M/S OPG METALS & FINSEC LTD. Vs. COMMISSIONER OF INCOME TAX & ANR.
September, 03rd 2013
WPC 8283/2010 Page 1 of 24 * IN THE HIGH COURT OF DELHI AT NEW DELHI + Writ Petition (Civil) No. 8283/2010 Reserved on: 23rd July, 2013 % Date of Decision: 30th August, 2013 M/s OPG Metals & Finsec Ltd. ....Petitioner Through Mr. Salil Kapur, Mr. Vikas Jain, Mr. Sanat Kapur & Mr. Ankit Gupta, Advocates. Versus Commissioner of Income Tax & Anr. …Respondents Through Mr. Kamal Sawhney, Advocate. CORAM: HON’BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE SANJEEV SACHDEVA SANJIV KHANNA, J.
OPG Metals and Finsec Ltd. by this writ petition challenges reassessment notice dated 25 th March, 2010 under Section 148 of the Income Tax Act (the Act), which relates to assessment year 2003-04 and the order dated 4th October, 2010 passed by the Assessing Officer dismissing their objections to the reassessment notice. CONTENTIONS OF THE PETITIONER
2. The petitioner‟s first contention is that it is a case of change of opinion as earlier a notice dated 7th November, 2006 under Section 148 of the Act was issued to the petitioner, in respect of the same assessment year. At that time when the Assessing Officer vide WPC 8283/2010 Page 2 of 24 assessment order dated 28th December, 2007 had made an addition of Rs.6,66,382/-, he did not deem it fit and appropriate to make any addition in respect of share transactions which are subject matter of the present reassessment notice. Thus it is a case of change of opinion after application of mind by the Assessing Officer. At the time of first reassessment, the details of the questioned share
transactions/consideration were specifically enclosed in form of a chart with the return of the income and also filed with the Assessing Officer, with letter/objections raised before the Assessing Officer. The Investigating Wing of the Department had furnished lists of beneficiaries of accommodation entries ascertained from the account of the alleged operators vide letters dated 2nd March, 2006, 16th June, 2006 and 5th February, 2007. Therefore, petitioner submits that this information regarding alleged dubious transactions, which is made subject matter of the second reassessment notice, was already available with the Assessing Officer when he had passed the first reassessment order on 28th December, 2007. In the present case there has been full and true disclosure of all material facts. Reliance is placed upon Income Tax Officer vs. Madani Engineering Works Ltd.  118 ITR 1 (SC) and judgment of a Division Bench of this Court in Haryana Acrylic Manufacturing Co. v. Commissioner of Income-tax (2009) 308 ITR 38 where it was held that:
“In the reasons supplied to the petitioner, there is no whisper, what to speak of any allegation, that the petitioner had failed to disclose fully and truly all material facts necessary for assessment and that because of this failure there has been an escapement of income chargeable to tax. Merely having a reason to believe that income had escaped assessment, is not sufficient to reopen assessments beyond the four year period indicated above. The escapement of income WPC 8283/2010 Page 3 of 24 from assessment must also be occasioned by the failure on the part of the assessee to disclose material facts, fully and truly. This is a necessary condition for overcoming the bar set up by the proviso to Section 147. If this condition is not satisfied, the bar would operate and no action under Section 147could be taken. We have already mentioned above that the reasons supplied to the petitioner does not contain any such allegation. Consequently, one of the conditions precedent for removing the bar against taking action after the said four year period remains unfulfilled. In our recent decision in Wel Intertrade Private Ltd. (supra) we had agreed with the view taken by the Punjab & Haryana High Court in the case of Duli Chand Singhania (supra) that, in the absence of an allegation in the reasons recorded that the escapement of income had occurred by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, any action taken by the Assessing officer under Section 147 beyond the four year period would be wholly without jurisdiction. Reiterating our viewpoint, we hold that the notice dated 29.03.2004 under Section 148 based on the recorded reasons as supplied to the petitioner as well as the consequent order dated 02.03.2005 are without jurisdiction as no action under Section 147 could be taken beyond the four year period in the circumstances narrated above.”
3. It is submitted that in the first round of reassessment, the issue was related to alleged bogus share transactions/consideration received through an alleged accommodation entry provider, which is the ground or reason for issue of second reassessment notice. This question could and should have been examined and addition could have been made during the first round of the reassessment proceedings. Judgment in the case of Jai Bharat Maruti v. Commissioner of Income Tax (2010) 324 ITR 289 (Delhi) on the point that Assessing Officer can reopen proceedings based on particular items and cannot proceed to bring to tax items which are not connected with what was initially indicated in