TaxTMI 
TaxTMI 
2023 (10) TMI 614
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....ec 68 was not applicable in the AY 2010- 11 and the burden u/s 68 was duly discharged by the appellant. 2. Because the CIT(A) has erred on law and facts in confirming assessment order which was passed in pursuance of assessment proceedings initiated u/s 147/148 of the Act by recording reasons by DCIT. Circle 8(1), New Delhi, who had no jurisdiction over the appellant as per law and thus the entire assessment proceedings initiated u/s 147/148 of the Act is beyond jurisdiction, illegal and against the authority of law and thus liable to be quashed. 3. Because the CIT(A) has erred on law and facts in confirming the assessment order which was passed in pursuance of assessment proceedings initiated u/s 147/148 of the Act, beyond four years, without fulfillment the mandatory jurisdictional conditions as per law, and in particular, relying on the borrowed satisfaction without any Independent inquiry, without any independent application of mind, based on some investigation wing report, without any tangible material to link the fact of the transaction of the appellant and thus the entire assessment proceedings initiated u/s 147/148 of the Act is without jurisdiction in ter....
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....ceedings. Since, this issue goes to the root of the matter, we deem it fit to address the same before going into the merits of the addition made u/s 68 of the Act in the sum of Rs. 1 Crore. 4. We have heard the rival submissions and perused the material available on record. The assessee filed its original return of income electronically on 15/10/2010 declaring total income of Rs. 5,03,571/-. The case was sought to be re-opened by issuance of notice u/s 148 of the Act dated 30/03/2017 after recording the reasons for reopening thereon. For the sake of convenience, the reasons recorded by the Ld. A.O. as enclosed in page 8-9 of the PB are reproduced hereunder: "1. Background The assessee company M/S. Edge Infrabuild Pvt. Ltd. has filed its return of income for A.Y. 2010-11, as per information available on ITD system of this Circle. 2. Information received 2.1. This office has received information from ADIT (Inv.) Unit 6(3), New Delhi in the above mentioned case which is as under: "Sh Himanshu verma was engaged in the activities of providing accommodation entries to various beneficiaries group. He did this by Incorporation of numerous cor....
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....dummy and bogus entity from which the assessee has received Rs. 1,00,00,000/- and being used to transferred beneficiary are undisclosed/unexplained in lieu of cash. In the light of above discussion, it is apparent that the assessee company has credited bogus entries to the tune of Rs 1,00,00,000/- from M/s Jaguar Softech Pvt. Ltd. and M's Shubb Propbuild Pvt. Ltd. which was not disclosed in return of income. Since the assessee company was accounted a bogus entry of Rs. 1,00,00,000/- as per details given above and information in the possession of this office, therefore, I have reason to believe that at least an income of Rs 1,00,00,000 has escaped assessment as defined by section 147 of the Act for Assessment Year 2010-11 The income chargeable to tax has escaped assessment for this year by the reasons of the failure on the part of the assessee to disclose fully and truly all material facts. Therefore it is a fir case for the issuance of notice u/s 148 of the Act for the financial year 2009-10 relevant to assessment 2010-11. The necessary sanction in this regard is being obtained separately from Pr. Commissioner of Income Tax, Delhi-03, New Delhi before....
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....his, the ld. AO concluded that assessee could not satisfactorily prove the nature and source of credit received from these two companies totaling to Rs 1,00,00,000/- which was treated by the AO as unexplained cash credit u/s 68 of the Act and added the same to the total income. 6. This action of the Ld. AO was upheld by the Ld. CIT(A). 7. At the outset, we find that the Ld. AR made a preliminary objection that notice u/s 143(2) of the Act was not issued to the assessee in the reassessment proceedings. Hence, he pleaded that the entire reassessment proceedings without the issuance of mandatory notice u/s 143(2) of the Act, had to be quashed as void abinitio. When this was confronted to Ld. DR, the Ld. DR vehemently relied upon para 4.6 of the order of the Ld. CIT(A) which read as under: "4.6. The AR of the appellant has also objected that the impugned reassessment order has been passed without assuming jurisdiction as per law and without serving the mandatory notices u/s 143(2) of the Income Tax Act, 1961 In this regard, It is seen from the order of the AO that in para 2 on page 1, it is clearly mentioned that notices u/s 143(2) was issued the assessee. It is further ....