Sca/18372/2018 Of Navin R Patel v. The Income Tax Officer Ward 3(2)(3)

C/SCA/17557/2018 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/SPECIAL CIVIL APPLICATION NO. 17557 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 18372 of 2018 FOR APPROVAL AND SIGNATURE: HONOURABLE MR. JUSTICE J.B.PARDIWALA andHONOURABLE MR. JUSTICE ILESH J. VORA ==========================================================1 Whether Reporters of Local Papers may be allowed to see the judgment ?2 To be referred to the Reporter or not ?3 Whether their Lordships wish to see the fair copy of the judgment ?4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ?==========================================================HEVAL NAVINBHAI PATEL C/O KETAN H SHAH VersusINCOME TAX OFFICER WARD 3(2)(2) ==========================================================Appearance:MR KETAN H SHAH(2705) for the Petitioner(s) No. 1MR. AMAN K SHAH(9992) for the Petitioner(s) No. 1MRS MAUNA M BHATT(174) for the Respondent(s) No. 1========================================================== CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALAand HONOURABLE MR. JUSTICE ILESH J. VORA Date : 01/02/2021 ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1. Since the issues raised in both the captioned writ applications are the same and the reasons assigned for the reopening of the assessment are also the same, those were heard analogously and are being disposed of by this common judgment and order.applications are the same and the reasons assigned for the reopening of the assessment are also the same, those were heard analogously and are being disposed of by this common judgment and order. 2. For the sake of convenience, the Special Civil Application No. 17557 of 2018 is treated as the lead matter.Application No. 17557 of 2018 is treated as the lead matter. 3. By way of this writ application under Article 226 of the Constitution of India, the writ applicants have prayed for the following reliefs:the Constitution of India, the writ applicants have prayed for the following reliefs: “A)This Hon'ble Court be pleased to call for the records of the proceedings, look into them and be pleased to issue a writ of certiorari or any other appropriate writ, order or direction quashing the impugned 148 notice dated 05.03.2018 at Annexure -A and objection order dated 19.09.2018 at Annexure – E. B)This Hon'ble Court be pleased to issue a writ of mandamus or any other appropriate writ, order or direction asking the respondent not to proceed further in pursuance of Section 148 notice at Annexure- A and objection order at Annexure – E. C)Pending the hearing and final disposal of this application, this Hon'ble Court be pleased to stay further proceedings in pursuance of section 148 notice at Annexure-A. D)This Hon'ble Court be pleased to grant any further or other relief as this Hon'ble Court deems just and proper in the interest of justice, and E)This Hon'ble Court be pleased to allow this application with costs against the respondent” 4. We may clarify at this stage that the writ applicant herein, namely Heval Navinbhai Patel is the unmarried daughter of the writ applicant of the connected writ application. herein, namely Heval Navinbhai Patel is the unmarried daughter of the writ applicant of the connected writ application. C)Pending the hearing and final disposal of this application, this Hon'ble Court be pleased to stay further proceedings in pursuance of section 148 notice at Annexure-A. D)This Hon'ble Court be pleased to grant any further or other relief as this Hon'ble Court deems just and proper in the interest of justice, and E)This Hon'ble Court be pleased to allow this application with costs against the respondent” 4. We may clarify at this stage that the writ applicant herein, namely Heval Navinbhai Patel is the unmarried daughter of the writ applicant of the connected writ application. herein, namely Heval Navinbhai Patel is the unmarried daughter of the writ applicant of the connected writ application. 5. The subject matter of challenge in the present writ application is to the notice issued by the respondents under Section 148 of the Income Tax Act, 1961 (for short, 'the Act, 1961') for the Assessment Year 2012-13. The reasons assigned for reopening of the assessment for the relevant year vide order 30.07.2018, reads thus: application is to the notice issued by the respondents under Section 148 of the Income Tax Act, 1961 (for short, 'the Act, 1961') for the Assessment Year 2012-13. The reasons assigned for reopening of the assessment for the relevant year vide order 30.07.2018, reads thus: “2. In this connection, please find following reason recorded for reopening of assessment as per direction given by the Hon. Gujarat High Court in special civil application no 3955 of 2014 dated 31-03-2014 in the case of Sahkarikhand Udyog Mandal Ltd; “Reason for reopening of the assessment in the case of Shri Heval Navinbhai Patel A.Y. 2012-13 u/s 147 of the I T Act.” In this case, it is gathered by the undersigned that: The undersigned is in the possession of information that a search u/s. 132/Survey u/s. 133A of the I T Act, 1961, was carried out at the various premises of Venus Group. One of the premises i.e. Crystal Arcade at C G road, Ahmedabad was covered u/s. 132 of the I T Act, 1961 and documents related to unaccounted cash transactions of the Venus Group were