TaxTMI 
TaxTMI 
2021 (9) TMI 1417
X X X X Extracts X X X X
X X X X Extracts X X X X
....ustice, we condone the delay of 10 days in filing the present appeal. The assessee has raised the following grounds: - 1. Legal Grounds regarding validity of initiation of reassessment proceeding under section 147. 1.1. That on the facts and circumstances of the case and in law the initiation of the reassessment proceeding is bad in law and deserves to be set aside because notice under section 148 was not served upon the assessee-appellant. 1.2. That on the facts and circumstances of the case and in law the initiation of the reassessment proceeding is bad in law and not valid because approval from the Pr. CIT under section 151 was obtained in a mechanical manner and without application of mind. 2. Grounds regarding validity of addition of Rs. 65,02,177/- solely on the basis of amount reflected in the Form 26AS. 2.1. That on the facts and circumstances of the case and in law Ld. CIT(A) erred in confirming the order of AO ignoring the remand report of the Asst.CIT, Circle 5(1)(1), Bangalore, dated 03/09/2019 which clearly stated that actual payment to the assessee-appellant is not known to the director of the deductor company and the direc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncome escaped assessment shall be Pr.CIT accordingly approval towards income escaped assessment was not obtained strictly as prescribed under section 151(1) hence whole reassessment proceedings are bad in law having regard to the ratio of the decision of the jurisdictional Delhi High Court in the case of 'CIT Vs. SPL's Siddhartha Ltd (2012) 345 ITR 223 (Del.HC)'. 2. That the CIT(A) erred on facts and in law in upholding the validity of the reassessment order dated 08/12/2017 passed by the assessing officer under section 143(3) read with section 147 of the Income-tax Act, 1961. without appreciating the fact that, Pr.CIT had given approval under section 151(1) towards initiation of income escaped assessment proceedings in a mechanical manner and without application of mind, hence, whole reassessment proceedings are bad in law having regard to the ratio of the decision of the Hon'ble Supreme Court in the case of 'CIT, Jabalpur Vs. S. Goyanka Lime & Chemicals Ltd (2015) 64 taxmann.com 313 (SC)'. 3. That the CIT(A) erred on facts and in law in upholding the validity of the reassessment order dated 08/12/2017 passed by the assessing officer under....
X X X X Extracts X X X X
X X X X Extracts X X X X
....IT 229 ITR 383. Accordingly, the additional grounds raised by the assessee are admitted for deciding on merits. 6. Ground No. 1 of the original grounds and ground nos. 1 & 2 of the additional grounds are relating to the validity of the initiation of proceedings u/s 147/148 of the Income Tax Act. 7. The Ld. AR of the assessee has submitted that the approval granted by the Pr. CIT as well as ACIT is not valid as only the Competent Authority can grant an approval after recording the satisfaction on the reasons recorded by the AO before issuing the notice u/s 148 of the Income Tax Act. In support of his contention he has relied upon the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs. SPL Siddhartha Ltd. 345 ITR 223. The Ld. AR has referred to the approval granted by the Addl. CIT as well as Pr. CIT and submitted that the Addl. CIT has no authority to grant approval and, therefore, in the absence of the satisfaction and approval of the Competent Authority which is only one Authority which cannot be substituted by the satisfaction of other Authority. The approval u/s 151 of the Income Tax Act is not valid in the case of the assessee and consequently the reo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sons of reopening recorded by the Assessing Officer. He has pointed out that the assessee is a non filer of Income Tax Return and only on the basis of the information received by the Assessing Officer as contained in Form No. 26AS. The Assessing Officer has formed the belief that income assessable to tax has escaped assessment. The reasons recorded by the AO has clearly makes out the receipt by the assessee on account of contract payments which were subjected to TDS u/s 194C as reflected in Form 26AS. The amount as shown in Form No. 26 is huge of more than Rs. 65 lakhs. Therefore, prima facie the reasons recorded by the Assessing Officer based on tangible material on which the Pr. CIT was satisfied while granting satisfaction. 9. In the rejoinder the Ld. AR has relied upon the decision of Mumbai Benches of the Tribunal in the case of ACIT Vs. Bharti Axa Life Insurance Co. Ltd. 128 taxmann.com 23 (Mum. Trib.). 10. We have considered the rival submissions as well as the relevant material on record. Though the assessee has raised the ground no. 1.1 disputing the service of notice issued u/s 148, however, at the time of hearing, the Ld. AR of the assessee has not addressed any ar....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... u/s 148. Sd/- (Archana Choughdary) Pr. Commissioner of Income Tax, Delhi-9, New Delhi. 12. Though prior to the approval of Pr. CIT there is also a satisfaction recorded by the Addl. CIT, however, it is clear from the satisfaction recorded by the Pr. CIT that she was satisfied with the reasons recorded and found it a fit case for issuing notice u/s 148. As per the satisfaction recorded by the Pr. CIT it does not reflect any influence or consideration of the satisfaction recorded by the Addl. CIT. Therefore, the satisfaction recorded by the Pr. CIT is separate and independent not having any influence. Hence, even if there is a satisfaction recorded by the Addl. CIT who is not a Competent Authority for granting sanction for issuing notice u/s 148 in this case the said satisfaction of Addl. CIT would not vitiate the satisfaction recorded by the Pr. CIT. Therefore, the satisfaction as recorded by the Pr. CIT at the time of granting the approval/sanction u/s 151 of the Income Tax Act manifests that it was an independent satisfaction based on the reasons recorded by the Assessing Officer. Even otherwise, the reasons recorded by the Assessing Officer prima facie makes ou....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... said that the same is issued by the Assessing Officer without verification of the return of income. He has distinguished the facts from the decision relied upon by the assessee in case DIT Vs. Society for Worldwide Inter Bank Financial, Telecommunications (supra) and submitted that in the said case the notice was issued prior to the filing of return of income by the assessee. 15. We have considered the rival submissions as well as the relevant material on record. There is no dispute that the return of income was filed by the assessee on 14.11.2017 and a copy of which is available in the Paper Book at page no. 8. This is also undisputed fact that the assessee has filed the return of income online and, therefore, the same is accessable to the Tax Authorities at moment it is filed. The Assessing officer had issued the notice u/s 143(2) on 16.11.2017 which is certainly after the return of income filed by the assessee. Therefore, in the facts and circumstances of the case, where the assessment was reopened due to the reasons that the assessee has not filed any returned income u/s 139 and Form No. 26AS shows the receipt of Rs. 65,02,171/- as contract receipt subjected to TDS u/s 194C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....On the other hand, Ld. DR has submitted that as per the agreement dated 6th August, 2009 there is a payment schedule and accordingly, the assessee received two cheques from the other party of the agreement. Even if the cheque issued by the contracting party got dishonored the amount becomes due and will be income of the assessee on mercantile system of accounting followed by the assessee. He has relied upon the orders of the authorities below. 18. We have considered the rival submissions as well as the relevant material on record. The Assessing Officer has made the addition based on the details of payment reflected in the Form 26AS. The assessee has contended before the Assessing Officer as well as CIT(A) that the payment shown in Form 26AS was not received by the assessee from M/s E-X Seed Technologies & Device P. .Ltd. as the cheque issued by the said company of Rs. 10 lakhs got dishonored and assessee has filed a police complaint. So far as the dishonor of the cheque is concerned the same is reflected in the bank account statement of the assessee and, therefore, we find that in the absence of any other amount received by the assessee or any settlement between the parties the ....