TaxTMI 
TaxTMI 
2018 (11) TMI 548
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....s and is not tenable on facts and in law. 4. The appellant craves leave to add. Alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal. 2. At the outset, we may like to mention that despite notifying, neither anyone was present in hearing on behalf of the assessee nor any application for adjournment was filed on behalf of the assessee. We may also like to mention that this case has been listed for hearing since 2012, but on last several occasions i.e. 15.12.2015; 27.07.2016; 19.10.2016; 16.01.2017; 03.04.2017; 06.06.2017; 22.08.2017; 18.01.2018; 02.04.2018, no one was present in hearings on behalf of the assessee despite notifying, thus, the case is heard ex parte qua the assessee. 3. Briefly stated facts of the case are that original return of income declaring nil income was filed on 15/09/2003. The return of income was processed under section 143(1) of the Income-tax Act, 1961 (in short 'the Act'). Subsequently, on receipt of information from the Investigation Wing of the Income Tax Department that the assessee received accommodation entries in the form of share application money, the Assessing Officer initiated proceedings un....
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..... CIT(A) on the validity of the reassessment proceeding under section 147 of the Act, the Revenue in appeal before the Tribunal. 4. All the grounds raised by the Revenue are in relation to challenge of reopening proceedings held as invalid by the Ld. CIT(A) . 5. The Ld. DR submitted that the Ld. CIT(A) has decided the issue of the validity of the reassessment ignoring the fact that the Assessing Officer prima facie gone through the information is received from the Investigation Wing and thereafter recorded detailed reasons to believe that the income escaped the assessment. According to him, the information received was from a credible source gathered after carrying out enquiries, it was in the nature of a fresh information and could not be termed as vague. He further submitted that there is no requirement in law to make preliminary investigation by the Assessing Officer prior to reopening of the assessment under section 147 of the Act. He also submitted that the Ld. CIT(A) has relied on the decision of the Hon'ble Delhi High Court in the case of CIT versus Atul Jain & Vinita Jain 299 ITR 383 (Delhi) wherein it is held that a reopening without verifying correctness of the informat....
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....iends, relatives/persons hired by him - and in turn issues the cheque of equal amount. It is a notorious practice in which the unaccounted money of the beneficiary is received in the form of share application money/share capital/ unsecured loans etc. The unaccounted money is given to the entry operator who in turn issues the cheque to the beneficiary. The transactions reported above, constitutes fresh evidence/information in respect of the assessee as a beneficiary of bogus accommodation entries and constitutes the unexplained income of the assessee. On the basis of this new information, I have reason to believe that the unexplained income represented by the amount received as beneficiary has escaped assessment as defined by section 147 of the I T Act, 1961 Therefore, it is a fit case for the issuance of notice u/s 148 of the I T Act, 1961." 7. The Annexure referred in the above reasons recorded has been reproduced in the assessment order. For ready reference, same is reproduced here: BENIFICIARY'S NAME VALUE OF ENTRY TAKEN INSTRUMENT NO. BY WHICH ENTRY TAKEN DATE ON WHICH ENTRY TAKEN NAME OF ACCOUNT HOLDER OF ENTRY GIVING ACCOUNT BANK FROM WHICH ENTRY GIVEN B....
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....Act and thus the Ld. CIT(A) rejected the plea of the assessee of reopening of the assessment on mere change of opinion in para 9.2 of the impugned order as under: "9.2 In so far as the plea of mere change of opinion is concerned it is held that this argument of Ld. Counsel is totally misplaced as the original proceedings culminated u/s 143(1) and not u/s 143(3). Undersection 143(1) there is no occasion for the AO to examine any issue and when issues cannot be examined where is the question of forming an opinion with relation to any matter indicated in the return? As the return was not examined under Section 143(3) before issuing the notice u/s 147 it cannot be said that the AO formed any opinion with regard to the disclosure of the share application money as shown in the return. The rulings relied upon by the Ld. Counsel do not pertain to a return merely processed u/s 143(1) hence are distinguished on facts." 9. Since the Ld. CIT(A) has already rejected the contention of the assessee and the assessee is not in appeal before us on this issue, we are not commenting on above finding of the Ld. CIT(A) on the issue of validity of reopening of the assessment. 10. Further, on the clai....
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.... made on the basis of the information from the DIT (Investigation) that specific money shown in books of account as received from share application money, was actually accommodation entry only. We note that the information of accommodation entry was unearthed by the enquiries carried out by the DIT Investigation and, thus, it is in the nature of new information. Accordingly, the ratio of the decision in the case of Sarthak Securities Co. Pvt Ltd (supra) cannot be applied over the facts of the instant case. 14. Therefore, we can summarise that the Assessing Officer himself recorded his satisfaction on the basis of the material in the form of report of the DIT (Investigation) available before him and it cannot be said as borrowed satisfaction without application of the mind. Thus, the Ld. CIT(A) has committed error in relying on the ratio of the above 3 cases while arriving at her decision. 15. Thereafter, the Ld. CIT(A) has referred to the decision of the Hon'ble Delhi High Court in the case of Signature Hotels Private Limited in WP(C) No. 8067/2010 vide order dated 21/07/2011. The Ld. CIT(A) relying on the above decision held that the proceedings under section 147 of the Act hav....
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....ned validly. The relevant finding of the Hon'ble High Court's reproduced as under: "8. As far as AY 2004-05 is concerned, this Court is of the opinion that in the reference to the bogus purchase made by the assessee from M/s. Kashish Impex Pvt. Ltd. and the information received for the period 17.09.2002 to 20.05.2005 and the amount of bogus purchase for the period under consideration amounted to '1.64 crores was entirely based upon the information received from the Directorate of Revenue Intelligence (DRI) Regional Unit at Jaipur. This in turn was based upon information given by the Central Excise Department. While it is true that the court is conscious that the reassessment notice should not have been routinely issued, at the same time, the nature of power is wide enough that when there an escapement of income and the Revenue has information ruling that this escapement is also relatable to suppression of material facts (which could include false claims), the power to reopen concluded assessment can validly be exercised. The consideration which ought to weigh with the Revenue and are considered valid are the existence of tangible material or information - in the light of th....