Haq Enterprises Pvt Ltd., Ahmedabad V. DCIT, CIrcle-2(1)(1), Ahmedabad

ITA 2214/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5756 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 05-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K C THAKKAR
• Keywords: Bogus purchase; Reason to believe
• Section: 148; 143(3); 143(1)

Judgement Text

- , - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIPKUMAR KEDIA, ACCOUNTANT MEMBER ./ ITA NO.2214/AHD/2017 [ASSTT.YEAR: 2009-10] HAQ ENTERPRISES P.LTD. 116, SHAH & SHAH ESTATE B/H. GUJARAT BOTTLING NR.MANIYAR TRAILER RAKHIYAL, AHMEDABAD. VS. DCIT, CIR.2(1)(1) AHMEDABAD. ( APPLICANT ) (RESPONDENT) ASSESSEE BY : SHRI K.C. THAKKAR, AR REVENUE BY : MS.SOMOGYAN PAL, SR.DR ! '#$ % &' / DATE OF HEARING : 07/08/2019 ()* % &' / DATE OF PRONOUNCEMENT: 8/08/2019 +, / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF THE LD.CIT(A)-2, AHMEDABAD DATED 8.9.2017 PASSED FOR TH E ASSTT.YEAR 2009-10. 2. ASSESSEE HAS TAKEN SIX GROUNDS OF APPEAL, OUT OF WHICH UNDER GROUND NO.1, IT HAS CHALLENGED REOPENING OF T HE ASSESSMENT BY ISSUANCE OF NOTICE UNDER SECTION 148 OF THE INCO ME TAX ACT, 1961. ITA NO.2214/AHD/2017 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 24.9.2009 DECLARING TOTAL INCOM E AT RS.10,60,240/-. THE LD.AO HAS RECORDED REASONS AND REOPENED THE ASSESSMENT AFTER TAKING PRIOR APPROVAL OF THE C OMPETENT AUTHORITIES. NOTICE UNDER SECTION 148 OF THE ACT W AS ISSUED ON 30.3.2016. THE AO THEREAFTER PASSED ASSESSMENT ORD ER UNDER SECTION 143(3) R.W.S. 147 ON 13.12.2016. THE LD.CI T(A) HAS UPHELD THE REOPENING OF THE ASSESSMENT. 4. THE LD.COUNSEL FOR THE ASSESSEE WHILE IMPUGNING THE ORDERS OF THE REVENUE AUTHORITIES TOOK US THROUGH REASONS RECORDED FOR REOPENING WHICH ARE AVAILABLE ON PAGE NO.17 OF THE PAPER BOOK. SUCH REASONS READ AS UNDER: ANNEXURE-A IN THIS CONNECTION, INVESTIGATION IS BEING CARRIED OUT IN' THE CASE OF M/S BHOOMIDEV CREDIT CORPORATION LIMITED AND SO FAR IT HAS BEEN CONCLUDED THE SAID COMPANY HAS BEEN INDULGED IN PRO VIDING BOGUS ENTRY TO VARIOUS COMPANIES/PERSONS. THE SAID COMPAN Y HAS ALSO MADE INVESTMENT OF RS. 25 LACS IN THE ASSESSEE COMPANY I.E. M/S HAQ ENTERPRISES DURING THE FY 2008-09, WHICH APPEARS TO BE BOGUS IN NATURE AND THE SAME REQUIRES VERIFICATION. IN VIEW OF ABOVE, I HAVE REASON TO BELIEVE THAT INC OME OF RS. 25 LACS HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTIO N 147 OF THE ACT. THEREFORE, IT IS A FIT CASE FOR INITIATION OF ACTIO N UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 TO TAX THE ESCAPED INCOME. (M ANAND KUMAR) DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-2(1)(1), AHMEDABAD 5. HE SUBMITTED THAT THE AO WAS UNABLE TO FORM HIS OPINION ABOUT ESCAPEMENT OF INCOME, RATHER HE JUST WANTED T O VERIFY THE ALLEGED INVESTMENT OF BHOOMIDEV CREDIT CORPORATION L