Usha Exports Vs ACIT (Bombay High Court)
The first contention raised by Dr. Shivram regarding the absence of statement regarding petitioner’s failure in the reasons is correct. The reasons supplied along with the impugned notice, which are reproduced above, contain no assertion there was any failure of the petitioner to disclose fully and truly all material facts necessary for the assessment. This omission can be a ground to set aside the Reassessment notice. Pursuant to the reasons given along with first reopening notice dated 29 September 2012, the Petitioner had supplied all the material regarding the very same allegations against the Petitioner and the same were examined by the Assessing Officer. All the material was placed before the Assessing Officer by the Petitioner. Acting upon this material, the Assessing Officer had, in fact, made certain additions. Therefore, it cannot be said that there was a failure by the Petitioner to disclose all material facts fully and truly. In the circumstances, the jurisdictional requirement to reopen the assessment proceeding after four years is not present. Neither it has been alleged.
Dr. Shivram then submitted that the foundation of the first reopening notice and the second notice is the same. That is the issue of bogus purchases and accommodation of entries and that there is a clear change of opinion by the Assessing Officer. He submitted that, in the reasons supplied along with first reopening notice, the issue of bogus accommodation of entries regarding purchases was discussed. The reasons given for second reopening notice reproduced above also refer to the said fact. The reasons also refer to a decision of the Supreme Court in the case of M/s.N.K.Proteins Ltd. (2017-TIOL-23-SC-IT v. DCIT ). Even this decision was before the Assessing Officer in the proceeding pursuant to first reopening notice. The Petitioner, along with its objections, placed explanatory note as to how the said decision of the Supreme Court in M/s.N.K.Proteins did not apply to the facts of the case. Therefore, this aspect was also considered when the proceeding under the first reopening notice was conducted. In the circumstances, the contention of the Petitioner that the impugned reopening notice is issued only on mere change of opinion will have to be accepted.
FULL TEXT OF THE HIGH COURT ORDER / JUDGEMENT
By this petition, the Petitioner challenges the notice dated 28 March 2019 seeking to reopen the assessment for the assessment year 2012-13, and the order dated 4 September 2019 disposing of the objections raised by the Petitioner to the said notice.
2. The Petitioner is a partnership firm carrying on the business of manufacturing and exports of diamonds. The Petitioner filed the return of income for the assessment year 2012-13 on 20 September 2012 declaring total income of Rs.29,76,330/-. The Respondent No.1- Assessing Officer sought details from the Petitioner regarding purchases, sundry creditors and sundry debtors and a notice to that effect under section 142(1) of the Income Tax Act, 1961 was issued on 31 July 2014. The Petitioner replied to the said notice on 19 August 2014 and submitted details as sought for. An assessment order was passed by the Assessing Officer on 19 February 2015 under section 143(3) of the Act without making any disallowances of the purchases.
3. The Petitioner received a notice from the Assessing Officer dated 29 September 2012, seeking to reopen the assessment for the assessment year 2012-13. The reasons supplied along with notice were as follows:
In this case, the assessee has filed the Return of Income for the AY 2012-13 declaring Total income of at Rs.29,76,330/- on 29/09/2012. Information gathered by this office reveals that the captioned assessee is one of the beneficiaries who purchased HAWALA bills from companies;managed by the Rajendra Jain Group, who are engaged in the business/ activity of issuing bogus bills without delivery of goods as per requirements of their customers. Information collected by the office of DGIT (Inv), Mumbai also confirmed the fact that the above assessee is a beneficiary on account of purchasing bogus bills without delivery of goods from parties mentioned below for the FY 2011-12 relevant to the assessment year 2012-13.
The Name of Parties from whom assessee has made purchases is a under:-
