M/S. Ankur Power Projects Pvt Ltd v. The Income Tax Ofïcer 15(1)(1) & Ors

IN THE HIGH COURT OF JUDICATURE AT BOMBAYO.O.C.J.WRIT PETITION NO. 187 OF 2019 M/s. Ankur Power Projects Pvt Ltd..Petitioner Versus The Income Tax OfÏcer 15(1)(1) & Ors...Respondents ................... Mr. Devendra H. Jain a/w Mr. Dharan Gandhi for the PetitionerMr. Devendra H. Jain a/w Mr. Dharan Gandhi for the Petitioner Mr. Suresh Kumar for the RespondentsMr. Suresh Kumar for the Respondents ................... CORAM : AKIL KURESHI & M.S. SANKLECHA, JJ. DATE : MARCH 8, 2019. P.C.: 1.The petitioner has challenged a notice of reopening ofassessment dated 28.3.2018 seeking to reopen thepetitioner's assessment for the assessment year 2010-11.The Assessing OfÏcer had supplied the reasons for reopening the assessment to the petitioner in which it was conveyedthat the Assessing OfÏcer had received information from theinvestigation wing of the department concerning one AbhijitSharma and the statement of account No. 1670301130608 ofICICI Bank was summoned for a period from 1.4.2010 to31.3.2013. The Assessing OfÏcer further stated that :- "..... On perusal of bank statement, it is seen that huge amount wasdeposited in the above mentioned account mainly through clearing /transfer / RTGS which were followed by transfer of the said fundsthrough cheque in the accounts of M/s. Ankur Power Project Pvt Ltd/ in different dates totaling to Rs. 3,04,98,000/-. The DDIT has concluded with the following remarks:- "When the ITD analysis of M/s. Abhijit Sharma wasdone, it was found that these entities are having low /NIL turnover and meager profit after tax (PAT). Primafacie, it seems that this company have been used forrouting of unaccounted funds." Thus, it is seen that M/s. Ankur Power Project Pvt Ltd is one ofthe beneficiary of accommodation entries from Abhijet Sharma. Theamount involved in the transaction is Rs. 3,04,98,000/- for AY 2011-12." 2.The case of the petitioner is that the reasons proceeded on entirely incorrect factual basis, that the assessee hadreceived a sum of Rs. 3.04 crores on different dates from thesaid account number 1670301130608 of ICICI Bank whichwas towards bogus accommodation entries. It is the case ofthe petitioner that no such amount was received from suchbank account and in fact, the petitioner had invested suchsum of Rs. 3.04 crore with one M/s. Kirlampudi CommercePvt Ltd who is the holder of the account in question. 3.The petitioner had raised objections to the notice ofreopening of assessment under a communication dated12.10.2018. Such objections were rejected by the AssessingOfÏcer on 5.11.2018. As per the decision of this Court in thecase Asian Paints Ltd Vs. Dy. CIT & Anr.[1], the AssessingOfÏcer had to wait for a period of four weeks after disposal ofthe objections before finalizing the assessment. Withoutdoing so, the Assessing OfÏcer passed reassessment orderon 3.12.2018. The petitioner has, therefore, challenged thevery reassessment proceedings as well as the order passedpursuant to such notice. 4.As noted, the case of the petitioner is that the reasonsproceeded on erroneous grounds and that such objectionwas taken in the communication dated 8.10.2018. Learnedcounsel for the department, however, submitted that no suchspecific objection was taken as is now being taken before thisCourt in the objections and that, therefore, the AssessingOfÏcer had no occasion to meet with such a pointed factualassertion. 1(2008) 296 ITR 90 (Bom) 4.As noted, the case of the petitioner is that the reasonsproceeded on erroneous grounds and that such objectionwas taken in the communication dated 8.10.2018. Learnedcounsel for the department, however, submitted that no suchspecific objection was taken as is now being taken before thisCourt in the objections and that, therefore, the AssessingOfÏcer had no occasion to meet with such a pointed factualassertion. 1(2008) 296 ITR 90 (Bom) 5.Under any circumstances, the action of the AssessingOfÏcer to pass the final order of assessment even before theperiod of four weeks as envisaged by the decision of thisCourt in the case of Asian Paints Ltd (supra) had expired,cannot be approved. The Assessing OfÏcer has filed anafÏdavit apologizing for such lapse of which we take note.The order of assessment, therefore, shall have to be setaside. While doing so, in view of the peculiar facts of thecase, we permit the petitioner to file further objections to thenotice of reopening of assessment. This recourse we adoptfor the reason that the assessee had raised the ground of thereasons proceeding on incorrect factual premise, but thepointed objection as is elaborated before us now was nottaken. If the assessee is correct in contending that thereasons proceeded on entirely erroneous footing and thateven going by record, in case of the petitioner, it cannot bestated that the income chargeable to tax had escapedassessment, surely reassessment proceedings would be afutile exercise. 6.Under these circumstances, we dispose of the petition with following directions:- i.Impugned order of the assessment dated 3.12.2018 is quashed.The proceedings are revived from the stage of issuance of noticeof reassessment. The proceedings are revived from the stage of issuance of noticeof reassessment. ii. The petitioner shall raise sufficient objections to thereassessment proceedings latest by 25.3.2019.reassessment proceedings latest by 25.3.2019. iii. The Assessing Officer shall dispose of such objections latest by30.4.2019.30.4.2019. iv. By and under this order, notice of re-assessment shall bedeemed to have been stayed from the date of its issuance for afurther period of four weeks after the order disposing of suchobjections is communicated to the petitioner, such stay of noticeof reopening shall continue.deemed to have been stayed from the date of its issuance for afurther period of four weeks after the order disposing of suchobjections is communicated to the petitioner, such stay of noticeof reopening shall continue. With these directions, Writ Petition is disposed of. [ M.S. SANKLECHA, J. ] [ AKIL KURESHI, J ]