TaxTMI 
TaxTMI 
2015 (8) TMI 1347
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.... is legally valid. 3. The Learned CIT(Appeals) has grossly erred on facts as well as in law in ignoring that the notice u/s. 148 is ab-initio void because the Ld. A.O. had not taken the approval from CIT u/s. 151 before issue of such notice though the assessment reopened was completed u/s. 143(3). 4. The Learned CIT(Appeals) has grossly erred on facts as well as in law in ignoring that no action u/s.147/148 can be taken against the assessment completed u/s. 153A/143(3). 5. The Learned CIT(Appeals) has grossly erred on facts as well as in law in ignoring that no addition can be made while completing assessment u/s. 153A/148/143(3) as no incriminating document was found during the course of search and no assessment proceeding was pending on the date of search. 6. The Learned CIT(Appeals) has grossly erred on facts as well as in law in ignoring that the reasons recorded do not indicate any satisfaction of the Ld. A.O. that there is any escapement of income due to failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. 7. The Learned CIT(Appeals) has grossly erred on facts as well as in law in confirming the addition of Rs. 45,0....
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....ssed under sec. 143(1) of the Act. Search was conducted on 18.1.2007 and assessment was framed under sec. 153A/143(3) of the Income-tax Act, 1961 on 31.12.2008 on the same income. On 30.3.2012, notice under sec. 148 of the Act was issued and reasons recorded were supplied to the assessee on 11.02.2013. The assessee filed objections on 08.03.2013 which were rejected on the same day. Thereafter, notice under sec. 142(1) of the Act was issued on 11.3.2013 along with query regarding investment of Rs. 45 lacs and the reassessment was completed on 26.3.2013 under sec. 147/143(3) of the Act. In this reassessment, the Assessing Officer made an addition of Rs. 45 lacs under sec. 68 of the Act on account of alleged accommodation entries in respect of investment in the share capital. 6. In ground No.1, the assessee has raised the issue of violation of principles of natural justice and the provisions of Income-tax Act, 1961. No argument has been advanced against the violation of principle of natural justice by the Learned CIT(Appeals). It is according subjected. So far as violation of the provisions of the Income-tax Act, 1961 is concerned, it is general in nature and does not need an indepen....
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.... case of ITO vs. Lakhmani Mewal Das (1976) -130 ITR 437 (S.C) and others. 10. The Learned AR contended that once search has been conducted and all the escaped income has been taxed under sec. 153A of the Act, there does not remain any scope for invocation of section 147 of the Act. He submitted that perusal of the reasons indicate that notice under sec. 148 has been issued in a mechanical manner on the basis of vague information from Investigation Wing as the information is so vague that it does not even mention the names and addresses of the entities providing the so-called accommodation entries and the purpose for which they were provided i.e. loan, gift, investment etc. There is no reference to any corroborative material in the possession of the Assessing Officer. He has not mentioned any material which led him to belief that the information received, is based on some relevant material and the income has escaped assessment. He cited following decisions in support: i) G & G Pharma India Ltd. vs. ITO - (2015) - TIOL-191-ITATDelhi; ii) Signatures Hotel (P) Ltd. vs. ITO (2011) - 338 ITR 51 (Del.); iii) CIT vs. Atul Jain (2008) - 299 ITR 383 (Del.). iv )Smt. Shakuntala Devi ....
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.... material facts necessary for its assessment while recording reasons to belief. 14. Considering the above submissions on the issue of validity of the initiation of reopening proceedings, we find that the conclusion of the ld CIT(A) at Page No.19 of the First Appellate Order that the approval was obtained from the Additional CIT, has not been rebutted by the revenue. The contention of the assessee in this regard remained that under the provisions of Section 151(1) of the IT Act, the Assessing Officer was required to obtain approval from the CIT before issue of notice u/s 148 which was not taken. In support the decision of the Hon'ble Bombay High Court in the case of Smt. Suman Waman Choudhury (supra) approved by the Hon'ble Supreme Court in SLP (C) No.6757 of 2009 judgment dated 16.03.2009 has been cited by the Learned AR, holding that the notice was without jurisdiction for want of prior approval of the concerned authority u/s 151(2) of the Act. Admittedly in the present case before us prior approval of the prescribed authority i.e. Commissioner of Income Tax has not been obtained before issuance of notice u/s 148 of the Act. Hence, we respectfully following the ratio laid down in....
