2024 (12) TMI 1257

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....ng of cut and polished, and rough diamonds. The original return of income for A.Y. 2009-10 was filed by the assessee on 28.09.2009 declaring total income of Rs. 2,70,210/- and return of income for A.Y. 2010-11 was filed on 14.10.2010 declaring total income of Rs. 3,50,170/-. 2.1. Pursuant to search and seizure action carried on in the case of one Bhawarnlal Jain and Group concerns on 03.10.2013, case of assessee for the year under consideration was reopened. The assessee was issued notice u/s. 148 of the act for A.Y. 2009-10 and 2010-11 on 18.03.2016. In response to the notice, the assessee filed letter on 06.06.2016 stating that, the original return of income filed for the years under consideration may be treated as return in response t....

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....nder consideration. 4 Details of the hawala entities from whom the assessee has obtained accommodation entries for the year under consideration are given as under:- Sr.No. Name of the hawala entities PAN Amount involved 1. MERIDIAN GEMS AAQFM7140P 39438810 2. MOULI GEMS ANBPB0169K 4983082 3. NAMAN EXPORTS AGWPC1001D 42794544   Total   8,72,16,436 5. On the basis of the aforesaid information available with the undersigned, I have reason to believe that income chargeable to tax, as indicated above, to the tune of Rs. 8,72,16,436/-, or any other income chargeable to tax which comes to my notice subsequently in the course of proceedings for re-assessment, has escaped....

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.... i) The Ld.AO made addition in the hands of the assessee without appreciating the facts and that the reopening was merely based on the information obtained from the investigation wing, wherein it is stated that, Bhanwarlal Jain and group were engaged in providing accommodation entries and that assessee had obtained accommodation purchases from the said group. ii) No opportunity of cross examination was granted to the assessee based on which the additions is made and that the Ld.AO never gave the materials to the assessee that was relied upon, thereby violating the principles of natural justice. 3.1. The Ld.CIT(A) in respect of the above legal contentions, rejected the arguments of the assessee by relying on the observations of t....

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....re this Tribunal. 4. The primary ground raised by the assessee is on non issuance of notice u/s. 143(2) of the act after filing the return of income in response to the notice issued u/s. 148 of the act. He placed reliance on the decision of Hon'ble Gujarat High Court in case of PCIT vs. Marck Bio Sciences Ltd reported in (2019) 106 taxmann.com 399. He also placed reliance on the decision of Hon'ble Supreme Court in case of Hotel Blue Moon reported in 321 ITR 362, and submitted that, section 292BB of the act, will come to the rescue of revenue only after issuance of notice u/s. 143(2) of the act. 4.1. The Ld.AR further place reliance on the decision of Hon'ble Surat Tribunal in case of Crypton Diamonds Pvt. Ltd. Vs ACIT in ITA Nos. 310....

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....eedings. Thus, based on various judicial pronouncements on this aspect, and the legal position being evidently clear that, the reassessment order can be passed without compliance with the mandatory requirement of a notice being issued by Ld.AO u/s. 143(2) of the act pursuant to filing of return of income, cannot be treated to be the correct procedure in the eyes of law as observed by Hon'ble Supreme Court in case of Hotel Blue Moon (supra). Further, non issuance of notice u/s. 143(2) of the act after filing of return of income cannot be said to be mere procedural irregularity and the same is not curable as observed by Hon'ble Supreme Court in case of Hotel Blue Moon (Supra). 5.2. The basic requirement under the act for issuance of no....