TaxTMI 
TaxTMI 
2018 (5) TMI 1326
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.... issue of the validity of the re-opening of the assessment. 2.1. The ld. Counsel for the assessee referred to the reasons of re-opening and challenged the validity of the same on the following grounds:- a) Notice was issued in the name of M/s. Navalco Commodities Pvt. Ltd., which had merged into the assessee company w.e.f. 01/04/2010 and hence notice was issued to a non-existing company, which is bad in law and hence the reassessment framed in pursuance of such notice is also bad in law. b) Notice was issue by the ITO Ward 7(3), who had no jurisdiction over the assessee, as is evident from the remand report submitted by him, wherein at para 5.2.2., the Assessing Officer admitted that the assessee was assessed by the ITO Ward 2(4). Hence, there was no application of mind and a notice issue by a non-jurisdictional Assessing Officer is bad in law. c) The reassessment was based on the direction of the DDIT and suffers from nonapplication of mind by the Assessing Officer. The reasons recorded that income subject to tax has escaped assessment, should be that of the Assessing Officer and not of some other authority. d) The reopening was beyond a peri....
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....Act, on 31/12/2009. This is a second reopening of the assessment. Admittedly, the reopening is beyond the period of four years from the end of the Assessment Year and the original assessment was completed u/s 143(3) of the Act. Under these circumstances, the proviso to Section 147 of the Act, comes into play. A perusal of the reasons recorded demonstrate that the Assessing Officer has not alleged that the assessee has failed to disclose fully and truly the material facts necessary for completion of the assessment. There is no whisper of such a violation by the assessee in the reasons. We find that the 'A' Bench of this Tribunal in the case of M/s. Beekay Steel Industries Ltd. vs. DCIT CC-XXX, Kolkata, in I.T.A. No. 105/Kol/2015, order dt. 31/05/2017, held as follows: 4.4. The Hon'ble Bombay High Court in the case of Tao Publishing (P) Ltd. v. Dy.CIT reported in (2015) 370 ITR 135 (Bom.), has held as follows:- "10. As stated above, the reasons supplied to the Petitioner do not disclose that there was any failure on the part of the Petitioner to provide all the material facts. That being the position, this ground could not have been taken up against the Petitione....
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....sment under sub-section (3) of section 143 or this section has been made for the relevant assessment year; and (b) unless any income chargeable to tax has escaped assessment forsuch assessment year by reason of the failure on the part of the assessee: (i) to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148; or (ii) to disclose fully and truly all material facts necessary for his assessment for that assessment year. Condition (a) is admittedly satisfied inasmuch as the original assessment was completed under section 143(3) of the said Act. Condition (b) deals with a special kind of escapement of income chargeable to tax. The escapement must arise out of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148. This is clearly not the case here because the petitioner did file the return. Since there was no failure to make the return, the escapement of income cannot be attributed to such failure. This leaves us with the escapement of income chargeable to tax which arises out of the failure on the part of t....
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....propositions laid down in the above case law to the facts to this case, we have to necessarily hold that the re-opening of the assessment proceedings is not valid that there is not even a whisper in the reasons recorded for the reopening of the assessment that there is a failure on the part of the assessee to disclose fully and truly all the necessary material facts required for assessment in view of the 1st proviso to Section 147 of the Act. In this case no tangible materials have come to the possession of the Assessing Officer subsequent to the Assessment Order u/s 143(3). Re-opening is done based on the same material and record and hence it is bad in law. As far as the contention, that there is a change in opinion is concerned, we are unable to agree with the ld. Counsel for the assessee as there was neither a query on this issue by the Assessing Officer during the original assessment proceedings, nor there was a reply by the assessee. Hence there was no opinion formed. Thus, the question of change of opinion does not arise. 4.9. In any event, as we have held that the re-opening is bad in law as it does not fulfill the requirement of the Proviso to Section 147 of the Ac....
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....ditional Commissioner. On 28-3-2011, the Additional Commissioner forwarded the proposal to the Commissioner. On this, a communication was issued on 29-3-2011 from the office of the Commissioner (1) conveying approval to the proposal submitted by the Assessing Officer. There is merit in the contention raised on behalf of the assessee that the requirement of section 151(2) could have only been fulfilled by the satisfaction of the Joint Commissioner that this is a fit case for the issuance of a notice under section 148. Section 151(2) mandates that the satisfaction has to be of the Joint Commissioner. That expression has a distinct meaning by virtue of the definition in section 2(28C). The Commissioner is not a Joint Commissioner within the meaning of section 2(28C). In the instant case, the Additional Commissioner forwarded the proposal submitted by the Assessing Officer to the Commissioner. The approval which has been granted is not by the Additional Commissioner but by the Commissioner. There is no statutory provision under which a power to be exercised by an officer can be exercised by a superior officer. When the statute mandates the satisfaction of a particular function....
