TaxTMI 
TaxTMI 
2021 (1) TMI 85
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....ompany Act, 1956. The assessee-company filed its return of income on 30.09.2009 for the assessment year under appeal declaring income at Rs. 20,83,590/-. The return was processed under section 143(1) of the I.T. Act, 1961. Subsequently, an information was received from the office of the Director of Income-tax (Investigation-II), New Delhi, Dated 12.03.2013, mentioning therein that a search operation was carried out in the case of S.K. Jain group of cases wherein after investigation and extensive enquiry and examination of document seized during course of search, it was found that the said group has been providing accommodation entries to various persons and the assessee-company was also figured in the same list. The A.O, therefore, recorded reasons for reopening of the assessment and issued notice under section 148 of the I.T. Act, 1961. The A.O. reproduced the reasons at pages 2 to 8 of the assessment order and after considering the objections of the assessee company against reopening of the assessment, rejected the objections of the assessee company and made the addition of Rs. 25 lakhs under section 68 of the I.T. Act, 1961 on account of unexplained share capital and further ....
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....e course of search in case of Sh. S.K. Jain Group which provided accommodation entry to the assessee in lieu of the cash payments. Subsequent to the information the Assessing Officer has made its own investigation by examining the information received from Investigation Wing, return of income, copies of relevant seized document, findings of the Assessing Officer and CIT(A) in case of Shri S.K. Jain. After making further investigation, the Assessing Officer has formed his belief that income amounting to atleast Rs. 25,00,000/- has escaped assessment. After considering aforesaid material I am satisfied that this is fit case for issue of notice u/s.148 of the Act. Sd/- Raman Kant Garg, Addl. Commissioner of Income Tax, Range-16, New Delhi. 13. Whether the Pr. CIT is satisfied on the reasons recorded by the ITO that it is a fit case for the issue of a notice under section 148. For the reasons as recorded by me in Annexure-I [copy attached with Memo], I am satisfied that it is a fit case for issue of notice u/s.148 of the Act. Approval u/s.151 is granted. Sd/- Sanjay Kumar Mishra Pr. Commissioner of Income Tax-06, New Delhi.....
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....hs which fact is incorrect. Thus, even the Senior Authorities have not applied their mind to the facts of the case and approved the reopening of the assessment under section 151 under wrong section as well as under mistaken belief of escapement of any income. Learned Counsel for the Assessee in their written synopsis relied upon several Judgments in support of the contention. Further he has submitted that the issue is squarely covered by the Order of ITAT, Delhi Bench in the case of VRC Township Pvt. Ltd., Delhi vs., ITO, Ward-17(1), New Delhi Dated 14.10.2020 in ITA.No.1503/Del./2017, in which several decisions of different High Courts and jurisdictional High Court have been relied upon for quashing the re-assessment proceedings on identical issue. He has, therefore, submitted that the issue is squarely covered by the decision of Hon'ble Tribunal in the case of VRC Township Pvt. Ltd., (supra). 5. The Ld. D.R. on the other hand relied upon the Orders of the authorities below and submitted that reassessment have been done on the basis of information received from Investigation Wing. 6. We have considered the rival submissions and perused the material on record. It is well s....
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....i. (Appellant) (Respondent) For Assessee : Shri Suresh K. Gupta, C.A. For Revenue : Ms. Shalini Verma, Sr. D.R. Date of Hearing : 13.10.2020 Date of Pronouncement : 14.10.2020 ORDER PER BHAVNESH SAINI, J.M. This appeal by Assessee has been directed against the Order of the Ld. CIT(A)-9, New Delhi, Dated 28.02.2015, for the A.Y. 2007-2008. 2. We have heard the Learned Representative of both the parties through video conferencing and perused the material available on record. 3. Briefly the facts of the case are that the return declaring income of Rs. 21,000/- was e-filed on 31.10.2007. The return was processed under section 143(1) at retuned income. Proceedings under section 147 of the Income Tax Act, 1961 were initiated after recording reasons that the assessee's income has escaped to the tune of Rs. 80 lakhs. Accordingly notice under section 148 was issued on 29.03.2012. The assessee in reply thereto submitted that the return originally filed may be treated as return filed in response to notice under section 148 of the I.T. Act, 1961. The A.O. noted in the presen....
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....at Holdings Ltd., Delhi vs., ITO, Ward-4(3), New Delhi in ITA.No.8066/Del./2019, Dated 15.01.2020 in which on identical issue the reopening of the assessment have been quashed holding that approval by Pr. CIT is invalid. 5. On the other hand, the Ld. D.R. relied upon the Orders of the authorities below and submitted that though the Old Form for recording of the reasons have been used and by mistake Section 147(b) have been mentioned in the reasons, but, it will not vitiate the entire re-assessment proceedings as well as would not vitiate the sanction granted by the Addl. CIT. 6. We have considered the rival submissions. It is well settled Law that validation of re-assessment proceedings shall have to be determined with reference to the reasons recorded for reopening of the assessment. The Ld. CIT(A) filed copy of the reasons recorded for reopening of the assessment at pages 14 and 15 of the PB. The same read as under : 6.1. The above recording of reasons for initiation of re-assessment proceedings clearly show that in para 7 A.O. has mentioned Section 147(b) of the I.T. Act is applicable for reopening of the assessment, though such Section does not exist ....
