2016-VIL-552-GUJ-DT
GUJARAT HIGH COURT
SPECIAL CIVIL APPLICATION NO. 3250 of 2016
Date: 05.08.2016
PEASS INDUSTRIAL ENGINEERS PVT LTD
Vs
DEPUTY COMMISSIONER OF INCOME TAX
FOR THE PETITIONER : MR MANISH J SHAH, ADVOCATE
FOR THE RESPONDENT : MR SUDHIR M MEHTA, ADVOCATE
BENCH
MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ
JUDGMENT
2. The petitioner is a limited company dealing in the business of manufacturing winding machines including cone winders, precison winders and versa winders and incidental spare parts. The petitioner is an income-tax assessee and has filed its return of income for the assessment year 2011-12 declaring total income of Rs. 5,44,47,395/- Said return of income as well as tax audit report and form No.3(C)(A) and 3(C)(D) are filled in by the petitioner which are attached to the petition. The petitioner has received a notice under Section 142(1) of the Act on 12.8.2013 along with questionnaires running into 24 questions calling for various details. On 22.8.2013, the petitioner had specifically replied to the details which are demanded and has also clarified the aspect of commission being paid by the petitioner along with Permanent Account Numbers of the party, to whom the said commission was paid. The petitioner while submitting reply has also specified that TDS was deducted on the amount of the total commission which was paid to the said parties. The particulars were also provided by the petitioner in the context of Question No.16 which was specifically asked for in questionnaire supplied to the petitioner. It is the case of the petitioner that after extensive scrutiny undertaken by the respondent in the assessment proceedings, on 3.10.2015 the assessment order came to be passed under Section 143(3) of the Income-Tax Act by making certain additions as reflected in the order.
3. Feeling aggrieved by and dissatisfied with the addition having been made in the scrutiny assessment, the petitioner has challenged the additions made in the assessment order by way of filing an appeal before the CIT (Appeals). The appellate authority had passed an order but, since it is not related to the issue involved in the present petition, same is not made a part of the proceedings. The petitioner has subsequently received the notice under Section 148 of the Income-Tax Act on 31.3.2015, inter-alia, stating to the petitioner that the authority has reason to believe that income chargeable to tax had escaped assessment and thereby, asking the petitioner to file return in the prescribed form within a period of 30 days.
4. The petitioner vide letter dated 25.4.2015 informed the authority that return of the petitioner has already been scrutinized in detail and the assessment order has been passed only after detailed inquiry and therefore, a request was made by the petitioner to inform the reason for issuance of notice under Section 148 of the Income-Tax Act, so that it could file his return of income and complied with notice. It is the case of the petitioner that in response to the notice of reassessment, the petitioner filed its return on 28.4.2015 and on 10.8.2015, the respondent authority supplied the reasons recorded and simultaneously, served the petitioner notices under Section 143(2) and 142(1) of the Income-Tax Act. On 24.8.2015, the petitioner, in response thereto, filed its objections wherein, it has been specifically pointed out that petitioner had disclosed fully and truly all material facts necessary for assessment and there was no failure on the part of petitioner to do so. It was also contended that reopening was being done on a mere change of opinion without satisfying himself on the information received. However, on 21.1.2016 the objections filed by the petitioner came to be disposed of vide its order and it is this background of the fact has brought the petitioner before this Court by challenging the legality and validity of notice under Section 148 of the Income-Tax Act as well as challenging the order disposing of the objections of the petitioner.
