Wp/2760/2019 Of Jainam Investments v. Assistant Commissioner Of Income Tax,Central Circle-8(1) And 2 Ors

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.2760 OF 2019 Jainam Investments)No.11-A, 5[th] Floor, Rockside Apartment,)A-Wing, Walkeshwar Road, Walkeshwar,)Mumbai – 400 006) ….Petitioner V/s.1. Assistant Commissioner of Income Tax,)Central Circle – 8 (1), Mumbai,)Aayakar Bhavan, Maharishi Karve Road,)Mumbai – 400 020)2. Additional Commissioner of Income)Tax, Central Range – 8, Mumbai,)Aayakar Bhavan, Maharishi Karve Road,)Mumbai – 400 020)3. Union of India)though the Secretary, Department of)Revenue, Ministry of Finance,)Government of India, North Block, New)Delhi – 110 001) ….Respondents ---- Mr. Madhur Agrawal a/w. Mr. Fenil Bhatt i/b. Mr. Atul Jasani for petitioner.Mr. Suresh Kumar a/w. Ms. Mohinee Chougule and Mr. Rahul Dubey forrespondents. ---- CORAM : K.R.SHRIRAM, & ABHAY AHUJA, JJ DATED : 24[th] AUGUST 2021 ORAL JUDGMENT : (PER K.R. SHRIRAM, J.) 1 Since pleadings are completed, we decided to dispose of this petition at the admission stage itself. Rule. Rule made returnable forthwith. 2Petitioner has approached this Court aggrieved by a noticedated 11[th] October 2018 under Section 148 of the Income Tax Act, 1961(the said Act) by which respondent no.1 has decided to reopen theassessment for the Assessment Year 2014-2015. Petitioner is alsochallenging the order dated 28[th] September 2019 passed by respondent no.1rejecting the objections raised by petitioner to the notice issued underSection 148 of the Act. 3Petitioner is a partnership firm engaged in the business oftrading in shares and securities. For the Assessment Year 2014-2015,petitioner filed its income tax returns on 27[th] September 2014. In theincome tax returns, petitioner has provided particulars of each loan ordeposit taken exceeding the limit specified in Section 269SS and 269Tduring the previous year. The particulars are contained in the annexuressubmitted with the returns. 4Petitioner received a notice dated 28[th] July 2016 underSub-Section 1 of Section 142 of the Act calling upon petitioner to produceor cause to be produced the accounts and/or documents specified atAnnexure ‘A’ to the said notice. Annexure ‘A’ contained 14 items on whichinformation was called for but what is relevant to this petition are theinformation sought at serial no.6 and serial no.12 in the Annexure ‘A’ and itreads as under : 6. Other Liabilities :- Details of Unsecured loans/depositstaken, whether squared up or not, in the following format.Also furnish confirmations from loan creditors showing PAN, names and designations of their assessing officers, copy ofaccount and furnish bank statements reflecting thereceipt/repayment of loan. 12. Please furnish reconciliation of AIR information (Copyenclosed) along with supporting evidence, thereof andreconciliation of TDS claimed as per certificates and theincome offered in the P&L account. 5By its Chartered Accountant’s letter dated 8[th] August 2016petitioner gave details regarding all unsecured loans that is pertaining toitem 6 quoted above. The list contained 58 entries and it gave the names ofthe entities from which the loan was taken alongwith its PAN number,address, opening balance, amount accepted, amount repaid, closing balanceas on 31[st] March 2014, interest accrued/paid and TDS on interest. Petitionerhas also annexed copies of the income tax returns filed by all those58 entities. Ofcourse in the petition only certain specimen income taxreturns have been annexed. Subsequently, petitioner, by its CharteredAccountant’s letter dated 14[th] December 2016, gave details/reply regardingitem 12 quoted above, i.e., annual information report of Shreenath, whichfor ease of reference is referred to as penny stock company. 5 Thereafter, an assessment order dated 20[th] December 2016 was passed by which respondent no.1 held that petitioner had takenaccommodation entries of fresh bogus loan from the following entities : 5 Thereafter, an assessment order dated 20[th] December 2016 was passed by which respondent no.1 held that petitioner had takenaccommodation entries of fresh bogus loan from the following entities : Respondent no.1 concluded that these entities are dummyconcerns being managed and operated by one Bhanwarlal Jain and thatthey are used as conduits for providing accommodation entries of loans andadvances to various beneficiaries. In the order, respondent no.1 even reliedupon reports of search on Bhanwarlal Jain group and came to a conclusionthat a total outstanding balance amount of Rs.8,75,00,000/- as on25[th] February 2014, which petitioner has shown as a loan from the13 entities mentioned above, should actually be added to the total incomeof petitioner. In other words, respondent no.1 disallowed a sum ofRs.8,75,00,000/- being maximum outstanding loan balance as on25[th] February 2014 under Section 68 of the Act and brought that amount totax. Respondent no.1 also disallowed certain amounts shown as interest andalso commission paid on these loans. Respondent no.1 added a total sum ofRs.9,01,20,042/- to the total income of petitioner. Respondent no.1 did notdeal with the notice issued regarding penny stock company and the replythat was received from petitioner with regard thereto. 