M/S. ESS PEE INDUSTIRES (GUJARAT) LTD. V. DY. COMMISSIONER OF INCOME TAX CIRCLE 1(1)(1)

SCA/22514/2017

AI Insights

The case involves two petitions filed by M/S Amit Polyprints Pvt Ltd against the Deputy Commissioner of Income Tax, challenging the notices issued for reopening the assessments for the assessment year 2010-11. The reopening was based on information about shell companies that had allegedly provided accommodation entries for share premium in Surat based companies. The court examined the validity of the reopening, considering the procedures followed by the Assessing Officer and the legal standards for such actions under the Income Tax Act. The court referenced a similar case, Aishwarya Dying Mills Pvt. Ltd, where the reopening was upheld under similar circumstances.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 766771 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 07-05-2018
• Assessment Year: misc
• Other Referred Cases: Inductotherm (India) P. Ltd vs. M. Gopalan, Deputy Commissioner of Income Tax, Assistant Commissioner of Income Tax v. Rajesh Jhaveri Stock Brokers P. Ltd., Commissioner of Income Tax vs. Kelvinator of India Ltd, Bakulbhai Patel vs. Income Tax Officer, Gujarat Power Corporation Ltd vs. Assistant Commissioner of Income Tax, Aishwarya Dying Mills Pvt. Ltd vs. Income Tax Department
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: NIKUNT RAVAL; KALPANAK RAVAL
• Assessee Lawyers: S N SOPARKAR; B S SOPARKAR
• Keywords: Accommodation entries; Reopening of assessment; Share capital; Share premium; Shell companies
• Section: 147; 148; 143(3); 143(1); 68

Judgement Text

"C/SCA/22489/2017 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 22489 of 2017 With R/SPECIAL CIVIL APPLICATION NO. 22514 of 2017 ========================================================== M/S AMIT POLYPRINTS PVT LTD Versus DY COMMISSIONER OF INCOME TAX ========================================================== Appearance: MR S N SOPARKAR, SR ADV WITH MR B S SOPARKAR(6851) for the PETITIONER(s) No. 1 MR NIKUNT RAVAL FOR MRS KALPANAK RAVAL(1046) for the RESPONDENT(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MR.JUSTICE B.N. KARIA Date : 07/05/2018 ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. These two petitions involve different assessees. They pertain to the notices issued by the Assessing Officer for reopening the assessments for the assessment year 2010-11. Background facts as well as the leading contentions are similar in both cases barring a minor difference that in case of the petitioner in Special Civil Application No. 22489 of 2017, the return filed by the assessee was originally accepted under section 143(1) of the Income Tax Act, 1961 whereas in case of the petitioner in Special Civil Application No. 22514 of 2017, the return was accepted after scrutiny. Page 1 of 21 C/SCA/22489/2017 ORDER 2. Since the rest of the material facts are identical, we may record them from Special Civil Application No. 22489 of 2017. The petitioner therein is a private limited company and is engaged in the business of processing man made fabrics on job work basis and manufacturing and trading in cloth. The petitioner has its manufacturing unit situated at GIDC, Sachin, Surat. For the assessment year 2010-11, the petitioner had filed the return of income on 30.09.2010 declaring 'Nil' income. Such return was accepted under section 143(1) of the Act without scrutiny. To reopen such assessment, the respondent Assessing Officer issued impugned notice. In order to do so, he had recorded following reasons: “The assessee company has filed its return of income for the year under consideration on 30/09/2010 declaring total income at Rs. Nil. In the case of the assessee, information have been received from the DDIT(Inv) Unit Unit-3(1), Kolkata in reference to sharing of information of shell companies which have given accommodation entries for share premium in Surat based companies. Vide the referred communication, the DDIT [Inv] Unit-3(1), Kolkata has provided list of 114 Kokata based shell companies which have given accommodation entries in Surat based companies. It has also been stated by the DDIT[Inv] that master data of paper/shell companies maintained by the Kolkata Directorate which has been prepared/complied on the basis of statement of many entry operators/dummy directors recorded during various search & seizure operation/survey operations/investigations/inquiries was checked. Page 2 of 21 C/SCA/22489/2017 ORDER On perusal of data so provided by the DDIT[Inv] Unit-3(1), Kolkata, it is noticed that during the period under consideration, the assessee company has accepted share capital/share premium from the following entities/parties which have been proved to be shell companies based on the investigation conducted by the DDIT[Inv] Unit-3(1), Kolkata: Sr. No Name of the Investor Share Share Capital Share Premium 1 Galore supplier Pvt. Ltd 2, Digamber Jain Temple Road, 1st Floor, Room No. 28, Kolkata 37000 37000 3330000 On verification of the materials available on record and facts and circumstances of the case, it is seen that the assessee has shown to have received share capital/share premium amounting to Rs. 