seized. On analysis and co-relating of these documents, it was found that unaccounted cash transaction were first recorded on vouchers further these were recorded on the day cash-book. (2)Incriminatingdocumentsrelatingto unaccounted cash: The seized incriminating documents related to unaccounted cash transactions were from the period since January 2007 to 07 March 2015. The transactions were recorded in continuous manner i.e. without any gap and these transactions of unaccounted cash are related to Venus Group and Vaswani Family member. The cash book is written in coded from for name, amounts, dates and estimates etc. Further, the signature on seized unaccounted day cash-book by Shri Deepak Bhudharmal Vaswani/ Ashok Sunderdas Vaswani proves about its verification and authenticity as these transaction entries were supported with supporting vouchers also. (3)Supporting Vouchers: There are two different colours of vouchers i.e. Green and pink coluors. The green colour vouchers are the indicators of receipt of cash whereas pink colour vouchers indicate expenses/ payments. Green colour envelopes contains details of land, survey no., name of broker and vouchers relating to persons(parties). On correlation of the seized evidences, found during the search operation, it has been noticed that the main persons of the group are engaged in huge land dealings and cash books/cash vouchers/day books with sale deeds of land transaction, it is ample clear that there were huge unaccounted cash transaction. (3)Supporting Vouchers: There are two different colours of vouchers i.e. Green and pink coluors. The green colour vouchers are the indicators of receipt of cash whereas pink colour vouchers indicate expenses/ payments. Green colour envelopes contains details of land, survey no., name of broker and vouchers relating to persons(parties). On correlation of the seized evidences, found during the search operation, it has been noticed that the main persons of the group are engaged in huge land dealings and cash books/cash vouchers/day books with sale deeds of land transaction, it is ample clear that there were huge unaccounted cash transaction. (4) EC Transaction: During the search operation at the premise as discussed above, it is noticed that there is a noting as ‘Against EC”. It has been decoded that an “Against EC” transaction is unaccounted day cash receipt and payment of equivalent amount of RTGS in the bank account. For example, if there is cash receipt against EC, it indicated that the Equivalent amount of RTGS has been paid to the other party through banking channel. Thus, one leg of the transaction is reflected in cash book and another leg in the bank book. These ‘Against EC’ vouchers are recorded in the unaccounteddaycashbook’ (5) It is noteworthy that the entries of date and amount are coded from i.e. the date of transaction has been pre-dated by 10 years and the actual amount has been represented in the cash book by taking (1/100t) of the actual value. After, obtaining records from the Sub registrar(s) offices, various beneficiaries have been identified who have transacted in unaccounted cash while dealing with the entities of Venus Group. In addition to the above, it is imperative, to notice that for each land transaction, the actual transaction as unaccounted cash is much higher than the actual value of shown in registered deeds. (6)On the basis of the material seized, it has been found that Shri Heval Navinbhai Patel (PAN- ), is one of the | confirming parties who have sold an immovable property at Village-Ognaj Survey No. 1292b registered on 21.10.2011 vide Sub Registrar, Ahmedabad-2 (Vadaj), registered No. 18921/2011. The total sale consideration as per sale deed is Rs. 5,38,00,000. However, it is gathered in light and on the basis of modus operandi, as discussed in above para(s), Shri Heval Navinbhai Patel has received Rs.9,07,26,000/- as unaccounted cash (on-money) over and above the registered sold value of the land in question. (7) In view of the above and in the opinion of undersigned the income amounting to Rs. 9,07,26,000/- has escaped the assessment year for A.Y. 2012-13 within the meaning u/s. 147 of the I T Act, 1961. Accordingly, a notice under section 148 of the Income Tax Act, 1961 will be issued after obtaining kind approval of the Pr. Commissioner of Income Tax-3, Ahmedabad.” 6. It appears that first in point of time, the writ applicants raised objections dated 03.08.2018 to the above referred reasons. The objections read as under: “That, the reopening has been made based on so called information received during the course of search u/s. 132 survey u/s. 133A in the case of Venus Group and documents seized. It is said that, I have not entered into any transactions with the aforesaid group and facts mentioned in reason recorded, para 2 to 5 are general in nature and not applicable to me. However, if Your Honour is having any statements of Directors / Partners of Venus Group alleging that I have entered into any financial transaction with them, kindly provide the same since this would be “tangible material” for the purpose of sec. 148. 