JUDGMENT

M.S. Sanklecha, J. - This Petition under Article 226 of the Constitution of India challenges the notice dated 30th March 2017 issued by the Assessing Officer under Section 148 of the Income Tax Act, 1961 (the Act). The impugned notice dated 30 March 2017 seeks to reopen the assessment for Assessment Year 2010-11.

2. Briefly the facts leading to this Petition is that for the subject Assessment Year 201011, the Respondent No.1 - Assessing Officer had on 22 March 2013 passed an assessment order under Section 143(3) of the Act. Thereafter the impugned notice dated 30th March 2017 was issued by the Assessing Officer, seeking to re-open the assessment for the Assessment Year 2010-11. The reasons recorded in support of the impugned notice dated 30 March 2017 for reopening indicates the basis of the reasonable belief on the part of the Assessing Officer that income chargeable for tax escaped assessment was the special audit report dated 21st April 2014 of Price-water House Coopers Private Ltd. (PWC) at the direction of the Forward Markets Commission as directed by its letter dated 17th October 2013. The recorded reasons as communicated to the Petitioner are as under:-

The assessee is electronic spot exchange for commodities. The case of the assessee for A.Y.2010-11 was assessed under section 143(3) of the Income Tax Act on 31.01.2013 assessing the total income at Rs. 3,00,51,25,092/-

A special audit was directed by the Forward Market Commission (FMC) in the affairs of the assessee company from inception till 30th September, 2013 to submit its report on the following aspects:-

Identification or related parties (as defined by FMC in the terms of reference and a working definition arrived at for the purpose of review)

review of non-trading transactions between MCX and significant relevant parties.

Review of transactions of expenses incurred (individually) above INR 25 lakhs.

Review of trading transactions covered by related parties identified above on the MCX platform.

Review of Risk Management system of the MCX technology platform.

Ascertain whether the meetings of the Board of MCX were held in compliance with the companies act, 1956.

The office is in the receipt of the report of the Auditor (Price Water Coopers Ltd.) dated 21st April 2014 (after the completion of assessment) wherein it is observed that several officers of Financial Technologies India Ltd. (FTIT) and its associate and group companies were in control and management of assessee and that erstwhile management of assessee had executed several dubious and illegal transactions with several related parties, entities in which the management had significant interests. The observations in the auditing report made it apparent that persons associated with FTIL and erstwhile officers of MCX were acting at the behest of FTIL, and had conspired to commit a large scale economic fraud for their own benefit at the cost of MCX and its shareholders. The new management of the assessee has also filed various criminal complaints against the concerned companies and persons who where involved in the commission of the offence. I have closely perused the report of the auditor and found that the assessee has not disclosed fully and truly all material facts during the assessment proceedings under section 143(3). Hence, I have a reason to believe that the income chargeable to tax for the year under consideration has escaped assessment on account of the following issues as discussed in the succeeding paras:-

1. The assessee has paid a sum of Rs. 19.53 crores to two companies i.e. MPPL Enterprises Pvt. Ltd. (MPPL) and Ovira Logistics Pvt. Ltd. (Ovira) as placement fees for divestment of their holding in MCX-SX shares. The auditor has observed that there was no proof of these services being provided to the assessee and that the fees were also much higher i.e. 5.40% in case of MPPL and 5.72% in case of Ovira. Further the report specifies that these companies were subsidiaries of IL & FS (the purc