50/2022 Of M/S Ambuj Foods Pvt. Ltd. Thru. Its Director v. Principal Commissioner Of Income Tax And Ors

Case : WRIT TAX No. - 50 of 2022Petitioner : M/S Ambuj Foods Pvt. Ltd. Through DirectorRespondent : Principal Commissioner Of Income Tax And OthersCounsel for Petitioner : Pradeep AgrawalCounsel for Respondent : Manish Misra, Hon'ble Devendra Kumar Upadhyaya, J.Hon'ble Subhash Vidyarthi, J. (Per Hon'ble Subhash Vidyarthi J) 1.Heard Sri Pradeep Agarwal assisted by Sri. Amar Mani Tiwari,Advocate, the learned Counsel for the petitioner and Shri ManishMisra, learned Counsel for the respondents. 2.By means of this Writ Petition filed under Article 226 of theConstitution of India, the petitioner has challenged the validity of anotice dated 31.03.2021 issued by the DCIT Circle Faizabad underSection 148 of the Income Tax Act, 1961 (hereinafter referred to as'the Act') proposing to assess/reassess the petitioner’s income/loss forthe assessment year 2015-16 and directing the petitioner to submit areturn for the said assessment year. The petitioner has also challengedthe order dated 03-03-2022 passed by the National FacelessAssessment Centre, rejecting the objections filed by the petitioner inresponse to the aforesaid notice. 3. The petitioner’s case is that it had filed its return for theAssessment Year 2015-16 on 02-09-2015 declaring a total income ofRs.3,49,140/-, which was processed on 10-10-2015 under Section 143(1) of the Act. The case was selected for scrutiny and notices underSection 143 (2) and Section 142 (1) were issued alongwith aquestionnaire asking for certain details. The questionnaire inter aliademanded production of all the share capital details of the petitioner’sshare-holders alongwith PAN and mode of payment for obtainingshares in his name or in the name of family members, and also thedetails of share premium receipts. The petitioner submitted a reply giving the details of all investor companies to whom shares wereallotted. The matter of increase in share capital was examined duringassessment proceedings under Section 143 (3) of the Act and nothingadverse came out from the information submitted in response to thequestionnaire. By means of an order dated 01-06-2017, the petitionerwas assessed for a total income of Rs.3,49,140/-. 4.On 30-03-2021, the A.O. issued a notice under Section 148 ofthe Act for the Assessment Year 2015-16, stating that he had reasonto believe that the petitioner’s income chargeable to tax has escapedassessment within the meaning of Section 147 of the Act. 5.It is stated in the reasons provided for re-opening of assessmentthat an information was flagged by the Directorate of Income Tax(System) on the Insight Portal that the petitioner has allotted 1,20,000equity shares to the shareholders @100 per share (face value Rs.10/-and premium Rs,90/-) during F.Y. 2014-15 and has collected apremium of Rs.1,08,00,000/-. The petitioner did not provide thedetails of shareholders even though several opportunities weregranted to it. After completion of assessment proceedings,information was received from I & CI Wing, on the basis whereof theA.O. had reason to believe that the premium of Rs.1,08,00,000/-collected by the petitioner was chargeable to tax but it has escapedassessment. 6.On 27-11-2021, the petitioner submitted its objections againstthe notice under Section 148 of the Act mainly on the grounds that thepetitioner’s case was selected for scrutiny under CASS for the reason“Large Share premium received during the year”. The matter ofincrease in share capital was thoroughly examined during theassessment proceedings under Section 143 (3). All the necessarydetails as required by the A.O. had been submitted by the petitionerand there was no failure on its part to disclose truly and fully allmaterial facts necessary for completion of the assessment. The issueof increase in share capital had already been examined by the A.O. indepth and no adverse inference could be drawn. The assessment underSection 143 (3) was made on 01-06-2017 and more than four years 6.On 27-11-2021, the petitioner submitted its objections againstthe notice under Section 148 of the Act mainly on the grounds that thepetitioner’s case was selected for scrutiny under CASS for the reason“Large Share premium received during the year”. The matter ofincrease in share capital was thoroughly examined during theassessment proceedings under Section 143 (3). All the necessarydetails as required by the A.O. had been submitted by the petitionerand there was no failure on its part to disclose truly and fully allmaterial facts necessary for completion of the assessment. The issueof increase in share capital had already been examined by the A.O. indepth and no adverse inference could be drawn. The assessment underSection 143 (3) was made on 01-06-2017 and more than four years have passed from the end of the relevant assessment. Therefore, thenotice was barred by the First Proviso appended to Section 147 of theAct. 