6. It appears that first in point of time, the writ applicants raised objections dated 03.08.2018 to the above referred reasons. The objections read as under: “That, the reopening has been made based on so called information received during the course of search u/s. 132 survey u/s. 133A in the case of Venus Group and documents seized. It is said that, I have not entered into any transactions with the aforesaid group and facts mentioned in reason recorded, para 2 to 5 are general in nature and not applicable to me. However, if Your Honour is having any statements of Directors / Partners of Venus Group alleging that I have entered into any financial transaction with them, kindly provide the same since this would be “tangible material” for the purpose of sec. 148. 2.Now, in reference to para 6 of your reason recorded, there is reference to land at survey no. 1292b, registered on 21.10.2011 wherein, I have been stated to be confirming party. I further say that I have not entered into any such transaction with the Venus Group and therefore, there is no question of the receipt of the amount of Rs. 9,07,26,000/-. 3. I further strongly say that the so called reason recorded is not supported with any seized material found and seized from the premises of Venus Group nor forming part of the reason recorded and therefore, my saying that I have not received any amount of Rs. 9.07 crore is also supported in absence of any supporting evidence. 4.I further object the search reopening which is based on mere general observation nor there is any tangible material or nexus with the so called escapement of income and therefore, the reopening is bad in law. 5. I further say that, there is no reference to any information received from the Assessing Officer of Venus Group in the reason recorded nor there is any application of mind seems to be applied and therefore, the reopening made is bad in law, ab initio void and illegal and therefore, liable to be quashed in toto. 6. Further, there is no such approval u/s. 151 of the prescribed authority and therefore, the reopening made is itself bad in law and void. I hereby say that any correspondence in this regards may please be made at e-mail id necessary speaking order may please be mailed with supporting evidences. “ 7. It appears that the aforesaid noted objections came to be disposed of by the respondents vide order dated 19.09.2018. The same reads thus : “7. After careful consideration of objections of the assessee and on verification of materials available on record it is found that the contention of assessee that the reopening has made on so called information received during the course of search u/s. 132/Survey u/s. 133A is not tenable because the officer was having tangible material on record such as vouchers, day cash book and ledger account of Ognaj 1292, as found and impounded due to search in the form of the information received from the ACIT, Central Circle 1(1), Ahmedabad vide letter dated 07/03/2017. Further, assessee had entered into transaction of sale of immovable property at Village-Ognaj, survey No. 1292/b registration no. 18921/2011 as the capacity of the confirming party. 8.In respect of third Para of objection letter it is to say that the AO had recorded reason on the basis of seize material available on record such as vouchers, day cash book and ledger account of Ognaj 1292, in the form of the information received from the Investigation Wing, Ahmedabad. Farther, the prima-facie belief was that the assessee had received an amount of Rs. 9.07 Crore from the Venus Group is also on the basis of material available on the record. 9, In respect of fourth Para of objection letter it is to say that as discussed in above, reopening is neither mere general observation nor without any tangible material or nexus with escapement of income and therefore, the reopening is as per law. 8.In respect of third Para of objection letter it is to say that the AO had recorded reason on the basis of seize material available on record such as vouchers, day cash book and ledger account of Ognaj 1292, in the form of the information received from the Investigation Wing, Ahmedabad. Farther, the prima-facie belief was that the assessee had received an amount of Rs. 9.07 Crore from the Venus Group is also on the basis of material available on the record. 9, In respect of fourth Para of objection letter it is to say that as discussed in above, reopening is neither mere general observation nor without any tangible material or nexus with escapement of income and therefore, the reopening is as per law. 10. Further, in Para first and sixth of reasons for reopening of assessment there is clearly mentioned that the assessing officer was in the possession of information that a search u/s. 132/Survey u/s. 133A of the I T Act, 1961, was carried out at the various premises of Venus Group. One of the premises i.e. Crystal Arcade at C G road, Ahmedabad was covered u/s. 132 of the I T Act, 1961 and documents related to unaccounted cash transactions of the Venus Group were seized. Therefore, the reopening made is as per law and it is legal. 11. The approval to issue notice u/s. 148 of the I T Act was accorded by the PCIT-3, Ahmedabad vide his letterno. F.No.PCIT3/Ahd/Tech/App.u/s.147/HNP/2017-18 dated 28/12/2017 u/s. 151 of the I T Act after his satisfaction on the reason recorded by the AO that it is a fit case of issuing notice u/s. 148 of the I T Act. 12. Further, it is to mention that the AO is not requiredtofurnishanysupporting evidences/material on the basis of that AO has recorded the reasons for reopening of assessment. There is nowhere in the provisions of Sec.147 r.w.s. 148 of the LT. Act to provide supporting evidence or material. Therefore, the assessee’s request for providing supporting material evidences on the basis of which the AO-has formed the belief of escapement of income cannot be accepted and therefore, the same is hereby rejected. 