37,00,000/-. Since the investor companies have been proved to be shell companies indulged in providing accommodation entries, the share capital/share premium claimed to have been received, from such companies by the assessee company is not genuine. Therefore, this amount is nothing but assessee company's own money introduced in the grab of share capital/share premium from the shell company and such as liable for taxation under the provisions of section 68 of the I.T.Act. In view of the above facts, since the above companies are proved to be bogus/paper companies and were given accommodation entries to the assessee company by way of share capital and share premium during the F.Y. 2009-10. I have reason to believe that the share capital/share premium received to the extent of Rs. 37,00,000/- (Rs. 3,70,000 share capital + Rs. 33,30,000 share premium) has escaped the assessment for A.Y. 2010-11 and the assessee company had failed to disclose full and true facts of it case, within the meaning of provisions of section 147 of the I.T.Act. Therefore, Page 3 of 21 C/SCA/22489/2017 ORDER I am satisfied that this is a fit case for issue of notice u/s 148 r.w.s. 147 of the act for action u/s. 147 of the Ac for the A.Y. 2010-11.” 3. The petitioner there upon raised objections to the notice of reopening. Having failed in persuading the Assessing Officer to drop the notice, the petitioner filed present petition. 4. From the reasons recorded it appears that, according to the Assessing Officer, information was received from Investigation Wing of Kolkata making reference of shell companies which had given accommodation entries for share premium in Surat based companies. The data so provided by the Investigation Wing showed that during the period under consideration, the assessee-company had accepted share capital/share premium from one Galore Private Limited for issuance of 37000 shares at a sizeable premium. The Assessing Officer noted that since the investor companies are proved to be shell companies indulging in providing accommodation entries, the share capital/share premium claimed to have been received by the assessee from such companies was not genuine. 5. Validity of notice of reopening of assessment of another assessee-Aishwarya Dying Mills Pvt. Ltd based on similar facts came up for consideration before this Court in Special Civil Application No. 22523 of 2017. After detailed Page 4 of 21 C/SCA/22489/2017 ORDER discussion, by a judgement dated 26.03.2018, the petition was dismissed. In such judgement following observations were made: “8. The contention with respect to the borrowed satisfaction and fishing inquiry overlap. We would address these contentions commonly. In the recent past, we have come across several cases where the assessing officer has sought to reopen the assessments, the common thread being the revenue's belief that several Surat based companies had received bogus share application or share premium money in disguise from Kolkata based shell companies. It appears that the Investigation Wing of the Income Tax Department at Kolkata had carried out detailed investigation. Stemming from recording of various statements of Directors of different companies pursuant to search and seizure and such other actions, the department claims that in many of these statements such Directors had admitted to be in control of various companies which were mere shell companies and had provided accommodation entries to range of companies. Such investigation reports based on the material collected by the Investigation Wing of the Income Tax department, Kolkata were supplied to the concerned Assessing Officers of beneficiary companies of such accommodation entries who happened to be stationed at Surat. Large number of reassessment notices were issued. Many of them were challenged before us. On the basis of multiple factual and legal aspects emerging, we have given our judgements in different cases from time to time. 9. The present is, however, a peculiar case where, instead of Investigation Wing of the Income Tax department at Kolkata providing any report or information, it was the Surat Unit of the Income Tax Department which apparently contacted the Investigation Wing at Kolkata and sought information whether there was any material to link the assessee companies at Surat with such bogus accommodation entry transactions. The Page 5 of 21 C/SCA/22489/2017 ORDER modality for seeking such information was, we are informed, worked out on the basis of certain parameters and criteria with which we are not concerned. The fact remains that it was the Surat unit of the Income Tax department which got in touch with the Kolkata Investigation Wing of the Income Tax department and sought certain information and clarifications with respect to various assessee companies who are assessed at Surat. The information, as requested, was provided. In the present case, the DDIT [Investigation] Kolkata in his email dated 27.03.2017 informed Income Tax department at Surat that master data of paper/shell companies maintained by Kolkata Directorate has been prepared on the basis of statements of maney entry operators or dummy Directors which were recorded during various