2022 (6) TMI 441

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....e Assessee. However, as the issues involved are common the same are taken up together for the convenience and avoid cost of repetition. 2. The facts in brief are the assessee was incorporated in 1998 under the provisions of the Companies Act, 1956 and is engaged in the business of trading and selling of timber, plywood, etc. The assessee had filed its return of income u/s. 139 of the Income Tax Act, 1961 ("the Act") at the total income of Rs. 1,72,92,735/- for the A.Y. 2011-12 and Rs. 2,32,50,410/- for the A.Y. 2012-13. The scrutiny assessment in the case of both the AYs was completed first under section 143(3) of the Act and, thereafter, a reassessment u/s. 153A of the Act, consequent to a search on the assessee, at the returned income. It is pertinent to point out that in the detailed assessments done twice for the relevant AYs neither any incriminating material was found nor any concealment of facts/income was alleged. However, pursuant to another round of reassessment of income u/s. 147 for both the AYs, initiated consequent to a search made on a third person, vide assessment order dt. 27.12.2018 for AY 2011-12 and order dt. 24.12.2019 for AY 2012-13, the income of the as....

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....ing that the proceedings initiated u/s. 147 are liable to be quashed, because the proceedings u/s. 147 were initiated, in a mechanical manner. At the time of initiating proceedings, the learned AO had not even bothered to look into the assessment folder, which also contained the assessment order dt. 27.02.2014 passed u/s. 143(3) as well as the assessment order dt. 22.11.2016 passed u/s. 153A. 3. That on the facts of the case and under the law, the learned CIT(A) has erred in not holding that the proceedings initiated u/s. 147 are liable to be quashed, because the payments were not received by the assessee towards share capital/premium or unsecured loan/advance or any other form of capital account. 4. That on the facts of the case and under the law, the learned CIT(A) has erred in not holding that the assessment proceedings as well as the assessment order passed u/s. 143(3)/147 are liable to be quashed, because an order disposing off the objections was not served upon the assessee. Note: The assessee craves leave to amend/modify aforementioned grounds of appeal and/or to raise additional grounds of appeal, at any time prior to/during the ....

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....mit that in a similar case where information from DIT(Investigation) was relied for reassessment Hon'ble High Court had not considered it sufficient for reopening assessment. Ld. Counsel also submitted that the case law relied by the Ld. CIT(A) to dismiss these grounds of appeal with regard to invoking jurisdiction were distinguishable on facts. Apart from that it was submitted that no opportunity of cross examination of the evidence collected behind the back of the assessee was given. In this context, judgment of Hon'ble Supreme Court of India in Andaman Timber Industries vs. Comm. Of Central Excise 62 taxmann.com was relied. 8. These arguments of the assessee were countered on behalf of the revenue by submissions that only reasons to believe are to be recorded and which need not be on higher scales of satisfaction. It was submitted that no inquiry is actually required before initiation of notice u/s. 147. Ld. DR submitted that primarily there should be some reasons which have been mentioned in the present case. It was also submitted that the information received was subsequent to assessment u/s. 147(3) and 153A of the Act so that could not have been basis to discredit ....

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.... (1) of the Act." 11. In the case in hand based upon the statement of Kishori Saran Goel, recorded u/s. 131 of the Act during the course of search of proceedings upon M/s. Spaze Group on 17.02.2016 the ld. AO made a conclusion that assessee had received accommodation entries. However, there is not a word in this reasons that what were the nature of accommodation entries because it is not a case of unexplained cash credits but a bogus sale. How the return filed reflected a possible escape of income. The reasons as recorded by the Ld. AO has no discussion of the material which was taken in account by the investigation wing. It was considered to be sacrosanct . The statement of Kishori Saran Goel is not part of the reasons to believe nor supplied and confronted to assessee, while issuing notice u/s. 148 of the Act. There is force in contention of counsel of assessee that as scrutiny assessment u/s. 153A in regard to assessee was conducted that all the more required to disclose the tangible material in regard to transaction requiring reassessment. There should have been an independent application of mind by the Ld. AO to the information out of the statement forming basis of allegati....