2014 (2) TMI 851

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....y, had raised additional capital and offered shares at a premium of Rs.90 per share during the concerned assessment year. The regular assessment under section 143(3) was completed by an order framed on 24.12.2007. The notice proposing reassessment, in the present case reads as follows : "ANNEXURE 'A' RASALIKA TRADING & INVESTMENT CO. PVT. LTD. 2005-06 In this case initiation was received from DIT (Investigation), New Delhi which was circulated amongst the Assessing officers of Delhi Charge vide F. No. CIT-I/2005-06/2132 dated 13.03.2006. The information received indicated that the assessee is amongst the beneficiaries of bogus accommodation entries as under:- Bank A/c in which entry is received Amount/ instruments no. D....

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....ng into their booms of accounts their unaccounted money. In view of the above facts, I have reason to believe that the assessee had introduced its unaccounted/ disclosed income routed through such bogus accommodation entries. Thus, the Income chargeable to tax amounting to Rs. 11,00,000/ - during the A.Y. 2005-06 has escaped assessment in the case and there has been a failure on the part of the assessee to disclosed fully and truly all material facts necessary for his assessment in the AY 2005-06. Hence, the same is to be brought to tax under section 147 of the Income Tax Act. It is a fit case for initiating proceedings u/ s 147 of the Act. Sanction for issue of notice u/s. 148 as prescribed u/s 151, to assessee such income may kindly be....

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....one into by the revenue. It was argued that in these circumstances, the notice is illegal and liable to be quashed. Counsel for the revenue submitted that the notice no doubt adverted to an investigation wing report of 13.3.2006. However, counsel argued that this report was not on the record when the assessment was completed originally on 20.4.2007. In the counter affidavit the revenue stated as follows : "The contents of the para are correct and admitted to the extent that the Respondents had passed the order after application of mind and accepted the income declared by the Assessee with no adverse finding but all this done on the basis of material/documents disclosed by the Assessee. The main reason for reopening the assessment was ....

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....sessment proceedings were initiated by the impugned notice which expressly and plainly states that "reasons to believe" are based upon the materials contained in an investigation report of 13.3.2006. The notice itself does not spell out that the report was not on the record when the original assessment was completed on 24.12.2007 nor did the revenue even suggest so in the counter affidavit filed in the proceedings. It is only in a subsequently filed additional affidavit that the position is sought to be clarified. Clearly this Court refrains from making such an enquiry, at a time when the AO has, in the first instance, failed to spell out clearly in the section 148 notice itself that such report was not on record. In other words "the reason....