TaxTMI 
TaxTMI 
2018 (11) TMI 548
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....ncome Tax Act, 1961. 3. The order of CIT(A) in erroneous 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....
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....t were held as not validly initiated by the Assessing Officer. 3.3 Aggrieved with the finding of the Ld. 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 & Vin....
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.... a systematic plan in which the cash is given to the entry provider - who deposits the same in his own account or that of his friends, 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 ....
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.... 1001000 1211 29-Nov-OI VINIYAS FINANCE & INVESTMENT RATNAKAR KAROL BAGII 30 8. We find that in the instant case, the return of income filed by the assessee in the regular course was only processed under section 143 (1) of the Act, wherein prima-facie arithmetical error in computation of income are only checked. No detailed scrutiny of the return of income filed was carried out prior to issue notice under section 148 of the 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 t....
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....sessment. Thus, in view of the decision of the Hon'ble Supreme Court in the case of Raymond Woollen Mills Limited (supra), the ratio of the decision in the case of Atul Jain & Vinita Jain (supra) cannot be applied over the facts of the instant case. 13. In the case of Sarthak Security Co. P. Ltd (supra) relied upon by the Ld. CIT(A), a reopening was held illegal as there was no new information before the Assessing Officer, but in the instant case the reopening has been 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 ....
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....tion entry taken, the instrument and date through which entry was taken, name and account number of the entry provider were available before the Assessing Officer and thus we cannot hold the information was vague. Further, the Hon'ble Delhi High Court in the case of PCIT Vs Paramount Communication Private Limited (supra), after considering various decisions held that the information received from Revenue Intelligence Authority constitute a tangible material and, thus, assessment was reopened 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 n....