search and seizure operation/survey operations/investigations/inquiries which were checked. It was found that there are 114 shell companies which were controlled and managed by various Kolkata based entry operators for providing accommodation entries. Details of these companies along with their operators were annexed with this email. It was further conveyed that as far as rest of 274 and odd companies are concerned, which do not form part of the data base so prepared, time was insufficient to make full verification. Such material was placed before the Assessing Officer. On the basis of such information, he found that the petitioner had received share application money from as many as 22 such shell companies during the year under consideration. A total of 3.47 lacs shares were allotted to these companies for raising share capital of Rs. 29,88,500/- and share premium of Rs. 11,87,94,000/-. On the basis of such information, he recorded his satisfaction that income chargeable to tax had escaped assessment. He recorded that he had reason to believe that share capital and share premium of Rs. 12,17,82,500/- [Rs. 29,85,500/-+Rs. 11,87,94,000] had escaped assessment. 10. It can thus be seen that the Assessing Officer had specific and definite information at his command to form a belief that income chargeable to tax had escaped assessment. He found that the assessee had received sizeable amount of share Page 6 of 21 C/SCA/22489/2017 ORDER application and share premium monies from various companies which were found to be shell companies and whose Directors' statements were recorded confirming this aspect. This is, therefore, not a case where the Assessing Officer was proceeding on borrowed satisfaction or that it had dearth information at his command to enable him to form a belief that income chargeable to tax had escaped assessment. 11. Counsel for the petitioner, as noted earlier, had raised a somewhat different contention with respect to the exercise undertaken by the Assessing Officer. His view was that in the present case, the Assessing Officer initiated the inquiries at the Investigation Wing of the Income Tax department, Kolkata. He had no sound basis or reason to initiate such inquiry. According to the counsel therefore, the exercise undertaken by the Assessing Officer was vitiated on two grounds: (i) on initiating a roving inquiry and; (ii) asking for information wholly arbitrarily without having reason to believe that the assessee company had received bogus share application money. 12. It is by now well settled that for reopening of the assessment by issuing notice under section 148 of the Act, even in a case where previously no scrutiny assessment was carried out, the Assessing Officer must have reasons to believe that income chargeable to tax had escaped assessment. This aspect has been elaborated by this Court in case of Inductotherm (India) P. Ltd vs. M. Gopalan, Deputy Commissioner of Income Tax reported in 356 ITR 481 making following observations: “13. Despite such difference in the scheme between a return which is accepted under section 143(1) of the Act as compared to a return of which scrutiny assessment under section 143(3) Page 7 of 21 C/SCA/22489/2017 ORDER of the Act is framed, the basic requirement of section 147 of the Act that the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment is not done away with. Section 147 of the Act permits the Assessing Officer to assess, re-assess the income or re-compute the loss or depreciation if he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. This power to reopen assessment is available in either case, namely, while a return has been either accepted under section 143(1) of the Act or a scrutiny assessment has been framed under section 143(3) of the Act. A common requirement in both of cases is that the Assessing Officer should have reason to believe that any income chargeable to tax has escaped assessment. 16. It would, thus, emerge that even in case of reopening of an assessment which was previously accepted under section 143(1) of the Act without scrutiny, the Assessing Officer would have power to reopen the assessment, provided he had some tangible material on the basis of which he could form a reason to believe that income chargeable to tax had escaped assessment. However, as held by the Apex Court in the case of Assistant Commissioner of Income Tax v. Rajesh Jhaveri Stock Brokers P. Ltd., (supra) and several other decisions, such reason to believe need not necessarily be a firm final decision of the Assessing Officer.” 