TaxTMI 
TaxTMI 
2023 (4) TMI 26
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....tice u/s. 143 (2) was not necessary. 3. The Ld. AO erred in law and on facts in not passing a separate speaking order rejecting the objections filed by the assessee to initiation of proceedings u/s. 147 before proceeding to pass assessment order and the Ld. CIT(A) erred in law and on facts in confirming the action of the AO. The Ld. AO had passed a composite assessment order including the rejection of objections. 4. The Ld. AO erred in law and on facts in making an addition of Rs. 1000000/- to the returned income u/s. 68 of the I.T. Act and the Ld. CIT(A) erred in law and on facts in confirming the addition in the facts and circumstances of the case. 5. The Ld. AO erred in law and on facts in not appreciating that the assessee had discharged its initial onus u/s.68 of the Act by producing evidence to substantiate, identity, genuineness and creditworthiness of the share applicant and the onus shifted to the AO was not properly discharged and the Ld. CIT(A) erred in law and on facts in confirming the action of the AO in the facts and circumstances of the case. 6. The Ld. AO erred in law and on facts in passing the assessment order without following....
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....ent at an amount of Rs. 10,03,490/- after making an addition of Rs. 10,00,000/- received by the assessee from M/s. S.R. Cables Pvt. Ltd. holding the same to be accommodation entry in nature. Before the Ld. Commissioner of Income Tax (Appeals) [CIT(A)], the assessee challenged the order of the Ld. AO on merits as well as legality of reopening. One of the main contentions raised by the assessee was that the assessment was framed without issuing statutory notice under Section 143(2). It was also contended that the reasons recorded were without due application of mind on the part of the Ld. AO. No issue of notice under Section 143(2) It can be seen from Paper Book filed by the assessee that there is no notice under Section 143(2) and there is no reference of notice under Section 143(2) in the assessment order also. The assessee made elaborate submissions before Ld. CIT(A) on account of absence of notice under Section 143(2). After considering the same and also calling for the assessment record, the Ld. CIT(A) dismissed the ground of the assessee. Relevant findings are at Page 6, Para 5.1 to 5.4 of the Ld. CIT(A) order. The Ld. CIT(A), after ....
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....ai Shiv Shankar Traders Pvt. Ltd., [2016] 383 ITR 448, Delhi High Court * Pro CIT v. Staunch Marketing Pvt. Ltd., ITA No. 935/2015 dt. 28.04.2017 * CIT v. Delhi Kalyan Samiti, ITA No. 696, 697, 699/2015 dt. 22.03.2016 * Pro CIT v. Silver Line, [2016] 383 ITR 455, Delhi High Court * Alpine Electronics Asia PTE Ltd. v. Director General of Income Tax & Others, [2012] 341 ITR 247, Delhi High Court * Pro CIT v. Paramount Biotech Industries Ltd., ITA No. 887/2017 & 888/2017 dt. 24.10.2017, Delhi High Court * Asst. CIT v. M/s. Hotel Blue Moon, [2010] 321 ITR 362 (SC) * Rajender Kumar Sehgal v. ITO, W.P.(c) 11255/2017, CM No. 46017/2017, dt. 19.11.2018 * Pro CIT V. Gravity Systems Pvt. Ltd., ITA No. 896/2017 & 899/2017 dt. 27.10.2017, Delhi High Court * CIT V. CPR Capital Services Ltd., [2011] 330 ITR 43, Delhi High Court * M/S. Supersonic Technologies Pvt. Ltd., M/S. SPJ Hotels Private Limited, M/S. Shiv Sai Infrastructure (P) Ltd. M/S. Superior Buildwell Private Limited V. PCIT ITA. No. 2269/Del/2017, 2857/Del/2017, 2527/Del/2017, 3301/Del/2017, dt. 10.12.2018, ITAT Delhi * A.C.I.T. v. M/s.....
