Poltavsky- TPS Power Services Ltd., New Delhi V. ITO ward-20(1), New Delhi

ITA 5081/DEL/2019

AI Insights

The case involves Poltavsky TPS Power Services Ltd., which appealed against the reassessment order passed by the Income Tax Officer for the Assessment Year 2009-10. Initially, the assessee's return was assessed under Section 143(3) of the Income Tax Act, 1961, and later reopened under Section 147 following a notice under Section 148. The reassessment was based on alleged unexplained credits in the form of share application money. The assessee challenged the jurisdiction and merits of the reassessment before the Commissioner of Income Tax (Appeals), which were dismissed, leading to the appeal before the Tribunal. The Tribunal found that the reassessment was not justified as the necessary legal requirements for reopening the assessment were not fulfilled.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121632 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 23-01-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 02-06-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 147; 68; 148; 28; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F” DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A No.5081/DEL/2019 Assessment Year 2009-10 Poltavsky TPS Power Services Ltd., 45-M Block, Commercial Complex, Greater Kailash-II, New Delhi. v. Income Tax Officer, Ward-20(1), New Delhi. TAN/PAN: AABCP2692R (Appellant) (Respondent) Appellant by: Ms. Sangeeta Singh, CA Ms. Kanishka Agarwal, CA Ms. Priyanka Jain, CA Respondent by: Shri Anil Kumar Sharma, Sr.DR Date of hearing: 07 02 2023 Date of pronouncement: 27 04 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: The capt i oned appe al has been fi l ed b y t he Assessee agai nst the or der of the Co mmi ssioner of I nc o me Tax (A ppeal s)- VI I, New Delhi (‘C IT( A) ’ in shor t ) dat ed 2 7.0 3. 2019 arisi ng fro m the assessment or der dated 30. 03. 2016 passed by t he Assessi ng Offi cer (AO) under Sect i on 147 r. w. Sect ion 143( 3) of t he Inc o me Tax Act , 1961 (t he Act ) concer ni ng AY 2009- 10. 2. As per t he gr ounds of appeal , t he a ssessee has chall enged the addit ions on meri t and has al so chall enged t he assumpti on of jurisdi cti on under Sect i on 147 of t he Act . I.T.A No.5081/Del/2019 2 3. Br iefl y st at ed, f or the Assessment Year 2009- 10 i n quest i on, t he assessee fi l ed ret urn of i nco me on 29. 09. 2009 decl ari ng t ot al inco me of Rs. 6, 27, 340/ -. T he retur n of i nco me fi led b y t he assessee was subj ected t o scrut i n y assess me nt and the assess ment order was passed under Sect i on 143( 3) dat ed 29. 12. 2011 w her eb y t he i nco me was assessed at Rs.8,19, 264/ -. The reaft er , the assess ment so co mpl et ed earl ier u nder Secti on 143( 3) of t he Act was reopened under Sect ion 147 of the Act b y issuance of not i ce date d 11. 03.2015 under Sect i on 14 8 of t he Act . The reo peni ng not ice was st ated to be i ssued wit h t he pre vious approval of CIT under Sect ion 151 of t he Act . The re- assess ment or der was fra me d under Secti on 147 r. w. Secti on 143( 3) of t he Act vide or der dat ed 30. 03. 2016 w hereb y t he inco me was re-a ssessed at Rs.6,70,19,264/- and addit ion of Rs.6,62,0 0,0 00/- made under Se ct i on 68 of t he Act on ac count of une xpl ai ned cr edi t s i n t he books of acc ount of the assessee bei ng share a ppli c at ion mone y r ecei ved dur i ng t he ye ar . 4. Aggri eved b y t he re-assessment of i nco me, t he ass essee prefer red a ppeal bef ore t he C IT( A) . Bef ore t he CI T(A), the assessee has chal lenged t he j ur isdi ct i on assu med b y t he Assessi ng Of fi cer un der Secti on 147 r. w. Secti on 148 of the Act and clai med that not i ce was issued f or r eope ni ng t he assess ment wi t hout meet in g t he pre requisi tes of Sect i on 14 7 t o S ect ion 151 of the Act . The assessee also chal lenged t he mer it s of the addit ions. The CI T(A ) h owe ver dismi ssed the gro unds taken on bot h count s, i. e., lack of j urisdi ct i on and lack of mer it s t owards addit ions. I.T.A No.5081/Del/2019 3 5. Aggri eved b y t h e de ni al of r el ief b y t he C IT( A) , the assessee preferred appeal bef ore t he Tri bunal . 6. When the mat ter was cal led f or hear ing, t he l d. AR f or the assessee referred to t he r easons r ecor de d and chal lenge d t he val i dit y of assu mpt ion of j urisdi cti on under Secti on 147 of t he Act . 6. 1 The l d. AR f or t he assessee submit t ed t hat the Assessi ng Of fi cer has wr ongl y usur ped j uri sdicti on under Sec ti on 147 of the Act cont r ar y t o t he ma ndate of law f or more than one r eason. (i ) the n oti ce f or r eopeni n g has be en i ssued be yond f our ye ars f r o m t he end of assess ment year 200 9- 10 i n questi on and t he assess me nt in t his case w as ear li er fra me d under Secti on 143( 3) of t he Act and t her ef or e, t he reopeni ng not i ce is cl earl y t i me barr ed f or t he reason t hat embar go pl aced b y t he 1 s t pr ovi so t o t he er stwhi le pr ovi si ons of Secti on 147 of t he Act could n ot be successful l y l ift ed b y t he Assessing Offi cer. (i i) The r easons recor ded do not meet t he requir e me nt of l aw u nder mai n pr ovi sions of Secti on 147 of t he Act and t he pr oviso t her et o. (i ii ) The i nher ent obj ect of r eopeni ng i n t he present case, i s to make enqui r ies to f ind out the bona fi des of shar e appli cat ion mone y and t o exa mi ne, whet her an y escape ment has occurre d wi thout appli cat ion of mi nd. (i v) The a pproval gi ven b y t he superi or aut hori t y under I.T.A No.5081/Del/2019 4 Secti on 151 of the Act i s not hi ng but a mechani cal appr oval and t hus does no t meet the r equi r e me nt of la w. We shal l deal wi th t he nuances of ar gu me nt s adva nce d on beh al f of t he assessee on the above br oa d pr oposit i ons at appr opri at e pl ace i n succee ding para gra phs. 6. 