13. In this context, it is also equally well settled that term “reason to believe” is vitally different from reason to suspect. We may recall, for a brief while, section 147 of the Act contained the expression “if the Assessing Officer for the reasons to be recorded by him in writing is of the opinion”. However, it was soon realized that this expression “is of the opinion” would be too wide giving excessive powers to the Assessing Officer to resort to reopening of assessment. This expression was, therefore, quickly changed to bring back the expression “if the Assessing Officer has reason to believe”. This aspect was highlighted by the Supreme Court in case of Page 8 of 21 C/SCA/22489/2017 ORDER Commissioner of Income Tax vs. Kelvinator of India Ltd. reported in 320 ITR 561. In context of section 147 of the Act post its amendment w.e.f. 01.04.1989, the Supreme Court held that Section 147 does not vest arbitrary power in the Assessing Officer and held that even post amendment of 01.04.1989 in section 147, concept of change of opinion would apply. It was observed as under: “6. On going through the changes, quoted above, made to Section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, re-opening could be done under above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act [with effect from 1st April, 1989], they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to re- open the assessment. Therefore post-1st April, 1989, power to re-open is much wider.However, one needs to give a schematic interpretation to the words \"reason to believe\" failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of \"mere change of opinion\", which cannot be per se reason to re-open. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to re-assess. But re- assessment has to be based on fulfillment of certain pre- condition and if the concept of \"change of opinion\" is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of \"change of opinion\" as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April, 1989, Assessing Officer has power to re- open, provided there is \"tangible material\" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to Section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only Page 9 of 21 C/SCA/22489/2017 ORDER deleted the words \"reason to believe\" but also inserted the word \"opinion\" in Section 147 of the Act. However, on receipt of representations from the Companies against omission of the words \"reason to believe\", Parliament re-introduced the said expression and deleted the word \"opinion\" on the ground that it would vest arbitrary powers in the Assessing Officer. We quote hereinbelow the relevant portion of Circular No.549 dated 31st October, 1989, which reads as follows: \"7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression `reason to believe' in Section 147.-- A number of representations were received against the omission of the words `reason to believe' from Section 147 and their substitution by the `opinion' of the Assessing Officer. It was pointed out that the meaning of the expression, `reason to believe' had been explained in a number of court rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 147 to reintroduce the expression `has reason to believe' in place of the words `for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the new section 147, however, remain the same.\" 14.This Court on number of occasions has held that reopening of assessment cannot be done for carrying out roving or fishing inquiries. In case of Bakulbhai Patel vs. Income Tax Officer reported in 2011 56 DDR (Guj) 212 Division Bench of this Court finding that the reasons recorded by the Assessing Officer for reopening of the assessment only provided that the Assessing Officer desiring to carry out a detailed investigation or verification to bring the assessee in the tax net held that notice of reopening of assessment was not valid. 15.The principle, that the notice of reopening can be issued only upon the Assessing Officer bona fide forming a belief that income chargeable to tax had escaped assessment is thus, well settled. Reassessment cannot be resorted to on mere suspicion or for carrying out fishing or roving inquiries. This is Page 10 of 21 C/SCA/22489/2017 ORDER so for many reasons. Reopening of a completed assessment is a serious issue. Once an assessment is reopened on a certain ground, entire assessment at the hands of revenue would be at large. This Court in case of Gujarat Power Corporation Ltd vs. Assistant Commissioner of Income Tax reported in 350 ITR 266 had observed as under: “41. The powers under section 147 of the Act are special powers and peculiar in nature where a quasi-judicial order previously passed after full hearing and which has otherwise become final is subject to reopening on certain grounds. Ordinarily, a judicial or quasi-judicial order is subject to appeal, revision or even review if statute so permits but not liable to be re-opened by the same authority. Such powers are vested by the Legislature presumably in view of the highly complex nature of assessment proceedings involving large number of assessees concerning multiple questions of claims, deductions and exemptions, which assessments have to be completed in a time frame. To protect the interest of the revenue, therefore, such special provisions are made under section 147 of the Act. However, it must be appreciated that an assessment previously framed after scrutiny when reopened, results into considerable hardship to the assessee. The assessment gets reopened not only qua those grounds which are recorded in the reasons, but also with respect to entire original assessment, of course at the hands of the revenue. This obviously would lead to considerable hardship and uncertainty. It is precisely for this reason that even while recognizing such powers, in special requirements of the statute, certain safeguards are provided by the statute which are zealously guarded by the courts. Interpreting such statutory provisions courts upon courts have held that an assessment previously framed cannot be reopened on a mere change of opinion. It is stated that power to reopening cannot be equated with review.” 