Point of Law: The function of the assessing authority at this stage is to administer the statute and what is required is a reason to believe and not to establish fact of escapement of income and therefore, looking to the scope of Section 147 as also sections 148 to 152 of the Act, even if scrutiny assessment has been undertaken, if substantial new material is found in the form of information on the basis of which the assessing authority can form a belief that the income of the petitioner has escaped assessment, it is always open for the assessing authority to reopen the assessment

JUDGMENT :

ASHOKKUMAR C. JOSHI, J.

1. This petition, under Article 226 of the Constitution of India, is filed by the petitioner- Kottex Industries Private Limited-assessee seeking to quash and set aside the Notice dated 30.03.2019 issued by the respondent authority under section 148 of the Income Tax Act, 1967 (herein after referred to as “the Act”) for the Assessment Year 2014-15, as it has reason to believe that the income chargeable to tax for the assessment year under consideration has escaped assessment within the meaning of section 147 of the Act.

2. The undiluted facts of the case of the petitioner are that the petitioner is a Company incorporated under the Companies Act, 1956. During the Financial Year 2011-12, relevant to Assessment Year 2012-13 (i.e. the year under consideration), the petitioner received share application money to the tune of Rs. 3,25,00,000/- from six different companies. The share application money pending allotment, was duly reflected in the Audited Annual Accounts. In the subsequent Assessment Year i.e. 2015-16, the said share application money was returned to the concerned parties. Thereafter, the petitioner filed its Return of Income (RoI) for the year under consideration on 04.09.2014, declaring total income of Rs. 3,98,69,380/-. The case of the petitioner for the year under consideration was selected for scrutiny assessment and various details were called by the then Assessing Officer including the details as to the share application money received during the year under consideration, which were furnished by the petitioner. The petitioner furnished the documentary evidence such as Confirmation, Income Tax Return, Computation of Income, Audit Report and Bank Statements pertaining to the share applicants at the original assessment stage. That, while framing assessment under section 143(3) of the Act vide order dated 30.11.2016, no addition came to be made in respect of the share application money. However, the respondent authority issued notice dated 30.03.2019 under section 148 of the Act seeking to reopen the case of the petitioner for the year under consideration. In response to the said notice, the petitioner company filed its RoI on 16.04.2019 and also requested to supply the reasons for reopening, which were supplied vide letter dated 06.05.2019. A perusal of the same revealed that the case of the petitioner was reopened on the count that the companies from which the share application money aggregating to Rs. 3,25,00,000/- was received during the year under consideration, were bogus concerns. The case of the respondent was that, during the course of scrutiny assessment of the petitioner for the Assessment Year 2016-17, addition was made under section 68 of the Act in respect of the share capital and share premium received from five companies, allegedly on the ground that such companies were bogus. The petitioner had received share application money from two out of such five companies during the year under consideration. It was further found during the scrutiny assessment for the Assessment Year 2016-17 that the concerned five companies had acted merely as conduits and that, such companies had, in turn, received money from four different companies. The petitioner has received share application money from three of such four companies during the year under consideration. As regards the sixth company i.e. Jineshwar Multitrade Pvt. Ltd. the name of the said company had been struck off by the Registrar of Companies (RoC) as was ascertained from the website of the Ministry of Corporate Affairs. The respondent authority, therefore, was of the view that all the six companies from which share application money had been received during the year under consideration, were bogus. Further, all the investor companies had common Directors namely Shri Narayan Kumar Patodiya and Shri Chandrashekhar Tiwari. Further, Shri Narayan Kumar Patodiya was the Director in total 14 companies of which, names of three comp