TaxTMI 
TaxTMI 
2023 (6) TMI 1066
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...., despite the fact that the assessee was not able to establish the genuineness of transactions and creditworthiness of creditors in respect of credits from M/s Legend Infrastructure Ltd., M/s. Placid Buildwell Pvt. Ltd. and M/s. S.S. Fincap Pvt. Ltd. on account of share capital /share premium during the year under consideration." C. O. No. 70/DEL/2021 :- 3. The assessee has raised the following substantive grounds of appeal:- "1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)] is bad, both in the eye of law and on the facts. 2. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in upholding the reopening of assessment done by the AO, despite the fact that the initiation of the proceedings under Section 147, read with Section 148 of the Act is bad and liable to be quashed, as the conditions and procedures prescribed under the statute have not been satisfied and complied with. 3. On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in confirming the reopening despite the fact that the same ....
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....ing addition of Rs. 23,16,00,000/-on account of share application money u/s 68 of the Act. 5. As against the assessment order dated 30/12/2016, the assessee preferred an appeal before the CIT(A) and the CIT(A) vide order dated 27/07/2018 held that 'the findings given by the A.O. in the assessment order that the share application money received by the appellant were accommodation entries and appellant had invested its own money was not based on any material fact available on record. Hence, the findings given by the A.O. is not justified'. Accordingly, the Ld. CIT(A) directed the A.O. to delete the addition made on account of capital infused. 6. Aggrieved by the order of the CIT(A) in deleting the addition, the Department filed an appeal in ITA No. 6300/Del/2018 on the grounds mentioned above and the Assessee filed C.O No. 70/Del/2021 challenging the reopening of assessment done by the A.O. u/s 147 read with Section 148 of the Act. 7. Since the assessee raised legal issue in the C.O. regarding the reopening of assessment u/s 147 read with Section 147 of the Act, we deem it fit to decide the Cross Objection of the assessee before the disposing the appeal filed by the revenue.....
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.... 2. Name Address/PAN/Asstt. Particulars of Directors of the company. 3. Details of shares holders and quantum of their holding in the assessee company as on 01.04.2008 and 31.03.2009. 4. Complete details of registered office, head office, branch office and any other place mentioned by the company. 5. Copy of assessment order of last three years. 6. Details of party-wise purchases and sales with their addresses, PAN and Ward/Circle. 7. Name and complete communication address of the parties from/to whom loan and advances above Rs. 50,000/- was received/given during the previous year with the terms/conditions. Discharge onus in case of loans/advances received as per sec. 68 of the I.T. Act- notes on its usage. Explain sources/purpose of giving loan as advance. 8. Details of expenses debited to P&L A/c with supporting evidence. 9. Details of expenses covered u/s 43B with date of payment and supporting evidence. 10. Details of additions to fixed assets along with supporting documents and when the same are put to use. 11. Details along with complete address and confirmation of parties/persons from whom uns....
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.... to use of assets during the year is enclosed and Marked as Annexure-6. 11. Details along with complete address with confirmations of all the transactions during the year as far as unsecured loans are concerned is enclosed and marked as Annexure-7. 12. Detail as regard to share capital has already been submitted on 03.06.2011. 13. Details related to bank with the copy of bank statements has already been submitted on 15.03.2011. However complete list of bank accounts maintained by the company is enclosed and marked as Annexure-8. 14. Details of sundry creditors as on 31.03.2009 along with the complete address and amount outstanding is enclosed and marked as Annexure-9 15. Not applicable being not either trading company or manufacturing company. 16. Details of sundry debtors as on 31.03.2009 along with the complete address and amount outstanding is enclosed and marked as Annexure-10 hope you will find our reply in order. Thanking You, Yours faithfully, 13. Based on the enquiry conducted by the Assessing Officer, assessment order u/s 143(3) of the Act was passed in the case of the assessee on 30.12.2011 assessing total inc....
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....ared long-term capital gain on sale of the property - It placed on record all evidences to show that the information submitted by it were correct, property was held for a period of more than three years, rent was received from the said property and no depreciation at all was claimed on the property - All documents were part of the returns of income at tax audit report filed before the Revenue - These evidences clearly show that the assessee made a true and full disclosure of facts regarding the sale of the assets and depreciation thereon which were very much part of the assessment records and the same had been examined by the AO in the original assessment proceedings- Neither the AO nor the Departmental Representative pointed out any discrepancy in the above mentioned information submitted by the assessee to the Revenue authorities nor they brought any evidence on record to show that the said information in the assessment order Assessment cannot be reopened on the basis of mere change of opinion on the same set of facts on record - In this case, there was true and full disclosure of facts and no new information came to the knowledge of the A.O. Therefore, the reopening of ....
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.... However, on receipt of representations from the Companies against omission of the words "reason to believe", Parliament re-introduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer. We quote here in below the relevant portion of Circular No.549 dated 31st October, 1989, which reads as follows: "7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression `reason to believe' in Section 147. --A number of representations were received against the omission of the words `reason to believe' from Section 147 and their substitution by the `opinion' of the Assessing Officer. It was pointed out that the meaning of the expression, `reason to believe' had been explained in a number of court rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 147 to reintroduce the expression `has reason to believe' in place of the words `for reasons to be recorded by him in writing, is of ....
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....ave the power of review. If a change of opinion were to be permitted as a ground for re-assessment then it would amount to granting a licence to the Assessing Officer to „review‟ his decisions, which power he does not have. 11. Consequently, holding that initiation of the proceedings in question was based entirely on change of opinion, we find that the re-assessment proceedings are without jurisdiction. The notices under Section 147/148 of the said Act and the proceedings pursuant thereto stand quashed. We make it clear that in this writ petition we have considered the case only from the stand point of jurisdiction and not on the merits of the issues with regard to taxability of the amount transferred to TIUF." 19. The Jurisdictional High Court in the case of CIT-VI, New Delhi Vs. Usha International Ltd. (2012) 348 ITR 485 (Delhi High Court) "Now we examine the claim of the assessee regarding this contention that reopening is on mere change of opinion. Reliance has been placed on a judgment of Hon'ble Delhi High Court rendered in the case of Usha International Ltd. (supra). Para 13 to 17 of this judgment are relevant for the dispute in present c....
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....nt order and one of the queries was that the assessee was asked to explain as to why the prior years expenses should not be disallowed. The reply of the assessee before the Assessing Officer are also reproduced by the Assessing Officer on pages 2 & 3 of that assessment year and in the reply para 4, it was submitted by the assessee before the Assessing Officer that prior year expenses should be allowed as deduction because the same are in the nature of business expenses for which liability arose during the present year under question. Even after making this query and receiving reply from the assessee, no addition was made by the Assessing Officer in the assessment order u/s 143(3) dated 11/12/2008 on account of prior period expenses. But still it has to be accepted that opinion was formed by the Assessing Officer although the reasons for forming an opinion is not available in the assessment order u/s 143(3) of the Act. Hence, this judgment of full Bench of Hon'ble Delhi High Court rendered in the case of Usha International Ltd. (supra) is squarely applicable in the present case and hence, respectfully following this judgment of Hon'ble Delhi High Court, we hold that in the p....