Point of Law: It is settled law that the reopening of the assessment beyond 4 years from the end of the relevant year, the Assessing Officer must have reasons to believe that income chargeable to tax have escaped assessment and same was occasioned either on account of failure on the part of the assessee to make a return of his income or disclose fully and truly all material facts necessary for assessment of that year and both the conditions are condition precedent and must be satisfied simultaneously before issuance of the notice.

ORDER :

ILESH J. VORA, J.

1. By filing this writ application under Article 226, the writ applicant seeks to challenge the notice dated 31.03.2019 issued by the respondent under Section 148 of the Income Tax Act, 1961 (‘the act’ for short) seeking to reopen the applicant’s income assessment for the A.Y 2012-13.

2. The brief facts leading to file the present writ application can be summarized as under:

2.1 The writ applicant – assessee Company filed its return of Income for the A.Y. 2012-13 on 24.08.2012 declaring total income at Rs. 28,910/and same was processed under Section 143(3) of the Act and final assessment was completed on on 31.03.2014.

2.2 The Assessing Officer has reopened the assessment under Section 147 by issuing impugned notice dated 31.03.2019 under Section 148 of the Act.

2.3 At the request of the writ applicant, reasons recorded have been furnished to the writ applicant on 09.05.2019, which reads as under :

“2. Since you have filed return of income in response to notice u/s. 148 of the income tax act, therefore, reason for reopening is provided as under:

“ The assessee company filed its Return of Income for the A.Y. 2012-13 on 24.08.2012 declaring total income at Rs. 28,910/. In this case assessment order under Section 143(3) was passed on 31.03.2014.

2. In this case, an information has been received from O/o the DDIT(Inv.), Unit2, Surat through email on 22.03.2019, related to inquiry report in the case of Shri Afroz Mohd. Hasanfatta and group. In this case, Enforcement Directorate (ED) received information through Customs Department Surat that some of the companies opened their bank accounts with ICICI Bank Surat and used their accounts for making foreign remittances against fake import documents. The ED conducted investigation and filed a charge sheet against some persons on 18.07.2014 and later on a supplementary chargesheet was filed on 18.07.2014 before the Special Court under the Prevention of Money Laundering Act, 2002. During the course of investigation by ED, searches at several places were conducted. Further, investigations were also carried by the Income Tax department on the inputs from other Govt. Agencies as well as its own information; which brought the big scam of money laundering to the fore. In the investigation, it was found that foreign remittances have been made by the following 12 entities from their bank accounts to the Dubai and Hongkong based companies on the strength of fake documents for the purpose of money laundering:

3. During the course of investigation, the following facts were unearthed:

1. These companies remitted total foreign outward remittances of INR 8,159 crores.

2. These entities had received the above said amounts through RTGS credits in their respective bank accounts primarily from certain other Indian fictitious concerns.

3. It was found that the accused Shri Madanlal Manekchand Jain and Shri Afroze Mohd. Hasanfatta have used the companies and fictitious firms for illegal transfer of money to Dubai and Hongkong based companies/concerns on the strength of fake import documents.

4. Shri Afroze Mohd. Hasanfatta was arrested on 21.05.2014 and his statement was recorded on 22.05.2014 under section 50 of PMLA, 2002. In his statements, he has Stated the entire modus operandi of money laundering scam.

5. Shri Madanlal M J