Validity of reopening of assessment should be judged only with reference to the reasons recorded by the Assessing Officer u/s.148(2)

Rajat Export Import India Pvt. Ltd. Vs. ITO (Delhi HC)– The reasons to believe recorded in writing by the Assessing Officer in the present case have been quoted earlier. They are detailed and show application of mind. The reasons record inferences and conclusions. We wanted to examine the material or evidence on the basis of which conclusions/inferences were drawn. When the record of the Assessing Officer was produced, it was noticed that the documents/ material furnished by the Investigating Wing was not on record and, therefore the order dated 2.12.2011 was passed. Subsequently, on 16.12.2011, the Assessing Officer appeared and had stated that the information given/furnished by the Investigating Wing was in a CD. The print out thereof was furnished. Copy of the material/ evidence relating to the petitioner was furnished to the counsel for the petitioner. In these circumstances, we did not feel that there was any necessity for the respondent to file counter affidavit.

 In the view we have taken as above, it is not considered necessary to examine the statement of Vishal Aggarwal to find out whether the assessee has been implicated therein in any manner as being a recipient of accommodation entries. Nor do we dispute the contention taken before us by the learned counsel for the assessee that the validity of the reopening of the assessment should be judged only with reference to the reasons recorded by the Assessing Officer under Section 148(2) at the time of issue of notice of reopening and any other material sought to be relied upon later, with a view to strengthening or improving the reasons, cannot be looked into by the Court. That contention is sound and is supported by ample authority but it does not apply to the present case. In the present case it cannot be disputed at all that the material present before the Assessing Officer at the time of recording reasons for reopening the assessment did show a link between M/s. Shivam Softech Ltd., described as an entry provider, with the petitioner herein. Not only was there a link between the two names, but the material also disclosed the date on which the entry was taken, the cheque or DD number, the name of the bank and branch and the account number. With such precise material before the Assessing Officer, the existence of which is beyond challenge, it can hardly be said that the Assessing Officer could not have had even a prima facie belief that income chargeable to tax had escaped assessment in the hands of the assessee for the assessment year 2004-05. For the above reasons we dismiss the writ petition filed by the assessee.

HIGH COURT OF DELHI

W.P.(C) 8341/2011

Date of Decision: January 18, 2012.

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