TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 695
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....describing the reason behind such action and ignoring the law that reasons to believe cannot be altered, changed or supplemented. There are major deviations in both the reasons which renders the reopening of case as illegal, invalid in law and void-ab-initio. 2. On the facts and circumstances of the case and in law, the assessment order passed by the assessing Officer liable to be quashed as there is no valid sanction/ approval of the specified authority u/s 151 of the Income Tax Act, 1961 for issue of notice u/s 148 of the Act. Even delayed approval received by Ld. AO on 30.03.2019 was given on wrong facts, which is not related with the facts of the case. The above said issue is squarely covered by latest judgment of Hon'ble Delhi High Court in case of M/s Tia Enterprises Put. Ltd. vs ITO vide W.P.(C) 13903/2018, which was delivered on 26.09.2023. Hon'ble Apex Court also dismissed the SLP on 13.09.2024, which was filed by department against above said judgment of Delhi High Court. 3. That on the facts and in the circumstances of the case and in law, Ld. CIT-Appeals erred in sustaining the order passed by ld. AO u/s 147/143(3) without appreciating that "ru....
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....d in response to reasons recorded were never disposed off by a speaking order before passing the final assessment order, which has invalidated the entire proceedings, since objections should be disposed off point wise properly as directed by Apex Court in GKN Driveshafts reported in 259 ITR 19. 7. That on the facts and in the circumstances of the case and in law, Ld CIT- A erred in sustaining the order passed by Ld. AO u/s 147/ 143(3) without appreciating that notice u/s 143(2) issued without waiting for GKN Driveshaft procedure to be exhausted is invalid. Rather Ld. AO issued notice u/s 143(2) dated 23.04.2019 on the very same day when assessee company has filed its ITR against the notice u/s 148 of the Act which makes notice u/s 143(2) as invalid and resultantly, the assessment is vitiated and is liable to be quashed. Matter is directly covered by the judgment of Hon'ble Delhi High Court in the case of Director of Income Tax Vs. Society for Worldwide Inter Bank Financial, Telecommunications in ITA No. 441/2010, reported at 323 ITR 249. 8. That on the facts and in the circumstances of the case and in law, Ld CIT- A erred in sustaining the order passed by Ld. ....
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....omes subsequently to his notice. 12. On the facts and circumstances of the case and in law, the notice under section 148 of the Income Tax Act, 1961 issued in the case is bad in-law, void and without jurisdiction. 13. Ld. AO as well as Ld. CIT(A) has erred on facts and in law in relying upon case laws without appreciating that the facts of present case are distinguished from the facts of relied upon cases. 14. The above grounds of appeal are independent and without prejudice to one another. 15. The detailed submission shall be filed at the time of hearing before your honor. 16. Your appellant craves leave to add, alter, amend, modify, rescind, supplement or alter any of the grounds of appeal stated herein above, either before or at the time of hearing of this appeal." 2.1 The substantive issues raised in this appeal are categorized in two heads; (i) whether the reopening of assessment under section 148 of the Income Tax Act, 1961 ('Act') in absence of valid reasoning and approval thereof under section 151 of the Act is valid in the eyes of the law and (ii) merit of addition of Rs. 55,00,000/-. 3. The relevant facts giving r....
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....ission dated 17.09.2024, emphasized on ground no. 2 only that challenges the reopening notice u/s 148 of the Act and reassessment order u/s 147 of the Act on the ground that the reassessment proceedings were commenced without the approval of the specified authority i.e. Pr. CIT. In this regard, the AO (DCIT Circle-1, Faridabad) was sought clarification on the issue. The AO, vide his letter dated 01.10.2024, (reproduced below) informed that approval was obtained from Pr. CIT. The extract of the letter of the AO dated 01.10.2024, along with the copy of ITBA order sheet, is reproduced below: Order sheet Details Date Action/Description From TO Document 26/03/2019 Submitted for Approval CIRCLE 1, FBD RANGE-1, FARIDABAD Notings/Remarks: Submitted for Approval Signature: 26/03/2019 Submitted for Approval RANGE-1, FARIDABAD PCIT, Faridabad Notings/Remarks:the assessee has deposited cash of Rs. 10,58,000/- in his saving bank account maintained with Axis Bank during Financial Year 2011-12 relevant to A.Y. 2012-13. Signature: 27/03/2019 Approve PCIT, Faridabad - ....