7.The petitioner further stated that the notice dated 22-09-2017issued under Section 133 (6) of the Act was received by it on 05-10-2017 and it had duly replied the notice giving complete name andaddress of the investor companies along with details of shareapplication money received and it is wrongly mentioned in the noticethat the petitioner did not provide the details of shareholders evenafter several opportunities. The notice itself stated that the case forA.Y. 2015-16 was selected for scrutiny under CASS for the reason“Large Share premium received during the year” and it is apparentthat the increase of share capital has already been examined by theA.O. and re-opening of the case under Section 148 on the same issueis not valid. It is stated in the reasons for issuance of the notice thatinformation had been received from I & CI Wing, but whatinformation was received was not brought to the knowledge of thepetitioner. The issue of increase in share capital has beenindependently examined by the I & CI Wing vide notice dated 22-05-2017 and the petitioner has complied with all the requirements of thenotice. No new information was in possession of the A.O. whichwould form the basis of issuance of the notice under Section 148 ofthe Act. 8.On 03-03-2022, the National Faceless Assessment Centrepassed an order rejecting the petitioner’s objections stating that theoriginal assessment for A.Y. 2015-16 was only a limited scrutinyassessment to verify the applicability of Section 56 (2) (vii b) of theAct, which means to verify any difference in aggregate considerationreceived on issue of shares when compared with Fair Market Value ofthe shares and consider the same as income under Section 56 of theAct. There is no scope for verifying the identity, genuineness andcreditworthiness of the shareholders in a limited scrutiny assessment.As was mentioned in the notice under Section 148, an informationwas given by the Directorate of Income Tax (System) on the Insight Portal, that the petitioner had allotted 1,20,000 equity shares to theshareholders @ Rs.100/- per share (face value Rs.10/- and premiumRs.90/-) during F.Y. 2014-15 and it had collected a premium ofRs.1,08,00,000/-. In spite of being granted several opportunities, thepetitioner did not provide the details of shareholders and, therefore,the genuineness and creditworthiness of the shareholders could not beestablished and hence appropriate remedial action as per theprovisions of the Act was recommended. Portal, that the petitioner had allotted 1,20,000 equity shares to theshareholders @ Rs.100/- per share (face value Rs.10/- and premiumRs.90/-) during F.Y. 2014-15 and it had collected a premium ofRs.1,08,00,000/-. In spite of being granted several opportunities, thepetitioner did not provide the details of shareholders and, therefore,the genuineness and creditworthiness of the shareholders could not beestablished and hence appropriate remedial action as per theprovisions of the Act was recommended. 9.The order further stated that in the letter of ITO (I & CI) dated04-06-2019, it has been stated that a notice dated 07-05-2018 wasissued to the petitioner under Section 133 (6) of the Act, which wasdelivered to the petitioner on 12-05-2018, but the petitioner did notcomply with the notice. Thereafter another notice dated 31-05-2018was issued, but the petitioner did not comply with this notice also.Thus the issue of increase in share capital and share premium, theverification of identity of investors, genuineness of transactions andcreditworthiness of shareholders was not examined either in limitedscrutiny assessment or by ITO (I & CI) Wing and it is a new issuewhich has formed the basis of reason for issuance of the notice underSection 148 of the Act. 10. Before proceeding to examine the rival contentions advancedon behalf the contesting parties, it would be appropriate to have alook at some pronouncements of the Hon’ble Supreme Courtexplaining the scope of interference while examining the validity of anotice issued under Section 148 of the Act in a Writ Petition underArticle 226 of the Constitution of India. In Raymond Woolen MillsLtd. Versus I.T.O., (1999) 236 ITR 36 (SC) the Hon’ble SupremeCourt has held that at the stage of the notice of reopening of theassessment, the Court has only to see whether there is prima faciesome material on the basis of which the Department could reopen thecase. The sufficiency or correctness of the material is not a thing tobe considered at this stage. 11. Again, in Raymond Woollen Mills Ltd. v. ITO, (2008) 14 SCC218, the Hon’ble Supreme Court reiterated that while examining the validity of a notice issued under Section 148 of the Income Tax Act,“we do not have to give a final decision as to whether there is asuppression of material facts by the assessee or not. We have only tosee whether there was prima facie some material on the basis ofwhich the Department could reopen the case. The sufficiency orcorrectness of the material is not a thing to be considered at thisstage.” 12. In light of the aforesaid pronouncements of the Hon’ble SupremeCourt we proceed to examine the rival submissions advanced onbehalf of the parties so as to ascertain as to whether there was primafacie some material on the basis of which the Department couldreopen the case, without going into the sufficiency or correctness ofthe material. 13. Mr. Pradeep Agrawal, the learned Counsel representing thepetitioner, has submitted that after completion of assessment for theA.Y. 2015-16 on 01-06-2017, no new or fresh tangible material hadcome to knowledge of the A.O. for initiating the proceedings underSection 147 / 148 of the Act and, therefore, the initiation of theproceedings after expiry of more than four years from the end of theAssessment Year is illegal and beyond jurisdiction. He has furthersubmitted that the petitioner had duly replied the questionnaire issuedby the A.O on 20-04-2017 and had submitted all the necessarydocuments in reply to the queries raised by the A.O. The initiation ofre-assessment proceedings amount to a review of the existingmaterial. Section 148 uses the words “reasons to believe” and not“reasons to suspect” and the provisions of Section 147 / 148 cannot beused for making a roving or fishing enquiry on a vague or remoteinformation in absence of any specific averment that the income hasescaped assessment. 