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September, 03rd 2013

WPC 8283/2010 Page 1 of 24
+ 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,
Commissioner of Income Tax & Anr. …Respondents
Through Mr. Kamal Sawhney, Advocate.

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.

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. [1979] 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

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

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