JUDGMENT

Heard Sri Ashish Bansal learned counsel for the petitioner and Sri Manu Ghildayal learned counsel for the revenue.

2. Present writ petition has been filed by the assessee to question the reassessment proceedings initiated in its case under section 148 of the INCOME TAX ACT , 1961 (hereinafter referred to as 'the Act') pursuant to the earlier order passed under Section 148(a) (d) of the Act, dated 31.7.2022 and the consequent notice issued on that date.

3. Submission of learned counsel for the petitioner is, the very initiation of the reassessment proceedings was bad. The Assessment Year in question is 2013- 2014. Three years from the end of that Assessment Year expired on 31.3.2017. By virtue of mandatory provisions of Section 149 of the Act read with relevant Circular of the CBDT, no reassessment proceedings may have been initiated against the petitioner after 31.3.2017 if the component of income alleged to have escaped assessment was less than 50 Lakhs.

4. In the present case, relying on the view now expressed by the assessing authority contained in its final show cause notice dated 12.5.2023, it has been vehemently urged, the objection raised by the petitioner at the initial stage that there was no second transaction of Rs. 27 lakhs and that there was only one transaction of Rs.27 lakhs alleged to have escaped assessment has been found true. The reassessment proceedings may not have been initiated at all since the quantum of escapement was only Rs. 27 lakhs i.e. well below the statutory limit of Rs. 50 lakhs.

5. To bolster his submission, learned counsel for the petitioner has referred to the original notice issued under Section 148(a) (b), dated 25.5.2022; reply furnished by the assessee thereto dated 11.6.2022 and; the order passed by the assessing authority under Section 148(b), dated 31.7.2022. Thus, it has been elaborated, at the stage of assuming jurisdiction, the assessing authority wrongly brushed aside the specific objection of the petitioner as to absence of second transaction of Rs. 27 lakhs. The recital in that order that accommodation entry had been provided to the petitioner in an unaccounted bank account from another unaccounted bank account of M/s Jar Metal Industries Pvt. Ltd. was nothing but a figment of imagination.

6. Thus, it has been submitted, reassessment proceedings have been initiated against the petitioner on non existent material. If the non existent transaction of Rs. 27 lakhs is ignored, then by virtue of the mandatory language of Section 149, no reassessment proceedings could ever have been initiated. It has been further submitted, reassessment order has been passed in the present case on 25.5.2023.

7. On the other hand, learned counsel for the revenue would submit, there is no material to reach any conclusion at this preliminary stage that the information pertaining to the second transaction of Rs. 27 lakhs was non-existent. The fact that such information has not been found credible enough to include that amount in the component of escapement of income may not prejudice the initiation of reassessment proceedings. At the stage of initiation of the proceedings, only a satisfaction was required to be drawn on the strength of information then available. At that stage, in the present facts, the assessing authority felt satisfied that there were two accommodation entries of 27 lakhs each, obtained by the assessee from M/s Jar Metal Industries. However, it may be true, during the course of reassessment proceedings and upon consideration of the replies furnished by the assessee, the assessing authority is now proposing to take a different view by ignoring one alleged accommodation entry of Rs. 27 lakhs. That course is stated to be wholly permissible in law and in the interest of assessee itself.

8. Then, it has been submitted, at present, there is no material to reach any conclusion that the other accommodation entry of Rs. 27 lakhs relied against the petitioner was either non-existent or tha