M/S.thirveni Earthmovers Pvt. Ltd.,22/110, Greenways Raod, Fairlands,Salem – 636 016 v. The Assistant Commissioner Ofincome Tax, Central Circle

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 01.09.2021 CORAM The Honourable Mr.Justice T.S.SIVAGNANAMand The Honourable Mr.Justice SATHI KUMAR SUKUMARA KURUP Judgment Reserved On Judgment Pronounced On 17.08.202101.09.2021 W.A.Nos.1911, 1922 and 1987 of 2021and C.M.P.Nos.12403, 12537, 12469, 12472, 12811 and 12817 of 2021 W.A.No.1911 of 2021 M/s.Thirveni Earthmovers Pvt. Ltd.,#22/110, Greenways Raod, Fairlands,Salem – 636 016.Represented by its Executive Directorand Authorised SignatorySri.B.Karthikeyan ...Appellant/Petitioner -vs- 1. The Assistant Commissioner ofIncome Tax, Central Circle, #3, Gandhi Road, Salem – 636 007. 2. The Deputy Commissioner ofIncome Tax, Central Circle, #3, Gandhi Road, Salem – 636 007. 3. The Deputy Commissioner ofIncome Tax, Circle I, #3, Gandhi Road, Salem – 636 007....Respondents Appeal under Clause 15 of Letters Patent against the orderdated 26.04.2021 made in W.P.No.10846 of 2016. Prayer in W.P.No.10846 of 2016 Writ Petition filed under Article 226 of the Constitution ofIndia to Call for the entire records of the 1st respondentcontained in its impugned order bearing proceedings No.AABCT6759R/2008-09 dated 23.02.2016, and to quash the same and to consequently forbear the respondents or any of theirsubordinates, agents or any other person claiming under therespondents, from in any manner re-assessing the petitionerincome for the assessment year 2008-2009 under section 147 ofthe Income Tax Act, 1961 W.A.Nos.1922 and 1987 of 2021 M/s.Thirveni Earthmovers Pvt. Ltd.,#22/110, Greenways Raod, Fairlands,Salem – 636 016.Represented by its Executive Directorand Authorised SignatorySri.B.Karthikeyan ...Appellant/Petitioner -vs- The Assistant Commissioner ofIncome Tax, Central Circle,#3, Gandhi Road, Salem – 636 007. ...Respondent/Respondent Appeals under Clause 15 of Letters Patent against the commonorder dated 26.04.2021 made in W.P.Nos.38185 and 38186 of 2016respectively. Prayer in W.P.Nos.38185 of 2016 Writ Petition filed under Article 226 of the Constitution ofIndia to Call for the entire records of the respondent containedin its impugned order bearing Proceedings No. AABCT6759R/2009-10 dated 13.10.2016, and to quash the same and to consequentlyforbear the respondent or any of its superiors, subordinates,agents or any other person claiming under or above therespondent, from in any manner re-assessing the petitionerincome for the assessment year 2009-10 under section 147 forthe Income Tax Act, 1961 Prayer in W.P.Nos.38186 of 2016 Writ Petition filed under Article 226 of the Constitution ofIndia to Call for the entire records of the respondent containedin its impugned order bearing Proceedings No. AABCT6759R/2010-11dated 13.10.2016, and to quash the same and to consequentlyforbear the respondent or any of its superiors, subordinates,agents or any other person claiming under or above therespondent, from in any manner re-assessing the petitionerincome for the assessment year 2010-11 under section 147 forthe Income Tax Act, 1961 COMMON JUDGMENT T.S.Sivagnanam, J. The writ petitioner in W.P.Nos.10846/2016, 38185/2016 and38186/2016 is the appellant before us. 2.The prayer sought for in W.P.No.10846 of 2016 is forissuance of writ of Certiorarified Mandamus to quash the orderpassed by the first respondent dated 23.02.2016, by which theobjections raised by the appellant, objecting to the reopeningof the assessment under Section 147 of the Income Tax Act, 1961['the Act' for brevity] was disposed of and for a consequentialdirection to forbear the respondent from in any manner re-assessing the appellant's income for the assessment year 2008-09under Section 147 of the Act. COMMON JUDGMENT T.S.Sivagnanam, J. The writ petitioner in W.P.Nos.10846/2016, 38185/2016 and38186/2016 is the appellant before us. 2.The prayer sought for in W.P.No.10846 of 2016 is forissuance of writ of Certiorarified Mandamus to quash the orderpassed by the first respondent dated 23.02.2016, by which theobjections raised by the appellant, objecting to the reopeningof the assessment under Section 147 of the Income Tax Act, 1961['the Act' for brevity] was disposed of and for a consequentialdirection to forbear the respondent from in any manner re-assessing the appellant's income for the assessment year 2008-09under Section 147 of the Act. 3.Writ Appeal Nos.1922/2021 and 1987/2021 are directedagainst the common order dated 26.04.2021 in W.P.Nos.38185/2016and 38186/2016. The common prayer in both the writ petitions isto quash the order passed by the first respondent dated13.10.2016 by which the objections raised by the appellantagainst the reopening of the assessment under Section 147 of theAct for the assessment year 2009-2010 and 2010-2011 weredisposed of by the respondent. The writ petitions have beendismissed by two separate orders both dated 26.04.2021. 4.Since the petitioner in all the three writ petitions isone and the same, namely, M/s.Thiriveni Earthmovers PrivateLimited, the facts as stated in W.P.No.10846/2016 are taken forconsideration. In this judgment, the appellant shall bereferred to as the assessee and the respondent as the revenue. 