S. Raheja Realty Pvt. Ltd v. Appearance

IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/SPECIAL CIVIL APPLICATION NO. 16627 of 2022 ========================================================== S. RAHEJA REALTY PVT. LTD. Versus OFFICE OF THE INCOME TAX OFFICER, WARD 4(1)(1), AHMEDABAD ========================================================== Appearance: MR PRIYAM M SHAH(12095) for the Petitioner(s) No. 1 for the Respondent(s) No. 1 ========================================================== CORAM:HONOURABLE MR. JUSTICE N.V.ANJARIAand HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 30/08/2022 ORAL ORDER (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1.By this petition under Article 226 of the Constitution ofIndia, the petitioner has prayed for the following reliefs. “(a) To quash and set aside the ImpugnedOrder dt. 26.07.2022 passed under Section148A(d) and Impugned Notice dt. 26.07.2022issued under Section 148 of the Income TaxAct, 1961 for A.Y. 2015-16 annexed atAnnexure - "A (Colly.)" to this Petition; (b) Pending admission, hearing and finaldisposal of this Petition, this Hon'ble Court maykindly be pleased to stay and suspend effect,operation and implementation of the ImpugnedOrder dt. 26.07.2022 passed under Section148A(d) and Impugned Notice dt. 26.07.2022issued under Section 148 of the Income TaxAct, 1961 for A.Y. 2015-16 annexed at Annexure - "A (Colly.)" to this Petition; (c) Pending admission, hearing and finaldisposal of this Petition, this Hon'ble Court maykindly be pleased to restrain the Respondentincluding any persons claiming through orunder the Respondent from proceeding withassessment/ reassessment proceeding inrespect of the Petitioner for AY 2015-16 infurtherance of the Impugned Order dt.26.07.2022 passed under Section 148A(d) andImpugned Notice dt. 26.07.2022 issued underSection 148 of the Income Tax Act, 1961 forA.Y. 2015-16 annexed at Annexure - "A (Colly.)"to this Petition; (d) Grant ex parte ad interim reliefs in terms ofprayer (b) and (c) hereinabove; (e) Any other and further relief, which is justand proper, may kindly be granted as may bedeemed expedient by this Hon'ble Court in thefacts and circumstances of the case. (f) Award cost of the present Petition.” 2.The brief facts of the case are that the petitioner is acompany incorporated under the provisions of Companies Act,1956. The petitioner filed its return of income for assessmentyear 2015-16 under Section 139(1) of the Income Tax Act, 1961(for short ‘the Act, 1961’) on 28.9.2015 declaring total income ofRs.32,27,720/-. 3.A notice under Section 143(2) was issued on 11.04.2016and notice under Section 142(1) was issued on 2.8.2017 uponthe petitioner along with questionnaire seeking various detailsincluding bank account details, bank statement and auditedannual reports. 3.1The petitioner filed its reply on 23.8.2017 providing copiesof the documents sought by the Assessing Officer. Afterconsidering the reply of the petitioner, the Assessing Officerpassed the assessment order dated 6.9.2017, assessing the totalincome of the petitioner at Rs.35,81,230/- making addition onaccount of interest on excess capital contribution in a LimitedLiability Partnership. 3.2The respondent issued a notice under Section 148 of theAct on 9.6.2021 to reopen the assessment for assessment year2015-16. 3.A notice under Section 143(2) was issued on 11.04.2016and notice under Section 142(1) was issued on 2.8.2017 uponthe petitioner along with questionnaire seeking various detailsincluding bank account details, bank statement and auditedannual reports. 3.1The petitioner filed its reply on 23.8.2017 providing copiesof the documents sought by the Assessing Officer. Afterconsidering the reply of the petitioner, the Assessing Officerpassed the assessment order dated 6.9.2017, assessing the totalincome of the petitioner at Rs.35,81,230/- making addition onaccount of interest on excess capital contribution in a LimitedLiability Partnership. 3.2The respondent issued a notice under Section 148 of theAct on 9.6.2021 to reopen the assessment for assessment year2015-16. 3.3Pursuant to the order passed by the Apex Court in case ofUnion of India and Ors. Vs. Ashish Agarwal and Ors., [2022SCC Online SC 543] the respondent issued a notice underSection 148A(b) of the Act. Prior to issuance of such notice, thepetitioner filed return of income pursuant to notice underSection 148 on 30.6.2021. Copy of reasons were also provided tothe petitioner on 5.7.2021, wherein it was stated that thepetitioner was beneficiary of accommodation entries / bogusloan to the tune of Rs.2,07,00,000/- with a third party that isShiv Shakti Trading Company and subsequently received thesame from Talland Data Soft Private Limited. 3.4The petitioner filed the objections on 8.7.2021 andthereafter filed further objections on 22.7.2021. The petitionerthereafter preferred Special Civil Application 6460 of 2022before this court challenging the notice dated 9.6.2021. Thiscourt disposed of the said petition on 5.5.2022 in view of thejudgment of the Apex Court in the case of Ashish Agarwal (supra). 