Point of Law: It is a settled position of law that reopening of case under Section 147 of the act, after expiry of 4 years, cannot be justified unless the income chargeable to tax has escaped assessment by reason of the failure on the part of the assessee to disclose all the true and material facts necessary for his assessment.

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 201213.

2. The brief facts can be summarized as under:

2.1 The writ applicant – assessee Company filed its return of Income for the A.Y. 201213 on 28.09.2012 declaring total income at Rs. 6,58,710/and an assessment under Section 143(3) of the Act was completed on 04.06.2014.

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, the reasons recorded have been furnished to the assessee 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 incometax act, therefore reason for reopening is provided as under.

“The assessee company filed its return of income for the A.Y. 201213 on28/09/212 declaring total income at Rs.6,58,710/. The assessee was engaged in the business of trading in rough and polished diamonds. The assessment U/s 143(3) of the incometax act was completed on 04/06/2014.

2.1. In this case, an information has been received from the DCIT Central Circle1(2) vide letter No.DCIT/CC1(2)/Abd/Shripalinfo./201819/1708 dated 28/02/2019. As per the information received a search action u/s 132 of the income-tax act was carried out in the case of Shree Shivpal Vora on 16/12/2016. During the course of search action several incriminating documents were found and seized which revealed that he was in control of affairs of 44 concerns which are in the business of giving accommodation entry and M/s Kalyan Exports Pvt Ltd is one such company. M/s. Madhav Gems Pvt Ltd has entered into transaction of Rs.4,24,500/with M/s. Kalyan Exports Pvt Ltd durin the F.Y.201112,

3. Since from the search action of Investigation wing, it is established that M/s. Kalyan Exports Pvt Ltd was involved in providing accommodation entry and it was not doing any actual business activity, therefore it is apparent that the assessee is beneficiary of accommodation entry of Rs.4,24,500/from M/s. Kalyan Exports Pvt Ltd. Therefore I have reason to believe that the income to the tune of Rs.4,24,500/has escaped assessment within the meaning of section 147 of the income-tax act.

4, In this case the return of income was filed for the year under consideration and regular assessment under section 143(3) was made on 04/06/2014. Since four years from the end of the relevant year has expired in this case, the requirement to initiate proceeding under section 147 of the income-tax act is reason to believe that income for the year under consideration has escaped assessment because of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the year under consideration. It is pertinent to mention here that reason to believe that income has escaped assessment for the year under consideration have been recorded above in para 1 to 3, I have carefully considered the assessment records containing the submission made by the assessee in response to the various notices issued during the assessment and noted that the assessee had not disclosed the fact that it had taken accommodation entry of Rs.4,24,500/from M/s. Kalyan Exports Pvt Ltd which is one of the concern through which Shree Shivpal Vora was found to be providing accommodation entry and it was not doing any actual business activity. Therefore the assessee has not disclosed fully and truly all material facts necessary for his assessment. So I have reason to believe that Income for the year under consideration to the tune of Rs. 424500/-has escaped assessment within the meaning of section 147 of the income-tax act.

5. In this case more than four years have lapsed from the end of assessment year under consideration. Hen