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....e Assessing Officer has invoked a provision of law to sustain the impugned notice which is admittedly not in the statute and the Joint Commissioner has yet approved it. 7. Mr. Chanderpal, learned Counsel appearing for the Revenue tendered a copy of the letter dated 19th December, 2017 issued to the petitioner wherein the Assessing Officer has stated that the words "147(b)" were inadvertently filled in the prescribed form, instead of Section 147 of the Act while obtaining the sanction from the Joint Commissioner of Income Tax. It is further submitted on behalf of the Revenue that the same is a curable defect under section 292B of the Act. Therefore, the impugned notice cannot be held to be bad for mere incorrect mentioning of section on account of the mistake. 8. There can be no dispute with regard to the application of Section 292B of the Act to sustain a notice from being declared invalid merely on the ground of mistake in the notice. However, the issue here is not with regard to the mistake / error committed by the Assessing Officer while taking a sanction from the Joint Commissioner of Income Tax but whether there was due application of mind by the Joi....
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....ently established that SH. S.K, Jain and his brother Sh. Virendra Jain are known entry providers and are in the business of providing accommodation entries to various beneficiary companies/entities/persons through cheques through a number of paper & dummy companies in lieu of cash. These dummy companies are totally managed and controlled by Sh. Surendra Kumar Jain and his brother Sh. Virendra Jain. The company M/s Shri Balkishan Agarwal Glass industries Ltd. has also received accommodation entry from Sh. S. K. Jain during the F.Y.2004-05. Details of cheque/pay orders issued in the name of the assessee are reproduced below:- Bank Book Date From TO Bank Cheque/RTGS Cheque Date Amount Through Annexure No. Page No, AVAIL Shri Balkishan Agarwal Glass Industries Ltd. ABN PIO No. 947828 11-Nov-04 500000 Neeraj A-148 22 AVAIL Shri Balkishan Agarwal Glass Industries Ltd, ABN PIO No. 947829 11-Nov-04 500000 Neeraj A-148 22 AVAIL Shri Balkishan Agarwal Glass Industries Ltd. ABN PIO No. 947830 11-Nov-04 500000 Neeraj A-148 23 ....
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....f clarity:- 25. A perusal of the above shows that at clause 7(a) the AO has categorically mentioned that no return has been filed by the assessee. However, a perusal of the paper book page 1 shows that the assessee has duly filed its return of income on 31.3.2006 declaring total loss of Rs. 2,79,76,596/- vide receipt number 0851001128. A perusal of Page 3 of the paper book shows that the return was processed under section 143(1) on 26th July 2006. Thus, it is seen that the AO had no occasion to go through the return filed by the assessee along with the audited accounts before recording reasons and has mentioned that no return has been filed while reopening the assessment and the ld. Addl. CIT, without application of mind, has simply mentioned, "I am satisfied that this is a fit case for issue of notice under section 148." The Hon'ble Bombay High Court in the case of Kalpana Shantilal vs ACIT 100 CCH 0165 has held that sanction granted by higher authority for issuing of reopening notice had to be on due application of mind and it could not be mechanical approval without examining proposal sent by AO. The Hon'ble Delhi High Court in the case of Yum Restaurants Ltd. ....
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....disclose fully and truly all material facts' is not enough. The reasons must specify as to what is the nature of default or failure on the part of the assessee. Similarly The Hon'ble Bombay High Court in the case of Anand Developers vs. ACIT, vide Writ Petition No. 17/2020, order dated 18th February, 2020 has held that a mere bald assertion by the AO that the assessee has not disclosed fully and truly all material facts is not sufficient. The AO has to give details as to which fact or the material was not disclosed by the assessee leading to its income escaping assessment otherwise the reopening is not valid. 27. Thus, we agree with the argument of the ld. counsel for the assessee that the reason to believe that income has escaped assessment is not based on correct facts and the approval has been given in a mechanical manner and, therefore, such notice based on wrong facts and the approval given in a mechanical manner make the re-assessment proceedings invalid being not in accordance with law. Accordingly we hold that the reassessment proceedings initiated by the AO is not valid in the eyes of law. Accordingly the same is directed to be quashed. Since the assessee succeeds....
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....per objections to the reopening of the assessment. Thus, the direction given in the case of SABH Infrastructure Ltd., vs., ACIT (supra), have not been applied because it is the duty of the A.O. to provide all the documents and reports which are part of the reasons to the assessee before taking steps into the matter. Further the Addl. CIT while granting or forwarding copy of the reasons to the Pr. CIT for his approval did not mention any fact in the proforma which is blank and no remarks have been mentioned by him despite his signature appeared thereon. The Pr. CIT while granting sanction/approval to reasons recorded for reopening of the assessment has simply mentioned "Yes, I am satisfied". Such type of approval was not found valid in many cases. The ITAT Delhi C-Bench in the case of M/s. Ganesh Ganga Investments Pvt. Ltd., Delhi vs., ITO, Ward-10(1), New Delhi in ITA.No.1579/Del./2019 for the A.Y. 2010-2011 vide Order Dated 07.11.2019 quashed the reopening of the assessment in the similar circumstances. The entire order is reproduced as under : "IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES "C": DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHAN....