2. On me ri ts, the l d. counsel f or t he a ssessee sub mi tt ed t hat addit ions have bee n ma de on t he gr oun d that the shar e subscr i pt ion recei ved al ong wi t h pre mi u m duri ng t he ye ar ar e me r el y acc o mmo dat ion ent ri es a nd t he assessee st ands as ben efi ci ar y t o such ent ri es. In t hi s regard, t he Ld. Counsel essenti al l y al leged t hat ; (i ) the ent ir e addi t ion has bee n ma de on sur mi ses, assumpti ons and general ized concl us ions t here on dehors the fact s on record. (i i) the all egat ions made agai nst t he assessee are not cor r obor at ed. (i ii ) t he r e-assess me nt or der i s marr ed b y ser i ous fact ual errors and concl usi ons arri ved ove rlookin g rele vant f acts. (i v) the r e-assess ment was made on p ure guess wi thout refer ence t o an y materi al . (v) the addi t ions ma de are squarel y opposed to t he statutor y provi sion. ( vi) t he assert ions made i n j ust if icat ion of addit io ns ar e a mer e i pse dixit and not o bject i vel y j usti fi able on f acts. ( vii ) t he Assessing Of f icer ove rl ooked f act ual evi dences, mi si nter pr et ed and mi sconst r ucted the doc u me nts pl aced. ( vii i ) The addit ions ma de be ar no di rec t nex us between I.T.A No.5081/Del/2019 5 conclusi on of fact s arr ived at and t he pri ma ril y f acts on w hi ch such conclusi on i s based. 6. 3 The ld. counsel fur ther sub mi tt ed that CIT(A) has not appli ed i ts mi nd to all consi derat i ons and t he ci rcu mst ances ger mane to t he issue. The ld. cou nsel sub mit ted that vol u mi nous doc u ments f il ed bef or e t he re venu e aut hori ti es t o sup port t he shar e subscri pti on are testa me nt t o t he fact that shar e appli cati on mone y recei ved and sha r e al lott ed t o t he subscr i bers at pre mi u m ar e bona fi de a nd car ried co mmer cial subst ance. We shal l deal wi th t he argu me nt s canvassed on merit s at appro pri at e pl ace. 7. The l d. DR f or the Revenue, on the ot her hand, point ed out that all t he condit i ons prescr ibe d f or confer me nt of powers under S ecti on 147 r. w. Sect ion 148 of t he Act to re- assess the inco me of the as sessee has been dul y met bef or e i ssuance of not ice and als o w hil e fr a mi ng the r e- assess ment or der w hich has thus been ri ght l y up hel d b y t he CI T( A). Th e l d. DR f or t he Reve nue also cont ende d that t he pr i mar y onus w hic h la y upon the assessee t o j usti f y t he bona f i de of shar e a ppl icat ion mone y receive d has not been dischar ged as cont e mplated i n l aw a nd theref ore, t he onl y r ecourse avai l abl e t o t he Re venue t o ma ke addit ions under Sect i on 68 has bee n r ight l y a dopt ed. The l d. DR for t he Re venue t hus rel i ed upon t he assess me nt or der and t he fi rst appel l at e order and su b mit t ed t hat no i nt erferenc e t her et o is call ed f or. 8. We have hear d bot h the si des i n l engt h a nd al s o per used I.T.A No.5081/Del/2019 6 the re- assess me nt or der an d t he fi rst appell at e order in questi on. We ha ve also careful l y p eruse d t he mate rial r efer red t o a nd reli ed up on fi led b y w a y of pape r book a nd als o t he case laws ci ted. 9. Si nce, t he assessee has int er al ia questi oned t he l eg al it y of re-assess me nt or der it sel f whi ch a ffect s t he jurisdi ct i on a nd goes t o the ve r y r oot of t he mat ter, we c onsi der it ne cessar y t o adj udi cate t he gr ounds concer ning thi s basic issue of lack of jurisdi cti on fi rst. 9. 1 The vali di t y of re- assess ment or der f ramed under Secti on 143( 3) r. w. Sect i on 147 of t he Act as wel l as vali di t y of issuance of noti ce under Sect i on 148 of t he A ct f or ma kin g t he re-assess me nt or der under Secti on 147 of the Act is in contr overs y. 9. 2 Before we pr oceed t o deal wi t h the j uri sdicti onal aspects, it wi ll be per ti nent to re produc e t he reasons r ecorde d i n conte mpl at ion under S. 148( 2) of the Act as extracted in t he assess ment or der. * [ G e n e r a l ] “ I n t h i s c a s e t h e a s s e s s e e h a s f i l e d i t s r e t u r n i n co m e f o r t h e A . Y . 2 0 0 9 -1 0 o n 2 9 .0 9 . 2 0 0 9 d e c l a ri n g t o t a l i n c o m e o f 6 , 2 7 ,3 4 0 / - . T h e r e t u r n w a s p r o c e s s e d u / s 1 4 3 ( 1 ) o f t h e I T . A c t . S u b s e q u e n t l y , t h e c a s e w a s s e l e c t e d f o r s c r u t i n y a n d a c c o rd i n g l y a s s e s s m e n t u / s 1 4 3 ( 3 ) w a s c o m p l e t e d a t a s s e s s e i n c o m e o f R s . 8 , 1 9 ,2 6 4 / - a f t e r m a k i n g t h e fo l l o w i n g a d d i t i o n s : 1 . D i s a l l o w a n c e o f i n t e r e s t o f R s . 1 , 8 9 , 9 7 7 / - g i v e n o n v a r i o u s d a t e d t o T u r b a t a o m T P S P r o j e c t L t d . 2 . R O C f e e p a i d f o r i n c r e a s e d o f a u t h o r i z e d c a p i t a l a m o u n t i n g t o R s . 4 , 9 4 6 / - . I.T.A No.5081/Del/2019 7 * [ S e c o n d P a r t ] D u r i n g t h e c o u r s e o f a s s e s s m e n t p ro c e e d i n g s f o r t h e A Y . 2 0 1 0 - 1 1 i n t h e c a s e o f M / s P o l t a v s k y T P S P o w e r S e r v i c e s L t d , t h e as s e s s i n g o f f i c e r h a s f o u n d t h a t t h e a s s e s s e e h a s i n t r o d u c e d sh a re c a p i t al o f R s . 1 , 3 7 ,2 9 , 0 0 0 / - a n d sh a r e p r e m i u m o f R s . 