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....ine approval of the Ld. PCIT under section 151 of the Act contained inaccurate forwarding of the Range Head. The said noting of the Range Head referred to the cash deposit of Rs. 10,58,000/- in the Axis Bank saving account of the appellant assessee, which had no relevance with the facts of the case and the reason on which the case was proposed for reopening. He thus, contended that this clearly demonstrated non-application of mind by the Range Head and mechanical approval by the Ld. PCIT under section 151 of the Act. Further, the Ld. AR drew our attention to the following two different reasons recorded by the AO for reopening of assessment under section 148 of the Act: Reasons dated 22.03.2019 (Manual copy) Annexure -A 1. Name & Address of the assessee M/s Avon Containers Pvt. Ltd., 18/1, Mathura Road, Faridabad. 2. PAN No. AADCA3625M 3. A.Y. 2012-13 4. Status Company Reasons for issuance of notice under section 148 of the Income Tax Act, 1961 1. As per information available with this office, the assessee has filed his return of income for the A.Y. 2012-13 on 30.09.2012 declaring income of Rs. 46,06,870/-. The case w....
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....supportive evidence. Therefore, in absence of relevant/supporting documents, it is unable to justify the above mention entry and the same is liable to be treated as unexplained income of the assessee from undisclosed sources. Furthermore, it is evident that there is a "Live Link" between the material available on record and the escaped Income, as mentioned above. 5. From the above, it is clear that the assessee has obtained bogus entries of Rs. 80,00,000/- from Himanshu Verma (Entry operator). Therefore, in this case the income declared by the assessee is not the true income of the assessee for the year under consideration and the only requirement to initiate proceeding u/s. 147-is reason to believe which has been recorded in this case. In view of the above, the provisions of clause (c) of Explanation 2 of section 147. are applicable to facts of the case and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped assessment on the failure on the part of assessee to not disclose all material facts fully and truly during the course of assessment. 6. Keeping in view the statutory provisions, legal principles, and fact....
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....sive loss or depreciation Rs. 50,42,370/- Under assessment 10. Whether the provisions of section 150(1) are applicable, if the reply is in the affirmative, the relevant facts may be stated against item no. 11 & it may also be brought out that the provisions of section 150(2) would not stand in the way of initiating proceedings u/s 147 No 11. Reasons for the belief that income has escaped assessment As per Annexure-'A' (Dr. Aditya Prakash Bhardwaj,IRS) Asstt. Commissioner of Income Tax Circle-1, Faridabad 12. Whether the Pr. Commissioner of Income Tax, Faridabad is satisfied on the reasons recorded by the AO that it is a fit case for the issue of a notice u/s 148. Annexure -A 1. Name & Address of the assessee M/s Avon Containers Pvt. Ltd., 18/1, Mathura Road, Faridabad. 2. PAN No. AADCA3625M 3. A.Y. 2012-13 4. Status Company Reasons for issuance of notice under section 148 of the Income Tax Act, 1961 1. As per information available with this office, the assessee has filed his return of income for the A.Y. 2012-13 on 30.09.2012 declaring income of Rs. 46,06,870/-. The....
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....nd actual income generated by the assessee on account of bogus entry of Rs. 60,00,000/- during Financial Year 2011-12 relevant to A.Y. 2012-13. Therefore, I have reason to believe that the income to the extent of Rs. 60,00,000/- chargeable to tax, has escaped assessment for the assessment year 2012-13 within the meaning of section 147 of the Income Tax Act, 1961. In order to assess the above income or any other income which comes to my notice subsequently in the course of assessment proceedings u/s 147, I proceed to initiate proceedings u/s 147 of the I.T. Act, 1961 in the case for A.Y. 2012-13. 6. In this case more than four years have lapsed from the end of assessment year under consideration. Hence necessary sanction to issue notice u/s 148 is being obtained separately from Principal Commissioner of Income Tax as per the provisions of section 151 of the Act. Date: 23.03.2019 (Dr. Aditya Prakash Bhardwaj,IRS) Asstt. Commissioner of Income Tax Circle-I, Faridabad 4.3 The Ld. AR submitted that there were factual differences in the said two reasoning recorded by the AO. In reasons dated 23.03.2019 (electronic copy) the quantum of accommodation entry of ....
