TaxTMI 
TaxTMI 
2025 (1) TMI 241
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.... 6. 2009-2010 736/Del/2024 CIT(A),Kanpur-4/10371/2019-20 Dated 19.12.2023 271(1)(C) 7. 2010-2011 737/Del/2024 CIT(A),Kanpur-4/10372/2019-20 Dated 18.12.2023 147/144 8. 2010-2011 738/Del/2024 CIT(A),Kanpur-4/10373/2019-20 Dated 19.12.2023 271(1)(C) 9. 2011-2012 739/Del/2024 CIT(A),Kanpur-4/10374/2019-20 Dated 18.12.2023 147/144 10. 2011-2012 740/Del/2024 CIT(A),Kanpur-4/10375/2019-20 Dated 19.12.2023 271(1)(C) 11. 2012-2013 741/Del/2024 CIT(A),Kanpur-4/10376/2019-20 Dated 18.12.2023 147/144 12. 2012-2013 742/Del/2024 CIT(A),Kanpur-4/10377/2019-20 Dated 19.12.2023 271(1)(C) 13. 2013-2014 743/Del/2024 CIT(A),Kanpur-4/10378/2019-20 Dated 18.12.2023 147/144 14. 2013-2014 744/Del/2024 CIT(A),Kanpur-4/10379/2019-20 Dated 19.12.2023 271(1)(C) 15. 2014-2015 745/Del/2024 CIT(A),Kanpur-4/10380/2019-20 Dated 18.12.2023 147/144 16. 2014-2015 746/Del/2024 CIT(A),Kanpur-4/10381/2019-20 Dated 19.12.2023 271(1)(C) 17. 2015-2016 747/Del/2024 CIT(A),Kanpur-4/10382/2019-20 Dated 18.12.2023 147/144 18. 2015-2016 748/Del....
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....A), NOIDA, UP. Deleting the additions and demand made in toto and quash the assessment order dated 06.08.2018 u/s 144/147 of the Act passed by the Ld. AO for the A.Y. 2007-08. Pass any other order as this Hon'ble Court may deem fit in the interests of justice. 4. Learned counsel representing assessee has further filed his written submissions dated 19.12.2024 reading as under: The present Appeal has been preferred by Mr. Sanjeev Wadhwa (hereinafter referred to as the "Appellant/Assessee") against the Impugned Orders passed by the Ld. AO and the Hon'ble CIT(A). I. The re-assessment proceedings are non-est. No order ought to have been passed in pursuance of the proceedings u/S. 147/148 of the IT Act. a. The re-assessment proceedings ought to have been initiated under Section 153C IT Act as the same have been initiated on the basis of statements made by third party and the material allegedly seized during the search and seizure at the premises of third party. b. Case as set up the Ld. AO in the Impugned Order, though not admitting, warrants initiation of proceedings u/s. 153C IT Act as the satisfaction of twin conditions is complete. ....
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....as been passed by the DCIT, Central Circle, Ghaziabad. b. The said order is not maintainable for this reason alone and is liable to be set-aside. c. The Impugned Order has been passed beyond the territorial jurisdiction for the reasons best known to the Department. IV. Grave prejudice has been caused to the Appellant. a. The Hon'ble CIT(A) has failed to note the patent illegality in the order passed by the Ld. AO while affirming the same. b. The addition of income by the Ld. AO is grossly incorrect and against the set principles of law. c. No reasons to believe for initiation of proceedings have been given by the Ld. AO. d. Grave prejudice has been caused to the Appellant by way of the Impugned Orders. e. The Impugned Orders have been passed based upon the assumptions raised from the material made available to the Ld. AO from the search and seizure along with the statements of third party. 5. We next note that the learned CIT(A) herein has affirmed the Assessing Officer action initiating under Section 148/147 proceedings against the assessee thereby making the impugned additions on merits as under: ....
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.... actual import of any goods of computer accessories was done in lieu of the said remittances. 6.1.4 Investigation by Enforcement Directorate Statement of Driver of Sh. Manish Kumar Jain i.e., Sh. Ram Sagar Sahni was recorded by the Enforcement Directorate who admitted that Sh. Manish Kumar Jain used to carry huge amount of cash and large number of bank accounts were opened in HDFC, OBC, Axis, Kotak Mahindra, Yes and Punjab National Bank etc. in the names of fictitious entities on the basis of forged documents. The statement before the Enforcement Directorate referred in the assessment order clearly reveals the complete details/modus operandi of collection of cash from various places and deposition of cash in various accounts before being remitted out of the country. Statement of Sh. Rakesh Jain was also recorded u/s 50 of PMLA of 2002 wherein, he admitted that cash was collected from Sh. Sanjeev Wadhwa and others and the said money was remitted abroad as per the instructions of Sh. Sanjeev Wadhwa and others. He clearly admitted to collection of cash by Sh. Manish Kumar Jain from 5h. Sanjeev Wadhwa and others, deposition of cash by Sh. Manish Kumar Jain in....
