TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 259
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....onsideration of the facts and circumstances of the case we hold as follows. 3. The A.O. in this case has reopened the assessments based on receipt of certain information from Investigation Wing. The Ld.CIT(A) at para 10 has held as follows. "10. I have gone through the order of the Ld. AO and the submissions of the Ld.AR of the assessee. Despite my requisition, and sending a messenger from this office, I have not had the privilege of perusing the assessment record. There is no doubt that the original order was only processed u/s 143(1). It was not scrutinized u/s 143(3). Thus, the Ld. AO did not have the opportunity to form an opinion on the return of income originally filed by the assessee as held in CIT Vs Gujarat Electricity Board [2003] 260 ITR 84 (SC), MTNL Vs. Chairman CBDT [2000] 246 ITR 84 (Delhi), ACIT Vs Rajesh Jhaveri Stock Brokers Pvt. Ltd. [2007] 291 ITR 500 (SC) and Rakesh Aggarwal Vs. ACIT [1997] 225 ITR 496 (Delhi.). Thus, there can be no quarrel that the notice u/s 148 was issued, per-se. 11. The issue which needs to be determined, at the very outset, is whether there was sufficient material and independent application of mind by the Ld. AO on the information....
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....ve". The scope of the provisions of section 147 of the Act has bee analyzed by the Delhi High Court in United Electrical Co (P) Ltd. Vs. CIT (2002) 178 CTR (Del) 192 wherein it has been observed as under: "Sec. 147 of the Act authorized the A 0 to assess or reassess income chargeable to tax, if he has reason to believe that the said income for any assessment year has escaped assessment. The power conferred under the said section, particularly after t" April, 1989, is no doubt very wide but it cannot be said to be plenary. True, the amended provisions of s. 147 are contextually different from the pre-11989 provision, inasmuch as the cumulative conditions spelt cut in cl.(a) of old s. 147 namely, that income chargeable to tax had escaped assessment by reason of: (i) omission or failure on the part of the assessee to make a return of his income under s. 139 of the Act for any assessment, or (ii) failure to disclose fully and truly all material facts necessary for his assessment for that year, are not present in the main section but the crucial expression 'reason to believe' still exists in the new provision. The amended s. 147provides that where the AO has reason to believe....
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....in Cap (P) Ltd. were not giving genuine loans. However, the name of the assessee was not mentioned in the statement recorded from Sh. V.K. Jain, Director of M/s Visa Fin Cap (P) Ltd. In para NQ. 13, the Hon'ble Delhi High Court has held as under:- "13. The present case is fully covered by the earlier decision of this Court in United Electrical Co. (P) Ltd. 's case (supra). In the instant case also, there is no mention of any name much less the name of the present assessee in the statement of Sh. V. K. Jain and as such we have no hesitation in holding that the reassessment proceedings under s. 147 of the Act were not initiated in accordance with law and we have no reason to disagree with the reasoning given by the Tribunal. 14. No substantial question of law arises for our consideration in the present case and the present appeal, is hereby, dismissed with costs of Rs. 5, 000/- which should be deposited by the appellant within four weeks with the Delhi High Court Legal Services Committee." 14. In CIT Vs. Atul Jain (2008) 299 ITR 383 (Delhi), the Hon'ble jurisdictional High Court was again considering the issue of bogus/accommodation entries. Commenting on satisfa....
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....ccommodation entries. When challenged during the assessment proceedings, the AO has opted to keep quiet on the issue. Most significantly the <;.;has not even recorded his satisfaction about the correctness or otherwise of the information received from the Investigation Wing. 16. Considering the above decision and the facts on law, it is crystal clear that while reopening the assessment, the Ld. AO did not even make a preliminary enq on the veracity of the report filed by the Investigation Wing, which had been forwarded to him. The statements relied upon are general in nature as admitted by the AO himself. The Income Tax Return, as originally filed by the assessee, if any, has also not been perused by the Ld. AO. Still he decided to initiate proceedings u/s 148 of the Act. This to my mind is incorrect and not in accordance with the provisions of Section 147 read with Section 148 of the Act." 4. The order of the Ld.CIT(A) is in consonance with the decision of the Jurisdictional High Court in the case of Principal Commissioner of Income Tax vs. G&G Pharma India Ltd. in ITA no. 545/2015 vide order dt. 8.10.2015 wherein at paras 12 and 13 it was held as follows. "12. In the prese....