13.Further, as per the decision rendered by the Hon'ble Supreme Court in the case of ACIT vs. Rajesh Jhaveri Stock Brokers P. Limited {2007} reported in 291 ITR 500, at the stage of initiation of reassessment proceedings under section 147 of the Act, it is not required to be conclusively proven that income has actually escaped assessment. The only requirement is that whether there was any relevant material on which a reasonable person can form the requisite belief that taxable income has escaped assessment. 14. In the case of Raymond Woollen Mills Ltd, vs. ITO [1999] reported in 236 ITR 34, the Hon’ble Supreme Court has held that at the stage of initiation of reassessment, the only thing required to be seen is that whether there is any prima-facie material on the basis of which a case can be reopened. It further held that the sufficiency or correctness of material is not a thing to be considered at this stage. 15. Further, the case of the assessee neither regular assessment u/s. 143(3) nor reopened assessment u/s. 147 of the Act has been conducted earlier in this case. The case of the assessee for A.Y.2012-13 was neither investigated earlier under any of the proceedings of the Income Tax Act. The final conclusion of the facts depends on the outcome of the findings of the presently ongoing re-opening/scrutiny proceedings. 16. In view of the above discussion and the judicial pronouncements in revenue’s favour, the objections raised by the assessee against re-opening of assessment cannot be entertained as the same are without any basis. It may be seen that while re-opening the assessment, proper procedure as per 15. Further, the case of the assessee neither regular assessment u/s. 143(3) nor reopened assessment u/s. 147 of the Act has been conducted earlier in this case. The case of the assessee for A.Y.2012-13 was neither investigated earlier under any of the proceedings of the Income Tax Act. The final conclusion of the facts depends on the outcome of the findings of the presently ongoing re-opening/scrutiny proceedings. 16. In view of the above discussion and the judicial pronouncements in revenue’s favour, the objections raised by the assessee against re-opening of assessment cannot be entertained as the same are without any basis. It may be seen that while re-opening the assessment, proper procedure as per Income tax law has been followed by the Assessing Officer. The case has been reopened well within the time limit prescribed as per the provisions of income-tax Act, 1961 and also on account of the fact that there was reason to believe that the income chargeable to tax has escaped assessment. Since this order has been passed covering all the objections raised by the assessee, all the ground/contentions/objections taken by the assessee in this regard may be treated as “disposed off’. In view of the facts discussed above, assessee’s request to drop the proceedings initiated u/s.147 of the Act is ‘hereby rejected. The facts narrated by the assessee shall be verified and due cognizance and ample opportunity would be given before finalizing the case.” 8. Thereafter, once again the writ applicants lodged further objections dated 22.10.2018, which reads thus: “1. That in para 2 you have stated that there is document seized from Venus Group for Ognaj land survey No.1292 as per A7, page 46 regarding payment made through Bhuro and you also relied upon cash payment voucher as per Annexure A7 page No. 2 to 45. In this connection we hereby say that, even as per the said seized material, there is a mentioning of payment made through Bhuro, however, the said seized material and cash voucher is not proved that the so called Mr.Bhuro has ultimately paid the amount to me. Further, I don’t know any Mr. Bhuro and therefore the reopening made is not based on tangible material. Further, in the said seized material, there is no such signature of me regarding receipt of the said amount. 2. In reference to para 3 it is said that, the approval memo has been provided in a letter dated 19.09.2018. This is factually incorrect and we have not provided any such approval memo sent by you to higher authority as well as order passed by higher authority based on your memo and, therefore, kindly provide the same. 3.Further, we strongly say that there is specific provision in ° search cases to apply section 153C based on the seized material referred by you and also after getting satisfaction note of AO of searched person which is absent in my case. Therefore, notice under Section 147/148 is itself bad in law and void and without jurisdiction or in excess of jurisdiction. 4. Further, without prejudice to the above, there is land sold for survey No.1292B by Mr. Navinbhai, Nikunjbhai and Sachinbhai, however, the confirming parties are, Navin Patel HUF, minor Dishant, Nima N. Patel and Heval Navinbhai. The name of confirming party has been incorporated in the said document without any rights in the aforesaid land but at the instance of the purchaser of the land since he want to incorporated all the family members to avoid future claim by them in the proposed land. As per clause No.2 to 12, there is no such mentioning the facts regarding the legal right of all the confirming parties. Therefore, not a single rupee has been paid by the purchaser to the confirming parties and, therefore, even otherwise so called on money cannot be received by me or any other confirming party. My birth date is 19.07.1993 and, therefore, become major in FY 2010-11. 