GARVIT DIAMONDS PVT. LTD. V. INCOME TAX OFFICER

SCA/21125/2019

AI Insights

Garvit Diamonds Pvt. Ltd. challenged a notice issued by the Income Tax Officer under Section 148 of the Income Tax Act, 1961, seeking to reopen the income tax assessment for the assessment year 2012-13. The notice was based on information from the Investigation Wing, which suggested that the company was involved in layering of funds and had received accommodation entries. The company argued that the reopening was based on borrowed satisfaction and that all material facts had been disclosed during the original assessment. However, the court upheld the reopening, citing the failure of the assessee to disclose true and full material facts necessary for the assessment.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 768521 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 09-03-2021
• Assessment Year: misc
• Other Referred Cases: Phoolchand Bajranglal and another Vs. ITO, Yogendrakumar Gupta Vs. ITO, Aradhna Estate (P) Ltd Vs. DCIT, Aaspas Multimedia Ltd. VS DCIT, Jayant Security Finance Ltd Vs. Asst. CIT, Principal Commissioner of Income Tax, Rajkot Vs. Gokul Ceramics, Central Provinces Manganese Ore Co. Ltd. v. Income Tax Officer, Nagpur, Income Tax Officer v. Purushottam Das Bangur, Income Tax Officer v. Selected Dalurband Coal Co. Pvt. Ltd., AGR Investment Ltd. v. Additional Commissioner of Income Tax, Sterlite Industries (India) Ltd. v. Assistant Commissioner of Income Tax
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: KALPANA RAVAL
• Assessee Lawyers: OMKAR DAVE
• Keywords: Accommodation entry; Income tax reassessment; Layering of funds; Unexplained credit entry
• Section: 147; 148; 143(3); 151

Judgement Text

"C/SCA/21125/2019 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 21125 of 2019 ========================================================== GARVIT DIAMONDS PVT. LTD. Versus INCOME TAX OFFICER ========================================================== Appearance: MR OMKAR C DAVE(2003) for the Petitioner(s) No. 1 MRS KALPANAK RAVAL(1046) for the Respondent(s) No. 1 ========================================================== CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE ILESH J. VORA Date : 09/03/2021 ORAL ORDER (PER : HONOURABLE MR. JUSTICE ILESH J. VORA) 1. By filing this writ application under Article 226, the writ applicant seeks to challenge the notice dated 31.03.2019 issued by the respondent under Section 148 of the Income Tax Act, 1961 (‘the Act’ for short) seeking to reopen the applicant’s income tax assessment for the A.Y 2012­13. 2. The brief facts leading to file the present writ application can be summarized as under: 2.1 The writ applicant – assessee Company filed its return of Income for the A.Y. 2012­13 on 07.02.2013 declaring total income at Rs. 1,75,310/­ and assessment under Section 143(3) of the Act was completed on 26.03.2015. Page 1 of 19 C/SCA/21125/2019 ORDER 2.2 The Assessing Officer has reopened the assessment under Section 147 by issuing impugned notice dated 31.03.2019 under Section 148 of the Act. 2.3 At the request of the writ applicant, reasons recorded have been furnished to the writ applicant on 17.05.2019, which reads as under : REASONS RECORDED : 1. The assessee Company has its return of income for AY 2012­13 on 07.02.2013 declaring total income at Rs.1,75, 310/­. The assessment u/s 143(3) was completed on 26.03.2015. 2. In this case, an information was received from the “DDIT (Inv.) Unit 4(2), Mumbai vide letter No. “DDIT(Inv.)­ 4(2)/ Information/ABR/2018­19 dated 15.03.2019. In this case, an information has been received that during the investigation of the below mentioned assessee, it is found from the. statements of reported account No.23105133390, 23105133404, 23105138686, 23105138937 and 23105138988 with Standard Chartered Bank for the reported entities, prima­facie it is seen that the transactions are seen as these accounts are used by these entities for layering of funds. Further, analysis of the above bank statements vis­a­ vis ITRs filed by reported entities was done and the findings are tabulated below:­ S r Name of the assessee PAN Total Credits in Bank A/c during A.Y. 2012­13 Total turnover during A.Y.2012­ 13 Total income for A.Y. 2012­13 Year of last ITR filed by the entity 1 Garvit Diamond Pvt. Ltd AADCG8 823H 51 L 1,78,77,90, 731 1,75,31 0 2018­19 3. The reported entities are showing meager incomes compared to turnovers which is not commensurate with the profit in their line of business. No Tax, Audit Report has been filed for all the reported entities, eve en though the turnover in all the entities is well above of Rs.60 Lakhs threshold. Thus, the assessee company is primarily engaged in providing entries only and thus the edits in the bank accounts of these entities are found explained. Page 2 of 19 C/SCA/21125/2019 ORDER 3.1 During the year under consideration, the assessee company has credited total amount of Rs.51,00,000/­ in its bank accounts held with Standard Chartered Bank. As from the DDIIT (Inv), Mumbai, it has bean established that amount of Rs,51,00,000/­ is mere accommodation entry and the assessee is beneficiary of the said amount. 