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2022 (11) TMI 767
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.... "2. The CIT(A) failed to verify whether the PAN AABCS8896C and AABCS2870C belongs to two different persons. The CIT(A) ought to have referred the matter to the AO for verification particularly in view of the fact that a person cannot have two PANs. The CIT(A) has erred in deleting the said addition of Rs. 2,05,00,000/- which is based on the entries taken from S.K. Jain Group of concerns. "3. That the appellant craves the leave to amend, modify, alter and or forgo any of the ground(s) without prejudice to each other." Revised Grounds of Appeal in the case of M/s. Shree Bal Kishan Aggarwal Glass Pvt. Ltd. -ITA No. 5821/Del/2017 for AY 2006-07-reg-PAN-AABCS8896C 1. "The CIT(A) has erred in deciding the appeal as the assessment order passed by the AO is in the case of the assessee having PAN - AABCS8896C, name - Shree Bal Kishan Aggarwal Glass Industries Pvt. Ltd. whereas the appeal order is in the case of PAN - AABCS2870C and on the name Shree Bal kishan Aggarwal Glass Industries Pvt. Ltd. whereas as per the department database the name against PAN AABCS2870C is Shri Bal Kishan Aggarwal Glass Industries Ltd." 2. "The CIT(A) failed to verify ....
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.... the order of the Commissioner under challenge could be defended by the Respondent assessee on all grounds including those grounds which have been decided against him. He also submitted that similar view has been taken by the Hon'ble High Court of Gujarat in the case of Dahod Sahakari Kharid Vechan Sangh Ltd. vs. CIT, 149 Taxman 456 (Guj) and in the case of PCIT vs. Sun Pharmaceuticals Industries Ltd. (2017) 86 taxmann.com 148 (Guj); the Hon'ble Supreme Court in the case of Hukam Chand Mills Ltd. vs. CIT; and the Hon'ble Bombay High Court in the case of New India Life Assurance Co., 31 ITR 844 (Bom). The Ld. AR submitted that the application under Rule 27 of the IT(AT) Rules, 1963 may kindly be admitted for adjudication. 4. The Ld. Sr. DR submitted that it is the prerogative of the assessee Respondent to invoke the Rule 27 of the IT(AT) Rules as per the requirement of facts and circumstances of the case. In view of the above, the application of the assessee under Rule 27 of the IT(AT) Rules, 1963 is admitted for adjudication by respectfully following the judgment of the jurisdictional High Court of Delhi in the case of Sanjay Sawhney vs. Pr. CIT and other judgments a....
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....at the reason recorded u/s. 147 on 19.03.2013 on the basis of incomplete information provided by investigation dt: 12.03.2013. The complete information was containing all the required information disclosing the name of the entry provider with details of transaction was provided to the AO by Ld. Addl CIT, Range-8, Delhi vide letter dt: 22.03.2013 after issuing of notice u/s. 148 dt: 21.03.2013. The reason why the information was incomplete is evident from the contents of the reason recorded. The reason does not show names of the entry provider/providers, amounts accepted from each entity/entities, mode particulars of remittance received which contained in the information remitted to the AO after issue of notice u/s. 148 of IT Act. Action of the information which was actionable in view of incompleteness thereof renders the reassessment proceeding initiated thereby void-ab-initio. b. From the complete information passed by the Addl CIT, Range-8, Delhi dt: 22.03.2013 and form perusal of assessment order at page 2, it can be clearly seen that all the transaction of Rs. 2,00,00,000/- are dated 30.03.2005 which falls in AY 2005-06 and not in year under appeal and therefore on the....
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....ount of invalid notice. 4. Recording of reason after taking approval u/s. 151 of IT Act: In para 14 of reason recorded (PB 9), there is mention of approval u/s. 151 of the Act already taken which implies that such approval has been taken by the AO before recording of reason on 19.03.2013. Even if it is argued that it is a clerical mistake, such mistake shows besides lack of application of mind on the part of the AO but also on part of approving authority. On similar facts, mentioned in the reason recorded, the Hon'ble ITAT in respondent assessee own case for AY 2003-04 in ITA No. l523/Dei/2014 in para 29 at page 29 has quashed the reassessment proceeding. 5. Mechanical approval u/s. 151 of IT Act. Mere appending "Yes" by approving authority shows that the approval is mechanical without application of mind. The exercise by the approving authority appears to have been ritualistic and formal rather than meaningful, which goes against the rationale of the safeguard of approval by a higher ranking officer provided in the Act. Inconsistencies and omissions pointed out in support of ground on non-application of mind are the glaring mistakes committe....
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.... in the name of Manohar Jaykishan Shah was received and it was reported in the I said FIU-IND-STR No. 1000010583 that there were 311 linked entities amongst whom fund transfers were made and in few accounts there were deposits also. In pursuance to the said report. Bank Statements of various entities have been obtained and on investigation, it has been noticed that Omkam Developers Pvt. Ltd. (Pan AAACO5036B] was one of the beneficiaries during the F.Y. 2008-09 relevant A.Y. 2009-10 and the amount brought through I accommodation entries by the above mentioned company is Rs. 193.00 Lakhs. Copy of the Status Report in the case of Manohar Jay kishan Shah in connection with FIU-IND-STR No. 1000010583 is reproduced below:- A. Background: * One Suspicious Transaction Report was received in the month November, 2009 from FIU-IND. In the said report, 31 related accounts were reported out of which 12 accounts were found to be associated, with business of Metal Trading Wherein Mr. Manohar Jaykishan Shah is a Proprietor/Signatory. There are other 19 outstation Branch Accounts which are linked/connected to main 12 accounts and having non-related business/not i....
