TaxTMI 
TaxTMI 
2018 (9) TMI 2154
X X X X Extracts X X X X
X X X X Extracts X X X X
....sed u/s. 143(1) of the Act. Subsequently, on the basis of information received from the Investigation Wing of the Department that the assessee has paid on money amounting to Rs. 79,26,400/- to M/s. Crescendo Associates, a concern of Hiranandani Group, towards purchase of flat, the Assessing Officer re-opened the assessment u/s. 147 of the Act and issued notice u/s. 148 of the Act on 30.03.2014 to the assessee. In response to the notice issued u/s. 148 of the Act, assessee vide letter dated 10.04.2014 requested the Assessing Officer to treat the return filed originally as the return in response to the said notice. Further, the assessee also requested the Assessing Officer to furnish the reasons for re-opening the assessment. Be that as it may, in the course of assessment proceedings, the Assessing Officer on the basis of the information available with him called upon the assessee to explain the source of payment of on money in cash amounting to Rs. 79,26,400/-. The AR of the assessee appeared from time to time before the Assessing Officer and furnished the details. Further, the assessee was asked to furnish the documents/material available regarding the payment of on money for purch....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... purchase of flat was made through banking channels. However, the flat could not be registered in assessee's name before F Y 2007-08 because of the order of the Hon'ble Bombay High Court. Thus, having found that the addition made on account of on money was without any cogent material/evidence, the CIT(A) deleted the addition. 5. The learned DR relied upon the observations of the Assessing Officer and submitted that during the assessment proceedings, the assessee has not furnished all the details called for by the Assessing Officer, thus, the assessee could not prove the fact that on money was not paid for the purchase of flat. The learned DR submitted, when the Assessing Officer was in possession of evidence found during the search and seizure operation indicating payment of on money, it was the duty of the assessee to come clean on the issue. Thus, he submitted, the addition made by the Assessing Officer should be restored. 6. The learned AR challenging the validity of re-opening of assessment u/s. 147 of the Act submitted, while issuing notice u/s. 148 of the Act, the Assessing Officer has not obtained the sanction of the prescribed authority as per section 151(2) of the Act. D....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in case of Nikhil Vinod Aggarwal in ITA No. 2574/Mum/2017 dated 13.10.2017 should be followed. 7. We have considered rival submissions and perused material available on record. At the outset, we propose to address the legal issue raised by the assessee in the cross objection, concerning the validity of assessment order passed u/s. 143(3) read with section 147 of the Act. The first contention of the assessee challenging the validity of assessment order is, before issuing notice u/s. 148 of the Act, the Assessing Officer has not obtained sanction of the appropriate authority as prescribed u/s. 151 of the Act. As could be seen from the facts on record, in the case of the present assessee, prior to the reopening of assessment u/s. 147 of the Act, there was no assessment completed u/s. 143(3) of the Act. Therefore, the provisions of section 151(2) of the Act, as it existed during the relevant assessment year would apply. As per the said provision, in a case where four years have expired from the end of the relevant assessment year, no notice u/s. 148 of the Act can be issued by the Assessing Officer without obtaining the sanction of the Joint Commissioner of Income Tax (JCIT). Thus, a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... from a higher authority does not satisfy the statutory mandate. That being the case, we hold that in absence of sanction / approval from the authority prescribed under section 151(2) of the Act, issue of notice under section 148 is invalid. Consequently, the assessment order passed in pursuance thereto is also invalid. In support of our aforesaid conclusion, we may refer to the decision of the Hon'ble Delhi High Court in case of CIT v/s Soyuz Industrial Resources Ltd., [2015] 232 taxman 414." Moreover, it is relevant to observe, in course of assessment proceedings, the assessee has specifically objected to the validity of the proceedings initiated u/s. 147 of the Act. However, before completion of assessment, the Assessing Officer has not disposed of the objections of the assessee. For that reason also the assessment order passed u/s. 143(3) read with section 147 of the Act has to be declared as invalid, hence, deserves to be quashed. 8. Having held so, we propose to deal the issue on merit also as, in our view, the assessee has a strong case on merit. It is evident from the assessment order, the Assessing Officer has primarily relied upon certain information received from t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion carried out in the case of Hiranandani Group. Further, he has relied upon the statements recorded from the directors and promoters of Hiranandani Group in course of search. However, though, the assessee in the course of assessment proceedings, has repeatedly requested the Assessing Officer to provide the information / adverse material in his possession, neither such adverse material was provided to the assessee nor confronted to him. Further, the statement recorded from third parties which were relied upon by the Assessing Officer for making the addition were neither confronted to the assessee nor the assessee was Shri Nikhil Vinod Aggarwal permitted to cross-examine the concerned persons. Neither in the assessment order the Assessing Officer has discussed in detail the nature of information / material available with him directly implicating the assessee for paying on-money for purchase of flat nor the learned Departmental Representative has brought on record any such material as may be available with the Assessing Officer. It is evident from the assessment order,, the Assessing Officer without disclosing adverse material / information available with him to the assessee during ....