TaxTMI 
TaxTMI 
2025 (7) TMI 315
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....ssessment and therefore ought to have held that the entire re-assessment proceedings are invalid, bad in law and without jurisdiction and in the process therefore ought to have annulled the re-assessment proceedings. 3. The learned CIT(A) on a wrong foundation of reasoning and non-appreciation of facts and merely on the basis of statement of the appellant on 07/01/2009 which related to M/s. Satyam Computer Services Limited (SCSL) came to an erroneous conclusion that the income escaping assessment belonged to the appellant and hence erred in upholding the re-assessment proceedings u/s. 147 r.w.s 148 of the Act. 4. The learned CIT(A) failed to note that the nexus or live link between the reasons recorded and income escaping assessment and further failed to note that the entire reassessment proceedings was after a period of four years and failed to note that there was no omission or failure on the part of the appellant to disclose truly and fully all the material facts necessary for completion of the original assessment u/s. 143(3) on 17/3/2006 wherein the income assessed was Rs. 2,99,95,090/-. 5. The learned CIT(A) failed to note that no additions were made....
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....to amend or alter any ground or add any other grounds which may be necessary." 4. Briefly stated facts of the case are that, the assessee is an individual and Chairman of M/s. Satyam Computer Services Limited [in short "M/s. SCSL"], filed it's return of income for the assessment year 2003-2004 on 30.09.2003 declaring an income of Rs. 2,99,95,090/-. The assessment has been completed u/sec.143(3) of the Income Tax Act, 1961 [in short "the Act"] on 17.03.2006 and accepted the income returned by the assessee. The assessment has been subsequently reopened u/sec.147 of the Act and notice u/sec.148 of the Act dated 26.03.2010 was issued and served on the assessee. The assessment has been reopened on the basis of reasons recorded, as per which, income chargeable to tax has been escaped assessment on account of confession statement given by Shri B. Ramalinga Raju-Assessee, Chairman of M/s. SCSL on 07.01.2009 in his letter sent to the Board of Directors with a copy marked to Securities Exchange Board of India [in short "SEBI"] that, the books of accounts of M/s. SCSL have been fudged for the last several years to manipulate the book results. He has filed a detailed letter indicating vario....
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...., has issued a detailed questionnaire u/sec.142(1) of the Act on 17.06.2011. Further, in the meantime, a forensic audit report has been obtained from KPMG and in the said report, certain observations has been made with regard to foreign bank account held by the company and it's operation. The Assessing Officer after considering various evidences filed by the assessee coupled with Special Audit Report submitted by the Special Auditor and also forensic Audit Report submitted by the KPMG, has completed the assessment u/sec.143(3) r.w.s.147 of the Income Tax Act, 1961 on 04.08.2011 and determined the total income of the assessee at Rs. 504,65,27,908/- by making additions towards interest income on accrual basis, addition towards unexplained credits and addition towards undisclosed income being unmatched salary payments from the bank accounts of the company held at Vienna. 6. Being aggrieved by the assessment order passed by the Assessing Officer, the assessee preferred an appeal before the learned CIT(A). Before the learned CIT(A), the assessee has challenged the validity of the reopening of the assessment and contended that, there is no live nexus between the 'formation of belief o....
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....estigating Agency on misappropriation of funds or diversion of funds and further, the charge-sheet mainly mentions about the inflation of revenues in the hands of the Company and corresponding creation of artificial cash and bank balances. Further, the company has declared turnover as per fudged accounts and whatever dividends received by the appellant, were accounted and declared for taxes. The so-called fudging of accounts may have a bearing on the assessment of the Company, but, it has no relevance to the individual assessment as there is no allegation of misappropriation of funds or diversion of funds. Therefore, un-reconciled amount in the hands of the Company, if any, cannot be treated as income of the assessee. Therefore, directed the Assessing Officer to delete the addition. 9. Aggrieved by the order of the learned CIT(A), the Assessee as well as the Revenue are in appeal before the Tribunal. 10. CA, K C Devdas, Learned Counsel for the Assessee, referring to the reasons recorded by the Assessing Officer for reopening of the assessment submitted that, the original assessment in the present case has been completed u/sec.143(3) of the Act on 17.03.2006. Notice u/sec.148 ....
