Shreenathji Terine Private Limited v. Oral Judgment

IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/SPECIAL CIVIL APPLICATION NO. 19978 of 2019 FOR APPROVAL AND SIGNATURE: HONOURABLE MR. JUSTICE N.V.ANJARIA andHONOURABLE MR. JUSTICE BHARGAV D. KARIA ==========================================================1Whether Reporters of Local Papers may be allowedto see the judgment ?2To be referred to the Reporter or not ?3Whether their Lordships wish to see the fair copyof the judgment ?4Whether this case involves a substantial questionof law as to the interpretation of the Constitutionof India or any order made thereunder ? ==========================================================SHREENATHJI TERINE PRIVATE LIMITED VersusTHE INCOME TAX OFFICER ==========================================================Appearance:MR TUSHAR HEMANI SENIOR ADVOCATE WITH MS VAIBHAVI K PARIKH(3238) for the Petitioner(s) No. 1MR NIKUNT RAVAL WITH MRS KALPANAK RAVAL(1046) for the Respondent(s) No. 1 ========================================================== CORAM:HONOURABLE MR. JUSTICE N.V.ANJARIAandHONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 05/09/2022 ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1.Heard learned Senior Advocate Mr. Tushar Hemani assisted by learned advocate Ms. Vaibhavi Parikh for the petitioner and learned advocate Mr. Nikunt Raval with learned advocate Mrs. Kalpana K. Raval for the respondents. 2.Having regard to the controversy involved inthis petition, with the consent of thelearned advocates for the respective parties,the petition is taken up for final hearing. 3.Rule returnable forthwith. Learned advocateMr. Nikunt Raval waives service of notice ofrule for the respondents. 4.The petitioner has preferred this petitionunder Article 226 of the Constitution ofunder Article 226 of the Constitution of India challenging the impugned notice dated 30.03.2019 issued under section 148 of the Income Tax Act, 1961 (For short “the Act”)proposing to reopen the assessment for theAssessment Year 2012-2013. 5.Brief facts of the case are that the petitioner - company during the Financial Year 2011-2012 relevant to Assessment Year2012-13 issued 80,000 shares of Rs.10/- eachat a premium of Rs.40/- per share to M/s. Indigo Commodeal Pvt. Ltd. Accordingly, thepetitioner received share capital and sharepremium aggregating to Rs.40,00,000/- [i.e.80,000 shares * Rs.50 per share (i.e. Rs.10face value + Rs.40 share premium)] throughbanking channel in two different lots i.e.Rs.25,00,000/-on03.06.2011and Rs.15,00,000/- on 07.07.2011. 5.1) The petitioner filed return of income for the year under consideration on 30.09.2012 declaring total income atRs.9,70,110/-. 5.2) The respondent issued the impugnednotice dated 30.03.2019 under section 148seeking to reopen the case of the petitionerfor the year under consideration. 5.3) The petitioner filed return of income in response to the impugned notice on27.04.2019 and requested the respondent tosupply copy of reasons for reopening theassessment. 5.4) The respondent supplied the copy of reasons for reopening the assessment videletter dated 25.05.2019. The reasons recordedby the Assessing Officer for reopening theassessment under section 147 of the Act readas under : “1. Brief Details of the Assessee: The assessee is a Private Limitedcompany and has filed its return ofincome for A.Y.2012-13 on 30/09/2012bydeclaringofincomeatRs.9,70,110/-. 2. Brief Details of Informationcollected/ received by the AO: 5.3) The petitioner filed return of income in response to the impugned notice on27.04.2019 and requested the respondent tosupply copy of reasons for reopening theassessment. 5.4) The respondent supplied the copy of reasons for reopening the assessment videletter dated 25.05.2019. The reasons recordedby the Assessing Officer for reopening theassessment under section 147 of the Act readas under : “1. Brief Details of the Assessee: The assessee is a Private Limitedcompany and has filed its return ofincome for A.Y.2012-13 on 30/09/2012bydeclaringofincomeatRs.9,70,110/-. 2. Brief Details of Informationcollected/ received by the AO: In this case, an information hasbeen received from the ITO (Inv.)Unit-1 and AIU Kolkata vide letterNo.ITO9Inv.)