14.The petitioner also submitted that similar nature of transactionswith the same parties were conducted in A.Y. 2012-13 by M/s ArohulFoods Pvt. Ltd., a sister concern of the petitioner, and the proceedingsunder Section 148 were initiated against M/s Arohul Foods Pvt. Ltd., but the same were quashed by the ITAT, Lucknow Bench vide orderdated 11-08-2021 passed in ITA No. 236 / Lkw / 2020. 15.Per contra, Sri. Manish Mishra, the learned Counsel for theIncome Tax department, has submitted that the petitioner had notmade a true and full disclosure of all material facts. On 20-04-2017,the A.O. had sent a notice under Section 142 (1) of the Act alongwitha questionnaire and point no. 7 of the same directed the petitioner toproduce all the share capital details of the petitioner’s shareholdersalongwith PAN and mode of payment for obtaining shares and alsothe details of share premium received during the relevant year, but thepetitioner did not provide this information. Although the petitionerhad disclosed that it had received Rs.1,08,00,000/- as share capitaland share premium, but the facts which have been discovered by theInvestigation Wing, could not be established by the A.O. Duringinvestigation, the companies were found to be mere paper companieshaving no existence and real business. All the companies throughwhich the entire share business has been dealt with by the petitionerhave been found to be bogus shell companies, through which theoperators provide accommodation entries for routing the unaccountedmoney of the petitioner company through banking channels in such amanner as makes it prima facie appear as a genuine transaction,though actually it is not and it causes taxable income escapingassessment. The A.O. had completed the assessment under Section143 (3) on the basis of facts available on record at that time and theA.O. could not examine the facts which were discovered later on and,therefore, the case has been re-opened on the basis of fresh materialon record. 16.Regarding the petitioner’s contention based on the judgmentpassed by ITAT in Arohul Foods Pvt. Ltd. matter, the respondentshave stated that the said order has not been accepted by thedepartment and an appeal under Section 260 A of the Act has beenalready been filed before this Court. 17.In Phool Chand Bajrang Lal v. ITO,(1993) 4 SCC 77, theHon’ble Supreme Court held that: - 16.Regarding the petitioner’s contention based on the judgmentpassed by ITAT in Arohul Foods Pvt. Ltd. matter, the respondentshave stated that the said order has not been accepted by thedepartment and an appeal under Section 260 A of the Act has beenalready been filed before this Court. 17.In Phool Chand Bajrang Lal v. ITO,(1993) 4 SCC 77, theHon’ble Supreme Court held that: - “25. From a combined review of the judgments of this Court, it follows thatan Income Tax Officer acquires jurisdiction to reopen assessment underSection 147(a) read with Section 148 of the Income Tax Act, 1961 only ifon the basis of specific, reliable and relevant information coming to hispossession subsequently, he has reasons which he must record, to believethat by reason of omission or failure on the part of the assessee to make atrue and full disclosure of all material facts necessary for his assessmentduring the concluded assessment proceedings, any part of his income,profit or gains chargeable to income tax has escaped assessment. He maystart reassessment proceedings either because some fresh facts come tolight which were not previously disclosed or some information with regardto the facts previously disclosed comes into his possession which tends toexpose the untruthfulness of those facts. In such situations, it is not a caseof mere change of opinion or the drawing of a different inference from thesame facts as were earlier available but acting on fresh information. Since,the belief is that of the Income Tax Officer, the sufficiency of reasons forforming the belief, is not for the Court to judge but it is open to an assesseeto establish that there in fact existed no belief or that the belief was not at-all a bona fide one or was based on vague, irrelevant and nonspecificinformation. To that limited extent, the Court may look into the conclusionarrived at by the Income Tax Officer and examine whether there was anymaterial available on the record from which the requisite belief could beformed by the Income Tax Officer and further whether that material hadany rational connection or a live link for the formation of the requisitebelief. It would be immaterial whether the Income Tax Officer at the time ofmaking the original assessment could or, could not have found by furtherenquiry or investigation, whether the transaction was genuine or not, if onthe basis of subsequent information, the Income Tax Officer arrives at aconclusion, after satisfying the twin conditions prescribed in Section 147(a)of the Act, that the assessee had not made a full and true disclosure of thematerial facts at the time of original assessment and therefore incomechargeable to tax had escaped assessment.” (Emphasis supplied) 18.In Srikrishna (P) Ltd. v. ITO,(1996) 9 SCC 534, the Hon’bleSupreme Court held that: - “Now, what needs to be emphasised is that the obligation on the assessee——to disclose the material facts or what are called, primary facts is nota mere disclosure but a