TaxTMI 
TaxTMI 
2020 (1) TMI 220
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....sessment order without removing the objection raised by the appellant regarding illegal assumption of jurisdiction by Ld. A.O. by passing a speaking order should therefore be set aside and quashed. 3. The CIT (A) has erred in upholding the action of the AO and passing the impugned order by obtaining behind the back of the appellant some alleged statements /information none of which had been made available to the appellant nor any opportunity provided to rebut the same and there was not even a show cause notice specifically proposing to make any addition nor any effective opportunity of hearing and hence, the impugned order passed in violation of natural justice is liable to be quashed. 4. The CIT(A) has erred in not being guided by correct factual and legal position, records, and binding precedents placed before him and has passed the impugned order erroneously which is therefore liable to set aside and quashed. 5. The CIT(A) ought to have dealt with all the submissions and objections of the appellant and ought to have followed the binding decisions of the Courts and Tribunals placed before him but has unfortunately not done so and has thus passed the imp....
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....) of the Act on 30.3.2016 after adding Rs. 8 lacs u/s. 68 of the Act as the genuineness and creditworthiness of the share application money received during the relevant assessment year was not proved by the assessee. 3. Aggrieved with the aforesaid assessment order dated 30.3.2016, assessee appealed before the Ld. CIT(A) who vide his impugned order dated 09.11.2017 has affirmed the action of the AO and dismissed the appeal of the assessee. 4. During the hearing, ld. Counsel of the assessee has only argued legal ground no. 1 and stated the reassessment as made is without jurisdiction, without compliance with mandatory provisions of section 147/148 of the Act and as such the same deserves to be quashed. He further stated that the reasons recorded for the reassessment are at pager book page no.13-14 and the reasons are bald and do not contain even the prima facie view or reason to believe of the AO that income has escaped assessment to tax within the meaning of section 147 of the Act. There is no application of mind by the AO and no process of the matter by the AO before recording of the said reasons. It was further submitted that notice under section 148 was issued merely on th....
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....es of allotment of shares in YI would be a reason to initiate reassessment proceedings. ii) Relying on PCIT vs. Meenakshi Overseas Pvt. Ltd. ITA No. 651/Del/2016 dated 11.1.2016 (Hon'ble Delhi High Court) approval u/s. 151 upheld. 2. Raymond Woollen Mills Ltd. v. ITO And Others [236 ITR 341 (Copy Enclosed) where Hon'ble Supreme Court held that in determining whether commencement of reassessment proceedings was valid it has only to be seen whether there was prima facie some material on the basis of which the department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. 2.1 Yuvraj v. Union of India Bombay High Court [20091 315 ITR 84 (Bombay)/[2009] 225 CTR 283 (Bombay) Points not decided while passing assessment order under section 143(3) not a case of change of opinion. Assessment reopened validly. 3. Devi Electronics Pvt Ltd Vs ITO Bombay High Court 2017-TIQL-92-HC-MUM- IT The likelihood of a different view when materials exist of forming a reasonable belief of escaped income, will not debar the AO from exercising his jurisdiction to assess the assessee on reopening notic....
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....asis of said information was justified. 11. Rakesh Gupta Vs CIT P&H High Court f20181 93 taxmann.com 271 (Punjab & Haryana) Where Assessing Officer received information from Principle Director of Income Tax (Investigation) that assessee had received bogus loss from his broker by client code modification, reassessment on basis of said information was justified. 12. Home Finders Housing Ltd. Vs. ITO (2018) 94 taxmann.com 84 (SC). SLP dismissed against High Court's order that non-compliance of direction of Supreme Court in GKN Driveshafts (India) Ltd. Vs. ITO (2002) 125 Taxman 963 that on receipt of objection given by assessee to notice under section 148, Assessing Officer is bound to dispose objections by passing a speaking order, would not make reassessment order void ab initio. 13. Baldevbahi Bhikhabhai Patel vs. DCIT (Gujarat High Court) (2018) 94 Taxmann.co, 428(Gujarat) Where revenue produced bunch of documents to suggest that entire proposal of reopening of assessment alongwith reasons recorded by the Assessing Officer for same were placed before Additional Commissioner who, upon perusal of same, recorded his satisfaction th....
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....tiating reassessment proceedings in the absence of anything to show that A.O. had independently applied his mind to arrive at a belief that the income had escaped assessment. Thus, the AO has acted mechanically and without any independent application of mind. The reasons recorded are therefore vague, highly non specific and reflect complete non-application of mind. It is also noted that there is no live link or direct nexus between alleged material and, inference. It is further noted that initiation of proceedings is also based on non application of mind much less independent application of mind but is a case of borrowed satisfaction. Nothing is independently examined or considered by the AO which can demonstrate application of mind by him. There is nothing to show that the cash is paid from coffers of the assessee. Reasons do no indicate as to who AO reached to the conclusion that the assessee received accommodation entry and escaped assessment. To support my aforesaid view, I draw support from the following decisions:- i)ACIT vs. Dhariya Construction Co. (2011) 198 taxman 202 (SC) wherein the Hon'ble Court has held that : "Section 147 of the Income Tax Act....
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....ed a sum of Rs. 1.13 crore. On what basis such an addition was made has not been explained. 15. For the aforementioned reasons, the Court is satisfied that no error was committed by the ITAT in holding that reopening of the assessment under Section 147 of the Act was bad in law." iii) 395 ITR 677 (Del) Pr. CIT v. Meenakshi Overseas (P) Ltd. "36. In the present case, as already noticed, the reasons to believe contain not the reasons but the conclusions of the AO one after the other. There is no independent application of mind by the AO to the tangible material which forms the basis of the reasons to believe that income has escaped assessment. The conclusions of the AO are at best a reproduction of the conclusion in the investigation report. Indeed it is a 'borrowed satisfaction'. The reasons fail to demonstrate the link between the tangible material and the formation of the reason to believe that income has escaped assessment. 37. For the aforementioned reasons, the Court is satisfied that in the facts and circumstances of the case, no error has been committed by the ITAT in the impugned order in concluding that the initiation of the proceedin....
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....ed by Surendra Kumar Jain Group of cases. The assessee company is identified as one of the beneficiaries of these alleged bogus transactions by the Directorate after making the necessary enquiries. It has been revealed that the following entries have been received by the assessee. Cheque books Company To Name dated name 13 Name Cheques/ Cheques Amount Name of company/peson of the RTGS/PO date the issuing No. bank middleman 11.07.07 Finage Giggle Kotak 000001 11.07.07 4,00,000 Satish Lease & Infotech Pvt. Goel Finance 11.07.07 Lotus Realcon Ltd Giggle Kotak 000021 11.07.07 4,00,000 Satish Pvt. Ltd Infotech Pvt. Ltd Goel The above amount of Rs. 8,00,000/- has been credited into assessee's bank account in F Y 2007-08. Investigation made by the Investigation Wing of the Department has found that assessee is a beneficiary of taking the aforesaid accommodation entries. I have also perused various materials and report from Investigation Wing and on that basis it is observed that the assessee company has introduced its own unaccounted money in its bank account by way of above a....