5. Mr.Manish J. Shah, learned counsel appearing for the petitioner has submitted several contentions to justify the challenge. It was, inter-alia, contended that though the notice for reopening is served within a period of 4 years to reopen the scrutiny assessment, the authority has over-looked the material fact that petitioner has disclosed fully and truly all material facts necessary for the purpose of assessment. It was submitted that Assessing Authority has specifically gone into and examined the transaction taken place with Target Goods Pvt. Ltd. Company during the original scrutiny assessment and after thoroughly scrutinizing all the relevant details, an assessment order came to be passed. Learned counsel further submitted that there appears to be a non-application of mind on the part of respondent authority in forming a reasonable belief that income of the assessee has escaped the assessment. It was contended by leaned counsel that the order of disposal of objections also appearing to be based on no proper exercise of powers and while forming an opinion, the Assessing Officer has also not verified the impugned transaction and therefore, there appears to be a clear error on the part of authority in deciding to reopen the assessment. Learned counsel submitted that during the scrutiny assessment, factum of TDS amount having been deducted, has also been brought to the notice in addition to addresses, permanent account number as also the amount of commission having been paid and therefore, just to reopen the assessment despite aforesaid material on record having been examined, the decision tantamounts to mere change of opinion which is not permissible and thereby, contended that the impugned notice as also the order deserves to be quashed and set aside. Learned counsel further submitted that the information received by DGIT (Inv.) Ahmedabad can never be termed as an additional information and that information can never be used to reopen the assessment. If that be so, the decision of authority to reopen the assessment said to be based on extraneous information. Learned counsel submitted that if the authority is not taking appropriate decision in consonance with the principle of law then, it is always open for the High Court to put check on the authority by exercising extraordinary jurisdiction and for that purpose, learned counsel relied upon a decision of Calcutta Discount Co. Ltd. V/s. ITO, reported in 41 ITR 191. By submitting this, learned counsel contended that even if it is within the period of 4 years, it is not open for the authority to reopen the assessment. The very base of escapement of income is missing and hence, requested the Court to allow the petition by setting aside the impugned notice issued under Section 148 of the Act as well as the order rejecting the objections. No other submissions made by learned counsel for the petitioner.
6. To meet with this stand taken by the learned counsel for the petitioner, Mr.Sudhir Mehta, learned counsel appearing on behalf of revenue submitted that while taking the decision to reopen the assessment, authority has properly applied its mind. It has been submitted that a specific reason is recorded as to why there is a reasonable belief formulated by the authority to believe that income of the petitioner is escaped the assessment. It is submitted that even if the authority has examined in the scrutiny assessment, the information which has been gathered from a separate wing, as stated above, is a cogent material based upon which the authority has rightly taken a decision to reopen the assessment. Learned counsel submitted that the transaction in question is a doubtful transaction. It was also submitted by learned counsel that the petitioner had a close nexus with Kayan brothers, who are well known entry operators through out the country and prima faice, it has been found by the authority that the petitioner is the beneficiary in past and therefore, that material having been unearthed upon receipt of the information from the separate wing, the authority has rightly and reasonably believed that income of the petitioner is escaped from the assessment. Learned counsel also submitted that opening of reassessment is after proper procedure envisaged under the statutory provision and the authority has acted well within the scope of its authority and therefore, in extraordinary jurisdiction of this Court, no interference be made. Learned counsel for the revenue submitted that an opportunity is available to petitioner to satisfy the assessing authority as at present, no final conclusion is arrived at and therefore, at this stage of the proceeding, no interference be made.
7. Having heard the learned counsel for the respective parties, before adverting to the contentions, the reasons which are recorded are worth to be taken into consideration and hence, same are reproduced hereinafter :
“3. The assessee is engaged in the business of manufacturing of textile machinery and spare parts. The assessee has filed his return of income on 29.9.2011 declaring total income at Rs. 5,44,47,395/-. The case was selected for scrutiny and assessment was completed u/s.143(2) dated 3.10.2013 assessing income at Rs. 4,45,52,400/-.
4. In this case, information has been received by DGIT (Investigation), Ahmedabad vide No.DGIT(Inv.) /AHD/VAT/Bogus Purchase/2014-15 dated 26.3.2015. It is stated in the letter that two surveys were carried out by the Pr.DIT (Inv.) Kolkata on Vikrant Kayan and Arvind Kayan respectively. The Kayans are known entry operators of Kolkata and have been giving entries of bogus share capital, bogus bills of expenses and bogus long term capital gains to various beneficiaries through out the country. The above mentioned assessee is also a beneficiary of Rs. 210.43 lacs (accommodating co. Target Goods Pvt. Ltd.) pertaining to A.Y.2011-12.”
