Case Law Details

Case Name : S. Raheja Realty Pvt. Ltd. Vs Office of Income Tax Officer (Gujarat High Court)
Appeal Number : R/Special Civil Application No. 16627 of 2022
Date of Judgement/Order : 30/08/2022
Related Assessment Year : 2015-16

S. Raheja Realty Pvt. Ltd. Vs Office of Income Tax Officer (Gujarat High Court)

On perusal of the Explanation (1) of the Section 148, it is clear that that for the purpose of Section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means any information fagged in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time.

In the facts of the case, the information is available with the Assessing Officer as per related information details on record containing the Investigation Report in case of one Shiv Shakti Trading Company wherein the DDIT, (Investigation), Unit-3(3), Kolkata has given details with regard to the accommodation entry given by the said Shiv Shakti Trading Company, who is stated to have received unexplained and undisclosed fund for more than Rs.37 crores for the assessment year 2015-16, which in turn has been given to Talland Data Soft Private Limited and other entities and the assessee has also received the fund from the said Talland Data Soft Private Limited as can be seen from the Entry Nos.21 and 22 of the list of the beneficiaries of the account of Talland Data Soft Private Limited available at the Page No.139 of the petition.

Therefore, it is apparent that the information relevant for the assessment year in accordance with the Risk Management Strategy formulated by the Board from time to time is available and therefore we are of the opinion that Assessing Officer has rightly issued the notice by rejecting the objections of the assessee by referring to such information and considering the same in detail, the impugned order passed under Section 148A(d) of the Act is passed giving cogent reasons for rejecting the objections of the assessee in accordance with the provisions of the Act.

In view of the above facts the Assessing Officer has rightly treated the case to be a ft case for exercising powers of reopening of assessment.

FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT

1. By this petition under Article 226 of the Constitution of India, the petitioner has prayed for the following reliefs.

“(a) To quash and set aside the Impugned Order dt. 26.07.2022 passed under Section 148A(d) and Impugned Notice dt. 26.07.2022 issued under Section 148 of the Income Tax Act, 1961 for A.Y. 2015-16 annexed at Annexure – “A (Colly.)” to this Petition;

(b) Pending admission, hearing and final disposal of this Petition, this Hon’ble Court may kindly be pleased to stay and suspend effect, operation and implementation of the Impugned Order dt. 26.07.2022 passed under Section 148A(d) and Impugned Notice dt. 26.07.2022 issued under Section 148 of the Income Tax Act, 1961 for A.Y. 2015-16 annexed at Annexure – “A (Colly.)” to this Petition;

(c) Pending admission, hearing and final disposal of this Petition, this Hon’ble Court may kindly be pleased to restrain the Respondent including any persons claiming through or under the Respondent from proceeding with assessment/ reassessment proceeding in respect of the Petitioner for AY 2015-16 in furtherance of the Impugned Order dt. 26.07.2022 passed under Section 148A(d) and Impugned Notice dt. 26.07.2022 issued under Section 148 of the Income Tax Act, 1961 for A.Y. 2015-16 annexed at Annexure – “A (Colly.)” to this Petition;

(d) Grant ex parte ad interim reliefs in terms of prayer (b) and (c) hereinabove;

(e) Any other and further relief, which is just and proper, may kindly be granted as may be deemed expedient by this Hon’ble Court in the facts and circumstances of the case.

(f) Award cost of the present Petition.”

2. The brief facts of the case are that the petitioner is a company incorporated under the provisions of Companies Act, 1956. The petitioner fled its return of income for assessment year 2015-16 under Section 139(1) of the Income Tax Act, 1961 (for short ‘the Act, 1961’) on 28.9.2015 declaring total income of Rs.32,27,720/-.

3. A notice under Section 143(2) was issued on 11.04.2016 and notice under Section 142(1) was issued on 2.8.2017 upon the petitioner along with questionnaire seeking various details including bank account details, bank statement and audited annual reports.

3.1 The petitioner fled its reply on 23.8.2017 providing copies of the documents sought by the Assessing Officer. After considering the reply of the petitioner, the Assessing Officer passed the assessment order dated 6.9.2017, assessing the total income of the petitioner at Rs.35,81,230/- making addition on account of interest on excess capital contribution in a Limited Liability Partnership.

3.2 The respondent issued a notice under Section 148 of the Act on 9.6.2021 to reopen the assessment for assessment year 2015-16.

3.3 Pursuant to the order passed by the Apex Court in case of Union of India and Ors. Vs. Ashish Agarwal and Ors., [2022 SCC Online SC 543] the respondent issued a notice under Section 148A(b) of the Act. Prior to issuance of such notice, the petitioner fled return of income pursuant to notice under Section 148 on 30.6.2021. Copy of reasons were also provided to the petitioner on 5.7.2021, wherein it was stated that the petitioner was beneficiary of accommodation entries / bogus loan to the tune of Rs.2,07,00,000/- with a third party that is Shiv Shakti Trading Company and subsequently received the same from Talland Data Soft Private Limited.

3.4 The petitioner fled the objections on 8.7.2021 and thereafter fled further objections on 22.7.2021. The petitioner thereafter preferred Special Civil Application 6460 of 2022 before this court challenging the notice dated 9.6.2021. This court disposed of the said petition on 5.5.2022 in view of the judgment of the Apex Court in the case of Ashish Agarwal (supra).

