TaxTMI 
TaxTMI 
2021 (5) TMI 342
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....from the ITO, Ward-15(3), Mumbai that a seizure action u/s. 132 of the Act was carried out in the case of M/s. Varah Infra Group of Jodhpur on 21.01.2015, on the allegation that the company has routed its unaccounted money in the form of share premium to various paper companies at Kolkata, Mumbai, Indore and Jodhpur and Shri Jagdish Prasad Purohit in his statement recorded u/s. 132(4) of the Act admitted that he and his associates provide accommodation entries to various willing companies in the form of share capital, share premium, bogus bills, unsecured loans etc. on commission basis. That M/s. Real Time Consultants Pvt. Ltd., Mumbai, one of the concerns managed by Jagdish Prasad Purohit had made investments amounting to Rs. 20 lacs in assessee company. 4. On the basis of the said information, the AO issued notice u/s. 148 of the Act after obtaining sanction from the Principal Commissioner of the Income Tax under section 151 of the Act. In response thereof the authorized representative of the assessee appeared before the AO. The AO issued notice u/s. 133(6) of the Act to M/s. Real Time Consultants Pvt. Ltd. however, the AO did not receive any response. Opportunity was also giv....
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....jurisdictional Tribunal in the aforesaid cases, the Ld. CIT(A) ought to have set aside/quashed the assessment order and deleted the addition made by the AO u/s. 68 of the Act. 7. The Ld. Counsel further pointed out that the Ld. CIT(A) has passed the impugned order in violation of the provisions of law. Since the case of the assessee was reopened on the basis of search conducted in the case of M/s. Varah Infra Group, the assessment was required to be completed u/s. 153C of the Act. Since, no action u/s. 153C was taken and assessment order was passed u/s. 143(3) read with section 147 of the Act, the Ld. CIT(A) ought to have set aside the assessment order passed by the AO. The Ld. Counsel relied on the decision of the ITAT, Chandigarh in the case of Shri Amarjeet Singh Randhawa vs. ACIT, ITA No. 795/Chd/2017 for the AY 2010-11 and Shri Sanjay Singhal (HUF) Vs. DCIT ITA No. 702 to 704/Chd/2018 for the AY 2011-12 to 2013-14 to substantiate his contention. 8. On the other hand, the Ld. Departmental Representative (DR) submitted that since the AO had passed the assessment order as per the provisions of law after due application of mind, the Ld. CIT(A) has rightly upheld the assessme....
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....h the sides quashed the proceedings u/s. 147 read with section 148 of the Act, holding that the AO has initiated reassessment proceedings on the basis of borrowed satisfaction and not on the basis of his own satisfaction which is the requirement of the law. The operative part of the order passed by the coordinate Bench is reproduced as under: "There is no quarrel with the proposition of law that for the purpose of assuming jurisdiction to reopen the case u/s. 147 of the Act, it is the A.O. who has to be satisfied and form belief of escapement of income. The AO, no doubt acts on information coming in his possession, for the purpose of reopening a case, but before acting on the same he has to be satisfied that the information sufficiently leads to a belief of escapement of income. He has to apply his mind to the information to arrive at such satisfaction. The reliance placed by the Ld. Counsel for the Assessee on latest decision of the ITAT Delhi Bench in the case of M/s. Rajshikha Enterprises Put. Ltd. (supra) is apt, wherein the aforesaid proposition of law was upheld relying on decisions of the Hon'ble Delhi High Court in the case of CIT vs. G & G Pharma India Ltd. (2....
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....e coordinate Bench has quashed the proceedings-initiated u/s. 147 read with section 148 of the Act, for the reason that the AO had formed the belief on the basis of information received from the Directorate of Income Tax (intelligence & Criminal Investigation) containing details of companies which have received share premium at very unreasonable rate. The findings of the coordinate Bench are as under: "10. The Ld. Counsel for the assessee at this stage has also invited our attention to the decision of the Coordinate Chandigarh Bench of the Tribunal in the case of 'D.D. Agro Industries Ltd. v. ACIT', ITA Nos. 349 & 350/Chd/2017 order dated 7.9.2017, wherein, on identical facts and circumstances, the Assessing Officer has recorded identical reasons to form belief for reopening of the assessment. The Coordinate Chandigarh Bench of the Tribunal has held that the Assessing Officer assumed jurisdiction relying upon the non-specific routine information blindly without caring to first independently consider the specific facts and circumstances of the case and that the assumption of jurisdiction by the Assessing Officer under the circumstances was wrong. The relevant part o....
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....asons recorded must have a live link with the formation of belief that income of the assessee has escaped assessment. Further, AO has no jurisdiction under section 147 of the Act to reopen the assessment after expiry of four years from the end of the relevant assessment year unless the income chargeable to tax has escaped assessment due to failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment of his income. In the present case, though the AO had issued notice u/s. 148 of the Act after obtaining sanction from the concerned authority, yet it is apparent that the AO has issued notice under section 148 of the Act on the basis of the information received from the department. AO has not pointed out as to how the investment in question is the unexplained income of the assessee. As has been held by the coordinate Benches in the aforesaid cases, action taken under section 147 on the basis of borrowed satisfaction is bad in law. Since the material for forming belief in the present case are similar to the material available in the aforesaid cases, and the coordinate Benches have decided the identical issue in favour of the assessee, we fin....