disclosure which is full and true. A false disclosureis not a true disclosure. The disclosure must not only be true but must be“”—full fully and truly. A false assertion, or statement, of material fact,therefore, attracts the jurisdiction of the Income Tax Officer under Sections34/147. Take this very case: the Income Tax Officer says that on the basisof investigations and enquiries made during the assessment proceedingsrelating to the subsequent assessment year, he has come into possession ofmaterial, on the basis of which, he has reasons to believe that the assesseehad put forward certain bogus and false unsecured hundi loans said tohave been taken by him from non-existent persons or his dummies, as the case may be, and that on that account income chargeable to tax hasescaped assessment. According to him, this was a false assertion to theknowledge of the assessee. The Income Tax Officer says that during theassessment relating to subsequent assessment year, similar loans (fromsome of these very persons) were found to be bogus. On that basis, he seeksto reopen the assessment. It is necessary to remember that we are at thestage of reopening only. The question is whether, in the abovecircumstances, the assessee can say, with any justification, that he had fullyand truly disclosed the material facts necessary for his assessment for thatyear. Having created and recorded bogus entries of loans, with what facecan the assessee say that he had truly and fully disclosed all material factsnecessary for his assessment for that year? True it is that Income Tax—Officer could have investigated the truth of the said assertion which he—actually did in the subsequent assessment year but that does not relievethe assessee of his obligation, placed upon him by the statute, to disclosefully and truly all material facts. Indubitably, whether a loan, alleged tohave been taken by the assessee, is true or false, is a material fact — andnot an inference, factual or legal, to be drawn from given facts. In thiscase, it is shown to us that ten persons (who are alleged to have advancedloans to the assessee in a total sum of Rs 3,80,000 out of the total hundiloans of Rs 8,53,298) were established to be bogus persons or mere name-lenders in the assessment proceedings relating to the subsequentassessment year. Does it not furnish a reasonable ground for the IncomeTax Officer to believe that on account of the failure — indeed not a merefailure but a positive design to mislead — of the assessee to disclose allmaterial facts, fully and truly, necessary for his assessment for that year,income has escaped assessment? We are of the firm opinion that it does. Itis necessary to reiterate that we are now at the stage of the validity of thenotice under Sections 148/147. The enquiry at this stage is only to seewhether there are reasonable grounds for the Income Tax Officer to believeand not whether the omission/failure and the escapement of income isestablished. It is necessary to keep this distinction in mind. 10. A recent decision of this Court in Phool Chand Bajrang Lal v. ITO, weare gratified to note, adopts an identical view of law and we are inrespectful agreement with it. The decision rightly emphasises the obligationof the assessee to disclose all material facts necessary for making hisassessment fully and truly. A false disclosure, it is held, does not satisfy thesaid requirement. We are also in respectful agreement with the followingholding in the said decision” 19. From the reasons for initiating the process of re-assessmentmentioned in the preceding paragraph, we find that although thepetitioner had disclosed that it had received Rs.1,08,00,000/- as sharecapital and share premium, but the from the facts disclosed by thepetitioner during assessment the A.O. could not ascertain that thecompanies were mere paper companies having no existence and realbusiness. The questionnaire annexed to the notice dated 20-04-2017 issued under Section 142 (1) of the Act required the petitioner toproduce all the share capital details of its shareholders alongwith PANand mode of payment for obtaining shares, but while providinginformation in response to the notice, the petitioner did not disclosethe mode of payment for obtaining shares. 20.We have noticed that the petitioner has himself annexed withthe Writ Petition a copy of a notice dated 07-05-2018 issued by theITO (Intelligence & Criminal Investigation) calling for informationunder Section 133 (6) of the Act, regarding details of the shareholdersin the following format: - issued under Section 142 (1) of the Act required the petitioner toproduce all the share capital details of its shareholders alongwith PANand mode of payment for obtaining shares, but while providinginformation in response to the notice, the petitioner did not disclosethe mode of payment for obtaining shares. 