4. In view of above facts/material available on records and after analyzing the same, I have reason to believe that income of the assessee to the extent of 51,00,000/­ has escaped assessment for A.Y.2012­13 within the meaning of Section 147 of the I.T. Act. 5. Applicability of the provisions of section 147/151 to the facts of the case. In this case a return of income was filed for the year under consideration and regular assessment u/s.143(3) was made on 26.03.2015. Since, 4 years from the end of the relevant year has expired in this case, the requirement to initiate proceedings u/s. 147 are reason to believe that income for the year under consideration has escaped assessment because of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the assessment year under consideration. It is pertinent to mention here that reasons to believe that income has escaped assessment for the year under consideration have been recorded above (refer paragraphs 2 to 4 above). In this case more than four years have lapsed from the end of assessment year under consideration. Hence necessary sanction to issue notice u/s. 148 has been obtained separately from Principal Commissioner of Income Tax as per th provisions of section 151 of the Act. In this case more than four years have lapsed from the end of assessment year under consideration. Hence necessary sanction to issue notice u/s. 148 been obtained separately from Principal Commissioner of Income Tax as per Provisions of section 151 of the Act.” 2.4 The writ applicant raised the objections vide its communication dated 04.07.2019, mainly on the following issues on facts and law: Page 3 of 19 C/SCA/21125/2019 ORDER (i) Reasons were not recorded before issuance of notice; (ii) Approval of Principal CIT, in terms of Section 151 of the Act is not obtained; (iii) No failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment; (iii) Reopening is based on “borrowed satisfaction”. 2.5 The objections came to be rejected by the respondent vide order dated 30.08.2019. 3. Being aggrieved by the disposal of the objections against the notice for reopening of the assessment, the writ applicant has come up before this Court with the present writ application. 4. We have heard Mr. Sunit Shah, the learned Senior counsel assisted by Mr. Omkar C. Dave, the learned advocate appearing for the writ applicant and Mrs. Kalpana K. Raval, the learned Standing Counsel appearing for the revenue. 5. Mr. Sunit Shah, the learned Senior Counsel appearing for the writ applicant raised the following contentions: 5.1 It was submitted that, as per the case of the revenue, the credit entries in the accounts amounting to Rs.51,00,000/­ remained unexplained and it is mere an accommodation entry and the assessee is the beneficiaries of the amount. In this regard, the learned counsel submitted that during Page 4 of 19 C/SCA/21125/2019 ORDER previous assessment proceedings made under Section 143(3) of the Act, the notices were served under Section 142(1) and in response to the notices, the assessee had furnished details of all banks and statement for the period 1.4.2011 to 31.3.2012 and also furnished the details of sundry debtors, loan advances, books of accounts etc. , and based on the material submitted, the Assessing Officer concluded that the credit transactions entered into by the assessee were genuine. Therefore, at the time of filing the return of income as well as during the assessment proceedings, all the material facts having been disclosed. In this circumstances, the pre­ condition for reopening in the case of beyond 4 years having not been satisfied as there was no failure on the part of the assesse to disclose the facts truly and fully. 5.2 It was pointed out that the respondent authority failed to comply with the provisions of Section 148(2) of the Act, as before issuing the notice, the Assessing Officer should record his reasons for reopening of the assessment. Referring to the letter, the learned counsel invited the attention of this Court that no date being mentioned on the reasons recorded, which evident that reasons for issuing notice under Section 148 of the Act were not recorded before issuing the notice and therefore, notice lacks validity. 5.3 It was further pointed out that, the reopening of the assessment is beyond the period of 4 years, the approval by the competent authority is required to reopen the assessment. Page 5 of 19 C/SCA/21125/2019 ORDER In this regard, the learned counsel pointed out that the revenue failed to produce the copy of the sanction accorded by the authority nor was it provided along with the copy of the reasons recorded. Therefore, there is no approval in terms of Section 151 of the Act and on this ground, the notice is bad in law and required to be quashed and set aside. 