5 , 4 8 ,8 0 , 0 0 0 / - w a s r e c e i v e d b y t h e a s s e s s e e . T h e a s s e s s e e w a s s o u g h t t o f u r n i s h t h e r e q u i s i t e d e t a i ls w . r . t . s h a r e a p p l i c a t i o n m o n e y / s h a r e a p p l i c a t i o n p r e m i u m a m o u n ts r e c e i v e d d u r in g t h e y e a r u n d e r c o n s id e ra t i o n . T h e q u e r y i n t h i s r e ga rd r a i s e d b y t h e A s s e s s i n g O f f i c e r i s r e p r o d u c e d h e r e u n d e r : b ) A s p e r i n f o r m a t i o n c o n t a i n e d i n t h e b a l a n c e sh e et d u r i n g t h e r e l e v a n t p r e v i o u s y e a r t h e c o m p a n y h a s r a i s e d s h a r e c a p i t a l o f R s . 1 3 7 2 9 0 0 0 / - w h i c h i t h a s a l s o r e c e i v e d p r e m i u m o f R s . 5 4 8 8 0 0 0 0 /- i n t h i s r e g a r d y o u a r e r e q u i r e d t o f u rn i s h f o l l o w i n g i n f o r m a t i o n : S . N o . N a m e & A d d r e s s o f t h e p e r s o n / E n t i t y a p p l i c a n t w i t h P A N A m o u n t I n s t r u m e n t N o . o f M o d e S o u r c e / A s s e s s m e n t B a n k A c c o u n t F u r t h e r f u r n i s h f o l l o w i n g i n f o r m a t i o n : • C o m p l e t e a c c o u n t s o f a l l t h e a p p l i c a n t s i n r e s p e c t o f s h a r e a p p l i c a t i o n . • D e t a i l s o f d i s t i n c t i v e n u m b e r s i s s u e d t o e a c h a p pl i c a n t . F u r n i s h c o p y o f a n n u a l r e t u r n su b m i t t e d t o t h e R O C s h o w i n g d e t a i l s a b o u t h o l d e r s o f s h a r e c a p i t a l a s o n 3 1 .0 3 . 2 0 1 0 . • P r o d u c e a l l , t h e p e r s o n wh o h a v e c o n t r i b u t e d t o w ard s s h a r e " c a p i t a l o f R s . 2 0 0 0 0 / - a n d a b o v e f o r e x a m i n a t i o n a n d v e r i f i c a ti o n o f g e n u i n e n e s s o f s h a r e c a p i t a l r e c e i v e d . • D e t a i l s i n r e s p e c t o f e q u i t y s h a r e c a p i t a l h o l d ing o f k e y m a n a g e m e n t p e r so n a l s a n d p ro m o t e r s o f t h e c o m p a n y . • D e t a i l s o f s h a r e h o l d i n g b y t h e o t h e r c o m p a n i e s in w h i c h t h e p r o m p t e r s h a v e s u b s t a n t i a l i n t e r e s t o f 1 0 0 % h o l d i n g o f s h a r e c a p i t a l . • D e t a i l s o f i n v e s t m e n t m a d e b y t h e p r o m o t e r s a n d th e i r a s s o c i a t e s , i n t h e r e g a r d a d a t e - w i s e a m o u n t s h o u l d b e f u r n i s h e d i n r es p e c t o f a l l o t m e n t o f s h a r e c a p i t a l . • i t i s f u r t h e r i t e r a t e d t h a t c o m p l e t e d e t a i l s s h o ul d b e su p p o r t e d b y d o c u m e n t s s h o w i n g o f i n v e s t m e n t s i n e q u i t y s h a r e c ap i t a l . P r o d u c e r e c o r d s o f d i s p a t c h o f s h a r e c e r t i f i c a t e t o t h e s h a r e h o l d e r s . In t h i s r e g a r d a l s o s u b m i t r e c o r d s s h o w i n g g e n u i n e n e s s o f s o u r c e o f f u n d s r e c e i v e d a s s h a r e c a p i t a l , i d e n t i t y o f t h e p e r s o n an d h i s c r e d i t w o r t h i n e s s i n r e s p e c t o f i n v e s t m e n t s m a d e b y h i m i n sh a r e c a p it a l / s h a r e p r e m i u m a n d s h a r e a p p l i c a t i o n m o n e y . F u r t h e r i t m a y a l s o b e e x pl a i n e d a s t o w h e r e t h e f u n d r e c e i v e d o n a c c o u n t o f s h a r e c a p i t a l w e r e u t i li z e d . I.T.A No.5081/Del/2019 8 • I n c a s e o f n o n s u b m i s s i o n o f i n f o r m a t i o n c a l l e d fo r o r t h e s a m e a r e n o t s u p p o r t e d b y d o c u m e n t a r y e v i d e n c e e x p l a i n in g t h e s ou r c e o f f u n d s i n v e s t e d a s s h a r e c a p i t a l , i t w i l l b e c o n s i d e r e d t h a t t h e f un d s i n t r o d u c e d a s s h a r e c a p i t a l b e l o n g t o t h e p ro m o t e r s a n d t h e c o m p a n y . R es p e c t i n g t h e i r u n d i s c l o s e d i n c o m e w h i c h i s n o t r e c o r d e d i n t h e b o ok s o f a c c o u n t s o f t h e c o m p a n y a n d t h e p ro m o t e r s a n d i n c o m e w i l l b e a s s e s se d a c c o r d i n g l y . " T h e a s s e s s e e c o m p a n y f a i l e d t o p r o v i d e t h e d e t a i l s i n t h e s p e c i f i e d m a n n e r . T h e a s s e s s i n g o f f i c e r n o t e d t h a t t h e a s s e s se e g a v e e v a s i v e m i s l e a d i n g r e p l i e s a n d e i t h e r d e l i b e r a t e l y w i t h h e l d m o s t o f t h e i n f o r m a t i o n o r w a s u n a w a r e o f t h e r e q u i s i t e d e t a i l s / d o c u m e n t s r e l a t e d t o v a r i o u s c o m p a n i e s / e n t i t i e s s u m m o n s t o t h e s e c o m p a n i e s o n 2 8 . 0 8 .2 0 1 2 s e e k i n g v a r i o u s d e t a i l s / d o c u m e n t s / c l a r i f i c a t i o n / d e p o s it i o n . H o w e v e r , n o t e v e n a s i n g l e s u m m o n w a s c o m p l i e d w i t h b y t h e r e s p e c t i v e c o m p a n i e s . U l t i m a t e l y , v i d e s h o w c a u s e n o t i c e d t . 2 8 . 0 2 .2 0 1 3 th e a s s e ss e e w a s c a t e g o r i c a l l y c o n f r o n te d w i t h t h e m a t e r i a l o n r e c o rd a n d w a s s o u g h t t o f u r n i s h i t s r e p l y / e x p l a n a t i o n s / d o c u m e n t s i n t h is r e g a r d . T h e a s s e s s e e a g a in g ro s s l y f a i l e d t o f u r n i s h a n y c o n d u c i v e m a t e ri a l a n d r a t h e r f u m n i s h e d a b u n c h o f p a p e r s b e f o r e t h e a s se s s i n g o ff i c e r w h i c h c o n t a i n e d v a r i o u s c o n f i r m a t i o n s/ p h o t o c o p i e s o f d e c l a r a t i o n s o n s t a m p p a p e r s / e t c , m e r i t s o f w h i c h a r e b e i n g d i s c u s s e d b y t h e A O a s u nd e r : " I d e n t i c a l b u n c h o f d o c u m e n t s h a v e b e e n s u b m i t t e d fo r a s m o n e y a s 2 5 s h a r e a p p l i c a n t c o m p a n i e s w h i c h a r e i d e n t i c a l a n d se e m t o b e p r e p a r e d a t o n e p l a c e a n d a t o n e g o . M o r e o v e r , t h e a s s e s se e h a s f a i l e d t o f u r n i s h e v e n th e m a n u f a c t u r e d / m a n i p u l a t e d c o n f i r m a t i o n s w . r . t . t h e t h r e e c o m p a n i es b e f o r e t h e A s s e s s i n g O f f i c e r . ” T h e a s s e s s i n g o f f i c e r v i d e h i s a s s e s s m e n t o r d e r d a te d 2 8 . 