/U-1/KOL/GirdharilalSharma/35357/2017-18 Dtd. 15/02/2018that Shreenathji Terine PrivateLimited received accommodation entryfrom the alleged company M/s. IndigoCommodeal Pvt. Ltd which had nobusiness activity. On perusal of theBalance Sheet, it is observed thatit had only share premium andinvestment in unquoted shares. Theassessee has shown its fixed assetis nil. On perusal of the bankaccount of Indigo Commodeal Pvt Ltd.it is also observed that there RTGScredits and transfers from differentBank Accounts and simultaneously thesaid amount transferred to thedifferent Bank Account through RTGS/transfer. Subsequently, funds weretransferred to different currentaccounts. As per the Flow Chart fundtransfers in different bank accountsobtained from the bank andbeneficiary, it is noticed that theassessee Company Shreenathji TerinePvt Ltd is one of the beneficiarycompanies who took entries from these shell companies which do nothave any real business and wasoperated only to bring theirunaccounted money in the books. Inthis process, the assessee companyShreenathjiTerinePvt.Ltdgradually brought their unaccountedcash back in the books withoutpaying any tax. The source of fund credited in thebooks of beneficiaries which isproved in above discussion to befund transfer from different shellcompaniesAccounthavingnobusiness. The details of following allegedbank account has been obtained fromBANK OF BARODA. Analysis of thisbank account shows the followingcredit and debit entries:- Further, it is reported that thematter of verification/enquiry washigh value transaction in thecurrent account and the economicrationale behind them. The statementof bank account held by the subjectas given in the dissemination notewereobtained.Thedetailedcomparison of the total amountcredited in the bank account vis-a-vis the gross sales reported has been made about. It is found thatthere is wide difference between thegross receipts disclosed to thedepartment in the return of theincome. So, in order to verify thesource and nature of transactionsnotice was issued to the subject,but the notice/summon couldn't beserved on the assessee personally,so the notice was served byaffixture by deputing the inspectorof unit. However, in spite of that,neither assessee itself nor throughauthorized representative attendedthe office. So the subjectShreenathji Terine Pvt Ltd failed toproduce satisfactory explain of thenature of transactions carried outin the said above bank account. 3. Analysis of information collectedreceived: The information received from theITO (Inv.) Unit-1 and AIU Kolkatahas been carefully considered andfound to be correct on the basisthat for A.Y.2012-13 the assesseehas shown that it has receipt hugeamount as share premium which is notjustifiable in view of thefinancials of the assessee company. 4.Inquiries made by the AO as sequelto information collected/ received: The Return filed by the assessee forA.Y.2012-13 has been perused and itis found that the assessee has shownsales at Rs.9,75,64,421/- and hasshown purchases at Rs.3,43,63,170/-. 3. Analysis of information collectedreceived: The information received from theITO (Inv.) Unit-1 and AIU Kolkatahas been carefully considered andfound to be correct on the basisthat for A.Y.2012-13 the assesseehas shown that it has receipt hugeamount as share premium which is notjustifiable in view of thefinancials of the assessee company. 4.Inquiries made by the AO as sequelto information collected/ received: The Return filed by the assessee forA.Y.2012-13 has been perused and itis found that the assessee has shownsales at Rs.9,75,64,421/- and hasshown purchases at Rs.3,43,63,170/-. The assessee has shown meager ProfitofRs.667337/-frombusinessactivities which is not commensuratewith huge figures of Sales andPurchases. (b) The assessee company ShreenathjiTerine Pvt Ltd is one of thebeneficiary companies who tookentries from shell company which donot have any real business and wasoperated only to bring theirunaccounted money in the books. Inthis process, the assessee companyShreenathji Terine Pvt Ltd graduallybrought their unaccounted cash backin the books without paying any tax. The source of fund credited in thebooks of beneficiaries which isproved in above discussion to befund transfer from shell companyAccount having no real businessactivities. 5. Findings of the AO: From the following points, it may beestablished that the credit entriesof Rs. 40,00,000/- in bank accountof the assessee company held withBank of Baroda Bank are suspiciousand accommodation entry only. (a) The Return filed by the assesseefor A.Y.2012-13 has been perused andit is found that the assessee hasshown sales at Rs.97,564,421/- andhasshownpurchasesatRs.3,43,63,170/- The assessee hasshown meager Net Profit of Rs.667337/-,whichisnotcommensurate with huge figures ofSales and Purchases. (b) The assessee company ShreenathjiTerine Pvt Ltd is one of thebeneficiary companies who tookentries from shell company which donot have any real business and wasoperated only to bring theirunaccounted money in the books. Inthis process, the assessee companyShreenathji Terine Pvt Ltd graduallybrought their unaccounted cash backin the books without paying any tax. The source of fund credited in thebooks of assessee company which isproved in above discussion to beaccommodationentryandfundtransfer from shell company i.e.Indigo Commodeal Pvt.Ltd. which donot having real business activities. 