5.4 It was further contended that the Assessing Officer has acted mechanically on the basis of vague information and no further inquiries being made by the Assessing Officer, to come to any independent conclusion that the income has escaped assessment. Therefore, reopening based on the third party satisfaction cannot be sustained in law and the proceedings initiated on borrowed satisfaction required to be quashed and set aside. 6. In view of the aforesaid contention, the learned counsel for the writ application submitted that, the impugned notice as well as the order of disposing off the objections are bad, illegal and without jurisdiction and therefore, the same deserve to be quashed and set aside and accordingly, the writ application may be allowed. 7. On the other hand, Mrs. Kalpana K. Raval, learned Standing Counsel appearing for the revenue has vehemently opposed the writ application, contending that the revenue is justified in reopening the assessment for the year under consideration. She has urged that Assessing Officer has reason to believe that the income has escaped assessment as the primary Page 6 of 19 C/SCA/21125/2019 ORDER information received from the Investigation Wing, Mumbai, it was found that the amount reflected in the bank account were used by the assessee for layering of funds and after independent inquiries and upon due satisfaction, the Assessing Officer formed an opinion that the credit amount of Rs.51,00,000/­ is mere an accommodation entry and the assessee is the beneficiaries of the transactions. In this circumstance, when at the relevant time, the assessee did not disclose the true facts of the transactions, the Assessing Officer having reason to reopen the assessment. 8. In view of the above contentions, the learned counsel for the revenue urged that the writ application may not be entertained. 9. Having heard the learned counsel appearing for the respective parties and having gone through the materials on record, the only question that falls for our consideration is whether the revenue is justified in reopening the assessment. 10. It is a settled position of law that reopening of case under Section 147 of the act, after expiry of 4 years, cannot be justified unless the income chargeable to tax has escaped assessment by reason of the failure on the part of the assessee to disclose all the true and material facts necessary for his assessment. In other words, to confer jurisdiction under Clause (a) of Section 147 of the Act, beyond the period of 4 years, two conditions are required to be fulfilled viz. (i) the Assessing Officer must have reason to believe that the Page 7 of 19 C/SCA/21125/2019 ORDER income, profits or gains chargeable to tax had been under­ assessed or escaped assessment, and (ii) the Assessing Officer must have reason to believe that such escapement or under­assessment was occasioned by reason of the omission of failure on the part of the assessee to make a return under Section 149 or to disclose fully and truly all material facts necessary for the assessment of that year. 11. We take the notice of the fact that the assessee company filed its return of income for the A.Y. 2012­13 on 07.02.2013 declaring total income of Rs.1,75,310/­ and the assessment under Section 143(3) of the Act was completed on 26.03.2015. The case of assessee is sought to be reopened on the basis of information received from the Investigating Wing, Mumbai, wherein, it was stated that, the agency had scrutinized selected bank account numbers of the assessee, maintained with Standard Chartered Bank and prima­facie it was found that the transactions reflected in the accounts used by the assessee for layering of funds and the credit entries of Rs.51,00,000/­ is mere an accommodation entries and this credit entries remained unexplained. 12. After careful examination of the reasons recorded and materials on record, it appears that the Assessing Officer has verified the information with regard to suspicious cash transactions and upon analysis of the bank statements, it was seen that compare to turnover, the total income was very less, which in his opinion, was not commensurates with the profit. Page 8 of 19 C/SCA/21125/2019 ORDER The Assessing Officer has further observed that in the absence of tax audit report, the turnover was also above Rs.60,00,000/­. In this backdrop, the Assessing Officer, has come to the conclusion that the assessee is engaged in providing accommodation entries only and the credits of Rs.51,00,000/­ in the bank account was found unexplained and assessee is the beneficiaries of the transactions. After analysis of the reasons, with respect to formation of belief with regard to escaped income, we find that at the relevant time during the course of earlier assessment proceedings, the true facts with regard to cash transactions as referred to above, had not been disclosed truly and fully. From bare perusal of the reasons recorded, it appears that the Assessing Officer could be said to have applied his independent mind to the information received from the concerned department and after being duly satisfied, he reached to the conclusion that the assessee failed to disclose the true facts with regard to alleged cash transactions, which found to be an accommodation entries and the assessee being the beneficiaries, the amount has escaped assessment. 13. In view of the aforesaid discussion, it could be said that after framing of the assessment made under Section 143(3) of the Act, tangible material came into the hands of the Assessing Officer through the investigation wing and upon perusal of the same, he made independent inquiries and applied his mind and upon due satisfaction, he formed an opinion that, the income has escaped assessment. Page 9 of 19 C/SCA/21125/2019 ORDER 14. The main contention advanced by the learned counsel that at the final assessment proceedings, all the material facts including the bank statements, books of accounts, credit transactions were furnished and same was thoroughly examined by the Assessing Officer and in this circumstances, when there was no concealment or suppression of any facts, the reopening beyond 4 years in the absence of any non­ disclosure of material facts cannot be permitted. We are not agree with the above contention as the true facts with regard to cash transaction made by the assessee was discovered by the Assessing Officer on the basis of the specific and relevant information received from the concerned department, which prima­facie prove that the transaction shown in the books of accounts itself on the basis of subsequent information is found to be a bogus transaction and mere a disclosure of the cash entries reflected in the bank account, cannot be said to be disclosure of the full and true facts. In this context, we may refer and rely on the observations made by the Apex Court in the case of Phoolchand Bajranglal and another Vs. ITO (2001) 10 SCC 189. The observations made in para­19 reads thus: “19. Acquiring fresh information, specific in nature and reliable in character, relating to the concluded assessment which goes to expose the falsity of the statement made by the assessee at the time of original assessment is different from drawing a fresh inference from the some facts and material which was available which the I.T.O. at the time of original assessment proceedings. The two situations are distinct and different. Thus, where the transaction itself on the basis of subsequent information, is found to be a bogus transaction, the mere disclosure of that Page 10 of 19 C/SCA/21125/2019 ORDER transaction at the time of original assessment proceedings, cannot be said to be disclosure of the \"true\" and \"full\" facts in the case and the I.T.O. would have the jurisdiction to reopen the concluded assessment in such a case. It is correct that the assessing authority could have deferred the completion of the original assessment proceedings for further enquiry and investigation into the genuineness to the loan transaction but in our opinion his failure to do so and complete the original assessment proceedings would not take away his jurisdiction to act under Section 147 of the Act, on receipt of the information subsequently. The subsequent information on the basis of which the I.T.O. acquired reasons to believe that income chargeable to tax had escaped assessment on account of the omission of the assessee to make a full and true disclosure of the primary facts was relevant, reliable and specific. It was not at all vague or nonspecific. ” 15. In case of Yogendrakumar Gupta Vs. ITO (2014) 366 ITR, this Court while rejecting petition challenging the notice for reopening which was issued beyond a period of 4 years from the end of relevant assessment year, wherein, one of the ground was that the issue was previously scrutinized during the assessment proceedings. We may reproduce the observations made in paras 16, 17 and 21, which read thus: 16. In Aradhna Estate (P) Ltd Vs. DCIT, (2018) 91 taxmann.com 119, this Court held that where reassessment proceedings were initiated on the basis of the information received from the investigation wing that assessee had received certain amount from the Shell Companies working as an accommodation entry provider merely because these transactions were scrutinized by the Assessing officer during original assessment proceedings, the reassessment could not be held unjustified. Page 11 of 19 C/SCA/21125/2019 ORDER 17. In Aaspas Multimedia Ltd. VS DCIT (2017) 78 taxmann.com, this Court while examining the validity of the notice, held that where assessment was made on the basis of information received from the Principal DIT, (Investigation), that assessee was beneficiary of accommodation entry by way of share application provided by a third party, same was justified. 18. In the case of Jayant Security Finance Ltd Vs. Asst. CIT (2018) 91, taxmann.com, this Court held that the information from the investigation wing stating that the loan from the company working as an entry operator and earning bogus firms to provide advances to various persons was sufficient and would constitute genuine and bonafide reason to believe. 19. In view of the law laid down by this Court as well as the Apex Court and considering the facts of the present case, we are of the view that, the assessee was aware that the transaction was not business transaction and it was only an accommodation entries and the company was one of the beneficiaries of the transactions, despite of this, the assessee failed to disclose true and correct facts at the relevant time and therefore, the Assessing Officer is entitled to initiate reassessment proceedings on the basis of tangible material came in his hand, which tends to expose the untruthfulness of the entry of purchase made in the books of accounts. In this context, we may refer the observation of the Apex Court in Page 12 of 19 C/SCA/21125/2019 ORDER the case of Honda Siel Power Products Vs. Dy. CIT, (2011) 10, taxmann.com, wherein, it is held that assessee having not pointed out during assessment proceedings about expenses incurred relatable to tax free income u/s. 14A, there was an omission and failure on its part to disclose fully and truly material facts, hence, reopening was justified. 20. The next contention raised by the learned counsel is that the reassessment proceedings could be said to have been initiated mechanically on the basis of third party information. We have examined the reasons as indicated above, and we are of the view that the Assessing Officer has verified the information and after application of mind and upon due satisfaction, he formed an opinion that income has escaped assessment. In this regard, it would be profitable to refer the decision of Principal Commissioner of Income Tax, Rajkot Vs. Gokul Ceramics reported in (2016) Taxman 1 (Gujarat), wherein, similar contention was raised and while rejecting the contention, this Court made the following observations. Paras 9 to 14 read thus: “ 9. It can thus be seen that the entire material collected by the DGCEI during the search, which included incriminating documents and other such relevant materials, was along with report and show­cause notice placed at the disposal of the Assessing Officer. These materials prima­facie suggested suppression of sale consideration of the tiles manufactured by the assessee to evade excise duty. On the basis of such material, the Assessing Officer also formed a belief that income chargeable to tax had also escaped assessment. When thus the Assessing officer had such material available with him which he perused, considered, applied his mind and recorded the finding of belief that income chargeable to tax Page 13 of 19 C/SCA/21125/2019 ORDER had escaped assessment, the re­opening could not and should not have been declared as invalid, on the ground that he proceeded on the show­cause notice issued by the Excise Department which had yet not culminated into final order. At this stage the Assessing Officer was not required to hold conclusively that additions invariably be made. He truly had to form a bona fide belief that income had escaped assessment. In this context, we may refer to various decisions cited by the counsel for the Revenue. 10. In case of Central Provinces Manganese Ore Co. Ltd. v. Income Tax Officer, Nagpur (supra) the Supreme Court noted that in case of the assessee which had an office in London, this Customs authority had come to know that the assessee had declared very low price in respect of the consignment of Manganese exported by them out of India. After due inquiries and investigations, the Customs authorities found that the assessee was systematically under­ voicing the value of Manganese as compared with the prevailing market price. The Income Tax Officer on coming to know about the proceedings before the Customs Collector in this respect issued notice for reopening of the assessment. In the reasons that the Assessing Officer relied on the facts as found by the Customs Authorities that the assessee had under­voiced goods during export. Under such circumstances, upholding the validity of the notice for reopening, the Supreme Court held and observed as under: \"So far as the first condition is concerned, the Income Tax Officer, in his recorded reasons, has relied upon the fact as found by the Customs Authorities that the appellant had under invoiced the goods it exported. It is not doubt correct that the said finding may not be binding upon the income tax authorities but it can be a valid reason to believe that the chargeable income has been under assessed. The final outcome of the proceedings is not relevant. What is relevant is the existence of reasons to make the Income Tax Officer believe that there has been under assessment of the assessee's income for a particular year. We are satisfied that the first condition to invoke the jurisdiction of the Income Tax Officer under Section 147(a) of the Act was satisfied.\" 11. In case of Income Tax Officer v. Purushottam Das Bangur (supra) after completion of assessment in case of the assessee, the Assessing Officer received letter from Page 14 of 19 C/SCA/21125/2019 ORDER Directorate of Investigation giving detailed particulars collected from Bombay Stock Exchange which revealed earning of share and price of share increased during period in question and quotation appearing at Calcutta Stock Exchange was as a result of manipulated transaction. On the basis of such information, the Assessing Officer issued notice for reopening of the assessment. The question, therefore, arose whether the information contained in the letter of Directorate of Investigation could be said to be definite information and the Assessing Officer could act upon such information for taking action under Section 147(b) of the Act. In such background, the Supreme Court observed as under: \"12. Ms. Gauri Rastogi, the learned counsel appearing for the respondents, has urged that the letter of Shri. Bagai was received by the Income tax Officer on March 26, 1974 and on the very next day, that is, on March 27, 1974, he issued the impugned notice under Section 147(b) of the Act and that he did not have conducted any inquiry or investigation into the information sent by Shri. Bagai. Merely because the impugned notice was sent on the next day after receipt of the letter of Shri. Bagai does not mean that the Income Tax Officer did not apply his mind to the information contained in the said letter of Shri. Bagai. On the basis of the said facts and information contained in the said letter, the Income Tax officer, without any further investigation, could have formed the opinion that there was reason to believe that the income of the assessee chargeable to tax had escaped assessment. The High Court, in our opinion, was in error in proceeding on the basis that it could not be said that the Income Tax Officer had in his possession information on the basis of which he could have reasons to believe that income of the assessee chargeable to tax had escaped assessment for the relevant assessment years. For the reasons aforementioned, we are unable to uphold the impugned judgment of the High Court. The appeal is, therefore, allowed, the impugned judgment of the High Court is set aside and the Writ Petitions filed by the respondents are dismissed. No order as to costs.\" 12. In case of Income Tax Officer v. Selected Dalurband Coal Co. Pvt. Ltd.(supra), the assessment was reopened on the basis of the information contained in letter from Chief Mining Officer that the colliery of the assessee had been Page 15 of 19 C/SCA/21125/2019 ORDER inspected and there had been under reporting of coal raised. Upholding the validity of re­opening of assessment, the Supreme Court held and observed as under: \"After hearing the learned counsel for the parties at length, we are of the opinion that we cannot say that the letter aforesaid does not constitute relevant material or that on that basis, the Income Tax Officer could not have reasonably formed the requisite belief. The letter shows that a joint inspection was conducted in the colliery of the respondent on January 9,1967, by the officers of the Mining Department in the presence of the representatives of the assessee and according to the opinion of the officers of the Mining Department, there was under reporting of the raising figure to the extent indicated in the said letter. The report is made by a Government Department and that too after conducting a joint inspection. It gives a reasonably specific estimate of the excessive coal mining said to have been done by the respondent over and above the figure disclosed by it in its returns. Whether the facts stated in the letter are true or not is not the concern at this stage. It may be well be that the assessee may be able to establish that the facts stated in the said letter are not true but that conclusion can be arrived at only after making the necessary enquiry. At the stage of the issuance of the notice, the only question is whether there was relevant material, as stated above, on which a reasonable person could have formed the requisite belief. Since we are unable to say that the said letter could not have constituted the basis for forming such a belief, it cannot be said that the issuance of notice was invalid. Inasmuch as, as a result of our order, the reassessment proceedings have not to go on we don not and we ought not to express any opinion on the merits.\" 13. In case of AGR Investment Ltd. v. Additional Commissioner of Income Tax and anr. (supra), a Division Bench of Delhi High Court considered the validity of reopening of assessment where the notice was based on information received from Directorate of investigation that the assessee was beneficiary of bogus accommodation entries. The Court while upholding the validity of reopening observed that sufficiency of reason cannot be considered in a writ petition. It was observed as under: Page 16 of 19 C/SCA/21125/2019 ORDER \"23 The present factual canvas has to be scrutinized on the touchstone of the aforesaid enunciation of law. It is worth noting that the learned counsel for the petitioner has submitted with immense vehemence that the petitioner had entered into correspondence to have the documents but the assessing officer treated them as objections and made a communication. However, on a scrutiny of the order, it is perceivable that the authority has passed the order dealing with the objections in a very careful and studied manner. He has taken note of the fact that transactions involving Rs. 27 lakhs mentioned in the table in Annexure P­2 constitute fresh information in respect of the assessee as a beneficiary of bogus accommodation entries provided to it and represents the undisclosed income. The assessing officer has referred to the subsequent information and adverted to the concept of true and full disclosure of facts. It is also noticeable that there was specific information received from the office of the DIT (INV­V) as regards the transactions entered into by the assessee company with number of concerns which had made accommodation entries and they were not genuine transactions. As we perceive, it is neither a change of opinion nor does it convey a particular interpretation of a specific provision which was done in a particular manner in the original assessment and sought to be done in a different manner in the proceeding under Section 147 of the Act. The reason to believe has been appropriately understood by the assessing officer and there is material on the basis of which the notice was issued. As has been held in Phool Chand Bajrang Lal (supra), Bombay Pharma Products (supra) and Anant Kumar Saharia (supra), the Court, in exercise of jurisdiction under Article 226 of the Constitution of India pertaining to sufficiency of reasons for formation of the belief, cannot interfere. The same is not to be judged at that stage. In SFIL Stock Broking Ltd. (supra), the bench has interfered as it was not discernible whether the assessing officer had applied his mind to the information and independently arrived at a belief on the basis of material which he had before him that the income had escaped assessment. In our considered opinion, the decision rendered therein is not applicable to the factual matrix in the case at hand. In the case of Sarthak Securities Co. Pvt. Ltd. (supra), the Division Bench had noted that certain companies were used as Page 17 of 19 C/SCA/21125/2019 ORDER conduits but the assessee had, at the stage of original assessment, furnished the names of the companies with which it had entered into transactions and the assessing officer was made aware of the situation and further the reason recorded does not indicate application of mind. That apart, the existence of the companies was not disputed and the companies had bank accounts and payments were made to the assessee company through the banking channel. Regard being had to the aforesaid fact situation, this Court had interfered. Thus, the said decision is also distinguishable on the factual score.\" 14. Learned Single Judge of Madras High Court in case of Sterlite Industries (India) Ltd. v. Assistant Commissioner of Income Tax reported in [2008] 302 ITR 275 (Mad) upheld the notice for reopening which was based on information from enforcement directorate showing possible inflation of purchases made by the assessee.” 21. The learned counsel raised the contention that while according the sanction under Section 151 of the Act, the authority concerned has not applied his mind properly and mechanically accorded the sanction. We have perused the papers of the approval, which shows that the competent authority has given the satisfaction in hand writing and has expressed his satisfaction with regard to reasons recorded and accorded the sanction to issue impugned notice. Therefore, the approval for reassessment was granted on the date on which the impugned notice was issued. In this circumstances, the contention raised by the learned advocate for the writ applicant that sanction was not obtained before issuance of the notice cannot be accepted. 22. In view of the discussions made hereinabove, it cannot be said that there was no tangible material before the Assessing Page 18 of 19 C/SCA/21125/2019 ORDER Officer and that he proceeded mechanically based on the sole information and the impugned notice is without jurisdiction and contrary to Section 147 of the Act. 23. For the foregoing reasons, no case is made out and accordingly, present writ application deserves to be dismissed and is dismissed. No order as to costs. (J. B. PARDIWALA, J) (ILESH J. VORA,J) P.S. JOSHI Page 19 of 19 "