TaxTMI 
TaxTMI 
2021 (4) TMI 305
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.... provided copy of the reasons for reopening of the assessment to the assessee also. The A.O. issued statutory notice and called for the details which have been filed by the assessee and examined by the A.O. The A.O. noted that assessee-company is a building developer/ colonizer and dealt in all kind of immovable properties during the year under consideration. The assessee was required to furnish confirmation along with copy of ITR and bank statement of the parties. The assessee has furnished confirmation along with copy of financial statement, copy of bank statement of the parties from whom share application/ share capital money received, notice under section 133(6) of the I.T. Act was also issued and statements of the Directors were also recorded by the A.O. The A.O. was satisfied with the explanation of assessee and thus, the A.O. assessed income of assessee at NIL vide Order Dated 30.06.2014 under section 143(3)/147 of the I.T. Act, 1961. 3.1. The Learned Pr. CIT taken-up the proceedings under section 263 of the I.T. Act, 1961 and issued notice under section 263 of the I.T. Act, 1961 Dated 17.01.2017 which is reproduced in the impugned order in which the Learned Pr. CIT has m....
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....e Assessee submitted that in A.Y. 2009-2010, the A.O. also reopened the assessment on identical reasons in the case of the assessee in which the matter travelled to ITAT G-Bench, New Delhi in ITA.No. 7791/Del./2018 and the Tribunal vide Order Dated 01.04.2019 quashed the re-assessment proceedings. The Order of the Tribunal Dated 01.04.2019 is reproduced as under : "IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'G': NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.7791/Del/2018 Assessment Year : 2009-10 M/s SBS Realtors (P) Ltd., B-14/C, First Floor, Freedom Fighters Enclave, Neb Sarai, New Delhi - 110 068. PAN : AALCS5106R. Vs. Income Tax Officer, Ward-22(4), New Delhi - 110 002. (Appellant) (Respondent) Appellant by : Shri Kapil Goel and Shri Rajesh Jain, CAs. Respondent by : Shri S.S. Rana, CIT-DR and Shri Rajesh Kumar, Additional CIT. Date of hearing : 11.03.2019 Date of pronouncement : 01.04.2019 ORDER PER G.D. AGRAWAL, VICE PRESIDENT :- This appeal by the assessee for the assessment year 2009-10 is directed....
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....egation that the amount received from Shri S.K. Jain group of cases is bogus accommodation entries. The Assessing Officer has mechanically reopened the assessment without any independent verification at his end. He, therefore, stated that the alleged reopening of assessment is not valid. He also stated that not only the reasons recorded is mechanical, even the approval given by the Additional Commissioner is mechanical and without application of any independent mind. In support of his contention, he relied upon the following decisions :- (i) Sarthak Securities Co.P.Ltd. Vs. ITO - [2010] 329 ITR 110 (Delhi). (ii) Signature Hotels P.Ltd. Vs. ITO - [2011] 338 ITR 51 (Delhi). (iii) PCIT Vs. G And G Pharma India Ltd. - [2016] 384 ITR 147 (Delhi). (iv) PCIT Vs. RMG Polyvinyl (I) Ltd. - [2017] 396 ITR 5 (Delhi). (v) PCIT Vs. Meenakshi Overseas Pvt.Ltd. - [2017] 395 ITR 677 (Delhi). 4. Learned DR, on the other hand, stated that it is a case where the original return was accepted under Section 143(1) and there was no regular assessment under Section 143(3). The Assessing Officer had received the specific information from DIT(Investigatio....
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....lhi that during the financial year 2008- 09 the aforementioned assessees has introduced its own money by way of taking bogus accommodation entries provided by Sh. S.K. Jain group of cases (entry operator) the details of accommodation entry amount received as beneficiary is given as under as provided by Investigation Wing : S.No. Beneficiaries Name of Entry Provider Amount Total Amount 1 M/s SBS Realtors P.Ltd. S.K. Jain group 235,00,000/- 235,00,000/- In the light of information provided by the investigation wing, it is necessary to examine and verify the genuineness, identification and creditworthiness of the aforesaid transaction. I have perused details of the cheques/PO received by the above company, the amount, the issuing company, the recipient company, middlemen bank etc. as tabulated below: S.No. From company name To company name Name of the issuing bank Chq./RTGS/PO Ch./Date Amount Name of the middle men 1 AD Fin Capital Services P.Ltd. SBS Realtors Pvt.Ltd. Axis P.O. No.023905 17.04.2008 1,000,000/- Rajesh Aggarwal 2 Shakini Holding Ltd. SBS Realtors Pvt.Ltd. Axis ....