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..... The facts of immediate source of the beneficiaries being shell companies have already been established and recorded u/s. 131 of the Income Tax Act-1961 during the investigation in other cases. The fact as also corroborated by the non-compliance to the summons as well as non-existence of real business of most of the entities mentioned in Annexure-C, C1 and 1 and 5. Flow Chart of Cash Flow Cash deposit in proprietorship concerns / Layering of funds through dummy Proprietorships and Shell companies / Fund transfer to Shell/Paper Company / Fund to the Beneficiaries Conclusion (i) In retrospect it can be rightly conceded that, the beneficiary companies have introduced (sic) cash in primary accounts discussed in Annexure-C and S symbolized by various companies (created for the purpose re-1, Annexure-S) operated by entry operators by entry operators, the unaccounted funds have been entered In the regular books of accounts of the beneficiary companies. (ii) in view of the above, the total amount which has been transferred to the beneficiaries or the recipient companies from the bank accounts of paper companies during FY. 2008-09 is detai....
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.... be initiated for the A.Y. 2009-10. As per ITD record, Return of Income has filed on 30.03.2010 at an income of' Rs. 2,389/- for the A.Y. 2009-10. Since four years has been expired from the end of the relevant assessment year in this case for the said assessment year, it is therefore I/requested that the reasons recorded above for the purpose of reopening of assessment is put up for kind satisfaction of Pr. CIT, Delhi-7, New Delhi in terms of proviso, to Section 151 of the Income Tax and approval for issue of notice u/s. 147 may kindly be accorded." 10.1 On perusal of the proforma for the approval granted by the PCIT, it is evident that in the relevant column No. 13 for satisfaction of the Pr. CIT, he has only mentioned "yes". No other information is available on record or provided by the Ld. DR, which could establish application of mind by the CIT, while granting sanction/approval for issue of notice u/s. 148 of the Act. No other evidence was produced as to substantiate that matter was ever discussed between the Assessing Officer or Addl. CIT and the Learned Pr. CIT for arriving at satisfaction of Learned Pr. CIT on the reasons recorded by the Assess....
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....1961. This issue is also considered in the Order of VRC Township Pvt. Ltd., (supra) following the decision of Hon'ble Bombay High Court in the case of Kalpana Shantilal Haria vs. ACIT [2017] 100 CCH 165 (Bom.). Following the same reasons for decision, we set aside the Orders of the authorities below and quash the reopening of the assessment in both the assessment years under appeals. All additions stand deleted. Accordingly, appeals of the Assessee are allowed." 10.3 In the instant case before us, also the Learned DR has argued that the mistake of noting section under section 147 of the Act for reassessment proceeding is a clerical mistake, however, the Tribunal in the above decision has rejected the said contention and quashed reassessment proceeding on the ground of non-application of mind while granting approval for reopening of the assessment under section 151 of the Act. 10.4 Respectfully, following the decision of the Hon'ble Delhi High Court in the case of NC Cable Ltd. (supra) and decision of the Tribunal in the case of Madhu Apartment Pvt. Ltd. (supra), we quash the reassessment proceeding in the case of the assessee. 10.5 Since we have quashed th....
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....annot be an mechanical approval without examining the proposal sent by the Assessing Officer. Prima facie, it appears to us that if the Joint Commissioner of Income Tax would have applied his mind to the application made by the Assessing Officer, then the very first thing which would arise is the basis of the notice, as the provision of law on which it is based is no longer in the statute. Non pointing out the mistake/error by the Joint Commissioner of Income Tax on the part of the Assessing Officer is prima facie evidence of non application of mind on the part of the sanctioning authority while granting the sanction." 8. We also take respectful cognizance of the judgment of the Hon'ble High Court of Delhi in the case of Yum! Restaurants Asia Pte. Ltd. vs. DDIT in WP(C) No. 614/2014 dated 31.08.2017 as relied on by the Ld. AR wherein their Lordships speaking for the Hon'ble jurisdictional High Court considered the glaring mistake in the Performa for approval as the valid ground for quashing reassessment on the foundation of non-application of mind by all the authorities involved in the process of recording reasons and providing approval u/s. 151 of the Act. 9. In the ....
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....ore, we are not adjudicating upon those legal contentions of the assessee. The Ld. Sr. DR has filed written submissions on merits. So far as the grounds of the Revenue on merits are concerned, the same are rendered infructuous since the reassessment proceedings and the impugned reassessment order (supra) have already been quashed in the earlier part of this order. ITA No. 5822/Del/2017 12. Since we have allowed the ground No. 1 of the assessee under Rule 27 of the IT(AT) Rules and have quashed the impugned assessment order, the additions made by the AO and confirmed by the Ld. CIT(A) do not hold the field and the same are deleted. Therefore, the appeal of the Revenue challenging the deletion of penalty have become infructuous and we are not adjudicating the same as having become infructuous. 13. In the result, both the appeals of the Revenue stand dismissed. Order pronounced in the open court on 31. 10. 2022. ============= Document 1 817116 M/s Cinkam Developers Ltd. AY. 2009-10 FORM OF RECORDING THE REASONS FOR INTIATING PROCEEDINGS U/S 147 OF THE I.T. ACT AND FOR OBTAINING THE APPROVAL OF ADDLCIT/CIT Name & address of the assessee Permanent Acco....