3.5 The respondent authority thereafter issued notice dated 25.5.2022 followed by notice dated 16.6.2022 requiring the petitioner to furnish details in pursuance to the notice under Section 148A (b), which is issued by the respondent authority in view of the Instruction No.01/22 issued by the Central Board of Direct Taxes providing guidelines to all the officers to be followed for reopening assessment under the new regime and as per the judgment of the Hon’ble Supreme Court.

3.6 The petitioner thereafter fled a reply to the aforesaid notices on 20.6.2022. The respondent authority by the impugned order passed under Section 148A (d) of the Act dated 26.7.2022, rejected the objections fled by the petitioner and issued a notice by under Section 148 of the Act. Being aggrieved, the petitioner has preferred this petition.

4. Learned advocate Mr. Priyam Shah for the petitioner submitted that the respondent authority has not considered the objections raised by the petitioner though the petitioner has fled all the details including the bank statement, audit reports in form 3CB and 3CD as required during the course of regular assessment under Section 143(d) of the Act.

4.1 It was submitted that the petitioner has raised an objection to the effect that the petitioner has never received the amount of Rs.1,87,00,000/-, but the petitioner has received only Rs.20,00,000/- from Talland Data Soft Private Limited. It was submitted that the petitioner has never been given any further details except the copy of the note received from DDIT, (Investigation), Unit-3(3), Kolkata dated 20.3.2020 and as the name of the petitioner appears in the said note of having received Rs.2,07,00,000/- from the Talland Data Soft Private Limited, the impugned reopening of assessment is initiated by the respondent authority. It was submitted that the respondent authority has not considered the objections raised by the petitioner and the petitioner is deprived of the opportunity to deal with the details in possession of the respondent authority as the same were not disclosed to the petitioner.

4.2 It was submitted that the loan received by the petitioner of Rs.20,00,000/- from the Talland Data Soft Private Limited is not a bogus loan and merely because DDIT, (Investigation), Unit- 3(3), Kolkata, has provided information that the party from whom the petitioner has received the loan has done transaction with another party which is a shell entity, it cannot lead to ‘belief’ that the transaction of the loan were also bogus. It was submitted that it is far fetched conclusion with no rational connection to the facts and evidence on record and is based on assumption and suspicion which cannot be said to be a reasonable belief. It was submitted that the provisions of Section 147 are not at all attracted as can be seen from the reasons given in the impugned order passed under Section 148A (d) and hence the proceeding being invalid and against the law, ought to have been dropped.

4.3 In support of his submissions, learned advocate Mr. Priyam Shah referred to and relied upon the decision of High Court of Calcutta in Civil M.A.T No.917 of 2022 in case of Maharaja Edifce Private Limited Vs. Union of India and Ors. to submit that the reasons provided to the petitioner did not contain any information but it is titled as ‘cash related information detail’ and such information cannot be said to be sufficient for reopening of the assessment.

4.4 It was submitted that the Calcutta High Court while allowing the petition, quashed and set aside the order passed under Section 148(d) and the matter was remanded to the Assessing Officer to pass a fresh order for considering the objections of the petitioner in the said case.

4.5 Learned advocate for the petitioner further relied upon decision of this court in Divya Jyoti Diamonds Private Limited Vs. Income Tax Officer reported in [439 ITR 471 (Gujarat)], wherein also this court remanded the matter back to the Assessing Officer as no reasons were assigned in the order rejecting the objections fled by the petitioner in response to the notice issued under the old regime.

5. Having considered the submissions made by learned advocate for the petitioner, it would be germane to refer to the provisions of Section 148 which have been substituted by the Finance Act, 2021 with effect from 1.4.2021.

“Issue of notice where income has escaped assessment.

148. Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of Section 148A, the Assessing Officer shall serve on the assessee a notice, alongwith a copy of the order passed, if required, under clause (d) of Section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139:

Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice.

Explanation 1.-For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means,

(i) any information fagged in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time;

(ii) any final objection raised by the Comptroller and Auditor General of India to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act.”

Reopening of assessment based on Investigation Report of other Assessee justified

6. On perusal of the Explanation (1) of the Section 148, it is clear that that for the purpose of Section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means any information fagged in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time.

7. In the facts of the case, the information is available with the Assessing Officer as per related information details on record containing the Investigation Report in case of one Shiv Shakti Trading Company wherein the DDIT, (Investigation), Unit-3(3), Kolkata has given details with regard to the accommodation entry given by the said Shiv Shakti Trading Company, who is stated to have received unexplained and undisclosed fund for more than Rs.37 crores for the assessment year 2015-16, which in turn has been given to Talland Data Soft Private Limited and other entities and the assessee has also received the fund from the said Talland Data Soft Private Limited as can be seen from the Entry Nos.21 and 22 of the list of the beneficiaries of the account of Talland Data Soft Private Limited available at the Page No.139 of the petition.

8. Therefore, it is apparent that the information relevant for the assessment year in accordance with the Risk Management Strategy formulated by the Board from time to time is available and therefore we are of the opinion that Assessing Officer has rightly issued the notice by rejecting the objections of the assessee by referring to such information and considering the same in detail, the impugned order passed under Section 148A(d) of the Act is passed giving cogent reasons for rejecting the objections of the assessee in accordance with the provisions of the Act.

9. In view of the facts as narrated in para 7 herein above coupled with the facts obtaining on record, the Assessing Officer has rightly treated the case to be a ft case for exercising powers of reopening of assessment. The provisions under Section 148A of the Act are duly noted and necessary conditions are satisfied which has resulted into impugned notice under Section 148 of the Act. No case is made out for interference.

10. In view of the above forgoing reasons, we are of the view that the petition is devoid of any merits and is accordingly dismissed. No order as to cost.

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