5.The assessee is a Company registered under the CompaniesAct, engaged in the business of iron ore mining services,transportation and handling of iron ore and limestone, quarryingof blue metal boulders and sale of blue metals. The assesseefiled its return of income for the assessment year under https://hcservices.ecourts.gov.in/hcservices/ consideration AY 2008-2009 on 30.09.2008 declaring a totalincome of Rs.117,55,95,560/-, the return was processed and theassessee was issued an intimation under Section 143(1) of theAct on 23.09.2009. Subsequently the case was selected forscrutiny and notice under Section 143(2) of the Act dated23.09.2009 was issued. The income tax was computed at higherrate resulting in a total tax demand of Rs.38,82,78,150/- aftercredit for tax deducted at source given for Rs.8,51,06,508/- asagainst the TDS of Rs.9,04,19,747/- claimed by the assessee.The assessee filed an application under Section 154 of the Acton 05.04.2010 to rectify the assessment. The rectificationorder was passed on 28.12.2010 and a revised demand forRs.38,05,14,782/- was issued. Subsequently, assessment wascompleted under Section 143(3) of the Act by order dated31.12.2010. In the said order of assessment, TDS credit wasgiven to the tune of Rs.8,51,06,508/- as against the TDS creditclaimd by the assessee to the tune of Rs.9,04,19,747/-.Therefore, the assessee filed an application under Section 154of the Act on 20.07.2011 on the ground that once TDS amount ofRs.55,65,195/- had not been given credit for was taken intoaccount, the levy of interest under Section 234B of the Actwould be reduced and there would be no further income taxpayable by the assessee. 6.While the application under Section 154 of the Act waspending, the Assessing Officer, the third respondent issuednotice dated 20.02.2015 under Section 148 of the Act to reopenthe assessment for the assessment year 2008-2009 on the groundthat income had escaped assessment. The said notice was issuedafter four years after the end of the relevant assessment year,namely, 2008-2009. The assessee by letter dated 21.04.2015requested the third respondent to furnish the reasons forreopening. On 12.10.2015, the second respondent to whose filethe case was transferred furnished the reasons for reopening.The second respondent stated that it had been seen from the Form26As downloaded that the petitioner was in receipt ofRs.419,47,44,777/- as opposed to the total amount credited tothe P&L account of Rs.387,30,50,376/- and that therefore theDeputy Commissioner of Income Tax had a reason to believe thatincome of Rs.41,59,51,722/- had escaped assessment within themeaning of Section 147 of the Act, that the assessee had claimedless TDS credit in respect of other deductors corresponding tothe TDS of Rs.36,46,935/- claimed by the assessee in itsrectification application dated 20.07.2011 and the assessee hassuppressed income of Rs.2,82,22,870/- on the basis that theassessee had not claimed TDS credit of Rs.6,39,531/-corresponding to the aforesaid income in the return of income. 7.The assessee would contend that the second respondentfailed to show any evidence of any failure on the part of theassessee to fully and truly disclose all materials. Theassessee filed their objections to the reopening on 22.11.2015,among other things, submitting that the reopening was completelyuntenable as complete information was available with theAssessing Officer even at the time of scrutiny under Section 143(3) of the Act and the reopening was contrary to law. Theassessee contended that they had made full and true disclosureduring the scrutiny assessment, the re-assessment cannot beinitiated after four years from the end of the relevantassessment year as per the first Proviso to Section 147 of theAct. It is further contended that there is no tangible materialto come to the conclusion that the income has escapedassessment, reopening is based on mere change of opening,reopening is based on assumptions and surmises, on merits thenotice under Section 148 is illegal and the notice under Section148 was issued with an intention of initiating a rowing andfishing enquiry. The assessee pointed out that the allegationthat they had not disclosed the entire contractual receipts asshown in Form 26AS is incorrect as the said Form is essentiallya consolidated statement, i.e. with the Income Tax Departmentand comprises of details of tax paid and deposited in theDepartment including any TDS deposited on behalf of theassessee. The said objections were rejected and an order to thesaid effect was passed on 23.02.2016 which was impugned in thewrit petition. 8.The facts in the other two writ petitions which order issubject matter of W.A.Nos.1922 and 1987 of 2021 are more or lesssimilar except that they are for the assessment years 2009-2010and 2010-2011 and in those writ petitions, the challenge was tothe rejection of the objections filed by the assessee forreopening of the assessment. 