TaxTMI 
TaxTMI 
2017 (4) TMI 711
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....aving any material before him to have a reason to believe that appellant's income chargeable to tax for the year under assessment has escaped assessment and that too on account of failure on assessee's part to disclose fully and truly all material facts necessary for completion of his assessment. (ii) with a view to make fishing enquiries without there being any cogent material to have a link between the alleged material in her possession and the formation of belief that appellant's income chargeable to tax has escaped assessment. (iii) in violation of ratio laid down by Hon. Apex Court. 3. The Learned Commissioner of Income Tax (Appeals) is not justified in confirming the additions made by the Assessing Officer without appreciating the ratio laid down by Honorable I.T.A.T., Mumbai bench (jurisdictional bench) in the cases facts of which are identical to the case of appellant. 4. The Learned Commissioner of Income Tax (Appeals) is not justified in confirming the addition made by the Assessing Officer without appreciating the facts of the appellant's case as well as documentary evidences produced before him. 5. The appellant craves leave to add, amend, alt....
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....providing bogus speculation profit / loss, short term / long term capital gain / loss, commodities profit / loss on commodity trading (through MCX) and had been continuing this business for many years. Shri Mukesh Choksi was running the business on commission basis. The list of person seeking entries for bogus profit / loss i.e.beneficiaries extracted from the computer data seized from Shri Mukehs Choksi's office premises during the course of search u/s.132 of the Act and in the said data the name of the assessee was appearing. The transaction amount was involved to the tune of Rs. 15,02,042/-. The copy of ledger of computer data was also annexed. 5. On appraisal of the income tax return of the assessee for the A.Y.2003-04, it was found that the assessee claimed Long Term Capital Gain out of share transactions, the details of which are mentioned below:- Details of working of Long Term Capital Gain as on 31/03/2003. In the name of Smt. Manjula Hirachand Kanunga PURCHASE DETAILS DATE NAME OF SCRIPT BROKER QUANTITY RATE AMOUNT 17/04/2001 Buniyad Chemicals Goldstar Finvest Pvt. Ltd. 12000 0.55,0.60 7,030.70 25/05/2001 Jaykaydee V....
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....td.) against the 22 persons whose names have been mentioned therein and out of them the proceedings against Shri Hirachand M. Kanunga has been ordered to be set aside u/s.147 of the Act vide order dated 27.02.2015 passed in ITA No.4261&4262/Mum/2010 and the proceeding against Shri Gautamchand M. Kanunga been ordered to be set aside u/s.147 of the Act vide order dated 08.01.2016 passed in ITA No.4259&4260/Mum/2012. Therefore, in the said circumstances the proceedings against the assessee u/s.147/148 of the Act is not liable to be sustainable in the eyes of law. However on the other hand the learned representative of the department has relied upon the order passed by the CIT(A) in question. On appraisal of the above said order, it came into the notice that the Hon'ble Income Tax Appellate Tribunal in case of Shri Hirachand M. Kanunga vide order dated 27.02.2015 passed in ITA No.4261&4262/Mum/2010 and in case of Shri Gautamchand M. Kanunga vide order dated 08.01.2016 passed in ITA No.4259&4260/Mum/2012 has held that the reopening u/s.147 of the Act is bad in law. The facts and circumstances of the present case is quite similar of the case mentioned above which are the part and parcel ....
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..... Ltd. 329 ITR 110. 6.1. The second proposition put forth by the Ld. Counsel is that there is no proper sanction/approval as per the provisions of Sec. 151(2) of the Act. In support of this contention, reliance was placed on the decision of the Tribunal Mumbai Bench in the case of Shri Amarlal Bajaj in ITA No. 611/M/04. 6.2. 2 . The last proposition made by the Ld. Counsel i s that the assessment has been framed in haste without allowing the time after rejection of objection. It is the say of the Ld. Counsel that once the AO rejects the objection filed by the assessee, then in such a case the AO should not proceed further in the matter for a period of 4 weeks. Reliance was placed on the decision of the Hon'ble Jurisdictional High Court in the case of Asian Paints Ltd. 296 ITR 90 and Aroni Commercials Ltd. 362 ITR 403. 7. Per contra, the Ld. Departmental Representative strongly supported the orders of the authorities below. It is the say of the Ld. DR that the assessment was reopened on the basis of tangible material evidence in the form of report received from the Investigation Wing, Mumbai and therefore it cannot be said that there is no application of mind. The Ld. D....