6 Aggrieved by this order of respondent no.1 adding a sum ofRs.9,01,20,042/- to its total income, petitioner filed an appeal before theCommissioner of Income Tax (Appeals) [CIT (Appeals)]. The CIT (Appeals),by an order dated 6[th] November 2017 allowed petitioner’s challenge to the assessment order. The CIT (Appeals) relied upon the orders passed inpetitioner’s case for Assessment Year 2012-2013 and Assessment Year 2013-2014 where it is observed that petitioner had done everything in its powerto prove the satisfactory nature of the loan transactions by providing PANdetails of creditors, constitution and address of the creditors, particulars ofincome tax returns filed by the creditors, confirmatory letters given by thecreditors, audited financial accounts (including balance sheet) of thecreditors, relevant bank statements of the creditors, details of interest paidto the creditors and details of TDS deducted and paid. The CIT (Appeals)had held that the onus thereafter shifted to the Assessing Officer and if theAssessing Officer was still not satisfied, he had the option of makinginquiries from the alleged lenders by summoning them. But as seen fromthe assessment order, nothing of that kind was done. The CIT (Appeals) alsohad held that if the Assessing Officer was not satisfied with what had beengiven to him by petitioner, he was duty bound to specify what morematerial he wanted petitioner to furnish, which was never asked. The CIT(Appeals) held that no cogent material was adduced to show that thoseloans were unexplained and the loans regarding those 13 entities should betreated as explained satisfactorily. The CIT (Appeals) had finally concludedthat the assessment order has to fail because reliance was made oninadequate evidence, failure to make incriminating material like reports,statements etc. forming basis for action by the Assessing Officer was notmade available, petitioner was not given due opportunity to cross examine witnesses whose statement have been relied upon and finally failure torecognise the satisfactory nature of the explanation/evidence tendered bypetitioner to explain identity of creditors, creditworthiness of the creditorsand the genuineness of the loan transactions. The facts of the case forAssessment Year 2014-2015 being similar, CIT (Appeals) in its orderconcluded “The facts of the present appeal are similar to the facts inappellant’s own case in AY 2012-13 and AY 2013-14. Respectfully followingthe various judicial pronouncements cited by the appellant in itssubmissions dated 04.09.2017, and also appellate orders in the assessee’sown case for AY 2012-13 and AY 2013-14, as reproduced above, I hold thatthe Appellant had explained the identity of loan creditors, theircreditworthiness and genuineness, with necessary documents and hasdischarged its onus of proving the credits. The AO has failed to dischargehis duty of rebutting the evidences produced by the appellant and alsofailed in bringing on record any assessee specific evidence to prove his case.Hence, the AO was not justified in making addition u/s. 68 of the Act, ofunsecured loans aggregating to Rs.8,75,00,000/- taken by the appellantfrom various parties belonging Bhanwarlal Jain Group by treating the sameas bogus or non-genuine”. Revenue, unhappy with this order of the CIT (Appeals),challenged it before the Income Tax Appellate Tribunal. The Income TaxAppellate Tribunal by its order pronounced on 8[th] February 2019, dismissedthe appeal of the Revenue. We are not made aware of any appeal filed challenging this order of the Income Tax Appellate Tribunal. 