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....e assessee has contended that vide letter dated 08.03.2013 it had requested the Assessing Officer to provide the following information to the assessee, but the Assessing Officer did not provide the required information, which suggests that the Assessing Officer did not have any corroborative evidence: i) The letter dated 27.03.2012 received from the office of ACIT, Central-22, New Delhi ii) The documentary evidence and basis on which such opinion is formed by ACIT, Central-22, New Delhi iii) How such documents are verified by you and what sort of enquiry was made prior to issuance of notice under section 148 iv) Result of the enquiry made be communicated upon the basis of which it is inferred by you that the income already assessed under section 143(3) required Revenue-assessment under section 148 after the expiry of 4 years. 15. The contention of the ld AR remained that the information received from the Investigating Wing which was passed to the Assessing Officer is vague and he does not even mention the names and addresses of the entities providing the so called accommodation entries and the purposes for which they were provided, i.e. loan, gift, investment etc. There is....
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.... of the Hon'ble Supreme Court in the case of ACIT Vs. Hotel Blue Moon (supra) cited by the ld AR. Respectfully following the ratio laid down in this case of the Hon'ble Supreme Court we concur with the contention of the assessee and hold that in absence of issuance of notice u/s 143(2) of the Act, the assessment in question framed u/s 147/ 143(3) of the Act is void ab initio. 17. In view of above finding, the initiation of reopening proceeding, acquisition of jurisdiction by the Assessing Officer for the proceedings and the assessment framed in furtherance to the said invalid notice u/s 148 of the Act is held invalid on counts discussed above. In view of this finding, other contentions do not need adjudication. The issues raised in this regard in Ground Nos. 2 to 6 and additional grounds to the above extent are accordingly allowed. 18. In view of above findings on the validity of the very assessment itself, the other grounds questioning the additions upheld by the ld CIT(A) have become infructuous and academic only. These grounds thus do not need any adjudication. 19. In the result appeal is allowed. ITA No. 55/Del/2015: 20. The assessee has questioned First Appellate Order on....
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....that the issue raised in the additional ground is legal in nature which goes to the root of the matter and adjudication of which does not require consideration of fresh material. The Learned AR submitted further that though in the ground Nos. 2 to 6, the assessee has already questioned the validity of issuance of notice under sec. 148 of the Act and the assessment framed in consequence thereto but still to avoid any technical difficulty on specific contention regarding validity of assessment in absence of notices issued under sec. 148 as well as sec. 143(2) of the Act has been raised. 22. The learned CIT(DR) on the other hand objected the application. 23. Considering the above submission that the issue raised is legal in nature which goes to the root of the mater and adjudication of issue raised in the additional ground does not require consideration of fresh material outside the record, we allow the application and in result additional ground is admitted for our adjudication. We will deal with it along with ground Nos. 2 to 4 in the succeeding paragraphs. 24. In ground No.1, the assessee has raised the issue of violation of principles of natural justice and the provisions of In....
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....sence of his own satisfaction of the Assessing Officer. The Assessing Officer in the present case has simply mentioned "perusal of information received from ACIT, CC-22, vide letter No....., is came to notice that the above named assessee has received accommodation entries from Shri S.K. Gupta" , without any verification. In support he placed reliance on the following decisions: i) CIT vs. Shri Rajasthan Syntex Ltd. (2009) - 313 ITR 231 (Raj.); ii) ITO vs. Vijender Kumar (2012) - 67 DTR(Del) (Trib.) - 283. 28. The Learned AR contended further that the expression "reasons to believe" has been explained by the Hon'ble Supreme Court in the case of ITO vs. Lakhmani Mewal Das (1976) - 103 ITR 437 (S.C) holding that if the confession from the creditors does not name the assessee, the confession cannot lead to reasons to believe that income has escaped in the case of the assessee. 29. Learned AR contended that there was no application of mind by the Assessing Officer before issuing notice under sec. 148 of the Act. The Assessing Officer vide letter dated 08.03.2013 was requested to provide the following information but no information/document was provided to the assessee and the....