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....eopening of the assessment, issued notice under section 148 to the assessee on 31.03.2017 which was served upon the assessee. The assessee objected to the reopening of the assessment and requested to provide copy of the approval of Competent Authority under section 151 of the I.T. Act, 1961. The Assessee also contended that whatever material was collected at the back of the assessee was not confronted and requested to supply statement of Shri Himanshu Verma, report and data complied / received from Investigation Wing, report and data complied/received by ITO, Ward-10(1), New Delhi, diaries and registers considered as incriminating material seized from Shri Himanshu Verma and any other documents which Department wanted to rely. It was further submitted that proceedings under section 147/148 of the I.T. Act, cannot be invoked for making inquiry or verification purposes. The assessee denied receipt of any accommodation entry from any such person. The A.O, however, rejected the objections of the assessee and proceeded to make assessment in the matter. The A.O. noted that in assessment year under appeal, assessee has received Rs. 11,05,00,000/- on account of share capital and share prem....
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....lid and bad in law. It was further submitted that assessee has shown all the amounts in his books of account and return of income filed with the Department. The A.O. has reopened the assessment by mentioning in the reasons that assessee has received entries of Rs. 2.45 crores which fact is incorrect. The initiation of re-assessment have been made merely on the basis of Investigation Wing report without applying the mind. No right of cross-examination have been provided to the assessee to the statement of Shri Himanshu Verma and others. The assessee relied upon the following decisions. 3.1. In the case of Pr. CIT vs., RMG Polyvinyl (I) Ltd., 396 ITR 5 (Del.) the Hon'ble Delhi High Court held as under: "In the present case too, the information received from the Inv. Wing cannot be said to be tangible material per se without a further enquiry being undertaken by the learned assessing officer" 3.2. In the case of Pr. CIT vs., Meenakshi Overseas (P) Ltd., 395 ITR 677 (Del.), the Hon'ble Delhi High Court held as under : "Reassessment notice condition precedent recording of reasons to believe that income has escaped assessment mere reproduction of inves....
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.... of excessive relief or allowing excess loss/depreciation. NO 10. Whether the provision of Sec. 150(1) are applicable. If the reply is in affirmative the relevant facts may be stated against Item No. 11 and 8 may also be brought out that the provisions of Sec. 150(2) would not stand in the way of initiating proceedings u/s. 147. NO 11. Reasons for the belief that the income has escaped assessment. As per annexure. Sd/- H.K. Sharma Dated: 29.03.2017. ITO, Ward-10(1), New Delhi. 12.....
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....Himanshu Verma, therefore, such statement cannot be read in evidence against the assessee. He has relied upon Judgment of Hon'ble Supreme Court in the case of M/s. Andaman Timber Industries vs., Commissioner of Central Excise, Kolkata-II reported in 281 CTR 241. 4. The Ld. CIT(A), however, did not accept the contention of assessee and confirmed the reopening of the assessment. The assessee also made submissions on merit to show that addition is wholly unjustified. However, the Ld. CIT(A) did not accept the contention of assessee and upheld the addition on merit as well. The appeal of assessee was accordingly dismissed. 5. The assessee in the present appeal challenged the reopening of the assessment under section 147/148 of the I.T. Act, 1961, on several grounds, addition of Rs. 11.05 crores under section 68 of the I.T. Act and addition of Rs. 22,10,000/- on account of commission. 6. We have heard the Learned Representatives of both the parties. Learned Counsel for the Assessee reiterated the submissions made before the authorities below and referred to reasons recorded in this case for reopening of the assessment, copy of which is filed at page-15 of the ....
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....s were not in order, assessee should have been confronted with the material so that assessee could rebut the same. Therefore, such fact could not be taken adversely against the assessee. The assessee never received notice Dated 11.12.2017 for production of the parties for examination. In reasons 06 parties are mentioned which belong to Shri Himanshu Verma, but, in his statement he says 08 parties, but, the A.O. made addition for 38 parties. A.O. made the addition only on the statement of Shri Himanshu Verma, but, the parties did not belong to him. Learned Counsel for the Assessee submitted that since approval is not in accordance with Law, therefore, reopening of the assessment is bad in Law and relied upon the same Judgments as were relied upon before Ld. CIT(A). He has submitted that A.O. did not apply his mind to the reasons and recorded incorrect facts and approval is also given on incorrect facts. The initiation and approval on the basis of wrong facts is not legally valid. He has relied upon Judgment of Hon'ble Delhi High Court in the case of Commissioner of Income Tax vs., Kamdhenu Steel & Alloys Ltd., 248 CTR 33 and other decisions as was relied upon befor....
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....., vs. DCIT [2018] 91 taxmann.com 119 (Gujarat) (HC). 4. Pushpak Bullion (P.) Ltd., vs. DCIT [2017] 85 taxmann.com 84 (Gujarat) (HC). 5. Ankit Financial Services Ltd., vs. DCIT [2017] 78 taxmann.com 58 (Gujarat) (HC). 6. Aaspas Multimedia Ltd., vs. DCIT [2017] 83 taxmann.com 82 (Gujarat) (HC). 7. Ankit Agrochem (P.) Ltd., vs. JCIT [2018] 89 taxmann.com 45 (Rajasthan) (HC). 8. Yogendrakumar Gupta vs., ITO [2014] 227 Taxman 374 (SC). 8. We have considered the rival submissions. It is well settled Law that validity of re-assessment proceedings is to be examined with reference to the reasons recorded for reopening of the assessment. The Counsel for Assessee has filed copy of the reasons recorded for reopening of the assessment at Page-15 of the Paper Book which reads as under : "M/s. Ganesh Ganga Investments Pvt. Ltd., PAN AAACG2710J A.Y. 2010-11 The assessee filed return of income for the A.Y. 2010-11 on 04.02.2011 declaring loss of Rs.(-) 14,162/-. The return was processed u/s 143(1). Information was forwarded to this office through the Addl.CIT, Range-10, New Delhi that search & seizure action was conducted by Inv. Wing ....