9.Since the appellant is before us questioning the reopeningof the assessment on legal grounds, it may not be necessary tohave a threadbare analysis of the facts and figures and to theextent required, we shall refer to the facts and figures as weproceed to decide the cases on merits. 8.The facts in the other two writ petitions which order issubject matter of W.A.Nos.1922 and 1987 of 2021 are more or lesssimilar except that they are for the assessment years 2009-2010and 2010-2011 and in those writ petitions, the challenge was tothe rejection of the objections filed by the assessee forreopening of the assessment. 9.Since the appellant is before us questioning the reopeningof the assessment on legal grounds, it may not be necessary tohave a threadbare analysis of the facts and figures and to theextent required, we shall refer to the facts and figures as weproceed to decide the cases on merits. 10.The learned Single Bench opined that if there areadditional materials available which satisfies the requirementsof Section 147 of the Act, then it is sufficient for theAssessing Officer to have reason to believe for the purposes ofreopening of assessment. It was further observed that from Form26AS, it is seen that the assessee was in receipt of income of Rs.419,47,44,777/-, whereas the total amount credited to theProfit and Loss account is Rs.387,30,50,376/- and in view of thelarge discrepancy and mismatch, the Assessing Officer had reasonto believe that income of Rs.41,59,51,722/- has escapedassessment within the meaning of Section 147 of the Act due tothe failure on the part of the assessee to disclose all and truematerial facts necessary for the assessment. Further, the Courtobserved that the rectification application dated 20.07.2011submitted by the assessee was considered by the AssessingOfficer and the information was verified and it was found thatthere was huge mismatch in the receipts appearing in Form 26ASvis-a-vis receipts credited in P&L account. Therefore, theAssessing Officer had reason to believe that the income of theassessee has escaped assessment and decided to reopen theassessment. Further, the learned Writ Court took note of thefact that the Assessing Officer relied on Justice MB ShahCommission report which was constituted by the Governments ofIndia to enquire into the cases of illegal mining in the Stateof Odisha. The Court pointed out that the assessee was araising Contractor employed by one KJS Ahulwalia, who was alessee whose name finds place in the Commission's report.Noting the materials available on record, the Court opined thatthere are sufficient reasons to believe that there is escapementof income and the sufficiency of reasons cannot be gone into bythe Court in a writ proceedings under Article 226 of theConstitution of India and those are all matters to beadjudicated before the competent authority and therefore, on thegrounds raised in the writ petition, there is no reason tointerfere with the re-assessment proceedings. 11.In so far as W.P.Nos.38185/2016 and 38186/2016, theassessee contended that the allegation that one M/s.IndraniPatnaik has illegally removed 3,04,568.175 Mts of iron ore withthe assistance of the assessee is only a surmise and not basedon any objective reasons, there is no embargo whatsoever betweenthe alleged dispatch by the mine owner and the assessee being araising contractor does not have power to dispatch the stockwhich belongs to the mine owner and they do not maintain thebooks of accounts pertaining to the production and dispatch ofiron ore. The assessee contended that the Mines Tribunal hadgranted the relief to the mine owner and the entire proceedingswere quashed on 16.01.2012 and prior to issuance of notice underSection 148 of the Act. The said order was put to challenge bythe State of Odisha in W.P.No.10219 of 2012 before the HighCourt of Odisha which was dismissed on 08.08.2016. Therefore,the assessee contended that the entire issue which is subjectmatter of reopening is non-est in law and there cannot be anyreason to believe that income has escaped assessment for theassessment years under consideration, namely, 2009-2010 and2010-2011. 12.The revenue resisted the prayer sought for in the writpetition stating that the Department came to be in possession ofnew issues emanating from Justice MB Shah Commission report onillegal mining in the State of Odisha and on examination of thereport, it reveal that based upon vigilance enquiry by the StateGovernment, the Commission noted that there was huge shortage ofstock valued at Rs.182,74,09,050/- and it gave a finding thatthe lessee M/s.Indirani Patnaik with the help of the assessee,the raising contractor had clandestinely disposed of thematerial without any records for which royalty and sales tax wasnot paid. It was further contended by the revenue that thevigilance inspection was conducted on 24.09.2009 and the periodfor which production and dispatches analysed and shortage ofstock arrived was from May 2008 to September 2009 relevant tothe assessment years 2009-2010 and 2010-2011. Further, as perthe work order dated 24.02.2008 given by M/s.Indrani Patnaik tothe assessee, they were entitled for 35.8% of the net value asits share of income on the value of the ore dispatched whichcomes to Rs.65.2 Crores for