16. However, we see no fetters on an Assessing Officer carrying out preliminary inquiries even before issuance of notice of reopening in order to collect information on the basis of which, he may either form a belief that income chargeable Page 11 of 21 C/SCA/22489/2017 ORDER to tax had escaped assessment or abandon any further inquiry, upon being satisfied that no such belief could be formed. We find no statutory backing to import the concept of impermissibility of a roving or a fishing inquiry at a stage prior to issuance of notice of reopening. In this context, reference may be made to section 133 of the Act. Chapter XIII of the Act pertains to Income Tax Authorities. Part A of Chapter XIII concerns appointment and control of the Income Tax Authorities, Part B to the Jurisdiction and Part C with their powers. Section 133 is included in Part C and reads as under: xxx xxx xxx 22. In the present case, the Assessing Officer has not even called for any information or document from the assessee or any other person in relation to the assessee's proposed assessments. He has, by all accounts, merely contacted the Investigation Wing of the Income Tax department at Kolkata and based on the process of shortlisting, has called for information with respect to dealings of such shortlisted companies. If on the basis of the information so collected, no further information, is made available to the Assessing Officer which would enable him to form a belief that income chargeable to tax had escaped assessment, he would not be justified in issuing notice for reopening. Only in cases, where on the basis of such information he could bona fide form a belief that income chargeable to tax had escaped assessment, he could exercise powers for reassessment. Mere fact, that instead of such information being supplied to him by the Investigation Wing of the Income Tax Department at Kolkata he sought such information, would not be of any consequence.” 6. Ordinarily therefore, these petitions would meet the same fate without any further discussion. Counsel for the petitioners however, raised two additional grounds. Firstly, he argued that in the judgement in case of Aishwarya Dying Mills Pvt. Ltd. Page 12 of 21 C/SCA/22489/2017 ORDER (supra) while referring the powers of a Revenue Officer under section 133 of the Act, an important proviso to sub-section (6) was not noticed. This proviso prohibits exercise of any such power for calling for information by any officer below the rank of Principal Director or Director or Principal Commissioner or Commissioner without prior approval of such authorities. He submitted that the view taken in case of Aishwarya Dying Mills Pvt. Ltd therefore, requires reconsideration. The second contention of the counsel was that the impugned notice carries the date of 27.03.2017. Sanction was granted by the Principal Commissioner on 31.03.2017. Thus, the notice preceded the sanction. He further argued that in any case, now it appears from the record that the Assessing Officer recorded the reasons on 29.03.2017. Notice for reassessment was therefore, prepared and assessment reopened before recording reasons which was impermissible. 7. On the other hand, learned counsel Mr. Raval for the department placed heavy reliance on the judgement in case of Aishwarya Dying Mills Pvt Ltd. He submitted that merely because the Assessing Officer in the present case had called for some information before forming the belief that income chargeable to tax had escaped assessment, the notice would not be rendered bad in law. Regarding the date of the impugned notice, he submitted that 27.03.2017 was the mere typographical error. The notice was prepared and issued only after the reasons were recorded by the Assessing Officer and Page 13 of 21 C/SCA/22489/2017 ORDER sanction was granted by the Principal Commissioner. He pointed out that the notice was dispatched in the late evening hours on 31.03.2017, clearly indicating that the same was issued after the sanction was granted. He relied on certain judgements to contend that issuance of notice is complete only upon its dispatch. 8. In view of the judgement of this Court in case of Aishwarya Dying Mills Pvt. Ltd, in which, notice of reopening of assessment on similar grounds have been upheld, further discussion on the issue is unnecessary. We however, have to take into consideration two additional contentions raised by the counsel for the petitioners in the present petitions. 