5. Therefore, we request that kindly dispose of this objection which is based on facts within reasonable which enable us to approach higher authority in the matter. Further, the so called reopening made based on the seized material found, terrace of Crystal Arcade/ Venus Group and therefore there might be some question answer paused to them regarding the seized material relied upon by you and, therefore, kindly provide the same which enable me to give further reply in reference to para 5 of you notice under Section 142(1). “ 9. Being dissatisfied with the aforesaid, the writ applicants have come up before this Court with the present writ applications. 10. The coordinate Bench of this Court passed the following order dated 26.11.2018 : “1.Mr. Ketan Shah, learned advocate for the petitioner has invited the attention of the court to the reasons recorded for reopening the assessment for assessment year 2012-13, to submit that the same is based upon some material from where it is found that the petitioner is one of the confirming parties who sold the immovable property at village Ognaj, Survey No.1292/B, registered on 21.10.2011 and that the total sale consideration as per the sale deed is Rs.5,38,00,000/-. It was pointed out that on the basis of the material seized, the Assessing Officer has sought to reopen the assessment of the petitioner on the ground that the petitioner has received Rs.9,07,26,000/- as unaccounted cash (on-money) over and above the registered sold value of the land in question. The attention of the court was invited to the sale deed of the subject land, to point out that the same reflects that the sale consideration has been received by three persons, viz., Navinbhai Ramabhai, Nikunjkumar Bhikhabhai and Sachin Bhikhabhai, and that nowhere it is reflected in the sale deed that the petitioner has received any consideration. Referring to the copies of the seized material, it was pointed out that insofar as the subject land being village Ognaj, Survey No.1292/B is concerned, the on-money is said to have been paid to Shri Bhuro and that there is no material to connect the petitioner with the seized material. It was submitted that therefore, based upon the seized material, the Assessing Officer could not have formed the requisite belief that any income chargeable to tax has escaped assessment in the case of the petitioner. 2.It was further submitted that in the present case, the material has been seized during the course of search and hence, there is a specific provision in such cases to apply section 153C of the Income Tax Act based on the seized material and hence, the notice under section 148 of the Act reopening the assessment of the petitioner under section 147 of the Act is void and without jurisdiction or in excess of jurisdiction. 3.Having regard to the submissions advanced by the learned counsel for the petitioner, Issue Notice returnable on 24[th] December, 2018. By way of ad-interim relief, the respondent is permitted to proceed further with the assessment; he, however, shall not pass the final order without the permission of this court. Direct Service is permitted.” 11.The connected writ application was ordered to be tagged and heard along with the present writ application.be tagged and heard along with the present writ application. 12.The order passed by the coordinate bench dated 03.12.2018 in the connected writ application reads thus:03.12.2018 in the connected writ application reads thus: “1. Mr. Ketan Shah, learned advocate for the petitioner invited the attention of the court to the order dated 26.11.2018 passed by this court in Special Civil Application No.17557 of 2018 in the case of Heval Navinbhai Patel, who is the son of the petitioner whose income is sought to be added to the income of the present petitioner, wherein this court has issued notice and granted interim relief. Direct Service is permitted.” 11.The connected writ application was ordered to be tagged and heard along with the present writ application.be tagged and heard along with the present writ application. 12.The order passed by the coordinate bench dated 03.12.2018 in the connected writ application reads thus:03.12.2018 in the connected writ application reads thus: “1. Mr. Ketan Shah, learned advocate for the petitioner invited the attention of the court to the order dated 26.11.2018 passed by this court in Special Civil Application No.17557 of 2018 in the case of Heval Navinbhai Patel, who is the son of the petitioner whose income is sought to be added to the income of the present petitioner, wherein this court has issued notice and granted interim relief. 2.For the reasons recorded in the order dated 26.11.2018 passed in Special Civil Application No.17557 of 2018, Issue Notice returnable on 24[th ]December, 2018. By way of ad-interim relief, the respondent is permitted to proceed further with the assessment; he, however, shall not pass the final order without the permission of this court.Direct Service is permitted.” 