the period covered under the report.Thus, it was contended that on receipt of new material based onthe Commission's report, the Assessing Officer had reason tobelieve that there was escapement of income and thus initiatedproceedings under Section 147 of the Act. 13.Further, it was contended that there was failure on thepart of the assessee to disclose fully and truly all materialsas envisaged in Section 147 of the Act and the assessment wasvalidly reopened. There are fresh tangible material and thereare enough reasons which have been set out for reopening theassessment as contained in the orders which were impugned in thewrit petitions. With regard to the writ petition filed by theState of Odisha challenging the order of the Mines Tribunal, theCourt pointed out that what was challenged in the writ petitionis an order dated 16.01.2012 passed by the revisional authorityunder Section 30 of the Mines and Minerals [Development andRegulation] Act, 1957 and admittedly the assessee was not aparty to the proceedings and the writ proceedings were conductedwith reference to the issues in an independent manner and thematerials relied on by the revenue for reopening the assessmenthas not been adjudicated by the High Court in the said writpetition. Further, the Court pointed out that even if therewere certain observations made in the order passed by the HighCourt of Odisha which would enure in favour of the assessee, theassess has to place all facts and circumstances before theAssessing Officer and participate in the re-assessmentproceedings. The discrepancy with regard to the TDS was alsopointed out and the Court came to the conclusion that whenmaterials are available on record, the Assessing Officer shouldallowed to proceed with the reopening proceedings and accordingly held that there are no grounds to interfere with thereopening of the assessment. accordingly held that there are no grounds to interfere with thereopening of the assessment. 14.Mr.R.V.Easwar, learned senior counsel assisted byMr.Suhrith Parthasarathy, learned counsel for the appellantsubmitted that the reopening proceedings do not satisfy the twoconditions under Section 147 of the Act, namely, (a) that theAssessing Officer had reason to believe that income has escapedassessment and (b) such escapement was due to the omission orfailure on the part of the assessee to make a return or todisclose fully and truly all material facts necessary for theassessment for the relevant year. The facts with regard to thescrutiny assessment which we have had set out in the precedingparagraphs were elaborated upon by the learned senior counsel.It is further submitted that Section 147 of the Act is triggeredonly if the Assessing Officer had “reason to believe” thatincome chargeable to tax had escaped assessment and in theabsence of the same, the entire re-assessment proceedings willbe void. Referring to the Constitution Bench judgment of theHon'ble Supreme Court in the case of Muthiah vs. CIT [1956 29ITR 390], it is submitted that the expression 'reason tobelieve' is distinguishable from the expression 'reason tosuspect' and precisely the Assessing Officer has done so andtherefore, the reopening is illegal. 15.With regard to the TDS, it was submitted that thereopening is sought to be done on the basis of Form 26AS and thereport of the Justice MB Shah Commission. The Form 26AS wasavailable with the Assessing Officer during the originalassessment proceedings and it was based on the same, theAssessing Officer granted TDS credit to a certain extent asagainst the TDS credit claimed by the assessee. Therefore, whenthe Assessing Officer has acted on the basis of Form 26ASavailable during the assessment proceedings, the same Form 26AScannot form the basis for reopening under Section 147 of theAct. In so far as Justice MB Shah Commission's report isconcerned, the assessee is neither a party nor referred to inthe said report and nothing has been independently brought outto link the assessee to the alleged excess production by KJSAhulwalia. It is submitted that though the assessee has given adetailed explanation, the same was brushed aside by theAssessing Officer while rejecting the objections to thereopening proceedings. Placing reliance on the decision of theHigh Court of Bombay in Sesa Sterlite Limited and others vs.Assistant Commissioner of Income Tax and others [(2019) 417 ITR334 (Bom)], it is submitted that the opinion expressed byJustice MB Shah Commission report cannot qualify as informationso as to sustain the belief on the part of the Assessing Officer of income having escaped assessment. Therefore, the reopeningof the assessment was bad in law. 16.Reliance was placed on the decision of the High Court ofDelhi in Commissioner of Income Tax vs. Kelvinator India Ltd.. [256 ITR 1] which was confirmed by the Hon'ble Supreme Court.Further, it is submitted that the assessee's books wereavailable with the Assessing Officer at the time of scrutinyassessment and any failure on the part of the Assessing Officerto make due enquiries during the scrutiny does not mean there isa failure on the part of the assessee to make full and truedisclosure. To support such proposition, reliance was placed onthe decision of the Hon'ble Supreme Court in Gemini LeatherStores vs. ITO [(1975) 100 ITR 1(SC)]. Reliance was also placedon the decision of the Constitutional Bench of the Hon'bleSupreme Court in the case of Calcutta Discounts Company Ltd. vs.ITO [(1961) 41 ITR 191 (SC)]. Similar are the arguments in theother two writ appeals. 