High Court on Reopening case u/s 147 to assess Bogus share capital

Case can be reopened u/s 147 of Income Tax Act where assessee is a dummy concern used to route unaccounted money by way of bogus share application money.

Madhya Pradesh High Court in matter of M/s Etiam Emedia Limited v/s Income Tax Officer-2(2) & Another

The Extract of Order is given below

45. In the present case, the reasons recorded in the matter were certainly communicated to the petitioner. The objections of the petitioner have been properly dealt and it is not a case of mere suspicion, it is a case, wherein the competent authority was having reason to believe to reopen the assessment. There was a specific information available with the authorities. The reasons to believe had been properly understood by the authorities and there was material on the basis of which, notice was issued.

46. In exercise of the jurisdiction under Article 226 of the Constitution of India, the sufficiency or insufficiency for the formation of the reason to believe cannot be considered, as held by the Delhi High Court. It is certainly open to the assessee to participate in the reassessment proceedings and to put forth its stand in detail to satisfy the Assessing Officer that no escapement of income has taken place.

At this stage, this Court does not find any reason to interfere with the notice as well as with the order passed by the respondents.

No case for interference is made out in the matter.

Accordingly, the present writ petition stands dismissed.

Certified copy, as per rules.

Click Here to Buy CA Final Pendrive Classes at Discounted Rate