13.Mr. Ketan Shah, the learned counsel appearing for the writ applicants submitted that the Assessing Officer had no tangible material to form a belief that the income chargeable to tax has escaped the assessment. He would argue that there was no material having any live link with the formation of such belief. Mr. Shah conceded to the fact that so far as the writ applicant of the Special Civil Application for the writ applicants submitted that the Assessing Officer had no tangible material to form a belief that the income chargeable to tax has escaped the assessment. He would argue that there was no material having any live link with the formation of such belief. Mr. Shah conceded to the fact that so far as the writ applicant of the Special Civil Application No. 17557 of 2018 is concerned i.e. Heval Navinbhai Patel, she had not filed her return of income for the relevant assessment year. So far as writ applicant of the connected writ application is concerned i.e. Navinbhai Patel, his return was filed under Section 143 (1) of the Act and the reopening of assessment is beyond the period of 4 years. In the case of Heval Navinbhai Patel, the reopening is within the period of 4 years. Mr. Shah would submit that in a case where the return was originally accepted then, reopening of the assessment would not be permissible. He would further submit that the reasons recorded nowhere indicate or suggest that during the search operation of the premises at the Venus Group, to whom the writ applicants sold the land, it was revealed that there was a huge cash transaction for such purchases. Merely because, the seized documents and other materials prima-facie suggest cash transactions with respect to the sale transaction between the Venus Group and writ applicants, would not automatically imply that the writ applicants had received such cash money. Mr. Shah, would submit that so far as Heval Navinbhai Patel is concerned, she has put her signature in the sale deed as one of the confirming parties. So far as Navinbhai Patel is concerned, his name figures as one of the recipients of a particular amount towards the sale consideration. Mr. Shah would submit that there is nothing to even remotely suggest that Heval Navinbhai Patel had received any cash amount in the sale transaction. He pointed out that so far as Navinbhai Patel is concerned, he received Rs. 26 lakh by way of a cheque towards his share in the property. Mr. Shah submitted that the Assessing Officer has thus proceeded on mere conjunctures and surmises. It is argued that as there is no material on record with the aid of which, the Assessing Officer could form a belief that the income chargeable to tax has escaped assessment, the question of sufficiency of the material would not arise. Mr. Shah would submit that as per the settled law, the notice of reopening has to be evaluated on the basis of the reasons recorded therein. The Assessing Officer cannot improve upon such reasons or deviate from such reasons to support the notice. 14. The second limb of Mr. Shah's argument is that the case on had is one of search. He would argue that the search proceedings were carried out at the premises of the Venus Group and some incriminating material is said to have come to the hands of the Assessing Officer, on the basis of which, he seeks to reopen the assessment. The argument is that the proceedings should have been initiated under Section 153(C) of the Act and not by issuing a notice under Section 148 of the Act for the purpose of reopening of the assessment. 15.In such circumstances referred to above, Mr. Shah prays that there being merit in both his writ applications, those be allowed and impugned notices be quashed.Shah prays that there being merit in both his writ applications, those be allowed and impugned notices be quashed. 16.On the other hand, both the writ applications have been vehemently opposed by Ms. Mauna Bhatt, the learned Senior Standing Counsel appearing for the revenue. 17.Ms. Bhatt would submit that Assessing Officer has recorded proper reasons. There was tangible material collected during the search operations in the case of the Venus Group, prima-facie revealing that huge cash transactions have been taken place in the sale of certain parcels of land. Ms. Bhatt submits that in the case of Heval Navinbhai Patel, the return of income for the relevant assessment year was not filed and the reopening is also within the period of 4 years. She would submit that in view of the explanation 2 to Section 147 of the Act, even where no return of income has been furnished by the assessee though his total income or the total income of any other person in respect of which he is assessable under this Act, it would be deemed to be one of the cases where the income chargeable to tax has escaped the assessment. She would submit that there was material prima-facie suggesting that there were cash transactions. has recorded proper reasons. There was tangible material collected during the search operations in the case of the Venus Group, prima-facie revealing that huge cash transactions have been taken place in the sale of certain parcels of land. Ms. Bhatt submits that in the case of Heval Navinbhai Patel, the return of income for the relevant assessment year was not filed and the reopening is also within the period of 4 years. She would submit that in view of the explanation 2 to Section 147 of the Act, even where no return of income has been furnished by the assessee though his total income or the total income of any other person in respect of which he is assessable under this Act, it would be deemed to be one of the cases where the income chargeable to tax has escaped the assessment. She would submit that there was material prima-facie suggesting that there were cash transactions. 