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....asoned order; therefore, the consequential assessment was not justified. 5. Per contra, the Ld. CIT-DR, placing emphasis on the finding of the Ld. CIT(A), contended that the reopening of the assessment was justified. 6. Now, we have to decide whether the approval under section 151 of the Act granted by the Ld. PCIT is valid and the same has been communicated to the AO prior to the issuance of notice under section 148 of the Act. We find merit in arguments of the Ld. AR that there are two separate reasons recorded by the AO for reopening of the assessment. Both proposals for reopening of the assessment have been sent, one through online and another manually, to the Ld. PCIT for approval under section 151 of the Act. Both reasoning recorded by the AO for reopening of the assessment differ as pointed out by the Ld. AR mentioned above in para 4.3. The Ld. CIT-DR failed to bring any material on the record to contradict the Ld. AR's submission that there are two different reasoning recorded by the AO for reopening the assessment which have been separately approved under section 151 of the Act. We, therefore, have taken note of the fact that there are two separate reasoning reco....
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.... TAX DEPARTMENT OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX. CIRCLE-I. NEW C.G.O. COMPLEX,B-BLOCK, NHL-IV, FARIDABAD, Tel: 0129-2410288 F.No. DCIT/C-1/PHD/2024-25/F88 E-mail: Faridabad.deitarincometax.gov.in Dated: 01.10.2024 The Commissioner of Income Tax (Appeal-3). Gurugram Sir. Sub: Appellate proceedings in the case of M/s Avou Containers Private Limited (PAN: AADCA3625M) for A.Y. 2012-13 regarding. Kindly refer to your office lener F.No. CITIA|-3/GGN/2024-25/147 dated 09.09.2024 on the subject cited alive, 2. In this regard, it is submitted that in the above -mentioned ease notice u/s [AB of the IT Act, 1961 was issued on 29.03.2019 for the A.Y. 2012-13/ Necessary prior approval in this case was obtained before Issuing notice u/s 148 from office of the Pr. Commissioner of Income Tax on 27:03.2019 through ITHA/System. Order sheet details of approval attached for your kind perusal Yours faithfully, Encl as above. (Utkarsh Gupta) Dy. Commisstaner of Income Tax, Circle 1. Faridabad Document 2 FORM FOR RECORDING THE REASONS FOR INITIATING PROCEEDINGS U/S 147 OF THE INCOME TAX_ACT, 1961 AND FOR OBTAINING APPROVAL OF THE PR. COMMISSIONER OF INCOME T....
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....ce under section 148 of the Income Tax Act, 1961 - reg. 5SZ- Refer to your office letter F.No. ACIT/C-I/FBD/2018-19/548) dated 23.03.2019 received in this office through Addl. Commissioner of Income Tax, Range-1, Faridabad's letter No. 2895 dated 24.03.2019 for seeking approval to issue notice under section 148 of the Income Tax Act for assessment year 2012-13. 1 have considered the proposal, assessment records and relevant documents/information and of the view that income has escaped assessment. Approval in this case is granted u/s 151(2) of the Act for initiating proceedings u/s 147 of the Act for the reasons stated below: Sr. No. of letter No. 548 19 4 dated 23.03.2019 M/s Avon Containers Pvt. Ltd., Name of the Assessee 18/1, Mathura Road, Faridabad (Sh./Smt./M/s) AADCA3625M PAN Assessment Year 2012-13 I agree with the proposal of the Assessing Officer. Despite opportunity given to the assessee through notice u/s 133(6), the assessee failed to explain the source of cash deposits. I am satisfied that there are reasons to believe that income chargeable to tax as indicated in the A.O.'s proposal has escaped assessment for the above mentioned Assessment Year.....