6. Basis of forming reason tobelieve and details of escapement ofincome: From the following points, it may beestablished that the credit entryfrom Indigo Commodeal Pvt. Ltd ofRs. 40,00,000/- in bank account ofthe assessee company is suspiciousand accommodation entry only. (a) The Return filed by the assesseefor A.Y.2012-13 has been perused andit is found that the assessee hasshown sales at Rs.97,564,421/- andhasshownpurchasesatRs.3,43,63,170/-. The assessee has shown meager Net Profit ofRs.667337/-,whichisnotcommensurate with huge figures ofSales and Purchases. (b) The assessee company ShreenathjiTerine Pvt Ltd is one of thebeneficiary companies who took entryfrom shell company which do not haveany real business and was operatedonly to bring their unaccountedmoney in the books. In this process,the assessee company ShreenathjiTerine Pvt Ltd brought theirunaccounted cash back in the bookswithout paying any tax. The source of fund credited in thebooks of assessee company which isproved in above discussion to beaccommodationentryandfundtransfer from shell company l.e.Indigo Commodeal Pvt. Ltd. which donot having real business activities. shown meager Net Profit ofRs.667337/-,whichisnotcommensurate with huge figures ofSales and Purchases. (b) The assessee company ShreenathjiTerine Pvt Ltd is one of thebeneficiary companies who took entryfrom shell company which do not haveany real business and was operatedonly to bring their unaccountedmoney in the books. In this process,the assessee company ShreenathjiTerine Pvt Ltd brought theirunaccounted cash back in the bookswithout paying any tax. The source of fund credited in thebooks of assessee company which isproved in above discussion to beaccommodationentryandfundtransfer from shell company l.e.Indigo Commodeal Pvt. Ltd. which donot having real business activities. As discussed in preceding paras theassessee company has credit ofRs.40,00,000/- in its Bank Accountwhich is a paper transaction only,therefore, as per the provisions ofsection 68 of the IT Act such creditof Rs.40,00,000/- is income of theassessee company which has beenescaped income assessment. In viewof the circumstances and facts ofthe case, I have reason to believethat the income of Rs.40,00,000/-chargeable to tax has escapedassessment for AY 2012-13. Thus, itis a fit case for issue of notice u/s. 148 of the I.T. Act 7. Escapement of Income chargeableto Tax in relation to anyassets(including financial interestin any entity) located outside India Not Applicable 8. Applicability of the provisionsof section 147/ 151 to the facts ofthe In this case a return of income wasfiledfortheyearunderconsideration, but no scrutinyassessment u/s. 143(3) of the Actwas made. Accordingly, in this case,the only requirement to initiateproceeding u/s.147 is reason tobelieve which has been recorded asabove. It is pertinent to mention here thatin this case the assessee has filedreturn of income for the year underconsideration but no assessment asstipulated u/s.2(40) of the Act wasmade and the return of income wasonly processed u/s.143(1) of theAct. In view of the above,provisions of clause (b) ofexplanation 2 to section 147 areapplicable to facts of this case andtheassessmentyearunderconsideration is deemed to be a casewhere income chargeable to tax hasescaped assessment.” 5.5) The petitioner, vide letter dated12.07.2019, requested the respondent tosupply a copy of sanction obtained undersection 151 of the Act, material mentioned inthe reasons for reopening and any othermaterial relied upon by the respondent forreopening the case of the petitioner. 5.6) The respondent, vide letter dated22.08.2019, supplied the copy of approvalaccorded by the Pr.CIT-2, Surat. However, itis the case of the petitioner that otherdocuments, as sought for by the petitioner,were not supplied on the count that the samewas part of Departmental internal procedureso also a confidential matter. 5.7) The petitioner, thereafter videletter dated 03.09.2019, raised objectionsagainst reopening of the assessment. 5.8) The respondent, vide order dated13.09.2019 disposed of such objections raisedby the petitioner and held that the action ofreopening is absolutely justified and validin the eye of law. 5.9) The petitioner, thereafter, vide letter dated 14.09.2019, again requested therespondent herein to supply copy of variousdocuments sought for by the petitioner videits earlier letter dated 03.09.19 except theapproval of the Principal Commissioner ofIncome Tax under section 151 of the Act. 5.10) The respondent, vide letter dated11.10.19, stated that copy of documentssought for by the petitioner were suppliedexcept copy/letter/ documents of informationreceived by the respondent. The informationso received has been communicated to thepetitioner through reasons for reopening. 