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....Join Fashion P. Ltd., 4. 4500000 Management Services P. Ltd., 5. 4000000 Greenvision Construction P. Ltd., 6. 4000000 USK Exim P. Ltd., TOTAL 2,45,00,000/- On the basis of the reports received from the Investigation Wing, I have downloaded the return from the ITD portal and verified the records and it is clear that the assessee company has not disclosed fully and truly all material facts necessary for its assessment for the assessment year under consideration as it emerges that transactions shown in the return are not genuine. Apart from the above the assessee company is not doing any real business and keeping in view the huge investments, disallowances u/s 14A read with rule 8D also applicable in the case. The statement given by Shri Himanshu Verma also establishes the link with the self-confessed "accommodation entry providers", whose business is to help assessees bring back their unaccounted money into their books of account. Thus, there is a direct link between the information/available with the department and the income escaping assessment. I have, therefore, reasons to believe that income to the extent of R....
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....aforenoted settled principles governing an action under section 147, there could be no hesitation in holding that there was no information on record which could provide foundation for the Assessing Officer's belief that the assessee's transaction with 'V' Ltd. was not genuine and its income had escaped assessment on that account. Therefore, the impugned action of the Assessing Officer could not be sustained. Even the Addl Commissioner had accorded his approval for action under section 147 mechanically. If the Addl. Commissioner had cared to go through the statement of said V 'perhaps he would not have granted his approval, which is mandatory in terms of proviso to subsection (1) of section 151 as the action under section 147 was being initiated after the expiry of four years from the end of the relevant assessment year. The Legislature has provided certain safeguards to prevent arbitrary exercise of powers by an Assessing Officer particularly after a lapse of substantial time from completion of assessment. The power vested in the Commissioner to grant or not to grant the approval is coupled with a duty. The Commissioner is required to apply his mind to the pro....
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....pplication of mind. 8. The ld. AR vehemently pointed out that the reassessment proceedings initiated by the Ld. AO is based on the information received from investigation wing and there was no material before him to substantiate the allegation contained in the information and therefore initiation of proceedings is bad in law. He also contended that the order under appeal is bad in law as the assessing officer has passed the order of assessment u/s 143(3) r/w. s. 147 of the Act without issuing notice u/s 143(2) of the IT Act. 9. The ld. AR drew our attention towards copy of proforma of obtaining approval u/s. 151 of the Act along with reasons recorded, which are placed at pgs. 16-18 of the assessee's paper book, submitted that in column 12 Addl. CIT has granted approval without application of mind by writing only 'Yes, I am satisfied'. The ld. AR submitted that as per decision of Hon Madhya Pradesh High Court in the case of CIT vs. M/s. S. Goyanka Lime and Chemicals Ltd. 231 Taxman 0073 (MP), where the Joint Commissioner recorded satisfaction in mechanical manner and without application of mind to accord sanction for issuing notice u/s. 148 of the Act and has only ....
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....ns given by Hon'ble High Court in the case of Asian Paints (supra) and on this count also reassessment proceedings and consequent orders are void and thus, bad in law. This view was again approved by Hon'ble High Court of Bombay itself in the subsequent decision in the case of Aroni Commercials Ltd. vs. DCIT reported in 362 ITR 403 (Bom) and followed by ITAT, Bombay in the case of Shri Hirachand Kanuga vs. DCIT in ITA No.4261 & 4262/2012 dated 27.02.2015. 12. On these submissions, the ld. DR could not controvert the facts that the AO disposed of objections of the assessee by way of passing order on 12.12.2016 and impugned reassessment order u/s. 143(3) r/w s. 147 of the Act was passed only after 10 days of disposal of objections. These facts trigger the ratio of the decision of Hon'ble Bombay High Court in the case of Asian paints (supra), wherein their lordship directed that the AO to wait for four weeks to begin assessment after disposing of the objections of the assessee and non-compliance the same renders assessment proceedings void and bad in law. Present impugned reassessment order cannot be held sustainable and valid as the AO has passed the sam....
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.... of Delhi in the case of PCIT vs. G&G Pharma India Ltd. reported in 384 ITR 147 (Del), the ld. AR submitted that reopening of assessment by an AO based on the information received from the Director of Investigation without making any effort to discuss the materials on the basis on which he formed a prima facie opinion that income had escaped assessment. The Court held that the basic requirement of s. 147 of the Act that AO should apply independent mind in order to form reasons to believe that income had escaped assessment had not been fulfilled. 15. The ld. AR submitted that as per ratio of the decision of Hon'ble High Court of Delhi in the case of PCIT vs. RMG Polyvinyl (I) Ltd. reported in 396 ITR 5 (Del), where information was received from investigation wing that assessee was beneficiary of accommodation entries but no further inquiry was undertaken by AO, said information could not be said to be tangible material as per se and, thus, reassessment on said basis was not justified. Finally, the ld. AR submitted that the impugned initiation of reassessment proceedings, notice and all consequent proceedings and orders are not valid and bad in law therefore, th....
