The Assessing Officer must provide clear, reasoned beliefs for reopening assessments; vague and cryptic reasons do not justify jurisdiction under the Income Tax Act.

JUDGMENT :

BHARGAV D. KARIA, J.

1. Heard learned Senior Advocate Mr. S.N. Soparkar with learned advocate Mr. B.S. Soparkar for the petitioner and learned Senior Standing Counsel Mr. Varun K. Patel for the respondent.

2. Rule returnable forthwith. Learned Senior Standing Counsel Mr. Varun Patel waives service of notice of rule.

3. All these three petitions are preferred to challenge the notice dated 31.03.2021 issued under section 148 of the Income Tax Act, 1961 (for short ‘the Act’) for the Assessment Years 2014-15, 2015-16 and 2016-17 in case of the petitioner assessee.

4. As the facts are common, the same can be summarized as under:

4.1 The petitioner is in the business of trading in gold and silver bullion. The petitioner filed return of income for the respective assessment years. For the Assessment Year 2014-15, the case of the assessee was selected for scrutiny and the order under section 143(3) was passed. For the remaining two assessment years, no scrutiny assessment was undertaken.

4.2 The respondent-Assessing Officer upon information received from credible sources that the petitioner has deposited cash of Rs. 16.80 Crore during the year 2013-14 in the bank account and on perusal of the details available it was found that the petitioner made cash sales without keeping proper documentary evidence and identity of the customers on the pretext that under no law it is mandatory to keep the details and during the year, cash deposit appearing in the bank account of the petitioner was found as under in all the three years, hence, the Assessing Officer formed reason to believe that income has escaped assessment:

4.3 For the Assessment Year 2015-16, there was one more reason for reopening as during survey conducted under section 133A of the Act by the Investigation Wing on 03.12.2016 at Indore Branch of Dhyanradha Multi State Cooperative Credit Society Ltd by DDIT (Inv.) Ujjain, it was found that the petitioner received Rs. 4,52,99,000/- which was deposited by various persons in the said cooperative society which was transferred to Axis Bank account and from that account the funds were transferred by related parties to the petitioner.

4.4 The petitioner filed objections to the notices for reopening contending inter alia that the petiitoner has accounted the cash sales in the books of account and the amount deposited in the bank account represents the cash sales and therefore, no addition can be made as it would amount to double taxation. With regard to amount received from Dhyanradha Multi State Cooperative Credit Society Ltd for A.Y. 2015-16, it was explained by the petitioner that the said amount was in relation to the sales made by the petitioner to one Patidar Enterprise during the year 2014-15 relevant to the Assessment Year 2015-16 towards the sale of the bullion and jewelry and the amount was duly reflected as sales in the books of account and offered to tax.

4.5 The Assessing Officer, however, in total disregard to the explanation given by the petitioner, disposed of the objections.

5. Learned Senior Advocate Mr. S.N. Soparkar appearing with the learned advocate Mr. B.S. Soparkar for the petitioner submitted that the reasons recorded are cryptic and vague as there is no nexus between the information received and the satisfaction recorded. It was submitted that there is complete non-application of mind in recording reasons.

5.1 It was further submitted that so far as Assessment Year 2014-15 is concerned, there was scrutiny during the course of regular assessment in which the information with regard to cash sales was called for which was submitted by the petitioner and therefore, the amount sought to be considered as escaping assessment would be a mere change of opinion.

5.2 It was further submitted that the petitioner has replied every summon and notice is