AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (8) TMI 266
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....ng that reopening of assessment under section 148 of the Act is valid and complies with all the mandatory conditions for reopening on the facts and circumstance of the case? (iii) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that proceedings w/s.147 were rightly initiated based on incorrect reasons recorded?" 3.1. It is the case of the assessee that the assessee is a Proprietor of M/s R.K.Traders engaged in business of trading in packing material, packing tools and corrugated boxes. For the Assessment Year 2009-10, the assesse filed the return of income which was accepted under Section 143(1) of the Act, 1961. 3.2. There was a search and seizure proceedings on 18.12.2010 at the premises of Wonder Packaging Industries by the Central Excise Department and it was alleged by the Department that the said Company was clearing goods i.e. corrugated boxes under the cover of two units i.e. Blue Star Packaging (the unit owned by the wife of the assessee) and M/s R.K.Traders, Proprietorship of the assessee. Based upon the search and seizure conducted by the Central Excise Department, a letter under Section 133 of the Act, 1....
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...., 1961 by order dated 09.12.2016 assessing the total income of Rs.16,21,640/-. 3.5. The Assessing Officer considering the fact admitted by the assessee that corrugated boxes manufactured by M/s. Wonder Packaging Industries Limited and sold to M/s. R.K.Traders were not recorded in the record of M/s. Wonder Packaging Industries Limited and not taken into account for the purpose of calculating the aggregate value of clearance of goods by M/s. Wonder Packaging Industries Limited. The Assessing Officer considered the amount received by the proprietory concern of the assessee as sales receipts from manufacturing in job work charges and proposed to reject the books of accounts under Section 145(3) of the Act, 1961 so as to apply the gross profit at the rate of 15% to the total receipts of the assessee. In reply to the showcause notice issued by the Assessing Officer, the assessee changed his stand and submitted that the assessee is not ready to accept the turnover of Rs.1,09,99,263/- and therefore, it is not included in his account and assessee is not maintaining any books of accounts as per Section 44AD of the Act, 1961 and therefore it is not reasonable to estimate the gross profit a....
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....in not disclosing truly and fully material facts necessary for the assessment. It was further submitted that while recording the reasons in the said case, this Court considered that there is no allegation that the assessment could be reopened considering the information received by the Department and as such, the conclusion arrived at by the Assessing Officer to reopen the assessment from the information received from the external sources could not be the basis for reopening. 4.4. It was therefore submitted that in the facts of the case, the Tribunal while dismissing the ground for reopening of the assessment, has committed a grave error in upholding the reasons recorded by the Assessing Officer wherein it is mentioned that M/s. R.K.Traders which is proprietary concern of the assessee had business dealing with M/s. Wonder Packaging Industries Limited as the business premises was used by the assessee firm. It was also pointed out that the Tribunal recorded that the return filed by the assessee on 23.02.2011 did not mention the income in the said return related to the transaction carried out with the said M/s. Wonder Packaging Industries Limited. It was therefore submitted that th....
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.... issue with regard to the remand of the matter on the ground of GP addition made by the Assessing Officer. 5. We have considered the submissions made by the learned advocate for the appellant. It is pertinent to note that in the facts of the case, there was no regular assessment conducted under the provisions of Sub-section (3) of Section 143 of the Act, 1961 after scrutiny but the returned income was accepted under the provision of Section 143(1) of the Act, 1961. The assessee neither raised any objection to the notice issued under Section 148 of the Act, 1961 at the relevant point of time nor raised such issue or objection even during the course of assessment and participated in the assessment proceedings by filing reply. Even before the CIT (Appeals), no ground is raised with regard to the reopening of the assessment. The assessee for the first time challenged the reopening before the Tribunal by raising the ground which the Tribunal decided after considering the materiel on record as under: "8. We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the reasons recorded on 21.03.2016 has categorically m....
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....ion / material received from other source, Assessing Officer is required to consider the material on record in case of the assessee and thereafter is required to form an independent opinion on the basis of the material on record that the income has escaped assessment. Without forming such an opinion, solely and mechanically relying upon the information received from other sources, there cannot be any reassessment for the verification. In such circumstances, the notice for reopening issued under Section 148 of the Act, 1961 was held to be not sustainable. However, in the facts of the case, on perusal of the reasons recorded, it emerges that on basis of the information received by the Assessing Officer, more particularly when there was no scrutiny assessment, the Assessing Officer has formed an opinion that from the return of income filed by the assessee it was not possible to ascertain whether the assessee has taken the transaction with M/s. Wonder Packaging Industries Limited in his books or not. 9. Similarly, in the decision in case of G & G Pharma India Ltd (Supra) of the Delhi High Court, there was a scrutiny assessment under Section 143(3) of the Act, 1961 and after relying ....