20.We have noticed that the petitioner has himself annexed withthe Writ Petition a copy of a notice dated 07-05-2018 issued by theITO (Intelligence & Criminal Investigation) calling for informationunder Section 133 (6) of the Act, regarding details of the shareholdersin the following format: - SlName ofCompanyPAAmoutMode ofDate ofAccounNo. of.theAddressNReceiveReceiptReceipttequityshareholdedNumbersharesrinallottedwhichduringtheF.Y.money2014-was15receivedA copy of the reply sent by the petitioner has also been annexed withthe Writ Petition, in which the following details have been furnished:-SlNameandAddress ofNationNumberTotalTotaloccupation ofallotteeality ofof sharesamountamount toallotteeallotteeallottedpaidbe paid on(Includingcallspremium)(Including(In Rs.)premiumoutstanding)(In Rs.)1Bluefox2A, GaneshIndian45,00045,00,000NilMerchants (P)ChandraLtd.Avenue, 7[th]Floor, RoomNo.11,Kolkata–700013IndianNil2Bluefox42, B. B.25,00025,00,000Dealtrade(P)Ganguly Ltd.Street,1[st]Floor,Kolkata700012IndianNil3Garima42, B. B.15,00015,00,000Dealtrade(P)GangulyLtd.Street,1[st]Floor,Kolkata700012IndianNil4Youthstar42, B. B.20,00020,00,000Dealtrade(P)GangulyLtd.Street,1[st]Floor,Kolkata700012IndianNil5Sangamyug2A Ganesh15,00015,00,000Commercial (P)ChandraLtd.Avenue, 7[th]Floor, RoomNo.11,Kolkata-700013Total1,20,0001,20,00,000 21.From a perusal of the above tables, it is apparent that thepetitioner did not furnish the PAN of the companies, the mode ofreceipt of the amount and the account number in which the moneywas received even after receipt of a notice under Section 133 (6) ofthe Act. Thus it appears that the petitioner did not make a full and truedisclosure of facts before the A.O. It has been discoveredsubsequently during investigation that all the companies throughwhich the entire share business has been dealt with by the petitioner,are bogus shell companies, through which the operators provideaccommodation entries for routing the unaccounted money of thepetitioner company through banking channels so as to give it a primafacie appearance of a genuine transaction, though actually it is not.Thus they manage taxable income to escape assessment. The A.O.had completed the assessment under Section 143 (3) on the basis ofthe facts available on record at that time and the A.O. could not examine the facts which were discovered later on and, therefore, thecase has been re-opened on the basis of fresh material on record. 22.Now we consider the next submission made on behalf of thepetitioner, that the initiation of the proceedings under Sections 147 /148 of the Act is based on a review of the existing material, which isnot permissible in law. From the discussion made above, it is clearthat during investigation carried out subsequent to the limited scrutinyassessment, it was found that all the companies through which theentire share business has been dealt with by the petitioner, are bogusshell companies, through which the operators provide accommodationentries for routing the unaccounted money of the petitioner companythrough banking channels, thereby causing taxable income escapingassessment. This fact could not be examined by the AO during theoriginal assessment for want of a full and true disclosure of facts bythe petitioner. Therefore, the A.O. did not examine the aforesaidissues and he did not form an opinion regarding the same during thelimited scrutiny assessment proceedings. In such a situation, it is not acase of change of opinion or the drawing of a different inference fromthe same facts as were earlier available but the A.O. has acted on freshinformation and it is not a review of the existing material. 23.The learned Counsel for the petitioner has placed reliance upona judgment of the Hon’ble Supreme Court in the case of CIT v.Marico Ltd., (2020) 16 SCC 354 and has contended that if the queryraised by the A.O. is replied and is not rejected in the assessmentorder, it would mean that the A.O. has accepted the view and thenotice issued on the same issue would amount to have been issued ona mere change of opinion. It would be appropriate to reproduce theaforesaid judgment, which is as follows: - “1. Delay condoned. In the present matter, the assessment order was passedon 30-1-2018 as regards the Assessment Year 2014-15. 2. According to the record, certain queries were raised by the assessingofficer on 25-9-2017 during the assessment proceedings which wereresponded to by the assessee vide letters dated 10-10-2017 and 21-12-2017.After considering said responses, the assessment order was passed on 30-1-2018. 3. Subsequently, by notice dated 27-3-2019 issued under Section 148 of theIncome Tax Act, the matter was sought to be re-opened. While acceptingthe challenge to the issuance of notice, the High Court in para 13 of itsjudgment observed as under: “13. Thus, we find that the reasons in support of the impugned notice is thevery issue in respect of which the assessing officer has raised the querydated 25-9-2017 during the assessment proceedings and the petitioner hadresponded to the same by its letters dated 10-12-2017 and 21-12-2017justifying its stand. The non-rejection of the explanation in the assessmentorder would amount to the assessing officer accepting the view of theassessee, thus taking a view/forming an opinion. Therefore, in thesecircumstances, the reasons in support of the impugned notice proceed on amere change of opinion and therefore would be completely withoutjurisdiction in the present facts. Accordingly, the impugned notice dated27-3-2019 is quashed and set aside.” 4. In the circumstances, we see no reason to interfere in the matter. Thisspecial leave petition is, accordingly, dismissed. Pending application(s), ifany, also stand disposed of.” 24.In the aforesaid case, the Hon’ble Supreme Court declinedleave to file appeal against the order passed by the High Court,without laying down any law. However, the meaning of theexpression “change of opinion” has been explained by the Hon’bleSupreme Court in CIT v. Techspan India (P) Ltd., (2018) 6 SCC685, in the following words: - “16. To check whether it is a case of change of opinion or not one has tosee its meaning in literal as well as legal terms. The words “change ofopinion” imply formulation of opinion and then a change thereof. In termsof assessment proceedings, it means formulation of belief by an assessingofficer resulting from what he thinks on a particular question. It is a resultof understanding, experience and reflection. 