Reopening of assessment under Section 148 requires clear, independent reasoning demonstrating income has escaped assessment, which was not satisfied in this case.

JUDGMENT :

(BHARGAV D. KARIA, J.)

1. Heard learned advocate Mr. B. S. Soparkar for the petitioner and learned advocate Ms. Maithili Mehta for the respondent.

2. Rule returnable forthwith. Learned advocate Ms. Maithili Mehta waives service of notice of Rule for the respondent.

3. By these petitions, the petitioner has challenged the notice dated 24.03.2020 issued under Section 148 of the Income Tax Act, 1961 (for short, "the Act" ) by the respondent – Assessing Officer seeking to reopen the completed assessment for the Assessment Year 2013-13 as well as order dated 30.12.2020 disposing off the objections raised by the petitioner against reopening the assessment.

4. The brief facts of the case are that the petitioner is a limited company and is one of the importers and refiners of edible oil in India. Petitioner filed its return of income for the Assessment Year 2013-2014 on 28.11.2013 declaring total income at Rs. Nil and paid tax of Rs. 25,43,81,347/- on Book Profit under section 115JB of the Act calculated at Rs.127,14,14,059/-.

5. The case of the petitioner was selected for scrutiny and the assessment order under section 143(3) of the Act was passed on 21.12.2016 determining the total income under MAT at Rs.134,86,55,336/-.

6. Respondent thereafter issued the impugned notice under section 148 of the Act dated 24.03.2020 reopening the Assessment for the Assessment Year 2013-2014. The respondent also supplied the reasons for reopening of the assessment.

7. The petitioner assessee raised various objections on merits and requested the respondent to drop the reassessment proceedings vide letter dated 10.12.2020.

8. Respondent vide order dated 30.12.2020 disposed off the objections.

9. Being aggrieved, the petitioner has preferred this petition.

10. Learned advocate Mr. B. S. Soparkar for the petitioner submitted that the impugned notice as well as the impugned order disposing off the objections are bad, illegal and contrary to law inasmuch as the reasons recorded are based on non application of mind and upon the borrowed satisfaction by the respondent. It was submitted that there is only one reason recorded to believe that income has escaped assessment i.e. information is received from DDIT (Inv.), Panipat that in a search action conducted on 23.05.2017 at the premises of one Hitesh Jain, it is found that there are 39 dummy concerns that did not exist on the address provided and while scrutinising the Bank statements of these entities, it was found that the petitioner had dealings with three of such concerns, based upon which the respondent has concluded that the petitioner is one of the beneficiaries of accommodation provided by Mr. Hitesh Jain and such benefit is received by the petitioner to the extent of Rs.1,92,57,338/-.

11. It was submitted that the reasons recorded does not reflect any independent application of mind on the part of the respondent inasmuch as the respondent has merely reproduced the information as received by it from the DDIT(Inv.) Panipat without applying his own independent mind as to the nature of information and how it affects the petitioner’s income disclosed and assessed for AY 2013-2014. It was further submitted that the information received is cryptic and the reasons recorded are not clear and in fact the reasons state that the respondent has assumed that the information received is self-explanatory and no further inquiry is required and therefore, the respondent has acted solely on the basis of letter from the DDIT(Inv) without any independent inquiry or belief and therefore, the mandatory requirement of section 147 of the Act of the Assessing Officer having to apply his own mind to record the reasons is not satisfied. In support of his submission reliance was placed on the following decisions:

1) In case of National Construction Co. reported in (2015) 60 taxmann.com 29 (Gujarat)

2) In case of Shodiman Investments (P.) Ltd reported in (2020) 422 ITR 337 (Bombay).

12. It was further submitted that merely having a