TaxTMI 
TaxTMI 
2019 (9) TMI 857
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....legal grounds raised by the assessee in all the appeals i.e. ground no. 1 which are identical in all the 03 appeals. For the sake of convenience, the legal ground raised by the Assessee in ITA No. 6677/Del/2018 (AY 2011-12) is reproduced as under:- "1. That on the facts and in the circumstances of the case and in law, Ld. CIT(A) erred in sustaining the order passed by the AO u/s. 147/143(3) without appreciating that assumption of jurisdiction u/s. 148 by AO was in violation of mandatory jurisdictional conditions stipulated under the Act; 1.1 That on the facts and in the circumstances of the case and in law, Ld. CIT(A) erred in sustaining the order passed by the AO u/s. 147/143(3) without appreciating that "Rubber Stamp" reasons in present case are based on borrowed satisfaction and are without independent application of mind." 3.1. Ld. Counsel for the assessee stated that AO has completed the assessment in dispute u/s. 147/143(3) of the Income Tax Act, 1961 (in short "Act") without appreciating the facts and circumstances of the case and wrongly assumed the jurisdiction u/s. 148 of the I.T. Act, 1961, which is in violation of mandatory jurisdictional conditions....
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....read as under in ITA No. 6677/Del/2018 (AY 2011-12):- 5.2 From a perusal of the reasons, it is seen that the notice u/s. 148 of the Act has been issued mechanically without application of mind and the satisfaction by the Assessing Officer is only the borrowed satisfaction of the Investigation Wing. The Assessing Officer, without applying his mind, has simply on the basis of information of the Investigation Wing jumped to the conclusion that there is escapement of income. From the perusal of the aforesaid reasons, I do not find any application of mind by the AO for reaching to the conclusion that there was escapement of income except the information from the Investigation Wing. Therefore, I find considerable cogency in the contention of the Ld. Counsel for the assessee that AO has completed the assessment in dispute u/s. 147/143(3) of the Act without appreciating the facts and circumstances of the case and wrongly assumed the jurisdiction u/s. 148 of the Act, 1961, which is in violation of mandatory jurisdictional conditions as stipulated under the Act. He further stated that Ld. First Appellate Authority has wrongly upheld the order of the AO and dismissed the appeal of the asse....
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....tter flagged as Annexure A) on the basis of search in the case of Sh. Surendra Kr. Jain group of cases (entry operator) New Delhi that during the financial year 2008-09 the aforementioned assessees has introduced its own money by way of taking bogus accommodation entries provided by Sh. S.K. Jain group of cases (entry operator) the details of accommodation entry amount received as beneficiary is given as under as provided by Investigation Wing : S.No. Beneficiaries Name of Entry Provider Amount Total Amount 1 M/s SBS Realtors P.Ltd. S.K. Jain group 235,00,000/- 235,00,000/- In the light of information provided by the investigation wing, it is necessary to examine and verify the genuineness, identification and creditworthiness of the aforesaid transaction. I have perused details of the cheques/PO received by the above company, the amount, the issuing company, the recipient company, middlemen bank etc. as tabulated below: S. No. From company name To company name Name of the issuing bank Chq./RTGS/ PO Ch./Date Amount Name of the middle men 1 AD Fin Capital Services P.Ltd. SBS Realtors Pvt.Ltd. Axis ....
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....ear have been elapsed from the end of the relevant A.Y. i.e. 2009-10, necessary statutory approval u/s 151(2) of the I.T. Act may kindly be accord to issue notice u/s 148 for the A.Y. 2009-10 for the purpose of reopening of the case u/s 147 of the I.T. Act, 1961. Sd/- (R.O. Bhutia) Income Tax Officer Ward-22(4), New Delhi" 6. From a perusal of the above reasons, it is seen that the Investigation Wing has supplied certain information to the Assessing Officer with regard to receipt of cheques by the assessee from various companies who are considered to be S.K. Jain group companies by the Investigation Wing. As per the Investigation Wing, the above cheques paid by S.K. Jain group companies were accommodation entries to M/s SBS Realtors Pvt.Ltd. i.e., the assessee. However, what is the material found during the course of search of S.K. Jain group cases which had led to form the belief that all those companies are providing accommodation entries is not mentioned in the reasons recorded. It is also not mentioned whether any of the directors of the above companies have provided accommodation entries to M/s SBS Realtors Pvt.Ltd. It is also not mentioned whether any doc....