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.... be accord to issue notice u/s 148 for the A.Y. 2009-10 for the purpose of reopening of the case u/s 147 of the I.T. Act, 1961. Sd/- (R.O. Bhutia) Income Tax Officer Ward-22(4), New Delhi" 6. From a perusal of the above reasons, it is seen that the Investigation Wing has supplied certain information to the Assessing Officer with regard to receipt of cheques by the assessee from various companies who are considered to be S.K. Jain group companies by the Investigation Wing. As per the Investigation Wing, the above cheques paid by S.K. Jain group companies were accommodation entries to M/s SBS Realtors Pvt.Ltd. i.e., the assessee. However, what is the material found during the course of search of S.K. Jain group cases which had led to form the belief that all those companies are providing accommodation entries is not mentioned in the reasons recorded. It is also not mentioned whether any of the directors of the above companies have provided accommodation entries to M/s SBS Realtors Pvt.Ltd. It is also not mentioned whether any document was found which led to the belief of giving of accommodation entries by those twelve companies to the assessee. On receipt of abov....
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....ensure that the assessee has not understated the income or has not computed excessive loss or has not underpaid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished." 7. Thus, if the Assessing Officer considered it necessary to ensure that the assessee has not understated the income, he can issue the notice under Section 143(2). However, proviso to above Section provides the time limit within which such notice can be issued. Once that time limit is expired, in our opinion, the Assessing Officer cannot invoke Section 148 just for the purpose of verification. Therefore, in our opinion, in the case under consideration, the reopening of assessment for the purpose of verification of genuineness, identification and creditworthiness of the transaction i....
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.... Central Excise. To have required the Revenue to disclose further details regarding the nature of documents or of contents thereof would be rewriting the conditions in section 147 which merely authorised the issuance of notice to reopen with conditions. For the assessment years 2004-05 and 2005-06, the notes disclosed the source of information, the Directorate of Revenue Intelligence, which had sent information based upon the Commissioner of Central Excise's investigations. To add further conditions to be nature of discussions or reasons that the Officer authorizing the notice would have to discuss in the note or decision was beyond the purview of the courts and was not justified. The orders of the Appellate Tribunal could not be sustained. The Appellate Tribunal was directed to hear the Department's appeals on their merits." 9. On the other hand, learned counsel for the assessee has relied upon the catena of judgment before and after the date of above judgment of Hon'ble Delhi High Court wherein the notice under Section 148 simply on the basis of report of the Investigation Wing has been quashed. The same is as under:- (i) Sarthak Securities Co.P.Ltd. Vs. ITO....
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....Ltd. (supra) and Meenakshi Overseas Pvt.Ltd. (supra). Therefore, they would be squarely applicable to the case of the assessee. Consequently, we hold the notice issued under Section 148 of the Act to be invalid for two reasons :- (i) the notice is issued for the purpose of verification of genuineness, identification and creditworthiness of the transaction, which is not permissible; (ii) the Assessing Officer has recorded his satisfaction on the basis of mere report from the Investigation Wing. There is no crucial link between the information made available to the Assessing Officer and the formation of belief of escapement of income. There is no basis for coming to the conclusion that the assessee received accommodation entries. The Investigation Wing alleged that the companies which issued cheques to the assessee company are companies of Shri S.K. Jain group and they are entry providers. However, the basis for such conclusion is missing. There is no mention that any document was seized from Shri S.K. Jain group or any director of the 12 companies which have given cheques to the assessee has given the statement that they have provided accommodation entries to the a....
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....T Circle- 1 New Delhi PAN: AADCD 8448 F [Appellant] Respondent] Date of Hearing : 18.03.2021 Date of Pronouncement : 24.03.2021 Assessee by : Shri M.P. Rastogi, Adv, Shri Deepal Malik, Adv Revenue by : Shri Amitabh Kumar Sinha, CIT- DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, The above captioned two appeals by the assessee are preferred against two separate orders dated 21.03.2017 framed u/s 263 of the Income tax Act, 1961 [hereinafter referred to as 'The Act' for short] of the Commissioner of Income Tax [Appeals], Central -1, New Delhi pertaining to Assessment Years 2008-09 and 2010-11 respectively. Since both these appeals involve common issues, they are being disposed off by this common order for the sake of convenience and brevity. 2. In both the appeals, the assessee has raised the following additional ground of appeal in addition to the grounds taken in Form No. 36: "That the Pr. CIT has no jurisdiction u/ s 263 of the Act to review and revise an order passed by the Assessing Officer u/s 153C/153A of the Act dated 30.03.2015 which it....
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....xports Pvt Ltd and accordingly, order of M/s Shahi Exports Pvt Ltd, as passed by the Assessing Officer u/s 153C of the Act, amounts to erroneous and prejudicial to the interest of the Revenue. 11. As per the facts mentioned hereinabove, additions made u/s 143(3) of the Act were repeated in the assessment order framed/s 153A r.w.s 153C of the Act. This means that no additions had any link with any incriminating material found at the time of search as assessed income u/s 143(3) of the Act is the assessed income u/s 153C of the Act. 12. The Hon'ble High Court of Delhi in the case of Kabul Chawla in 380 ITR 573 has held that "if no incriminating material was found during the course of search in respect of an issue, then no additions in respect of any issue can be made to the assessment under Section 153A and 153C of the Act." 13. The Hon'ble Supreme Court in the case of Singhad Technical Educational Society 397 ITR 344 has also held that in the absence of any incriminating material, no jurisdiction can be assumed by the Assessing Officer u/s 153C of the Act. 14. In light of the above binding decisions, assessment framed u/s 153C of the Act in....
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.... Learned Pr. CIT has wrongly assumed the jurisdiction under section 263 of the I. T. Act, 1961. It is an admitted fact that in A.Y. 2009-2010 the A.O. has recorded similar reasons for reopening of the assessment. However, the same have been quashed by the Tribunal vide Order Dated 01.04.2019 (supra). The A.O. in the impugned re-assessment order has mentioned the information received from DIT (Inv.)-II, New Delhi that assessee has received accommodation entries of Rs. 40 lakhs. However, A.O. was satisfied with the explanation of assessee and did not make any addition after examining the issue in detail vide Order Dated 30.06.2014. It would, therefore, show that A.O. has taken one of the possible view under the Law. Therefore, on the same set of facts the Learned Pr. CIT should not have taken different view by exercising powers under section 263 of the I.T. Act, 1961. Since the re-assessment proceedings are already declared illegal and bad in Law in A.Y. 2009- 2010 in the case of assessee on the same reasons, therefore, in assessment year under appeal also initiation of reassessment proceedings is illegal and bad in Law. Therefore, the same cannot be subject to proceedings under sect....
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.... From business income Unabsorbed depreciation for AY 2008-09 From business income Rs.(-)1,99,18,201/- : Rs.(-)5,05,16,927/- Rs.(-)3.53,281/- Unabsorbed depreciation for AY 2009-10 From business income Total Rs.(-) 18,67,88,973/- GROSS TOTAL INCOME: Less: Deductions (under Chapter VI-A) Donation (80GX(100%) Donation (80G) (50%) U/s 80-IA U/s 80JJAA Total TOTAL INCOME:- नई : 1,00,00,000/- 68,29,750/- 5,13,45,183/- 5,22,35,747/- : Rs.12,04,10,680/- Rs. 44,68,84,236/- Rs.12,04,10,680/- Rs. 32,64,73,556/- Rounded off to Rs.32,64,73,560/- 8. Assessed at total income of Rs.32,64,73,560/-. Issue demand notice, Challan, ITNS 150 and necessary forms. Give credit of prepaid taxes. Charge interest under Sec. 234 B, 234 C and 234D of the 1.T. Act, 1961, as applicable. Penalty proceedings u/s 271(1) (c) of the I.T. Act, 1961 read with section 274 are being initiated separately for furnishing inaccurate particulars of income and for concealment of particulars of income. The assessee has True Copy MALIK B.Com. L. L. B. Tax Laws Consultan L... Page 7 of 8 Document 3....