8. On perusal of the same, it would appear that there is a specific information received from DGIT (Inv.) Ahmedabad under a communication dated 26.3.20156 that two survey operations were carried out in place of Vikrant Kayan and Arvind Kayan, the material has led to believe that income of the petitioner has also escaped the assessment. The Kayan brothers named above are well known entry operators of Calcutta and have spread their wings across the country and it has been found in the said material that present petitioner is also a beneficiary to the extent of sizable amount of Rs. 210.43 lacs pertaining to Assessment Year 2011-12. When this material came to be received by the assessing authority, the material can be said to be substantive material, based upon which the belief is formed and therefore, this being the position more particularly when the decision of reopening is within the period of 4 years, it is always open for the Assessing Officer to make a further scrutiny which can never be said to be either a change of opinion or taking a review of earlier decision of assessment or it can never be said to be a reflection of non application of mind. Therefore, the reasons which are assigned are sufficient enough to believe for the authority to reopen the assessment.
9. Learned counsel for the petitioner, as stated earlier, has contended that scrutiny assessment has already taken place and therefore, said assessment cannot be reopened. But, in fact, the materials stated to have been received as mentioned above is found by the authority as sufficient material to reopen the assessment and therefore, this Court sitting in extraordinary jurisdiction cannot substitute the belief which has been formulated by the Assessing Officer while taking a decision to reopen the assessment and therefore, when a substantial material is available at command, the authority is to be justified in issuing notice under Section 148 of the Act. This decision cannot be termed as a change of opinion nor can it be said to be passed based upon non-application of mind. The earlier scrutiny assessment was not based upon such information which has been received by the DGIT (Inv.) Branch and therefore, there was no occasion for Assessing Officer to examine the nexus between Kayan brothers and the petitioner and a specific information came to be received that the assessee is the beneficiary of said entry operators well known in the country to the extent of sizable amount of Rs. 210.43 lacs and therefore, the discretion appears to have been rightly exercised by the authority. Therefore, the contentions raised by the learned counsel for the petitioner being devoid of merits, no interference is desirous from this court.
10. The Assessing Officer at the time of issuing notice under Section 148 of the Act is not coming to a final conclusion and his reason for belief is merely a cause or justification and therefore, that expression based upon which the action is initiated, cannot be treated to mean that Assessing Officer has finally ascertained the fact of legal evidence or conclusion. At the initial stage, what is required to be seen is that reason to believe is concluded not on the established fact of the escapement of income and therefore, only question left for relevant consideration is, whether there was a material to form a reasonable belief to be seen and therefore, looking to the position prevailing as on date, it is always open for the petitioner to justify or to deal with the same when final assessment is taking place. But, at this stage, neither the petitioner nor this Court can come to the conclusion that a specific conclusion is arrived at of escapement of income by the petitioner. The proposition on this is reflected in a decision delivered by the Hon’ble Apex Court in case of Assistant Commissioner of Income-Tax V/s. Rajesh Jhaveri Stock Markets Pvt. Ltd., reported in 2007 (291) ITR 500 wherein, in Para.16, 17 and 18 the Court has analyzed the provisions and has propounded as referred to above.
“16. Section 147 authorises 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 an inbuilt idea of fairness to taxpayers. As observed by the Delhi High Court in Central Provinces Manganese Ore Co. Ltd. [1991 (191) ITR 662], for initiation of action under section 147(a) (as the provision stood at the relevant time) fulfillment of the two requisite conditions in that regard is essential. At that stage, the final outcome of the proceeding is not relevant. In other words, at the initiation stage, what is required is reason to believe, but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belief by the Assessing Officer is within the realm of subjective satisfaction (see ITO v. Selected Dalurband Coal Co. Pvt. Ltd. [1996 (217) ITR 597 (SC)] ; Raymond Wollen Mills Ltd. v. ITO [ 1999 (236) ITR 34 (SC)].
