TaxTMI 
TaxTMI 
2022 (12) TMI 231
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....Tax Act, 1961 (hereinafter "the Act") by issuance of notice u/s 148 of the Act dated 26.03.2014 and consequent passing of re-assessment order vide order dated 20.03.2015, which according to the Ld. AR, is bad in law for several reasons (infra). According to the Ld. AR, the AO did not had the requisite jurisdiction to re-open the assessment u/s 147 of the Act because the reasons recorded by the AO dated 18.03.2014 (refer page 18 to 22 PB) was by for non-application of mind which is discernable from perusal of the same, wherein the AO has mentioned that the assessee had taken accommodation entry to the tune of Rs.5,20,00,200/- whereas in the "reasons recorded for reopening" given to the assessee vide letter dated 12.08.2014 (refer page 19-20 ....
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....pen the assessment for AY. 2007-08. Moreover, according to the Ld. AR adverse information may trigger "reason to suspect", (when he received information from DGIT (Inv.) against the assessee) and not reason to believe, which is the requirement of law to re-open, which was absent in this case. According to him, when the AO had adverse information ["reason to suspect"], then the AO had to make reasonable inquiry and collect materials which would make him believe that there is infact any escapement of income, which exercise is totally absent in this case. According to the Ld. AR, based on the borrowed satisfaction of the DGIT(Inv.), the AO has reopened the assessment which he could not have done, so the AO could not have validily re-opened the....
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.... allotment to prove identity, creditworthiness and genuiness of the same. It was also pointed out by the Ld. AR that the AO had issued notice to the share applicants u/s 133(6) of the Act which were duly replied to by the share applicants. So, the AO in the original assessment did not draw any adverse view against the assessee on the issue of share allotment. 5. Further, according to the Ld. AR, the AO did not follow the binding order of the Hon'ble Jurisdictional High Court in the case of Asian Paint Ltd. Vs. DCIT 296 ITR 90 wherein the Hon'ble Bombay High Court held that if the assessee objects to AO regarding his action of reopening the assessment, and if the AO over-rules the objection, then the AO should not proceed further in the m....
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....nt. All the petitions stand disposed of accordingly." 6. According to Ld. AR, the AO has not followed the binding direction (supra) and to prove that the Ld. AR drew our attention to the date of events as under: - Date Particulars 30.10.2007 Return of Income filed 29.09.2008 Notice u/s 143(2) issued after selecting the case for compulsory scrutiny 30.11.2009 Assessment order passed u/s 143(3) 01.10.2013 Search and seizure action took place in case of Shri Pravin Kumar Jain 07.03.2014 Date of letter from DGIT (Inv.) to the AO 18.03.2014 Date of recording reasons by the AO 21.03.2014 Date of approved by the Additional Commissioner 25.03.2014 CIT's approval conveyed by the Additional Com....
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....rder was passed on 20.03.2015 which is against the binding decision/direction of the Hon'ble High Court dated 29.01.2007 (supra); and he pointed out that in number of cases when AO has not followed the aforesaid order in Asian Paints (supra), the AO's re-assessment order has been quashed. And therefore the Ld. AR pleads that the action of AO not to have followed the binding direction of Hon'ble High Court in Asian Paints itself vitiates the re-assessment order passed within two (2) weeks after disposing of the objection. And thus effectively did not allow the assessee to pursue the extra-ordinary remedy of approaching the Hon'ble High Court for issuance of writ. So he prays that AO's action of not providing four (4) weeks or at least three ....
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....the "reasons recorded" spells out the figure/sum escaped is alleged as Rs.5,20,00,200/- whereas at page 19-20 PB, another reasons recorded (no date) it alleges escapement of income to the tune of Rs.2,87,50,000/- which mistakes according to Ld AR exposes the non-application of mind of AO while recording reasons about the escapement of income. Further according to Ld AR, it is a case of borrowed satisfaction from DIT (Inv.) and not of the AO which itself vitiates the re-opening. Be that as it may, one of the other issue brought to our notice is regarding violation of the order of the Hon'ble High Court's binding direction (supra) to give assessee at least four (4) weeks time, after AO disposes of the objection raised by assesse against re-op....