0 3 .2 0 1 3 h a d c o n c l u d e d t h a t t h e t r a n s a c t i o n s w i t h a l l c o m p a n i e s h a v e b e e n m a n a g e d / m a n i p u l a t e d b y t h e s a m e p e r s o n / s e t o f p e r s o n s a s in e v i d e n t f r o m c a r e f u l p e r u s a l o f t h e d o c u m e n t s g i v e n b y t h e a s s s se e i n i ts l a s t s u b m i s s i o n i n t h e f o r m o f b u n c h o f p a p e r s w i t h o u t a n y c o v e r i n g l e t t e r. T h e m a in c h a r a c t e r i s t i c s o f t h e s e d o c u m e n t s w e r e d i s c u s s e d by t h e A s s e s s i n g O f f i c e r w h i c h i s r e p r o d u c e d a s u n d e r : a ) T h e s e t o f p a p e rs w . r . t a l l t h e c o m p a n i e s c o n t a in a p p l i c a t i o n a l c o n f i r m a t i o n a f f i d a v i t ( P h o t o c o p y ) , s h a r e c e r t i f i c at e ( p h o t o c o p y ) a n d c o p y o f c h e q u e ; e x a c t l y i n t h e s a m e s e q u e n c e . b ) A l l t h e a p p l i c a t i o n f o r s h a r e s a n d c o n f i r m a t i o n a r e p r i n t e d i n s i m i l a r f o n t s , i n s i m i l a r m a n n e r , o n s i m i l a r q u a l i t y o f p a pe r , c ) E v e n t h e s t a m p s a f f i x e d o n t h e a p p l i c a t i o n f o r sh a r e s a n d c o n f i r m a t i o n s a r e b e a r i n g s i m i l a r f o n t s a n d f i n i s h . d ) A l l t h e a p p l i c a t i o n f o r s h a r e s a n d c o n f i r m a t i o n s a r e p u r p o r t e d l y s i g n e d b y s i m i l a r p e r s o n s w h o h a d s i g n e d t h e s h a re a p p l i c at i o n m o n e y c h e q u e s . H o w e v e r t h e d i f f e r e n c e i n t h e s i g n a t u r e s o n c h e q u e v i z a v i z , t h e a p p l i c a t i o n / c o n f i r m a t i o n s f i l e n o w a re c l e a r l y n ot i c e a b l e . A l l t h e s i g n a t u r e s h a v e b e e n a t t e m p t e d t o b e i m i t a t e d t h o u gh t h i s m i s a d v e n t u r e o n t h e p a r t o f t h e a s s e s s e e c l e a r l y e s t a b l i s h e d t h e m an i p u l a t i v e t a c t i c s I.T.A No.5081/Del/2019 9 f o l l o w e d b y t h e a s s e s se e . e ) A l l t h e a f f i d a v i t s a r e p h o t o c o p i e s o f s t a m p p a p er s w i t h o u t a n t s e r i a l n u m b e r , t y p e d i n s i m i l a r f a s h i o n i n s a m e f o n t s w i t ho u t m e n t i o n o f d a t e a n d p l a c e d o n o t b e a r t h e s t a m p o f n o t a r y ; a n d l a s t b u t n o t t h e l e a s t ; p u r p o r t e d l y s i g n e d b y s i m i l a r p e r s o n s a s d i s c u s s e d a b o v e t h o u g h t p o o r l y m a n i p u l a t e d d u e t o p o o r i m i t a t i v e s i g n a t u r e s . f ) A c l o s e s c r u t i n y o f t h e p h o t o c o p i e s o f c h e q u e s al s o r e v e a l t h a t t h e a c c o u n t s a r e m a i n t a i n e d i n s i m i l a r b a n k b ra n c h e d A s m a n y a s 1 0 a c c o u n t s i n K o t a k M a h i n d r a B a n k , O l d R a j i n d e r N a g a r , t w o a c co u n t s i n K o t a k M a h i n d ra B a n k , C h a n d n i C h o w k , s e v e n a c c o u n t s i n K o ta k Ma h i n d ra B a n k , P r e e t V i h a r , o n e a c c o u n t w i t h D . C . B . C h a n d n i C h o w k , t h r e e a c c o u n t s w i t h A x i s B a n k L t d . S a l k i a B r a n c h , K o l k a t a , o n e a c c o u n t w i t h A x i s B a n k L i d . C h a i t a n S e t t s t r e e t , K o l k a t a ) . C h e q u e s a r e w r i t t e n i n i d e n t i c a l f a s h i o n a n d t h e y c a n b e g r o u p e d b y t h e s i m i l a r i t y i n w r i t i n g t he r e q u i s i t e s p a c e s o n t h e c h e q u e l e a v e s . T h e s e f a c t s a r e p a r t i c u l a r l y c o n s i d er e d n o t a b l e i n t h e l i g h t o f r e c e n t n e w s r e p o r t o f v a r i o u s b a n k i n c l u d i n g t h e a b o v e b a n k s h a v in g b e e n f o u n d i n d u l g i n g i n m o n e y - l a u n d e r i n g ( a s p e r C o b ra p o s t . c o m ' s s t i n g o p e r a t i o n ) a n d i n v e s t i g a t i o n t o p r o b e t h e s a m e h a s a l r e a d y b e e n i n i t i a t e d b y v a r i o u s a g e n c i e s i n c l u d i n g R e s e r v e B a n k o f I n d i a. I n v i e w o f t h e a b o v e t h e A s s e s s i n g O f f i c e r h a d f o l lo w i n g o b s e r v a t i o n s w h i c h a r e r e p r o d u c e d a s u n d e r ; 1 . " I n m a n y c o m p a n i e s s i m i l a r s e t o f p e r s o n s a n d D ir e c t o r s a n d v a r i o u s c o m p a n i e s h a v e c o m m o n a d d r e s s e s . 2 . N a m e o f t h e c o m p a n i e s a r e a v a i l a b l e o n a n y o f t he a d d r e s s e s g i v e n b y t h e a s s e s s e e p r e v i o u s l y a s w e l l a s o n t h e n e w s e t of c o n f i r m a t i o n s w h i c h i s e v i d e n t f r o m t h e r e p o r t o f t h e i n s p e c t o r p l a c e d o n r e c o rd a n d a s r e p ro d u c e d a b o v e w h ic h i s n o t m e r e l y a c o - i n c i d e n t . 3 . T h e a s s e s s e e h a s n o t b e e n a b l e t o f u rn i s h t h e d et a i l s / d o c u m e n t s t o p r o v e t h e a u t h e n t i c i t y o f t h e s e c o m p a n i e s a n d t h e fa c t s a n d c i r c u m s t a n c e s o f t h e c a s e p r o v e b e y o n d d o u b t t h a t t h e a s s e s s e e h as e n g a g e d in i n t r o d u c t i o n o f i t s o w n f u n d s i n t h e b o o k s o f a c c o un t s i n t h e g u i s e o f s h a r e a p p l i c a t i o n m o n e y b y s h a m / p a p e r c o m p a n i e s c o n t r o l le d b y s a m e p e r s o n ( s ) f o r p r o v i d i n g a r o u t t o c h a n n e l s f u n d s a s i s e v i d e nt f r o m t h e o b s e r v a t i o n m a d e i n t h e s h o w c a u s e n o t i c e a s w e l l a s a b o v e . 