17. The scope and effect of section 147 as substituted with effect from April 1, 1989, as also sections 148 to 152are substantially different from the provisions as they stood prior to such substitution. Under the old provisions of section 147, separate clauses (a) and (b) laid down the circumstances under which income escaping assessment for the past assessment years could be assessed or reassessed. To confer jurisdiction under section 147(a) two conditions were required to be satisfied firstly the Assessing Officer must have reason to believe that income profits or gains chargeable to income tax have escaped assessment, and secondly he must also have reason to believe that such escapement has occurred by reason of either (i) omission or failure on the part of the assessee to disclose fully or truly all material facts necessary for his assessment of that year. Both these conditions were conditions precedent to be satisfied before the Assessing Officer could have jurisdiction to issue notice under section 148read with section 147(a) But under the substituted section 147 existence of only the first condition suffices. In other words if the Assessing Officer for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. It is however to be noted that both the conditions must be fulfilled if the case falls within the ambit of the proviso to section 147. The case at hand is covered by the main provision and not the proviso.
18. So long as the ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under section 147 and failure to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings even when intimation under section 143(1) had been issued.”
11. In another case recently being dealt with by this Court in a group of tax appeals being Tax Appeal Nos.542 of 2015 and allied matters wherein, very issue whether at the instance of same material of another wing, whether reopening is permissible or not. While dealing with said issue this Court has examined the said aspect and has come to the conclusion that reopening is permissible. In the said group of appeals, the substantial question of law posed before the Court, whether the ITAT was justified in setting aside the reassessment orders on the ground that reopening of assessment under Section 147 of the Act was bad in law. In that particular group of matters, the reopening was initiated by the authority based upon the show cause notice along with accompanied material forwarded by the Excise Department to the Income-Tax Department and on the basis of said material provided by the Excise Department, the Assessing Officer has reopened the assessment of the assessee by issuing notice under Section 148 of the Act. The assessee of that case in the similar manner in this case has contended that the information provided by a different Investigating Team may not be ipso facto utilized to re open the assessment which has become final by the Income-tax authority. It was also contended by the assessee of that case that there was no independent application of mind on the part of Assessing Officer and just based upon said information provided by the Excise Department, the authority resorted to Section 148 of the Act to reopen the assessment. This issue in extenso dealt with by the Division Bench of this Court and by a detailed judgment, came to conclusion that the Assessing Officer has merely relied upon the show cause notice issued by the Excise Department and has not concluded finally and therefore, there is no illegality or irregularity in arriving at a belief that assessment deserves to be reopen. Relying upon the decision delivered by the Apex Court, it is held that action of reopening of assessment was found to be justified. Relevant Paragraph Nos.9, 10, 11, 12, 13 and 16 of the said decision worth to be taken note of and therefore, reproduced hereinbelow :
“9. It can thus be seen that the entire material collected by the DGCEI during the search, which included incriminating documents and other such relevant materials, was alongwith report and showcause notice placed at the disposal of the Assessing Officer. These materials prima facie suggested suppression of sale consideration of the tiles manufactured by the assessee to evade excise duty. On the basis of such material, the Assessing Officer also formed a belief that income chargeable to tax had also escaped assessment. When thus the Assessing officer had such material available with him which he perused, considered, applied his mind and recorded the finding of belief that income chargeable to tax had escaped assessment, the re-opening could not and should not have been declared as invalid, on the ground that he proceeded on the show-cause notice issued by the Excise Department which had yet not culminated into final order. At this stage the Assessing Officer was not required to hold conclusively that additions invariably be made. He truly had to form a bona fide belief that income had escaped assessment. In this context, we may refer to various decisions cited by the counsel for the Revenue.