7Before the order was passed by the Income Tax AppellateTribunal, respondent no.1 issued a fresh notice dated 11[th] October 2018under Section 148 of the Act stating that he had reasons to believe thatpetitioner’s income chargeable to tax for the Assessment Year 2014-2015has escaped assessment within the meaning of Section 147 of the Act. In thereasons for reopening, respondent no.1 after mentioning about the loantaken by petitioner from the 13 entities mentioned in paragraph 5 abovesimply says : “In addition to the above loans, there are certain other loanstaken by M/s. Jainam Investment from the concerns ownedby Shri Rajesh Jain and Shri Manish Jain (the sons of ShriBhanwarlal Jain) which are controlled directly or indirectlyby Shri Bhanwarlal Jain. The details of such concerns thathave provided said bogus loans to M/s. Jainam Investmentsare as under : Respondent no.1 further states that petitioner has traded in thescript of Shreenath (incorrectly mentioned as Shrenth), which is a pennystock company and is a beneficiary to gain the bogus short term capital lossin the sum of Rs.2,91,61,107/-. Respondent no.1 concludes that he was satisfied that an action under Section 147 is warranted by the reason of thefailure on part of the petitioner to disclose fully and truly all material factsand hence, it is proposed to reopen the assessment for the Assessment Year2014-2015 under Section 147. The satisfaction is contained in the last paragraph of the reasons to believe, which reads as under : Respondent no.1 further states that petitioner has traded in thescript of Shreenath (incorrectly mentioned as Shrenth), which is a pennystock company and is a beneficiary to gain the bogus short term capital lossin the sum of Rs.2,91,61,107/-. Respondent no.1 concludes that he was satisfied that an action under Section 147 is warranted by the reason of thefailure on part of the petitioner to disclose fully and truly all material factsand hence, it is proposed to reopen the assessment for the Assessment Year2014-2015 under Section 147. The satisfaction is contained in the last paragraph of the reasons to believe, which reads as under : In view of the above and taking into consideration thecontents of statement on oath recorded u/s. 132 (4) of theIncome Tax Act, 1961 of Shri Bhanwarlal Jain dated11.10.2013 regarding the assessee’s indulgence in theacceptance of accommodation entries from entities operatedby Bhanwarlal Jain and family concerns mentioned supra andalso having regard to the unscrupulous activities ofBhanwarlal Jain Group of entities. Information received fromthe Kolkata Investigation Wing regarding dealing in pennystocks and creating fictitious profits/losses to reduce the taxliability; the undersigned has reason to believe that theincome chargeable to tax has escaped assessment at least tothe extent of Rs.20,16,61,106/- in the case of the abovementioned assessee within the meaning of Section 147 of theIncome Tax Act, 1961. Further, I am satisfied that an actionu/s 147 is warranted by the reason of the failure on part ofthe assessee to disclose fully and truly all material facts.Accordingly, the assessment for A.Y. 2014-15 is proposed tobe reopened u/s 147 by issue of notice u/s 148 of the Act”. 8Petitioner replied to this notice by a letter dated 12[th] November 2018. Main grounds, among many other, taken are that reassessment isproposed (a) merely on account of change of opinion and (b) there is nofresh tangible material to come to a different conclusion. During the courseof arguments, Mr. Agrawal submitted an additional ground that there wastotal non-application of mind both by respondent no.1 in recording thereasons for initiating proceedings under Section 147 of the Act and byAdditional CIT in granting the approval. We shall discuss with that later. 9Dealing with the reopening for the five allegedly bogus loantransactions, Mr. Agrawal submitted (a) it is settled law that reassessmentproposed merely on account of change of opinion is not permissible;(b) review in the garb of reassessment is absolutely prohibited and theCourts have consistently held that reassessment cannot be allowed in suchsituation of change of opinion; and (c) presence of fresh tangible material isa sine-qua-non for a valid reassessment. According to Mr. Agrawal, thestatement of Mr. Bhawarlal Jain is the sole basis for the proposed additionthat was recorded on 11[th] October 2013. The statement of Mr. HemalJhaveri recorded in survey proceedings, post the search on Bhanwarlal Jaingroup was also recorded on 16[th] October 2014 and 18[th] October 2014. Theoriginal assessment, after considering all these material, was completed on20[th] December 2016 and therefore, it is clear that all the material, which arebeing considered now, were also considered at the stage of originalassessment and there is absolutely no fresh tangible material available withthe department which can lead to a different conclusion. Mr. Agrawalsubmitted that alongwith the annual returns, details of the loans taken bythese five companies have also been given in response to the first showcause notice dated 28[th] July 2016, list of 58 companies with all details havebeen provided including annual returns etc. and these have been factuallyconfirmed in the order passed by the CIT (Appeals) and there is nothing toconclude that there was failure on the part of petitioner to disclose fully andtruly all material facts. 10 Relying upon the judgment of this Court in Aroni CommercialsLtd. V/s. Deputy Commissioner of Income Tax 2 (1)1, Mr. Agrawalsubmitted that once a query is raised during the assessment proceedingsand the assessee has replied to it, it follows that the query raised was asubject of consideration of the Assessing Officer while completing theassessment. It is not necessary that an assessment order should containreference and/or discussion to disclose its satisfaction in respect of thequery raised. Mr. Agrawal submitted that if the Assessing Officer hasconsidered the objection raised in the grounds for issuing notice underSection 148 of the Act during the original assessment proceedings but hasnot rejected those objections, the Assessing Officer is deemed to haveaccepted the objection. On the issue of penny stock company, Mr. Agrawalsubmitted that explanation was given in the reply to the first show causenotice and in the original assessment order, the Assessing Officer does noteven deal with that and therefore, it should be held that he has accepted theexplanation. Mr. Agrawal also submitted that even these points are notraised by the Revenue before the CIT (Appeals) and Income Tax AppellateTribunal. Mr. Agrawal also submitted that in the reason for initiatingproceedings, in column 7, respondent no.1 has stated that explanation 2(b)to Section 147 was applicable, whereas what was applicable was 2(c). Mr.Agrawal submitted that explanation 2(b) to Section 147 is where a return ofincome has been furnished but no assessment has been made, whereas what 1. (2014) 44 taxmann.com 304 (Bombay) would have been applicable was 2(c) which applies to the case where anassessment has been made but income chargeable to tax has been underassessed. Mr. Agrawal also submitted that in column 8, respondent no.1 hassaid that the assessment is proposed to be made for the first time, whereasthe answer should have been negative. These points were not disputed byMr. Suresh Kumar. Mr. Agrawal further submitted that in the reason forreopening, in the first paragraph itself, it is mentioned that previousassessment was completed on 20[th] December 2016 and if only theAdditional CIT had read that, he would not have signed the form seekinghis approval. Therefore, even the approval has been granted withoutapplication of mind, which is one more ground to set aside the reassessmentnotice and the rejection of the objections raised by petitioner. 11Mr. Suresh Kumar in response submitted that it was not achange of opinion but new material was obtained. Mr. Suresh Kumar readout the reasons for reopening to submit that fresh material was obtained.Mr. Suresh Kumar also submitted that five entities from whom loans weretaken by petitioner are owned by Shri Rajesh Jain and Shri Manish Jain (thesons of Shri Bhanwarlal Jain) and therefore, they are different from the13 entities mentioned above. Mr. Suresh Kumar submitted that it was theduty of petitioner to disclose fully and truly all material facts and they didnot disclose that they have taken bogus entry loans from these five entities.Mr. Suresh Kumar relied upon a judgment of the Apex Court in Phool 11Mr. Suresh Kumar in response submitted that it was not achange of opinion but new material was obtained. Mr. Suresh Kumar readout the reasons for reopening to submit that fresh material was obtained.Mr. Suresh Kumar also submitted that five entities from whom loans weretaken by petitioner are owned by Shri Rajesh Jain and Shri Manish Jain (thesons of Shri Bhanwarlal Jain) and therefore, they are different from the13 entities mentioned above. Mr. Suresh Kumar submitted that it was theduty of petitioner to disclose fully and truly all material facts and they didnot disclose that they have taken bogus entry loans from these five entities.Mr. Suresh Kumar relied upon a judgment of the Apex Court in Phool Chand Bajrang Lal V/s. Income Tax Officer2 to submit that it was open tothe Assessing Officer to reopen the assessment if he finds that thetransactions are found to be bogus and mere disclosure of that transactionat the time of original assessment proceedings cannot be said to be adisclosure of the material facts truly and fully and the ITO would have thejurisdiction to reopen the concluded assessment in such a case. Mr. SureshKumar also relied upon a judgment of this Court in Export Credit GuaranteeCorporation of India Ltd. V/s. Additional Commissioner of Income Tax[3] tosubmit that where the Assessing Officer has tangible material to come to theconclusion that there is an escapement of income from assessment, thepower to reopen can be exercised. 12 It is settled law that where the assessment is sought to bereopened after the expiry of a period of four years from the end of therelevant year, the proviso to Section 147 stipulates a requirement that theremust be a failure on the part of the assessee to disclose fully and truly allmaterial facts necessary is not applicable. Where the assessment is sought tobe reopened within a period of four years of the end of the relevantassessment year, the Apex Court in Commissioner of Income Tax V/s.Kelvinator of India Limited[4] has laid down the test of the principle whichreads as under : "Therefore, post 1[st] April, 1989, power to reopen is muchwider. However, one needs to give a schematic interpretationto the words "reason to believe" falling which, we are afraid,wider. However, one needs to give a schematic interpretationto the words "reason to believe" falling which, we are afraid, 2. (1993) 69 Taxman 627 (SC) 3. (2013) 30 taxmann.com 211 (Bombay)4. (2010) 320 ITR 5614. (2010) 320 ITR 561 s. 147 would give arbitrary powers to the AO to reopenassessments on the basis of "mere change of opinion", whichcannot be per se reason to reopen. We must also keep inmind the conceptual difference between power to review andpower to reassess. The AO has no power to review; he hasthe power to reassess. But reassessment has to be based onfulfillment of certain pre- condition and if the concept of"change of opinion" is removed, as contended on behalf ofthe Department, then, in the garb of reopening theassessment, review would take place. One must treat theconcept of "change of opinion" as an inbuilt test to checkabuse of power by the AO. Hence, after 1 st April, 1989, AOhas power to reopen, provided there is "tangible material" tocome to the conclusion that there is escapement of incomefrom assessment. Reasons must have a live link with theformation of the belief. Our view gets support from thechanges made to s. 147 of the act, as quoted hereinabove.Under the Direct Tax Laws (Amendment) Act, 1987,Parliament not only deleted the words "reason to believe" butalso inserted the word "opinion" in s. 147 of the Act.However, on receipt of representations from the companiesagainst omission of the words "reason to believe", Parliamentre-introduced the said expression and deleted the word"opinion" on the ground that it would vest arbitrary powers inthe AO". In the case at hand, the assessment is sought to be openedwithin a period of four years and hence, the proviso to Section 147 of theAct is not applicable. In the case at hand, the assessment is sought to be openedwithin a period of four years and hence, the proviso to Section 147 of theAct is not applicable. 13It is also trite that the Assessing Officer cannot reopen anassessment even within a period of four years merely on the basis of achange of opinion. The Assessing Officer has no power to review anassessment which has been concluded. Certainly where he has tangiblematerial to come to the conclusion that there is an escapement of incomefrom assessment, the power to reopen can be exercised. What is tangible issomething which is not illusory, hypothetical or a matter of conjecture. InExport Credit Guarantee Corporation of India Ltd. (Supra), the Court held that even a single ground on the basis of which the assessment is sought tobe reopened is valid and within jurisdiction, the notice for reopening of theassessment would have to be upheld. That is once a tangible basis has beendisclosed for reopening the assessment. But in the reasons to believe in thepresent case apart from there being non application of mind as submitted byMr. Agrawal, with whom we concur, we find not even a single ground ismentioned on the basis of which the assessment is sought to be reopenedwith regard to the five entities. There is no tangible basis that has beendisclosed for reopening the assessment. The Assessing Officer simply statesas quoted above “in addition to the above loans, there are certain otherloans taken by M/s. Jainam Investment from the concerns owned byShri Rajesh Jain and Shri Manish Jain (the sons of Shri Bhanwarlal Jain)which are controlled directly or indirectly by Shri Bhanwarlal Jain”. Thiswas always available with the Assessing Officer when the earlier assessmentorder was passed. Infact as noted earlier, in response to the annual returns,in reply to the notice issued under Sub-Section 1 of Section 142 of the Act,all details of the 58 entities including these five have been provided. Even inthe statement of the representative of petitioner recorded on 18[th] October2014 under Section 131 of the Act, the representative has disclosed aboutthe unsecured loans taken by petitioner from Shri Rajesh Jain andShri Manish Jain (the sons of Shri Bhanwarlal Jain). It will be useful toreproduce question no.35 and answer thereto : Q. 35. Apart from the concerns mentioned in Q. No.14 above, are there any other concerns of Shri Bhanwar Lal Jain fromwhich M/s. Jainam Investments has also taken unsecuredloan? Please provide the years-wise details of loan taken fromsuch parties. Ans. Apart from the concerns mentioned in Q. No.14 above,there are certain parties which are introduced to me by ShriRajesh Jain and Shri Manish Jain son of Shri Bhanwarlal Jainfrom whom unsecured loan has been taken. The details areas follows : 14 14Therefore, there is no tangible material which has come to theknowledge of the Assessing Officer while reopening the assessment.Moreover, if one considers the opening paragraphs of the reasons forreopening, it says “A search/survey action u/s. 132/133A of the Income Tax Q. 35. Apart from the concerns mentioned in Q. No.14 above, are there any other concerns of Shri Bhanwar Lal Jain fromwhich M/s. Jainam Investments has also taken unsecuredloan? Please provide the years-wise details of loan taken fromsuch parties. Ans. Apart from the concerns mentioned in Q. No.14 above,there are certain parties which are introduced to me by ShriRajesh Jain and Shri Manish Jain son of Shri Bhanwarlal Jainfrom whom unsecured loan has been taken. The details areas follows : 14 14Therefore, there is no tangible material which has come to theknowledge of the Assessing Officer while reopening the assessment.Moreover, if one considers the opening paragraphs of the reasons forreopening, it says “A search/survey action u/s. 132/133A of the Income Tax Act, 1961 was carried out on 25/10/2016 in the cases of JSK Industries Pvt.Ltd., EMI Transmission Ltd. & Karamtara Engineering Pvt. Ltd. and otherrelated group entities (together referred to as JEK group) ….. During thecourse of Survey action u/s. 133A conducted on 25.10.2016 at the premisesof M/s. Jainam Investments …….. accommodation entries in the form ofbogus loans in its books from various Bhanwarlal Jain group of entities…...”. These were material available even before the first order was passedbecause the first order was passed on 20[th] December 2016. Nowhere in thereasons for reopening, it is mentioned that these tangible materials wereobtained or received much after the original assessment order was passed.Moreover, the statement of Bhanwarlal Jain recorded on 11[th] October 2013has been relied upon, whereas the original assessment, after considering thestatement and all other material, was completed on 20[th] December 2016.We repeatedly asked Mr. Suresh Kumar to identify the fresh tangiblematerial that was available with the department and the date on which itwas received to which there was no answer because it is not stated in thereasons for reopening. Therefore, we cannot accept the reason forreopening with regard to the entries regarding these five entities. 15As regards the penny stock, in the reason for reopening, it isstated that the Kolkata Investigation Wing have analyzed the trade data andthere are 13 penny stocks in which it was conclusively ascertained thatpetitioner is found to be involved in trading of these scripts and is abeneficiary to gain the bogus short term capital loss and for the Assessment Year 2014-2015 the name of the script Shrenth (it should be Shreenath). Inthe first show cause notice, respondent no.1 has called upon petitioner toprovide information related to penny stocks and gave the name ofShreenath. In its reply dated 14[th] December 2016, petitioner has providedall details including submission of transactions recorded in the annualinformation report in the script of Shreenath. The assessment order doesnot deal with these submissions nor the first assessment order referred toany penny stock. In the reasons for reopening, it is not respondents’ casethat in the original assessment order it was missed out. The reasons forreopening of assessment, as held in Aroni Commercials Ltd.