5.8) The respondent, vide order dated13.09.2019 disposed of such objections raisedby the petitioner and held that the action ofreopening is absolutely justified and validin the eye of law. 5.9) The petitioner, thereafter, vide letter dated 14.09.2019, again requested therespondent herein to supply copy of variousdocuments sought for by the petitioner videits earlier letter dated 03.09.19 except theapproval of the Principal Commissioner ofIncome Tax under section 151 of the Act. 5.10) The respondent, vide letter dated11.10.19, stated that copy of documentssought for by the petitioner were suppliedexcept copy/letter/ documents of informationreceived by the respondent. The informationso received has been communicated to thepetitioner through reasons for reopening. Such documents/ statements received with theinformation could not be supplied as itcontains material not related to thePetitioner and the same is internalcorrespondence of the Department. 5.11) Being aggrieved by the impugnednotice issued under section 148 of the Act,the petitioner has preferred the presentpetition. 6.Learned Senior Advocate Mr. Tushar Hemani forthe petitioner submitted that the impugnednotice under section 148 of the Act, issuedby the respondent is patently bad, illegal,contrary to law and in gross violation of the fundamental rights guaranteed to thepetitioner under Article 14 of the Constitution of India. 6.1) It was submitted that the reasonsfor reopening lacked validity and on thebasis of such reasons, the respondent couldnot have reason to believe that incomechargeable to tax has escaped assessment inthe hands of the petitioner. 6.2) It was submitted that the respondenthas stated in the reasons for reopening thatM/s. Indigo Commodeal Pvt. Ltd. is a papercompany and does not have any businessactivity, however, there is no rational forreaching such a conclusion inasmuch as noperson has given any statement or confessionto the effect that M/s. Indigo Commodeal Pvt.Ltd. is a paper company providingaccommodation entries. 6.3) It was further submitted that M/s.Indigo Commodeal Pvt. Ltd. has filed returnof income for the Assessment Year 2012-2013 on 25.01.2016 declaring business income ofRs.2,82,005/- and the said company beingengaged in the investment activity earnedincome in the form of interest on loans whichis the business income of the said companyand therefore, it cannot be said that nobusiness activity has been carried out by thesaid company. It was further submitted thatperusal of Balance-sheet of M/s. IndigoCommodeal Pvt. Ltd. reveals that the saidcompany has fixed assets in the form ofcomputer as well as furniture and fixturesand therefore, it cannot be said that thesaid company does not have fixed assets. Itwas submitted that assessment in the case ofM/s. Indigo Commodeal Pvt. Ltd. for theAssessment Year 2013-2014 was also framedwherein the business income declared by thesaid company was accepted and the onlydisallowance made while framing assessmentwas the disallowance under section 14A of the Act. M/s. Indigo Commodeal Pvt. Ltd. hasalso filed all the annual return with ROC.The said company has also filed annualaccounts. The status of the said company isactive as is evident from the MCA's masterdetails of the said company. It wastherefore, submitted that M/s. IndigoCommodeal Pvt. Ltd. was not a paper companyand it does carry out its business. Thus, therespondent could not have reason to believethat income chargeable to tax had escapedassessment in the hands of the petitioner. Act. M/s. Indigo Commodeal Pvt. Ltd. hasalso filed all the annual return with ROC.The said company has also filed annualaccounts. The status of the said company isactive as is evident from the MCA's masterdetails of the said company. It wastherefore, submitted that M/s. IndigoCommodeal Pvt. Ltd. was not a paper companyand it does carry out its business. Thus, therespondent could not have reason to believethat income chargeable to tax had escapedassessment in the hands of the petitioner. 6.4) Learned Senior Advocate Mr. Hemanisubmitted that the summons as well as thenotice could not be served to the petitioneras the premises of the petitioner were closeddown on account of discontinuation of thebusiness and neither any notice affixed wasfound by the petitioner nor any efforts weremade at the end of the Department so as to serve the notice through postal authoritiesand therefore, there was no occasion for thepetitioner to comply either with such summonsor any such notice. 