AI Drafter 
TaxTMI 
TaxTMI 
2017 (8) TMI 224
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....at on the facts and circumstances of the case and the provision of law the Ld CIT(Appeal) has failed to appreciate that the notice u/s 148 is illegal, bad in law, time barred and without jurisdiction and as such the assessment order passed u/s 148 is illegal and bad in law. 2. That on the facts and circumstances of the case and the provision of law the Ld CIT(Appeal) has failed to appreciate that the initiation of reassessment proceeding u/s 147 is illegal and bad in law. 3. That on the facts and circumstances of the case and the provision of law Ld CIT Appeal has filed to appreciate that no valid notice u/s 143(2) has been issued, consequently assessment framed becomes illegal. 4. That on the facts and circumstances of the case and the provision of law the Ld CIT(Appeal) has failed to appreciate that the impugned assessment order passed by the Ld. AO is bad in law, illegal and wrong on facts. 5. That on the facts and circumstances of the case and the provision of law the Ld CIT(Appeal) has failed to appreciate that the impugned assessment order passed by the Ld. AO is against the principles of natural justice and has been passed without affordin....
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.... the aforesaid order of the Ld. CIT(A), Assessee is in appeal before the Tribunal. 6. Ld. Counsel of the assessee reiterated the contention raised in the Grounds of Appeal. He further submitted that the AO has mechanically issued the notice on the basis of letter received from the office of the CIT Central-3. There is no live link in the reasons recorded between the information obtained and the belief formed by the AO. Only the value of entry taken is mentioned but the nature of entry whether it is, bogus gift, loan or share capital money is not mentioned. Moreover, on what basis the above presumption is drawn that the assesssee has taken any accommodation entry is also not mentioned. No reference is made to any tangible material statement or annexure in support of the information receive on the basis of which reasons have been recorded. From the reasons it is also not clear whether any statement of Smt. Anjali Gupta/ Sh. Suresh Kumar Gupta has been recorded or not. Even in the reasons recorded, Pay Order no. mentioned is wrong meaning thereby that the AO has not bothered to even verify the information received with the assessment folder wherein the confirmation/copy of Pay orde....
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.... letter has been received from the CIT(Central)-III, New Delhi forwarding therewith copy of letter of the ACIT, Central Circle-22, New Delhi. As per information vide this letter (supra), a Survey u/s 133'A was conducted on 20.11.2007 in the case of Sh. S.K. Gupta and the companies operated by him at 308, Arunanchal Building, 19, Barashamba Read, New Delhi- 110001. S.K. Gupta is basically a charted accountant but he is found to have been indulged providing accommodation entries to the different parties through the bank accounts operated by him in the name of different companies, individual and others, reported to be more than 30 in number. As per the print out taken from Annexure A-14 (laptop) impounded during the course of survey, there were huge cash found to have been deposited in various ledger accounts. Sh. S.K. Gupta is the main person controlling the concern of this group. 4. This fact was confronted to Sh. S.K. Gupta who, vide his statement on 26.12.2008, has admitted as under:- "Q2 Investigation Wing of the Income Tax Department has reported that transaction undertaken through these companies were not genuine. They were mere entries given for equivalen....
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....t based on any tangible material as well as are not acceptable in the eyes of law. The AO has mechanically issued notice u/s. 148 of the Act, on the basis of information allegedly received by him from the Income Tax Department. Keeping in view of the facts and circumstances of the present case and the case law applicable in the case of the assessee, I am of the considered view that the reopening in the case of the assessee for the asstt. Year in dispute is bad in law and deserves to be quashed. I find that Hon'ble Jurisdictional High Court in the case of Signature Hotels P. Ltd. vs. Income Tax Officer [2011] 338 ITR 0051 has held as under:- "Held, allowing the petition, that the reassessment proceeding were initiated on the basis of information received from the Director of Income Tax (Investigation) that the petitioner had introduced money amounting to Rs. 5 lacs during the financial year 2002-03 as stated in the Annexure. According to the information, the amount received from a company, S, was nothing but an accommodation entry and the assesee was the beneficiary. The reasons did not satisfy the requirements of Section 147 of the Act. There was no reference to any docume....
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....in light of the law explained with sufficient clarity by the Supreme Court in the decisions discussed hereinbefore, the basic requirement that the AO must apply his mind to the materials in order to have reasons to believe that the income of the Assessee escaped assessment is missing in the present case. 13. Mr. Sawhney took the Court through the order of the CIT(A) to show how the CIT (A) discussed the materials produced during the hearing of the appeal. The Court would like to observe that this is in the nature of a post mortem exercise after the event of reopening of the assessment has taken place. While the CIT may have proceeded on the basis that the reopening of the assessment was valid, this does not satisfy the requirement of law that prior to the reopening of the assessment, the AO has to, applying his mind to the materials, conclude that he has reason to believe that income of the Assessee has escaped assessment. Unless that basic jurisdictional requirement is satisfied a post mortem exercise of analysing materials produced subsequent to the reopening will not rescue an inherently defective reopening order from invalidity. 14. In the circumstances, the c....