TaxTMI 
TaxTMI 
2023 (7) TMI 867
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....3) out of the four (4) appeals disposed of by the Tribunal concerned AY 2011-12. The fourth appeal, which was preferred by the appellant named above i.e., SGCPL, concerned AY 2010-11, the remaining appeals as noticed above, related to AY 2011-12. 3. The record shows that on the very first day when the above-captioned appeal and the connected appeals came up before the coordinate bench of this court, they were admitted and a broad question of law was framed; which was modulated on 09.02.2023, after hearing the counsel for the parties. The relevant part of the order dated 09.02.2023 reads as follows: 6. Having heard the counsel for the parties, we are of the view, that the question of law, as framed by the coordinate bench, needs modulation. In fact, both counsels agree, that the following questions of law would arise for consideration: (i) Whether the Income Tax Appellate Tribunal [in short, "Tribunal"] erred in admitting and adjudicating the additional ground concerning jurisdictional defect, in the reasons recorded by the Assessing Officer, even when no such ground was raised before the first appellate authority i.e., the Commissioner of Income Tax (Appeals)? (ii) Whether t....
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.... Suresh Kumar Jain was recorded, which was retracted by him within seven (7) days i.e., on 26.03.2012. 5.6 It is this statement which, perhaps, led to the issuance of a notice dated 11.02.2014 under Section 148 of the Act. Via this notice, it was communicated to SGPCL by the AO that he had reasons to believe that income chargeable to tax had escaped assessment and, therefore, he proposed to assess/reassess his income. 5.7 Therefore, SGCPL was granted five (5) days from the date of service to file a return. It appears the SGPCL via response dated 17.02.2014 indicated that the ROI already placed on record should be treated as its true and fair return in response to the notice issued under 148 of the Act. 5.8 Since reasons for issuing notice under Section 148 had not been furnished, on the very same date when the reply was filed i.e., 17.02.2014, the respondent/assessee asked to be furnished a copy of the reasons recorded for triggering assessment/reassessment proceedings against it. 5.9 The AO, instead of immediately furnishing reasons recorded by him for triggering reassessment/assessment proceedings, issued two separate notices of even date i.e., dated 19.02.2014 under Section ....
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....ance sheet statements, it is seen that these companies are just receiving funds from some private limited companies and then transferring the same to other private limited companies which gives the idea that these companies are nothing but paper companies created as conduit companies to facilitate these type of transactions. Further, these investors had shown nominal income in their returns of income which further suggested that the companies have no legitimate income in their hands. This fact also strengthened the fact that these investors are just conduit companies created on paper." 8. Being aggrieved, SGCPL carried the matter to the Commissioner of Income Tax (Appeals) [in short, "CIT(A)"]. CIT(A), via order dated 12.12.2014, sustained the addition made by the AO. 9. SGCPL, being dissatisfied, escalated the matter to the Tribunal. In the appeal filed with the Tribunal, SGCPL not only raised arguments concerning the merits of the matter but also sought to plead an additional ground, which questioned the jurisdiction of the AO to invoke the provisions of Section 148, read with Section 147 of the Act. 10. A perusal of the impugned order passed by the Tribunal shows that the add....
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....y SGCPL for the first time before the Tribunal. Given this position, the Tribunal ought not to have entertained the additional ground. (ii) The decision rendered by the Tribunal is, primarily, founded on its decision concerning the jurisdiction of the AO to commence proceedings against SGCPL under Section 148/147 of the Act. (iii) SGCPL had failed to discharge its onus concerning the genuineness, credit worthiness of the creditors. Therefore, the addition made under Section 68 of the Act ought not to have been disturbed by the Tribunal. (iv) The Tribunal, inter alia, ought not to have held that the AO had not applied his mind, merely, because there was reference to a provision which had been deleted. This was an obvious mistake which could not have invalidated the assessment/reassessment proceedings, as it fell within the scope and ambit of 292B of the Act. 17. Mr S. Krishnan refuted the submissions made by Mr Sharma. 17.1 According to Mr Krishnan, the Tribunal had got it right in entertaining the additional grounds concerning jurisdiction, as no fresh facts were required to be examined. Mr Krishnan submitted that all that the Tribunal was required to look at were the reaso....
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.... the period in issue is concerned, after the expiry of four (4) years from the end of the relevant AY, the AO is required to form an opinion that the respondent/assessee had failed to disclose, truly and fully, all material facts necessary for his assessment for the AY in issue. The other grounds generally available to the AO for reopening are the failure of the respondent/assessee to either file a return under Section 139 or in response to a notice under Section 142(1) or 148 of the Act. 21. In this particular case, SGCPL had indicated to the AO that the return already filed should be treated as a return filed in response to the notice issued under Section 148 of the Act. Furthermore, the AO did, in a sense, pay ostensible obeisance to the provisions of Section 147 of the Act (as obtaining at the relevant point in time) by recording that SGCPL had failed to disclose, truly and fully, all material facts. 22. That said, the AO grievously erred in referring to sub-clause (i) of clause (c) appended to Explanation 2 to Section 147 of the Act, which had been removed from the statute with effect from 01.04.1989. 23. Furthermore, Section 292B of the Act can have no application in the i....