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....ection 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished." 7. Thus, if the Assessing Officer considered it necessary to ensure that the assessee has not understated the income, he can issue the notice under Section 143(2). However, proviso to above Section provides the time limit within which such notice can be issued. Once that time limit is expired, in our opinion, the Assessing Officer cannot invoke Section 148 just for the purpose of verification. Therefore, in our opinion, in the case under considera....
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.... constituted reference to tangible material "outside" the record which was information based upon the investigation of the Commissioner of Central Excise. To have required the Revenue to disclose further details regarding the nature of documents or of contents thereof would be rewriting the conditions in section 147 which merely authorised the issuance of notice to reopen with conditions. For the assessment years 2004- 05 and 2005-06, the notes disclosed the source of information, the Directorate of Revenue Intelligence, which had sent information based upon the Commissioner of Central Excise's investigations. To add further conditions to be nature of discussions or reasons that the Officer authorizing the notice would have to discuss in the note or decision was beyond the purview of the courts and was not justified. The orders of the Appellate Tribunal could not be sustained. The Appellate Tribunal was directed to hear the Department's appeals on their merits." 9. On the other hand, learned counsel for the assessee has relied upon the catena of judgment before and after the date of above judgment of Hon'ble Delhi High Court wherein the notice under Section 148 simply ....
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....tion from the Investigation Wing. The facts in the case of the assessee are almost identical to the facts in the case of RMG Polyvinyl (I) Ltd. (supra) and Meenakshi Overseas Pvt.Ltd. (supra). Therefore, they would be squarely applicable to the case of the assessee. Consequently, we hold the notice issued under Section 148 of the Act to be invalid for two reasons :- (i) the notice is issued for the purpose of verification of genuineness, identification and creditworthiness of the transaction, which is not permissible; (ii) the Assessing Officer has recorded his satisfaction on the basis of mere report from the Investigation Wing. There is no crucial link between the information made available to the Assessing Officer and the formation of belief of escapement of income. There is no basis for coming to the conclusion that the assessee received accommodation entries. The Investigation Wing alleged that the companies which issued cheques to the assessee company are companies of Shri S.K. Jain group and they are entry providers. However, the basis for such conclusion is missing. There is no mention that any document was seized from Shri S.K. Jain group or any director ....
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....t is proposed to be for the first time. If the reply Is affirmative, then please state Yes a) whether any voluntary return had already been filed, and Yes b) If so, the date of filing of return 8. If the answer to item No.7 is in the Negative N/A please state 9. 10. A) Income originally assessed B) Whether it is a case of under assessment, sessment to lower rate, assessment is sub subjected of sive relief, loss or pr depreciation Whether the provision of section 150(2) are applicable. If the reply is in the affirmative, the relevant facts may be stated against item No 10 it may be brought out that the provisions of section 150(2) Would not stand in the way of initiating proceeding u/s 147 Reason for belief that the income has escaped assessment. No The information is based on search & seizure operation under section 132 and survey operation under section 133A of the IT. Act conducted in the case of Shri Surendra Kumar Jain, Shri Virender Jain and Smt. Priti Jain (Wife of Shri Surendra Kumar Jain) (Collectively called Surendra Kumar Jain Group) on 14/09/2010. During the course of search and seizure several....
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....egate amount of cash received by Shri S.K. Jain Group during the different financial years. From the search material found from S.K.Jain Group the following entry belongs to the assessee of this ward i.e. M/s Luxe Trading & Holding (India) Pvt. Ltd. which is as under:- ANNEXURE-A-11, PAGE-28 OF CHEQUE BOOK cany coun 10700091 AUGE Ar to LUTE TRADING & Morning f CAN - 294133 and slosti R On the basis of the search in the case of Shri Surendra Kumar Jain group of cases (entry operator and further enquiries the DDIT (Investigation) has suggested that notice under section 148 has to be issued in a number of cases for the assessment years 2006-07 to 2011-12 to bring to tax the undisclosed income Document 3 regarding the accommodation entries obtained by such persons. Out of the list of persons one of the case of M/s Luxe Trading & Holding (India) Pvt. Ltd pertains to Ward-15(4), New Delhi. M/s Luxe Trading & Holding (India) Pvt. Ltd. (PAN -AAACL 1949E) has filed its return of income for the assessment yea 2011-12 with the A.O. Ward 13(4), New Delhi. The return of income filed by the assessee company ha been down loaded from the ITD ....