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....e report of the Investigation Wring and has simply acted upon the said information. The contents of the reasons recorded by the Ld. AD for reopening the assessment are summarized as follows:- (a) In first Para the Ld. AD has made a reference to the report of some Investigation Wing, and also quoted the modus operandi of some bogus companies as discussed in the report. (b) In the second paragraph a table has been made where there is a reference of some accommodation entry received by the assessee from M/s. S.R. Cables Pvt. Ltd. (c) In the third paragraph only the facts of filing of return by the assessee has been stated and on the basis of that a conclusion has been derived that income to the extent of Rs. 10,00,000/- has escaped assessment. On perusal of the above reasons shows that the Ld. AO straightaway concluded that the assessee has taken accommodation entry. The Ld. AO is not itself aware of the fact as to the nature of the entry taken by the assessee. The name of the lender is wrong therein. Further the Ld. AO has not mentioned in which manner the amount has come to the assessee, whether it is by way of loan, share capital or gift....
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....pplied his mind to the materials available on record and has, on that basis, arrived at his reasons to believe. The process of thinking of the officer must be discernible. The reasons have to be made explicit. It is only the reasons that can enable the reviewing authority to discern how the officer formed his reasons to believe. As explained in Oriental Insurance Company v. Commissioner of Income Tax [2015] 378 ITR 421 (Delhi), "the prima facie formation of belief should be rational, coherent and not ex-facie incorrect and contrary to what is on record". A rubberstamp reason can never take the character of 'reasons to believe', as explained by the Supreme Court in Union of India v. Mohan Lal Kapoor: (1973) 2 SCC 836. In Dilip N Shroff v. CIT (2007) 6 SCC 329, the Supreme Court decried the practice of issuing notices in a standard pro forma manner "without material particulars and without deleting inappropriate words or paragraphs". 4. Therefore, in view of the above circumstances and further considering the settled position of law in this regard, the reassessment proceedings initiated by the AO are without due application of mind, and thus, the reassessment proceedings s....
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....Mr. S K Jain. Arguments by ARJ Appellant on 15.02.2023 mainly focused on the issue related to non issue of notice u/s. 143(2) by the A.O. in response to the letter filed by the assessee company on 08.09.2014 wherein t was submitted that the assessee filed the ITR u/s. 139(1) for the A Y under consideration on 03.11.2007 and the same be treated as returned filed in response to notice issued u/s. 148 of the I.T. Act. It is humbly submitted that the decision of Coordinate Bench in ITA No. 2461/Del/2019 (A.Y. 2010-11) in the case of Rakesh Aggarwal Vs. ITO, W-48(1), New Delhi may kindly be considered by the Hon'ble Bench. Copy of this decision is enclosed Factual Matrix & Background: There was a search conducted at the premises of Mr. S K Jain resulting in the seizure of large number of incriminating documents. Inquires during the post search investigations established that Shri S K Jain was in the business of proving accommodation entries. He had floated and operated large number entities for the purpose of providing accommodation entries to various beneficiaries in the form share capital, share application money and loans etc. routing the cash received ....
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....moters & Finlease P Ltd. [18 taxmann.com 602 [Delhi], 206 Taxman 207, 342 ITR 169, VIT Vs Ultra Modem Exports P Ltd. [40 taxmann.com 458 : 220 Taxman 165 [Delhi], vide para 6.1 to 6.13 [Page 7 onwards] NOTE: In the present case, in spite of several opportunities having been provided, during the assessment and appellate proceedings the assessee has failed to produce any evidence to prove that the money introduced in its books as share capital and share premium was genuine transaction in the fact and circumstances of the case. It could not produce any reliable evidence to controvert the findings of the Department which include AO's findings and evidences gathered as a result of Search and Seizure operation in S K Jain case. Hon ITAT Delhi in ITA Nos. 6991 to 6997/Del/2014 in the case of Virender Kumar Jain and ITA No. 6998/to 7004/Del/2014 in the case of Surender Kumar Jain held them as entry providers and that substantive amounts of accommodation entries provided by them are to be taxed in the hands of the beneficiaries. The present case is has a very different situation where live and pulsating evidence seized from Jain Brothers is linked to the credit entries....
