TaxTMI 
TaxTMI 
2024 (10) TMI 86
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....has erred on facts and in law in upholding the addition of Rs. 1,20,000/- u/s 69C as alleged commission paid for obtaining accommodation entries. 3. The information has been collected behind the back of the assessee and the assessee was never confronted with the same nor an opportunity provided for cross-examination of Jain Brothers, alleged intermediary and the relevant seized material relied upon has not been provided to the assessee. 4. The Ld. CIT(A) has erred on facts and in law in upholding addition irrespective of the fact that assessee has discharged onus u/s 68. No independent enquiry conducted. 5. The learned CIT(A) has erred on facts and in law in upholding the impugned order of the learned assessing officer where initiation u/s 148 & consequent proceedings are contrary to law, passed without application of mind and without complying with the procedure and rules, is against equity and justice and facts of the assessee and material on record. 6. The learned CIT (A) has erred on facts and in law by not adjudicating ground of initiation of penalty proceedings u/s 271(1)(c) without any material on record." 3. The assessee has also raise....
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....e assessee. The income returned at Rs. 1,42,060/- was thus assessed at Rs. 62,62,060/-. 5. Aggrieved by the additions made in reassessment proceedings, the assessee preferred appeal before the CIT(A). The CIT(A) however, did not find any merit both on the points of lack of jurisdiction or merits of the additions. The CIT(A) thus endorsed the action of the AO. 6. Further aggrieved, the assessee preferred appeal before the ITAT. 7. The grounds of appeal raised by the assessee are three fold; (i) challenge to the assumption of jurisdiction under section 147/148 r.w.s 151 of the Act; (ii) wrong assumption of jurisdiction under section 147 instead of statutory path available under section 153C of the Act and (iii) the challenge to the action of the Assessing Officer in making additions by invoking section 68 and 69C of the Act on merits in pursuance of the assumption of jurisdiction under section 147 of the Act. 8. When the matter was called for hearing, the learned Counsel for the assessee adverted to the main grounds and strongly voiced objection on legal ground of lack of jurisdiction available under Section 147 of the Act. The learned Counsel contended that the assumptio....
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.... b) If so, the date of filing the said return: 15.11.2010 9. If the answer to item 8 is in the negative, please state: a) The income originally assessed: 143(1) b) Whether it is a case of under- assessment, assessment at too low a rate, assessment which has been made the subject of excessive relief or allowing of excessive loss or depreciation. 10. Whether the provisions of Sec. 150(1) are applying. If the reply is in the affirmative the relevant facts may be stated against item No. 11 and it may also be brought out that the provisions of Section 150(2) would not stand in the way of initiating proceedings u/s 147 No. 11. *Reasons of the belief that income has escaped assessment Annexure - 'A' Enclosed 12. Whether the Addl. CIT is satisfied on the reasons on the reasons recorded by the AO that it is a fit case for the issue of notice under section 148 of the Income Tax Act, 1961 I have carefully examined the proposal of the AO, CIT is satisfied on and reasons recorded by the Assessing Officer for the reasons recorded initiating action u/s 147 of the Income Tax Act, by the AO that it is a 1961.....
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.... under Section 147 of the Act are broadly outlined hereunder : (i). The reasons recorded would make it evidently clear that the Assessing Officer has acted in a mechanical manner and without application of mind and without objectively ascertaining the facts before recording the reasons towards alleged escapement. The assessment has been reopened on the basis of borrowed satisfaction without independent application of mind and thus consequential action and proceedings are illegal and bad in law. On facts, the AO in para 8 of the reason recorded alleged accommodation entries of Rs. 60 lakhs in the F.Y. 2008-09 from S.K. Jain Group of Companies. Thus, the AO, by his own reckoning, believed that the relevant assessment year qua escapement would be 2009-10 rather than 2010-11 in question. The assertion, made in para 8, thus, is not reconciled with underlying facts. Such contradiction indicates nothing but absence of any application of mind by the AO as to the timing of transaction which empowers the AO to reopen the case of a particular assessment year. The assessee had raised the objection vide his letter dated 22.09.2017 but the AO while disposing off this objection vide orde....
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....t the assessment of alleged entry provider Zenith Automotive P. Ltd. was completed under Section 153C [143(3)] and bare no adverse finding of such entity alleged to be conduit entity. Thus the theory propounded in the reasons recorded fall flat. (iv). The assessee further contends that approval has been routinely granted by the PCIT under Section 151 of the Act despite error / omission in the Performa placed by the AO through Addl. CIT(A) for approval of the PCIT. For instance, Row No. 9(b) of the Performa states "whether it is a case of under-assessment, assessment at too low a rate, assessment which has been made the subject of excessive relief or allowing of excessive loss or depreciation." This question has been kept blank by the AO. Thus, it is not known as to what is the nature of the allegation i.e. whether it is a case of under - assessment or assessment at low rate of taxes etc. The PCIT has ignored such lack of information while granting the approval showing non-application of mind. Furthermore, as per Row No.12, the Addl. CIT has forwarded the Performa for approval of PCIT for deriving satisfaction on the reasons recorded as per the observation....
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....tation period for issue of notice. Such conduct clearly reflects the reluctance of the AO to initiate reopening proceedings based on some generalized and uncorroborated information. The notice under Section 148 of the Act on the last day (despite availability of so called information) was impliedly under compulsion to save on limitation. No independent inquiry appears to have been made by the AO in the long intervening period including the fate of assessment of the so called entry providers. Thus, the circumstances would show that the AO has proceeded on dotted lines as dictated in the information received. 14. To demonstrate the inherent lack of application of mind, firstly, by the AO under Section 148(2) and thereafter, by the PCIT under Section 151 of the Act, the assessee points out that the financial year is wrongly mentioned, approval granted by the PCIT based on incomplete Performa and also satisfaction of the Addl. CIT that the 'case requires verification' which is not the same expression as "the chargeable income has escaped" assessment referred to in the main provision of Section 148 of the Act. 15. On perusal of the objections raised on behalf of the assessee, we f....