Case Law Details
Hemant Manaharlal Shah (HUF) Vs ITO (Gujarat High Court)
The Assessing Officer formed a belief that income chargeable to tax has escaped assessment, on the ground that noticing a big mismatch between the returned income and cash transactions in the assessee’s bank accounts, queries were raised, which remained unreplied. This is contrary to the facts on record. As noted, in reply to the notice dated 21.02.2017 issued by the Assessing Officer, the assessee had given a detailed reply on 06.03.2017. He had pointed out that he had received Rs.25 lakhs in cash for sale of his Mango crop. Such amount was deposited in the bank account. Part of it was withdrawn and redeposited. That is how the total cash deposit in his account reached Rs.30.75 lakhs during the relevant period. Along with his reply, the assessee had also furnished a copy of the agreement between the assessee and the purchaser of the Mango crop. The bank statement was also produced. If the Assessing Officer was not still satisfied, it was always open for him to call for further details or even for valid reason to discard the assessee’s reply and reopen the assessment recording the reasons. However, under no circumstances, he could have simply ignored the reply and proceeded to form a belief that income chargeable to tax has escaped assessment on the premise that his queries had remained unreplied. In plain terms, his reasons proceeded on wrong facts. His satisfaction was thus, tainted by wrong facts. His attempt to cover the issue through the order disposing of objections must fail. His assertion that such large amount of agricultural income required verification, would amount to improving the reasons and also seeking to carry out fishing inquiry through the process of reopening of the assessment.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
1. Petitioner has challenged a notice dated 28.03.2017 issued by the respondent-Assessing Officer
seeking to reopen the petitioner’s assessment for the assessment year 2010-11.
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