2015 (11) TMI 1886

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....s mind independently to the material referred to by him while recording reasons for reopening. It was submitted that without forming a prima facie opinion, on the basis of such material, it is not correct on the part of the A.O. to record reasons that he has reason to believe that income has escaped assessment and reopen the assessments. The Ld. Sr.D.R. strongly opposed these contentions. Both the parties relied on various case laws. 3. After hearing rival contentions I hold as follows. 4. The reasons for reopening recorded by the A.O. are as follows. "Information is received from the Investigation Wing of the Income Tax Dept. That M/s Perfect Capital Services Ltd. is a beneficiary of accommodation entries received from certa....

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.... account of failure on the part of the assessee to disclose truly and fully all the material facts necessary for assessment for the above A.Y. the income chargeable to tax to the extent of accommodation entry mentioned above which is Rs.3,50,000/- has escaped assessment within the meaning of section 147 of the Act. To bring to tax the income which has escaped assessment, I propose to issue notice u/s 148 of the Income Tax Act, 1961. Since, four years has expired from the end of the relevant A.Y. and no scrutiny assessment was completed u/s 143(3) in this case for the said A.Y. the reasons recorded above for the purpose of reopening of assessment is put up kind satisfaction of ACIT, Range 14, N.Del in terms of proviso of S.151(2) of....

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....s evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries". In the considered view of the Court, in light of the law explained with sufficient clarity by the Supreme Court in the decisions discussed hereinbefore, the basic requirement that the AO must apply his mind to the materials in order to have reasons to believe that the income of the Assessee escaped assessment is missing in the present case. Mr. Sawhney took the Court through the order of the CIT(A) to show how the CIT (A) discussed the materials produced during the hearing of the appeal. The Court would like to observe that this is in the nature of a post mortem exercise after the event of reopening of the asse....