9. His first contention was that the Assessing Officer in the present case had called for certain information from the Investigation Wing of the Kolkata and upon being supplied the material, formed a belief that income chargeable to tax had escaped assessment. According to him, this was wholly impermissible. This Court while rejecting such a contention in case of Aishwarya Dying Mills Pvt. Ltd. placed reliance on section 133 of the Act without noticing provision to sub- section (6) thereof. From the quoted portion of the judgement of this Court in case of Aishwarya Dying Mills Ltd, we could gather that such a contention was raised and rejected by the Court. In the process, the Court undoubtedly made a reference to the powers of an Assessing Officer under section 133 of the Page 14 of 21 C/SCA/22489/2017 ORDER Act, in particular, sub-section (6) thereof. The proviso to sub section (6) of course limits the powers of any authority below a certain rank in calling for such information when the assessment is not pending, without the approval of the higher authority. However, the contours of the powers of a Revenue Officer under section 133 was not the sole or even the prime basis for the Court in case of Aaishwarya while rejecting the contention. This would be amply clear from the quoted portion of the said judgement and in particular concluding remarks in para 22 of the judgement. After giving detailed reasons why merely bacause the Assessing Officer in a given case calls for information from another wing of the department before making up his mind whether there was sufficient material to reopen the assessment, would not invalidate the proceedings, reference was made to the provisions contained in section 133(6) of the Act to highlight that the powers of the Assessing Officer in this respect are quite wide. In para 22 of the judgement, it was noted that in the present case the Assessing Officer is/has not even called for any information or document from the assessee or any of the person in relation to the assessee's proposed assessments. He has merely contacted the Investigation Wing of the department at Kolkata and called for certain information based on the process of shortlisting. The Court thus had made a clear distinction between exercise of powers under section 133(6) of the Act and the Act of the Assessing officer in the said case of calling for information from another wing of the department. Proviso to sub-section Page 15 of 21 C/SCA/22489/2017 ORDER (6) does not take away the power of the Assessing Officer to call for relevant information. It only provides for approval of the higher authority before exercising such power in cases where the assessment is not pending. 10. For the reasons cited, in case of Aishwarya Dying Mills Ltd., we do not find that the notice of reopening can be invalidated on this ground. Learned counsel for the petitioners however, strenuously argued that once the Assessing Officer completes the assessment, he loses all his rights to call for any other information in connection with such assessment. We find no such inhibition in the Act. If there is preliminary or prima facie material with him to trigger a further inquiry inter or intra-departmentally and the Assessing Officer calls for information from another wing or office of the department, and which information he utilizes and on the basis of reliable information so provided to him he forms a belief that income chargeable to tax had escaped assessment, we do not find that such process can be faulted. Accepting the contention of the counsel for the petitioners would amount to rendering an Assessing Officer a mute spectator once the assessment is over and allowed to act only after some information is provided to him by some other departmental authority or wing. There is neither any statutory force nor any reason to limit his role in this respect. 11.Coming to the question of sequence of events relating to Page 16 of 21 C/SCA/22489/2017 ORDER issuance of notice, few events, which emerged from the files made available for our perusal and with respect to which the counsel for the petitioners had not raised any serious factual dispute, may be recorded. On 29.03.2017, the Joint Commissioner of Income Tax, Range-I, Surat, wrote to the respondent-Assessing Officer pointing out that the Investigation Wing of Kolkata had confirmed that out of 389 companies sent by Principal Commissioner of Income Tax, III-Surat, about 114 companies appeared in the list of bogus or shell companies in the data base maintained by them. It had also marked such companies and mentioned the names of entry operators and forwarded statements. The letter also records that a copy of the reply is forwarded on your Email ID and physical copy of the list was handed over to him on 27.03.2017. This letter contains an accompaniment which is in the nature of email letter from DDIT (Inv.), Kolkata dated 27.03.2017 stating that, as directed, sharing of information with respect to 389 Kokatta based shell companies which had given accommodation entires was prepared on the basis of statements of entry operators or dummy directors. It was found that there are 114 paper or shell companies out of these 389 companies pertaining to the internal data base which are controlled and managed by various Kolkata based entry operators. 12. The reasons were recorded on 29.03.2017. The same were put up before the immediate superior officer and with his Page 17 of 21 C/SCA/22489/2017 ORDER remarks before the Principal Commissioner of Income Tax, who granted his sanction for reopening the assessment on 31.03.2017. The notice was issued and dispatched in the later part of the day on 31.07.2017. 