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2017 (3) TMI 569
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....ning. The appellant filed its return of income on 02.12.2003 declaring loss of Rs. 535/- and later on the case was reopened u/s. 147/148 and assessment was completed on 30.11.2010 u/s. 147/144 of the Income-tax Act by making addition u/s. 69A of Rs. 21,35,625/-. The Assessing Officer issued notice u/s. 148 on 26.03.2010 at the address 1/5179, Balbir Nagar, Gali No. 7, Shahdara, Delhi, as mentioned on the return for the assessment year 2009-10 filed on 09.12.2009. The notice returned back with the remark of postal authorities "left without address". Later on, the notice was served by affixture by the notice server in the present of Income-tax Inspector on 29.04.2010 at the above address. The appellant has filed his return of income for the year under consideration at the address, C- 107, ABC Complex, 20 Veer Savarkar Block, Shakarpur Delhi 110092. The Assessing Officer reopened the case on the basis of information received from investigation wing of the Income-tax Department. The Investigation wing during investigation found that the assessee has received an amount of Rs. 21,25,000/- towards accommodation entries, the details of which are as under : S. no. Amount Instrument....
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....se. He has simply reopened the case only on the basis of information received from Investigation Wing. He relied on the detailed written submissions dated 28.11.2011 made before the first appellate authority. For the sake of convenience, we are reproducing the same hereunder : "1. That the appellant is a Private Limited Company incorporated under the provisions of the Companies Act, 1956. For the year under appeal, Income Tax Return was filed on 02.12.2003 declaring a loss of Rs. 535/- 2. That on the basis of some vague information received from Investigation Wing of the Department, the ld. A.O. issued notice u/s 148 to the appellant. However the same was never served upon the assessee at any time. 3. That the ld. A.O. completed assessment u/s 148 read with 344 on 30.11.2010 making an addition of Rs. 2135625/-. 4. Notice u/s 148 is bad in law, without jurisdiction and is void a. Non-service of notice u/s 148 1. The Id. A.O. has stated that he had issued notice u/s 148 of the Income Tax Act, which is not correct as the assessee never received such notice. Even the Id. AO in his order has stated that the notice was returned back and hence not served at all. 2. Th....
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....der is without jurisdiction; is void and should be quashed. c. Non- Supply of reasons in time 1. For the AY 2003-04, the reasons for re-opening was communicated by the Id. AO to the appellant on 15.11.2010 as per the assessment order, which is quite beyond the statutory time limit prescribed u/s 149. U/s 149(1)(b) a notice u/s 148 cannot be issued after the issue of 6 years from the end of the AY. 2. As the issuance of the s. 148 notice and the communication and furnishing of reasons go hand in hand, the reasons have to be supplied to the assessee before the expiry of period of 6 years. If this is not done, the validity of the s. 148 notice cannot be upheld. In any proceeding, whether civil or criminal, a summons issued without a copy of the plaint or complaint has to be construed as if no valid service of notice has been effected upon the defendant or respondents. 3. The ITAT Delhi bench in Sh. Balwant Rai Wadhwa vs. ITO [2011-ITRV-ITAT-DEL- 024) ITA No. 4806/Del/10) pronounced on 14th January 2011 discussing Haryana Acrylic case has held that despite service of s. 148 Notice in time, non-supply of 'Reasons For Reopening' within time renders the reopening void.....
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....ed on 15.11.2010. On the same date the Id AO handed over the reasons, etc to the AR of the appellant. c. It is pertinent to note that the Id. AO did not give any opportunity to the AR inspite of repeated requests. The case of the appellant for AY 2008-09 was being heard by the same Id. AO, wherein all submissions were duly made from time to time. Whenever the AR went to submit the documents for the AY in question, the Id. AO was casual and said that he would hear the same later. d. Further please note that order for AY 2008-09 was passed u/s 143(3) with NIL demand on 30.12.2010 (copy of order enclosed), whereas order for AY 2003-04 (order under appeal) was passed on 30.11.2010, without providing any opportunity. Also he did not hand over the assessment order to the appellant, like he did for AY 2008-09 and the appellant had to collect it on 12.01.2010 after stating that it did not receive the order. e. The ld AO never ever whispered about the assessment u/s 144 for AY 2003-04 though appellant was present before him several times for assessment for AY 2008- 09 for the same assessee and passed the order u/s 144 much before the case was time bar. f. As, the conduct of the ....
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.... k. It is pertinent to note that monies have been received as sale proceeds, the result of which is that an asset held by the appellant has been converted into money, hence there cannot be any accommodation entry. l. The Ld. A.O. forgot that the assessee is an artificial judicial person (Company) and it cannot of its own have any unaccounted cash. m. The Id. AO failed to note that all the payments were received through a/c payee crossed cheques through proper banking channels and are duly accounted for in the books, records and documents of the assessee, which is evident from the records. n. Sir, when purchased investments are sold and the payments realized for the same, how can there be any accommodation entry. o. When the purchase are genuine, how its sale can be held in doubt, when all documents prove the same. The basic requirement of s. 68 as held in CIT vs. Oasis Hospitalities P. Ltd. [201MTRV-HC-DEL-031] ITA No. 2093 of 2010 with ITA No. 2094 of 2010 were proved by the assessee: i. Identity: PAN, Ration Card, ITR, Ration card, etc. ii. Genuineness: The money is received by cheque and is transmitted through banking or other indisputable channels, the genuin....
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.... @ of 1% would have been paid on above transactions and charging Rs. 21250/- to tax'. This addition is based on the Ld. A.O. estimates, which is without any basis. This addition has been made purely on surmises and conjectures, hence should be deleted. From the foregoing submissions, it is concluded that: i. That the appellant is an artificial judicial person it cannot have unaccounted money of its own. ii. That the assessment u/s 147 is bad in law as the appellant never received any notice u/s 148. iii. That the Id. AO wrongly made addition u/s 69A, though all monies received were duly accounted in the books of accounts of the appellant. iv. That Rs. 2125000/- was received for sale of investments and is supported by sale bills, copy of a/c duly confirmed, confirmation for the purchaser, affidavit from the purchasers. v. All persons from whom payment was received against sale of investments are established. vi. PAN proof of subscribers, Copy of ITRs acknowledgement / Intimation u/s 143(1) of the subscriber, Confirmation of share application received from subscribers, affidavits of the subscribers are all furnished. vii. All the payments were received by the ap....
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....be deemed to be served on the assessee. Therefore, the contention of assessee regarding invalidity of assessment on the basis of non-service of notice u/s. 148 is rejected. 6. The ld. AR of the assessee submitted before us that the impugned amounts were received by him as a result of sale proceeds of investments in shares of different companies made before 31.03.2002. The ld. AR of the assessee had filed the details of investments held as on 31.03.2002 with the submission that money in question was received as a result of sale proceeds of investment, which results that an asset held by the appellant has been converted into money at cost and hence, there will be no effect in the balance sheet and there cannot be any accommodation entry regarding sale of an asset which was already held by the assessee. It was also the contention of the assessee that once the prior investments are sold and payments realized by cheques, how such sale could be doubted without doubting the purchase of assets already held by the assessee. The ld. Authorities below have failed to examine this aspect of the case nor have given any finding on the same, particularly when the assessee had submitted the deta....