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....my directors. The ld. AR submitted that in the table given in para 3 is taken along with para 6 of the reasons recorded then, it is clear that the names of companies are 13 and above named two persons at serial No. 11 & 12 have been noted and there is no name of entry provider in the other 11 columns and there is no link in the reasons recorded with regard to these 11 companies. The ld. AR submitted that these facts clearly show that the AO has acted on suspicion only and not on any credible input available to him through DDIT (investigation) information or otherwise on the basis of any exercise or application of mind by himself. Therefore, the reassessment proceedings and all consequent orders are not sustainable and bad in law. Reiterating his earlier arguments, the ld. AR vehemently pointed out that the approval/sanction given in para 12 of the proforma is not a valid sanction as per ratio of the various decisions including decision of Hon'ble High Court of Madhya Pradesh in the case of S. Goyanka Lime and chemicals Ltd. (supra), which has been upheld by Hon'ble Supreme Court by dismissing SLP of the Revenue reported in 237 Taxman 378 (SC) therefore, initiation ....
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....e that the income has escaped assessment. The text and words used by the AO in the reasons recorded for reopening of assessment clearly show that the AO proceeded to initiatory assessment proceedings and reopening of assessment without having any valid satisfaction and only on the basis of borrowed satisfaction as there was no independent application of mind by the AO to the tangible material received from Investigation Wing which could form the valid basis and reason to believe that income has escaped assessment. 21. In view of decisions of Hon'ble High Court of Delhi in the cases of PCIT vs. Meenakshi Oversaes (supra), PCIT vs. G&G Pharma (I) Ltd. (supra) and decision in the case of PCIT vs. RMG Polyviny (I) Ltd. (supra), where information was received from investigation wing that assessee was beneficiary of accommodation entries but no further inquiry was undertaken by AO, said information could not be said to be tangible material per se and, thus, reassessment on said basis was not justified. In the case of Meenakshi Overseas (supra), their lordship speaking for the Hon'ble Jurisdictional High Court held that where the reasons recorded by the AO failed to demonstra....
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.... in the reasons belong to Shri Himanshu Verma. There is no investor exist in the name of M/s. Management Services Pvt. Ltd., and no addition in respect of the same company have been made by the A.O. The A.O, therefore, recorded incorrect facts in the reasons for reopening of the assessment. Thus the same cannot be approved under the Law. It is well settled Law if wrong facts and wrong reasons are recorded for reopening of the assessment, reopening of the assessment would be invalid and bad in Law. We rely upon Judgment of Hon'ble Punjab & Haryana High Court in the case of Atlas Cycle Industries 180 ITR 319 (P&H). It is well settled Law that note already filed with return disclosing nature of capital receipt and no other tangible material found, therefore, reopening of the assessment under section 148 was quashed. We rely upon Judgment of Hon'ble Delhi High Court in the case of CIT vs., Atul Kumar Swami [2014] 362 ITR 693 (Del.) and Judgment of Hon'ble Allahabad High Court in the case of Kanpur Texel P. Ltd., 406 ITR 353 (Alld.). Similarly, in the case of CIT vs., Vardhaman Industries [2014] 363 ITR 625 (Raj.), the Hon'ble Rajasthan High Court has held that "reasons must be....
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....for the Assessee also relied upon Order of ITAT, Delhi Bench in the case of Pioneer Town Planners Pvt. Ltd., (supra) in which on identical facts reopening of the assessment have been quashed. The Ld. D.R. relied upon certain decisions in support of the contention that reopening of the assessment is justified, but, the same are distinguishable on facts of the present case. Considering the facts and circumstances of the case in the light of above discussion and decisions referred to in the Order, we are of the view that reopening of the assessment is bad in law and that sanction/approval granted by Pr. Commissioner of Income Tax is also invalid. We may also note that vide Order sheet Dated 23.08.2019 the case was re-fixed for hearing because the Ld. D.R. argued that approval have been granted by Commissioner of Income Tax after due discussion of the matter and perusal of the relevant information and thereafter approval in prescribed proforma sent to the A.O. and he has mentioned that I am satisfied. However, no record was produced. Therefore, this case was re-fixed for fresh hearing. However, on the date of hearing no such record have been produced for the inspection of the ....
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....e by the above decisions of the Tribunal as well. The A.O. has thus no justification to assume jurisdiction under section 147 of the I.T. Act, 1961, in a Lawful manner and as such the same are liable to be quashed. In view of the above discussion, we set aside the Orders of the authorities below and quash the reopening of the assessment. Resultantly, all additions stand deleted. Since we have quashed the reopening of the assessment, therefore, there is nothing to decide the issue of addition on merits. Appeal of the Assessee allowed. 7. In the result, appeal of the Assessee allowed." 6.1. The form for recording reasons was also same in this case as is mentioned by the A.O. in the case of assessee. Thus, the issue is squarely covered in favour of the assessee by the aforesaid decision of the Delhi Tribunal in the case of VRC Township Pvt. Ltd., Delhi (supra). Following the reasons for the same, we set aside the Orders of the authorities below and quash the reopening of the assessment under section 147/148 of the I.T. Act. Resultantly, all additions stand deleted. In view of the above findings, the other grounds are left with academic discussion only. Accordingly, a....