17.The learned senior counsel submitted that when the writpetition was pending before the learned Single Bench, the Courtnoted that the assessee had filed application under Section 154of the Act as early as on 20.07.2011 and that the disposal ofthe rectification application will have material ramification inthe case in the light of the objections on merits raised by theassessee and direction was issued to the assessee to appearbefore the Assessing Officer and the Assessing Officer wasdirected to dispose of the rectification application afterhearing the assessee prior to the next date of hearing of thewrit petition by order dated 21.10.2019. Subsequently when thecase was heard on 19.11.2019, the revenue produced an orderunder Section 154 of the Act dated 18.01.2013 which in theopinion of the Court did not taken into account the objectionsraised as it is a computer generated order. Therefore, theCourt clarified that the rectification application dated20.07.2011 be heard and a speaking order be passed by theAssessing Officer in the light of the objections raised on themerits by the assessee in the objections dated 23.11.2015 andthe assessee was directed to appear before the AssessingOfficer. 18.Subsequently, an order was passed and when the writpetitions were heard on 22.01.2020, the Court noted that twoorders have been passed by the Assessing Officer dated06.12.2019 and 16.01.2020 and it appears that the orders passedby the Court on 21.10.2019 as clarified on 19.11.2019 had notbeen complied with by the Assessing Officer whereas the revenue took a stand that the directions have been complied with. TheCourt therefore observed that since there is some area of doubtas to whether the order has been complied with or not, it gaveliberty to obtain suitable clarification from the very sameHon'ble Court which passed the order dated 21.10.2019 and19.11.2019 and the matter was adjourned. Subsequently anotherorder was passed by the Assessing Officer on 11.02.2020. Theinterim directions issued in the writ petitions were referred toby the learned senior counsel with a view to impress upon theCourt that when the rectification application was pending, thereis no occasion for the Assessing Officer to reopen theassessment, more particularly, for the reasons which have beenstated to be the basis for the reopening of the assessment. Infact this submission is without prejudice to the othercontentions of the assessee that the entire reopening of theassessment was bad in law. 19.The learned senior counsel referred to the return ofincome filed by the assessee for the assessment year 2008-2009in particular Column No.15 which relates to taxes paid and hasdrawn our attention to paragraph (b) of Column No.15 which dealswith TDS and referred to Schedule TDS 2 which provides for theentire details which were appended to the return of income filedby the assessee. These aspects were referred to, tosubstantiate the contention that all materials were fully andtruly disclosed by the assessee at the time of filing the returnand the scrutiny assessment was done on the same material,reopening could not have been made. The learned senior counselreferred to the rectification application dated 05.04.2010 andthe order rectifying assessment dated 28.12.2010 and thereafterthe second rectification application dated 20.07.2011 which wasnot disposed of and which was noted by the learned Single Benchwhen the writ petition was pending and interim directions wereissued on 21.10.2019. Next, the learned senior counsel hasextensively referred to the reasons for reopening ascommunicated by the assessee vide communication dated12.10.2015. It is submitted that a reading of the reasons forreopening will clearly show that it is based upon the details inForm 26AS which was available with the Assessing Officer at thetime of scrutiny assessment and the same could not have been thereason for reopening. With the above submission, the learnedsenior counsel sought for setting aside the reopening of theassessment for all the three assessment years. 