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Gujarat High Court

Radha Madhav Processors Private ... vs Income Tax Officer, Ward 2(1)(1), Surat on 15 October, 2019

Author: Harsha Devani

Bench: Harsha Devani, Sangeeta K. Vishen

        C/SCA/18100/2019                                             ORDER




         IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

          R/SPECIAL CIVIL APPLICATION NO. 18100 of 2019

==========================================================
          RADHA MADHAV PROCESSORS PRIVATE LIMITED
                            Versus
            INCOME TAX OFFICER, WARD 2(1)(1), SURAT
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Appearance:
MR B S SOPARKAR(6851) for the Petitioner(s) No. 1
for the Respondent(s) No. 1
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 CORAM: HONOURABLE MS.JUSTICE HARSHA DEVANI
        and
        HONOURABLE MS. JUSTICE SANGEETA K. VISHEN

                             Date : 15/10/2019

                        ORAL ORDER

(PER : HONOURABLE MS.JUSTICE HARSHA DEVANI)

1. Mr. B.S. Soparkar, learned advocate for the petitioner, invited the attention of the court to the reasons recorded for reopening the assessment, to submit that the information received by the Assessing Officer from the office of the DDIT (Investigation) was to the effect that the petitioner company had taken accommodation entries of Rs.10,00,000/­ from Shri Manohar Lal Nangalia for the assessment year 2013­14. It was submitted that on the basis of such information, the Assessing Officer has recorded a similar finding for the purpose of arriving at the conclusion that income chargeable to tax has escaped assessment.

2. It was submitted that the reasons recorded are completely invalid inasmuch as the Assessing Officer has not applied his mind at all to the information received by him and that the reopening is based upon a borrowed satisfaction as the Assessing Officer has not even examined the nature of the transaction in question in the books of the petitioner. It was submitted that there is no link between the information received and the formation of belief.

3. It was pointed out that in the objections raised by the petitioner to the reopening of assessment, the petitioner had stated that the amount in question was towards the repayment of unsecured loan of Rs.10,00,000/­ borrowed from Harshratna Financial Service Pvt. Ltd. It was further pointed out that for the assessment year 2011­12, the assessment of the petitioner was reopened on the very same ground that the petitioner had taken accommodation entries of Rs.10,00,000/­ from Shri Manohar Lal Nangalia.

4. The attention of the court was invited to the assessment order dated 17.12.2018 passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") read with section 147 of the Act to point out that the Page 2 of 3 Downloaded on : Wed Jul 14 03:58:36 IST 2021 C/SCA/18100/2019 ORDER amount in question has already been taxed in the assessment year 2011­12. It was submitted that therefore, the same amount cannot be taxed once again in the year under consideration.

5. It was submitted that in this case, there is no scrutiny assessment, however, on the basis of the reasons recorded, the Assessing Officer could not have formed the belief that income chargeable to tax has escaped assessment and hence, the assumption of jurisdiction by the Assessing Officer under section 147 of the Act is without authority of law.

6. Having regard to the submissions advanced by the learned advocate for the petitioner, issue Notice, returnable on 03.12.2019.

By way of ad­interim relief, the further proceedings pursuant to the impugned notice dated 26.03.2019 issued under section 148 of the Act for the assessment year 2013­14 are hereby stayed.

Direct service is permitted.

(HARSHA DEVANI, J) (SANGEETA K. VISHEN,J) PRAVIN KARUNAN Page 3 of 3 Downloaded on : Wed Jul 14 03:58:36 IST 2021