17. It is well settled and held by this Court in a catena of judgments and itwould be sufficient to refer to CIT v. Kelvinator of India Ltd. wherein thisCourt has held as under: (SCC p. 725, para 5-7) “5. … where the assessing officer has reason to believe that income hasescaped assessment, confers jurisdiction to reopen the assessment.Therefore, post-1-4-1989, power to reopen is much wider. However,one needs to give a schematic interpretation to the words “reason tobelieve”…. Section 147 would give arbitrary powers to the assessingofficer to reopen assessments on the basis of “mere change of opinion”,which cannot be per se reason to reopen.escaped assessment, confers jurisdiction to reopen the assessment.Therefore, post-1-4-1989, power to reopen is much wider. However,one needs to give a schematic interpretation to the words “reason tobelieve”…. Section 147 would give arbitrary powers to the assessingofficer to reopen assessments on the basis of “mere change of opinion”,which cannot be per se reason to reopen. 6. We must also keep in mind the conceptual difference between powerto review and power to reassess. The assessing officer has no power toreview; he has the power to reassess. But reassessment has to be basedon fulfilment of certain precondition and if the concept of “change ofto review and power to reassess. The assessing officer has no power toreview; he has the power to reassess. But reassessment has to be basedon fulfilment of certain precondition and if the concept of “change of opinion” is removed, as contended on behalf of the Department, then,in the garb of reopening the assessment, review would take place. 7. One must treat the concept of “change of opinion” as an in-builttest to check abuse of power by the assessing officer. Hence, after 1-4-1989, assessing officer has power to reopen, provided there is “tangiblematerial” to come to the conclusion that there is escapement of incomefrom assessment. Reasons must have a live link with the formation ofthe belief.” 18.Before interfering with the proposed reopening of the assessment on theground that the same is based only on a change in opinion, the court oughtto verify whether the assessment earlier made has either expressly or bynecessary implication expressed an opinion on a matter which is the basisof the alleged escapement of income that was taxable. If the assessmentorder is non-speaking, cryptic or perfunctory in nature, it may be difficultto attribute to the assessing officer any opinion on the questions that areraised in the proposed reassessment proceedings. Every attempt to bring totax, income that has escaped assessment, cannot be absorbed by judicialintervention on an assumed change of opinion even in cases where theorder of assessment does not address itself to a given aspect sought to be”examined in the reassessment proceedings. (Emphasis supplied) 25.In the present case, during the limited scrutiny assessmentunder Section 143 (3) the petitioner did not make a full and truedisclosure of all the material facts and, therefore, the A.O. could notform any opinion regarding the fact that the companies through whichthe entire share business has been dealt with by the petitioner, arebogus shell companies, through which the operators provideaccommodation entries for routing the unaccounted money of thepetitioner company. This fact came to light only after investigationconducted subsequent to the limited scrutiny assessment and it wasonly thereafter that the A.O. had formed an opinion in this regard.Therefore, the present case would not fall in the category of “changeof opinion”. 26.The learned Counsel for the petitioner has placed reliance onthe following passages from the judgment of the Hon’ble SupremeCourt in New Delhi Television Ltd. versus DCIT reported in (2020)424 ITR 607 (SC): - “In our view, the assesse disclosed all the primary facts necessary forassessment of its case to the Assessing Officer, What the Revenue urges isthat the Assessee did not make a full and true disclosure on certain other facts. We are of the view that the assesse had disclosed all primary factsbefore the Assessing Officer and it was not required to give any furtherassistance to the Assessing Officer any disclosure of other facts. It was forthe Assessing Officer at this stage to decide what inference whould bedrawn from the facts of the case. In the present case the Assessing Officeron the basis of the facts disclosed to him did not doubt the genuineness ofthe transaction set up by the Assessee.” “We are clearly of the view that the Revenue in view of its CounterAffidavit before the High Court that it was not relying upon the nondisclosure of facts by the Assessee could not have been permitted to orallyurge the same. Even otherwise we find that the Assessee had fully and trulydisclosed all material facts necessary for its assessment and, therefore, theRevenue cannot take the benefit of the exgtended period of limitation of 6years.” “We are clearly of the view that the Revenue in view of its CounterAffidavit before the High Court that it was not relying upon the nondisclosure of facts by the Assessee could not have been permitted to orallyurge the same. Even otherwise we find that the Assessee had fully and trulydisclosed all material facts necessary for its assessment and, therefore, theRevenue cannot take the benefit of the exgtended period of limitation of 6years.” “Revenue has failed to show non disclosure of facts the notice having beenissued after a period of four years is required to be quashed.” 