TaxTMI 
TaxTMI 
2015 (7) TMI 1284
X X X X Extracts X X X X
X X X X Extracts X X X X
....t satisfying the statutory pre-conditions for initiation of the proceedings and, completion of assessment under the Act. 2.1 That the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in initiating proceedings U/S 147 of the Act on the basis of information received from DIT (investigation) mechanically and without independent application of mind. In doing so, he overlooked the fact that, there was no basis/ material to allege or assume that Assessee Company received accommodation entries and as such notice issue U/S 148 of the Act is entirely misconceived, misplaced and, unsustainable. 3 That the learned Commissioner of lncome Tax (Appeals) has erred in law and on facts in overlooking the basic fact that the addition of Rs. 5,78,365/- comprising of amounts received from three parties namely Mls Kanodia Agency, Sh. Dinanath Luhariwala Spinning Mills Pvt. Ltd. and Mls Ashish Investments during the impugned assessment year and held to be unexplained cash credit uls 68 of the Act was wholly unsustainable in law, as the same was received against the repayment of loans and advances given in earlier assessment years to these parties by the appellant company ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Ld. CIT(A), Assessee is in appeal before the Tribunal. 6. At the time of hearing, Ld. Counsel of the assessee stated that the Revenue Authorities has passed the impugned order against the facts and law on file which deserve to be cancelled. To support his contention, he draw our attention towards Page No. 14 of the Paper Book filed by the assessee which are the reasons recorded u/s. 148(2) of the I.T. Act for issue of notice u/s. 148(1) of the I.T. Act, 1961. He stated that Department does not possess any information which may have provided foundation for belief that income had escaped. The assessee had maintained full and true account of its income and all relevant documents have been attached with the return of income filed by the assessee. He further stated that Notice U/s. 148 of the I.T. Act dated 31.3.2008 was unexpectedly issued by the Department, after a lapse of 7 years, the date of filing of the original return. In response to the same, assessee has written a letter stating that the original return may be taken to have been filed in compliance with notice u/s. 148 and assessee has also filed objections to the reasons recorded vide letter dated 29.8.2008 which the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....led by the assessee as well as the case laws cited by the Ld. Counsel of the assessee. At the time of hearing, Ld. Counsel of the assessee only argued on the legal issue mentioned in ground no. 2 reproduced above. To adjudicate the ground raised by the assessee, we have perused the reasons recorded u/s. 148(2) for issue of Notice u/s. 148(1) of the I.T. Act, 1961, which the assessee has attached at Page No. 14 of the Paper Book which is reproduced as under:- "1. The assessee company filed its return of income on 19/06/2001 declaring a total income of Rs. 5,450/-. 2. Certain investigations were carried out by the Directorate Income-Tax (Investigation)-I, New Delhi in respect of the bogus/accommodation entries provided by certain individuals/companies. The name of the assessee company figures as one of the beneficiaries of these alleged bogus transactions given by the Directorate after making the necessary enquires. The name and other particulars of the above said assessee are as under: - Name of the assessee / beneficiaries Name of the bank of beneficiary Name of the operator Instrument No. Operator's a/c No. and Bank. Date of entry Amoun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he law. There is no independent application of mind, AO had mechanically issued u/s. 148 of the I.T. Act, on the basis of the information allegedly received by him from the Ld. DIT(Inv.)-I, New Delhi. Even otherwise, the AO had issued notice u/s. 148 of the I.T. Act in the absence of tenable evidence or material in respect of any undisclosed income and recording of requisite satisfaction in respect of any such undisclosed income. Secondly, AO as well as Ld. CIT(A) has wrongly held that assessee was given sufficient opportunity to raise the objection within the specified time which he never responded and thus the Assessee cannot claim and the Rule of Natural Justice were adhered to. The finding of the revenue authorities are totally wrong and contrary to the evidence filed by the assessee. In fact the assessee has filed the reply/objection dated 29.8.2008 to the reasons recorded for issuance of notice u/s. 148 of the I.T. Act and also requested for supply of statements of any party recorded at the back of the assessee which has been used. The asseseee has also requested to the AO to give opportunity of cross examination that persons whose statements has been recorded and used agains....