TaxTMI 
TaxTMI 
2013 (5) TMI 414
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....years from the end of the relevant assessment year. The Tribunal held that as there has been no failure on the part of the assessee to disclose material facts and the same is also not alleged either in the notice under Section 148 or in the reasons recorded for initiating reassessment proceedings, the reassessment proceedings are illegal and without jurisdiction. In absence of failure, on the part of the assessee, to disclose fully and truly all material facts necessary for the proceedings, the Assessing Officer would lack the jurisdiction to initiate reassessment proceedings. Consequently, the Tribunal has quashed the reassessment order. 2. The challenge on the part of the revenue to the order passed by the Tribunal has to be considered in light of the following facts. 3. The assessee filed its return of income on 31.03.2003 declaring an income of Rs. 30,18,779/-. The said return was initially accepted under Section 143(1) on 30.05.2003. However, subsequently on 20.10.2003, the same was taken up for scrutiny. The balance sheet and the books of account of the assessee disclosed that, during the relevant previous year, the assessee had received an aggregate sum of Rs. 4,82,01,....
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....spect of whom the additions were made in the assessment order dated 30.03.2005. The assessee further produced evidence to show that in some cases, the share application money had since been refunded. The CIT (Appeals) forwarded the additional evidence produced by the assessee to the Assessing Officer for examining the same and furnishing a report thereon. The Assessing Officer submitted a report dated 07.10.2005 reiterating the issues mentioned in the assessment order. The CIT (Appeals) concluded that some of the persons to whom summons had been issued could not appear before the Assessing Officer due to paucity of time and, in the light of the subsequent evidence, deleted the additions made by the Assessing Officer to the extent of Rs. 37 lacs. The addition of Rs. 5 lacs in relation to the share applicant who had categorically stated that she had no link with the assessee was upheld by the CIT(A). 5. It can be seen from the above facts that the assessee furnished all particulars relating to the share application money including confirmations from the share applicants as well as other evidence in relation to those persons, who the Assessing Officer had found to be suspect. 6.....
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....50088 500000 26-JUL-01 --DO-- --DO-- --DO-- 50088 500000 26-JUL-01 --DO-- --DO-- --DO-- 50088 500000 26-JUL-01 --DO-- --DO-- --DO-- 50088 500000 26-JUL-01 --DO-- --DO-- --DO-- 50088 500000 26-JUL-01 --DO-- --DO-- --DO-- 50088 500000 495673 21-JUL-01 DINANAT H LAHURIWALA OBC MINTO ROAD 19 500000 495673 21-JUL-01 --DO-- --DO-- --DO- 19 500000 495673 21-JUL-01 --DO- --DO- --DO- 19 500000 495673 21-JUL-01 --DO- --DO- --DO- 19 500000 495673 21-JUL-01 --DO- --DO- --DO- 19 500000 495673 21-JUL-01 --DO- --DO- --DO- 19 500000 495673 21-JUL-01 --DO- --DO- --DO- 19 250000 142208 30-JUN-01 DINESH GUPTA JAILAXMI COOP BANK FATEHP URI 11246 250000 142208 30-JUN-01 --DO-- --DO-- --DO-- 11246 250000 142208 30-JUN-01 --DO-- --DO-- --DO-- 11246 250000 142208 30-JUN-01 --DO-- --DO-- --DO-- 11246 250000 142208 30-JUN-01 --DO--....
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....000 311122 18-JUL-01 --DO-- --DO-- --DO-- 2919 500000 311122 18-JUL-01 --DO-- --DO-- --DO-- 2919 500000 311122 18-JUL-01 --DO-- --DO-- --DO-- 2919 500000 311122 18-JUL-01 --DO-- --DO-- --DO-- 2919 500000 311122 18-JUL-01 --DO-- --DO-- --DO-- 2919 500000 311122 18-JUL-01 --DO-- --DO-- --DO-- 2919 500000 311122 18-JUL-01 --DO-- --DO-- --DO-- 2919 250000 135415 30-JUN-01 SUSHIL GOYAL JAILAXMI COOP BANK FATEH PURI 10081 250000 135415 30-JUN-01 --DO-- --DO-- --DO-- 10081 250000 135415 30-JUN-01 --DO-- --DO-- --DO-- 10081 250000 135415 30-JUN-01 --DO-- --DO-- --DO-- 10081 250000 135415 30-JUN-01 --DO-- --DO-- --DO-- 10081 250000 135415 30-JUN-01 --DO-- --DO-- --DO-- 10081 500000 503258 27-JUL-01 SWETU STONE P. LTD OBC MINTO ROAD 33 500000 503258 27-JUL-01 --DO-- --DO-- --DO-- 33 500000 503258 27-JUL-01 --DO-- --DO-- --DO-- 33 500000 503258 27-JUL-01 ....
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....the basis of initiating the reassessment proceedings. The Assessing Officer recorded that he had reason to believe that the amount of Rs. 3,65,80,000/- has escaped assessment. It is relevant to state that the reasons as furnished by the Assessing Officer, first of all, did not disclose any allegation that the assessee had failed to make any disclosure for the purposes of the assessment. Secondly, it would be pertinent for us to mention that a bare perusal of the entries listed in the table forming a part of the reasons indicate that most of the entries have been repeated six times to form the total of Rs. 3,65,80,000/-. The Assessing Officer has thus made an addition on the basis of certain set of alleged entries which ex facie include the same entries which have been repeated multiple times to arrive at the figure of Rs. 3,65,80,000/-. This is clearly evident from the fact that the details of instruments through which payments are alleged to have been made are also similar. 9. We may also add that although the said reasons as furnished by the Assessing Officer contain a statement that information had been received that certain goods of the assessee had been seized by DRI and pe....
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....d failed to disclose all the material facts but the same can be gleaned from the reasons itself. We are unable to accept this contention. In the first instance, we do not find the reasons as recorded by the Assessing Officer to be reasons in law, at all. A bare perusal of the table of alleged accommodation entries included in the reasons as recorded, discloses that the same entries have been repeated six times. This is clearly indicative of the callous manner in which the reasons for initiating reassessment proceedings are recorded and we are unable to countenance that any belief based on such statements can ever be arrived at. The reasons have been recorded without any application of mind and thus no belief that income has escaped assessment can be stated to have been formed based on such reasons as recorded. 15. Having stated the above, we are also unable to accept the contention that there has been failure on the part of the assessee to disclose all material facts in his return as, first of all, there is no such allegation in the reasons as furnished to the assessee; secondly, we cannot ignore the fact that the enquiry into the share application money had been conducted in de....
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....ed by the Assessing Officer. In fact, as indicated above, the Assessing Officer could not have made this a ground because the Assessing Officer had required the petitioner to furnish details with regard to loss occasioned by foreign exchange fluctuation which the petitioner did by virtue of the reply dated February 5, 2002. Since the petitioner had fully and truly disclosed all the material facts necessary for the assessment, the pre-condition for invoking the proviso to section 147 of the said Act had not been satisfied. In this connection, it may be relevant to note one decision, although there are several others. The said decision is that of the Punjab and Haryana High Court in the case of Duli Chand Singhania v. Asstt. CIT : (2004) 269 ITR 192. In the said decision, the High Court of Punjab and Haryana was faced with a similar situation. The court noted that there was not even a whisper of an allegation that the escapement in income had occurred by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. The court observed that absence of this finding, which is the sine qua non for assuming jurisdiction ....