26.However, in the same judgment, after referring to the earlierjudgments in the cases of Clagett Brachi Co. Ltd. versus CIT, (1989)Supp. (2) SCC 182, Phool Chand Bajrang Lal versus ITO, (1993) 4SCC 77 and Ess Kay Engineering Co. P. Ltd. versus CIT, (2001) 10SCC 189, the Hon’ble Supreme Court held that: - “subsequent facts which come to the knowledge of the Assessing Officercan be taken into account to decide whether the assessment proceedingsshould be re-opened or not. Information which comes to the notice of theAssessing Officer during proceedings for subsequent assessment years candefinitely form tangible material to invoke powers vested with theAssessing Officer under Section 147 of the Act. The material disclosed inthe assessment proceedings for the subsequent years as well as the materialplaced on record by the minority shareholders form the basis for takingaction under section 147 of the Act. At the stage of issuance of notice, theAssessing Officer is to only form a prima facie view. In our opinion thematerial disclosed in assessment proceedings for subsequent years wassufficient to form such a view. We accordingly, hold that there werereasons to believe that income had escaped assessment in this case.” 27.Thus in New Delhi Television Ltd. versus DCIT (Supra), theHon’ble Supreme Court has reiterated the well-established principlethat subsequent facts which come to the knowledge of the AssessingOfficer can be taken into account to decide whether the assessmentproceedings should be re-opened or not. 28.Regarding a transaction which is discovered to be bogus aftercompletion of assessment, the Hon’ble Supreme Court held in PhoolChand Bajrang Lal v. ITO, (1993) 4 SCC 77, as follows: - 27.Thus in New Delhi Television Ltd. versus DCIT (Supra), theHon’ble Supreme Court has reiterated the well-established principlethat subsequent facts which come to the knowledge of the AssessingOfficer can be taken into account to decide whether the assessmentproceedings should be re-opened or not. 28.Regarding a transaction which is discovered to be bogus aftercompletion of assessment, the Hon’ble Supreme Court held in PhoolChand Bajrang Lal v. ITO, (1993) 4 SCC 77, as follows: - 19. In the present case, as already noticed, the ITO, Azamgarh, subsequentto completion of the original assessment proceedings, on making anenquiry from the jurisdictional ITO at Calcutta, learnt that the CalcuttaCompany from whom the assessee claimed to have borrowed that loan ofRs 50,000 in cash, had not really lent any money but only its name, tocover up a bogus transaction and after recording his satisfaction asrequired by the provisions of Section 147 of the Act proposed to reopen theassessment proceedings. The present is, thus, not a case where the IncomeTax Officer sought to draw any fresh inference, which could have beenraised at the time of original assessment on the basis of the material placedbefore him by the assessee relating to the loan from the Calcutta Companyand which he failed to draw at that time. Acquiring fresh information,specific in nature and reliable in character, relating to the concludedassessment which goes to expose the falsity of the statement made by theassessee at the time of original assessment is different from drawing a freshinference from the same facts and material which was available with theITO at the time of original assessment proceedings. The two situations aredistinct and different. Thus, where the transaction itself on the basis ofsubsequent information, is found to be a bogus transaction, the meredisclosure of that transaction at the time of original assessmentproceedings, cannot be said to be disclosure of the “true” and “full” factsin the case and the ITO would have the jurisdiction to reopen theconcluded assessment in such a case. It is correct that the assessingauthority could have deferred the completion of the original assessmentproceedings for further enquiry and investigation into the genuineness tothe loan transaction but in our opinion his failure to do so and completethe original assessment proceedings would not take away his jurisdiction toact under Section 147 of the Act, on receipt of the informationsubsequently. The subsequent information on the basis of which the ITOacquired reasons to believe that income chargeable to tax had escapedassessment on account of the omission of the assessee to make a full andtrue disclosure of the primary facts was relevant, reliable and specific. Itwas not at all vague or non-specific. (Emphasis supplied) 29.Now we proceed to consider the next submission advanced onbehalf of the petitioner, that the case of M/s Arohul Foods Pvt. Ltd.,which is a sister concern of the petitioner, was re-opened underSection 148 of the Act for A.Y. 2012-13 on similar issues and re-opening of the case in the matter of M/s Arohul Foods Pvt. Ltd. wasquashed by the ITAT, Lucknow Bench vide order dated 11-08-2021.The respondents have stated in the Counter affidavit that the department has not accepted the order of the ITAT and has challengedthe order by filing an appeal under Section 260 A of the Act. Evenotherwise, an order passed by the ITAT would not be relevant whenthe validity of the re-assessment is being examined by this Court in aWrit Petition. Therefore, this submission of the petitioner is alsorejected. 