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....een dismissed by the Hon'ble Supreme Court in Its order reported at [2017] 84 taxmann.com 300 (SC)]": It has further been held by Hon'ble High Court of Gujarat In the case of Pushpa Uttamchand Mehta vs. Income-tax Officer reported at [2022] 139 taxmann.com 409 (Gujarat) as under: "However, it was found that Assessing Officer had Information in form of accounts/documents received from Investigation wing that 'U' was a company, run, managed and operated by entry providers and it was a penny stock and had been used by operators to provide exempt LTCG/Short Term Capital Loss and assessee was one such operator - Whether thus, there was sufficient material available on record for Assessing Officer to form a reasonable belief and there was a live link existing of material and income chargeable to tax that escaped assessment - Held: yes - Whether therefore, it could not be said that Assessing Officer, on absolutely vague or unspecific information, initiated proceedings of reassessment without taking pains to form his own belief in respect of such materials - Held, yes Para 18) [In favour of revenue)* It has further been held by the Ld. ITAT Agra Bench ....
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....g that Assessing Officer had received entirely new set of documents and materials for his consideration in form of report received from investigation wing and such materials did not form part of original assessment proceedings * Whether since Assessing Officer had sufficient material at his command to form a reasonable belief that income chargeable to tax had escaped assessment, merely because these transactions were scrutinized by Assessing Officer during original assessment would not preclude him from reopening assessment: thus, impugned reassessment notice was justified - Held, yes (Para 8I [In favour of revenue" Also, in the judgment of Hon'ble High Court of Delhi in the case of AGR Investment Ltd. vs. Additional Commissioner of Income-tax reported at [2011|197 Taxman 177 (Delhi) it has been held as under15 *Section 147 of the Income-tax Act, 1961 - Income escaping assessment - Non-disclosure of primary facts - Assessment year 2003-04 - Whether in exercise of power under article 226 of Constitution, Court can adjudge sufficiency of material for reopening assessment under section 147 - Held, no. - Whether whore Assessing Officer had specific information fro....
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....age only question whether there was relevant material to form a reasonable belief is to be seen, in the background of facts there is specific information received about 'K' and It has been prima facie found that the assessee is also the beneficiary of the said "K. At this stage of the proceeding, the tactum of said aspect whether the assessee is beneficiary or not is not to be finally adjudicated upon by the Assessing Officer. Therefore, the Court is not in a position to dwell into it, but only has to examine whether there is a reasonable belief arrived at or not. From the basis of aforesaid circumstances prevailing on record, it appears that the Assessing Officer is justified prima facie in arriving al conclusion to reopen the assessment. A liberty is always available to the assessee to justify or to deal with the same, but this is not the stage where the process of reopening based upon aforesaid material is to be intercepted." Thus, it is a settled principle of law that at the time of issue of notice u/s 148 E pot necessary for the AO to establish beyond doubt that income has escaped assessment. As per law, at this stage there should only exist reason to believe&....
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....ess. It has been observed that Registry mentions in the office report that where the notice is returned as 'refusal, is complete/proper service, whereas when it is returned as 'unclaimed, is not proper service/incomplete service. In the opinion of this Court, it is not proper and correct. The word 'refusal' can be interpreted in synonymous to the word "unclaimed". As held by the Hon'ble Supreme Court in the above decisions, when a notice is served to the proper address of the addresses, it shall be deemed to be served unless contrary is proved. Thus, when the notice is returned as unclaimed, it shall be deemed to be served and it is proper service: Therefore, service of notice to the sole respondent which has returned as unclaimed is considered as deemed to be served but none has entered appearance.* Further, the Hon'ble Supreme Court of India in the case of Atulbhai Hiralal Shah vs: DCT 2016 73 taxmann.com 325 has held that "where notice u/s 148 sent to assessee at the address contained in his PAN Card is returned back with the remark "left", reassessment proceedings could not be terminated merely on ground of non-service of notic....
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....s Voter IDs and bogus PAN Cards for opening of bank accounts, the statement of various persons recorded by different agencies clearly brings on record the fact that the appellant was laundering unexplained money through bank accounts of bogus entities before being remitted abroad. 6.2.2 The statement of various persons as already discussed under the heading of brief facts, clearly highlights the nexus and modus operandi of the activities of the appellant. It has also been reported that against the remittances mode to Hong Kong, actual Imports did not happen. In result, the whole of transactions routed through bank accounts during the said year was rightly treated by the AO as income of the assessee. The appellant has not been able to explain the sources of cash and the credits in the accounts of various bogus entitles being managed by him under his directions through Sh. Manish Kumar Jain. Also AO disallowed 20% of the expenses in absence of furnishing of the books of accounts, bills & vouchers which is held to be very nominal and genuine. In view of above discussion, the additions made by the AO are upheld and these grounds of appeal are dismissed. 6.3 Ground of ....
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....he credibility of the persons who had given information against him, then different considerations would have applied and in those circumstances, refusal to give an opportunity to cross-examine the persons giving information against him or to lead evidence on his own part to rebut the facts would have been necessary and denial of such opportunity would have been fatal. But such is not the case here as we have mentioned hereinbefore. It is true that all actions against a party which involve penal or adverse consequences must be in accordance with the principles of natural justice but whether any particular principle of natural justice would be applicable to a particular situation or the question whether there has been any infraction of the application of that principle, has to be judged, in the light of facts and circumstances of each particular case. The basic requirement is that there must be fair play in action and the decision must be arrived at in a just and objective manner with regard to the relevance of the materials and reasons. We must reiterate again that the rules of natural justice are flexible and cannot be put on any rigid formula. In order to sustain a compl....