10. In case of Central Provinces Manganese Ore Co. Ltd. vs. Income Tax Officer, Nagpur (supra) the Supreme Court noted that in case of the assessee which had an office in London, this Customs authority had come to know that the assessee had declared very low price in respect of the consignment of Manganese exported by them out of India. After due inquiries and investigations, the Customs authorities found that the assessee was systematically under-voicing the value of Manganese as compared with the prevailing market price. The Income Tax Officer on coming to know about the proceedings before the Customs Collector in this respect issued notice for reopening of the assessment. In the reasons that the Assessing Officer relied on the facts as found by the Customs Authorities that the assessee had undervoiced goods during export. Under such circumstances, upholding the validity of the notice for reopening, the Supreme Court held and observed as under:
‘So far as the first condition is concerned, the Income Tax Officer, in his recorded reasons, has relied upon the fact as found by the Customs Authorities that the appellant had under invoiced the goods it exported. It is not doubt correct that the said finding may not be binding upon the income tax authorities but it can be a valid reason to believe that the chargeable income has been under assessed. The final outcome of the proceedings is not relevant. What is relevant is the existence of reasons to make the Income Tax Officer believe that there has been under assessment of the assessee's income for a particular year. We are satisfied that the first condition to invoke the jurisdiction of the Income Tax Officer under Section 147(a) of the Act was satisfied.’
11. In case of Income Tax Officer vs Purushottam Das Bangur (supra) after completion of assessment in case of the assessee, the Assessing Officer received letter from Directorate of Investigation giving detailed particulars collected from Bombay Stock Exchange which revealed earning of share and price of share increased during period in question and quotation appearing at Calcutta Stock Exchange was as a result of manipulated transaction. On the basis of such information, the Assessing Officer issued notice for reopening of the assessment. The question, therefore, arose whether the information contained in the letter of Directorate of Investigation could be said to be definite information and the Assessing Officer could act upon such information for taking action under Section 147(b) of the Act. In such background, the Supreme Court observed as under:
‘12. Ms. Gauri Rastogi, the learned appearing for the respondents, has urged that the letter of Shri Bagai was received by the Income tax Officer on March 26, 1974 and on the very next day, that is, on March 27, 1974, he issued the impugned notice under Section 147(b) of the Act and that he did not have conducted any inquiry or investigation into the information sent by Shri Bagai. Merely because the impugned notice was sent on the next day after receipt of the letter of Shri Bagai does not mean that the Income Tax Officer did not apply his mind to the information contained in the said letter of Shri Bagai. On the basis of the said facts and information contained in the said letter, the Income Tax officer, without any further investigation, could have formed the opinion that there was reason to believe that the income of the assessee chargeable to tax had escaped assessment. The High Court, in our opinion, was in error in proceeding on the basis that it could not be said that the Income Tax Officer had in his possession information on the basis of which he could have reasons to believe that income of the assessee chargeable to tax had escaped assessment for the relevant assessment years. For the reasons aforementioned, we are unable to uphold the impugned judgment of the High Court. The appeal is, therefore, allowed, the impugned judgment of the High Court is set aside and the Writ Petitions filed by the respondents are dismissed. No order as to costs.’
12. In case of Income Tax Officer vs Selected Dalurband Coal Co. Pvt. Ltd.(supra), the assessment was reopened on the basis of the information contained in letter from Chief Mining Officer that the colliery of the assessee had been inspected and there had been under reporting of coal raised. Upholding the validity of re-opening of assessment, the Supreme Court held and observed as under:
‘After hearing the learned counsel for the parties at length, we are of the opinion that we cannot say that the letter aforesaid does not constitute relevant material or that on that basis, the Income Tax Officer could not have reasonably formed the requisite belief. The letter shows that a joint inspection was conducted in the colliery of the respondent on January 9,1967, by the officers of the Mining Department in the presence of the representatives of the assessee and according to the opinion of the officers of the Mining Department, there was under reporting of the raising figure to the extent indicated in the said letter. The report is made by a Government Department and that too after conducting a joint inspection. It gives a reasonably specific estimate of the excessive coal mining said to have been done by the respondent over and above the figure disclosed by it in its returns. Whether the facts stated in the letter are true or not is not the concern at this stage. It may be well be that the assessee may be able to establish that the facts stated in the said letter are not true but that conclusion can be arrived at only after making the necessary enquiry. At the stage of the issuance of the notice, the only question is whether there was relevant material, as stated above, on which a reasonable person could have formed the requisite belief. Since we are unable to say that the said letter could not have constituted the basis for forming such a belief, it cannot be said that the issuance of notice was invalid. Inasmuch as, as a result of our order, the reassessment proceedings have not to go on we don not and we ought not to express any opinion on the merits.’