3.5The respondent authority thereafter issued notice dated25.5.2022 followed by notice dated 16.6.2022 requiring thepetitioner to furnish details in pursuance to the notice underSection 148A (b), which is issued by the respondent authority inview of the Instruction No.01/22 issued by the Central Board ofDirect Taxes providing guidelines to all the officers to befollowed for reopening assessment under the new regime and asper the judgment of the Hon’ble Supreme Court. 3.6The petitioner thereafter filed a reply to the aforesaidnotices on 20.6.2022. The respondent authority by the impugnedorder passed under Section 148A (d) of the Act dated 26.7.2022,rejected the objections filed by the petitioner and issued a noticeby under Section 148 of the Act. Being aggrieved, the petitionerhas preferred this petition. 4.Learned advocate Mr.Priyam Shah for the petitionersubmitted that the respondent authority has not considered theobjections raised by the petitioner though the petitioner has filedall the details including the bank statement, audit reports inform 3CB and 3CD as required during the course of regularassessment under Section 143(d) of the Act. 4.1It was submitted that the petitioner has raised an objectionto the effect that the petitioner has never received the amount ofRs.1,87,00,000/-, but the petitioner has received onlyRs.20,00,000/- from Talland Data Soft Private Limited. It wassubmitted that the petitioner has never been given any further details except the copy of the note received from DDIT,(Investigation), Unit-3(3), Kolkata dated 20.3.2020 and as thename of the petitioner appears in the said note of havingreceived Rs.2,07,00,000/- from the Talland Data Soft PrivateLimited, the impugned reopening of assessment is initiated bythe respondent authority. It was submitted that the respondentauthority has not considered the objections raised by thepetitioner and the petitioner is deprived of the opportunity todeal with the details in possession of the respondent authority asthe same were not disclosed to the petitioner. details except the copy of the note received from DDIT,(Investigation), Unit-3(3), Kolkata dated 20.3.2020 and as thename of the petitioner appears in the said note of havingreceived Rs.2,07,00,000/- from the Talland Data Soft PrivateLimited, the impugned reopening of assessment is initiated bythe respondent authority. It was submitted that the respondentauthority has not considered the objections raised by thepetitioner and the petitioner is deprived of the opportunity todeal with the details in possession of the respondent authority asthe same were not disclosed to the petitioner. 4.2It was submitted that the loan received by the petitioner ofRs.20,00,000/- from the Talland Data Soft Private Limited is nota bogus loan and merely because DDIT, (Investigation), Unit-3(3), Kolkata, has provided information that the party fromwhom the petitioner has received the loan has done transactionwith another party which is a shell entity, it cannot lead to‘belief’ that the transaction of the loan were also bogus. It wassubmitted that it is far fetched conclusion with no rationalconnection to the facts and evidence on record and is based onassumption and suspicion which cannot be said to be areasonable belief. It was submitted that the provisions of Section147 are not at all attracted as can be seen from the reasonsgiven in the impugned order passed under Section 148A (d) andhence the proceeding being invalid and against the law, ought tohave been dropped. 4.3In support of his submissions, learned advocate Mr.PriyamShah referred to and relied upon the decision of High Court ofCulcutta in Civil M.A.T No.917 of 2022 in case of Maharaja Edifice Private Limited Vs. Union of India and Ors. tosubmit that the reasons provided to the petitioner did notcontain any information but it is titled as ‘cash relatedinformation detail’ and such information cannot be said to besufficient for reopening of the assessment. 4.4It was submitted that the Culcutta High Court whileallowing the petition, quashed and set aside the order passedunder Section 148(d) and the matter was remanded to theAssessing Officer to pass a fresh order for considering theobjections of the petitioner in the said case. 4.5Learned advocate for the petitioner further relied upondecision of this court in Divya Jyoti Diamonds Private Limited Vs. Income Tax Officer reported in [439 ITR 471(Gujarat)], wherein also this court remanded the matter back tothe Assessing Officer as no reasons were assigned in the orderrejecting the objections filed by the petitioner in response to thenotice issued under the old regime. 5.Having considered the submissions made by learnedadvocate for the petitioner, it would be germane to refer to theprovisions of Section 148 which have been substituted by theFinance Act, 2021 with effect from 1.4.2021. “Issue of notice where income has escapedassessment. 