The main legal point established in the judgment is the requirement for clear and unambiguous reasons based on 'reason to believe' for reopening an assessment under Section 147 of the Income-tax Act, and the assessing officer's obligation to disclose fully and truly all material facts necessary for assessment.

JUDGMENT

Dhiraj Singh Thakur, J. - The Petitioner challenges the validity of the notice issued under Section 148 of the Income-tax Act, 1961 ('Act'), as also the proceedings for reopening of assessment under Section 147 of the Act.

2 Briefly stated the material facts are as under :

The Petitioner fled a return of income under Section 139 of the of the Act for the assessment year 2015-16. The case was selected for scrutiny under Computer Assisted Scrutiny Selection ('CASS'). The assessing offcer issued a notice under Section 142(1) of the Act calling for various details mentioned therein. The Petitioner states that pursuant to the said notice, it submitted its fnancial statements for the year ending 31 March 2015. The assessment proceedings were completed under Section 143(3) on 31 August 2017 accepting the loss at Rs.(-) 4,23,213/- declared in the return of income.

3 A notice under Section 148 of the Act dated 31 March 2021 was issued by the assessing offcer seeking to reopen the Petitioner's assessment for assessment year 2015-16 on the ground that the assessing offcer had reason to believe that income for that year had escaped assessment within the meaning of Section 147 of the Act. The notice under Section 148, therefore, required the Petitioner to fle a return in the prescribed form for the said assessment year within 30 days from the date of service of the said notice. The notice was purported to have been issued after obtaining necessary satisfaction of Principal Commissioner of Income Tax-5, Mumbai.

4 The Petitioner further states that return of income was fled in response to the notice under Section 148 on 13 April 2021 declaring income at Rs.(-) 4,23,213/- and further also made a request for a copy of the reasons recorded for reopening the assessment. This right was exercised keeping in view the directions of the Supreme Court in the case of GKN Drivershafts (India) Ltd. Vs. ITO (2003) 259 ITR 19, wherein it was held that on receipt of a notice under Section 148, the proper course for the assessee was to fle a return if he so desired and to seek the reasons for issuing the notice. The assessing offcer was then held bound to furnish reasons, to which the the Noticee was entitled to fle objections to the notice. Thereafter, assessing offcer was held to be under an obligation to dispose of the same by passing a speaking order.

5 Respondent No.1, accordingly, supplied the reasons recorded for reopening the assessment vide communication dated 23 June 2021, which read as under :

1. .........

2 Brief details of information collected/received by the AO : In this case, credible information is received on INSIGHTS PORTAL under the high risk CRIU/VRU cases. On perusal of the information from the insights portal, it is stated that the assessee has transacted funds with the Account No.914020039098036 of M/s Outstripe Suppliers Pvt. Ltd. which has been conclusively proven to be a shell company by the investigation wing. The assessee has taken accommodation entries amounting to Rs.2,15,00,000/- during the A.Y.

3. Analysis of information collected/received : It has been conclusively proven from the investigation report of the investigation wing that the assessee is the benefciary of accommodation entries by layering of funds through various shell companies. The details of the accommodation entries take by the assessee are categorized as under :

Sr. No. Particulars of Bank A/c Value

1. Account No.914020039098036 Rs.2,15,00,000/- of M/s Outstripe Suppliers Pvt. Ltd.

4. ............

5. ............

6. Basis of forming reasons to believe and details of escapement of income : As discussed above, the assessee is a benefciary of accommodation entries which the assessee has used to evade taxation. In view of this, I have reasons to believe that income more than Rs.2,15,00,000/-, chargeable to tax escaped assessment within the meaning of Section 147 of the Act, due to the failure on the part of the assessee not to disclose fully and truly all the material