TaxTMI 
TaxTMI 
2021 (8) TMI 632
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....-existing facts/ incorrect facts. 4. On the facts and under the circumstances of the case the AO has erred in relying on the statement of Sh. Aseem Gupta, ignoring that statements recorded on oath under survey have no evidentiary value. 5. The AO has further erred in overlooking the guidelines of CBDT vis-a-vis relying on the statement of third party without there being any cross examination. 6. The Jurisdiction assumed by the AO u/s 147 read with 148 after the expiry of four years from the end of relevant assessment year, is bad in law as there is no whisper in the reasons recorded that there is failure on the part of assessee to disclose the material facts fully and truly, particularly where original assessment has been made u/s 143(3) of the Act. . 7. The Jurisdiction assumed by the AO u/s 147 read with 148 is bad in law as it is a case reopened after the expiry of four years from the end of relevant assessment year, and hence it is incumbent on AO to satisfy the requirements of the proviso of section 147. 8. On the facts and circumstances of the case the AO has failed to appreciate that for assuming jurisdiction u/s 147 there must be....
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....ee has filed return of income and has also filed reply to explain the receipt of share application money. Declining the contentions raised by the assessee, AO proceeded to conclude that the assessee has taken accommodation entries amounting to Rs. 50,00,000/-, the immediate source of this amount was found in the entities controlled by Aseem Gupta and thereby made an addition of Rs. 50,00,000/- as the assessee has failed to prove the genuineness of the transactions and assessed the total income at Rs. 1,08,49,430/-. 4. Assessee carried the matter before the ld. CIT (A) by way of filing appeal who has confirmed the addition by dismissing the appeal. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal. 5. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 6. Ld. AR for the assessee challenging the impugned order passed by the ld. CIT (A) contended inter alia that AO while recording the reasons for reopening has recorded incorrect facts; that AO has reopened....
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.... (Annexure-A). The Investigation wing of the department had carried out search/survey operations at various residential and business premises of the entry operator Sh Aseem Kumar Gupta group on 26.03.2010. As informed by the Investigation wing of the department, Sh Aseem Gupta has admitted to provide accommodation entries to several beneficiaries with the help of several bank account opened in the name of several proprietary concerns and companies in which either he himself, or his employees, were director or proprietor. 2. The general modus operandi of Sh. Aseem Kumar Gupta was to accept cash from the beneficiaries. The cash was deposited in the bank accounts and cheques were then issued to the beneficiaries. In order to disguise his transactions as genuine, Sh. Aseern Kumar Gupta has been following Layering of accounts, whereby cash was introduced in various bank accounts in the names. of proprietary concerns of his employees and beneficiaries were issued cheques from one of his intermediary company after routing the funds among several intermediaries. 3. It is informed by the Investigation wing of the department that from the verification of the documents seize....
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....of the assessee company needs to be re-opened, as the above entries has been obtained through the entry operator. I, therefore, have reasons to believe that this amount of 50,00,000/- represents income of the assessee chargeable to tax and which has escaped assessment for the A.Y. 2009-10. In order to verify the genuineness, identification and creditworthiness of the aforesaid transactions, the case needs to be re-opened u/s 147 of the I.T. Act, 1961. Since more than four years have been elapsed from the end of the relevant A.Y. i.e. 2009-10, necessary statutory approval u/s 151(2) of the LT. Act may kindly be accorded 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 LT. Act. 1961. The limitation for issuing the notice is expiring on 31.03.2016. Submitted for kind perusal and approval please. Sd/- 22.03.2016 (RAGHUNATH) Deputy commissioner of Income tax Circle-23(2), New Delhi" 10. Ld. AR for the assessee contended that first of all, he would argued on the legal ground that, "the assessment framed by AO u/s 147/143(3) of the Act is void ab initio as the jurisdiction assumed by the AO u/s 147 is ....
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.... date? I am again confronting you the queries and you are directed to give your reply on the raised queries? Ans Since we have to call the details from Kolkata it is taken time and all these details are under compilation, therefore, I request you to grant some time to submit them through my counsels. The time till 14.03.2014 may be granted to submit the details. Que 5 I have issued a notice to M/s. Moderate Credit Corporation Ltd. which is being confronted to you for furnishing confirmation of share capital, copy of ITR & bank statement but they not responded till date? Ans After perusing your notice it is seen that the notice has been sent on the old address and the company M/s. Moderate Credit Corporation Ltd. has changed its address and the new address will be communicated to you by 13.03.2014. Thereafter, you may sought details from them from the new address." 13. Aforesaid questions and answers given thereto apparently bring on record the fact that due enquiry was made by the AO regarding share capital received from M/s. Moderate Credit Corporation Ltd. and after being satisfied, he accepted the returned income of the assessee vide order ....
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.... not subjected to scrutiny" whereas assessment order dated 27.03.2014 was passed u/s 147/143(3) of the Act in this case. All these material facts go to prove that ld. CIT has accorded approval in a mechanical manner without application of mind. Had he gone into factual details put forth by the AO for grant of approval, the approval would not have been granted. In these circumstances, we are of the considered view that mechanical approval granted by the CIT makes the entire assessment proceedings nullity. 16. As discussed in the preceding paras, the issue in question that assessee company has received accommodation entry from Moderate Corporate Corp. belonging to one Aseem Gupta, CA was subject matter of the earlier assessment framed u/s 147 read with section 143 (3) of the Act. 17. Ld. DR for the Revenue contended that return of income filed by the assessee company does not disclose the factum of share premium received, so this issue was not discussed earlier. We are of the considered view that when assessment was reopened for the first time this issue was before the AO who recorded statement of Jasdeep Singh qua the issue in question and has also during the assessment procee....
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....ve a live link with the formation of the belief. Our view gets support from the changes made to section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words "reason to believe" but also inserted the word" opinion" in section 147 of the Act. However, on receipt of representations from the companies against omission of the words "reason to believe", Parliament reintroduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer. We quote herein below the relevant portion of Circular No. 549 dated October 31, 1989 ([1990] 182 ITR (St.) I, 29), which reads as follows: "7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression 'reason to believe' in section 147.-A number of representations were received against the omission of the words 'reason to believe' from section 147 and their substitution by the 'opinion' of the Assessing Officer. It was pointed out that the meaning of the expression, 'reason to believe' had been explained in a number of court rulings in the past and was well settl....