TaxTMI 
TaxTMI 
2015 (6) TMI 37
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing issued capital U/S 68 of the Income Tax Act, 1961. 2. That the Learned A.O. has erred in law and facts of the case in not considering the various details, pleadings and written submissions made from time to during the course of assessment proceedings. 3. That the interest as charged under Section 234B and 234C is illegal on various factual and legal grounds. 4. That the demand of Rs. 91,38,760/- created, pursuant to this assessment which is a disputed demand, be kindly stayed till disposal of the Appeal. 5. That the several observations as made and inferences drawn are untenable, incorrect, unwarranted and uncalled for. 6. That the Appellant may take any other Ground or Grounds at the time of hearing of Appeal with the kind permission of the learned I.T.A.T. 3. The grounds raised in the assessment year 2008-09 are reproduced hereunder:- 1. That the Learned Additional Commissioner of Income Tax, Range-1, Ghaziabad has erred in law by making an addition of Rs. 1,50,00,000/- to the Income of the Assessee's company being issued capital U/S 68 of the Income Tax Act, 1961. 2. That the Learned A.O. has erred in law ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on 234B and 234C is illegal on various factual and legal grounds. 4. That the demand of Rs. 1,22,93,420/- created, pursuant to this assessment which is a disputed demand, be kindly stayed till disposal of the Appeal. 5. That the several observations as made and inferences drawn are untenable, incorrect, unwarranted and uncalled for. 6. That the Appellant may take any other Ground or Grounds at the time of hearing of Appeal with the kind permission of the learned I.T.A.T. 6. The brief facts of the case are that this case has been selected for scrutiny on the information received from DIT(Inv.)-II, Delhi regarding accommodation entries provided by Shri Surendra Kumar Jain Group of cases to various beneficiary companies and other. Accordingly, after obtaining approval for issuance of notice u/s. 148 read with section 147 of the I.T. Act, 1961, a notice u/s. 148 dated 25.3.2013 was issued and served upon the assessee fixing the date for compliance within 15 days from the date of service of notice. Subsequently notice u/s. 142(1) dated 4.10.2014 alongwith questionnaire was also issued by the AO requiring various details and information as considered necessa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the impugned assessment order passed u/s. 147 by the Ld. AO is liable to be quashed." The above additional ground of appeal was not raised before the Ld. CIT(A) by assessee's counsel through oversight. Though the issue of notice u/s. 148 of the I.T. Act by the Ld. AO on the basis of information received from Investigation Wing is wholly unjustified and illegal. A Certificate of the Counsel who had prepared and filed the appeal before the Ld. CIT(A) Sh. Pankaj Gupta is reproduced below:- "To whom it may concern" This is to certify and confirm that I had prepared the grounds of appeal in the appeals of M/s Modinagar Rolls Ltd., Modinagar for the assessment years 2007-08, 2008-09 and 2009-10 filed before the Ld. CIT(A), Ghaziabad. It was through oversight that I did not raise the additional ground of appeal as mentioned in the accompanying application though objections to the issue of notice u/s. 148/147 were duly filed before the AO. For S.S. Gupta & Co. Chartered Accountants Sd/- Partner Place: Meerut Date: 18/03/2015" The appellant relies on the following case la....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... validity and legality of reassessment order passed u/s 147/148 of LT. Act 1. The AO had recorded his reasons for issuing notice u/s 147 of IT. Act as per copy placed at page 41 of the paper book. 2. The appellant had filed its objections against the issue of notice u/s 148, copy placed at pages 42- 49 of the paper book. 3. The AO had not passed any order on the objections raised by the Assessee and consequently the impugned r:eassessment order as passed u/s 147/148 is illegal and void ab-initio. Appellant relies on the decision of Hon'ble Apex Court in the case of GKN Driveshafts(lndia) Ltd. Vs. Income-tax Officer and Others - 259 ITR 19 (SC) in which it was held that the AO had to dispose of the objections, if filed, by passing a speaking order before proceeding with the assessments for those years. Failure to pass such an order has vitiated the impugned reassessment order uls 147/148 of the I.T. Act which deserves to becancelled/quashed/annulled. 4. The impugned reassessment is also illegal because in the reasons recorded, there was no specific allegation that the appellant had failed to truly disclose any material facts at the time of assessment and consequen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....are application money taken by company is nothing but their own unaccounted money introduce by way of bogus share application money. Hence, I have reason to believe that income has escaped assessment". From the above, it is evident that the Id. AO had issued notice uls 148 in respect of the share application money of Mls Shalini Holdings Ltd. which had invested share application of Rs. 25,OO,000/- only and therefore, the Id. AO was not justified in making additions of Rs. 1,50,00,000/- by adding the share application money provided by the other two limited Cos. besides S/Sh. Aditya Gupta and Ashish Gupta. 