148. Before making the assessment,reassessment or recomputation under section147, and subject to the provisions of Section148A, the Assessing Officer shall serve on theassessee a notice, alongwith a copy of the order passed, if required, under clause (d) of Section148A, requiring him to furnish within suchperiod, as may be specified in such notice, areturn of his income or the income of any otherperson in respect of which he is assessableunder this Act during the previous yearcorresponding to the relevant assessment year,in the prescribed form and verified in theprescribed manner and setting forth such otherparticulars as may be prescribed; and theprovisions of this Act shall, so far as may be,apply accordingly as if such return were areturn required to be furnished under section139: passed, if required, under clause (d) of Section148A, requiring him to furnish within suchperiod, as may be specified in such notice, areturn of his income or the income of any otherperson in respect of which he is assessableunder this Act during the previous yearcorresponding to the relevant assessment year,in the prescribed form and verified in theprescribed manner and setting forth such otherparticulars as may be prescribed; and theprovisions of this Act shall, so far as may be,apply accordingly as if such return were areturn required to be furnished under section139: Provided that no notice under this section shallbe issued unless there is information with theAssessing Officer which suggests that theincome chargeable to tax has escapedassessment in the case of the assessee for therelevant assessment year and the AssessingOfficer has obtained prior approval of thespecified authority to issue such notice. Explanation 1.-For the purposes of this sectionand section 148A, the information with theAssessing Officer which suggests that theincome chargeable to tax has escapedassessment means, (i) any information flagged in the case of theassessee for the relevant assessment year inaccordance with the risk management strategyformulated by the Board from time to time; (ii) any final objection raised by the Comptrollerand Auditor General of India to the effect thatthe assessment in the case of the assessee forthe relevant assessment year has not beenmade in accordance with the provisions of thisAct.” 6.On perusal of the Explanation (1) of the Section 148, it isclear that that for the purpose of Section 148A, the information with the Assessing Officer which suggests that the incomechargeable to tax has escaped assessment means anyinformation flagged in the case of the assessee for the relevantassessment year in accordance with the risk managementstrategy formulated by the Board from time to time. 7.In the facts of the case, the information is available withthe Assessing Officer as per related information details onrecord containing the Investigation Report in case of one ShivShakti Trading Company wherein the DDIT, (Investigation),Unit-3(3), Kolkata has given details with regard to theaccommodation entry given by the said Shiv Shakti TradingCompany, who is stated to have received unexplained andundisclosed fund for more than Rs.37 crores for the assessmentyear 2015-16, which in turn has been given to Talland Data SoftPrivate Limited and other entities and the assessee has alsoreceived the fund from the said Talland Data Soft PrivateLimited as can be seen from the Entry Nos.21 and 22 of the listof the beneficiaries of the account of Talland Data Soft PrivateLimited available at the Page No.139 of the petition. 8.Therefore, it is apparent that the information relevant forthe assessment year in accordance with the Risk ManagementStrategy formulated by the Board from time to time is availableand therefore we are of the opinion that Assessing Officer hasrightly issued the notice by rejecting the objections of theassessee by referring to such information and considering thesame in detail, the impugned order passed under Section148A(d) of the Act is passed giving cogent reasons for rejectingthe objections of the assessee in accordance with the provisions of the Act. 9.In view of the facts as narrated in para 7 herein abovecoupled with the facts obtaining on record, the Assessing Officerhas rightly treated the case to be a fit case for exercising powersof reopening of assessment. The provisions under Section 148Aof the Act are duly noted and necessary conditions are satisfiedwhich has resulted into impugned notice under Section 148 ofthe Act. No case is made out for interference. 10.In view of the above forgoing reasons, we are of the viewthat the petition is devoid of any merits and is accordinglydismissed. No order as to cost. of the Act. 9.In view of the facts as narrated in para 7 herein abovecoupled with the facts obtaining on record, the Assessing Officerhas rightly treated the case to be a fit case for exercising powersof reopening of assessment. The provisions under Section 148Aof the Act are duly noted and necessary conditions are satisfiedwhich has resulted into impugned notice under Section 148 ofthe Act. No case is made out for interference. 10.In view of the above forgoing reasons, we are of the viewthat the petition is devoid of any merits and is accordinglydismissed. No order as to cost. (N.V.ANJARIA, J) Manshi (BHARGAV D. KARIA, J)