Case Law Details
Rajhans Processors Vs Union of India (Rajasthan High Court)
Authority admits in this order that there has to be some material on record on the basis of which, the A.O. would form a bonafide belief that income of the assessee had escaped assessment for the Assessment Year 2017-18. When we peruse the impugned notice (Annex.5) and the reasons for reopening the assessment (Annex.8), it becomes clear that the same are founded on a non-existent transaction of purchase of immovable property situated at C-152, Nirman Vihar, Delhi. In spite of the petitioner elaborating in its reply as well as objections that it had never entered into any such transaction, the respondent authorities made no effort whatsoever to rectify the blatant blunder and instead they have tried to justify the fundamentally flawed reopening proceedings on entirely a new ground that the petitioner did not upload the financial statement with the return and that the details of the land transaction were not mentioned in the Schedule 6 of the balance sheet. This observation of the authority is also incorrect on the face of record because the balance-sheet was admittedly uploaded with the return filed by the petitioner pursuant to receiving the notice under Section 148 of the Income Tax Act. In Schedule 6 of the balance sheet, transaction pertaining to procurement of immovable property worth Rs.1,26,25,900/- is clearly stated.
Resultantly, we are of the firm view that the very foundation of the impugned notice, the reasons to believe and the order turning down objections is non-existent. All the three proceedings are based Sherly on conjectures and surmises. The A.O. had no tangible evidence to initiate the re-assessment proceedings against the petitioner and the impugned action is based sherly on borrowed satisfaction. Even if it is assumed for argument’s sake that the transaction made by the petitioner for acquisition of immovable property at Pali may be read in place of Delhi, then also, the said transaction is duly mentioned in the return filed by the petitioner for the relevant financial year and is supported by the audited balance-sheet, which was accepted by the Assessing Officer. Hence, there is no escape from the conclusion that no tangible material was available with the Assessing Authority so as to initiate the re-assessment proceedings against the petitioner by taking recourse to the provisions under Section 148 and 143 (2) of the Income Tax Act.
As a consequence, the impugned notice under Section 148 of the Income Tax Act dated 31.03.2021 (Annex.5), the reasons to believe conveyed vide notice under Section 143(2) of the Income Tax Act dated 28.06.2021 (Annex.8), the order dated 13.09.2021 (Annex.12) disposing of the objection of the petitioner and all consequential proceedings sought to be taken in pursuance thereof deserve to be and are hereby quashed and struck down.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
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