4 . T h e a s s e s s e e h a s n o t b e e n a b l e t o p ro d u c e a n y o f t h e s i g n a t o r i e s / D i r e c t o r s o f t h e a b o v e c o m p a n i e s d e s p i t e h a v i n g b e en s o u g h t t o d o s o . 5 . T h e a s s e s s e e h a s g r o s s l y f a i l e d t o p r o v i d e t h e co n t a c t d e t a i l s o f t h e D i r e c t o r s , c o p i e s o f m u t u a l c o r r e sp o n d e n c e s , e t c , to p r o v e t h a t t h e s h a r e t r a n sa c t i o n s ( i n v o l v i n g p a y m e n t o f s h a r e p r e m i u m @ 40 0 9 o f f a c e v a l u e o f s h a r e s ) w i t h t h e s a i d c o m p a n i e s w a s g e n u i n e a n d a s p e r t h e n o r m a l c o u r s e o f b u s i n e s s p r a c t i c e . " T h e A s s e s s i n g O f f i c e r f o u n d t h a t i t i s a m a t t e r o f r e c o r d t h a t t h e a s s e s s e e c o m p a n y g r o s s l y f a i l e d t o p ro d u c e t h e b o o k s o f a c c ou n t s a n d a n s w e r s! e x p l a n a t i o n s / j u s t i f i c a t i o n i n c o n t e x t o f t h e p o i nt s r a i s e d i n t h e q u e s t i o n n a i r e a s w e l l a s s h o w c a u s e n o t i c e . T h e a s se s s e e h a s f a i l e d t o I.T.A No.5081/Del/2019 10 s u b s t a n t i a t e t h e c l a i m m a d e b y i t a n d ra t h e r t h e r e i s a m p l e e v i d e n c e o n r e c o rd t o i m p l i c a t e t h e a s s e s s e e o n v a r i o u s a s p e c t s a n d t h e a s s e s s e e h a s n o t b e e n a b l e t o r e b u t t h e s a m e w h e n i t w a s c o n f r o nt e d v i d e t h e s h o w c a u s e n o t i c e d t . 2 8 .0 2 . 2 0 1 3 . t h e v a g u e a n d e v a s i v e r e p l i e s h a v e b e e n f i l e d b y t h e a s s e s s e s a n d t h e a s s e s s e e h a s e v a d e d t o a n swe r t h e q u e s t i o n i n t h e s p e c i f i e d m a n n e r d e sp i t e i n t h e f a c e o f s p e c i f i c q ue r i e s r a i s e d d u r i n g t h e c o u r s e o f a s s e s sm e n t p r o c e e d i n g s , t h e so u r c e o f f u nd s a n d n a t u r e o f r e c e i p t s o f t h e a s s e s se e a r e m o s t l y u n e x p l a i n e d a n d m a r r e d b y s u s p i c i o u s a n d b o g u s t r a n sa c t i o n s w h i c h h a v e b e e n g iv e n a n o t h er c o l o u r / d e v i c e t o m i s c h i e v o u s l y e v a d e t h e ro w i n g e y e s o f R e v e n u e . T h e a s s e s s e e h a s n o t b e e n a b l e t o e x p l a i n t h e b a s i c s o f i t s e x i s t e n c e / o p e r a t i o n / f u n d in g . T h e a s s e s s e e c o m p a n y h a s k e p t m u m i n r e s p o n s e t o t h e q ue r i e s a s r a i s e d a s p e r t h e d i s t i n c t i v e p o i n t s v i d e s h o w c a u s e n o t i c e d t . 28 .0 2 . 2 0 1 3 . T h e A s s e s s i n g O f f i c e r w a s n o t s a t i s f i e d w i t h t h e c o r r e c t n e s s a n d c o m p l e t e n e s s o f t h e a s s e s s e e ' s b o o k s o f a c c o u n t s a n d t h e b o o k r e s u l t s / a c c o u n t s o f t h e a s s e s s e e a n d t h e r e f o r e w i t h i n t h e m e a n i n g o f s e c t i o n 1 4 5 ( 3 ) o f t h e I n c o m e T a x A c t , 1 9 6 1 . S i n c e t h e s h a r e c a p i t a l o f R s . 1 , 3 7 , 2 9 , 0 0 0 / - a n d s h a r e p r e m i u m o f R s . 5 , 4 8 , 8 0 , 0 0 0 / - w a s n o t p e r t a i n i n g t o a s s e s s m e n t y e a r 2 0 1 0 - 1 1 t h e A O h a s p u t a n o t e t o s c ru t i n i z e t h i s s h a r e a p p l i c a t i o n m o n e y i n h i s a s se s s m e n t o r d e r f o r t h e a s s e s sm e n t y e a r 2 0 1 0 - 1 . T h e r e l e v a n t p o r t i o n t o t h i s r e g a r d m e n t i o n e d b y t h e A C i n h i s o rd e r r e p r o d u c e d a s u n d er : * [ T h i r d P a r t ] N e c e s s a r y m e a s u r e s w . r . t . i n t r o d u c t i o n o f t h e b o g u s sh a r e a p p l i c a t i o n m o n e y i n t o b o o k s o f a c c o u n t s b y t h e a s s e s s e e c o m p a ny w o u l d b e t a k e n f o r t h e r e s p e c t i v e y e a r w h e n t h e s h a r e a p p l i c a t i o n m o n ey h a s b e e n c re d i t e d i n t h e b o o k s o f a c c o u n t . * [ F o u r t h P a r t ] O n p e ru s a l o f a s s e s s m e n t r e c o rd f o r t h e a s s e s s m e n t y e a r 2 0 1 0 - 1 1 , i t i s f o u n d t h a t t h e s a i d t h e r e a p p l i c a t i o n m o n e y m o s t l y c r e d i t e d i n t h e b o o k s o f a c c o u n t s d u r i n g t h e F . Y . 2 0 0 8 - 0 9 r e l e v a n t t o a s s e ss m e n t y e a r 2 0 0 9 - 1 0 . I n v i e w o f t h e c o n c u r r e n t f i n d i n g s r e c o r d e d b y A s s es s i n g O f f i c e r a n d p e r u s a l o f r e c o rd s f o r t h e A s s e s s m e n t y e a r 2 0 1 0 - 1 1 i t i s f o u n d t h a t t h e a s s e s s e e h a d r e c e i v e d s h a r e c a p i t a l o f R s . 1 , 3 7 , 2 9 , 00 0 / - a n d sh a r e p r e m i u m o f R s . 5 , 4 8 , 8 0 , 0 0 0 / - ( T o t a l 6 , 8 6 ,0 9 , 0 0 0 / - ) i n t h e F . Y . 2 0 0 8 - 0 9 r e l e v a n t t o A . V . 2 0 0 9 - 1 0 a n d t h e a s s e s s e e c o m p a n y g ro s s l y f a i l ed t o p r o d u c e t h e b o o k s o f a c c o u n t s a n d a n s w e r s / e x p l a n a t i o n s / j u s t if i c a t i o n i n c o n t e x t o f t h e p o i n t s r a i s e d i n t h e q u e s t i o n n a i r e a s w e l l a s sh o w c a u s e n o t i c e s i s s u e d b y t h e t h e n A s s e s s i n g O f f i c e r i n r e s p e c t o f s a i d s ha r e a p p l i c a t i o n m o n e y . O n t h e f a c t s a n d c i r c u m s t a n c e s o f t h e c a s e a n d f i n di n g s r e c o rd e d b y t h e A 0 f o r t h e a s s e s s m e n t y e a r 2 0 1 0 - 1 1 , I h a v e r e a s o n s t o b e l i e v e t h a t a n a m o u n t o f R s . 