Nirmal Bang Securities Pvt Ltd Vs ACIT (Bombay High Court)
In this case reasons quoted were bereft of any material as AO quoted that search information is received with regard to accommodation entry But does not indicate what address was searched, from whom such information was received, what date the search happened, what date the information was received, what was the information etc. Admittedly a copy of the information received also has not been provided to petitioner to enable petitioner to effectively deal with the reasons.
Petitioner filed its objection by a communication dated 12th August, 2021 and same were rejected by an order dated 13th January 2022
Admittedly the notice for reopening has been issued four years after the expiry of the relevant assessment year. Therefore, reopening is barred unless respondent is able to show that petitioner had failed to disclose fully and truly all material facts for assessment.
Having seen the reasons, no case of failure to disclose is made out. The factum of failure to disclose cannot be culled from the reasons in support of the notice seeking to reopen the assessment. Therefore, certainly it will be fatal to the assumption of jurisdiction under Sections 147 and 148 of the Act.
We also have to observe that the reason recorded for reopening as noted earlier, is bereft of any material or information. We wonder what prompted the jurisdictional Assessing Officer to write such a bald and toothless reason. Certainly the reasons, as recorded, cannot even indicate anywhere or by no stretch of imagination can it be concluded that any income has escaped assessment. We are also surprised that by reading these reasons, approval under Section 151 has been granted, which also indicates clear non-application of mind by the authority which granted the approval.
We only hope that respondents’ officers will record better reasons for reopening and the authority granting approval will also apply their mind sincerely before granting an approval.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. No reply has been filed and by consent of the parties taken up for admission/disposal, at this stage itself.
2. Prayer clause (a) of the petition reads as under:
“(a) that this Hon’ble Court may be pleased to issue a Writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ, order or direction, calling for the records of the Petitioner’s case and after going into the legality and propriety thereof, to quash and set aside the said (i) Notice u/s 148 dated 31st March, 2021 (Exh.”A”), (ii) the impugned order dated 13/1/2022 being (Exh.”B”) and (iii) Notice u/s 142(1) dtd.20/1/2022 being (Exh.”C”).”
3. Petitioner is a stockbroking firm and returned an income of Rs.1,03,30,630/- for Assessment Year 2013-2014. During the course of assessment proceedings, Assessing Officer issued notice dated 13th July 2015 under Section 142(1) of the Income Tax Act, 1961 (“the Act”) asking for various details. The assessment of petitioner for Assessment Year 2013-2014 was completed under Section 143(3) of the Act assessing total income at Rs.9,10,95,756/-. Thereafter, assessment was reopened under Section 147 vide notice dated 30th March 2018 under Section 148 as information about large value cash transaction was received. Upon considering the submissions made as well as the documents submitted by petitioner no addition was made and income was assessed as per order dated 19th April, 2018 passed in appeal under Section 250 against the original assessment order.
4. The assessment of petitioner is now again proposed to be reopened by issuing notice dated 31st March 2021 under Section 148 of the Act. The reasons supplied to petitioner for reopening are as under:-
“In this case, search information is received with regard to accommodation entry, STR etc in which assessee is beneficiary, the details of which are as under:
