India Pesticides Ltd. V. Assistant Commissioner Of Income Tax-1 And 2 Others

WTAX/69/2022

AI Insights

India Pesticides Ltd. filed a writ petition challenging the notice and the subsequent approval for reassessment of their income tax for the assessment year 2013-14. The notice was based on information suggesting that the petitioner had shown an accommodation entry of Rs. 50,00,000 through a bogus company. The petitioner argued that there was no material to support the claim that the entry was an accommodation entry and contested the jurisdiction of the Assessing Authority to initiate proceedings under Section 148 of the Income Tax Act, 1961. The court, after reviewing the detailed investigation and materials provided by the tax authorities, dismissed the petition, affirming the validity of the notice and the approval for reassessment.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 796817 (HC-ALLAHABAD)
• Appeal Type: Others
• Pronouncement Date: 02-03-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: ANURAG SHARMA; GAURAV MAHAJAN
• Assessee Lawyers: SUYASH AGARWAL
• Keywords: Accommodation entry; Certiorari; Certiorari; Jurisdiction; Prohibition; Reassessment; Writ Tax; Manifest Error of Law
• Section: 148; 143(2); 151

Judgement Text

"Court No. - 3 Case :- WRIT TAX No. - 69 of 2022 Petitioner :- India Pesticides Ltd. Respondent :- Assistant Commissioner Of Income Tax-1 And 2 Others Counsel for Petitioner :- Suyash Agarwal Counsel for Respondent :- A.S.G.I.,Anurag Sharma,Gaurav Mahajan Hon'ble Surya Prakash Kesarwani,J. Hon'ble Jayant Banerji,J. Heard Shri Suyash Agarwal, learned counsel for the petitioner and Shri Krishna Agrawal, learned counsel for the respondents. This writ petition has been filed praying for the following relief: \"(i) Issue a writ, or direction in the nature of Certiorari quashing the notice dated 31.03.2021, issued u/s 148 of the IT Act, for A.Y. 2013-14 and the order dated 30.07.2021, of the Assistant Commissioner Income Tax-1, Bareilly, respondent no. 1, rejecting the objection of the petitioner. (Annexure No. 5 & 11) (ii) Issue a writ, or direction in the nature of Certiorari quashing the approval granted by the Pr. Commissioner of Income Tax Bareilly respondent no. 2, u/s 151(1) of IT Act, permitting the respondent no. 1, to reopen the assessment for A.Y. 2013-14 u/s 148 of the Act, (Annexure No. 6) (iii) Issue a writ, or direction in the nature of Prohibition restraining the respondent no. 1, to frame the reassessment order u/s 148 of the Act, for A.Y. 2013-14, in pursuance of notice dated 22.11.2021 issued u/s 143(2) of the Act. (Annexure No. 12)\" Briefly stated facts of the present case are that on the basis of the information collected/received by the Assessing Authority from Deputy Director, Income Tax (Investigation), Unit-3(1), Kolkata (DDIT) vide letter dated 12.3.2019, prima facie, it came to the light that the petitioner has shown accommodation entry of Rs. 50,00,000/- on 7.6.2012 through a bogus company. Detailed facts in this regard finds mention in the papers annexed to the order of approval dated 31.3.2021 under Section 151 of the Income Tax Act, 1961 passed by the Principal Commissioner of Income Tax, Bareilly. On the basis of some prima facie relevant materials, the approval was sought by the Assessing Authority for initiating proceeding for reassessment and the approval was granted by the Competent Authority by order dated 31.3.2021 under Section 151 of the Act, 1961. A notice under Section 148 read with Section 151 of the Act, 1961 has been issued by the Assessing Authority to the petitioner. Aggrieved with the approval order and the notice, the petitioner has filed the present writ petition. Learned counsel for the petitioner submits that there was absolutely no material for reason to believe that entry showing receipt of Rs. 50,00,000/- on 7.6.2012 in the books of account of the petitioner, is an accommodation entry. He, therefore, submits that neither approval could have been granted by the Principal Commissioner nor the Assessing Authority has jurisdiction to initiate proceedings under Section 148 of the Act, 1961. We have carefully considered the submissions of the learned counsel for the parties and perused the record of the writ petition. From the papers annexed to the order of approval under Section 151 of the Act, 1961, we find that detailed investigation was carried by the departmental authorities at Kolkata in which it was detected that several shell entities being held/controlled by a group of persons with common E-mail ID, unaccounted money amounting to approximately Rs. 500 Crores for financial year 2011-12 and 2012-13 giving accommodation entries with the help of shell/paper entities, have been detected. Details of information and copies of documents were supplied by the authorities at Kolkata to the Assessing Authority of the petitioner in CD from which it transpired that the petitioner has shown entry of an amount of Rs. 50,00,000/- on 7.6.2012 from one M/S. Royal Business Innovatives Private Limited as accommodation entry. From the facts as briefly noted above, it transpires that the Assessing Authority has prima facie some material in his hands for reason to believe that income of the petitioner chargeable to tax has escaped assessment for the assessment year 2013-14. Thus, neither the impugned notice nor the approval granted by the respondent no. 2 can be said to be without jurisdiction or suffering from any manifest error of law. Consequently, the impugned notice under Section 143(2)/147/148 and the order of approval under Section 151 of the Act, 1961, cannot be said to be without jurisdiction or to be suffering from any manifest error of law. For the reasons aforestated, we do not find any merit in this writ petition. Consequently, writ petition fails and is hereby dismissed. Order Date :- 2.3.2022 A. V. Singh Digitally signed by AJAY VIKRAM SINGH Date: 2022.03.03 18:04:13 IST Reason: Location: High Court of Judicature at Allahabad "