TaxTMI 
TaxTMI 
2025 (4) TMI 939
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....er was called for hearing, the Ld. Counsel adverted to the petition dated 16.12.2014 under Rule 27 of the Income Tax (Appellate Tribunal) Rules, 1963 placed by the assessee with a prayer to examine the legality of assumption of jurisdiction under s. 147 of the Act. 3.1. It was contended that above ground is a legal ground and its adjudication does not require any intense investigation and relevant facts are explicitly available on record. It was entitled to support the outcome of the order of the CIT(A) on all grounds including the grounds taken in the impugned petition which was also raised before the CIT(A) although adjudicated against the assessee. The Ld. Counsel pointed out that the jurisdiction assumed under s. 147 in the instant case is outside the sanction of law and therefore, consequential assessment order itself is vitiated in law owing to exercise of nonest jurisdiction. 3.2. The Ld. Counsel also submitted that the first appellate order cannot be faulted with on merits. Notwithstanding, the legality of assumption of jurisdiction is required to be examined by the Tribunal. 3.3. To begin with, we advert to the objections raised by the assessee in terms of applica....
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....Top Promoters P.Ltd. Axis 5000000 248615 07.07.2008 AD Fin Capital Services Axis 2500000 120238 19.08.2008 Humtum Marketing P.Ltd. Axis 2500000 128027 19.07.2008 Virgin Capital Services Axis 2500000 229868 19.07.2008 Euro Asia Mercantile P.Ltd. Axis 2500000 252494 19.07.2008 Shalini Holdings Ltd. Axis 2500000 252407 22.07.2008 Shalini Holdings Ltd. Axis 2500000 229872 22.07.2008 Euro Asia Mercantile P.Ltd. Axis 2500000 128031 22.07.2008 Virgin Capital Services Axis 2500000 120239 22.07.2008 Hum Tum Marketing P.Ltd. Axis Copies of handwritten papers seized from residence of Sh. SK Jain have also been forwarded from the wing. The middleman involved in helping the assessee take these entries has been named as Mr Vijay Gupta. Thus, the assessee has ploughed back unaccounted money of Rs 3 crores in its business through the channel of accommodation entry. The assessee has also paid commission of 1.75% in cash on the same. Therefore, it is failure on the part of the assessee to disclose fully and truly all material facts necessary for ....
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....which is wholly distinct from the pre-eminent expression 'reason to believe'. The 'reason to believe' is the fulcrum for exercise of powers under s. 147 of the Act. The 'believe' fostered, although subjective in nature, must trigger from reasons which are objective in nature and need to be based on something tangible and substantive. The 'belief on escapement' thus could not have been made in the instant case in the absence of any objective material referred in the reasons recorded. [ii] In the absence of any reference to any tangible material showing involvement of assessee in obtaining any accommodation entry as alleged, the approval granted by the Competent Authority under s. 151 of the Act is clearly mechanical. A mechanical approval would thus not permit the AO to re-open the assessment earlier completed under s. 143(3) of the Act. Such mechanical approval has thus also vitiated the assumption of jurisdiction under s. 147 of the Act standalone basis. [iii] The AO, while recording the reasons under s. 148(2) of the Act, has even not cared to take cognizance of the basic information that assessment was earlier carried out under s. 143(3) of the Act. The impact ....
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....s no reference or particulars about the date on which the information was received by the AO. There is also no reference of any objective particulars which led the AO to believe towards escapement of chargeable income. The AO has merely quoted the entries routed through banking channels from various parties which were alleged to be accommodation entries. No basis has been referred to show his application of mind on the material if any, to implicate the assessee with such vicious allegation. 8.1. A plain reading of reasons would clearly show that re-opening proceedings have been initiated based on some generalized and uncorroborated information. There does not appear any application of mind on the so-called information (contents not available) collected by the AO. The circumstances narrated in the reasons recorded would show that the AO has proceeded on dotted lines as dictated in the information received. 8.2. The reasons recorded apparently vouches for the fact that no immediate nexus or live link is reflected between any tangible material and the corresponding 'belief' thereon towards escapement. 8.3. The Hon'ble Delhi High Court in its judgement in W.P.(C). 13273/2018 i....
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....eld to be void ab-initio and thus consequential re-assessment order is bad in law and therefore stands quashed. 11. The Revenue has challenged the justification advanced by the CIT(A) while granting relief to the assessee on merits of the case. The relevant operative para of the order of the CIT(A) dealing with the aspects of merits are reproduced as under:- ".......I have gone through the facts of the case, grounds of appeal, observations of the Assessing officer in the assessment order dated 18.03.2015, written submissions and paper book of the appellant company and case laws relied upon by the appellant and considered them. On perusal of the assessment record for the assessment year, it is seen that the appellant has furnished all the relevant details pertaining to the share capital and share premium that were called for by the Assessing Officer, and in response to the aforesaid notice, appellant furnished various details pertaining to the share capital and share premium from 7 companies. The evidences furnished by the assessee during the course of the assessment proceedings are as under: i. Copy of share application ii. Confirmation iii. C....
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....d has confirmed the investment made in assessee company. Further, from the perusal of the balance sheets of such companies it has been found that such companies have sufficient reserve and surplus and investment has been made by account payee cheques as such creditworthiness cannot be disputed. As such, share capital received by the assessee cannot be held to be not genuine. That the Apex Court in the case of CIT vs. Lovely Export 216 CTR 195 has held that if the share application money is received by the assessee company is from alleged bogus shareholders, whose names are given to the AO, then the Department is free to proceed to reopen the individual assessments of share applicants and addition cannot be made in the hands of the assessee. The AR of the appellant has relied on various other case laws of the Hon'ble Jurisdictional High Court, and other High Courts and Hon'ble Tribunal on this issue which are not reiterated here as they are embedded in the written submission furnished by the appellant company. Respectfully following the aforesaid judgments relied upon by the appellant on this issue, I hold that the appellant has discharged its onus cast upon it as p....