TaxTMI 
TaxTMI 
2021 (11) TMI 805
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....ration for deciding the above appeals en masse. 3.Grounds of appeal raised by the Revenue in lead case in ITA No.106/SRT/2017 for A.Y. 2007-08 are as follows: "i) On the facts and in the circumstance of the case and in law, the Ld. CIT(A) erred deleting the addition of Rs. 3,99,61,340/- made on account of bogus purchase. ii) On the facts and in the circumstance of the case and in law, the Ld. CIT(A) erred in quashing the reassessment order passed by the assessing officer u/s 144 r.w.s. 147 of the Act the basis of the additional grounds of appeal submitted by the assessee because the assessing officer vide his letter dated 30.12.2014 furnished the reasons recorded by him for the purpose of reopening the case of the assessee for assessment and also request the assessee to file objections, if any against the re-opening of the assessment. However, the assessee did not object to the same as no other correspondence attendance was made by the assessee. iii) On the facts and in the circumstance of the case and in law, the Ld. CIT(A) erred in appreciating the fact that the concerns like M/s Mihir Diamonds, M/s. Krishna Dial and M/s Karishma Diamonds Pvt Ltd from which the assessee ma....
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....oan, share capital, etc., given by Shri Bhawarlal Jain group of Mumbai, a leading entry provider. A search and seizure action was carried out by the Investigation wing, Mumbai in the Bhawarlal Jain group of cases on 03.10.2013, which resulted in collection of evidences and other findings, which conclusively proved that the said Shri Bhawarlal Jain and his son, Shri Rajesh Bhawarlal Jain had, through a web of 70 benami concerns, run and operated by them in the names of their employees, provided accommodation entries to various parties in respect of bogus unsecured loans and bogus purchases. Various evidences found and seized from the premises of the said Shri Bhawarlal Jain and his son proved the above facts. The evidences will having details of calendar year wise (Jan to Dec) accounts of these benami entities right from F.Y. 2004-05 onwards. The assessing officer noted that the said group has indulged in giving such accommodation entries of about Rs. 25,000 crores. Shri Bhawarlal Jain has admitted the entire nature of bogus transactions in his statement recorded u/s 132(4) of the Income Tax Act, 1961 recorded at 16, Mohan Building, JSS Road, Girgaum, Mumbai - 04, on 11.10.2013. It ....
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....al Jain. The assessing officer observed that investigations made by the investigation wing revealed that actual importers of rough diamonds import part of their diamond requirement through benami entities operated by Shri Bhawarlal Jain & family, which ensures benefit of suppression of turnover, profits and capital requirement of the former. The consignments are sent on credit by the suppliers in the names of these benami entities at the instance of the actual importers and on receipt of the imported consignments from Customs, through CHA, the consignment is handed over to the actual importer and the bogus stock is entered in the books of the benami entities and the same is not recorded in the books of the actual importer. These benami entities of Shri Bhawarlal Jain group thereafter issue bogus sale bills against the bogus stock. 6. From the details and evidences made available through the above referred letter dated 13.03.2014 of the Director of Income Tax (Investigation), Mumbai, it was observed by the assessing officer that the following entities of Shri Bhawarlal Jain group have given accommodation entries of bogus purchases as under, during F.Y. 2006-07 to the assessee Shri....
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....ded to the total income of the assessee. 9. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the ld.CIT(A). The ld.CIT(A) admitted the additional ground of the assessee on legal issue and allowed the appeal of the assessee stating that notice under section 143(2) of the Act was not issued to the assessee at all and therefore, the reassessment proceedings under section 147/ 148 of the Act would not valid and hence, the ld.CIT(A) has quashed the reassessment proceedings initiated under section 147/148 of the Act. 10.Aggrieved by the order of ld CIT(A), the Revenue is in appeal before us. 11. Shri Ritesh Mishra, Learned -CIT(DR) for the Revenue contends that decision of the Ld. CIT(A) is not acceptable as the ld CIT(A) has erred in quashing the reassessment order passed by the assessing officer u/s 144 r.w.s. 147 of the Act on the basis of the additional grounds of appeal raised by the assessee during the appellate proceedings. He further contends that assessing officer vide his letter dated 30.12.2014 furnished the reasons recorded by him for the purpose of reopening the case of the assessee for assessment and also requested the ass....
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....arious judgments of Hon'ble Supreme Court and other High Courts (including Gujarat High Court), and prays the Bench that order passed by the ld CIT(A), on legal issue, may be upheld. 13. We have given our thoughtful consideration to rival contention. We have perused case file as well as paper books furnished by assessee with the able assistance of Shri Rohit Vijayvargiya, representing the assessee and Shri Ritesh Mishra, Learned CIT(DR), representing the Revenue. We find that one key issue arises for our apt adjudication in the instant lis, which is, whether issue of notice under section 143(2) is mandatory by the assessing officer to assume the jurisdiction to frame the scrutiny assessment/reassessment? We note that this legal issue before us, is no longer res-integra, it is well settled by various judgments of the Hon`ble Supreme Court and other High Courts that in absence of notice under section 143(2) of the Act, the Assessing Officer could not assume jurisdiction and this defect cannot be cured subsequently, since it is not procedural defect but it is the defect that goes to the root of the jurisdiction. We note that Assessing officer had furnished the remand report on ....
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....h Court of Delhi in the case of Commissioner of Income Tax v. Madjiya Bharat Energy Corporation Ltd. (2011) 337 ITR 339 Del. 17. Learned Counsel of the assessee drew our attention on the order passed by Delhi High Court on 17th August, 2011 in Review Petition No.441/2011 in ITA No.950/2008 (CIT v. Madhya Bharat Energy Corporation) whereby Court reviewed its main judgment in the matter rendered on 11th July 2011 on the ground that the said appeal had not been admitted on the question concerning the mandatory compliance with the requirement of issuance of notice under section 143(2) of the Act. In its review order, Court noted that at the time of admission of the appeal on 17th February, 2011 after noticing that in the said case that no notice under section 143(2) had ever issued, the Court held that no question of law arose on that aspect. The upshot of the above discussion is that the decision of this Court in CIT v. Madhya Bharat Energy Corporation (supra) is not of any assistance to the Revenue as far as the issue in the present case is concerned. This is important to mention that the same Delhi High Court in its subsequent decision in the case of Pr. CIT v/s Shri Jai Shiv Shank....
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....er to assume jurisdiction under respective sections. To support this proposition, we rely on the decision of P & H High Court in the case of CIT v/s Cebon India Ltd (2012) 347 ITR 583 wherein it has been categorically held that absence of a statutory notice cannot be held to be curable u/s 292BB of the Act. 20. We note that a plain reading of section 148 of the Act reveals that within the statutory period specified therein, it shall be incumbent to send a notice under section 143(2) of the Act. The provisions contained in sub-section (2) of section 143 is mandatory and the legislature in their wisdom by using the word 'reason to believe' had cast a duty on the Assessing Officer to apply mind to the material on record and after being satisfied with regard to escaped liability, shall serve, notice specifying particulars of such claim. In view of the above, after receipt of return in response to notice under Section 148, it shall be mandatory for the assessing officer to serve a notice under sub-Section (2) of Section 143 assigning reason therein. In absence of any notice issued under sub-section (2) of section 143 after receipt of fresh return submitted by the assessee in re....