- (1.) HEARD Shri Ravi Kant, senior advocate assisted by Shri Shakeel Ahmed, advocate for the petitioner and Shri R.K. Upadhyaya, learned standing counsel for the Department.
(2.) THE present writ petition has been filed claiming the following reliefs : (a) Issue a suitable writ, order or direction in the nature of writ of certiorari, calling for the records and quashing the impugned notice dt. 28th March, 2005 (Annex. IV to the writ petition) issued by the respondent. (b) Issue a writ, order or direction in the nature of prohibition restraining the respondent from proceedings any further action with the reassessment of the income of petitioner in response to the notice dt. 28th March, 2005 (Annex. IV to the writ petition) for the asst. yr. 1998 -99, (c) Issue any other writ, order or direction as this Hon'ble Court may deem fit and proper in the petition against the respondents. (d) Award the costs of the petition to the petitioner. The facts giving rise to the present writ petition in brief are as follows : The petitioner for the asst. yr. 1998 -99 submitted his return of income of Rs. 2,44,443, The assessment was completed after notice to the petitioner under Section 143(3) of the Act. True copy of the assessment order has been annexed as Annex. 3 to the writ petition. It may be stated here that while completing the assessment a show -cause notice was given by the assessing authority vide Annex. 1 to the writ petition asking the petitioner besides other things, date of acquisition, with source, of the shares sold and also to produce copies of purchase and sale vouchers with copy of relevant bank account and also required the petitioner to justify the claim under Sections. 54F and 54EA of the Act. Reply was submitted by the petitioner stating that the purchase amount of shares was disclosed under VDIS, 1997. He also along with reply enclosed the purchase and sale bill of the shares. However, the assessment was completed but in the assessment order there is no discussion about the income earned as long -term gains from the sale of shares. It appears that subsequently the Department issued a notice under s, 148 of the IT Act. A true copy of the said notice has been annexed as Annex. 4 to the writ petition. The Department on the request of the petitioner has supplied the reasons for reinitiating proceedings relevant for the asst. yr. 1998 -99. The Asstt. CIT -1, Agra, has recorded the following reasons for reopening the assessment: Reason to believe Shri Shyam Bansal, 1 -2, State Bank Colony, Bhadwar House, Agra. Asst. yr. 1998 -99 As per enquiries made by the DI (Inv.) Wing, Unit, Agra, the assessee has taken fictitious entry of long -term gain as per details given below : ??? (table)SI. No.Name of brokerBank a/c of brokerName & address of the beneficiaryBeneficiary bank & a/c No.AmountDD No.Date of DDDate of clearingNature of entry1Ashok Gupta & Co., DelhiBank of India, Asaf Ali Road, DelhiShri Shyam Bansal, 1 -2 State Bank Colony, Bhadawar House. AgraCanara Bank, M.G. Road, Agra, CCA -1/946.16,40020 -11 -972,441 -97Long -term capital gain2Ashok Gupta & Co., DelhiBank of India, Asaf Ali Road, DelhiShri Shyam Bansal, 1 -2 State Bank Colony, Bhadawar House. AgraCanara Bank, M.G Road, Agra, CCA -1/948,00,00020 -11 -9724 -11 -97Long -term capital gain3Ashok Gupta & Co. DelhiBank of India, Asaf Ali Road, DelhiShri Shyam Bansal. 