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TaxTMI 
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2022 (8) TMI 1513
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....ances 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 documentary supporting produced by the appellant. 7. The appellant craves leave to add....
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....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, in our considered opinion consideration of validity of jurisdiction of the Assessing Officer is only of academic int....
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....l 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 Engineering Co. 2009-10 11,64,189/- 3. Ramani Metal Corporation 2009-10 31,47,840/- 4. Aryen Sales Corporation 2009-10 31,47,840/- 5. Krishana Steel Industries 2009-10 2,94,371/- Total 57,57,264/- Shiv Sagar Steel (India) 2010-11 3,69,895/- Asian Metal Industries 2010-11 5,86,137/- Rainbow ....
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.... 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 statements of Mahesh Garg and Shubhash Gupta were recorded by the Director of Income-Tax (Investigation) and on the basis of the statements they have come to the conclusion that the said persons were entry operators. Copy of the statements of Mahesh Garg and Shubhash Gupta have not been placed on record by the respondent. The petitioner, has, however, enclosed copy of statements of Mahesh Garg and Shubhash Gupta recorded on different dates. The said persons W.P. (C) NO. 8067/2010 Page ....
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....ich 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 and payments were made to the Assessee company through the banking channel. Regard being had to the aforesaid fact situation, this Court had interfered. Thus, the said decision is also distinguishable on the factual score." 18. The facts indicated above do not show that M/s Swetu Stone Pvt. Ltd. is a non-existing and a fictitious entity/person. Decision in AGR Investment Limited (supra), therefore, does not help the case of the respondent." 8. The Ld. counsel also referred to the deci....
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....t, 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. Rajesh Jhaveri Stock Broker P. Ltd. [2007] (7 SCR 765). Therefore, we reject the contention of the Ld. counsel that the source of information was only a list of suspicious dealers available on the website of the Sales-tax Department of Maharashtra Government. 10. As far as the contention of the Ld. counsel that Assessing Officer did not carry out further inquiries before forming reasons to believe is concerned, we are of the opinion that during the relevant period the Assessing Officer was not empowered for carrying out an inv....
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....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 to, or any information contained therein, relate to, the assessee." 10.1 The relevant provision of section 148A was not in operation during the assessment year in consideration before us, and therefore we reject the contention of the Ld. counsel of the assessee that no enquiry was carried out by the Assessing Officer before forming requisite belief that income escaped assessment. 11. The Ld. CIT(A) has rejected the ground of the assessee challenging the validity of the jurisdiction observing as under: "8. Ground no.2: In this ground assessee has challenged the jurisdiction of AO to is....
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....t 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. Ltd. vs ITO (SC) 191 ITR 662 (ii) A close reading of reasons recorded by A.O. shows that A.O. had perused and understood the facts discovered in the extensive inquiries conducted by Investigation Wing and failure of assessee to produce the parties, brokers or any delivery challans of goods, etc. (iii) Not a case of change of opinion: It is not a case of change of as no opinion was formed in 143(1)(a) processing. There was no 143(3) earlier in these cases. New tangible facts, in the form of elaborate inquiries by Investigation-Wing-had come before A.O. (iv) It is not intended by law that each officer should be working in a silo, The sharing and flow of information from one department....
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....tment 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 there was specific information- partywise/amountwise which was available with AO. Also, assessee had failed to produce the parties and he did not have any contemporary evidences of purchase like delivery challans, octroi and stock register, etc. Thus, on the basis of such detailed and specific information including statements of persons supplying bogus bills without actual delivery of goods - all distinguish the case laws quoted by assessee in its defence. In view of difference in facts and AO's case being on much stronger footings and various specific case laws quoted above in the order, the case laws relied upon rejected and do not come to rescue of assessee. 8.5 Thus, there is no force in the arguments of assessee, ground no.2 is, therefore, dismissed." 11.1 In....
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....he 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 assessee has submitted that no notice under section 143(2) of the Act was issued after filing of the return of income and therefore assessment completed is void ab initio. 18. The Ld. CIT(A) has rejected the contention of the assessee that no notice under section 143(2) of the Act was issued after filing a return of income by the assessee. The Ld. CIT(A) has observed that the Assessing Officer issued notice under section 148 of the Act on 12/03/2014, asking the assessee to file return of income within 10 days. The assessee chose not to file return of income within the prescribed time period. The assessee alternatively did not ask for extension of the time for filing return of income also and therefore in absence of the return of income filed by the assessee the Ld. Assessing Officer issued notice ....
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....od 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 prescribed period and thus according to the assessee it was a belated return and the Assessing Officer could not have taken cognizance of the said return. According to him the said return was not a valid return filed and therefore Assessing Officer cannot make assessment thereon under section 143(3) of the Act. He submitted that in such a case, the Assessing Officer could have made the assessment under section 144 of the Act. 20. On the issue of requirement of notice under section 143(2) to be issued and served subsequent to filing of return of income, the Ld. counsel relied on the decision of the Mumbai Tribunal 'E' Bench in the case of Sudhir Menon Vs ACIT Central Circle (Appeal No. 1744 of 2016 dated 3/10/2018). Further, the Ld. counsel relied on the decision of the Hon'ble Supreme Court in the case of Hotel Bl....
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....ed 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 case on 11/08/2014, the assessee has only submitted a letter that original return of income filed by the assessee might be treated as return of income filed in response to notice under section 148 of the Act. The said original return of income was already available with the Assessing Officer, and therefore it does not take much time in going through the said return and thereafter issue notice under section 143(2) of the Act. Therefore, the contention of the assessee that even notice issued under section 143(2) of the Act on the day of filing of return of income is also invalidate the assessment, is rejected. In view of the above discussion, the ground No. 3 of the appeal is also dismissed. 25. In ground No. 4 (wrongly mentioned as ground No. 11), the assessee is claiming that documents in relation to bogus purchases were imp....