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....erred to any material on the basis of which he had arrived at the satisfaction. He placed reliance on the following decisions: i) The Central India Electric Supply Co. Ltd. vs. ITO - ITA No. 17/1999 dated 28.01.2011 (Delhi High Court); ii) Arjun Singh vs. ADIT (2000)- 246 ITR 363 (MP); 32. The Learned AR submitted that notice under sec. 148 cannot be supported by any other fact than the reasons recorded. The reasons recorded cannot be supplemented later on even while rejecting the objections filed by the assessee. He placed reliance on the following decisions: i) Additional DIT vs. Indivest Pte. Ltd., SLP Civil No. 36562/2012 - order dated 23.3.2013; ii) Northern Exim (P) Ltd. vs. DCIT- 2012 - TIOL-220-S.C-Del- IT; iii) Prashant S. Joshi vs. ITO (2010) - 1 Taxman.com 103 (Bom.) 33. The Learned AR contended that the reassessment order in question is illegal also because notice under sec. 143(2) was never issued before completing the reassessment. Reliance was placed on the following decisions: 1) Greater Noida Industrial Development Authority vs. ACIT- 2015-TIOL-227-ITAT-Del, order dated 9.1.2015; 2) CIT vs. Rajiv Sharma (2010) - 192 Taxman 197 (All.); 3) Alpine El....
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....sessment upon a dissolved company is impermissible as there is no provision in Income-tax Act, 1961 to make an assessment thereupon. We thus respectfully following the ratio laid down in the above cited decisions hold that the notice under sec. 148 of the Act issued on 30.3.2012 on Magpie Projects Pvt. Ltd., a non-existent company was illegal. 36. We also find substance in the contentions of the Learned AR that before completing assessment under sec. 143(3), it is mandatory to issue notice under sec. 143(2) of the Act, otherwise the assessment order is illegal. On perusal of the assessment order framed under sec. 147/143(3) of the Income-tax Act, 1961, we nowhere find that the Assessing Officer has mentioned about the issuance of notice under sec. 143(2) of the Act which is mandatory as per the ratios laid down in the cited decisions including the decision of Hon'ble Supreme Court in the case of ACIT vs. Hotel Blue Moon (supra). Hon'ble Delhi High Court in the case of Alpine Electronics Asia Pvt. Ltd. vs. DCIT (supra) has been pleased to hold in para No. 24 of the decision that section 143(2) is applicable to the proceedings under sec. 147/148 of the Income-tax Act, 1961. ....
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....ly erred on facts as well as in law in rejecting the additional documents filed before her though they were only clarificatory in nature and in public domain which do not require any application u/s.46A. 6. The Learned CIT(Appeals) has grossly erred on facts as well as in law in ignoring that cross-examination of Mr. S.K. Gupta was not provided by the Ld. A.O. inspite of the specific request vide letter dated 19.03.2013. 7. The Learned CIT(Appeals) has grossly erred on facts as well as in law in ignoring that the Ld. A.O. neither provided the statement of Sh.S.K. Gupta to the assessee nor other documents used against the assessee. 8. The appellant craves to add, alter, modify and withdraw any ground of appeal before or during the appellate proceedings." Besides above grounds, the assessee vide application dated 27.2.2015 has also prayed for admission of the following proposed additional ground: "The impugned assessment order u/s. 147/143(3) dated 26.3.2013 is illegal and without proper jurisdiction as notices u/s. 148 as well as u/s. 143(2) were not issued and also there was noncompliance u/s. 143(3) in as much as the sum payable by the assessee on the basis of assessment w....