TaxTMI 
TaxTMI 
TaxTMI 
2019 (5) TMI 1552
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....y based on suspicion only and reasons recorded lack live nexus which is sine qua non for valid reopening action; b. That order passed by Ld AO dated 13/11/2017 and further order passed by Id CIT A dated 28/09/2018 are bad in law as reasons recorded in extant case are delightfully silent on lack of disclosure on stated bank a/c in earlier assessment proceedings (order u/s 143(3) dated 27.02.2013) vide first proviso in section 147 of the Act and same is the position in notice u/s 148 dated 28.03.2017 for AY 2010-2011 and objection disposal dated 29.09.2017. c. That order passed by Ld AO dated 13/11/2017 and further order passed by Id C1T A dated 28/09/2018 are bad in law as reasons recorded as supplied are sans approval if any taken from competent authority. d. That order passed by Ld AO dated 13/11/2017 and further order passed by Id CIT A dated 28/09/2018 are bad in law as reasons recorded stated Rs. 50,00,000 is unexplained amount simply where as Ld AO changing basis of reopening in order passed states that assessee has utilized undisclosed funds being cash for clearing of cheque in the bank a/c and Ld CIT-A further changes it to held that assessee could not substantiate the....
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.... therefore, there is no credit of any donation in the accounts of the assessee. 5. The learned DR on the other hand fiiled the written submissions which is reproduced below:- "In the above case, it is humbly submitted that the following decisions may kindly be considered with regard to reopening of cases beyond 4 years u/s 147 of I.T.Act: 1. PCIT Vs Paramount Communication (P.) Ltd.(2017-TIOL-253-SC-IT)(Copy enclosed) where Hon'ble Supreme Court dismissed SLP of assessee. Information regarding bogus purchase by assessee received by DRI from CCE which was passed on to revenue authorities was 'tangible material outside record' to initiate valid reassessment proceedings. PCIT Vs Paramount Communication (P.) Ltd.[2017] 79 taxmann.com 409 (Delhi)/[2017] 392 ITR 444 (Delhi) where Hon'ble Delhi High Court held that Information regarding bogus purchase by assessee received by DRI from CCE which was passed on to revenue authorities was 'tangible material outside record' to initiate valid reassessment proceedings 2. Aradhna Estate (P.) Ltd.Vs DCIT [2018] 91 taxmann.com 119 (Gujarat) (copy enclosed) where Hon'ble Gujarat High Court held that where reassessment p....
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....rfere with the formation of such belief unless it is shown to be wholly perverse. 8. Indu Lata Rangwala Vs DCIT [2017]80taxmann.com102(Delhi)/[2016] 384 ITR 337 (Delhi)/[2016] 286 CTR 474 (Delhi) (copy enclosed) where Hon'ble Delhi High Court held that where initial return of income is processed under section 143(1), it is not necessary in such a case for Assessing Officer to come across some fresh tangible material to form 'reasons to believe' that income has escaped assessment 9. Honda Siel Power Products Ltd. v. Dy. CIT [2012] 20 taxmann.com 5 (SC)/[2012] 206 Taxman 33 (SC)(MAG.)/[2012] 340 ITR 64 (SC)/[2012] 247 CTR 316 (SC) (Copy enclosed) where Hon'ble Supreme Court held that assessee having not pointed out during assessment proceedings about expenses incurred relatable to tax free income u/s 14A there was omission and failure on its part to disclose fully and truly material facts and hence reopening of assessment was justified 10. Honda Siel Power Products Ltd. v. Dy. CIT [2011] 10 taxmann.com 2 (Delhi)/[2011] 197 Taxman 415 (Delhi)/[2012] 340 ITR 53 (Delhi)/[2012] 247 CTR 322 (Delhi) (Copy enclosed) where Hon'ble Delhi High Court held that assessee havin....
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....record with revenue that assessee had received share capital which according to CBI were revenue receipts camouflaged as capital receipts, was justified. Reasons to be recorded by Assessing Officer for taking decision to reopen escaped assessment does not mean that such reasons are to be communicated along with notice itself; very notice will not provide a cause of action for assessee to file writ petitions. 15. CIT Vs P.V.S. Beedies (P.) Ltd.[1999] 103 Taxman 294 (SC)/[1999] 237 ITR 13 (SC)/[1999] 155 CTR 538 (SC) (Copy enclosed) where Hon'ble Supreme Court held that Audit party had merely pointed out a fact which had been overlooked by Assessing Officer and this was not a case of information on a question of law. Reopening of case under section 147(b) on basis of factual information given by internal audit party was valid in law 16. PranawaLeafin (P.) Ltd. Vs DCIT [2013] 33 taxmann.com 454 (Bombay)/[2013] 215 Taxman 109 (Bombay)(MAG.)(Copy enclosed) where Hon'ble Bombay High Court held that where there was failure on part of assessee to make true and complete disclosure in respect of share transactions entered into by it, in view of proviso to section 147, Assessing Offic....
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....k Limited. Prince Anwar Shah Road, Kolkata branch vide A/c No. 255010100128834 which carried the transfer of several crores of rupees. Contributions were received u/s 25(l)(ii) of the Income Tax Act, 1961from various corporate/non - corporate entities in this fraudulent account and these amount were either withdrawn in cash through two or more layers, which happed to be societies/trusts or bogus donations were paid in lieu of cash to the societies /trusts, who are beneficiaries to these transactions of bogus donation, which are situated all over India. The mediators, who are generally Chartered Accountants, get commission of 15-20% in cash out of the contributions received u/s 35(l)(ii) of the I.T. Act and 2-5% out of the bogus donation paid. By way of this mediators get benefit from both parties. This facts relating to fraudulent bank account opened by the Chartered Account, are further confirmed from the letter filed by the President of the society before various enforcement agencies namely:- 1. The Manager, Axis Bank, Kolkata 2. The Chairman, Axis Bank, Mumbai 3. Officer Incharge, Durgapur Police Station 4. FIR/complain in Durgapur Police Station 5. Letter of ACIT, D....
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....he same court i.e. Hon'ble Delhi High Court in the case of HCL Technologies Limited vs. DCIT in W.P. (C) 8164/2010 order dated 20.7.2017 wherein their Lordships held as under:- "16. The AO has not made the effort of disclosing, in the reasons, what according to him constituted the failure by the Assessee to make a full and true disclosure. A mere reproduction of the language of the provision will not suffice. Also, although making such an averment either in the order rejecting the objections of the Assessee or subsequently in the counter-affidavit in the answer to a writ petition will not satisfy the requirement of the law. The reasons will have to speak for themselves. For complying with the jurisdictional requirement under the first proviso to Section 14/ of the Act, the reasons would have to show in what manner the Assessee had failed to make a full and true disclosure of all the material facts necessary for the assessment. The failure to do so would not be a mere irregularity. It would render the reopening of the assessment after four years vulnerable to invalidation. "(emphasis supplied) Thus wherever first proviso to section 147 is applicable the reasons recorded should ....