6 , 8 6 ,0 9 , 0 0 0 / - h a s e s c a p e d f r o m t h e AY. 2 0 0 9 - 1 0 w h i c h w a s c h a r g e a b l e t o t a x . I a m a l s o sa t i s f i e d t h a t o n a c c ou n t o f f a i l u r e o n t h e p a r t o f t h e a s s e s s e e t o d i s c l o s e t r u l y a n d f u l l y a l l t h e m a t e r i a l f a c t s n e c e s s a r y f o r a s s e s s m e n t f o r t h e a b o v e a s s e s s m e n t y e a r , t h e in c o m e c h a rg e a b l e to t a x t o t h e t u n e o f R s . 6 , 8 6 ,0 9 , 0 0 0 / - h a s e s c a p e d a ss e s s m e n t w i t h t h e m e a n i n g o f S e c t i o n 1 4 7 o f t h e I . T . A c t 1 9 6 1 .” N o t e : * i n s e r t i o n s r e p r e s e n t c o m p a r t m e n t a l i z a t i o n o f r e a s o n s r e c o r d e d . S u c h i n s e r t i o n i s o u r s a n d I.T.A No.5081/Del/2019 11 h a v e b e e n d o n e w i t h a n o b j e c t t o d i s s e c t v a r i o u s p ar t s o f r e a s o n s f o r n u a n c e d u n d e r s t a n d i n g o f c h a l l e n g e t o b a s i s o f r e o p e n i n g . 10. To begi n wi t h, i t ma y be perti ne nt t o obser ve th at S. 147 is a substa nti ve pr ovisi on vesti ng j uri sdi ct ion to reopen a con cl uded assessment and t her ef or e condit io ns st ipulate d for assump ti on of j ur i sdicti on ar e r equi red t o be adhe re d st rict l y. Secti on 147 i s st r uctur ed wi t h i nbui l t safeguards. The AO i s not per mi tt ed t o exer cise t he powers under S. 147 ar bi tr ari l y or me cha nical l y. T he reasons for reopening (e xt racte d above) ar e the f ulcr u m f or f or mat i on of beli ef t owa rds al leged es cape me nt. On a pprai sal of the reasons so recor ded f or exercise of drast i c powers confer red under S. 147 for reo peni ng of assess ment f or AY 2009- 10 i n quest ion and havi ng re gar d t o stance t aken on beh al f of the assessee, i t emerges that the s ol it ary cause f or for mat ion of bel ief towar ds pur por ted esca pe ment is t he obser vat io ns ma de b y t he AO ad vers e t o Assessee while maki ng assess ment of subsequent Assessment Year 2010-1 1 and a conse quent ‘not e’ pre par ed b y t he AO whi le ma ki ng assess ment for AY 201 0- 11. The consequenti al not e s o pre pared as a resul t of su bseque nt assess ment has t hus galvani ze d t he acti on of reopeni ng of assess ment of AY 2009- 10. 11. For an obj ecti ve under standi ng, t he bod y of reasons recor ded has been br oadl y di vi de d in f our parts; 11. 1 Fi rst part i s gener al and int rod uct or y i n nat ure. 11. 2 I n t he seco nd part of reasons recor ded, t he AO was eng age d t o cull out cert ai n i na dequaci es obser ved in t he course of enquir ies c onduct ed i n A Y 2 010- 11 t owar ds receipt b y I.T.A No.5081/Del/2019 12 assessee on account of shar e subscr ipt i on & shar e all ot ment at pre mi u m. Evi de ntl y, t he sec ond par t al legi ng i nadequaci es app ears t o be ver y generali zed and wi thout an y speci f i cati ons on al leged mi s de mea nor qua a n y part i cul ar share subsc ri ber or a tr ansact ion. Besi des, such gene ric observat ions are i n r el at ion t o subsequent AY 2010-11. 11. 3 I n the t hi rd part , t he A O o bser ved that a ‘note’ has been put b y t he AO of AY 20 10- 11 to ‘scr uti ni ze ’ t he shar e appli cati on mone y i n the r el evant ye ar i n w hi ch s uch mone y has bee n cl ai med t o be receive d b y t he assessee. The said ‘n ote ’ has al so been made par t of t he r easons r ecor ded. 11. 4 I n t he f o urt h and last part of reasons under chal l enge, the AO o bser ved t hat as per t he fin ding s recor ded b y t he AO in AY 2010- 11, t he asse ssee has gr ossl y f ai l ed to just if y t he pr opri et y of the recei pt s as per poi nts rai sed i n q uest ionnaire and show cause not i ces i ssu ed i n AY 2 010- 11. The AO in t hi s part t hus reli ed upon t he fi ndi ngs rec or de d in A Y 2010- 11 for the purposes of for mat i on of bel ief t owar ds pur p ort ed escape ment and all ege d f ai lu re on t he part of t he Assessee t o di scl ose ma teri al f acts ful l y and t rul y f or t he year 2009- 10 i n q uest ion. 11. 5 On t he basi s of such r easons, t he not ice under S. 148 was issued and ser ved on the assessee to re ope n t he assessment con cl uded earl ier, aft er t he end of 4 yea rs f ro m the AY 200 9- 10 in quest ion. 12. As per mai n pr ovisi on of er st w hil e S. 147 of t he Act , the AO is vest ed wi t h powers to re open t he assess ment subj ect I.T.A No.5081/Del/2019 13 however t o presence of s o me t angibl e materi al whic h i s capabl e of for mati on of bel ief t owar ds e scape ment of i nco me. T he reasons or materi al t hus must have a li ve l i nk wi th t he f or mati on of bel ief. The ca use of act i on is ‘r easo n t o bel i eve’ t owar ds escape ment. Apa rt fr o m t he pri ma r y condi t ions of mai n pr ovi sio n, t he fir st provis o cast s f urt her obli gat ion on the revenue to ove rcome t he e mbar go of l i mit at i on of 4 ye ars. 13. We shal l now advert t o test t he reasons fo r reopeni ng on the touc hst one of ma i n pr ovi sio n of S. 147 of t he Act . The mai n pr ovi sio n essent ia ll y pr ovi des t hat bel ief must be buil t on so me ma teri al or reas ons whi ch are specif ic in nat ure and rel i abl e i n charact er . I n the present case, t he basi s for f or mati on of bel ief is t he ‘Note ’ cul mi nated fr o m the assess me nt pr oc eedings i n subsequent assessme nt ye ar . 13. 