TaxTMI 
TaxTMI 
2024 (3) TMI 574
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....and circumstances of the case, the order passed by NFAC upholding the validity of reassessment proceedings is bad in law on the ground that issue regarding invalidity of initiation of reassessment proceedings as per notice dated 29.03.2016 is bad in law on account of non-culmination and pendency of earlier notice issued u/s. 148 of the Income Tax Act, 1961 ("the Act") which was dated 26.03.2013 which could not be automatically considered as null and void as has been held by the AO. 3. That under the facts and circumstances of the case, the Ld.NFAC has failed to appreciate that the reasons recorded with regard to notice issued u/s. 148 of the Act dated 29.03.2016 have no mention of earlier notice dated 26.03.2013 and any disposal thereof or the fact that the notice dated 29.03.2016 is being issued for the reason that earlier notice dated 26.03.2013 has become infructuous due to assessment to be framed in pursuance thereto has become time barred, therefore, the initiation of reassessment proceedings is bad in law as without recording such fact in the reasons the second notice could not have been issued and would be based on non-application of mind and bad in law. 4.....
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....ived in the bank account of the assessee from existing corporate entities whose existence cannot be denied and whereabouts are ascertainable and these facts are sufficient to discharge the onus laid upon the assessee as assessee was not under legal obligation' to prove the source of source in a case where shares have been allotted in respect of share application money in the relevant financial year itself. 8. That under the facts and circumstances of the case, Ld. NFAC has failed to appreciate that the addition of Rs. 1,37,30,000/- was liable to be deleted on the ground that the assessee was not provided with the opportunity of cross-examining the persons whose statements were recorded and the assessee was not provided with the copy of seized material on the basis of which the inference was drawn that the income has escaped in the hands of the assessee. The addition is liable to be deleted on the ground that the same is in violation of principles of natural justice. 9. That appellant craves to leave, alter, amend or modify the grounds of appeal before or during the hearing of the appeal. 10. That each ground is independent and without prejudice to eac....
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....ully and truly all material facts necessary for assessment. Further, the amount escaped assessment is more than Rs. 1 lakh. As, four years have elapsed since the end of the A.Y. 2009-10, kind approval is sought for issue of Notice u/s. 148 in case of M/s.Bharath Hi-Tech Builders Pvt. Ltd. for A.Y. 2009-10 as per proviso to sec.151 of the I.T.Act, 1961." 4. In response to the notice issued u/s. 148 of the Act, the assessee vide letter dated 11.04.2016 submitted that the original return filed may be taken as a return filed in response to the said notice. The assessee objected to the fresh notice issued u/s. 148 of the Act (dated 29.03.2016). It was submitted that the first notice dated 26.03.2013 u/s. 148 of the Act was still pending and did not culminate in an assessment. Therefore, it was contended that second notice issued on 29.,03.2016 would be invalid. The assessee also objected as regards assumption of the jurisdiction for the issue of notice u/s. 148 of the Act in a search related case. It was the contention of the assessee that the assessment proceedings ought to have been initiated u/s. 153C r.w.s. 153A of the Act. The Assessing Officer, however, rejected the ob....
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....ormation was received from investigation wing about certain companies that they were involved in giving accommodation entries of various natures to several beneficiaries and assessee was one of them, information supplied by investigation wing to Assessing Officer, thus, formed a prima fade basis to enable Assessing Officer to form a belief of income chargeable tax having escaped assessment. Further in In Vasudev Fatandas Vaswani Vs ITO, 2018-TIOL- 2305-HC-AHM-IT, it was held that when issuing notice for reopening assessment, the AO is only required to show reasonable belief that income escaped assessment & is not required to establish the same beyond reasonable doubt. 6.1.2 The facts of the case are examined in the light of the above decisions; I find no inadvertence in the reopening of the case by the AO. All the principles as enunciated by the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Limited v. 170(2003)259 ITR19(SC), has been followed by the AO. In view of the above discussion, the appeal on Ground No. 1 to 4 are dismissed. 6.2 The appellant further in its Grounds of Appeal No. 5 to 8 assailed the AO in making addition of Rs. 13730000/- ....