7. Moreover, the reasons have been recorded on the basis of mere change of opinion because the Id. AO had duly examined the share capital provided by all the three limited Cos. and also by S/Sh. Aditya Gupta and Ashish Gupta by proper application of his mind in the course of original assessment proceedings which stands proved from the following: a) Copies of the order sheet entry dated 27/10/2009, attached as Annexure I to these Synopsis, relevant portion of which is reproduced below at pages 6-7 &....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent Order dated 11/12/2003. Further, the reasons for reopening as communicated by the petitioner is not on the basis of any tangible material but merely on verification of the material and primary facts already on record that the Assessing Officer has duly considered while passing the order dated 11/12/2003 for Assessment Year 2007-08. There is no fresh tangible material which would warrant taking a view different from the one taken during the regular assessment proceedings. In fact even the order dated 15/10/2012 disposing of the objections clearly records that radiography charges and labor charges were made to various persons like Senior Technicians, Senior Radiographer and Jr. Technicians etc. from the chart submitted in the regular assessment proceeding leading to order dated 11/12/2009. Therefore, it is very clear that impugned notice for reassessing the assessment year 2007-08 has been issued merely on change of opinion and in fact seeks to review the assessment which is already completed. ................................... In view of the above, we find that the impugned notice dated 28/3/2012 is bad in law as the same has been issued merely on account of change of opi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act is concerned, we are of the view that the AO has issued notice u/s. 148 of the I.T. Act, after recording the following reasons which is at page 41 of the Paper Book. "Reasons for the belief that income has escaped assessment Information received from DIT(Inv.)-II, ARA Centre Jhandewalan Extn., New Delhi letter F.No.DIT(Inv.)- II/U/s.148/2012-13/240, Dated 15.03.2013 Regarding accommodation entries provided by Shri Surendra Kumar lain Group of Cases to various beneficiary companies & others. The assessee of this Range. M/s. Modi Nagar Rolls Ltd. has taken entries from the concern entry provider Shri Surendra Kumar Jain Group of cases. During the Year under consideration M/s Modi Nagar Rolls Ltd. has taken an entry of Rs. 1,45,00,000/- from Hillridge Investment Ltd.,Nisha Holding Ltd and Shalini Holdings Ltd. by check through UTI, HDFC and Axis Bank through Shri Pankaj of Meerut. I have verified the record. It is pertinent to mention here that in A.Y. 2010-11 assessment of above referred company M/s. Modi Nagar Rolls Ltd. was passed by the undersigned, On enquiry made by undersigned and non furnishing of complete detail the capacity, creditworthiness and genuineness cou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sment order invalid and also mentioned various decisions rendered by the Hon'ble Supreme Court of India, Hon'ble High Court of India and the Tribunal. Ld. Counsel of the assessee further requested that the notice u/s. 148 is illegal and assessment may be cancelled. 15.3 After perusing the Written Submissions filed by the assessee alongwith various decisions rendered by the Hon'ble Supreme Court of India and the Hon'ble High Court on the issue in dispute. We have perused the order sheet of the AO and we find that while recording the reasons by the AO, the AO has mentioned the names of three firms namely Hillridge Investment Ltd; Nisha Holdings Ltd and Shalini Holdings Ltd. and stated that the AO had issued notice u/s 148 in respect of the share application money of M/sShalini Holdings Ltd. We also find that vide the order sheet entry 27.10.2009 and 4.11.2009, the AO called the details of three parties and in response thereto the assessee filed complete details of share application money as allotted, Board Resolution, name and address of allottees and copy of challans, copy of Form No. 2 as filed with ROC, copy of bank certificate, confirmation letter with copy of incorporation ce....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e the' Assessing Officer, while framing the original scrutiny assessment, did not examine the assessee's claim to deduction. He was actually conscious of such a claim and was also of the opinion that the entire claim was not required to be granted. He called for an explanation of the assessee and after taking into consideration the explanation, made disallowance to the extent he was convinced it was necessary. If, in the process, he made a legal error, the succeeding Assessing Officer could not correct such an error, through the process of reopening of the assessment. The notice was not valid - 360 ITR 380 NTPC ltd, vs. DCIT dated 7.3.2013 (Delhi HC) (Supra). Held, allowing the petitions, that notices issued under section 148 of the Income-tax Act, 1961, seeking to reopen the concluded assessments under section 147 pertaining to the assessment years 1999-2000, 2001-02, 2002- 03 and 2003-04 were not valid. - 363 ITR 603 NDT Systems and another vs ITO dated 4.12.2001 (Bombay High Court) (Supra). "Therefore, the impugned notice and the reasons in support thereof clearly indicates that it has been issued merely on the basis of change of opinion ....