18.In such circumstances referred to above, Ms. Bhatt prays that there being no merit in both the writ applications, those may be rejected.Bhatt prays that there being no merit in both the writ applications, those may be rejected. -ANALYSIS : 19. At the outset, we may record three settled principles of law which would have some bearing in the present of law which would have some bearing in the present 18.In such circumstances referred to above, Ms. Bhatt prays that there being no merit in both the writ applications, those may be rejected.Bhatt prays that there being no merit in both the writ applications, those may be rejected. -ANALYSIS : 19. At the outset, we may record three settled principles of law which would have some bearing in the present of law which would have some bearing in the present set of cases. First is that in a case where the return filed by the assessee is accepted under Section 143 [1] of the Act without scrutiny, since the Assessing Officer had not formed any opinion, the principle of change of opinion would not apply. This has been made sufficiently clear in the case of Assistant-Commissioner of IncomeTax v. Rajesh Jhaveri StockBrokers Private Limited, reported in [2007] 291 ITR 500 in which it was held and observed as under :- "One thing further to be noticed is that intimation under section 143(1)(a) is given without prejudice to the provisions of section 143(2). Though technically the intimation issued was deemed to be a demand Page 9 of 21 C/SCA/16385/2017 JUDGMENT notice issued under section 156, that did not per se preclude the right of the Assessing Officer to proceed under section 143(2). That right is preserved and is not taken away. Between the period from April 1, 1989 to March 31, 1998, the second proviso to section 143(1)(a), required that where adjustments were made under the first proviso to section 143(1) (a), an intimation had to be sent to the assessee notwithstanding that no tax or refund was due from him after making such adjustments. With effect from April 1, 1998, the second proviso to section 143(1)(a) was substituted by the Finance Act,1997, which was operative till June 1, 1999. The requirement was that an intimation was to be sent to the assessee whether or not any adjustment had been made under the first proviso to section 143(1) and notwithstanding that no tax or interest was found due from the assessee concerned. Between April 1, 1998 and May 31, 1999, sending of an intimation under section 143(1)(a) was mandatory. Thus, the legislative intent is very clear from the use of the word intimation as substituted for assessment that two different concepts emerged. While making an assessment, the Assessing Officer is free to make any addition after grant of opportunity to the assessee. By making adjustments under the first proviso to section 143(1)(a), no addition which is impermissible by the information given in the return could be made by the Assessing Officer. The reason is that undersection 143(1)(a)no opportunity is granted to the assessee and the Assessing Officer proceeds on his opinion on the basis of the return filed by the assessee. The very fact that no opportunity of being heard is given undersection 143(1)(a)indicates that the Assessing Officer has to proceed accepting the return and making the permissible adjustments only. As a result of insertion of the Explanation to section 143 by the Finance (No. 2) Act of 1991 with effect from October 1, 1991, and subsequently with effect from June 1, 1994, by the Finance Act, 1994, and ultimately omitted with effect from June 1, 1999, by the Explanation as introduced by the Finance (No. 2) Act of 1991 an intimation sent to the assessee under section 143(1)(a) was deemed to be an order for the purposes of section 246 between June 1, 1994, to May 31, 1999, and under section 264 between October 1, 1991, and May 31, 1999. It is to be noted that the expressions intimation and assessment order have been used at different places. The contextual difference between the two expressions has to be understood in the context the expressions are used. Assessment is used as meaning sometimes the computationofincome,sometimesthe determination of the amount of tax payable and sometimes the whole procedure laid down in the Act for imposing liability upon the tax payer. In the scheme of things, as noted above, the intimation under section 143(1)(a) cannot be treated to be an order of assessment. The distinction is also well brought out by the statutory provisions as they stood at different points of time. Under section143(l)(a)as it stood prior to April 1, 1989, the Assessing Officer had to pass an assessment order if he decided to accept the return, but under the amended provision, the requirement of passing of an assessment order has been dispensed with and instead an intimation is required to be sent. Various circulars sent by the Central Board of Direct Taxes spell out the intent of the Legislature, i.e., to minimize the departmental work to