The Gujarat High Court ruled that the reopening of the assessment was valid because the assessed person is granted entry into the accommodation after investigation and investigation.
Mr Ketan S. Shah, the applicant’s lawyer, Bharatkumar Kalubhai Ghadiya, the reopening is based on a simple change of opinion as it is reopened on the basis of the so-called information, which is subsequent to the adoption of the valuation order, however, in the order dealing with the objections raised by the applicant, the respondent admitted that there was no name of the applicant mentioned here by the person namely Sanjay Shah and others whose premises had been searched.
It is alleged that the very basis for the exercise of jurisdiction under section 148 of the Act rests on information in the case of Shri Jignesh Shah and on the statements he made. However, since he denied that he had not given the complainant’s name and that the latter was not a beneficiary, the question of going further by means of the contested notification does not arise.
The petitioner argued that even if not, the statement of a corrupt party cannot be considered as a tangible element so as to have reason to believe that the taxable income has escaped assessment. He argued that the reopening is based on a simple change of opinion of the assessing officer insofar as a notice under section 148 of the Act can only be issued if an assessment officer has reason to believe that any taxable income has escaped assessment and for such forms of belief there should be material and tangible acts, which are lacking in this case. He argued that the Applicant’s case had been selected for careful assessment and that the issue at issue had been thoroughly examined during the initial assessment and that, therefore, simply because the assessment officer changes his mind, no action under section 147 of the Act may be taken.
The division chamber of Judge Bela M. Trivedi and Judge AC Joshi held that it cannot be said that there is no reason to believe that the taxable income escaped assessment because this exercise of reopening has only been carried out after proper investigation and registration of the statements of the persons concerned, as mentioned above, and after finding a prima facie case, a disputed notice is issued to the applicant. It further appears that there was no procedural failure and / or deviation from the prescribed procedure upon reopening and the reasons recorded are not lacking in validity as the necessary approvals from the competent authority appear to have been received.
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