Point of Law: Section 68 of Act, as is well known, provides that where any sum is found credited in books of an assessee maintained for any previous year, and assessee offers no explanation about the nature and source thereof or explanation offered by him is not, in the opinion of Assessing Officer, satisfactory, the sum so credited maybe charged to income tax as the income of the assessee of that previous year.

ORDER :

ILESH J. VORA, J.

1. By filing this writ application under Article 226 of the Constitution of India, the writ applicant seeks to challenge the impugned Notice issued under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) dated 01.03.2008 for the A.Y. 2012-13, whereby, the assessment is sought to be reopened in exercise of the powers under Section 147 of the Act, 1961.

2. The brief facts can be summarized as under:

2.1 The assessee company is engaged in the manufacuring of pharmaceutical intermediates. The assessee filed its e-return of income on 27.09.2012 declaring total income at Rs.2,02,52,860/-. The return was processed under Section 143 (1) of the Act. The case was selected for scrutiny assessment and under Section 143 (2) of the Act, the notice was issued on 06.08.2013. The notice under Section 142 (1) of the Act along with questionnaire was issued on 17.10.2013 and 30.10.2014 and in response to the notices, the assessee company submitted its details. After perusing the details furnished by the assessee, the assessing officer raised the issues i.e. (1) Disallowance of cash payment under Section 40A (3) of the Act, (2) Employee's contribution towards P.F & ESIC (3) Disallowance under Section 195 of the Act and finally, the additions were made under the issue raised and the scrutiny assessment framed vide order dated 04.03.2015.

2.2 Thereafter, the assessing officer reopened the assessment under Section 147 of the Act by issuing impugned notice dated 01.03.2018 under Section 148 of the Act.

2.3 At the request, the reasons recorded have been furnished to the assessee, which reads as under:-

“Brief details of the assessee

The assessee company is engaged in the business manufacturing of Pharmaceuticals Intermediates. The assessee filed its e-return of income on 27.09.2012 declaring total income of Rs.2,02,,52,860/-. The return was processed under Section 143(3) of the Act. The case was selected for scrutiny assessment and order under Section 143(3) of the Act was passed on 09.03.2015 determining total income at Rs.2,20,77,490/-.

Brief details of information received by this office :-

This office is in receipt of following information from the office of Asst. (Inv.) Unit-2(2), Mymbai:-”Enquiries have been conducted in the case of Shri Yogesh D. Waghela, Prop. Of M/s. Brown Pharmaceuticals & Chemicals, PAN AAWPW7911Q. It is seen that Shri Yogesh D. Waghela has not filed return of income for A.Y. 1011-12 & 2012-13.

Summons were issued to HDFC & ICICI Bank and statements of following accounts for F.Ys 2010-11 & 2011-15 were obtained:

Sr. No.Name of the Bank Account in the name of Account No.1HDFC Bank Brown Pharmaceuticals & Chemicals 4750500016352ICICI Bank Brown Pharmaceuticals & Chemicals 15805006609

On further perusal of account nos.00475050001635 & 015805006609 of the assessee held with HDFC Bank & ICICI Bank respectively, it is seen that credits & debits in the above bank accounts are as under:-

Bank account No.F.Y. 2010-11F.Y. 2011-12Credits (Rs.)Credits (Rs.)Debits (Rs.)HDFC Bank – 47505000163512,48,64,51412,30,04,96311,85,82,618 12,04,41,646ICICI Bank -158050066091,15,28,0511,15,39,051Account closed on 15.07.2010

It is pertinent to mention here M/s. Brown Pharmaceuticals & Chemicals is amongst the concerns which are declared as suspicious parties by Mahrashtra State VAT department.

Further, summons were issued to HDFC Bank & ICICI Bank to provide the details of credits and debit parties in the above bank statement and from the anaylysis of details received from the HDFC Bank & ICICI Bank and the list of beneficiaries to hawala operators received from sales Tax Department (Maharashtra) which is consolidated by the Directorate of investigation, Mumbai, it is observed that following entities reflecting in the bank statement are also reflecting in such hawala list either as beneficiaries or as Hawala Dealer:

Sr. No.Name of Beneficiary/hawala DealerPAN1SRS PHARMACEUTICALS PVT. LTDAAFCS4633P2TEJAK