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....any particular issue, then it is that authority alone who should apply his/her independent mind to record his/her satisfaction and further mandatory condition is that the satisfaction recorded should be "independent" and not "borrowed" or "dictated" satisfaction. Law in this regard is now wellsettled. [Para 8] The Apex Court in the case of Anirudh Sinhji Karan Sinhji Jadeja v. State of Gujarat [1995] 5 SCC 302 has held that if a statutory authority has been vested with jurisdiction, he has to exercise it according to its own discretion. If discretion is exercised under the direction or in compliance with some higher authorities instruction, then it will be a case of failure to exercise discretion altogether. [Para 9] Therefore, the Tribunal has rightly decided the legal aspect, keeping in view wellestablished principles of law laid down in catena of judgments including that of the Supreme Court. [Para 10] No question of law arises. This appeal is accordingly dismissed. [Para 11] The Hon'ble Delhi High Court in the case of Pr. CIT vs N.C. Cables in ITA No. 335/2015 judgement dated 11.01.2017 held that approval under section 151 is to be made after appli....
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....transactions were made by the assessee. What was the information given by the Director of Income-tax (Inv.), New Delhi, vide letter dated 16.06.2006 has also not been mentioned. In other words, the contents of the letter dated 16.06.2006 of the Director of Income-tax (Inv.), New Delhi have not been given. The AO has vaguely referred to certain communications that he had received from the DIT(Inv.), New Delhi; the AO did not mention the facts mentioned in the said communication except that from the informations gathered by the DIT (Inv.), New Delhi that the assessee was involved in giving and taking accommodation entries only and represented unsecured money of the assessee company is actually unexplained income of the assessee company or that it has been informed by the Director of Income-tax (Inv.), New Delhi vide letter dated 16.06.2006 that the assessee company was involved in giving and taking bogus entries/transactions during the relevant financial year. The AO did not mention the details of transactions that represented unexplained income of the assessee company. The information on the basis of which the AO has initiated proceedings u/s 147 of the Act are undoubtedly vague and....
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....ot valid and justified in the eyes of law. The recent decision of Hon'ble jurisdictional High Court of Delhi in the case of Signature Hotels (P.) Ltd. (supra) also supports the view we have taken above." 9. We do not see any reason to differ with the view expressed by the Tribunal. No substantial question of law arises for our consideration. The appeals are dismissed. There shall be no order as to costs. 7.2. The Jurisdictional High Court in the case of Principal CIT vs G&G Pharma India Ltd. in ITA 545/2015 vide order dt. 08.10.2015 at paras 12 and 13 was held as follows: "12. In the present case, after setting out four entries, stated to have been received by the assessee on a single date i.e. 10th Feb. 2003, from four entries which were received by the assessee on a single date i.e. 10th Feb. 2003, from four entries which were termed as accommodation entries, which information was given to him by the Director Investigation, the A.O. stated: 'I have also perused various materials and report from Investigation Wing and on that basis it is evident that the assessee company has, introduced its own unaccounted money in its bank account by way of above accommod....
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....fficer. (ii) A notice u/s 148 can be quashed if the 'belief' is not bona fide, or one based on vague, irrelevant and non-specific information. The basis of the belief should be discernible from the material on record, which was available with the Assessing Officer when he recorded the reasons. There should be a link between the reasons and the evidence material available with the Assessing Officer. (iii) The reassessment proceedings 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 lakhs during F.Y.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 assessee was the beneficiary. The reasons did not satisfy the requirements of section 147 of the Act. There was no reference to any document or statement, except the annexure. The annexure could not be regarded as a material or evidence that prima facie showed or established nexus or link which disclosed escapement of income. The annexure was not a pointer and did not indicate escapement of income. (iv) F....
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....(Annex Building), P-13, Chowringhee Square, 5 floor, Kolkata-700 069 that "A search and seizure operation under section 132 of Income Tax Act, 1961 was conducted on Kolkata based Cygnus group of companies on 23.12.2014. During the course of post search investigation, it has been found that some of the group companies has raised bogus share capital during the financial year 2007-08 On 31.03.2008, Suniojit Finance Ltd., a group of company of Cygnus gropu has allotted 5,20,000 share at a premium of Rs.240/- to the following companies/jamakharachi companies Address Certified to be True Copy Name Galleine Traders Pvt Ltd Balised Dealers Pvt Ltd. Callidora Traderes Pvt Ltd Cristane Tieup Pvt Ltd Esmari Merchantile Pvt Ltd ISIS Merchantiles Pvt Ltd. Kirsten Distributors Pvt Ltd Lairy Distributors Pvt Ltd. Lyska Agencies Pvt Ltd Maybrie Traders Pvt Lid Nendel Tie Up Pvt Ltd. Rhonwyn Trading Co Pvt Ltd Shoshana Mercantiles Pvt Ltd No. of Amount Rs) shares 3. CR. Avenue, Kol-72 40000 1.00.00.000 127A, Sarat Bose road, Kolkata-700026 40000 1.00.00.000 -Do- 40000 1,00,00,000 ....