TaxTMI 
TaxTMI 
2022 (3) TMI 209
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....d. 3. That under the facts and circumstances of the case, the Ld. CIT(A) erred in confirming the addition of a sum of Rs. 2,50,50,000/- for the share capital raised by the assessee, holding the same to be unexplained cash-credit in terms of sec.68 of the Income Tax Act, 1961. The addition is unjustified and need to be deleted. 4. That the appellant craves leave to add, alter, amend or withdraw any ground or grounds of appeal before or at the time of hearing." 2. Although in this appeal the assessee has raised multiple grounds of appeal but at the time of hearing the solitary grievance of the assessee has been confined to the legal issue relating to the validity of reopening of the assessment u/s 147 r.w.s 148 of the Act. 3. The brief facts of the case are that the assessee filed its return of income for assessment year 2009-10 on 04.09.2009 and the returned income was accepted. However, during the assessment proceedings for assessment year 2012-13, the Assessing Officer noticed that the assessee company had shown huge share premium of Rs. 2,24,55,000/-. The Assessing Officer asked the assessee to give details of premium amount along with name, address, PANs ....
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....(b) stood omitted from Income Tax Act w.e.f. 01.04.1989. That the approval was given by the Addl. CIT under non-existent section, in a mechanical manner, without application of mind and hence, in the absence of valid approval as mandated by law u/s 151, the reopening of the assessment u/s 147 r.w.s. 148 of the Act is bad in law and without jurisdiction and hence is liable to be quashed. The Ld. counsel in this respect has relied upon the following case laws: (i) Kalpana Shantilal Haria vs. ACIT [2017] 100 CCH 165 (Bom-HC) (ii) Omkam Developers Ltd. vs. ITO (ITA No.6862/Del./2018) [Del-Trib] dated 11.05.2021 (iii) Madhu Apartment Private Ltd. v. ITO (2021) 86 ITR 317 (Delhi-Trib.) (iv) Maheshwari Roller Flour Mills Pvt. Ltd. Vs. ITO (ITA.No.4257/Del./2019) (Delhi- Trib.) dated 17.12.2020 (v) VRC Township Pvt. Ltd. Vs. ITO (ITA.No.1503/Del./2017) (Delhi-Trib.) dated 14.10.2020 (vi) Smt. Kalpana Shantilal Haria vs. ACIT [WP(L) No. 3063 of 2017 (Bom)] 6. The Ld. counsel has further submitted that mere appending of the expression 'Yes' to the proposal of Assessing Officer for reopening of the assessment, was not sufficient. The wr....
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....lue, premium amount, as on 31/3/09 and 31/3/12. But no reply was given till date. He only says that the premium amount a/c is continued at constant figure over the years, since 31/3/09. In view of this, 1 have reason to believe that the premium amount as stated above is not explained, and therefore chargeable to tax but has escaped assessment within the meaning of sec. 147 of IT Act.'61." 9. A perusal of the above reproduced reasons for reopening of the assessment reveals that the Assessing Officer, in fact, had not got any reliable information or tangible material to form the belief that the income of the assessee for the year under consideration has escaped assessment. The Assessing Officer during the assessment proceedings for assessment year 2012-13 wanted to enquire about the share premium shown by the assessee in his accounts. However, the assessee replied that no share premium was received during the assessment year under consideration (A.Y. 2012-13); that the share premium amount account was continued at constant figures over the years since 31.03.2009. 10. Since, no share premium was received by the assessee during the assessment year 2012-13, therefore, in our view,....
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....t the Income-tax Officer may act on direct or circumstantial evidence, but not on mere suspicion, gossip or rumour. The Income-tax Officer would be acting without jurisdiction if the reason for his belief that the conditions are satisfied does not exist or are not material or relevant to the belief required by the section. The court can always examine this aspect, though the declaration or sufficiency of the reasons for the belief cannot be investigated by the court. The entire law as to what would constitute "reason to believe" has summed up by the Hon'ble Supreme Court in Income Tax Officer v.LakhmaniMewaldas (1976) 103 ITR 437. Reliance in this respect can also be placed on the decision of the Hon'ble Punjab & Haryana High Court in the case of 'CIT vs Paramjit Kaur' (2008) 311 ITR 38 (P&H), wherein the Hon'ble High Court held that the in the absence of sufficient material to form satisfaction of the Assessing Officer that income of the assessee had escaped assessment, the issuance of notices u/s 148 of the Act was not valid. 11. The Hon'ble Delhi High Court in ACIT vs. Meenakshi Overseas (P) Ltd. (2017) 82 taxmann.com 300 (Del) has held as under: "23.....
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....ped assessment. The company shows huge share premium of Rs. 2,24,55,000 in course of assessment for AY12-13, the AR was asked to give detail of premium amount along the name, address, PANs of the shareholders, no of share, face value as on 31-3-09 and as on 31-3-12. No Reply was given but only stated that the premium amount a/c is continued at constant figures over the years, since 31-3-09. In view of this, this case is fit for reopening u/s 147 by issuing notice u/s 148 for A.Y 09-10 ITO, Ward-4(3), Kolkata. 11 Whether the CIT/JCIT is satisfied on the reasons recorded by the ITO, Ward-4(3), Kolkata that it is a fit case for issue of notice u/s 148. Yes Sd. 3-3-15 Addl.CIT, R-4, Kolkata. 14. A perusal of the aforesaid approval granted by the Addl. CIT reveals that the Assessing Officer had mentioned the relevant section as '147(b)' which admittedly has been omitted from the Statute w.e.f. 01.04.89 and further without application of mind to the contents of the aforesaid proposal, the Ld. Addl. CIT granted approval in a mechanical manner by saying 'Yes', even without application of mind that the approval has been sought under wrong section. The aforesaid contents....