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....er: a. Notice issued u/s 148 is valid. b. The notice issued is within the frame work of law and with proper jurisdiction. c. The notices have been served on the last known addresses of the appellant: d. The cash & credits in the multiple bogus accounts could not be explained by the appellant. e. The creation of multiple bogus entities by using bogus Voter IDs and bogus PAN cards highlights the intent and nature of activities carried out by the appellant. f. The statements of various persons recorded by different agencies acts as corroborative evidence to the volume of documentary evidence available with the AO g. Allowing cross-examination in such a case cannot be compulsive requirement wherein, the documentary evidences voluminous." 5.1 It is in this backdrop that the learned counsel first of all submits that once the impugned proceedings under Section 148/147 have been initiated against the assessee based on the seized material; the only recourse available to departmental authorities is to invoke Section 153C proceedings as the appellant herein happens to be a person other than the searched assessee and therefore, ....
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....l the relevant notice, nor his passport details form part of records before us. We further wish to clarify there is no clarity in the case file that the US based authority had ever detained him during his alleged overseas trip. 10. Learned counsel's next vehement contention is that the assessment herein has been wrongly framed at Ghaziabad as the assessee all along has been assessed within the territorial jurisdiction of Delhi only. He could hardly dispute his clinching the fact that we are dealing with a "centralized" assessment as discussed in the CIT(A)'s detailed discussion in para.6.1.11 which does not call for any interference on our part. We thus reject Assessee(s) last argument as well. 11. Before concluding, learned counsel made a last ditch effort that Shri Manish Jain's statement did not carry any significance as per the CBDT's F.No. 286/2/2003-IT(lnv.11) dt. 10-03-2003. We find no reason to accept instant concluding argument as well once the impugned disallowance/additions are not merely based on the said statement but also the other relevant tangible material(supra). We thus affirm both the learned lower authorities' respective findings initiating Section 148/147....
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....n the light of the above submissions and documents filed by the AR during the course of appellate proceedings and findings of the AO in the penalty order, the various grounds of appeal are adjudicated as below: 7.1 Grounds of Appeal Nos. 1 to 14: In these grounds of appeal, the AR has inter-alia raised the following issues: A. The penalty order is without the approval from the Higher Authorities. B. Show cause notice was not served on the appellant. C. That levy of penalty is bad in law, 7.1.1 The penalty order is without the approval from the Higher Authorities. The AR has contended that the penalty order has been passed without the approval of higher authorities. A perusal of the penalty order reveals that the same has been passed with the approval of Addl. CIT and the letter number and date are clearly mentioned in the penalty order. Hence, the above contentions of the appellant do not carry any merit, 7.1.2 Show cause notice was not served on the appellant. The AR has further contended that the show cause notice was not served on the assessee. The AO in the penalty order has clearly mentioned that the show ....
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....#39;, is not proper service/incomplete service. In the opinion of this Court, if is not proper and correct. The word refusal can be interpreted in synonymous to the word 'unclaimed". As held by the Hon'ble Supreme Court in the above decisions, when a notice is served to the proper address of the addressed, it shall be deemed to be served unless contrary is proved, Thus, when the notice is returned as unclaimed, it shall be deemed to be served and it is proper service. Therefore, service of notice to the sole respondent which has returned as unclaimed is considered as deemed to be served but none has entered appearance." Further, the Hon'ble Supreme Court of India in the case of Atulbhal Hiralal Shah vs. DCIT 2016 73 taxmann.com 325 has held that "where notice u/s 148 sent to the assessee at the address contained in his PAN Cord is returned back with the remark "left", reassessment proceedings could not be terminated merely on ground of non-service of notice". The case of the appellant is similar to the issues which were under consideration before the Hon'ble Supreme Court in the cases cited above. Hence, this contention of the appellant al....
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....s held as under: "Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Whether penalty under section 271(1)(c) is civil liability and for attracting such civil liability, willful concealment is not an essential ingredient as is case in matter of prosecution under section 27SC - Held, yes" Further, the Hon'ble High Court of Madhya Pradesh in the case of Steel Infots Ltd vs. CIT reported at [2008] 296 ITR 228 (Madhya Pradesh) has held as under: "If assesses despite being afforded an opportunity to prove transactions relied on by it for claiming benefits fails to substantiate those transactions, then a case for imposition of penalty is made out" Further, the Hon'ble High Court of Delhi in the case of Commissioner of Income-tax, Delhi-IV vs. Escorts Finance Ltd. reported at [2009| 183 Taxman 453 (Delhi) has held as under: "Section 271(1)(c) of the Income-tax Act, 1961-Penalty- For concealment of income- Whether if claim made in return of income appears to be ex facie bogus, it would be treated as a case of concealment or furnishing of inaccurate particulars and penalty proceeding would be justified - ....