TaxTMI 
TaxTMI 
TaxTMI 
2020 (8) TMI 797
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.... before or at the time of hearing." 2. The assessee is a company and filed its return of income on 31.10.2010 declaring total income of Rs.36,89,317/-. The AO records that information was received from DDIT(Inv.), Unit-3(1), Kolkata based on which notice u/s 148 of the Act was issued on 30.03.2017. In response, the assessee filed its return of income on 24.10.2017 declaring the same total income of Rs.36,89,317/-. Thereafter on 05.05.2017 the assessee requested the AO for copy of the reasons recorded for re-opening. This was supplied to the assessee. On 22.11.2017 and 24.11.2017 the assessee filed various objections to the re-opening of assessment before the AO. The AO without disposing all these objections of the assessee, completed the assessment u/s 147 r.w.s. 143(3) of the Act on 20.12.2017 determining the total income of the assessee at Rs.9,21,13,367/- inter alia making an addition of Rs.8,84,24,050/-. The assessment order extracts reasons recorded and thereafter concludes as follows: "During the assessment procedure Shri Santosh Choraria, A/R of the assessee appeared and submitted various documents. I have gone through all the documents very carefully. But the assessee c....
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.... assessment and vehemently contended that there was application of mind by the AO to the information received and that under law a reasonable belief is sufficient and that the escapement of the income need not be proved with evidence at the time of recording reasons for re-opening. He submitted that the reopening of the assessment should be upheld and the matter may be remanded to the file of the ld. CIT(A) for fresh adjudication. 6. The ld. Counsel for the assessee on the other hand opposed this contention and submitted that the AO had given a notice to the assessee on 08.03.2017, which was received by the assessee on 17.03.2017. Calling for the explanation on the information received by the AO from the DDIT(Inv.) regarding the investment from M/s. Subhalaxmi Vanijya Pvt. Ltd. and submitted a reply was filed by the assessee on 28.03.2017 explaining the transactions with documentary evidences. 7. He submitted that the AO, without waiting for the reply of the assessee on 17.03.2017 sent proposals to the PCIT through the ACIT for approval for initiating proceedings u/s 148 of the Act. He pointed out that on 29.03.2017 the JCIT, Range-5, Kolkata "rejected" the proposal of the AO for....
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....e other hand, in his reply submitted that the very fact that the JCIT had at one stage rejected the proposal for re-opening demonstrates that there was application of mind prior to grant of approval. He submitted that this is a case of transfer of funds through layering and on investigation the same was found out by the Investigation Wing and based on these results, the AO, after being satisfied that income subject to tax had escaped assessment had re-opened the assessment. He prayed that the order of the ld. CIT(A) be reversed and that of the AO restored. 11. Rival contentions heard. On a careful consideration of the facts and circumstances of the case, perusal of the papers on record and case laws cited, we hold as follows. 12. The reasons recorded are extracted for ready reference: The AO recorded the following reasons on 17.03.2017: "An information has been received through which it appears that there are cash deposits in number of bank accounts followed by transfers of funds to number of accounts of ICICI Bank, Kolkata and also other banks. Prima facie from the pattern of transaction it appears that cash have been deposited to obtain cheques by the beneficiary companies. ....
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.... Rs. 83,00,000/- M/s. Sambhudha Tracon Private Limited 00060518954 Mohit Textile ICICI Bank A/c, Kolkata Rs. 2,81,24,050/- M/s. Sambhudha Tracon Private Limited 0006050004448 Sri Biswajit Mukherjee ICICI Bank A/c, Kolkata Rs. 63,00.000/- M/s. Sambhudha Tracon Private Limited 000605017752 M7s Subhlakshmi Vanijya Pvt Ltd ICICI Bank A/c, Kolkata Rs. 71,00,000 M/s. Sambhudha Tracon Private Limited Rs. 8,84,24,050/- In this regard assessee's submission dated 28-03-2017 are not properly explained in respect of the source of the investment. Under the above circumstances, I have reason to believe that income of MZs Sambudha Tracon Pvt Ltd during the FY 2009-10 relevant to AY 2010-11 has escaped assessment within the meaning of section 147 of the Act." 13. A perusal of these reasons recorded on both these dates demonstrate that, the AO has relied only on the information furnished by the DDIT(Inv.). 14. Both on 17.03.2017 and on 27.03.2017, the AO sends separate proposals to the JCIT requesting for approval for re-opening of the assessment. The JCIT, Range-5, Kolkata vide his letter dated 29.03.2017 rejected the proposals dated 17....