TaxTMI 
TaxTMI 
2022 (8) TMI 1513
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.... under: 1. On the facts and in the circumstances of the case, the learned cit (a) erred in rejecting the contention of the appellant that A.O. has failed to assume a valid and legal jurisdiction to issue notice under section 147 of the it. Act. 2. On the facts and the circumstances of the case whether the Ld. CIT (A) was correct in holding that return of income on which assessment was made was a valid return. 3. 3. On facts and circumstances of the case Whether learned CIT(A) was correct in holding that assessment order was valid in spite of the fact that no notice under section 143(3) of the act was issued after filing of return. 4. On the facts and the circumstances of the case, whether the Learned CIT(A) was holding that assessment order passed by A.O. was a legal assessment order in spite of violation of natural justice. 5. On the facts and circumstances of the case whether the Learned CIT (A) in confirming the invoking of section 69 of the I.T. ACT. 6. On the facts and circumstances of the case whether the Learned CIT (A) in confirming the addition of Rs.11,60,990/ to the total income of the appellant and ignoring all the d....
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....iry itself. The assessee has categorically stated in the survey itself that he was not obtaining bogus hawals bills. The assessee reiterated that no evidence of cash purchase or any other incriminating documents have been found at the time of survey. Despite the above even without making any enquiry from the concerned party the Assessing Officer has treated purchase to be bogus and made disallowances on the theory of peak credit. In our considered opinion it is settled law that statements obtained during the survey, are not conclusively proved for any addition. As a matter of fact, in this case even survey did not reveal anything against the assessee. The Assessing Officer has not even bothered to issue notice to alleged bogus suppliers. All the purchases are through banking channel. Sales have not at all being doubted. In this view of the matter in our considered opinion addition is totally based upon surmises and conjecture, not sustainable in law. Accordingly, we set aside the orders of the authorities below and delete the additions. 4. The assessee has also challenged the validity of jurisdiction of the assessment. Since, we have already deleted the additions on merit,....
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.... Total 24,82,749/- 1. River Gold Elevators 2008-09 3,02,162/- 2. Paras Steel India 2008-09 2,34,300/- 3. Anand Deep Metal 2008-09 21,25,432/- 4. R.J. Metal Industries & M/s Rajlaxmi Corporation & Reliable Metal Works 2008-09 9,12,750/- 5. Aaren Sales Corporation 2008-09 4,51,140/- 6. Manglik Metal (India) 2008-09 50,002/- 7. Suryadev Metal (India) 2008-09 97,500/- 8. N B Enterprises 2008-09 10,47,438/- 9. Naman Enterprises 2008-09 9,44,213/- 10. Om Corporation 2008-09 3,25,024/- 11. Manav Impex 2008-09 10,17,193/- 12. Pradeep Metal Syndicate 2008-09 2,49,670/- 13. Navratan Impex 2008-09 5,46,104/- 14. Ramani Metal Corporation 2008-09 9,17,464/- 15. Rishab Metal (India) 2008-09 85,000/- 16. Shiv Sagar Steel (India) 2008-09 8,54,409/- 17. Antriksh Metals 2008-09 68,690/- 18. Kavita Sales & Jyoti Enterprises 2008-09 5,03,634/- Total 1,07,32,125/- 1. Anand Deep Metal 2009-10 10,97,899/- 2. Valianat Steel Engi....
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....evidence to support the formation of his belief. According to the Ld. counsel of the assessee, the Assessing Officer did not make any further enquiry for recording reasons to believe that income escaped assessment. The Ld. counsel relied on the decision of the Hon'ble Delhi High Court in the case of Signature Hotels Private Limited vs. ITO 338 ITR 51 (Delhi). According to the Ld. counsel the Hon'ble Delhi High Court in the said case quashed the reassessment proceeding in view of vague information received from the Director of Income-tax (Investigation) and reopening of the assessment is in mechanical manner. But we find that in the case of Signature Hotels Private Limited (supra), one of the main reason for quashing the reassessment by the Hon'ble High Court, is not referring the relevant material in the reasons recorded. The only material which was referred by the Assessing Officer was an annexure. The relevant finding of the Hon'ble Delhi High Court is reproduced as under: "17. In the counter affidavit it is stated that M/s Swetu Stone Pvt. Ltd. had applied for allotment of shares worth Rs.5 lacs and the same were allotted by the petitioner. It is further stated that sta....
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....itional Commissioner of Income Tax and Another should be applied. In the said decision, decisions in the case of Sarthak Securities Company Private Limited (supra) and SFIL Stock Broking Limited (supra) was distinguished by giving the following reasons: "22. ....In SFIL Stock Broking Ltd. (supra), the bench has interfered as it was not discernible whether the Assessing Officer had applied his mind to the information and independently arrived at a belief on the basis of material which he had before him that the income had escaped assessment. In our considered opinion, the decision rendered therein is not applicable to the factual matrix in the case at hand. In the case of Sarthak Securities Co. Pvt. Ltd. (supra), the Division Bench had noted that certain companies W.P. (C) NO. 8067/2010 Page 16 were used as conduits but the Assessee had, at the stage of original assessment, furnished the names of the companies with which it had entered into transaction and the Assessing Officer was made aware of the situation and further the reason recorded does not indicate application of mind. That apart, the existence of the companies was not disputed and the companies had bank accounts ....
