TaxTMI 
TaxTMI 
TaxTMI 
2016 (10) TMI 1279
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....ugned assessment order without complying with mandatory conditions of section 147 to 151 of the Income Tax Act, 1961 and reopening of the case is bad in law and beyond the jurisdiction of the learned Assessing Officer. ii. That having regard to the facts and circumstances of the case, learned Commissioner of Income Tax (Appeals) has erred in law and on facts in confirming the action of learned Assessing Officer in framing impugned assessment order without disposing off the objections of the appellant against the reasons recorded. iii. That having regard to the facts and circumstances of the case, learned Commissioner of Income Tax (Appeals) has erred in law and on facts in not quashing the impugned assessment order which was passed without recording satisfaction of joint commissioner of income tax before the issuance of notice u/s 148 of the Act. iv. That having regard to the facts and circumstances of the case, learned Commissioner of Income Tax (Appeals) has erred in law and on facts in confirming the action of learned Assessing Officer in making aggregate addition of Rs. 2,80,000/- treated as income of the appellant u/s 68 of the Act. v. That having regard to the fac....
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....the earlier occasion the adjournment was granted on the request of the Department, despite, none represented on behalf of the Revenue. We also find that the assessee has filed copy of the relevant documents in the form of paper book. In view of above facts and circumstances and looking to the issue involved in the appeal, we have heard the appeal exparty, qua the Revenue. 7. The facts in brief of the case are that on the basis of the information received from the Investigation Wing of the Income Tax Department, that the assessee was engaged in providing of accommodation entries for monetary benefit, the Assessing Officer recorded reasons for reopening of the assessment and issued notice under section 148 of the Income-tax Act, 1961 (in short 'the Act'). The Assessing Officer claimed that this notice was duly served on the assessee company on 31/03/2006. In response, the assessee vide letter dated 21/11/2006, stated that the original return of income filed by the assessee under section 139 of the Act might be treated as return in compliance to notice under section 148 of the Act. The Assessing Officer noted that original return of income was filed on 30/11/1999 declaring income of....
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....re he made the additions accordingly. 7.2 Before the learned Commissioner of Income-tax (Appeals), the assessee challenged the reassessment proceedings initiated by the Assessing Officer on the ground that the Assessing Officer had no reasons to believe that the income has escaped assessment. The assessee submitted that there was no material on the basis of which, the belief that income escaped, could be formed. He further submitted that belief of the Assessing Officer should not be product of imagination or speculation. The assessee also took the ground that the assessment was framed without disposing off the objection of the assessee against reasons for reopening and the assessee was not provided opportunity to cross-examine the persons, whose statements have been referred by the Assessing Officer. The learned Commissioner of Income-tax (Appeals), however, rejected the legal grounds of the assessee and upheld the reassessment proceedings with following observations: "3.1. I have considered the facts of the case, order of the AO and submissions made by the Id. AR appearing on behalf of the appellant. The notice u/s 148 was issued in the present case on 30.03.2006. As per the ....
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....her, the appellant has not pointed out any specific infirmity in the action of the Assessing Officer, as far as reopening of Assessment as per the provisions of section 147 is concerned. Hence, it is clear that the reason to believe recorded by the Assessing Officer, were having rational nexus / relevant to the facts of the appellant and the reopening was done by the A.O. as per the provisions of the I.T. Act. 3.4. The copy of the reasons recorded by the AO was provided to the A.R. of the appellant during the course of assessment proceedings. The reopening of the assessment proceedings is as per the provisions of Law and the AO has followed all the procedures and guidelines laid down by Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. \/s. Income Tax Officer(2003) 259 ITR 19/(2002) 125 Taxman 963 (SC) for supplying of the reasons recorded and disposing off of the objections raised by the appellant. 3.5. In the case of Highgain Finvest Pvt. Ltd. 304 ITR 325 (Del), Jurisdictional High Court of Delhi'xlpheidthe reopening of the assessment when specific information is available with the assessing officer. The fact of this case is also similar to the facts of ....
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.... of the Hon'ble High Court are reproduced as under: "12. In the present case, after setting out four entries, stated to have been received by the Assessee on a single date i.e. 10th February 2003, from four entities which were termed as accommodation entries, which information was given to him by the Directorate of Investigation, the AO stated: "I have also perused various materials and report from Investigation Wing and on that basis it is evident that the assessee company has introduced its own unaccounted money in its bank account by way of above accommodation entries." The above conclusion is unhelpful in understanding whether the AO applied his mind to the materials that he talks about particularly since he did not describe what those materials were. Once the date on which the so called accommodation entries were provided is known, it would not have been difficult for the AO, if he had in fact undertaken the exercise, to make a reference to the manner in which those very entries were provided in the accounts of the Assessee, which must have been tendered along with the return, which was filed on 14th November 2004 and was processed under Section 143(3) of the Act. Without f....
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....47/148 of the Income Tax Act, 1961." 11. From the above reasons recorded, we find: (i) that the Assessing Officer has not even mentioned the letter number and date of the letter of Director of Income-tax (Investigation), which constituted the information on the basis of which, he reopened the assessment. (ii) that the Assessing Officer has not mentioned name of persons who gave statement that the assessee was engaged in providing accommodation entry (iii) that the Assessing Officer has not verified that the assessee had already filed return of income for the year under consideration. (iv) that the Assessing Officer was not sure of the amount of income escaped and thus he has not even mentioned amount of income escaped , which is evident from the sentence in the reasons recorded that escaped income on account of accommodation entry was likely to exceed Rs. 1 lakh (v) the Assessing Officer has not even mentioned the nature of income escaped i.e loans or share application money or share capital etc. 12. In view of above, it is manifested that the Assessing Officer has not applied his mind to the information and he has recorded the reasons in a mechanical manner, whi....