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.... u/s. 147 with an objective to verify some information regarding accommodation entry or share premium and share capital is valid and sufficiency of that material cannot dictate the validity of Notice u/s. 148. Therefore, the AO had a prima-facie case on the basis of specific and credible information about the assessee to record reasons for reopening of the assessment [to quote the case specific information] The important question is........ Whether there was relevant material on which a reasonable person could have formed a belief which definitely was there in this case? Whether or not, the material would conclusively establish the escapement is not important. This aspect has to be examined subsequently in the reassessment proceedings. It is noted that the AO has applied his mind to the information available independently to arrive at the belief on the basis of material which was available with him. Hence, the AO had validly assumed jurisdiction u/s. 148 of the Act by recording the reasons to believe in accordance with the provisions of the Act u/s. 147 of the Act and, therefore, the ground of appeal on this is deserve to be dis....
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....ssue reopening notice under section 148 was obtained from Pro Commissioner as per provision of section 151, Pro Commissioner was not required to provide elaborate reasoning to arrive at a finding of approval when he was satisfied with reasons of reopening. [Ref. Para 42 and 43 of the said order] Hence, the AO had validly assumed jurisdiction u/s. 148 of the Act by recording the reasons to believe in accordance with the provisions of the Act u/s. 147 of the Act. On the issue of notice u/s. 143[2]: It is to noted that the notice u/s. 148 was issued on 6.3.2014 asking the assessee to file its return of income for the relevant A.Y. within 30 days time. However, assessee responded to the same vide letter dated 8.9.2014, much beyond 30 days, requesting the AO that the ITR filed u/s. 139[1] on 3.11.2007 may be treated as filed u/s. 148. As such there was no valid return having being filed u/s. 148 and no need to issue notice u/s. 143[2]. The Hon'ble Friday Bench of ITAT Delhi in the case of Rakesh Aggarwal Vs ITO (ITAT Delhi), while disposing the MA No. 249 of 2020 vide order dated 15.12.2020, in respect of the Hon'ble Tribunal Order in ITA No. ....
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....ents to buttress the contention that the assessment so framed is invalid on account of non-issuance of notice u/s. 143(2) of the Act. The assessee has placed reliance on the following case laws:- * Indus Towers Limited v. Dy. CIT, W.P.(C) 1560/2014, dt. 29.05.2017, Delhi High Court SLP dismissed by Supreme Court, [SLP No. 34285/2018 dt. 21.1.2019] * Pro CIT v. Shri Jai Shiv Shankar Traders Pvt. Ltd.,: [2016] 383 ITR 448, Delhi High Court * Pro CIT v. Staunch Marketing Pvt. Ltd., ITA No. 935/2015 dt. 28.04.2017 * CIT v. Delhi Kalyan Samiti, ITA No. 696, 697, 699/2015 dt. 22.03.2016 * Pro CIT v. Silver Line, [2016] 383 ITR 455, Delhi High Court * Alpine Electronics Asia PTE Ltd. v. Director General of Income Tax & Others, [2012] 341 ITR 247, Delhi High Court * Pro CIT v. Paramount Biotech Industries Ltd., ITA No. 887/2017 & 888/2017 dt. 24.10.2017, Delhi High Court * Asst. CIT v. M/s. Hotel Blue Moon, [2010] 321 ITR 362 (SC) * Rajender Kumar Sehgal v. ITO, W.P.(c) 11255/2017, CM No. 46017/2017, dt. 19.11.2018 * Pro CIT V. Gravity Systems Pvt. Ltd., ITA No. 896/2017 & 899/2017 dt. 27.10.2017, Del....