TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 634
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.... file, the delay be condoned. 3. The Ld. Sr. DR opposed the condonation of delay and submitted that the appeal should be dismissed at the very threshold. 4. Having heard both the parties, it is our considered opinion that the delay of 13 days deserves to be condoned as the assessee would not stand to gain by intentionally delaying the filing of appeal. Accordingly, the delay stands condoned. 5. The brief facts of the case are that the return of income was filed for the year under consideration declaring income of Rs. 29,041/- on 01.11.2004. There was a search and seizure action u/s 132(1) of the Income Tax Act, 1961 (hereinafter referred to call 'the Act') on 01.09.2005. Assessment was framed u/s 153A/143(3) of the Act on 26.12.2007 and the income was assessed at Rs. 3,96,76,291/- after making additions on account of receipt of share capital and estimated commission paid for arranging accommodation entries. The Ld. CIT (Appeals), vide order dated 03.03.2010, deleted the entire addition. The ITAT in ITA no. 2701/Del/2009, vide order dated 23.03.2011, upheld the order of the Ld. CIT (Appeals) and, thus, the income shown in the original return at Rs. 29,041/- stood restored. 5.1 M....
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....ts as well as challenged the initiation of reassessment proceedings but the Ld. CIT(A), vide the impugned order, dismissed the assessee's appeal. Now the assessee is before the ITAT and has raised the following grounds of appeal:- "1. Because learned CIT (A) has erred in law on facts in sustaining the reopening of assessment made twice u/s 143(3)/153A after the lapse of four years from the end of assessment year. WITHOUT PREJUDICE TO THE AFORESAID 2. Because learned CIT (A) has erred in law and facts in not adjudicating the Ground no. 3.1 wherein the appellant has challenged the adoption of earlier assessed income under section 153A vide order dated 31.12.2010 instead of returned income. 3. Because learned CIT (A) has erred in law and on facts in sustaining the addition of Rs. 20,00,000 under section 68 on account of share capital issued particularly when no contrary evidence or incriminating material was ever confronted to the appellant during reassessment proceedings and very same transaction stood verified and assessed twice. 4. Because the order appealed against is contrary to the facts, law and principles of natural justice." 6.0 At the outset, the Ld. Authoris....
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....port of his contention and it was prayed that the reassessment be quashed. 8.0 In response, the Ld. Sr. Departmental Representative submitted that it is not the assessee's case that all the information was already in possession of the AO at the time of first assessment proceedings because the department had received fresh information only subsequent to the survey in the premises of Sh. S.K. Gupta which was conducted on 20.11.2007. It was submitted that the receipt of Rs. 20,00,000/- as share capital from Chander Prabhu Financial Services and Chander Prabhu Finance & Securities Ltd. was fresh information before the Assessing Officer and, therefore, the reopening was valid in law. It was also submitted by the Ld. Sr. DR that Sh. S.K. Gupta had accepted that Chander Prabhu Financial Services was an entry operating company through his group of companies and, therefore, the AO cannot be held to be at fault for initiating the reassessment proceedings. It was also submitted that failure to provide cross examination will not invalidate the re-assessment proceedings. 9.0 We have heard the rival submissions and have also perused the material on record. We first take up the assessee's plea ....
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....for rebuttal as is evident from Para 1.3 of the assessment order on 11.11.2011. Thus, it is very much apparent that the statement of Shri SK Gupta was not the sole foundation for the initiation of re-assessment proceedings and, therefore, we are afraid that the assessee's reliance on the judgment of the Hon'ble Apex Court in the case of M/s. Andaman Timber Industries (supra) will not come to the aid of the assessee on the facts of this case. The department also had sufficient corroborative evidence/s as found in the lap-top found during the course of survey at the premises of Shri SK Gupta to proceed against the assessee by issuing notice u/s 148 of the Act. Therefore, we are dismiss the assessee's plea that the reassessment proceedings stand vitiated as the assessee was denied the opportunity to cross examine Shri SK Gupta. 9.1 The assessee has also challenged the re-opening on the ground that no fresh material had come into existence and the issue of share capital had already been examined in the earlier assessment proceedings. However, this contention of the assessee also does not hold much ground. The Hon'ble Gujarat High Court, in the case of Yogendra Kumar Gupta vs. ITO repo....
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....d verified and assessed twice and, therefore, no addition could have been made on this account as there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment. However, the fact remains that although the issue of share capital was examined by the AO on earlier two occasions, this time, fresh information, gathered during the course of survey proceedings, added an entirely new dimension to the impugned transaction. The AO simply could not be expected to put blinkers on his eyes and ignore the information just for the reason that the impugned transaction was a part of the share capital which had been examined on two earlier occasions. One may, at this stage, refer to the Full Bench judgment of the Hon'ble Delhi High Court in the case of CIT vs. Usha International (2012) 348 ITR 485 (Del FB). The Full Bench was constituted to consider the meaning of the expression "change of opinion" for purposes of section 147 and whether, in the light of the judgment in the case of Kelvinator reported in 256 ITR 1 (Del FB) and as approved by the Hon'ble Apex Court in 320 ITR 521 (SC), in a case where the assessee has furnished full and t....
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....t get protection and cover under the principle of "change of opinion". Factual information or material which was incorrect or was not available with the Assessing Officer at the time of original assessment would justify initiation of reassessment proceedings. The requirement in such cases is that the information or material available should relate to material facts. The expression material facts' means those facts which if taken into account would have an adverse affect on the assessee by a higher assessment of income than the one actually made. They should be proximate and not have remote bearing on the assessment. The omission to disclose may be deliberate or inadvertent. The question of concealment is not relevant and is not a precondition which confers jurisdiction to reopen the assessment. In the appeal before us, the AO has recorded a clear finding in the "reasons recorded" that there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment within the meaning of section 147 of the Act. It has been contended by the Ld. AR that the AO has simply stated that there was a failure on the part of the assessee to fully and ....