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....ferred in the case of the assessee is being extremely vague and scanty and therefore reopening is invalid in law. However, in the instant case before us the claim of information being scanty and vague has not been substantiated by the Ld. counsel of assessee. 9.1 The Ld. counsel of the assessee has presumed the source of information as website of Government of Maharashtra, whereas the Assessing Officer has reopened the assessment on the basis of enquiry report forwarded by the Investigation Wing of the Incometax Department, which is based on survey under section 133A of the Act carried out by the investigation wing and on the basis of the said enquiry report of the Investigation Wing, the Assessing Officer has reopened the assessment. The report of the Investigation Wing is based on verification carried out after due inquiries, therefore, it is one of the credible source, on which the Assessing Officer has relied upon for reopening of the assessment. In our opinion said report from Investigation Wing is one of the relevant information on which a reasonable person can make requisite belief that income escaped assessment as held by the Hon'ble Supreme Court in the case ACIT v. Raj....
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....ly referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: Provided that the provisions of this section shall not apply in a case where, - (a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain ....
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.... purchase party as well as broker and delivery challan for the purchase made from the above parties, it is emerged that the purchase are not genuine. The actual purchase must have been done from the undisclosed parties in the market in cash and the total amount in each year which represents the undisclosed cash/ income in the hands of the assessee. Hence, satisfaction regarding income escaped was recorded on reasonable belief and notices u/s 148 were issued by AO. 8.1 There were new facts before the AO: Reasons to believe: (i) The requirement of Sec. 147 is only to have prima-facie reason to believe that income has escaped assessment. It has been held in plethora of case laws that at the time of reopening, A.O. is not required to establish the escapement of income. The existence of reason is enough. In this regard, reliance is placed on following case laws of the Apex Court: a. Kalyanji Mavji & Co. vs CIT (SC) 102 ITR 287 b. ITO vs Lakhmani Mewal Das (SC) 103 ITR 437 c. Phool Chand Bajrang Lal and Another vs ITO & Anr. (SC)203 ITR 456 d. Sri Krishna (P) Ltd. ys CIT (SC)221 ITR 538 e. Central Provinces Manganese Ore Co. ....
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....; to initiate valid reassessment proceedings. 4. Aaspas Multimedia Ltd. vs DCIT 2017-83 Taxmann.com 82(Guj) assessment was made on basis of information received from Principal DIT (Inv) that assessee was beneficiary of accommodation entries by way of share application provided by a third party, same was justified. 5. Indu Lata Rangwala vs DCIT 80 Taxmann.com 102 (Delhi)[2016] 384 ITR 337 Del High Court- where initial return of income is processed u/s 143(1), it is not necessary in such a case for AO to come across some fresh tangible material to form 'reasons to believe' that income has escaped assessment." 6. Pushpak Bullion (P) Ltd vs DCIT (Entry Receiver) 85 Taxmann.com 84 Gujarat High Court - where Investigation Wing of department had during course of investigation in case of a third party found that he was indulged in providing accommodation entries and bogus bills and assessee had made sizeable purchases from him, reopening notice against assessee was justified. 8.4 Cases relied upon by assessee distinguished: The case laws relied upon by assessee are distinguishable as the facts of assessee's case are different, in so far as th....
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....ecorded in itself is not sufficient to establish that same was recorded after 12/03/2014. Secondly, it is very much possible that after going through the audit report on date of its filing, the Assessing Officer gone through the said report and recorded the reasons to believe. Thirdly, no evidence duly certified from the authorities are produced before us which could establish that reasons were recorded on 10/03/2014. Merely on the presumption of the assessee, it cannot be held that reasons were recorded after 12/03/2014. Accordingly we reject the contention of the Ld. counsel of the assessee. The ground No. 1 of the appeal is accordingly dismissed. 15. In the ground No. 2 to 4 (wrongly mentioned as Ground No. 9 to 11), the assessee has challenged validity of the assessment order passed by the Assessing Officer. 16. In ground No. 2 (wrongly mentioned as ground No. nine), the assessee has raised the issue as to whether the return of income filed on 12/08/2014 can be considered as a valid return of income and an assessment made on the basis of said return of income can be considered as valid and legal assessment. 17. In ground No. 3 (wrongly mentioned as ground No. 10), the ....
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.... of not serving any notice in that case is fully met with in assessee's case as has been brought out above in the para 9. Since, AO had actually served notice to assessee on 12/08/2014 after return of income was purportedly filed vide letter dated 11/08/2014 submitted on 12/08/2014, the requirement of law was fully met with. Hence, case laws quoted by assessee do not support this cause. Thus, on totality of facts, jurisdiction of AO is very much valid in the light of facts and conduct of assessee. Hence, ground no. 3 of appeal is dismissed." 19. Before us, the Ld. counsel of the assessee submitted that section 148 of the Act requires that assessee should furnish his return of income within the time period prescribed in the said notice and any return of income filed after expiry of the prescribed period should be treated as invalid return. The assessee submitted that in the notice under section 148 (which we have reproduced above), the Assessing Officer had specified period of 10 days for filing a return of income. Said notice was issued on 12/03/2014 whereas the assessee has filed return of income on 12/08/2014 and therefore the return has been filed much beyond the....
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....cer has validly completed the assessment under section 143(3) of the Act. We do not find any error in the order of the Ld. CIT(A) on this issue in dispute. The ground No. 2, of the appeal is accordingly dismissed. 23. As regards to ground No. 3 of the appeal, it is evident from the facts brought on record, we find that notice under section 143(2) of the Act has been served upon the assessee on 12/08/2014, which is after the filing of return of income by the assessee. The assessee has been put to notice only after the filing of the return of income and therefore, the contention of the assessee that the notice bear the date of 14/07/2014 is of no relevance, which may be due to any typographical error covered under section 292B of the Act. In view of the our finding of the fact that notice under section 143(2) has been issued after filing return of income and therefore the decisions relied upon by the assessee are of no assistance because in those decisions either no notice under section 143(2) has been issued and served or same has been issued or served prior to filing of return of income and therefore facts of those cases are distinguishable. 24. Further, we find that in this ....