TaxTMI 
TaxTMI 
2021 (4) TMI 739
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.... Subsequently, during the course of assessment proceedings, the Assessing Officer asked the assessee to explain the identity and creditworthiness of the loan creditor and genuineness of the transaction. Rejecting the various explanation given by the assessee and rejecting the objections of the assessee to such reopening of assessment for non-issue of notice u/s 148, the Assessing Officer completed the assessment u/s 147/143(3) of the Act, determining the total income of the assessee at Rs. 31,02,400/-, wherein, he made addition of Rs. 30 lakhs u/s 68 of the Act and further an amount of Rs. 60,000/- being unexplained expenditure incurred for obtaining the accommodation entries u/s 69C of the Act. 3. Before the learned CIT(A), the assessee apart from challenging the addition on merit, challenged the validity of reopening of assessment. However, the learned CIT(A) was also not satisfied with the arguments advanced by the assessee and upheld the validity of reopening of assessment proceedings as well as on the merit. 4. Aggrieved with such order of the learned CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal:- 1. Because, t....
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....of the assessee repeatedly that no service of notice was made and the said notice was served through affixture without resorting to service by post etc., the lower authorities have upheld the validity of service of notice. The learned counsel for the assessee referring to section 282 read with service rules from 9 to 17/20 of order 'V' under CPC, 1908, submitted that when the affixture is admittedly after working hours and without identification of place/witness, the proceedings u/s 147/148 are void ab initio. The learned counsel for the assessee referring to various pages of paper book submitted that on 31st March, the Assessing Officer recorded the reasons, send the reasons for approval, obtained approval of the Addl. CIT on the very same date and thereafter issued notice, ordered the notice server and ITI to affix the notice etc, are not practically possible. Referring to the order of the Assessing Officer holding that service by affixture is sufficient and no need to serve by post etc. and the order of the learned CIT(A) holding that since the notice is issued on the last day and therefore, could not be sent through post and therefore, service by affixture on 31.03.2015 is vali....
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..... as per statement of one Mr. Tarun Goyal. But the Assessing Officer has not taken any action on this information though time to issue notice on the income tax return filed on 27.09.2008 was available till 30.09.2009. This shows that the Assessing Officer was not convinced about the creditability of said information and chose not to take any action. He submitted that this information is not new and is available at the time of original assessment. There is no material linking the assessee with Mr. Tarun Goyal who admittedly never invoked the name of the assessee about any accommodation amount. He submitted that the letter dated 09.03.2015/23.03.2015 is without any approval u/s 133(6) of the Act and was seeking details about an accommodation entry of Rs. 35/30 lakhs for which adjournment was allowed on 06.04.2015, but reasons dated 31.03.2015 is recorded for non-compliance of the said letter. He submitted that there is neither any 'reason to believe' nor there is credible material/live link with Assessing Officer and at the most he acted on borrowed satisfaction. Further, the lower authorities have given the approval in a mechanical manner. Referring to the following decisions, he su....
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....arned CIT(A) is not justified. 10. The learned DR on the other hand, heavily relied on the order of the learned CIT(A). He submitted that the learned CIT(A) has given valid reason while upholding the validity of reassessment proceedings. Referring to the decision of Hon'ble Supreme Court in the case of Raymond Woollen Mills Ltd. vs ITO & Ors [236 ITR 34](SC), he submitted that the Hon'ble Supreme Court has 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. Relying on various decision as mentioned by learned CIT(A), he submitted that the reopening of the assessment was validly made and therefore, the order of the learned CIT(A) on this issue should be upheld. 11. So far as the arguments of the learned counsel for the assessee that notice was not served on the assessee is concerned, he submitted that the said notice was served through affixture which is a valid mode of service and assessee should not raise any objection on this ....
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....s appeal holding that there was no proper application of mind by concerned sanctioning authority u/s Section 151 as a pre-condition for issuing notice u/s 147/148- Held, Section 151 stipulates that CIT (A), who was competent authority to authorize reassessment notice, had to apply his mind and form opinion-Mere appending of expression 'approved' says nothing- It was not as if CIT (A) had to record elaborate reasons for agreeing with noting put up-At same time, satisfaction had to be recorded of given case which could be reflected in briefest possible manner- In present case, exercise appears to have been ritualistic and formal rather than meaningful, which was rationale for safeguard of approval by higher ranking officer-Revenue's appeal dismissed." 14.1. I find the Hon'ble Madhya Pradesh High Court in the case of CIT vs. S. Goyanka Lime & Chemicals Ltd. reported in 231 taxmann 73 (MP) has held that where the Joint Commissioner recorded satisfaction in a mechanical manner and without application of mind to accord sanction for issuing notice under section 148 of the Act, reopening of assessment was invalid. Similar view has been taken by the Hon'ble Delhi High Court i....
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....e Act before the specified date, the other plank of arguments made by the assessee challenging the validity of reassessment proceedings as well as the addition on merit become academic in nature and therefore, the same are not being adjudicated. 16. In the result, the appeal of the assessee is allowed. The decision was pronounced in the open court on 16.04.2021. ============= Document 1 Reason for issuing Notices Us, 145 in the case of M/s. Digvijas Advisors (P) Ltd. (PAN: AAACK52450) for the assessment'year 2008-09 A letter No, ADIT (InvyUnit-IV Beneficiaries 2008-09 392 dated 31.03.2009 has been received from the Addl DIT (Unit-IV. New Delhi wherein he has comunicated that a search and seizure action us 1321) of the 1.1. Act 1961 was carried out at the premises of Shri Taron Goyal Chartered Accountant at 1334. WEA. Arya Samaj Road. Karol Bagh, New Delhi on 15.09.2008. It has been intimated that Sh. Turun Goyal has been held to be an entry operator and is providing accommodation entries to various beneficiaries through large mumber of shell companies controlled by him, cash was received and deposited in the bank accounts of these shell comp....
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....here that assessment for AY 2008-09 was completed u/s 143(1) of the Aci Therefore, I have reason to believe that the amount of Rs 30,00,000 has escaped assessinest for the year under consideration. In view of the above, it is proposed to re-open the case us 147 of the 1.1. Act. 1961 Since four years have been elapsed from the end of the relevant assessment year, approval of the Addl.CIT. Range-7, New Delhi is solicited as per provision of section 1512) of the IT Submitted for approval to issue notice us. of the income Tax Act, 1961. 148 r.w.s provision of section 1491) (b) (Rajkumar Sharma) 110, Ward 7(3), New Delhi Document 2 Reply to objections raised vide letter dated 18th June, 2015. Office of the Income Tax Officer, Ward-7(3), Room No. 400B, 4th Floor C.R. Building, I.P. Estate, New Delhi-110002 F. No. ITO/W-7(3)/86/2015-16/429 To Date: 30-10-2015 Principal Officer M/s Digvijay Advisors (P) Ltd., Suite 4-G, 4 Floor, Uppal tower, M-6, Plaza, Jasola Distt. Centre, New Delhi-110 044. Sir/Madam, Kindly refer to your AR's letter dated 18-06-201 Scontended that no notice ws148 has been served by 31-03....