1 2 State Bank Colony, Bhadawar House, AgraCanara Bank, M.G. Road, Agra CCA -1/944,95,52121 -11 -9725 -11 -97Long -term capital gain4Ashok Gupta & Co., DelhiBank of India, Asaf Ali Road. DelhiShri Shyam Bansal, 1 -2 State Bank Colony, Bhadawar House, AgraCanara Bank. M.G. Road, Agra CCA -1/946,98,95018 -12 -9723 -12 -97Long -term capital gain5Ashok Gupta & Co., DelhiBank of India, Asaf Ali Road, DelhiShri Shyam Bansal, 1 -2, State Bank Colony, Bhadawar House, AgraCanara Bank, M.G. Road, Agra CCA -1/944,99,2509 -1 -9814 -1 -8Long -term capital gain6Ashok Gupta & Co., DelhiBank of India, Asaf Ali Road, DelhiShri Shyam Bansal, 1 -2, State Bank Colony, Bhadawar House, AgraCanara Bank, M.G, Road, Agra CCA -1/941,99,70013 -1 -9821 -1 -98Long -term capital gain7Ashok Gupta & Co., DelhiBank of India, Asaf Ali Road, DelhiShri Shyam Bansal, 1 -2, State Bank Colony, Bhadawar House, AgraCanara Bank, M.G. Road, Agra CCA -1/945,48,65615 -1 -9821 -1 -98Long -term capital gain8Ashok Gupta & Co., DelhiBank of India, Asaf Ali Road, DelhiShri Shyam Bansal, 1 -2, State Bank Colony, Bhadawar House, AgraCanara Bank, M.G. Road, Agra CCA -1/943,58,74816 -3 -9823 -3 -98Long -term capital gam9Ashok Gupta & Co., DelhiBank of India -, Asaf Ali Road; DelhiShri Shyam Bansal, 1 -2 State Bank Colony, Bhadawar House, AgraCanara Bank M.G. Road Agra CCA -1/943,49,38818 -3 -9823 -3 -98Long -term capital gain10Ashok Gupta & Co., DelhiBank o India, Asaf Ali Road, DelhiShri Shyam Bansal, 1 -2 State Bank Colony, Bhadawar House, AgraCanara Bank M.G. Road Agra CCA -1/942,99,47620 -3 -9824 -3 -98Long -term capital gain11Ashok Gupta & Co., DelhiBank of India, Asaf All Road, DelhiShri Shyam Bansal, 1 -2, State Bank Colony, Bhadawar House, AgraCanara Bank, M.G. Road, Agra CCA -1/944,99,12721 -3 -9826 -3 -98Long -term capital gain12Ashok Gupta & Co., DelhiBank of India, Asaf All Road, DelhiShri Shyam Bansal, 1 -2, State Bank Colony, Bhadawar House, AgraCanata Bank, M.G. Road, Agra CCA -1/946,46,24525 -3 -9827 -3 -98Long -term capital gain60,11,461The fictitious entry of long -term capital gain as mentioned above has been introduced by the assesses in his books of account claiming that it represents the sale proceeds of the shares as mentioned above. The unaccounted for money generated by the assessee has been introduced in the garb of sale proceeds of the aforesaid share. In a large number of assessees it is found that they have surrendered the entries and paid taxes also before the respective officers of their jurisdiction. Therefore, I have reason to believe that the income to the tune of amount which represents sale proceeds of shares is actually the assessee's unaccounted money from undisclosed sources. This has escaped assessment. Therefore, this is a case where income has escaped assessment under the provisions of Section 147 and issue of notice under Section 148 of the IT Act is warranted. Hence, I have reason to believe that the above income of Rs. 60,11,461 has escaped assessment within the meaning of Section 147 of the Act, 1961. Therefore, action under Section 147 is to be taken for which proposal for obtaining approval of the Addl. CIT, Range -1, Agra, is being sent 151(2) before issuing notice under Section 148 of the IT Act, 1961.
(3.) CHALLENGING the validity, legality and jurisdiction of the AO to initiate reassessment proceedings, the present writ petition has been filed. Shri Ravi Kant, senior advocate, strenuously submitted that there is absolutely no material in possession of the AO to form a belief that income has escaped assessment and to initiate the reassessment proceeding under Section 148 of the Act. He has placed reliance upon an unreported judgment of this Court in Writ Petn. No. 874 of 1999 Dass Friends Builders (P) Ltd. v. Dy. CIT decided on 9th of August, 2005 reported at (2006) 201 CTR (All) 447 - -Ed., Elaborating the argument it was submitted by the learned Counsel for the petitioner that all the facts were disclosed before the assessing authority during the course of assessment proceedings. It was submitted that the petitioner has not concealed any income from the Department and as such the very issuance of notice under Section 148 of the Act is wholly without jurisdiction.;