20.Mr.A.P.Srinivas, learned senior standing counselsubmitted that mere production of books of accounts by theassessee cannot tantamount to full and true disclosure as perthe explanation to Proviso to Section 147 of the Act. With 20.Mr.A.P.Srinivas, learned senior standing counselsubmitted that mere production of books of accounts by theassessee cannot tantamount to full and true disclosure as perthe explanation to Proviso to Section 147 of the Act. With regard to the TDS credit, the same is given only as per thecredit available in the Online Tax Accounting System which reflects the correct TDS available to the assessee at thegiven point of time. It is submitted that the provisions ofSection 147 of the Act prior to the amendment and post-amendmentare different and the conditions that were present earlier areno longer required to be fulfilled post amendment of the saidprovision. Further, Explanation 1 to third Proviso isabundantly clear to indicate that mere production before theAssessing Officer, the Accounts books or other evidence fromwhich material evidence could with due diligence have beendiscovered by the Assessing Officer will not necessarily amountto disclosure. Further, it is submitted that the assessee hasspelt out as to what opinion was formed by the Assessing Officerinitially and how the reasons furnished shown change of opinion.The records show that no opinion was formed by the AssessingOfficer during the original assessment proceedings on the issueswhich have been mentioned in the reasons recorded in thereopening of assessment. In other words, it is submitted noopinion had been formed by the Assessing Officer during thecourse of original assessment on the issues under consideration.It is further submitted that the information in Form 26AS whichis a statement of TDS deducted and deposited by itself was notused as a reason for reopening of the assessment. Rather theinformation was matched with the details provided by theassessee in his return of income and accompanyingstatements/documents and on observing that certain receipts ofincome were not accounted by the assessee, the AssessingOfficer formed the belief that income chargeable to tax hadescaped assessment and therefore, has reopened the assessment byissuing notice under Section 148 of the Act. Further, it issubmitted that this observation was made from the rectificationapplication filed by the assessee on 20.07.2011 claimingadditional credit for tax deduction, albeit corresponding incomereceipts had not appeared in the P&L account filed by theassessee along with the return of income. 21.Elaborating on the issue regarding the TDS, it issubmitted that there is a huge difference between the datareflected in Form 26AS and the assessee's statement. Form 26ASis constantly updated from time to time and the figures mayincrease or decrease based on the TDS statement filed by thedeductors. It is further submitted that though the amount ofTDS credited in the assessee's account may vary according tothe e-TDS statement filed by the deductor, the amount of grossreceipts received/receivable by the assessee during thefinancial year is available with the assessee as it followsMercantile System of Accounting. It is submitted that theassessee has credited in his P&L Account an income of Rs.377,87,93,055/- only out of the total receipts of Rs.419,47, 44,777/- and there is a huge difference in the assessee'ssubmission before the Assessing Officer during the course ofassessment and the figures which were reflected in Form 26AS.Therefore, it is submitted that the assessee did not submit thecorrect figures before the Assessing Officer and the facts cameto the knowledge when the assessee filed the rectificationapplication and Form 26AS was downloaded by the AssessingOfficer. Thus, it is clear that there is failure on the part ofthe assessee to disclose fully and truly all materials beforethe Assessing Officer and the reopening of the assessment isvalid. Rs.377,87,93,055/- only out of the total receipts of Rs.419,47, 44,777/- and there is a huge difference in the assessee'ssubmission before the Assessing Officer during the course ofassessment and the figures which were reflected in Form 26AS.Therefore, it is submitted that the assessee did not submit thecorrect figures before the Assessing Officer and the facts cameto the knowledge when the assessee filed the rectificationapplication and Form 26AS was downloaded by the AssessingOfficer. Thus, it is clear that there is failure on the part ofthe assessee to disclose fully and truly all materials beforethe Assessing Officer and the reopening of the assessment isvalid. 22.The learned counsel had referred to the relevant detailsappearing in Form 26AS which has been extracted in ground (f) ofthe counter affidavit to point out that there is a huge mismatchin receipts appearing in Form 26AS vis-a-vis the receiptscredited in the P&L Account. Countering the submissions of thelearned senior counsel that Form 26AS was very much availablebefore the Assessing Officer and based on which TDS credit wasgiven during the course of assessment, it is submitted that theissue for reopening of the assessment is not the TDS credit butthe gross receipts received by the assessee and the assessee hadnot disclosed all the receipts/receivables in his financialstatements which they are bound to do, more so because they arefollowing Mercantile System of Accounting, wherein allreceipts/receivables are recorded in the financial year itself.Therefore, there should not be any deviation in reporting ofthe gross receipts as this figure is very much available withthe assessee and if the assessee had disclosed fully and trulyall material facts before the Assessing Officer, there would notbe any deviation between its financial statement and Form 26AS.Further, it is submitted that as per Justice MB Shah Commissionreport, a tabulated statement has been given which lists