TaxTMI 
TaxTMI 
2021 (8) TMI 1267
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.... expenditure raised by the AO in his assessment order on basis of which addition of Rs. 11,18,669/- was made. (3) That the commissioner of Income Tax (Appeals) has erred in law and on facts of the case in deleting Rs. 6,94,52,809/-which was added to the income of the assessee on account of as unexplained deposits. (4) That the commissioner of Income Tax(Appeal) has erred in law and on facts in relying on the submissions filed by the assessee which were inadequate, incomplete, not genuine, not reliable and already rejected by AO during the assessment stage. (5) That the commissioner of Income Tax (Appeals) has erred in law and on facts by neither conducting her own independent and effective inquiry nor giving a direction as per subsection 4 of section 250, Income Tax Act and ignoring Hon hie Delhi High Court's judgment in the case of "The Commissioner of Income Tax - II Vs M/s Jansampark Advertising and Marketing (P) Ltd." (6) (a) The order of the CIT(Appeals) is erroneous and not tenable in law and on facts, (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the app....
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....relation to the assessment order in the case of M/s Sam Portfolio Pvt Ltd travelled upto the Tribunal and the Tribunal in ITA No. 6218/DEL/2015 and CO No. 403/DEL/2015 vide order dated 20/02.2020 has annulled the assessment order. 10. On finding parity on the facts of the case in hand with the facts of the case of M/s Sam Portfolio Pvt Ltd [supra], we have no hesitation in adopting the findings given by this Tribunal in the case of M/s Sam Portfolio Pvt Ltd [supra]. The relevant findings in that case of this Tribunal read as under: "8. This order of the CIT is dated 20.03.2014 and subsequent to this order the AO issued notice u/s 148 of the Act dated 27.03.2014. The reasons for the belief that income has escaped assessment read as under: 10. Reasons for the belief that income has escaped assessment:- The assessment or the year under consideration was made u/s 143(3) r.w.s. 153C on 23.12.2011 as a total income of Rs. 8,60,27,610/- as against returned income of NIL. Aggrieved by the above order, the assessee filed revision application u/s 264 of the Income Tax Act, 1961 before CIT, (Central)-II, New Delhi. The assessee challenged assumption of j....
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....sits, which has escaped assessment on protective basis in interest of revenue. It is further stated that assessee was done of the intermediary companies used by Shri Aseem Kumar Gupta for providing accommodation entries as admitted by Shri Aseem Gupta. I, therefore, have reasons to believe that this amount of Rs. 8,60,27,610/- represents income of the assessee chargeable to tax which has escaped assessment for A.Y. 2008-09. The necessary approval may kindly be accorded to initiate proceedings u/s 147 of the Income Tax Act, 1961 for the A.Y. 2008-09 in view of the provision of section 151(1) of the Income Tax Act, 1961. 9. It can be seen from the above, the AO has referred to the issues which were considered in the assessment order dated 23.12.2011 framed u/s 143(3) r.w.s. 153C of the Act. As mentioned elsewhere, the said assessment order was declared null and void and thus became non-est. This means that everything has gone back to the stage of the return of income and, therefore, the AO should have proceeded from the stage of the return of income. 10. A careful reading of the aforesaid notice and the reasons for the belief that the income has escaped ass....
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....roceedings had failed to result in a valid assessment due to lapse on the part of the IT authority. Resultantly, the appeal is allowed and the order of the Tribunal is set aside." 14. The Hon'ble High Court of Rajasthan in the case of M/s. Rameshwar Prasad Sharma in ITA No.642/2011 dated 04.09.2017 at the occasion to consider inter alia the following substantial question of law. "1. Whether the tribunal was legally justified in reversing the finding of CIT(A) and annulling the reassessment u/s 147 which was done on the basis of material found during the course of survey and not on the basis of annulled assessment u/s 143(3)?" 15. Hon'ble High Court held as under : 11. Against this order, the assessee preferred appeal before ld. CIT(A). The proceedings initiated u/s 148 were also challenged. The ld. CIT(A) uphold the reopening of the assessment. However, appeal of the assessee on merit was allowed in part as certain additions were sustained i.e. trading addition by applying n.p. rate at 10.5% confirming the addition of Rs. 3,25,000/- in the name of Sh. S.K. Upadhyay and not treating the interest on fixed deposit income as business income.....
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....3(2) issued was barred by limitation. Since, the first assessment was subject matter of appeal before appellate authority, therefore, on the same issue when it was found that assessment has been annulled it cannot be a subject matter of reopening of the assessment. Thee must be some fresh material or new information which authorizes the AO to issue notice u/s 148. There are so many cases when return had been filed by the respective assessee has been accepted u/s 143(1) on the same material. No notice u/s 148 can be issued as held by various courts. There must be reason to believe and there must be some material before AO to hold that any part of income has escaped assessment. 15. In the present case there was no fresh material at all. The material which was available before the AO was only original assessment order which was annulled. Once an assessment has been annulled then department cannot adopt a recourse to corret their mistake committed originally not issuing notice u/s 143(2) in time. 23. Again such facts are not in the case in hand as the reason were recorded on the basis of annulled assessment only. Therefore, the ratio of this decision is also ....
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....under Section 143(2) were initiated beyond time. The reassessment proceeding under Section 147 was initiated by the AO and the total income was assessed at Rs. 21,15,040 as was determined in the original assessment. Thus, it appears that reassessment proceeding was initiated not because any income had escaped assessment to tax but to circumvent the time-barred assessment. Thus, the reassessment proceeding under Section 147 amounts to extending the limitation which the AO is not empowered to. It is trite law that limitation period under Section 143 cannot be extended by an IT authority and it is also quite recognised principle of law that an act, which cannot be done by an authority directly, cannot be done indirectly by him. Fact that the return was pending for disposal cannot constitute a valid reason for reopening the assessment, even under the amended s. 147. Though s. 147, after the amendment, has widened the powers of the AO to reopen the assessment, still there is intrinsic evidence in the section itself to show that cases where returns validly filed have not been disposed of, have not been brought under the net of the section. This is dear from Expln. 2(b) which say....