6.5) It was submitted that the groundraised by the respondent to the effect thatthe petitioner had meagre profit which is notcommensurate with its sales and purchases, ismerely a passing remark and had the case ofthe petitioner been reopened on the saidcount the it would be nothing but reopeningfor making roving inquiries and the same isnot permissible in the eye of law. Legislature has amended Section 68 of the Actby inserting a proviso which is in respect ofreceipt of share application money, sharecapital and share premium. Such provisorequires that in case of receipts in respect of share capital and share premium, theconcerned person, from whom such funds havebeen received, also need to offer anexplanation about nature and source of suchsum so credited and the same must be foundsatisfactory to the Assessing Officer.However, such amendment is with effect from01.04.2013 and hence, the same is notapplicable for the year under considerationi.e. Assessment Year 2012-2013. It wassubmitted that as per the pre-amendment law,the only burden on the recipient of sharecapital, share premium and/or shareapplication money was to establish identityof concerned person from whom such funds havebeen received as is held by the Apex Court inthe case of CIT v/s. Lovely Exports (P.) Ltd.reported in 216 CTR 195 (SC). It wassubmitted that in the present case identityof the concerned person is not in dispute atall. In fact, the Respondent has mentioned the name of the concerned share applicant inthe reasons for reopening itself which showsthat identity of such persons is not indispute at all, and once identity of theconcerned person has been established, noaddition can be made in the hands of thepetitioner in respect of share capital andshare premium received. 6.7) It was further submitted that the pre-requisite for reopening an assessmentunder section 147 of the Act is that theremust be escapement of any income chargeableto tax. In the case of the petitioner,reopening proceedings have been resorted toin order to tax share capital and sharepremium received during the year underconsideration. It was submitted that Sharecapital and Share premium is a Balance-sheetitem which cannot give rise to a presumptionthat any Income chargeable to tax has escaped assessment. Thus, in absence of any incomechargeable to tax, reopening is not justifiedin the eye of law. Hence, impugned noticedeserves to be quashed and set aside. 6.7) It was further submitted that the pre-requisite for reopening an assessmentunder section 147 of the Act is that theremust be escapement of any income chargeableto tax. In the case of the petitioner,reopening proceedings have been resorted toin order to tax share capital and sharepremium received during the year underconsideration. It was submitted that Sharecapital and Share premium is a Balance-sheetitem which cannot give rise to a presumptionthat any Income chargeable to tax has escaped assessment. Thus, in absence of any incomechargeable to tax, reopening is not justifiedin the eye of law. Hence, impugned noticedeserves to be quashed and set aside. 6.8) It was further submitted thatnotice under section 148 can be issued if andonly if an Assessing Officer has reason tobelieve that any income chargeable to tax hasescaped assessment. It implies that anAssessing Officer himself must be satisfiedthat some income chargeable to tax hasescaped assessment and such satisfaction mustbe of the concerned Assessing Officerhimself. It was submitted that in the presentcase, no such satisfaction has been recordedby the respondent himself. In fact, therespondent has merely relied upon theinformation received from the office of theITO (Inv.), Unit 1 and AIU, Kolkatta for thepurpose of reopening the assessment in the case of the petitioner. In absence of anysuch exercise at the end of the respondent,it becomes clear that the assessment has beenreopenedmerelybasedonborrowedsatisfaction as against the statutoryrequirement of independent satisfaction. 6.9) It was further submitted that as persection 151 of the Act, no notice shall beissued under section 148 of the Act after theexpiry of a period of four years from the endof the relevant assessment year unless thePrincipal Chief Commissioner or ChiefCommissioner or Principal Commissioner orCommissioner is satisfied, on the reasonsrecorded by the Assessing officer, that it isa fit case for the issue of such notice. Itwas submitted that in the present case,reopening is beyond a period of four yearsfrom the end of the relevant assessment yearand hence, sanction of Principal Chief Commissioner or Chief Commissioner orPrincipal Commissioner or Commissioner is tobe mandatorily obtained. 