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....ocuments seized as a result of search operation conducted against Sh. S.K. Jain Group (Entry Operator). The incriminating document seized during search (date of search 14.09.2010) included the companies/ persons as identified to be beneficiaries have obtained the accommodation entries generally in the form of share capital/share premium/loans. The details like the amount received by these companies / persons, the cheque/ PO number, the name of issuing company, the mediator/ middle man, bank e.t.c. as recorded in the seized documents have been tabulated and enclosed with the report. 6. In the appraisal report of Sh. Surendra Kumar Jain Group, the investigation Wing has summarized evidences which established that Sh. Surendra Kumar Jain and his brother Sh. Virendra Jain were accommodation entries providers and their modus operandi for providing accommodation entries in lieu of cash which are discussed below in brief. A. During the course of search proceedings in the Sh. S.K. Jain Group it was found that a number of companies were running from the residential as well as other address related to Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain.....
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.... as per Annexure 'A'). These transaction are found recorded at various documents seized from S.K. Jain Group Company (details as per Annexure- 'A'). a copy of which has been supplied along with the report as scanned documents in the CD. Details of analysis of information received and collected material 9.1 have carefully examined the above referred to information as received along with the return of the assessee for A.Y. 2009-10. It is evident from the perusal of the return that assessee has introduced capital in the form of share application money amounting to Rs. 25,00,000/- during this period. The above information as disclosed in return of income s corroborated with the information received about the receipt of accommodation entry by the assessee amounting to Rs. 25,00,000/- from the Investigation Wing as discussed above. 10. I have carefully perused the report of investigation wing along with transaction as recorded in the seized documents and results of post search enquiries; it has revealed following important facts: i. That passbooks and chequebooks in the name of approximately 200 persons/firms/companies including the assessee c....
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....ain / Virendra Jain are / were director in many of these companies presently or at one point of time in the past. It is evident from above that all the relevant documents pertaining to conduit companies/firm were found in custody and control of Shri S.K. Jain 11. It has been further noticed that out 99 companies controlled by Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain, a large number of companies have following common addresses: i. 106, Palco House, T-10, Main Patel Road, Patel Nagar, Delhi (12 companies). ii. 3198-15, 4th Floor, Gali No.1, Sangatrashan, Paharganj, New Delhi (14 companies). iii. 12. 209, Bhanot Plaza, 3, D.B. Gupta Road, Paharganj, New Delhi. (11 companies). To verify the genuineness and the existence of these companies at the above mentioned addresses, a simultaneous survey action 133A of the 1.T. Act, 1961 was carried out on 14.09.2010 on above referred to address which resulted following facts: a. At 106, Palco House, T-10, Main Patel Road, Patel Nagar, Delhi the survey party found only one person named Sh. Mukesh Kumar, S/o Sh. Satyender Kumar, R/o Village Gazera, Distt. Pauri Gadhwal. He told the surv....
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....ighlighted by investigation wing that during the course of post search enquiries they had obtained the bank details of S.K. Jain Group Companies like account opening forms, introducers' form and statement of accounts etc. for last few years on test check basis. It has been pointed out that in some cases where the option of mobile banking has been exercised, the mobile numbers of either of Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain were provided in the account opening forms of those specific companies/firms/persons. Some of these bank accounts are mentioned. Account No. Name of the Company Eagle Infratech Pvt. Ltd. Kailash Textiles Mani Mala Delhi Properties Person to whom this number belongs Virendra Jain Mobile NO. 9891095232 9891095232 9891095232 Virendra Jain Virendra Jain Pvt. Ltd. 224010200005890 224010200007016 224010200005845 Singhal Securities Pvt. Ltd. Roshal Lal Lalit Kumar & Co. Finage Leasing & Finance Ltd. 9310395234 9310395234 9310395233 223010200012014 Mani Mala Delhi Properties 9310395235 Pvt. Ltd. Axis Bank 224010200006989 Erode Clothing Empire....
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....ital, share premium, capital gains or loans as per the *specific requirement of the recipient clients were provided in lieu of the cash received from them. In this way, the chain for providing an accommodation entry gets completed. धकारी आय Income Page 5 of 45 Certified True Copy d. This contention gets more credibility with the seizure of documents by investigation wing evidencing the above mentioned process used by Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain for providing accommodation entry. 15. I have also noted that various specific documents were seized from S.K. Jain Group which establish that Sh. SK Jain and Sh. Virendra Jain were engaged in the business of providing accommodation entries by issuing cheque in lieu of cash through several paper companies controlled by them by charging a certain amount of commission. e.g. b. a. Pages No. 1 to 13 of the Annexure A-150 found and seized from the residence of Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain contain one account in respect of one Sh. Satish Garg for a period spread to three Financial Years i.e. April 2007 to Ma....
