TaxTMI 
TaxTMI 
2016 (4) TMI 995
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.... (a) Assuming jurisdiction u/s 148 of the IT Act 1961 in the absence of relevant information with him leading to formation of belief that the income had escaped assessment. (b) Making an addition of Rs. 10,01,045/- in the returned income of the Assessee Company by treating the amount of share application money as accommodation entries amount. (c) Ignoring the fact that shareholder Companies have been struck of the records of Registrar of Companies but still the confirmations of its then directors dated 12.02.2013 is on records. (d) Ignoring the fact the shareholder's existence at the time of remittance of share application money, the allotment of shares and confirmation of the above given by the director....
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....ssue, the Learned AR submitted that the reasons recorded under sec. 148(2) of the Income-tax Act, 1961 in the present case are based on "borrowed satisfaction" of DIT (Inv), New Delhi, hence, the very initiation of proceedings under sec. 147 of the Act is bad in law. 4.1 The Learned AR contended further that there was no application of his own mind by the Assessing Officer for formation of belief himself that income had escaped assessment as it is very much evident from the reasons recorded that his action was solely based upon the information received from the Investigation Wing. 4.2 In support, the Learned AR referred the contents of the reasons recorded and reproduced at page No.1 of the assessment order. He pointed out that the re....
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....e present case, are being reproduced hereunder: "12. In the present case, after setting out four entries, stated to have been received by the assessee on a single date i.e. 10th February 2003, from four entries which were termed as accommodation entries, which information was given to him by the Directorate of Investigation, the A.O. stated: "I have also perused various materials and report from Investigation Wing and on that basis it is evident that the assessee company has introduced its own unaccounted money in its bank account by way of above accommodation entries." The above conclusion is unhelpful in understanding whether the A.O. applied his mind to the materials that he talks about particularly since he did not describe wha....
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....the requirement of law that prior to the reopening of the assessment, the A.O. has to apply his mind to the materials, conclude that he has reason to believe that income of the assessee has escaped assessment. Unless that basic jurisdictional requirement is satisfied, a post mortem exercise of analyzing materials produced subsequent to the reopening will not rescue an inherently defective reopening order from invalidity. 14. In the circumstances, the conclusion reached by the ITAT cannot be said to be erroneous. No substantial question of law arises." 7. Now, we have to examine the reasons recorded in the present case before us in view of the ratios laid down in the above cited decision of the Hon'ble jurisdictional High Cou....
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.... within the meaning of section 147 of the Income Tax Act, 1961. Since 4 years have been elapsed, the facts are submitted for your kind perusal and approval of the Addl./Jt. CIT, Range-8, New Delhi as per section 151(2) of the Income Tax Act, 1961 for issuance of notice u/s 148 of the Income Tax Act." 8. The very perusal of the reasons, it is apparent that these were based on the information received from DIT(Inv), New Delhi after narration of which, the Assessing Officer has simply recorded that he had reason to believe that amount/income of Rs. 6.06 lacs has escaped assessment for the assessment year 2005-06 for failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment withi....
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....ng Officer has simply recorded the information received from the Investigation Wing and without making any exercise of his mind on those information to form his own reasons to believe for the escaped assessment of Rs. 6.06 lacs, has issued notice under sec. 148 of the Act. We, respectfully following the ratios laid down by the Hon'ble jurisdictional High Court of Delhi in the case of CIT vs. G&G Pharma India Ltd. (supra), hold that the reasons to believe recorded by the Assessing Officer in the present case to initiate the proceedings under sec. 147 of the Act without application of his own mind on the information received were not as per the requirement of the provisions of the law laid down under sec. 147 of the Act, hence, the initiation....