2011-12 on 13.9.2011, declaring total income of Rs.11,72,704/-. 3.2 A notice under Section 143(2) of the Act dated 27.9.2012 and subsequent notice under Section 142(1) of the Act dated 9.4.2013 were issued upon the petitioner along with detailed questionnaires. Apropos to the aforesaid, the petitioner submitted its reply on 2.5.2013. Another notice dated 14.10.2013 under Section 141(1) of the Act was received by the petitioner and thereafter, the same was replied vide reply dated 12.10.2013 and 22.10.2013. In response to certain further queries raised by the respondent during the course of hearing, the petitioner responded to those queries vide letter dated 25.11.2013 along with details about the trading summary of the petitioner from 1.4.2010 to 31.3.2011 during which transactions done through M/s.Divya Commodities were shown. 3.3 Thereafter, a specific show cause notice dated 21.3.2014 came to be issued requiring the petitioner, inter-alia, to submit details and clarification about transactions done through the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reopening of assessment in case of petitioner is based on factually incorrect information as the respondent in the reasons incorrectly recorded that the case of the petitioner was only processed under Section 143(3) of the Act and there was no scrutiny assessment. Mr.Shah, in the said context, submitted that in fact, the fact is that the return of income filed by the petitioner was previously scrutinized and the same was culminated into assessment order. According to Mr.Shah, thus, the notice issued under Section 148 of the Act cannot be sustained. To substantiate the aforesaid contention, Mr.Shah has heavily relied upon the following judgments : (i) Sagar Enterprise v. ACIT, reported in (2002) 257 ITR 335 (Guj.) (ii) Palgram Hindu Sarvajanik Trust v. ITO(E), reported in (2016) 69 taxmann.com 44 (Guj.) (iii) Bharatkumar Nihalchand Shah v. ACIT, reported in (2021) 434 ITR 621. (iv) Kapadia Money Changers (P) Ltd. v. ACIT, reported in (2019) 108 taxmann.com 275 (Guj.) (2) Learned advocate Mr.Shah next submitted that reopening of assessment in case of petitioner is based on borrowed satisfaction and there is complete non-application of mind at the instance of Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave gone through the material produced on record. No other and further submissions have been canvassed by learned advocates appearing for the respective parties, except what are stated herein-above. 8. Considering the submissions of the learned advocates appearing for the respective parties and having gone through the material produced on record, a short question that falls for consideration of this Court is whether the notice issued under Section 148 of the Act and the order passed disposing of the objection can be said to be legal in eye of law ? 9. So as to decide the aforesaid question, certain undisputed facts deserve to be taken note of, thus, as under : (i) The return declaring total income of Rs.11,72,704/- for the Assessment Year 2011-12 was filed on 13.9.2011 along with audited financial statement. (ii) A notice under Section 143(2) of the Act dated 27.9.2012 was served under scrutiny assessment. (iii) A notice under Section 142(1) of the Act dated 9.4.2013 was issued seeking, inter-alia, the specific details about the business activity of the petitioner and trading account, profit and loss account and balance-sheet along with computation of total income. The said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ode 1-H041) is also bought Rs. 18,69,29,856/- and sold for Rs. 19,45,15,466/- the commodity through broker Divya Commodities (Broker.code CL0185) during the F.Y 2010-11. As such it is evident/reason to believe that the assessee has not shown correct income for the year under consideration, which is nothing but escaped income in the hands of the assessee. On verification of ADIT(Inv)'s report it is seen that Shri Hemanshu Ramaniklal Shah (Client Code 1- H041) is also bought commodities of Rs. 18,69,29,856/- and sold for Rs. 19,45,15,466/- through broker Divya Commodities (Broker code CL0185) during the F.Y 2010-11which was not disclosed by him in the return of income for A.Y. 2011-12. On perusal of information, it is noticed that there are several brokers who have, indulged in providing bogus entry of losses/ profit arisen on trading on NMCE through bogus/jamakharchi companies. The prices of the commodities have artificially rigged on NMCE by the brokers. Further, it is noticed that the commodities are artificially purchased from the same person and sold them back to the same persons within a minutes or very less time after rigging the prices of the commodities which resulted in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 143(1) of the I. T. Act. In view of the above, provisions of clause (b) to explanation 2 to section 147 are applicable to facts of this case and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped assessment. 10. In this case, more than four years have lapsed from the end of the assessment year. Hence, necessary sanction to issue the notice u/s 148 has been obtained separately from Principal Commissioner of Income Tax-1, Surat, as per the provisions of section 151 of the I.T. Act." 11. Bare perusal of the reasons so recorded would go to suggest that the Assessing Officer is of the opinion that the assessee has not disclosed fully and truly all facts and details with regard to trading done through the broker i.e. M/s.Divya commodities and as such, the return was processed under Section 143(1) of the Act and no scrutiny assessment was passed under Section 143(3) of the Act, the Assessing Officer has reason to believe the escapement of income. However, in our considered opinion, keeping in mind the aforesaid undisputed fact, the Assessing Officer has while issuing notice and recording reasons completely gone into oblivion to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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