TaxTMI 
TaxTMI 
2019 (10) TMI 708
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....rchases from M/s AVI Exports. 2. Briefly the facts of the case are that assessee individual had filed original return of income for assessment year under appeal on 21st September, 2007 declaring total income at Rs. 1,42,307/-. On the basis of information received from DGIT(Inv.), Mumbai, the case was reopened by issuing notice u/s 148 dated 29.03.2014, after getting prior approval from the Addl. CIT, Range-9, Surat. The AO issued statutory notices, the assessee informed the AO that return of income filed originally may be treated as return having been filed in response to notice u/s 148 of the Act. The AO considering report of Investigation Wing and other material found the assessee being proprietorship of M/s Gem Art, Surat has ta....
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....J0819L STATUS : Individual O/O : ITO, Ward 9(4), Surat A.Y. : 2007-08 Reasons for the belief that income has escaped assessment: Search action was carried out by the Investigation wing, Mumbai on various groups which are involved in providing accommodation entries by way of issuing non genuine bills. On examination of the above information I have reason to believe that the above named assessee is a beneficiary of non genuine transactions of Rs. 12,48,93,566/- during FY 2006-07 from the following parties: S.No. Name & PAN of the concern with whom transaction made Amount (Rs.) 1. Gem Art 12,48,93,566/- In view of the above, I have reason to believe that the assessee has earned income excee....
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.... preferred the appeal before the Hon'ble High Court, however, departmental appeal has been dismissed. The findings of the Hon'ble High Court in para 9 to 12 of the order are reproduced as under: "9. If on the basis of information made available to him and upon applying his mind to such information, the Assessing Officer had formed a belief that income chargeable to tax has escaped assessment, the Court would have readily allow him to reassess the income. In the present case however, he recorded that the information required deep verification. In plain terms therefore, the notice was being issued for such verification. His later recitation of the mandatory words that he believed that income chargeable to tax has escaped assessment, ....
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....ction/approval u/s 148 in accordance with law and departmental appeal has been dismissed. The findings of the Hon'ble High Court in para 7 to 11 are reproduced as under: "7. We have considered the rival contentions and we find that while according sanction, the Joint Commissioner, Income Tax has only recorded so "Yes, I am satisfied". In the case of Arjun Singh (supra), the same question has been considered by a Coordinate Bench of this Court and the following principles are laid down : - "The Commissioner acted, of course, mechanically in order to discharge his statutory obligation properly in the matter of recording sanction as he merely wrote on the format "Yes, I am satisfied" which indicates as if he was to sign only ....
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....sion agent only and commission income has been declared in the return of income. He has referred to audited balance sheet of the assessee u/s 44AB in which the nature of business of assessee has been explained as commission agent. PB 73 to 79 are details of sale and purchases made on commission basis from AVI Exports on commission basis by assessee. PB 95 is the assessment order u/s 143(3) in the case of same assessee for AY 2006-07 dated 21.10.2008 in which the AO accepted that assessee derived income from commission agent of diamonds. He has, therefore, submitted that reopening of assessment is illegal and bad in law and addition is wholly unjustified. 6. On the other hand, Ld. DR relied upon orders of the authorities below and submitt....
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....the assessee. Ld. Counsel for assessee relied upon judgment of Hon'ble Gujarat High Court in the case of Manzil Dinesh Kumar Shah (supra) in which the AO in the reasons recorded that he reopened the assessment because it needs deep verification. The Tribunal had held that notice to be invalid. The Hon'ble High Court confirmed the view of the Tribunal. The findings of the Hon'ble High Court are reproduced above which clearly support the fact that reopening of the assessment in the matter is wholly illegal and invalid. The issue is, therefore, covered by above judgment of Hon'ble High Court. Further, while granting sanction for reopening of the assessment, Ld. Addl. CIT Range-9, Surat has merely mentioned "Yes, satisfied". In the same form fo....