TaxTMI 
TaxTMI 
2022 (4) TMI 283
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....g to reopen the completed assessment. The reassessment order was consequently finalized after making additions/disallowances amounting to Rs. 3,54,99,619/- owing to unexplained cash credits. The reassessment order was thus framed determining the reassessed income at Rs. 4,27,57,571/-. 3. The assessee challenged the reassessment before the CIT(A) on both counts, namely, validity of jurisdiction assumed under Section 148 of the Act as well as merits of additions so made in the reassessment proceedings. The CIT(A) found merit in the plea of the assessee on jurisdictional defect alleged by the assessee as well as merits of the addition. The CIT(A) consequently allowed the appeal of the assessee on both counts. 4. Aggrieved by the aforesaid order of the CIT(A), the Revenue has filed appeal before the Tribunal. The grounds of appeal raised by the Revenue read as under: "1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in holding that the Assessing Officer has wrongly assumed the jurisdiction over the assessee under Section 148 of the Act. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the ad....
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....AR of the appellant that there was no material on record to show that appellant has not disclosed fully and truly all material facts in the return filed by it or during the original assessment proceedings. Before reopening the case, Ld. AO has not enquired the facts which was communicated by the DDIT (Inv.), Faridabad. From the records it is also clear that Ld. Assessing Officer has not scrutinized the original records before recording the reasons. From the records it is clear that DDIT (Inv.) has given information for transactions worth of Rs. 1,02,50,000/- which is appearing in the HDFC Bank Account. However, the total transaction with the Nat West Trade Links was to the tune of Rs. 3,64,99,691/-. On this amount of sales, appellant has not received the amount of Rs. 10 lacs which was outstanding on the last day of the financial year of this assessment year. This information clearly indicates that Ld. Assessing Officer has proceeded on the basis of letter received from the DDIT (Inv.)-I, Faridabad. Since the sales and purchases were already investigated during the original assessment proceedings, on the basis of same information, the assessment cannot be reopened again. Respectful....
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.... jurisdiction by the Assessing Officer to reopen the completed assessment in the instant case, it would be pertinent to address the aforesaid question at the outset. 7. With reference to jurisdiction issue, Ld. DR for the Revenue, at the outset, submitted that the Assessing Officer has rightly assumed jurisdiction to make reassessment by issuing notice under Section 148 of the Act on the basis of tangible material/information received from Deputy Director of Income Tax (Inv.)-I, Faridabad vide letter dated 07.03.2014 based on the outcome of inquiries in the matter of the assessee based upon three STR No. 1000014477 dated 20.07.2010 in the case of Global Trade Corporation. It was submitted that the Assessing Officer acted upon such prima facie information received from other wing of the Department and hence such action was within the authority of law. It was thus submitted that the information received were relevant and need not be pinpoint accurate or complete in all respect at the stage of issuance of notice. It was thus submitted that the CIT(A) misdirected himself in law and on facts in wrongly holding that the Assessing Officer lacked jurisdiction under Section 147 of the Ac....
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.... from FIU in the STR No. 1000014477 dated 20.07.2010 in the case of Global Trade Corporation having PAN No. ASCLPS3593J having two A/c 10250500817 and 630305500180. In the account funds are received by cash deposits, RTGS and clearing and debit are mostly by cash withdrawal during EDD. Customer reported to be trader of steel plant and lubricants. Although business of steel products involves rare cash usage the value of non-cash deposition and nature of transactions incurred appear to be unusual in relation to what would be expected from normal activity of the customer. Similar information was received on 20.04.2011 in the STR No. 1000030164 dated 20.04.2011. In this STR also the following firms appeared. Their details are as under:- Sr. No. Name of the Company Address A/c No. 1 Global Trade Corporation IC/70, Back side of Bata Petrol Pump, NIT, Faridabad 10250500817 630305500180 2. R. K. Trading IC/70, Back side of Bata Petrol Pump, NIT Faridabad 630305011259 3. SSB Sales Corporation IC/70, side of Bata Petrol Pump, NIT, Faridabad 630305011253 As per STR reporting SSB sales Corporation is proprietorship concern and S....
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....during the F.Y. 2006-07 relevant to A.Y. 2007-08 is as under, Dated Particulars Cheque Accepted 05. 01. 2007 Shubham Chemcials and Solvents Ltd. 500, 000. 00 17.01.2007 Shubham Chemcials and Solvents Ltd. 400, 000. 00 17.01.2007 Shubham Chemcials and Solvents Ltd. 500, 000. 00 18.01.2007 Shubham Chemcials and Solvents Ltd. 500, 000. 00 19.01.2007 Shubham Chemcials and Solvents Ltd. 500, 000. 00 22.01.2007 Shubham Chemcials and Solvents Ltd. 500, 000. 00 23.01.2007 Shubham Chemcials and Solvents Ltd. 500, 000. 00 24.01.2007 Shubham Chemcials and Solvents Ltd. 300, 000. 00 25.01.2007 Shubham Chemcials and Solvents Ltd. 350, 000. 00 25.01.2007 Shubham Chemcials and Solvents Ltd. 650, 000. 00 27.01.2007 Shubham Chemcials and Solvents Ltd. 450, 000. 00 31.01.2007 Shubham Chemcials and Solvents Ltd. 500, 000. 00 05.02.2007 Shubham Chemcials and Solvents Ltd. 400, 000. 00 05.02.2007 Shubham Chemcials and Solvents Ltd. 400, 000. 00 06.02.2007 Shubham Chemcials and Solvents Ltd. 400, 000. 00 07.02.2007 Shubham Chemcials and Solvents Ltd. 50....
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....g channel has been carried out by the assessee with Global Trade Corporation, R.K. Trading, SSB Sales Corporation and Natwest Trading Links. Noticeably, the information supplied by the DDIT is merely advisory in nature whereby the Assessing Officer was advised to check the copy of account of the assessee with all these firms and examine them from an angle as to whether the entries are in the nature of accommodation entries with such parties and check necessary action as a consequence thereof. In a sense, the Assessing Officer was advised to make proper inquiries into such hugely suspicious entries. However, the Assessing Officer in response to such information dated 07.03.2014 issued notice under Section 148 on 28.03.2014 without any intermittent inquiry to ascertain the propriety of facts emerging from such information and to make prima facie opinion of escapement of chargeable income on such purportedly suspicious transactions. 9.3. In this backdrop, where an inquiry was warranted as per the information received from the other wing, the Assessing Officer could not have ipso facto hold the 'reasons to believe' contemplated under Section 147 of the Act without coming to ....
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....s of Section 147 of the Act. 9.5. Delineating further, we now advert to the requirement of 1st proviso to Section 147 of the Act. The instant case has been reopened after four years from the end of the relevant assessment year where the assessment was earlier framed under Section 143(3) of the Act. Consequently, the reasons so recorded must pass the examply burden placed upon Assessing Officer by the 1st proviso to Section 147 of the Act in addition to the condition stipulated in main provisions of Section 147 of the Act. The instant case being covered by 1st proviso to Section 147 could be reopened only when twin conditions co-exist namely, (i) the Assessing Officer holds reasons to believe about the escapement of chargeable income (which is not found to be satisfied as deliberated in the preceding paragraph); (ii) the escapement is due to failure on the part of the assessee to disclose fully and truly all material facts. As a logical corollary, the burden is on the Assessing Officer to form a prima facie opinion that the conditions embedded in first proviso is also found scrupulously satisfied when the same is challenged. The allegation of the Assessing Officer on the failure ....