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....along with the report as per the Annexure- 'A', annexed herewith. It is seen from the perusal of the same that the name of the assessee appears on these documents having taken accommodation entries amounting to Rs. 25,00,000/- from various companies controlled by S.K. Jain through intermediary (O.P. Karnani) as evident from for-going discussion. On further perusal and analysis of cash book and ledger maintained by the SK Jain Group Seized during the course of search operation of S.K. Jain Group, it is noticed that M/s. S.K. 16(1) Ward-168 Cain Group (Accommodation entry operator) received the certain payments in cash through Intenary (O.P. Karnani) as per Annexure - 'B' annexed herewith. It is seen from this table that SK Jan Group has received Rs. 1,07,00,000/- from the intermediary O.P. Karnani during the period from 06.01.2009 to 08.01.2009. Part of this sum has been converted into accommodation entry to the benefit of instant assessee as evident from for-going discussion. The difference in the cash Certified True Copy Document 2 आयय received from intermediary and accommodation entries issued to the instant assessee may....
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....anies/ persons through various middlemane/agents in lieu of accommodation entries provided to them on different dates have been recorded. That these dummy companies are running their activities from the residential and the other premises of Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain. • That existence of third party correspondence with these companies in the custody of Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain have been re-covered from S.K. Jain Group Company. -16(1) That S.K. Jain/ Virendra Jain are/were director in many of these companies presently or at point of time in the past. Seizure of documents showing working of commission of mediators. d. That evidences have been seized from S.K. Jain Group pertaining to all legs of modus operandi eiving accommodation entries in lieu of cash i.e. at the stage of receipt of cash, at the point of payment of cheque, working of commission, control of intermediary companies etc. अधिकारी, Officer Page 7 of 45 Certified True Copy e. Perusal of various documents as per Annexure - 'A' seized from the premises of Shri S.K. Jain ....
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....ction impound by the proviso that no action can be taken unless any income chargeable to tax has escaped income by reason of failure as the part of the assessee to make a return under section 139 or in response to a notice issued under sub- section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year." Moreover, as the case pertains to a period beyond four years from the end of relevant assessment years at the time of issue of notice, necessary sanction has to be obtained from Pr. Chief Commissioner of Income Tax or Pr. Commissioner of Income Tax or Commissioner of Income Tax, in view of the amended provision of section 151 w.e.f 01.06.2015. The necessary sanction in this regard is being obtained separately from Pr. Commissioner of Income Tax-06, Delhi before the issue of notice u/s. 148" Document 3 Form for recording the reasons for initiating proceedings u/s 148 and for obtaining the approval of the Addl. Commissioner/Commissioner of Income Tax Name and address of the assessee VRC Township Pvt Ltd., 100/23, IInd Floor, Shiva. Tower, Sec-9, Rohini. D....
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....AME OF THE VALUE OF TOTAL VALUE NAME COMPANY FLOATED BY SH TARUN GOYAL ENTRY (In Rs.) TAKEN OF ENTRY TAKEN (In Rs.) 1. VRC Township (P) Campri Fiscal 10,00,000 10,00,000 Ltd Servises Pvt. Ltd 2. VRC Township (P) Countrywide Credit 15,00,000 15,00,000 Ltd & Securiites Pvt Ltd 3. VRC Township (P) Karol Bagh Trading 15,00,000 15,00,000 Ltd Ltd. 4 VRC Township (P) Tejasvi Investments 25,00,000 25,00,000 Ltd Pvt Ltd 5 15,00,000 VRC Township (P) Sadguru Finman Pvt 15,00,000 Ltd Ltd The above amount of Rs 80,00,000/- has been credited into assesses's bank account on various dates. 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 evident that the assessee company has introduced its own unaccounted money in its bank account by way of above accommodation entries. Therefore, I have reason to believe that the income of the assessee company amounting to Rs 80,00,0....
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....gs Ltd. Formerly known as M/s Behat Holdings Pvt. Ltd. 14, 4380/4-B, Murarli Lal Street Ansari Road, Darya Ganj, New Delhi- 110 002. AADCB7691L : : Company 2010-11 1. Reasons for issue of Notice u/s 148 for reopening of assessment u/s 147 of IT Act 1961 for the A.Y.2010-11 in the case of M/s M/s Behat Holdidngs Ltd. Formerly known as M/s Behat Holdings Pvt. Ltd. In this case, the information forwarded by the Serious Fraud Office, New Delhi vide letter F.No. SFIO/NKSHPL/2016 was received from the office of Pr.Commissiner of Income tax, Delhi-2, New Delhi vide letter F.No.Pr.CIT-2/ITO(Hqqrs.2)/2016-17/1813 dated 05.01.2017 alongwith the report of serious Fraud Investigation Office, Ministry of Finance, New Delhi 2. In the report of Serious Fraud Office, it has been mentioned that search and seizure operation under the Income tax Act was conducted at the business premises of some of these companies alongwith residential premises of its promoters, Sh. S.K. Jain and Virendra Jain(Jain Brothers). In the assessment order, the Income tax Department has recorded a finding that Jain brothers were controlling around 99 companies/e....
