TaxTMI 
TaxTMI 
2026 (4) TMI 471
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.... Act, 1961 (hereinafter referred to as 'the Act') dated 18.12.2017 by the Assessing Officer, Income Tax Officer, Ward-16(2), New Delhi (hereinafter referred to as 'ld. AO'). 2. The Assessee has raised several grounds challenging the validity of assumption of jurisdiction under section 147 of the Act. The Assessee had also raised additional grounds on 18.3.2026. Since these are legal issues going to the root of the matter and facts relevant for its adjudication are on record, in view of the decision of the Hon'ble Supreme Court in the case of NTPC Ltd reported in 229 ITR 383 (SC), we are inclined to admit the additional grounds and take up the same first for adjudication. 3. We have heard the rival submissions and perused the materials....
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....ment proceedings are very wide, at the same time they are not all encompassing in nature. These powers are widely controlled by the words 'reason to believe' employed by the section. The reasons for formation of belief for reopening an assessment must have a rational connection or relevant bearing on the formation of the belief. The existence or otherwise of such a belief, on the part of the Assessing Officer, is not a mere question of limitation, but the very foundation of his jurisdiction. These words import the presence of the following four essential ingredients:- a) some material or materials and not mere fancy, imagination, speculation, suspicion ; b) a nexus between such material and the belief of escapement of inco....
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.... reads as under : Beneficiary's name Value of entry taken Instrument No. by which entry taken Date on which entry taken Signature Hotels Pvt Ltd. 500000 (AC No.-21060) 09-Oct-02 Name of account holder of entry giving account Bank from which entry given Branch of entry giving bank A/c No. entry giving account Swetu Stone PV SBP DG 50106" 14. The first sentence of the reasons states that information had been received from Director of Income-tax (Investigation) that the petitioner had introduced money amounting to Rs. 5 lakhs during the financial year 2002-03 as per the details given in the annexure. The said annexure, reproduced above, relates to a cheque received by the petitioner ....
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....perandi adopted by him while conducting his business. Merely because the Assessee had received some amount of Rs 1,00,00,000 on 23-6-2009 from one of the entities controlled by Shri Shirish C Shah, it cannot be automatically be concluded as an accommodation entry. First of all, whether it is a capital receipt or a revenue receipt was not mentioned in the reasons recorded by the Learned AO. The nature of receipt is not at all mentioned in the reasons recorded. Hence it is very clear that the opening has been made in the instant case only to make fishing and roving enquiries to ascertain the nature of credit of Rs 1,00,00,000 received by the Assessee from Prraneta Industries Limited. It is trite law that reopening of an assessment cannot be m....
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....crore on that account through regular banking channels. The details regarding the same had already been filed by the Assessee in the original assessment proceedings. The then Assessing Officer having taken due cognizance of the details furnished by the Assessee had resorted to frame the assessment under Section 143(3) of the Act without drawing any adverse inference on the amounts received from Prraneta Industries Limited in the sum of Rs. 1 crore on account of sale of shares. Hence, there cannot be any failure that could be attributed on the part of the Assessee to make full and true disclosure of all material facts that are relevant for the purpose of assessment. Admittedly in the instant case, the reopening has been done beyond four year....
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....aw proper legal or factual inferences therefrom. The Assessee is under no obligation to instruct the Assessing Officer what inference should be drawn from the disclosed materials. Mere subsequent receipt of material or information from DCIT Central Circle 2(2), Mumbai or later formation of a different inference by the department does not override the statutory protection contained in the first proviso to section 147 of the Act. Hence, the ratio of the aforesaid decision of Hon'ble Supreme Court squarely applies to the instant case. Similar view was taken by the Hon'ble Supreme Court in yet another decision in the case of PCIT vs L&T limited reported in 113 taxmann.com 48 (SC). Further, the Hon'ble Jurisdictional Delhi High Court in the case....