(Supra), has tobe tested/examined only on the basis of the reasons recorded at the time ofissuing a notice under Section 148 of the Act seeking to reopen anassessment. These reasons cannot be improved upon and/or supplementedmuch less substituted by affidavit and/or oral submissions. Moreover, thereasons for reopening an assessment should be that of the Assessing Officeralone who is issuing the notice and he cannot act merely on the dictates ofany another person in issuing the notice. Moreover, the tangible materialupon the basis of which the Assessing Officer comes to the reason to believethat income chargeable to tax has escaped assessment can come to himfrom any source, however, reasons for the reopening has to be only of theAssessing Officer issuing the notice. No such tangible material is disclosed inthe reasons for reopening. Assessing Officer simply says KolkataInvestigation Wing have analyzed the trade data of identified 84 penny stocks and concluded that most of the purchases in penny stocks onabnormally higher rate are being done by these paper companies and one ofthose penny stock is Shreenath in which petitioner was found to be involvedin trading. This is far too general. In the case of Phool Chand Bajrang Lal(Supra), on which Mr. Suresh Kumar relied upon, the I.T.O. Azamgarh,subsequent to completion of the original assessment proceedings, received aconfidential communication from the I.T.O., Calcutta based on a requestmade by the I.T.O. Azamgarh. No such material has been identified.Ofcourse, the submission of Mr. Suresh Kumar that there was no true andfull disclosure on the facts of the case and therefore, the I.T.O. would havethe jurisdiction to reopen the concluded assessment in such a case is notacceptable because as noted earlier, the proviso to Section 147 does notgovern a notice for reopening within a period of four years and admittedly,in this case, the notice to reopen was issued within a period of four years.Therefore, we have to agree with petitioner that there is no tangiblematerial for the reopening as stated in the reasons for reopening. 16The Assessing Officer was aware of the fact that the script ofShreenath was allegedly a penny stock company as it is clear from theannual information report given by the Assessing Officer himself topetitioner alongwith the first notice. Therefore, there is no question of anyfurther information on the same issue being treated as information so as tojustify the reopening of the assessment. The expression "reason to believe"in Section 147 of the Act has been held to mean a cause or justification. It is GAURIAMITGAEKWAD also the position that at the stage when the Assessing Officer reopens anassessment, it is not necessary that the material before the Court shouldconclusively prove or establish that income has escaped assessment. Butthat does not mean that the Assessing Officer will not even mention enoughdetails of tangible material that he has received for him to reopen theassessment. A general and bald statement, as stated in the reasons forreopening that Kolkata Investigation Wing have analyzed the trade data ofidentified 84 penny stocks and there are 13 penny stocks in which petitioneris found to be involved, has been made, is not enough. The Assessing Officershould have atleast indicated the details of the material that he hadreceived and when he received. GAURIAMITGAEKWAD also the position that at the stage when the Assessing Officer reopens anassessment, it is not necessary that the material before the Court shouldconclusively prove or establish that income has escaped assessment. Butthat does not mean that the Assessing Officer will not even mention enoughdetails of tangible material that he has received for him to reopen theassessment. A general and bald statement, as stated in the reasons forreopening that Kolkata Investigation Wing have analyzed the trade data ofidentified 84 penny stocks and there are 13 penny stocks in which petitioneris found to be involved, has been made, is not enough. The Assessing Officershould have atleast indicated the details of the material that he hadreceived and when he received. 17In the circumstances, we have to hold that the impugned noticedated 11[th] October 2018 [ITBA/AST/S/148/2018-19/1012962880(1)] andimpugned order dated 28[th] September 2019 [ITBA/AST/F/17/2019-20/1018438264(1)] require to be set aside and are hereby set aside. 18Petition disposed accordingly. (ABHAY AHUJA, J.) (K.R. SHRIRAM, J.) Digitallysigned byGAURI AMITGAEKWADDate:2021.09.0815:06:45+0530