13. The impugned notice undoubtedly carries the date of 27.03.2017. In this context, therefore, when the petitioner had raised the ground that such notice was issued before grant of sanction by the competent authority, the respondent had filed additional affidavit on 05.04.2018 mainly pointing out that the date of 27.03.207 was a printing error which was subsequently corrected as 31.03.2017 through hand. To explain such error in the said affidavit following further averments have been made: “3. The precise chronology of events are as follows: (i) On the proposal to the Hon'ble Pr. Commissioner of Income Tax-I, Surat, based on the information regarding Shell Companies received from the DDIT(Inv.), Unit 3(1), Kolkata was sent for necessary approval u/s. 151 of the Act, by the undersigned himself, as he was holding charge of DCIT, Circle-1(1)(1), Surat at that point of time as well. (ii) The proposal got approved from office of the Joint Commissioner of Income Tax, Range-1(1), Surat on 30.03.2017 and was forwarded to the office of the Pr. Commissioner of Income Tax-I, Surat for further approval on 30.03.2017. (iii) The Hon'ble Pr. Commissioner of Income Tax-I, Surat Page 18 of 21 C/SCA/22489/2017 ORDER accorded his approval on 31.03.2017 after satisfying himself about the reasons recorded by the DCIT, Circile-1(1)(1), Surat, i.e. the undersigned himself. (iv) The notice u/s. 148 of the Act, was prepared after getting the said approval u/s. 151 of the Act and was issued/dispatched to the assessee i.e. M/s. Amit Polyprints Pvt. Ltd. viz Speed Post on 31.03.2017 itself. (v) The Speed Post has unique number of track the consignment. The number attached to this notice was EG408021705IN. This number also mentioned on the foot note of the notice, as it is a general practice followed in the Income Tax Department. (vi) The invoice receipt of the Postal Department showing the dispatch of the said notice mentioned the time of dispatch as 23:33 Hours of 31.03.2017. (vii) It shows that the notice left the premise of the office of the DCIT, Circle-1(1)(1), Surat i.e. the undersigned only after due approval was received from the Hon'ble Pr. Commissioner of Income Tax-I, Surat on 31.03.2017 and not before it. Hence, it is clear that the date has been mentioned erroneously as 27.03.2017 due to typographical error. (viii) It is also submitted that notice was also sent by e-mail from the official designation based e-mail id i.e. [e-mail] to the assessee company on 31.03.2017 at 09:39 P.M., which proves that the notice was sent at the last moment after getting approval from the Hon'ble Pr. Commissioner of Income Tax-I, Surat. Which is further corroborated from the fact that the same notice was sent on the last day for physical dispatch by Speed Post as mentioned in para No. 3(vi). Certified copy of proof of e-mail sent to the assessee company is attached to this affidavit as Annexure-A. (ix) This is the true position of facts, as the undersigned was holding the charge of the DCIT, Circle-1(1)(1), Surat on the dates mentioned above. Page 19 of 21 C/SCA/22489/2017 ORDER (x) It is prayed that the correct date of notice may kindly be treated as 31.03.2017 only and not 27.03.2017.” 14. If we therefore accept the explanation of the respondent that the date 27.03.2017 mentioned in the impugned notice is only a typographical error and the notice was actually issued on 31.03.2017, everything else would fall in place. We have no reason to discard such explanation. Our reasons for such conclusions are as under: Undisputably, the reasons were recorded on 29.03.2017. The proposal for granting sanction was placed before the Principal Commissioner of Income Tax on 31.03.2017 on which date, he also granted necessary sanction. The notice was actually issued and dispatched in the later part of the day. We therefore have no reason to believe that such notice was issued and dispatched before the sanction was signed by the Principal Commissioner. One more reason to accept the respondent's explanation about the issuance date in the impugned notice is that as noted, it was only on 29.03.2017 that he was supplied full information about different shell companies under a communication by the Joint Commissioner of Income Tax, Range-I, Surat. This communication of course, refers to handing over certain papers to him on 27.03.2017. However, this has reference only to the list (of shell companies) and not the further information received from Investigation Wing of Kolkata. It was contained in the brief email which Page 20 of 21 C/SCA/22489/2017 ORDER accompanied the said letter dated 29.03.2017. Thus, it seems highly unlikely that the Assessing Officer would have decided to issue notice even before full information was supplied to him. In absence of any rebuttal we have no reason to discard the statement of the respondent-Assessing Officer made on oath which even otherwise gets support from the original files, attendant circumstances and facts noted above. 15. In the result, petitions are dismissed. (AKIL KURESHI, J) (B.N. KARIA, J) JYOTI V. JANI Page 21 of 21 "