TaxTMI 
TaxTMI 
2019 (3) TMI 1610
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....opened by issuing notice u/s 148 of the Act on 28.03.2014. The assessment order for reassessment u/s 143(3) r.w.s. 147 of the Act was passed on 31.03.2015. The re-assessment order was completed after making addition in respect of alleged purchases of Rs. 4,16,38,902/-. 4. By the impugned order, CIT(A) confirmed the addition to the extent of Rs. 2,84,96,601/- by estimating profit of 6% on the entire sales. Assessee is in further appeal before us against the addition upheld by the CIT(A) and also against the confirmation of reopening by the CIT(A). 5. It was argued by the Ld. AR that notice issued u/s.148 of the Act by ACIT, Cir-2, for reopening of the case is without jurisdiction. Our attention was invited to the following facts:- a. The assessee has filed its original return of income for 2007-08 Asst. Year vide acknowledgment no. 2407471241007 on 24.10.2007 with ward 4(2), Thane, The copy of acknowledgment is placed on record b. The original assessment order u/s 143(3) of the Act for 2007-08 Asst. Year was passed by ITO ward 2(3), Thane, on 22.12.2009. Further, the rectification u/s 154 of the Act was done by ITO ward 2(3), Thane on 10.03.2010. The copy of the said order....
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.... "It is well-settled that if a notice under section 148 of the Act has been issued without the jurisdictional foundation u/s 147 of the Act being available to the AO, the notice and the subsequent proceedings will be without jurisdictional and thus, liable to be struck down. In view of foregoing, we have no hesitation in upholding the findings of Ld. CIT (A), quashing the reassessment order. Consequently, ground no 1 in the appeal is dismissed". 9. It was further contended that provisions of Section 292BB was not applicable in terms of the order of Delhi Bench of ITAT dated 14/09/2010 in the case of M/s Naseman Farms Pvt. Ltd. (Appeal No.970/2010). Accordingly, it was pleaded that notice issued u/s.148 of the Act is without valid jurisdiction. After reading the provisions of Section 147, Ld. AR contended that section states that the assessing officer has to believe, hence it is clear and also it is well settled law that the assessing officer should have his own satisfaction for reason to believe that income chargeable to tax has been escaped and he cannot borrow the reason from others. As per the assessment order, the reopening was made only on the basis of information received ....
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....ourse to section u/s 147 was taken. This is clear cut violation of section 147 of the Act as the section states that the recourse to section 147 can be taken on satisfaction of the AO by reason recorded in writing but in the case of assessee recourse to section 147 was taken on the basis of just information. The Ld. AO has not mentioned how and on what documents he has reached to the conclusion that information was valid. 11. It was also argued by Ld. AR that original assessment was completed u/s.143(3) after making detailed enquiry with regard to the purchases and sales so made by the assessee. However, reopening was made after more than four years from the end of the relevant assessment year by issue of notice u/s.148. As per Ld. AR, there is no failure on the part of the assessee to make return u/s.139 or in response to notice issued under sub-section 1 of Section 142 or Section 148 to disclose fully and truly all material facts necessary for assessment, accordingly, no reopening can be made after expiry of four years from the end of the relevant assessment year in terms of proviso to Section 147. 12. On the other hand, Ld. DR relied on the order of the lower authoriti....
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....ve that the officer was neither having statement recorded during search nor having any incriminating documents seized during the search at assessment stage. It means the no incriminating documents or statement recorded were available at the time of recording of reason, then on which material or documents, the officer reached to believe that the income is escaped or under assessed. 18. In para 7 of the assessment order in which the Ld. AO once again mentioned as Under: "During the course of assessment proceedings, Shri Manoj Jain duly authorised by the assessee attended along with the two directors namely Shri Ashok Jain and Uttamchand Osfwai They were confronted upon the information received from the investigation wing." 19. It is again established that the Ld. AO was having just information and the same is part of assessment order. Hence, it is established that the reasons were recorded just on the basis of information without any material and the same is not sufficient for reopening the assessment completed under scrutiny proceedings of Sec.143(3) of IT Act. Furthermore, the relevant assessment year under consideration is 2007- 08, whereas reopening was on 28/03/2014 by is....
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....ofit & Loss a/c of all the three concerns for A.Y.2007-08, copies of bank statement of these concerns for F.Y.2006-07, copies of bills issued to the assessee, copies of ledger extract of the assessee as appearing in their books of accounts for the relevant period. However, Shri Gautam Jain failed to attend in person for verification." 22. Shri Gautamchand Jain appeared before the AO on 25/03/2015 when the AO recorded his statement which has been reproduced in the assessment order at page No.14 to 20. 23. From the record we also found that the alleged parties have also replied to summons issued u/s 131 of the Act and provided all the required details to the Ld. AO. The assessee has produced the director/partner of alleged parties and the Ld. AO had recorded the statement on oath. In the whole statement there is no adverse answer by the said director/partner of alleged parties. 24. In view of the above discussion, we do not find any merit for the addition so made by the AO when all the documentary evidences with respect to the purchases, corresponding sales, quantitative statement was filed before the AO. The alleged party has also replied to the summon issued by the AO u/s.131....
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....(SC) :(2000)243ITR83(SC). 28. The Commissioner gets power of revision, under Sectipn_263 where the assessment order is erroneous and prejudicial to the interest of revenue. The twin conditions are required to be satisfied simultaneously. S. Murugan v. /TO [20J2JI35 ITD 527 (Chennai) (Trib.). J. K. Construction Co. v. /TO [2007] 162 Taxman 46 (Jodhpur) (Trib) 29. So far as enquiry made by the AO and the addition made by the AO to the extent of 3% of alleged bogus purchases is concerned, we found that the case of the assessee company was selected for scrutiny and the assessment was completed u/s 143(3) of the Act. During the assessment proceedings, the assessee company has submitted all the required details which include the confirmation of accounts, stock register, payment through account payee cheques etc. The assessee has produced Mr. Gautam B Jain during the assessment proceedings of 2007-08 Asst. Year and the Ld. AO could not brought any adverse material against the assessee, however, the AO has made addition of 3% of alleged bogus purchase. The addition of 3% of alleged bogus purchases was made by AO after making detailed inquiry. However, there is no material availab....