scrutinize each and every return and to concentrate on selective scrutiny of returns. These aspects were highlighted by one of us (D. K. Jain J) in Apogee International Limited v. Union of India (1996) 220 ITR 248]. It may be noted above that under the first proviso to the newly substituted section 143(1), with effect from June 1, 1999, except as provided in the provision itself, the acknowledgment of the return shall be deemed to be an intimation under section 143(1) where (a) either no sum is payable by the assessee, or (b) no refund is due to him. It is significant that the acknowledgment is not done by any Assessing Officer, but mostly by ministerial staff. Can it be said that any assessment is done by them? The reply is an emphatic no. The intimation under section 143(1)(a) was deemed to be a notice of demand under section 156, for the apparent purpose of making machinery provisions relating to recovery of tax applicable. By such application only recovery indicated to be payable in the intimation became permissible. And nothing more can be inferred from the deeming provision. Therefore, there being no assessment under section 143(1)(a) the question of change of opinion, as contended, does not arise." 20.The aforesaid principles were reiterated by the Supreme Court in its later judgment in the case of Deputy Commissioner of Income- Tax & Anr. vs. Zuari Estate Development & Investment Company Limited, reported in [2015] 373 ITR 661 . Supreme Court in its later judgment in the case of Deputy Commissioner of Income- Tax & Anr. vs. Zuari Estate Development & Investment Company Limited, reported in [2015] 373 ITR 661 . 20.The aforesaid principles were reiterated by the Supreme Court in its later judgment in the case of Deputy Commissioner of Income- Tax & Anr. vs. Zuari Estate Development & Investment Company Limited, reported in [2015] 373 ITR 661 . Supreme Court in its later judgment in the case of Deputy Commissioner of Income- Tax & Anr. vs. Zuari Estate Development & Investment Company Limited, reported in [2015] 373 ITR 661 . 21.Despite the position as aforesaid, even in a case where the return of the assessee is accepted without scrutiny under Section 143 [1] of the Act, in order to reopen the assessment, the Assessing Officer must have reason to believe that income chargeable to tax has escaped assessment. This issue has been discussed at considerable length by this Court in the case of Inductotherm [India] Private Limited v. M.-where the return of the assessee is accepted without scrutiny under Section 143 [1] of the Act, in order to reopen the assessment, the Assessing Officer must have reason to believe that income chargeable to tax has escaped assessment. This issue has been discussed at considerable length by this Court in the case of Inductotherm [India] Private Limited v. M.-Gopalan, Deputy Commissioner of IncomeTax, reported in [2013] 36 taxman.com.401/217 Taxman 132 (Mag.)/356 ITR 481 (Guj.) reported in [2013] 36 taxman.com.401/217 Taxman 132 (Mag.)/356 ITR 481 (Guj.) "13. Despite such difference in the scheme between a return which is accepted under section 143(1) of the Act as compared to a return of which scrutiny assessment under section 143(3) of the Act is framed, the basic requirement of section 147 of the Act that the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment is not done away with. Section 147 of the Act permits the Assessing Officer to assess, re-assess the income or re-compute the loss or depreciation if he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. This power to reopen assessment is available in either case, namely, while a return has been either accepted under section 143(1) of the Act or a scrutiny assessment has been framed under section 143(3). A common requirement in both of cases is that the Assessing Officer should have reason to believe that any income chargeable to tax has escaped assessment. 16. It would, thus, emerge that even in case of reopening of an assessment which was previously accepted under section 143(1) of the Act without scrutiny, the Assessing Officer would have power to reopen the assessment, provided he had some tangible material on the basis of which he could form a reason to believe that income chargeable to tax had escaped assessment. However, as held by the Apex Court in the case of Assistant Commissionerof Income Tax v. Rajesh Jhaveri Stock Brokers P. Ltd., (supra) and several other decisions, such reason to believe need not necessarily be a firm final decision of the Assessing Officer." 22.The requirement, thus for reopening of assessment, is "reasonable belief". This expression is not synonymous with Assessing Officer having finally ascertained the fact by any legal evidence or conclusion. In this context, the Supreme Court in the case of Rajesh Jhaveri Stock Brokers Private Limited [Supra] had observed as under :- 22.The requirement, thus for reopening of assessment, is "reasonable belief". This expression is not synonymous with Assessing Officer having finally ascertained the fact by any legal evidence or conclusion. In this context, the Supreme Court in the case of Rajesh Jhaveri Stock Brokers Private Limited [Supra] had observed as under :- "Section 147 authorizes and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word reason in the phrase reason to believe would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with a