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Case Law Details

Case Name : Raju Bhupendra Desai Vs ITO (Gujarat High Court)
Appeal Number : R/Special Civil Application No. 20294/2019
Date of Judgement/Order : 05/07/2021
Related Assessment Year :
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Raju Bhupendra Desai Vs ITO (Gujarat High Court)

There is also no merit in the submission of Mr. Patel that the respondent was carrying out fishing and roving inquiry completely on incorrect facts and based on the borrowed belief of DCIT Central Circle-1(3), Ahmedabad. It may be noted that merely because in the reasons recorded to reopen the case under section 153C, the respondent has recorded in the first opening paragraph that he had received the information from DCIT Cen, Cir-1(3), Ahmedabad, it could not be said that the respondent had borrowed the belief from the other officer or that he had initiated the action without any application of mind. In the reasons recorded in support of the notice under section 142(1) read with section 153C, the respondent has narrated all the material received by him connecting the petitioner for prima facie coming to the conclusion that the sheets seized during the search proceedings at the various locations of MS Patel Group of Ahmedabad, revealed that Shri Raju Bhupendra Desai i.e. the petitioner had entered into monetary transactions with SVP Corporation, the proprietary concern of Shri Vishal D. Pandya. The respondent after having gone through the information and material, had recorded the satisfaction that the documents found and seized from the premises of the accommodation entry provider Group of Ahmedabad pertained to the petitioner – assessee and had bearing on the determination of the total income of the petitioner – assessee for the assessment year 2012-13, and therefore, the case was required to be assessed under section 153C read with 153A of the Income-Tax Act for the A.Y. 2012-13.

 The objections against the said reasons recorded by the respondent for re-opening of the case of the petitioner, were duly considered by the respondent vide the detailed order dated 10.10.2019 (Annexure D), after calling upon the petitioner to furnish the details and documents vide the notice dated 23.09.2019 issued under section 142(1) of the said Act. The petitioner again filed objections against the said order passed on 10.10.2019 (Annexure D), which also came to be disposed of by the respondent vide the order dated 30.10.2019 (Annexure F).

Mere mention of receipt of information from DCIT not makes an AssessmentNotice as based on borrowed belief

It may be noted that at the time of issuing the notice under section 153C of the Act, the Assessing Officer has to satisfy himself whether the books of accounts or documents or assets seized or requisitioned by the other Assessing Officer in the proceedings under section 153A and handed over to him, had a bearing on the determination of the total income of the person to whom the notice under section 153C is issued. Such satisfaction would be in the realm of subjective satisfaction of the concerned Assessing Officer. The sufficiency or correctness of the documents or material handed over by the other Assessing Officer to him also could not be gone into by the Courts at this stage. In the case of Raymond Woolen Mills Ltd. Versus ITO reported in (1999) 236 ITR 34 (SC), it has been held that in determining whether the commencement of reassessment proceeding is valid, the Court has only to see whether there is prima facie some material on the basis of which the department has opened the case, and that the sufficiency or correctness of the material could not be considered at this stage. It is true that the supreme Court has made the said observations while considering the validity of the reasons recorded by the Assessing Officer for reopening of the assessment of the assessee under Section 147, whereas the present case arises out of the proceedings initiated and the satisfaction recorded by the Assessing Officer for initiating the proceedings under section 153C of the said Act, nonetheless such reliance of the decision of Supreme Court by the respondent could not be said to be out of place when the matter was concerning about the reopening of the assessment of the petitioner – assessee.

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