7.On the other hand, learned advocate Mr.Nikunt Raval for the respondent submittedthat in the present case the information wasreceived from the ITO (Inv.) Unit-1 and AIU,Kolkata vide letter dated 15.02.2018 thatShreenathji Terine Private Limited receivedaccommodation entry from the alleged companyM/s Indigo Commodeal Pvt Ltd, which had nobusiness activity. It was submitted that onperusal of the Balance Sheet, it was foundthat it had only share premium and investmentin unquoted shares. The assessee has shownits fixed asset as nil. Upon perusal of thebank account of Indigo Commodeal Pvt Ltd, itwas found that there are RTGS credits andtransfers from different Bank Accounts andsimultaneously the said amount transferred to thedifferentBankAccountthroughRTGS/transfer. Subsequently, funds weretransferred to different current accounts. Asper the Flow chart of fund transfers indifferent bank accounts obtained from thebank and beneficiary, it was noticed that theassessee company - Shreenathji Terine Pvt Ltdis one of the beneficiary companies who tookentries from these shell companies which donot have any real business and was operatedonly to bring their unaccounted money in thebooks. It was submitted that the assesseecompany - Shreenathji Terine Pvt Ltdgradually brought their unaccounted cash backin the books without paying any tax. It wassubmitted that the details of alleged bankaccount have been obtained from Bank ofBaroda which shows the following credit anddebit entries: 7.1) It was submitted that upon detailedcomparison of the total amount credited inthe bank account vis-a-vis the gross sales it 7.1) It was submitted that upon detailedcomparison of the total amount credited inthe bank account vis-a-vis the gross sales it was found that there is wide differencebetween the gross receipts disclosed to thedepartment in the return of the income. So, in order to verify the source and nature of transactions notice was issued but thenotice/summon could not be served on theassessee personally, so the notice was servedby affixture by deputing the inspector ofunit. However, in spite of that, neitherassessee itself nor through authorizedrepresentative attended the office. 7.2) Relying upon the judgment of thisCourt in case of M/s Peass Industrial Engineers Pvt. Ltd. Vs DCIT reported in(2016) 72 Taxmann 302 (Gujrat), it wassubmitted that from the material available onrecord, if the Assessing Officer formedreasonable belief that income of the assesseehas escaped assessment then the reopening ofassessment was justified. 7.3) It was submitted that upon theinformation available before the Assessing Officer, at the initial stage what isrequired is reason to believe, but notestablished fact of escapement of Income. Insupport of such submission, reliance wasplaced on the decision in case of A Raman &Co., reported in 67 ITR 11 (SC), as well asin case of Kalyanji Mavji reported in 102 ITR287 (SC). 7.4) It was submitted that the contentionof the petitioner that the re-opening lacked validity cannot be accepted as the case wasreopened after the satisfaction arrived at bythe the Assessing Officer and after takingdue approval of the Higher Authorities. 7.5) It was submitted that contention ofthe petitioner that there is an amendment toSection 68 of the Act with effect from01.04.2013 and hence the same is not applicable for the year under considerationand the assessee has to just establish theidentity of the concerned person form whosuch funds are received, such facts could beverified and established only when theassessment is reopened. 7.6) Reliance was placed on the decision ofthis Court in case of Rainbow Texchem (P)Ltd. v. Income-tax officer reported in (2021)129 taxmann.com 85 (Gujarat) to contend thatwhere Assessing Officer issued a reopening notice against assessee on the ground that aninformation was received from investigatingwing that during a survey conducted in caseof a person, several material was impoundedwhichrevealedaccommodationentries,impugned notice for reopening the assessmenton the basis of said information was justified. 8.Having heard the learned advocates for therespective parties and having considered thefacts and materials placed on record, itappears that relying upon the informationreceived from the Investigation Wing of thedepartment, considering it is as a dependablesourceofinformationthroughwhomtransaction being undertaken by the assesseeare collected and disseminated, the AssessingOfficer has formed the reason to believe that income has escaped assessment on theassumption that source of funds credited in the books of the petitioner company is a fundtransferred from different shell companyaccount having no business. 9.However, it is the case of the assessee thaton the basis of the documentary evidenceavailable on record of the department, M/s. Indigo Commodeal Pvt. Ltd. was having business income and not the Income from OtherSources and the assessment order passed undersection 143(3) for the Assessment Year 2013-2014 would also show that the company isengaged in the business. It was also pointedout that M/s. Indigo Commodeal Pvt. Ltd. hasfiled annual return with ROC showing thestatus of the company as active. 