TaxTMI 
TaxTMI 
2010 (2) TMI 852
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....arding the modus operandi of the beneficiaries and the entry operators. The Assessing Officer after recording reasons reopened assessment u/s 147 by issue of notice u/s 148 dated 31/3/2008 which was served upon the assessee. 4. The Assessing Officer during the course of assessment proceedings noted that assessee was one of the close associates of late Shri Sanjay Mohan Aggarwal. During the financial year 2000-01, the assessee company introduced fresh share capital amounting to Rs. 4,95,00,000/-. The assessee was asked to furnish necessary details and confirmation in respect of share capital introduced and other necessary details including narration of bank statement. The assessee filed a certified copy of bank statement of Account No.3072 in the name of assessee. The Assessing Officer from copy of the bank statement noted that all credit entries were transferred from the accounts operated by Shri Sanjay Mohan Aggarwal. During the course of assessment proceedings photocopies of confirmation in respect of share capital introduced during the year were filed but the assessee failed to produce the concerned persons. Since the assessee did not produce the persons, the Assessing O....
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....as not mentioned that there was a failure on the part of the assessee to disclose fully and truly necessary material for completion of assessment. Therefore, the assessment framed u/s 143(3)/147 is bad in law. He placed reliance on the following decisions:- 1. Haryana Acrylic Manufacturing Co. Ltd. v. CIT, 308 ITR 38 (Del.) 2. CIT v. Wel Interade Pvt. Ltd., 308 ITR 22 (Del.) 3. M/s JSRS Udyog Ltd. v. CIT, 313 ITR 321 (Del) 4. CIT v. Intercontinental Trading and Investment Co. Ltd. 165 Taxman 82 (Del) He has further submitted that the Assessing Officer while recording reasons has mentioned that the income chargeable to tax has escaped assessment as per provision of sec. 147(a), (b) and (c) of the Income-tax Act, 1961. He has submitted that there is no section in the statute, namely, sec. 147(a), (b) and (c) of the Income-tax Act. Therefore, the Assessing Officer had not applied her mind while reopening the assessment. He further submitted that there was no basis with the Assessing Officer to assume that income of the assessee exceeding Rs.1 lac had escaped assessment. Therefore, reasons recorded by the Assessing Officer are highly vague and ar....
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....ya Bank, Ansari Road, Daryaganj, Delhi. This Company is an associate of Sh. Sanjay Mohan Aggarwal who as per the DIT (inv.) Report, is the oldest and most savvy entry operator of Delhi. The amount of entries given runs into crores of Rupees. These entries in the Bank Account represent unexplained cash deposited in the Bank Accounts of the Assessee Company against which cheques have been issued to beneficiaries after charging commission from them. The commission income received in cash is not declared accounted for in the Returns of income. The quantum of commission income escaping assessment, though will finally be determined after analysis of complete statements of the Bank Accounts of the Company, is certainly believed to be more than Rs.1 lakhs because as per the DIT (Inv.) Report, the amount of entries given runs into several crores of Rupees during the F.Y. 2000-01 relevant to Assessment Year 2001-02. In view of the above credible information received from the DIT (Inv.), I have reasons to believe that the income of my assessee who stands as a beneficiary from the entry provider, which is chargeable to tax has escaped assessment per the provisions of section 147(a), (b....
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....vercoming the bar set up by the proviso to sec. 147. Hon'ble Delhi High Court has held that if this condition is not satisfied, the bar would operate and no action u/s 147 could be taken. Similar view has been taken by the Hon'ble Delhi High Court in the case of CIT v. Wel Intertrade Private Ltd. (supra). Therefore, in the absence of any recording of reasons that there was failure on the part of the assessee to disclose fully and necessary facts for his assessment, the assumption of jurisdiction is bad in law. Moreover, the Assessing Officer has recorded reasons without giving any amount of income escaped. The Assessing Officer has assumed that income by way of commission must have exceeded Rs.1 lac which has not been disclosed. The reasons recorded are vague. Moreover, the Assessing Officer had also stated in the reasons recorded that commission income has escaped assessment within the provisions of sec. 147(a), (b) and (c) of the Act. With effect from 01-4-1989, there is no provision in the Income-tax Act as in sec. 147(a) or 147(b). However, Explanation 2 to sec. 147 specifies the conditions under which income chargeable to tax shall be deemed to have escaped assessment. In the ....