out 146lessees who were involved in illegal and excess production ofiron ore during the period 2000-2001 to 2009-2010 and KJSAhulwalia and other persons are lesseses who employed theassessee as raising contractor. The assessee is doingextraction work for the lessee, the contract charges correspondto the value of the excess production was believed to have beensuppressed and hence, the Assessing Officer has rightly reopenedthe assessment. The information in Form 26AS about thereceipts of income found out from the rectification applicationfiled subsequent to the assessment proceedings led to thediscovery of non-disclosure of receipts in the P&L Account whichis a tangible material and hence, exercise of power underSection 147 of the Act is valid. On the above grounds, thelearned senior standing counsel sought to sustain the orderpassed by the learned Writ Court. 23.We have elaborately heard the learned senior counselappearing for the appellant and the learned senior standingcounsel appearing for the respondents. 23.We have elaborately heard the learned senior counselappearing for the appellant and the learned senior standingcounsel appearing for the respondents. 24.We have set out the relevant facts to demonstrate as tohow the proceedings have reached the present stage where theobjections raised by the assessee to the reopening of assessmenthave been rejected. The sum and substance of the contentionsraised by the assessee is that the TDS issue could not have beenthe basis for reopening the assessment as Form 26AS was verymuch available at the time of scrutiny assessment and based uponthe said Form, TDS credit was granted to the assessee and basedon the very same material, the Assessing Officer is notjustified in reopening the proceedings. Secondly it iscontended that there is no fresh tangible material availablewith the Assessing Officer to reopen the assessment and all thatthe Assessing Officer falls back on is the Form 26AS whichcannot be done. Therefore, the submission is that the re-assessment proposed is based on change of opinion and it is notbased upon the facts but merely on assumptions and presumptions.So far as the effect of Justice MB Shah Commission report isconcerned, the assessee would state that they are not party tothe said proceedings and in any event, the revisional authorityhas granted full relief to the lessees and such order passed hasbeen affirmed as the writ petition filed by the State of Odishahas been dismissed by the High Court of Odisha. 25.After carefully going through the material facts, we findthat the case as projected by the assessee does not meritacceptance. We support this conclusion with the followingreasons. Admittedly, the TDS issue cropped up only after theassessee filed a rectification application under Section 154 ofthe Act after the assessment was completed. Therefore, it needsto be examined as to whether the details as contained in Form26AS as filed by the assessee along with the return of incomewas the sole reason for reopening the assessment. When we lookinto the facts we find that after the rectification applicationwas filed, the details in Form 26AS was downloaded by theAssessing Officer and while examining the same, they found thatthere was mismatch of TDS and also the receipts which form theincome of the assessee. This undoubtedly is a tangible materialto form an opinion that the income has escaped assessment. Itis seen that from Form 26AS, the Assessing Officer was able toascertain that the assessee was in receipt of Rs.419,47,44777whereas total amount credited in P&L account isRs.387,30,50,376. The break-up details were noted and it waspointed out that the income mentioned from sale of boulders,transportation receipts, trailer hire receipts and profit on sale of assets would not form part of receipts appearing in Form26AS as tax deduction at source is not required on suchreceipts. Further the assessee has credited in the P&L accountan income of Rs.377,87,93,055/- only out of the total receiptsof Rs.419,47,44,777/- as appearing in Form 26AS. Thus theAssessing Officer while recording reasons for reopening statedthat the assessee has suppressed incoe of Rs.41,59,51,722/- bynot crediting entire receipts as appearing in Form 26AS.Further, the Assessing Officer recorded that even if the entirereceipts of Rs.387,30,50,376/- credited in the P&L Account hassuffered TDS which is much lesser than the amount appearing inForm 26AS which is Rs.419,47,44,777/-. The assessee filedrectification application dated 20.07.2011 wherein they statedthat they have received contract payment of Rs.12,70,89,680/-from Tata Steel Ltd. and claimed corresponding TDS ofRs.28,79,852/-. The Assessing Officer pointed out that as perForm 26AS the assessee is in receipt of contract charges ofRs.1,66,78,156/- only and corresponding TDS of Rs.3,77,927/-. 