30.The last submission advanced on behalf of the petitioner is thatthe proceedings initiated after a lapse of more than four years arebarred by the First Proviso appended to Section 147 of the Act.Section 147 of the Act, as it stood at the relevant time, was follows: - department has not accepted the order of the ITAT and has challengedthe order by filing an appeal under Section 260 A of the Act. Evenotherwise, an order passed by the ITAT would not be relevant whenthe validity of the re-assessment is being examined by this Court in aWrit Petition. Therefore, this submission of the petitioner is alsorejected. 30.The last submission advanced on behalf of the petitioner is thatthe proceedings initiated after a lapse of more than four years arebarred by the First Proviso appended to Section 147 of the Act.Section 147 of the Act, as it stood at the relevant time, was follows: - “147. Income escaping assessment.— If the Assessing Officer, hasreason to believe that any income chargeable to tax has escapedassessment for any assessment year, he may, subject to the provisions ofSections 148 to 153, assess or reassess such income and also any otherincome chargeable to tax which has escaped assessment and which comesto his notice subsequently in the course of the proceedings under thissection, or recompute the loss or the depreciation allowance or any otherallowance, as the case may be, for the assessment year concerned (hereafterin this section and in Sections 148 to 153 referred to as the relevantassessment year): Provided that where an assessment under sub-section (3) of Section 143or this section has been made for the relevant assessment year, no actionshall be taken under this section after the expiry of four years from the endof the relevant assessment year, unless any income chargeable to tax hasescaped assessment for such assessment year by reason of the failure onthe part of the assessee to make a return under Section 139 or in response toa notice issued under sub-section (1) of Section 142 or Section 148 or todisclose fully and truly all material facts necessary for his assessment, forthat assessment year: ………… Explanation 1.—Production before the Assessing Officer of account booksor other evidence from which material evidence could with due diligencehave been discovered by the Assessing Officer will not necessarily amountto disclosure within the meaning of the foregoing proviso.” (Emphasis supplied) 31.As is evident from the discussions made in the precedingparagraphs of this judgment, the facts regarding the petitioner’sdealings with shell companies for routing its own unaccounted moneyinto its books of accounts had not been truly and fully disclosed by thepetitioner during the original assessment and scrutiny assessment. The petitioner did not furnish complete information regarding its sharetransactions, particularly the information regarding the mode ofreceipt of amount for share transfer, the date of receipt of the amountand the account number in which the money was received. Therefore,the present case falls within the exception carved out in the Firstproviso, “unless any income chargeable to tax has escapedassessment for such assessment year by reason of the failure on thepart of the assesseto disclose fully and truly all material factsnecessary for his assessment, for that assessment year and the bar ofinitiating re-assessment proceedings after a lapse of four years sincethe original assessment contained in the First Proviso appended toSection 147 of the Act, would not apply to the present case.Therefore, the submission to this effect made by the learned Counselfor the petitioner cannot be accepted. 32.Keeping into view the scope of power of judicial review whilescrutinizing a notice issued under Section 148 of the Act as explainedin Raymond woolen Mills Ltd. (1) and (2) and Phool ChandBajarang Lal and Srikrishna (Supra), while examining the validityof the notice issued under Section 148 of the Income Tax Act, we donot have to give a final decision as to whether there is a suppression ofmaterial facts by the assessee or not and the sufficiency or correctnessof the material need not be considered at this stage. In the instant case,the notice under Section 148 of the Act has been issued by theassessing officer after receipt of information and conducting aninvestigation and after forming a reason to believe that the petitionerdid not truly and fully disclose all the material facts at the time oflimited scrutiny assessment, and it has been discovered subsequentlyduring investigation that all the companies through which the entireshare business has been dealt with by the petitioner, are bogus shellcompanies, through which the operators provide accommodationentries for routing the unaccounted money of the petitioner companythrough banking channels in a manner which prima facie makes itappear as a genuine transaction, though actually it is not. Thus taxableincome amounting to Rs.1,08,00,000/- has escaped assessment. Weare satisfied that there is prima facie material available on record before the assessing officer for issuing a notice for reassessment. Thenotice under Section 148 as well as the order dated 03-03-2022 passedby the National Faceless Assessment Centre rejecting the petitioner’sobjections against issuance of the notice, do not suffer from any suchillegality as to warrant interference by this Court in exercise of itsWrit Jurisdiction. 33. The Writ Petition lacks merits and is, accordingly, dismissed. Noorder as to costs. Order Date : 11-04-2022 pks (Subhash Vidyarthi, J.) (Devendra Kumar Upadhyaya, J.)