TaxTMI 
TaxTMI 
2021 (2) TMI 781
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....s completed at the returned income. Thereafter, the case of the assessee company was reopened u/s 147 of the Act and the original returned loss of Rs. 7.54 Cr was reduced to Rs. 5.86 Cr by adding back an income of Rs. 1.67 Cr. Against the order so passed, the assessee filed appeal to the ld. CIT(A) challenging the assumption of jurisdiction by the AO u/s 147 of the Act and also raising grounds on the merits of the case. The ld. CIT(A) dismissed the legal ground raised by the assessee while he partly allowed the ground raised on merits. 3. Aggrieved by the same, the assessee has come in appeal before us raising both legal ground and also on merits. We shall first be dealing with the legal ground raised by the assessee since it challenges the validity of the assessment order itself. The said ground relates to ground No. 1 raised by the assessee and reads as under : "1. That the ld. CIT(A) has erred in dismissing the ground of proceedings of re-opening the case u/s 148 of the Income Tax Act, 1961. 4. The primary argument of the assessee challenging the assumption of jurisdiction by the AO u/s 147 of the Act is on the premise that the reasons recorded by the AO for assum....
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....see, ITR's details, Processing details, Tax details etc. 5. From the above information it was seen that assessee is involved in taking bogus purchase bill from bogus dealers namely as M/s Shital Trading Company for Rs. 1,31,78,094 and from M/s Raj Dealers for Rs. 35,96,520/- in the A.Y 2011-12 and thus the assessee has suppressed its profit by way of debiting bogus purchases in the Trading and Profit & Loss account. 6. In view of above facts of the case, I have reason to believe that the income chargeable to tax, as discussed in para no. 05 above i.e.. Rs. 1,67,74,614/-, has escaped assessment (and also any other income chargeable to tax which has escaped assessment and which comes to notice subsequently in the course of the proceedings u/s 147 of Income Tax Act. 7. In this case a return of income was filed for the year under consideration and regular assessment u/s 143(3)/147 was made 20.03.2014. Since, 4 years from the end of the relevant year has expired in this case, the requirement to initiate proceeding u/s 147 of the act are reason to believe that income for the year under consideration has escaped assessment because of failure .on the part of ....
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....id reasons, it is not a case of change of opinion by the AO. In this case, more than four hears have lapsed from the end of assessment year under consideration. Hence necessary sanction to issue notice u/s 148 has been obtained separately from Principal Commissioner of Income Tax as per the provisions of Section 151 of the Act." 5. Referring to the above, ld. counsel for the assessee pointed out that the AO had recorded satisfaction of escapement of income on the basis of information which had come to his possession from the Commercial Tax Department, Chhatisgarh, that bogus purchase bills had been taken by the assessee from two parties. Drawing our at tent ion to para 5 of the reasons recorded, ld. counsel for the assessee contended that while noting the figures of bogus purchases, the AO had recorded wrong figures. That the actual purchases from one such alleged party M/s Sheetal Trading Company, noted by the AO at Rs. 1,31,78,094/- in para 5, was Rs. 67,18,244/-while that of the another M/s Raj Dealers, recorded at Rs. 35,96,520/- was Rs. 73,62,946/-. Further the name of one of the parties had also been noted wrongly as M/s Raj Dealers in place of its actual name Raj....
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.... bound to act on the same. The AO could not have slept on the information without taking any action. The credible information received could not be kept in the file without taking cognizance and the AO was rather duty bound to act on the same. Considering the facts in this case, it is found to be a fit case where the AO has rightly initiated action under Section 147 on the basis of information received from Directorate of Income Tax (Investigation). The issue is covered by the decision of the Hon'ble ITAT, Mumbai (ITA No. 995/mum/2012) in the case of Ratnakar M. Pujari, Mumbai Vs. ITO Ward-25(3)(3), Mumbai, where, the Hon'ble ITAT has elaborately discussed the issues of re-opening u/s 147 and consequential addition. The Hon'ble ITAT has held that the reopening u/s 147 is justified, as the information received from the Investigation wing is fresh and tangible material which has live link and nexus with the formation of belief that the income of the assessee has escaped assessment. In view of these facts and in the circumstances of the case, the arguments of the AR are found devoid of merits and the issue of notice by the AO u/s 148, after recording reasons for re-opening....