TD. IN THE ASSESSMENT COMPANY. FOR THIS ASPECT, HE CANNOT REO PEN THE ITA NO.2214/AHD/2017 3 ASSESSMENT. FOR BUTTRESSING HIS CONTENTIONS HE RELI ED UPON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT RENDE RED IN THE CASE OF PR.CIT VS. MANZIL DINESHKUMAR SHAH IN R/TAX APPE AL NO.451, 457 AND 458 OF 2018. HE POINTED OUT THAT IDENTICAL QUESTION HAS BEEN CONSIDERED BY THE HONBLE GUJARAT HIGH COURT A ND HELD THAT UNDER THIS CIRCUMSTANCES, ASSESSMENT CANNOT BE REOP ENED. 6. ON THE OTHER HAND, THE LD.DR CONTENDED THAT NO D OUBT, THE AO HAS MADE MENTION IN THE REASONS THAT INFORMATION REVEALED DURING THE INVESTIGATION CARRIED OUT IN THE CASE OF BHOOMIDEV CREDIT CORPORATION LTD. FOR VERIFICATION, BUT IN TH E SAME BREATH HE PROPOUNDED THAT INCOME TO THE EXTENT OF RS.25 LAKHS HAS ESCAPED WHOSE INFORMATION REVEALED TO THE INVESTIGATION WIN G DURING THE COURSE OF INVESTIGATION CARRIED OUT IN THE CASE OF BHOOMIDEV CREDIT CORPORATION LTD. REASONS ARE NOT BASED ON SUSPICION RATHER EXACT INFORMATION IS AVAILABLE WITH THE AO AND HE HAS NOT SCRUTINIZED THE RETURN OF THE ASSESSEE. IN SUCH SITUATION, HE CANN OT MAKE A CANDID OPINION ABOUT THE ESCAPMENT OF INCOME UNLESS HE VERIFIED THE DETAILS OF INVESTMENT MADE BY THE BHOOMIDEV CRED IT CORPORATION LTD. WITH THE ASSESSEE COMPANY. THE DE TAILS OF INVESTMENT WILL NOT BE AVAILABLE WITH THE RETURN OF INCOME. IT HAS TO BE VERIFIED ONLY; THERE IS NO COURSE OPEN FOR TH E AO. 7. WE HAVE DULY CONSIDERED RIVAL SUBMISSIONS AND GO NE THROUGH THE RECORD CAREFULLY. SOMEWHAT SIMILAR SITUATIONS WERE ARISEN BEFORE THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF MANZIL DINESHKUMAR SHAH (SUPRA). THE REASON IN THAT CASE READ AS UNDER: ITA NO.2214/AHD/2017 4 THE ASSESSEE HAS FILED HIS RETURN OF INCOME IN ACI T, CPC, BANGALORE VIDE CKNOWLEDGMENT NO.96931140300909F OR A.Y. 200910 ON 30/09/2010 DECLARING TOTAL INCOME RS. 3,44,587/ WHICH WAS PROCESSED U/S. 143(1) OF TH E I.T. ACT ON 11/08/2010. HOWEVER NO SCRUTINY ASSESSMENT U /S. 143(3) WAS MADE. IN THIS CASE THE INFORMATION CONVEYED BY THE DGIT ( INV.) MUMBAI DATED 22/02/2013 ADDRESSED TO DGIT(INV.)AHMEDABAD ALONGWITH THE BOARDS CONFIDENTI AL LETTER DATED 21/02/2013 TO TAKE ACTIONS IN RESPECT OF CASES OF NO GENUINE BILLS INFORMATION EMANATING OUT OF VAT DEPARTMENT, MUMBAI TO THE CCITIII, AHMEDABAD. THE CCITIII, AHMEDABAD VIDE LETTER DATED 20/03/2013FORW ARDED THE SAME TO THE CITV, AHMEDABAD. THE SAME WAS FORWA RDED TO THE O/O. THE JT. CIT, RANGE11, AHMEDABAD BY THE CITABAD-V, AHMEDABAD VIDE LETTER NO.VIT- V/AHD/INF.VAT/201213/6675 DATED 21/03/2013. THE JT. CIT. RANGE11, AHMEDABAD VIDE LETTER NO.JT.CIT/R11/ NON GENUINE BILLS/201213/6675 DATED 22/03/2013 FORWARDED THE SAME TO THIS OFFICE. THE INFORMATION RECEIVED FROM THE VAT DEPARTMENT, M UMBAI RELATING TO BOGUS PURCHASES OF EACH BENEFICIARY FIR M FROM