26.The Assessing Officer has tabulated the parties from whomthey are stated to have received contract charges, whose namesdo not find place in Form 26AS. Such tabulated statement is asfollows: 27.On receiving such details, the Assessing Officer pointedout that there is a huge mismatch in receipts appearing in Form26AS vis-a-vis receipts credited in P&L account. The receiptsand TDS from the above mentioned parties were not appearing inForm 26AS whereas it was claimed by the assessee in therectification application dated 20.07.2011. The AssessingOfficer has recorded that the assessee has claimed less TDS inrespect of some other deductors and thereby suppressedcorresponding receipts to that extent and during the assessmentproceedings, the assessee did not produce the accurateparticulars of income and TDS claimed and it is only after therectification application was filed the issue cropped up.Further the Assessing Officer has noted from the rectificationapplication that the assessee has claimed TDS of Rs.6,39,531/-which was neither claimed in the return under Section 143(1) norduring the assessment proceedings. The details were tabulatedin the following manner: 28.Thus, the Assessing Officer recorded that the assesseenever disclosed and claimed the above TDS during the assessmentproceedings though he had opportunity to do so and therefore,deliberately concealed the particulars during assessmentproceedings. Therefore, we are fully satisfied that the issuewhich is now subject matter of the reopening was never discussedduring the original assessment proceedings and no opinion wasformed by the Assessing Officer during the original assessment proceedings on this issue. In fact, the issue cropped up onlyafter the assessee filed the rectification application.Therefore, the contention of the assessee that the reopening isa case of change of opinion and based on surmises andconjunctures has to be outrightly rejected. 29.Next we consider as to what would be the effect of thereport of Justice MB Shah Commission. The assessee seeks towriggle out from the rigor of the said report by contending thatthey are only a raising contractor, they are not party to theproceedings which were subject matter of reference to theCommission. Admittedly, the lessee who had awarded the raisingcontract to the assessee was a party to the subject matter whichwas referred to the Enquiry Commission. The matter concernedillegal mining in the State of Odisha and there were 146 lesseeswho were involved in the illegal mining and excess production ofiron ore during 2000-2001 to 2009-2010. Though the assessemight not have been party to the subject which was probed by theCommission, the admitted fact is that they were a raisingcontractor for the lessee whose mining activities were subjectmatter of scrutiny by the enquiry commission. The revisionalauthority under the Mines and Minerals [Development andRegulation] Act, 1957 appears to have passed an order in favourof the lessees and the State of Odisha was unsuccessful in thechallenge to the said order of the revisional authority as thewrit petition filed by the State was dismissed. 30.The writ petition filed by the State of Odisha wasdismissed on the technical ground. In any event, it is tooearly for this Court to rule on the effect on the judgment ofState of Odisha qua the assessee and undoubtedly this is amatter which is required to be adjudicated on facts. Thespecific stand of the revenue is that the assessee who was araising contractor engaged for extraction of iron ore by thelessee, the contract charges corresponding to the value of theexcess production has been believed to have been suppressed.This aspect has to be gone into in the re-assessmentproceedings. Therefore, we are of the clear view that theassessee has not made full and true disclosure of all materialfacts during the original assessment, the reopening of theassessment was not based on the change of opinion but the factswhich emanated after the rectification application was filed bythe assessee and it is incorrect on the part of the assessee tostate that the reopening of the original assessment was onassumptions and presumptions. The reliance placed on theinterim directions which were issued during the pendency of thewrit petitions is of little avail as the the main writ petitionshave been dismissed which is subject matter of challenge before us in these appeals. Therefore, the assessee cannot be heard tosay that they can advance their case based on certain interimdirections issued in the writ petitions when the cases werepending before the learned Single Bench. Thus, for all theabove reasons, we hold that the reopening proceedings have beenvalidly done and the assessee should co-operate in the re-assessment to be done by the Assessing Officer. 31.In the result, we find no ground to interfere with thereopening of the assessment in all these cases. Accordingly,the writ appeals fail and are dismissed. No costs.Consequently, connected miscellaneous petition is closed. Sd/- Assistant Registrar(CS VIII) //True Copy// Sub Assistant Registrar cse To 1. The Assistant Commissioner ofIncome Tax, Central Circle, #3, Gandhi Road, Salem – 636 007. 2. The Deputy Commissioner ofIncome Tax, Central Circle, #3, Gandhi Road, Salem – 636 007. 3. The Deputy Commissioner ofIncome Tax, Circle I, #3, Gandhi Road, Salem – 636 007. +3ccs to M/s.Arun Karthik Mohan, Advocate,Sr.43814,43815,43816+1 cc to Mr.A.P.Srinivas,Advocate Sr.No.43883 NR[co]NSK 21/09/2021