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....en subjected to cross-examination. If the AO refuses to produce an informant for cross examination by the assessee there cannot be any. violation of natural justice. In the case of GTC Industries ltd. Vs ACIT (1998) 60 TTJ(Bomb-Trib) 308, it was held that where statement and report of third parties are only the secondary and subordinate material which were used to buttress the main matter connected with the amount of addition, denial of opportunity to cross examine third did not amount to violation of natural justice. In the present case, as discussed above, there is overwhelming evidences as discussed in details in the assessment order on which adverse views have been taken are sham transactions. In light of the above discussion the objection of the appellant with regard to not providing the opportunity to cross examine is hereby rejected and dismissed." 6. The contentions raised by the assessee on merits was also rejected by the CIT(A). The relevant finding of the CIT(A) in rejecting the contentions on merits reads as follows:- "6.2.2 Adverting to the ground of appeal of addition of Rs. 13730000/-, the submission of the appellant and the assessment order is examined. ....
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....has filed written submissions challenging the reopening of assessment and also on merits. The gist of the written submissions on the validity of reassessment are as follows:- (i) Order dated 07.11.2016 cannot be considered as order disposing of objection of the assessee which were duly filed on 07.11.2016 and the order dated 07.11.2016 is disposing of the objections purportedly filed on 03.11.2016 when the copy of reasons was given to the assessee on 04.11.2016, therefore, it is a case where the objections filed by the assessee are not disposed of by way of speaking order and reassessment order is bad in law according to decision of Hon'ble jurisdictional High Court in the case of Deepak Extrusions (P.) Ltd., v. DCIT 80 Taxmann.com 77 (Karnataka). (ii) Without culmination of reassessment proceedings initiated as per notice dated 26.03.2013. Second notice dated 29.03.2016 issued u/s. 148 of the Act was invalid. (iii) The reassessment proceedings are invalid on account of non-application of mind by the AO. (iv) The reassessment proceedings are invalid on account of no approval obtained u/s. 151 of the Act as mandated by law. (v) The assess....
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....leged objections filed on 03.11.2016 are reproduced below:- "4. This office received a letter from the assessee on 03.11.2016 (assessee has mentioned 31.10.2016 in the letter head, which is not relevant) though last date for submission of the requisite details was on or before 02.11.2016. Though assessee submitted the letter on 03.11.2016 which is after the due date mentioned in the show cause notice, however the Authorised Representative (AR) Mr.Guruswamy H appeared for the hearing on 04.11.2016 at 11.30 AM (the date of hearing fixed vide show cause notice). During the course of hearing he asked the copy of the reasons recorded for the reopening the assessment by quoting case law laid down by Honourable Supreme Court in the case of M/s.GKN Driveshaft v. ITO (2003) 259 ITR 19. The copy of the reasons recorded by the DCIT, Central Circle 2(3), has been given to the Authroised Representative (AR) Mr.Guruswamy H on 04.11.2016 during course of hearing. 9. For reasons mentioned above, the assessee's objections filed in this office on 03.11.2016 (though due date for submission was on 02.11.2016 as per show cause notice but accepted in view of the natur....
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.... dated 29.03.2016 only on 07.11.2016. However, the order of the A.O. dated 07.11.2016 does not dispose off the above objection of the assessee, but refers to objections dated 31.10.2016 (filed on 03.11.2016). 13. The reassessment proceedings are also invalid on the ground that no sanction under section 151 of the Act has been granted by the PCIT. After repeating requests submitted to the AO, the copy of sanction u/s. 151 of the Act was provided to the assessee as per letter dated 03.02.2021 (refer pages 51 to 54 of the paper book if 101 pages). It can be seen that the sanction has been granted only as per letter dated 24.03.2016 which does not bear the signature of PCIT and it is only a letter wherein ACIT is informing the AO that he is directed to communicate the approval given by the PCIT. The Performa attached with the same also does not bear the signature of PCIT. Thus, it is a case where no approval has been granted by PCIT u/s. 151 of the Act as approval should be given only after application of mind by the approving authority. It can be seen from the wording of letter the so called approval has been given subject to recording of reasons. The reasons are recorded after app....