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....of the assessee is illegal and incorrect and cannot be sustained. Therefore, he submitted that, the additions made by the Assessing Officer should be deleted. 12. Shri B. Bala Krishna, learned CIT-DR, on the other hand, supporting the order of the learned CIT(A) on the issue of validity of reopening of the assessment submitted that, there is fresh tangible material in the form of confession statement given by the assessee to the Board of Directors of M/s. SCSL and copy marked to SEBI which clearly shows fudging of accounts of Company with corresponding diversion of funds to various group companies of the appellant. Further, the appellant himself has stated that, there are understated liabilities to the tune of Rs. 1230 crores and the same has been funded by himself which is having a bearing on the total income of the appellant. Since, there is enough material which suggest escapement of income, which came to the possession of the Assessing Officer, subsequent to the completion of the original assessment u/sec.143(3) of the Act, the Assessing Officer has reopened the assessment on sound footing. The learned CIT-DR further, referring to the decision of Hon'ble Supreme Court in the....
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....fficer, there is a fresh tangible material in the form of confession letter which suggest escapement of income in the hands of the assessee and thus, completed the assessment by making various additions including addition towards unaccounted income being un-reconciled payments from bank account held in the name of the Company at Vienna. 15. We had given due consideration to the relevant facts in light of arguments of the Counsel for the Assessee on the issue of reopening of the assessment and additions made by the Assessing Officer towards unaccounted income and we find that, there is no dispute on the issue of fudging of accounts of M/s. SCSL because, the appellant himself has admitted in his letter dated 07.01.2009 addressed to the Board of Directors of the Company with a copy marked to the SEBI that, the books of accounts of the assessee company have been fudged. It is also note in dispute that, on the very same day, the Government of India intervened by filing a petition before the Company Law Board to suspend the existing Board of Directors and takeover the Company in the interest of employees and shareholders. The Company Law Board vide order dated 09.01.2009 approved the ....
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....guments advanced by both the sides, in light of Judgement dated 31.01.2025 of Hon'ble High Court for the State of Telangana at Hyderabad in W.P.Nos.23255, 17528, 17526, 19622 of 2011, W.P.No.3906 of 2012 and W.P.No.9667 of 2013. We find that the Hon'ble High Court for the State of Telangana at Hyderabad vide it's Judgment dated 31.01.2025 has allowed the above mentioned six writ petitions filed by the assessee and took the W.P.No.23255 of 2011 as a "lead" case and framed substantial issues involved in all writ petitions filed by the assessee and answered the issues raised by the appellant-company in paras 71 to 76 of it's Judgment which has been reproduced hereinabove in the preceding paragraphs. As per the Judgment of the Hon'ble High Court for the State of Telangana at Hyderabad, the assessment for the assessment years 2003-2004 to 2008-2009 are held to be illegal and violative of Article 265 of the Constitution of India and also void ab initio. The Hon'ble High Court for the State of Telangana at Hyderabad directed the respondents no.1 and 3 to re-quantify/re-compute the income of the petitioner-company by conducting a fresh and appropriate assessments for the assessment years 2....
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.... total income of the appellant for the year under consideration because, the appellant himself in his letter dated 07.01.2009 stated that, there is an understated liability to the tune of Rs. 1230 crores and the same has been funded by himself. Further, the Assessing Officer in the reasons recorded for reopening of the assessment has brought-out various facts including investment by the appellant in the group companies and various intra-group transactions between M/s. SCSL and other group companies including the appellant. Further, the additions made by the Assessing Officer towards unaccounted income being un-reconciled payments from bank account held in the name of M/s. SCSL at Vienna has been made on the basis of forensic audit report submitted by KPMG without providing a copy of said forensic audit report to the assessee for his comments and rebuttal. Since the forensic audit report is the basis for additions in the hands of the assessee and further, the assessment of M/s. SCSL has been set-aside to the file of Assessing Officer for reconsideration for considering re-casted books of accounts, in our considered view, the assessment of M/s. SCSL [M/s. Tech Mahindra Limited] is de....