HAWALA BILLER. ON VERIFICATION OF INFORMATION I T IS FOUND THAT THE ASSESSEE MANJIT DINESHKUMAR SHAH HAS ALSO MADE PURCHASES OF RS.3,21,74,262/DURING THEF.Y. 200809 (A.Y. 200910) FROM HAWALA DEALER AS INFORMAT ION RECEIVED BY THIS OFFICE.IT NEEDS DEEP VERIFICATION. I HAVE THEREFORE FIRM REASON TO BELIEVE THAT THE IN COME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE A. Y. 200910 DUE TO THE OMISSION OR FAILURE ON THE PART O F THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERI AL FACTS NECESSARY FOR ASSESSMENT. THUS, THE CASE NEEDS TO B E REOPENED BY ISSUING NOTICE U/S 148 OF THE I.T. ACT, 1961. ITA NO.2214/AHD/2017 5 8. EXAMINING THE OBSERVATION OF THE AO THAT IT NEED S DEEP VERIFICATION, THE HONBLE HIGH COURT HAS OBSERVED A S UNDER: 8. WITH THIS BACKGROUND, WE MAY REVERT TO THE REAS ONS RECORDED BY THE ASSESSING OFFICER. INFORMATION FROM THE VALUE ADDED TAX DEPARTMENT OF MUMBAI WAS PLACED FOR HIS CONSIDERATION. THIS INFORMATION CONTAINED LIST OF A LLEGEDLY BOGUS PURCHASES MADE BY VARIOUS BENEFICIARIES FROM HAWALA DEALERS. ASSESSEE WAS ONE OF THEM. AS PER THIS INFO RMATION, HE HAD MADE PURCHASES WORTH RS.3.21 CRORES (ROUNDED OFF) FROM SUCH HAWALA DEALERS DURING THE FINANCIAL YEAR 2010-11. ACCORDING TO THE ASSESSING OFFICER, THIS INFORMATIO N NEEDED DEEP VERIFICATION. 9. IF ON THE BASIS OF INFORMATION MADE AVAILABLE TO HIM AND UPON APPLYING HIS MIND TO SUCH INFORMATION, THE ASS ESSING OFFICER HAD FORMED A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, THE COURT WOULD HAVE READIL Y ALLOW HIM TO REASSESS THE INCOME. IN THE PRESENT CASE HOW EVER, HE RECORDED THAT THE INFORMATION REQUIRED DEEP VERIFIC ATION. IN PLAIN TERMS THEREFORE, THE NOTICE WAS BEING ISSUED FOR SUCH VERIFICATION. HIS LATER RECITATION OF THE MANDATORY WORDS THAT HE BELIEVED THAT INCOME CHARGEABLE TO TAX HAS ESCAP ED ASSESSMENT, WOULD NOT CURE THIS FUNDAMENTAL DEFECT. 10. LEARNED COUNSEL FOR THE REVENUE HOWEVER URGED U S TO READ THE REASONS AS A WHOLE AND COME TO THE CONCLUS ION THAT THE ASSESSING OFFICER HAD INDEPENDENTLY FORMED A BE LIEF ON THE BASIS OF INFORMATION AVAILABLE ON RECORD THAT I NCOME IN CASE OF THE ASSESSEE HAD ESCAPED ASSESSMENT. ACCEPT ING SUCH A REQUEST WOULD IN PLAIN TERMS REQUIRE US TO I GNORE AN IMPORTANT SENTENCE FROM THE REASONS RECORDED VIZ. IT NEEDS DEEP VERIFICATION. 9. THUS, THE HONBLE HIGH COURT HAS DEPRECATED THAT FOR VERIFICATION ASSESSMENT CANNOT BE REOPENED. RESPEC TFULLY FOLLOWING THE DECISION OF HONBLE JURISDICTIONAL HI GH COURT IN THE ITA NO.2214/AHD/2017 6 CASE CITED (SUPRA) WE ARE OF THE VIEW THAT REOPENIN G IS NOT SUSTAINABLE. ACCORDINGLY, IT IS QUASHED. APPEAL O F THE ASSESSEE IS ALLOWED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE COURT ON 8 TH AUGUST, 2019. SD/- SD/- (PRADIPKUMAR KEDIA) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER