2023 (10) TMI 1320

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.... with relevant Circular of the CBDT, no reassessment proceedings may have been initiated against the petitioner after 31.3.2017 if the component of income alleged to have escaped assessment was less than 50 Lakhs. 4. In the present case, relying on the view now expressed by the assessing authority contained in its final show cause notice dated 12.5.2023, it has been vehemently urged, the objection raised by the petitioner at the initial stage that there was no second transaction of Rs. 27 lakhs and that there was only one transaction of Rs. 27 lakhs alleged to have escaped assessment has been found true. The reassessment proceedings may not have been initiated at all since the quantum of escapement was only Rs. 27 lakhs i.e. well below the statutory limit of Rs. 50 lakhs. 5. To bolster his submission, learned counsel for the petitioner has referred to the original notice issued under Section 148A(b), dated 25.5.2022; reply furnished by the assessee thereto dated 11.6.2022 and; the order passed by the assessing authority under Section 148(b), dated 31.7.2022. Thus, it has been elaborated, at the stage of assuming jurisdiction, the assessing authority wrongly brushed aside the spec....

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....o that amount. 9. Having heard learned counsel for parties and having perused the record, in the first place, under the amended law, the assessing authority draws power to reassess the assessee, from Section 147 of the Act, if any income chargeable to tax in the case of that assessee escapes assessment. That power has been made subject to provisions of Section 148 to 153 of the Act. By virtue of Section 148 of the amended law, reassessment notice may be issued under that provision subject to compliance of Section 148A of the Act, whereafter he may serve the jurisdictional notice. 10. Section 148A is a new provision. Earlier, under the unamended law, by virtue of decision of the Supreme Court in GKN Driveshafts (India) Ltd Vs. Income Tax Officer, 259 ITR 19 (SC), it had been made obligatory on part of the assessing authority to consider the objections to jurisdictional notices issued under Section 148, before proceeding with the reassessment proceedings. While that was the scheme under the unamended law, upon amendments made by the Finance Act, 1921, new provision Section 148A has been introduced. That not only gives statutory right to the assessee to object to proceeding under Se....

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....in this regard, necessary verification is to be need and it should be investigated during the course of assessment proceedings u/s 147 of the Act. 6.5 Bank statement of JAR Metal Industries Pvt. Ltd has not enclosed with this information as the various numbers of entities involved in this matter and it is not possible to each & every entity's bank statement enclosed with the information. 6.6 As per information, value of the total accommodation entries were Rs 54,00,000/ and the escaped amount is above Rs. 50,00,000/-. As per as per Instruction No. 01/2022 dated 11.05.2022 of CBDT, this case is not time barred. 6.7 As per material which provided to the assessee, two entry of Rs. 27,00,000/- dated 10.04.2012 and Rs. 27,00,000/- dated 04.10.2012 are mentioned in its and assessee company has confirmed this in its reply. In this regard, without complete inquiry form the concerned parties, it cannot be accepted that only Rs. 27,00,000/- was credited in the bank account of the assessee company." 13. Thereafter, the reassessment notice dated 31.7.2022 appears to have been issued to the assessee. The assessee filed further replies and the proceedings have been conducted and now c....

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....o tax liability is not sine qua non of valid assumption of jurisdiction. 18. The fact that in the present case, the assessing authority has reconsidered his position and now reached a conclusion that there exists only one accommodation entry of Rs. 27 lakhs and not two such entries, may only impact the quantum of reassessment order to be made. 19. Insofar as at the stage of assumption of jurisdiction, the assessing authority had taken note of two entries that too after issuing due notice to the petitioner and passing an order under Section 148A(d), establishes due compliance of the procedure. The fact that such tentative conclusion recorded at that stage may not be found to be correct in entirety, and the fact only one accommodation entry of Rs. 27 lakhs may have been obtained by the assessee, may not be enough to now lead to the conclusion that learned counsel for the petitioner has tried to persuade us to. There is no material or basis to conclude that there never existed any material or information as to allegation of the second accommodation entry of Rs. 27 lakhs, in an undisclosed bank account. In any case, it is too late in the day to enter into that exercise. 20. The effe....