TaxTMI 
TaxTMI 
2017 (7) TMI 576
X X X X Extracts X X X X
X X X X Extracts X X X X
...., it will be subject to the outcome of this writ petition". The Court is informed that in fact on 30th March 2016, an assessment order was passed by the AO pursuant to the reopening of the assessment under Section 148 of the Act against the Petitioner making the additions as proposed. However, in terms of the interim order passed by this Court, the said order has not been given effect to. 3. It may further be mentioned that during the course of hearing of the present petition on 7th December 2016, the original file concerning the reopening of the assessment was brought before the Court by learned counsel for the Respondent. The Court recorded his statement that "there are other parts of the file which are currently not available." The Court then directed that the record produced on that date to be kept in a sealed cover by the Court. 4. Today, Mr Rahul Chaudhary, learned Senior Standing Counsel for the Revenue, informed the Court no other part of the file is available with the Department. The Court perused the file kept in the sealed cover and returned it to Mr Chaudhary. Background facts 5. The background facts are that the Petitioner filed its return of income for the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ils of information received regarding escapement of income" are set out. It essentially states that search was conducted against entry operator S.K. Jain and his group. The investigation wing on a detailed enquiry into the working of S.K. Jain Group concluded that S.K. Jain and his group and Virendra Kumar Jain were accommodation entry providers. The modus operandi adopted by them was set out in paras 11 to 18. All that was gathered during the investigation qua the operation of S.K. Jain and his brother Virendra Kumar Jain is set out. The details of the bank accounts of the S.J. Jain Group companies were set out. 8.4 In paras 19 to 21 the "summary of evidence relating to the Assessee" is set out. There is a reference to Annexure- A recovered during the search which enclosed the copies of various documents seized from the premises of S.K. Group along with the report. It was stated that " the Assessee appears to have taken accommodation entry amounting to Rs. 1.35 crores "credit from various companies controlled by S.K. Jain Group through intermediary (A.K. Jain)...." 8.5 In paras 20 to 22, the details of the assessment proceedings and the order of the CIT(A) in relation to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sclosing the material on the basis of which the conclusion that the Assessee's income had escaped assessment was reached. Inter alia, the Assessee pointed out as under: "1. The reason do not reflect any application of mind for reopening of assessment. There is no material mentioned on the basis of which the assessment has been sought to be reopened. Your good self has merely stated that it has been gathered that the accommodation entries of Rs. 1,35,00,000/- were received during the year under reference. How was the information gathered? What is the source of information? Even the information is incomplete, vague and does not inspire any confidence. It appears to be a mere allegation and nothing beyond that. 2. It is well settled law that the reasons to believe must reflect a prima facie view based on material available. The reasons must show that the material has been received from a credible source and that material leads to a prima facie conclusion that income has escaped assessment. As per reasons cited by you, there is no mention of what are the entries alleged to be accommodation in nature. Who have they been received from? Is there any statement or allegation by the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ech Technologies Pvt. Ltd 20,00,000 080682 07.05.2007 UTI Shalini Holdings Ltd. 3 Mastech Technologies Pvt. Ltd 15, 00,000 080562 16.05.2007 UTI Shalini Holdings Ltd. 4 Mastech Technologies Pvt. Ltd 15, 00,000 080564 21.05.2007 UTI Shalini Holdings Ltd. 5 Mastech Technologies Pvt. Ltd 15,00,000 080569 05.06.2007 UTI Shalini Holdings Ltd. 6 Mastech Technologies Pvt. Ltd 24,00,000 081321 11.10.2007 Axis Bank Shalini Holdings Ltd. 7 Mastech Technologies Pvt. Ltd 12, 00,000 190248 14.01.2008 Axis Bank Shalini Holdings Ltd. Total 1,35,00,000 There was thus failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment for AY 2008 - 2009 which resulted into escapement of income of Rs. 1,35,00,000/- for assessment year 2008- 2009. In view of this, I have reasons to believe that the Income of Rs. 1,35,00,000/- chargeable to tax has escaped assessment in the case of M/s Mastech Technologies Pvt. Ltd. for the AY 2008 - 2009 within the meaning of section 147 of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....herefore, there was failure to comply with the mandatory requirement of Section 148 of the Act inasmuch as the reasons for reopening of the assessment were not communicated to the Petitioner. Mr Wadhwa pointed out that the second reopening of the assessment under Section 148 of the Act by issuing a second notice on 18th January, 2016, was clearly without approval of the Additional CIT and was, in any event, barred by limitation. Submissions of counsel for the Revenue 18. Countering the above submissions, Mr Rahul Chaudhary, learned Senior Standing Counsel appearing for the Revenue, submitted that on the strength of Section 129 (1) of the Act, the AO had merely continued the proceedings under Section 148 of the Act which were initiated by issuance of the notice dated 23rd March, 2015. The Revenue's case, in other words, is that the notice dated 18th January, 2016 did not constitute an initiation of fresh proceedings under Section 148 of the Act. 19. Mr Chaudhary further submitted that on the face of it the notice dated 18th January, 2016 could not be treated as initiation of proceedings under Section 148 of the Act since it had no approval of the Additional CIT. In any even....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sued by the incumbent AO. 23. A careful perusal of the notice dated 18th January, 2016 reveals that it does not state anywhere that it is in continuation of the earlier notice dated 23rd March, 2015. There is no noting even on the file made by the AO that while issuing the said notice he was proposing to continue the proceedings that already commenced with the notice dated 23rd March, 2015. Annexure- A to the notice under Section 142(1) of the Act reveals what weighed with the AO when he issued the said notice dated 18th January, 2016. In this document with the sub-heading "proceedings u/s 148/147 of the Act for AY 2008-2009, show cause notice - reg." the AO states as under: "Please refer to re-assessment proceedings u/s. 147/148 of Income-tax Act, 1961 pending against you for A.Y. 2008-09. A notice u/s. 148 of the Act was issued initiating the proceedings vide notice dated 18.01.2016 served upon you through speed post after duly recording the reasons for reopening the same u/s. 148. The case has been re- opened u/s. 148 of the Act on account of there being a reason to believe that at least an amount of Rs. 1,35,00,000 has escaped assessment for A.Y. 2008-09. A copy of the re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tice being time barred, it should not be taken to have been issued at all, is unacceptable. 29. The Court has not been provided with any satisfactory explanation as to why the notice dated 23rd March, 2015 issued by the AO under Section 148 of the Act was not carried to its logical end. The mere fact that the AO who issued that notice was replaced by another AO can hardly be the justification for not proceeding in the matter. On the other hand, the AO did not seek to proceed under Section 129 of the Act but to proceed de novo under Section 148 of the Act. This was a serious error which cannot be accepted to be a mere irregularity. 30. As regards the non-communication of the reasons as contained in Annexure-A to the proforma on which the approval dated 19th March, 2015 was granted by the Additional CIT, there is again no satisfactory explanation. The fact remains that what was communicated to the Petitioner on 23rd February, 2016 was only one line without any supporting material. There appears to be also no clarity of how the case had to be proceeded with by the Revenue. On one date i.e. 16th February 2016, the AO was issuing notice both under Section 142(1) of the Act as well....