13. In case of AGR Investment Ltd. vs. Additional Commissioner of Income Tax and anr (supra), a Division Bench of Delhi High Court considered the validity of reopening of assessment where the notice was based on information received from Directorate of investigation that the assessee was beneficiary of bogus accommodation entries. The Court while upholding the validity of reopening observed that sufficiency of reason cannot be considered in a writ petition. It was observed as under:
‘23 The present factual canvas has to be scrutinized on the touchstone of the aforesaid enunciation of law. It is worth noting that the learned counsel for the petitioner has submitted with immense vehemence that the petitioner had entered into correspondence to have the documents but the assessing officer treated them as objections and made a communication. However, on a scrutiny of the order, it is perceivable that the authority has passed the order dealing with the objections in a very careful and studied manner. He has taken note of the fact that transactions involving Rs. 27 lakhs mentioned in the table in Annexure P-2 constitute fresh information in respect of the assessee as a beneficiary of bogus accommodation entries provided to it and represents the undisclosed income. The assessing officer has referred to the subsequent information and adverted to the concept of true and full disclosure of facts. It is also noticeable that there was specific information received from the office of the DIT (INV-V) as regards the transactions entered into by the assessee company with number of concerns which had made accommodation entries and they were not genuine transactions. As we perceive, it is neither a change of opinion nor does it convey a particular interpretation of a specific provision which was done in a particular manner in the original assessment and sought to be done in a different manner in the proceeding under Section 147 of the Act. The reason to believe has been appropriately understood by the assessing officer and there is material on the basis of which the notice was issued. As has been held in Phool Chand Bajrang Lal (supra), Bombay Pharma Products (supra) and Anant Kumar Saharia (supra), the Court, in exercise of jurisdiction under Article 226 of the Constitution of India pertaining to sufficiency of reasons for formation of the belief, cannot interfere. The same is not to be judged at that stage. In SFIL Stock Broking Ltd. (supra), the bench has interfered as it was not discernible whether the assessing officer had applied his mind to the information and independently arrived at a belief on the basis of material which he had before him that the income had escaped assessment. In our considered opinion, the decision rendered therein is not applicable to the factual matrix in the case at hand. In the case of Sarthak Securities Co. Pvt. Ltd. (supra), the Division Bench had noted that certain companies were used as conduits but the assessee had, at the stage of original assessment, furnished the names of the companies with which it had entered into transactions and the assessing officer was made aware of the situation and further the reason recorded does not indicate application of mind. That apart, the existence of the companies was not disputed and the companies had bank accounts and payments were made to the assessee company through the banking channel. Regard being had to the aforesaid fact situation, this Court had interfered. Thus, the said decision is also distinguishable on the factual score.’
16. Thus, the decision in case of Futura Ceramics Pvt. Ltd. And anr vs. State of Gujarat through Secretary and ors(supra) was rendered in an entirely different background and had no direct application to the question whether on the basis of information supplied by the Excise Department to the Assessing Officer of suppression of valuation of goods or clandestine removal of goods for evading excise duty, notice for re-opening of the assessment could have been issued.”