10.In absence of any tangible material withthe respondent Assessing Officer, reopeningnotice issued merely on the basis of information would be without jurisdiction as 9.However, it is the case of the assessee thaton the basis of the documentary evidenceavailable on record of the department, M/s. Indigo Commodeal Pvt. Ltd. was having business income and not the Income from OtherSources and the assessment order passed undersection 143(3) for the Assessment Year 2013-2014 would also show that the company isengaged in the business. It was also pointedout that M/s. Indigo Commodeal Pvt. Ltd. hasfiled annual return with ROC showing thestatus of the company as active. 10.In absence of any tangible material withthe respondent Assessing Officer, reopeningnotice issued merely on the basis of information would be without jurisdiction as there is no nexus between the informationcoming in possession of the Assessing Officerand formation of belief that incomechargeable to tax has escaped assessment. 11.The Assessing Officer while dealing withthe objections raised by the petitioner hasmerely relied upon the information receivedfrom Investigation Wing of the department onthe basis of an entry of Rs. 40 lakhs for theFinancial Year 2011-2012 which is squared upduring the year only. Therefore, in the factsof the case, there is no income which hasescaped assessment except one entry of Rs. 40lakhs being debited and credited in the booksof the petitioner company for the year underconsideration. Merely because the assesseehas shown a meagre profit of Rs.6,67,337/-from the business activity which according tothe Assessing Officer do not commensuratewith the figures of sale and purchase amountingtoRs.9,75,64,421/-and Rs.3,43,63,170/- respectively, the AssessingOfficer could not have formed any reasonablebelief that income has escaped assessmentonly because of one debit and credit entry ofRs. 40 lakh in the bank account of thepetitioner company held with Bank of Barodaon the presumption that same is suspiciousand accommodation entry only. 12.ThustheAssessingOfficerhas endeavored to review the assessment which hasbeen completed under section 143(3) of theAct in absence of any prima facie materialavailable with the Assessing Officer toreopen the case of the petitioner. The ApexCourt in case of Commissioner of Income taxv. Kelvinator of India Ltd. reported in(2010) 320 ITR 561(SC) has held as under: “2. A short question which arisesfor determination in this batch of civil appeals is, whether theconcept of "change of opinion"stands obliterated with effect from1st April, 1989, i.e., aftersubstitution of Section 147 of theIncome Tax Act, 1961 by Direct TaxLaws (Amendment) Act, 1987? xxxx 6. …………prior to Direct Tax Laws(Amendment) Act, 1987, re-openingcould be done under above twoconditions and fulfillment of thesaid conditions alone conferredjurisdiction on the AssessingOfficer to make a back assessment,but in section 147 of the Act [witheffect from 1st April, 1989], theyare given a go-by and only onecondition has remained, viz., thatwhere the Assessing Officer hasreason to believe that income hasescapedassessment,confersjurisdiction to re- open theassessment.Therefore,post-1stApril, 1989, power to re-open ismuch wider, However, one needs togive a schematic interpretation tothe words "reason to believe"failing which, we are afraid,Section 147 would give arbitrarypowers to the Assessing Officer tore-open assessments on the basis of"mere change of opinion", whichcannot be per se reason to re-open.We must also keep in mind theconceptual difference between powerto review and power to re-assess.The Assessing Officer has no power to review; he has the power to re-assess. But re-assessment has to bebased on fulfillment of certain pre-condition and if the concept of"change of opinion" is removed, ascontended on behalf of theDepartment, then, in the garb of re-opening the assessment, review wouldtake place. One must treat theconcept of "change of opinion" as anin-built test to check abuse ofpower by the Assessing Officer…..” 13.In view of above facts and settled legal position, the contentions raised on behalf of the respondent authority as well asreliance placed on decisions would not beapplicable in facts of the case. 14.For the foregoing reasons, the petitionsucceeds and the impugned notice dated30.03.2019 issued under section 148 of theAct by the respondent exercising the powersto reopen the assessment for the AssessmentYear 2012-2013 is illegal and hereby quashedand set aside. As a consequence, order dated13.09.2019 of the Assessing Officer disposing of the objections of the petitioner againstthe impugned notice is also quashed and setaside. 15.Rule is made absolute to the aforesaidextent. No order as to costs. (N.V.ANJARIA, J) RAGHUNATH R NAIR (BHARGAV D. KARIA, J)