1 To rei t erate, t he observati ons cull ed out in subsequent year as recor ded i n second part of reas ons are ver y ge ner al and vag ue and ar e pr edo mi nantl y i n t he natur e of opi ni on and i nfer ences owi ng t o i nade qua ci es i n the docu ment s and all ege d i nabil i t y of AO t o gather a dequat e inf or mati on t o hi s sat i sf action i n t hat yea r t o w hi ch t he tr ansact io n di d not act ual l y bel ong. I n the inst ant case, t he assess me nt was earli er carri ed out under S. 143( 3) of t he Act aft er requi si t e enqui ri es under S. 133( 6) w er e carri ed o ut wit h t he i nvest ors/ subs cr iber of t he shar ehol dings. The assess me nt s o made has been reopened. I n thi s bac kdr op, the reas ons on r ecor d do not i ndi cate an y s pecif i c mat eri al agai nst t he assessee to di sl odge t he bona fi des set up b y t he assessee. Succinc tl y put , t he AO has solel y r el ied on t he I.T.A No.5081/Del/2019 14 obser vat io ns made in AY 2010- 11 based on so me enquiri es reveali ng non-compli ances of su mmons et c. where the mone y towar ds share su bscri pt ion was not ad mit te dl y r ec eived. Th e obser vat i ons i n r el at i on t o AY 2010-11 as adopt ed in t he second par t, are in t he a ppar ent l y i n nat ure of bal d al l egati ons wi thout an y s pecif ic detail s. The na me of an y s ubscri ber who i s all eged to be ent r y p rovi der does not feat ur e in t he re cor ded reasons at al l. No defi nit i ve li nk i s present . At t he t i me of f or mati on of bel i ef, it i s neit he r t he case of t he AO that the assessee had not fi led an y docu me nt s what soeve r i n t he ori gi nal assessment t o support t he subsc ri pti on nor ad vers e materi al has be en ref err ed to have been uneart hed w here b y t he al l eged f al si t y i n t he cl ai m of the assessee stands e xposed. The obser vat i ons i n second par t ar e t hus ver y ge ner ic and are i n the r eal m of mere a dve rse opi nion for med pr obabl y due to lack of cl i nchi ng proof on bonafi des of shar e appl icat i on money. T he AO har bour ed bel ief on vague and nondescr ipt h ypot hesis e mergi ng fr o m assess ment of subse que nt year w hen the s hare a ppl icat i on mon e y i n quest i on was not recei ve d at t he fi rst place. Besi des, no t angi bl e ma teri al h as bee n ref err ed w hic h is capa ble of i gnit in g the bel ief towar ds all eged escape ment . The r equi re ment of mai n pr ovisi on of S. 14 7 are t hus appar ent l y not me t. 13. 2 This apart , the i mpug ned not e, as per t hi rd part of r e asons recor ded, spell s out a case f or a mere ‘sc rut in y’ of the tr ansact ion of sh ar e appl i cati on mone y i n t he a ppr opr i ate year of receipt of suc h mone y. A mer e scrut in y pr o posed, givi ng ri se t o reassess ment pr oceedings in t he inst ant, does not meet t he requir e me nt s of mai n provi sion w hi ch cal ls for hol di ng reason I.T.A No.5081/Del/2019 15 to bel ief bef ore co mme nce ment of reassess ment pr oceedings. The c onfer ment o f power s under sect ion 147 of t he Act is wide but not pl enar y. It post ul at es t hat t he Assessi ng of fi cer must hav e reason t o bel ieve t hat t he char gea ble inco me has escaped assess ment . The exp ressi on ‘r easo n t o bel i eve ’ i s the most val ua ble safe guar d a vai l abl e t o pr eve nt arbi tr ar y exer ci se of jurisdi cti on. I t is tr it e that t he ‘re ason t o s uspect ’ can not be equ at ed wit h expressi on ‘r easo n t o bel ieve’. The AO, i n the inst ant case, has based i ts bel ief on an ‘off ice Not e’ cont ai ni ng obser vat io ns i n ot her assessment ye ar , which not e, in turn, onl y suggest s a case for ‘scr uti n y’ i nt o the i mpug ned trans act ions. A pr oposed scr uti n y t o fi nd out w het her an y escape ment exist s is at best a case of ‘r easons to sus pect ’. It is wel l set tl ed that t he not ice of r eopeni ng can be supported wit hi n the conf ines of reasons recor ded b y t he AO. The AO c annot suppl ement t he reasons. Ot her pri ncipl e whic h i s equall y well settl ed and w hich wo uld appl y t o pr esent case i s t hat r eopeni n g of the a ssess ment wo uld not be per mi t ted for a f ishi ng or a r ovi ng inquir y. T his can, as well , be seen as part of requi re me nt of main pr ovisi on of S. 147 of t he Act . The r eopeni ng i s not per mi ssible merel y t o launc h ve rif icat io n of t ransacti ons t o fi nd o ut whether an y inco me has act ual ly e scaped assess ment o r not as echoed in l ong li ne of judicial pr ecede nts. 13. 3 I n totali t y, t he purported beli ef in t he i nstant case i s t hus pre mi sed on whol l y t entati ve gr ounds and t hus a mere prete nse. Such acti on does not pass t he test of ‘reas on t o beli eve ’. We thus see no se mbl ance i n t he act ion of t he A O on the t ouc hsto ne of mai n pr ovisi ons of S. 147. I.T.A No.5081/Del/2019 16 14. The r eope nin g in t he inst ant case i s al so governed b y the fett er s of l i mit at i on p ut b y t he fi rst pr oviso t o S. 147 of the Act. The fi rst pr ovi so casts exe mpla r y b ur den on the re venue. Fr o m the langua ge of f ir st provi so, it appe ar s t hat what is to be seen is whet her the Asse ssee at the t i me of ori ginal assessment , has suppressed an y m at eri al part i cul ar s del i berat el y or f al si fied an y di sclosure. Fur the r, whil e the bur den is on assessee t o pl ace all ma teri al f acts i. e. pr i mar y fact s i n r el at i on to a t ra nsacti on, such onus d oes n ot ext end t o second ar y or inf erent ial fact s. The dut y of disclosur e is li mi t ed to fur nishi ng pri mar y facts w hi ch me ans no f urt he r assi st ance r equi re d to A O b y w a y of disclos ur e. 14. 