12. On the basis of aforesaid proposition laid by series of decisions, we are of the opinion that when the Authority is armed with the tangible material in the form of specific information received by the Investigation Wing, Ahmedabad is throughly justified in issuing a notice for reassessment. It is revealed from the said additional material available on hand a reasonable belief is formed by the Assessing Authority that income of the petitioner has escaped assessment and therefore, once the reasonable belief is formulated by the Authority on the basis of cogent tangible material, the Authority is not expected to conclude at this stage the issue finally or to ascertain the fact by evidence or conclusion, we are of the opinion that function of the assessing authority at this stage is to administer the statute and what is required at this stage is a reason to believe and not establish fact of escapement of income and therefore, looking to the scope of Section 147 as also Sections 148 to 152 of the Act, even if scrutiny assessment has been undertaken, if substantial new material is found in the form of information on the basis of which the assessing authority can form a belief that the income of the petitioner has escaped assessment, it is always open for the assessing authority to reopen assessment. From the reasons which are recorded, it clearly emerges that the petitioner is the beneficiary of those entries by Kayan brothers, who are well known entry operators across the country and this fact has been unearthed on account of the information received by DGIT Investigation Branch and therefore, it cannot be said in any way that even if four years have been passed, it is not open for the Authority to reopen the assessment. In the present case, there was independent application of mind on behalf of the assessing authority in arriving at the conclusion that income had escaped assessment and therefore, the contentions raised by the petitioner are devoid of merits. Dealing with the contentions of the petitioner that the information received from DGIT, Investigation Branch, Ahmedabad, can never be said to be additional information. We are of the opinion that the information which has been received is on 26.3.2015 from the DGIT, Investigation Branch, Ahmedabad, whereby it has been revealed that present petitioner is also the beneficiaries of those Kayan brothers, who are in the activity of entry operation throughout the country and therefore, it cannot be said that this is not justifiable material to form a reason to belief by the Authority and therefore, this being a case, the Authority is justified in issuing notice under Section 148 of the Act to reopen the assessment and therefore, the challenge contained in the petition being devoid of merits, same deserves to be dismissed.
13. From the aforesaid pronouncements, in the opinion of this Court, the observations made by the Hon’ble Apex Court in the cases referred to above are sufficient enough to meet with the situation and therefore, without repeating or reproducing the same, the Court is of the opinion that extraordinary jurisdiction is not required to be exercised in the background of aforesaid facts. No doubt, the High Court has power of judicial review to scrutinize the decision of administrative authority but, once it is found that the authority below has acted well within the bounds of its authority and peripheral limit, it is not always to exercise and invoke extraordinary jurisdiction and to examine and substitute the finding of the reasonable belief. The scope of Articles 226 and 227 of the Constitution are sufficiently analyzed by series of decisions wherein, it has been propounded that what is to be seen is a decision making process and one of such decisions delivered by the Hon’ble Apex Court in the case of State of U.P. & Anr. V/s. Johri Mal, reported in AIR 2004 SC 3800 wherein, the scope of examining the decision of authority is spelt out. Relevant Para.30 of the said decision is worth to be taken note of which reads, thus;
“30. It is well-settled that while exercising the power of judicial review the Court is more concerned with the decision making process than the merit of the decision itself. In doing so, it is often argued by the defender of an impugned decision that the Court is not competent to exercise its power when there are serious disputed questions of facts; when the decision of the Tribunal or the decision of the fact finding body or the arbitrator is given finality by the statute which governs a given situation or which, by nature of the activity the decision maker's opinion on facts is final. But while examining and scrutinizing the decision making process it becomes inevitable to also appreciate the facts of a given case as otherwise the decision cannot be tested under the grounds of illegality, irrationality or procedural impropriety. How far the Court of judicial review can re-appreciate the findings of facts depends on the ground of judicial review. For example, if a decision is challenged as irrational, it would be wellnigh impossible to record a finding whether a decision is rational or irrational without first evaluating the facts of the case and coming to a plausible conclusion and then testing the decision of the authority on the touch-stone of the tests laid down by the Court with special reference to a given case. This position is well settled in Indian Administrative Law. Therefore, to a limited extent of scrutinizing the decision making process, it is always open to the Court to review the evaluation of facts by the decision maker.”
13. Therefore, considering the proposition of law on the issue of exercising extraordinary jurisdiction in the decision referred to above, this Court is of the opinion not to accept the contentions of the petitioner to exercise the jurisdiction as contended and therefore, in the background of aforesaid facts and circumstance, we are of the opinion that no interference is called for. Hence, the petition deserves to be dismissed and accordingly, it is dismissed. Notice is discharged. Interim relief, if any, granted earlier stands vacated.
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