TaxTMI 
TaxTMI 
2025 (12) TMI 292
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.... taken as the lead case and the decision rendered thereon shall apply mutatis mutandis for Assessment Year 2016-17 in ITA No. 3013/Del/2025 also except with variance in figures. 2. The assessee has raised the following grounds of appeal before us:- "1. That the Assessing Officer (AO) erred both on facts and in law in passing the impugned assessment order dated 29.03.2022 under section 147 read with section 144 and 1448 of the Income-tax Act, 1961 ("the Act"), wherein the income of the appellant was erroneously assessed at Rs. 2,26,86,550/- as against the returned income of Rs. 1,52,86,550/- The said order is bad in law, being contrary to facts and passed in violation of the principles of natural justice 2. That the reassessment is barred by limitation under section 149 of the Income Tax Act, 1961, as the notice under section 148 was issued on 01.04.2021, beyond the permissible time limit prescribed under the law. 3. That the learned Assessing Officer erred in initiating reassessment proceedings without adhering to the mandatory procedure under the amended reassessment regime introduced by the Finance Act, 2021, effective from 01.04.2021, and has also f....
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....ation was received from Joint Director of Income Tax (Investigation), Unit-1, New Delhi about certain accommodation entries obtained by the Assessee from bogus concerns managed and operated by Anand Kumar Jain and Naresh Kumar Jain, on whom search and seizure action under Section 132 of the Act was carried out by the Income Tax Department. Details of concerns who had taken accommodation entries from Anand Kumar Jain and Naresh Kumar Jain was conveyed through this information. It was seen that the Assessee M/s Ess Gee Trendz Pvt. Ltd. was one of the beneficiaries of this arrangement for tax evasion. As per this information, the Assessee had taken accommodation entries amounting to Rs. 74 lakhs. Accordingly, the reasons for reopening were recorded and case of the Assessee was reopened under Section 147 of the Act. Notice under Section 148 of the Act dated 31-03-2021 was duly issued. The reasons recorded for reopening the assessment are as under:- "1. The assessee flied its return income of Rs. 14701230/- for the year under Act, 1961 dated 24/12/2017 at an assessed income of Rs. 15286550/-consideration on 30.10.2015. The case was scrutinized vide order u/s 143(3) of the 1.7 ....
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....cts and hence the above conclusion that income has escaped assessment is not merely based on change of opinion. Hence, necessary sanction u/s 151(1) to issue notice u/s 148 of the Act, for A.Y. 2015-16 is required to assess the escaped income and also any other income which may subsequently come to the notice during the course of assessment proceedings." 4. In response to the notice issued under section 148 of the Act for assessment year 2015-16 dated 31-3-2021, no return of income was filed by the Assessee Company. Hence there was no occasion for the Learned AO to issue notice under section 143(2) of the Act and accordingly the assessment was sought to be concluded under section 144 of the Act, prior to which notice under section 142(1) of the Act was duly issued to the Assessee. Finally, a show-cause notice dated 23-2-2022 was issued to the Assessee and the Assessee was asked to show-cause why assessment proceeding should not be completed under section 144 of the Act by adding a sum of Rs 74 lakhs to the total income of the Assessee. In response to the said show-cause notice, the Assessee submitted its written reply on 8-3-2022 which is reproduced as under:- "Sir, Ass....
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....ately." 6. We find that in the reasons recorded for reopening the assessment, the learned AO had stated that assessee had taken accommodation entries in the form of bogus expenses from entities controlled and operated by Jain Brothers. However, in para 8.3 of the assessment order in the concluding portion of the assessment order, the learned AO states in point number 2 that assessee had received Rs 74 lakhs from concerns of Jain brothers. This itself goes to prove that the learned AO was not even clear as to the nature of transactions, if any, the assessee had with the entities controlled and managed by Jain brothers. Whereas, the assessee had categorically stated that it had no transactions whatsoever with any of the entities controlled and operated by Jain brothers. The assessee could not be expected to prove the negative when it had denied having any transactions with the entities. That would result in impossibility of performance for the Assessee and the legal maxim "LEX NON COGUT AD IMPOSSIBLIA", meaning thereby - "the law cannot expect a person to perform a task which he could not possibly perform", would come to the rescue of the Assessee. Further, in the in the entire re....