Wp/3307/2022 Of Akshar Properties v. Asst. Commissioner Of Income Tax Circle 27(1) And Ors

Digitallysigned byMEERAMEERAMAHESHMAHESHJADHAVJADHAVDate:2023.12.1615:05:51+0530 1/3 915-wp-3307-22.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAYCIVIL APPELLATE JURISDICTION WRIT PETITION NO. 3307 OF 2022 Akshar Properties V/s.Asst. Commissioner of Income Tax Circle 27(1) & Ors. ….Petitioner ....Respondents ---- Ms Ritika Agarwal a/w Ms Ayesha Ansari i/b Acelegal for Petitioner.Mr. Vipul Bajpayee for Respondents. ---- CORAM : K. R. SHRIRAM & Dr. NEELA GOKHALE, JJ.DATED : 12[th] DECEMBER 2023 P.C. : 1Petitioner is impugning a notice dated 30[th] March 2021 issued underSection 148 of the Income Tax Act 1961 (the Act), for AY-2016-17 onvarious grounds and in particular that the documents / information reliedupon by respondents in forming the reasons to believe for escapement ofincome, has not been made available to petitioner. 2The reasons for reopening reads as under: “The DDIT (Inv.), 4(1), Thane has informed that a survey u/s 133Awas conducted in the case of Akshar Group on 10.12.2020. Duringthe survey, it has been identified that the assessee has takenunsecured loans of Rs.5,20,71,836/- from shell companies providingaccommodation entries. On verification of ITR for A.Y. 2013-14, it isseen that there is substantial increase of unsecured loan amounting toRs. 16,40,62, 152/- during the year. During the survey proceedings, ithas been identified that assessee has taken bogus unsecured loans ofRs.5,20,71,836/-. Thus, the assessee has brought its unaccountedmoney in the books of account through accommodation entry ofunsecured loans. Hence, income chargeable to tax amounting to Rs.5,20,71,836/- has escaped assessment for F.Y. 2012-13 relevant to A.Y.2013-14 by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, for A.Y.2013-14. I have reason to believe that an amount of Rs. 5,20,71,836/-has escaped assessment for A.Y. 2013-14, within the meaning ofprovisions of section 147 of the Income Tax Act, 1961, due to failureon the part of the assessee to disclose true and correct income.” 3Ms Agarwal states that though, objections were filed and objectionshave been rejected on specious grounds, that details sought by respondentsare not required to be provided at the stage when respondents hadmaterial with them to arrive at a belief that income has escaped assessmentat the time when notice under Section 148 was issued. If petitioner is madeavailable with those documents / information based on which the officerhas formed an opinion that there was escapement of income, it would helppetitioner to effectively respond and also explain that there was never andthere cannot be any escapement of income. 4In the order rejecting petitioner’s objection, the officer simply statesthat at the time of reopening, the Assessing Officer was not required toestablish escapement of income. The officer may be correct but if, in thereasons to reopening assessment reliance has been placed on documents tosuggest that petitioner has taken unsecured loan from shell companiesproviding accommodation entry and paid interest of Rs.17,66,667/- againstbogus unsecured loan availed in previous years, the least an AssessingOfficer could do is to make available those documents to petitioner,particularly when petitioner is denying that petitioner has taken anyunsecured loans from shell companies or payment of interest against bogus unsecured loan. 4In the order rejecting petitioner’s objection, the officer simply statesthat at the time of reopening, the Assessing Officer was not required toestablish escapement of income. The officer may be correct but if, in thereasons to reopening assessment reliance has been placed on documents tosuggest that petitioner has taken unsecured loan from shell companiesproviding accommodation entry and paid interest of Rs.17,66,667/- againstbogus unsecured loan availed in previous years, the least an AssessingOfficer could do is to make available those documents to petitioner,particularly when petitioner is denying that petitioner has taken anyunsecured loans from shell companies or payment of interest against bogus unsecured loan. 5Therefore, we hereby quash and set aside the order dated 27[th]January 2022 passed by respondents rejecting petitioner’s objections andremand the matter for denovo consideration. Within three weeks fromtoday petitioner shall be provided copies of all such documents /information indicating those received from DDIT (Inv.), 4(1), Thane, reliedupon in the reasons for reopening. If any information received from DDIT(Inv.), (4(1), Thane, does not pertain to petitioner, such portion can beredacted before making the documents available to petitioner. Within twoweeks of receiving the documents, petitioner shall file comprehensive replyto the notice for reopening. The Assessing Officer shall pass a reasonedorder in accordance with law and before passing any order, a personalhearing shall be given to petitioner, notice whereof shall be communicatedat least five working days in advance. The assessment order shall be passedon or before 31[st] March 2024. 6Petition disposed.7We clarify that we have not made any observations on the merits ofthe matter. 7We clarify that we have not made any observations on the merits ofthe matter. (Dr. NEELA GOKHALE, J.) (K. R. SHRIRAM, J.)