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....the Hon'ble Delhi High Court in the case of Sarthak Securities Co. P. Ltd (supra) wherein also the original return was processed and intimation was sent u/s. 143(1) of the Act accepting the return. The notice u/s. 148 of the Act was issued by the AO alleging that he has reason to believe income chargeable to tax for the assessment was 2003-04 has escaped assessment within the meaning of Sec. 147 of the Act and accordingly required the assessee to file the return for the assessment year in consideration. The assessee submitted the return of income as filed earlier should be treated as the return in compliance with the notice under reference. The assessee also requested to provide a copy of the reasons recorded it/s. 148(2) and the approval for issuance of notice. While furnishing the reasons, the ITO also initiated reassessment proceedings by issuing formal notice. On a writ petition, the Hon'ble High Court held as under: "Held, allowing the petition, that the formation of belief was a condition precedent as regards the escapement of the tax pertaining to the assessment year by the Assessing Officer. The Assessing Officer was required to form an opinion before he pr....
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....rities Pvt. Ltd.) share scam -reg. Ref. Statement dated 11/ 12/ 2009 u/s 131 of Shri M. C. Chowksi by DDIT, Mumbai. Please refer to the above. On perusal of the proposals for initiating proceedings u/s 147, you are hereby directed to issue notice u/ 148. The proposals in the following cases are approved: (1) Mr. Gaiitamchand M. Kanunga (2) Mr. Gautamchand M. Kanunga (HUF) (3) Mr. Hirachand M. Kanunga (HUF) (4) Mr. Hirachand M. Kanunga (5) Miss Sonamn G. Kanunga (Minor) through Shri Gautamnchand M. Kanunga (6) Miss Lavina V. Kanunga (Minor) through Shri Vimaichand M. Kanunga (7) Master Kenil G. Kanunga (Minor) through Shri Gautamnchand M. KanUnga (8) Master Nilesh H. Kanunga (Minor) through Shri Hirachand M. JKanunga (9) Sint. Manjula H. Kanunga (10) Miss. Deepika H. Kanunga (Minor) through Shri Hirachand M. Kcmnunga (11) Miss. Simnran H. Kanunga (Minor) through Shri Hirachand M. Kanunga (12) 5mm' Damayanti Ramesh Gada (13) Shri. Ram esh Premnchand Gada (14) Shri. Alliad P. Kashikar (15) 5mm'. Nilima A. Kashikar ....
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....ddl. Commissioner has simply sanctioned the proposal for initiating proceedings u/s. 147 in group cases of beneficiaries of Mahasagar Securities P. Ltd. Nowhere the Addl. CIT has recorded his dissatisfaction. The Hon'ble Supreme Court in the case of Chhugamal Rajpal Vs S.P. Chaliha & Others 79 ITR 603 observed that the important safeguards provided in Sec. 147 and 151 were lightly treated by the Income-Tax Officer as well as the Commissioner. 11. In the light of the above mentioned reasons, in our considerate view, Section 147 and 148 are charter to the Revenue to reopen earlier assessments and are, therefore protected by safeguards against unnecessary harassment of the assessee. They are sword for the Revenue and shield for the assessee. Section 151 guards that the sword of Sec. 147 may not be used unless a superior officer is satisfied that the AO has good and adequate reasons to invoke the provisions of Sec. 147. The superior authority has to examine the reasons, material or grounds and to judge whether they are sufficient and adequate to the formation of the necessary belief on the part of the assessing officer. If, after applying his mind and also recording his reasons,....
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.... simply mentioned "approved" to the report submitted by the concerned AO. In the light of the ratios/observations of the Hon'ble High Court mentioned hereinabove, we have no hesitation to hold that the reopening proceedings vis-à-vis provisions of Sec. 151 are bad in law and the assessment has to be declared as void ab initio. 14. Proceeding further, a perusal of the assessment order show that the AO has supplied the reasons recorded on 15.11.2010. The assessee filed his objection on 25.11.2010. The objections filed by the assessee were rejected on 14. 12. 2010 and the assessment order was made on 24.12.2010. Thus the AO did not wait for four weeks from the date of the rejection of the objections and thereby violated the principles enunciated by the Hon'ble Jurisdictional High Court in the case of Asian Paint Ltd. (supra) wherein the Hon'ble High Court has observed as under: "Reassessment-Notice u/s. 148- Objections by assessee-If the AO does not accept the objections filed by the assessee against reopening of assessment, he is not to proceed further in the matter for a period of four weeks from the date of service of order rejecting the objections on....