TaxTMI 
TaxTMI 
TaxTMI 
2017 (3) TMI 1789
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....horised Representative relied upon the following case laws. (i) G&G Pharma India Ltd. vs. ITO 384 ITR 147 (Del) (ii) ITAT Delhi B Bench in ITA nos. 4281 and 4249/Del/2010 in the case of Comero Leasing & Financial P.Ltd. order dt. 14.8.2014. - for the proposition that the ACIT has accorded approval u/s 151(1) of the Income Tax Act, 1961 (the Act) in a mechanical manner and without application of mind, he relied on the decision of the Delhi E Bench of the Tribunal in the case of ITO vs. MB Jewellers P.Ltd. in ITA no.2499/Del/2011 and C.O. 228/Del/2011 order dt. 14th November, 2014, which had in turn relied on a number of High Court judgements. 2.2. The Learned Departmental Representative on the other hand opposed the contentions of the assessee and submitted that after receiving the information, the AO has formed a prima facie opinion by applying his mind to the facts of this case and thereafter recorded reasons for re-opening as there was escapement of income. 2.3. He relied on the following case laws. i. ITO vs. Purushottam Das Bangur and another, 224 ITR 362 (SC) ii. Midland Fruit and Vegetable Products (India) vs. CIT, 208 ITR 266 (Del.) 3. After hearing riva....
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....n and Co.Pvt.Ltd. Syndicate Bank Punjabi Bagh 5,00,000 2.10.03 Bharat Nylons Ltd. Syndicate Bank Punjabi Bagh 4740 HC Jain and Co.Pvt.Ltd. Syndicate Bank Punjabi Bagh 5,00,000 316706 2.10.03 Bharat Nylons Ltd. Syndicate Bank Punjabi Bagh 4743 HC Jain and Co.Pvt.Ltd. Syndicate Bank Punjabi Bagh 5,00,000 2.14.03 KVF Securities P.Ltd. Syndicate Bank Punjabi Bagh 4820 HC Jain and Co.Pvt.Ltd. Syndicate Bank Punjabi Bagh 5,00,000 2.14.03 KVF Securities P.Ltd. Syndicate Bank Punjabi Bagh 4820 HC Jain and Co.Pvt.Ltd. Syndicate Bank Punjabi Bagh 5,00,000 246735 2.14.03 Bharat Nylons Ltd. Syndicate Bank Punjabi Bagh 4743 HC Jain and Co.Pvt.Ltd. Syndicate Bank Punjabi Bagh 5,00,000 246735 2.14.03 Bharat Nylons Ltd. Syndicate Bank Punjabi Bagh 4743 HC Jain and Co.Pvt.Ltd. Syndicate Bank Punjabi Bagh 1,00,000 246864 3.21.03 Saudamini Trading & Investment Syndicate Bank Punjabi Bagh 4824 HC Jain and Co.Pvt.Ltd. Syndicate Bank Punjab i Bagh 1,00,000 246864 3.21.03 Saudamini Trading & Investment Syndicate Bank Punjabi Bagh 4824 HC Jain and Co.Pvt.Ltd....
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....the Income Tax Act, 1961 notice u/s 148 is being issued." 3.1. A perusal of the same demonstrates that there were duplicate entries (i.e. the same entries were repeated) at item numbers 20, 22, 24, 26, 28 and 30. In fact the A.O. acknowledges this fact that the same entry was recorded more than once, in the information provided by the DDIT, at para 8.1 and 8.2 of the assessment order. This demonstrates that the A.O. has not gone through the information received from the Investigation Wing. A basic verification would have revealed the duplication of entries. He simply based his reasons on this information without application of mind or verification. 3.2. The Jurisdictional High Court in the case of Principal CIT vs. G&G Pharma India Ltd. in ITA 545/2015 vide order dt. 8.10.2015 at paras 12 and 13 it was held as follows: "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 Feb. 2003, from four entries which were received by the assessee on a single date i.e. 10th Feb., 2003, from four entries which were termed as accommodation entries, which information was given to him by the Director of Investigatio....
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..... The Assessing Officer must have 'reason to believe' that income chargeable to tax has escaped assessment. This is mandatory and the 'reason to believe' are required to be recorded in writing by the Assessing Officer. (ii) A notice u/s.148 can be quashed if the 'belief' is not bona fide, or one based on vague, irrelevant and non-specific information. The basis of the belief should be discernible from the material on record, which was available with the Assessing Officer, when he recorded the reasons. There should be a link between the reasons and the evidence/material available with the Assessing Officer. (iii) The reassessment proceedings were initiated on the basis of information received from the Director of Income-tax (Investigation) that the petitioner had introduced money amounting to Rs. 5 lakhs during F.Y. 2002-03 as stated in the annexure. According to the information, the amount received from a company, S, was nothing but an accommodation entry and the assessee was the beneficiary. The reasons did not satisfy the requirements of section 147 of the Act. There was no reference to any document or statement, except the annexure. The annexure could not be regarded as a ....
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.... the reopening is held to be bad in law. For this proposition we rely on the judgement of the Mumbai 'E' Bench of the Tribunal in ITA 611/Mum/2004 in the case of Amarlal Bajaj vs. ACIT reported in 333 ITR 237 (Del) vide order dt. 24.7.2013 has considered the legal position and held as follows. "5. We have considered the rival submissions and carefully perused the orders of the lower authorities and also the material evidences brought on record from both sides. We have also the benefit of perusing the order sheet entries by which the Ld. CIT has granted sanction. Let us first consider the relevant part of the provisions of Sec. 151 of the Act. 151. (1) In a case where an assessment under sub-section (3) of section 143or section 147has been made for the relevant assessment year, no notice shall be issued under section 148[by an Assessing Officer, who is below the rank of Assistant Commissioner [or Deputy Commissioner}, unless the [Joint} Commissioner is satisfied on the reasons recorded by such Assessing Officer that it is a fit case for the issue of such notice} : Provided that, after the expiry of four years from the end of the relevant assessment year, no such notice shal....
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....ase for issuing a notice under section 148. The notice issued under section 148 was therefore, invalid. It would be pertinent here to note the reasons recorded by the AO. "Intimation has been received from DCIT-24(2), Mumbai vide his letters dt. 22nd February, 2002 that one Shri Nitin 1. Rugmani assessed in his charge had arranged Hawala entries in arranging loans, expenses, gifts. During the year Shri Amar G. Bajaj, Prop. Of Mohan Brothers, 712, Linking Road, Khar (W), Mumbai-52 was the beneficiary of such loans, expenses and gifts. The modus-operandi was to collect cash from the parties to whom loans were given and cash was deposited into account of Shri Nitin 1. Rugani and cheques were issued to the beneficiary of the loan transaction. In order to ensure that the money reached by cheques to the beneficiary Shri Nitin 1. Rugani kept blank cheques of the third parties. The assessee Shri Amar G. Bajaj had taken benefit of such entries of loans, commission ad bill discounting of Rs. 8,00,000/-, 11,21,243/- and 9,64,739/- respectively. The assessment was completed u/s. 143(3) of the 1. T. Act on 3Ft March, 1998 by DCIT-Spl. Rg. 40, Mumbai. It is seen from records that the aforesai....