1 The quest i on w het her t he Assessee coul d be st at ed to have di sclosed f ul l y a nd trul y al l mat eri a l fact s has t o be e xa mi ne d i n the l i ght of f act s of each case. I n the pr esent case, t he mat eri al fact s, namel y deta il s and part i cul ar s of share applicat ion mone y were cal le d f or i n t he ori ginal assess ment b y issuance of not ice of A O dt . 04/ 08/ 2011 pl aced at pa ge 723 of th e pa per book. As obser ved ear li er , speci fi c e nqui ri es were al so c onduct ed b y t he AO wit h shar e appl icant s b y seeki ng detail s under secti on 133( 6) of t he Act . The cop y of not ices issued to t he shar e appli ca nts and el abor at e enqui ri es conduct ed, r epl ies fi led bef ore AO i n regular assess me nt pr oceedi ngs, as advert ed, ar e pl aced at pages 451- 616 of t he paper book. Al ongsi de, evi de nces showi ng subst anti al busi ness act ivit ies pr oposed t o be carri ed out b y t he Assessee, l ist of pr oj ects/ orders awar ded t o the assessee or it s gr oup co. whi ch si gnif icant l y bolst er i ts substr at u m of Assessee co. and pr ovi ding r easons f or subscr i pt ion were also pr oduced be fore AO as per page 617 t o I.T.A No.5081/Del/2019 17 720 of t he paper b ook. 14. 2 As pe r t he cont ent i ons of t he Assessee, except f or bal d al legati on of fai l ure t o di scl ose mat eri al f acts b y the assessee i n the ori gi nal assess me nt, no f ou ndat ion has been laid i n t his regar d i n t he reas ons recorded. It i s not known what mat eri al fact s have not bee n disclose d which t he assessee was pr iv y t o. A con dit io n t owar ds disclosur e of fact s presupposes knowledge of fact s b y an asses see. The l aw can not expect an assessee t o unfol d so met hi ng whic h t he Assessee has no k nowl ed ge of. The AO, i n the i nst ant case, has rather reope ned the case on t he pre mi se of ina dequac y i n the inf or mati on col lect ed i n subsequent assessme nt ye ar an d not on account of any f ai lur e on the part of t he assessee to di scl ose mat er ial fact s qua AY 2 009- 10 i n questi on. There is no al l egati on in t he reasons record ed that onus c ast upon the assessee in t he ori gi nal assessment was not di scha rge d or an y fact was not di scl osed whi ch t he assessee was aw are of an d ought t o ha ve dis cl osed. Needl ess t o sa y, t he onus of disclosur e does not exte nd be yond t he ful l and t r ut hf ul di sclosure of all pr i ma r y facts. Once, all such fact s ar e di sclosed, t he onu s st ands dischar ged a nd i t i s not for assessee to t el l t he assessing off icer , what i nf erences, whet her of f acts or law, shoul d be dr awn b y hi m on t hese facts. Thi s is t he vi ew exp ressed b y Hon ’bl e Supreme Court i n Cal cut t a Di s count C o. Ltd. (1961 ) 41 ITR 191. 14. 3 I n t he li ght of al l egati on re cor ded, i t i s mani fest t hat the requir e me nt of f i rst pro viso are not met f or mult iple reasons na mel y, t he al legat i on of fail ure t o di scl ose facts of mat eri al I.T.A No.5081/Del/2019 18 nat ur e i s non- desc ript and obscure a nd i s merel y an it er at ion of statut or y la nguage; it i s not kno wn w hat pri mar y fact s of substant i ve nat ur e were not ‘di scl osed’ whic h were i n t he knowledge o f the Assessee; whi ch specifi c f act di scl osed wer e found to be untr ue l at er on. The all egat ion that t he shar e appli cati on recei ved ar e acco mmodat i on ent ri es wit hout fur t her cor r obor at i ve fact s is b y it sel f i nsuffi ci ent t o all ege the escape ment i n terms of fi rst provi so . 14. 4 As not e d above, wi t hhol ding t he mat er ial fact s which i s i n the knowl e dge of Assessee is one of the condi ti ons pr ecedent t o li ft t he e mbar go of li mi tat ion placed under t he f irst pro viso. I mpo rtant l y, suc h fail ure of t he assessee t o di scl ose mat eri al fact s conte mpl at ed i n f irst pr ovi so t o S. 147 has to be j udge d i n the conte xt of pro ceedi ngs of t he same year i . e. AY 2009- 1 0 a nd not wi t h ref ere nce t o some enqui r y i n subsequent A Y 2010- 11. An y al l ege d f ai lur e i n so me ot her assess me nt year woul d not me et t he re qui re ment of f ir st provi s o t o S. 147 with r eference t o reopeni ng of so me ot her year. To r ei terate, fr om the bod y of reasons recor ded for AY 2009-10 i n questi on, it can not be deci pher ed as t o what materi al f acts in relati on to shar e appli cati on mone y wer e wit hheld b y the Assessee i n AY 2009- 10 in quest ion. A n al leged no n-co mpli ance of su mmons i ssued in so me other ye ar s cannot be reckoned as ‘fail ure on the part of assessee’ and t hat too i n so me ot he r assess ment year . Coupled wi t h t hi s, an enqui r y was made in rel at i on t o s hare appl i cati on mone y r ecd. whi l e f ra ming re gul ar assess ment of A Y 2009-10 and assess ment was f ra med t aki ng note of outcome of such enq uir y. Hence, mere r epr oduct i on of st at ut or y la nguage of f ir st I.T.A No.5081/Del/2019 19 pr ovi so woul d not meet the re qui rement of l aw f or extension of li mi t at ion pe ri od be yond 4 years. 15. Thus, when s een holi sti call y, t he c oncl usi on is i nescapabl e that t he A O has f ai led t o sati sf y the pre- requisi tes of mai n pr ovi sio n of S. 147 and also fi rst provi so t heret o. The jurisdi cti on assu med thus i s cl earl y wi tho ut l egal f oundat i on. 16. The not ice i ssued under S. 148 t o reopen t he comp leted assess ment is t hus wit hout jurisdi c ti on a nd consequentl y, t he reassess ment or der i s bad i n law and thus quas hed. 17. I n vi ew of s uc h c oncl usi on, we c onsider i t unnecessar y t o del ve i nt o mer it s of addit ions canvassed at t he t i me of heari ng. 18. I n t he resul t, t he appeal of t he Assessee is all owed. Order pronounced in the open Court on 27/04/2023. Sd/- Sd/- [CHANDRA MOHAN GARG] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /04/2023 Prabhat