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....BC Pvt. Ltd. PK Aggarwal Behat Holdings 6 6/27/2009 Victory Axis 12480 PK Aggarwal 1,000,000.00 Pvt. Ltd. Behat Holdings 7 7/7/2009 1,000,000.00 Apoorva Axis RTGS Pvt. Ltd. PK Aggarwal Behat Holdings 8 7/7/2009 Hum Tum Axis RTGS 500,000.00 Pvt. Ltd. PK Aggarwal Behat Holdings 9 7/7/2009 Karishmal Axis RTGS PK Aggarwal 1.000.000.00 Pvt. Ltd. Behat Holdings 10 7/8/2009 Euro (M) Axis RTGS PK Aggarwal 1,000,000.00 Pvt. Ltd. Behat Holdings 11 7/8/2009 Hum Tum Axis RTGS 500,000.00 12 7/8/2009 1,000,000.00 Mega Top Axis RTGS Pvt. Ltd. Behat Holdings PK Aggarwal PK Aggarwal Pvt. Ltd. Behat Holdings 13 7/9/2009 Aasheesh Axis RTGS PK Aggarwal 1,000,000.00 Pvt. Ltd. Behat Holdings 14 7/9/2009 1,000,000.00 Apoorva Axis RTGS PK Aggarwal Pvt. Ltd. Behat Holdings 15 7/9/2009 Shalini Axis RTGS 1,000,000.00 Pvt. Ltd. PK Aggarwal Behat Holdings 16 7/9/2009 Victory Axis RTGS PK Aggarwal 1,000,000.00 Pvt. Ltd. ....
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....ehat Holdings PK Aggarwal 1,000,000.00 Pvt. Ltd. Behat Holdings 40 7/29/2009 Karishma Axis RTGS PK Aggarwal 1.000.000.00 Pvt. Ltd. Behat Holdings 41 7/29/2009 Mega Top Axis RTGS PK Aggarwal 1,000,000.00 Pvt. Ltd. Behat Holdings 42 7/30/2009 43 7/30/2009 1,000,000.00 1,000,000.00 Euro (M) Axis RTGS - Pvt. Ltd. PK Aggarwal Behat Holdings Hum Tum Axis RTGS PK Aggarwal Pvt. Ltd. Behat Holdings 44 7/30/2009 Shalini " Axis RTGS 1,000,000.00 Pvt. Ltd. PK Aggarwal Behat Holdings 45 7/30/2009 1,000,000.00 46 7/30/2009 Victory Zenith Axis RTGS PK Aggarwal Pvt. Ltd. Behat Holdings Axis RTGS 1,000,000.00 Pvt. Ltd. PK Aggarwal Behat Holdings 47 7/31/2009 Aasheesh Axis RTGS. PK Aggarwal 1,000,000.00 Pvt. Ltd. 48 7/31/2009 Apoorva Axis RTGS 1,000,000.00 Behat Holdings Pvt. Lid. PK Aggarwal 19 f Behat Holdings 7/31/2009 Attractive Axis RTGS PK Aggarwal 1,000,000.00 Pvt. Ltd. Behat Holdings 50- 7/31/2009 Karishma Axis ....
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....nt to the instant case) seized from the premises of Shri S.K. Jain Group during the course of search. These documents have been supplied by the Investigation Wing in the form of scanned copies of seized document in a CD. It is noted from the perusal of the copy of seized document that the name of the assessee appeared on these documents along with details of accommodation entries amounting to Rs. 7,00,00,000/- from various companies controlled by S.K. Jain Group through intermediary, Shri P.K. Aggarwal as evident from above discussion. (c) The analysis of cash book and ledger maintained by the SK Jain Group, seized during the course of search operation of S.K. Jain Group, revealed that M/s. S.K. Jain Group (Accommodation entry operator) received the certain payments in cash through intermediary, P.K. Aggarwal. It has been noticed from this table that S.K. Jain Group had received Rs. 7,00,00,000/- from the intermediary - P.K. Aggarwal, during the period from 26.06.2009 to 17.11.2009. A part of cash was used to issue cheque to the assessee i.e. accommodation entries. The difference in the cash received from intermediary and cheque amount issued ....
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....ries provided to beneficiary on different dates. 7. d. e. That entry provider companies were running their activities from the residential and the other premises of Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain through entry provider companies. That third party correspondence with entry provider companies were seized from the custody of Sh. Surendra Kumar Jain and Sh. Virendra Kumar Jain. That S.K. Jain / Virendra Jain and there close associates were directors of these entry provider companies during relevant but different time period. Seizure of documents had revealed that commission income were earned by Jain Brothers and mediator. It was further proved that evidence relating to all the steps involved in providing accommodation entries by entry provider companies in lieu of cash payment to Jain Brothers on charging commission were seized from custody and control of Jain Brothers. A perusal of documents as seized from the premises of Shri S.K. Jain Group and enclosed along with this note as-Annexure has revealed that accommodation entry amounting to Rs. 7,00,00,000/- by the assessee from S.K. Jain Group Companies were not....
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....his relevant year. Thus, this specific condition for reopening is hereby fully filled in the instant case as assessee has failed to disclose such material facts on its own earlier. The case is squarely covered under provisions of section 147 of income-tax Act, 1961. 10. The assessment/re-assessment proceedings in this case for A.Y. 2010-11 pertain to period beyond four years but before the expiry of six years from the date of issue of notice. In view of the same, as no assessment has been made in this case for A.Y. 2010-11 u/s. 143(3) or u/s 147, the first proviso to section 147 (as re-produced below) is not applicable to the case. "Provided that where an assessment under sub section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to ....