TaxTMI 
TaxTMI 
2022 (10) TMI 1313
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....nt and prima facie investigation of information received. 2. That the learned CIT(A) has failed to appreciate the facts that the assessment order passed U/s 143(3) r.w.s. 147 by learned A.O. is null and void and without jurisdiction. 3. Whether on the facts and in the circumstances of the case and in law the learned CIT(A) is justified in holding that the notice issued U/s 148 dated 25.3.2013 and served by affixture on the next day ? 4. That the proceedings U/s 147 initiated by learned A.O. on the basis of information received from search cases and assessment made U/s 143(3) r.w.s. 147 by learned A.O. and confirmed by CIT(A) is not in accordance with the provisions of the Act which deserves to be cancelled. 5. That the assessment order was passed on the basis of informations received from third party and appellant has specifically asked for an opportunity to cross- examination of parties on the basis whose statement, reopening of assessment was made U/s 143(3) r.w.s. 147 is in gross violation of natural justice, hence assessment be held as illegal bad in law and void. 6. That the learned A.O. who has issued notice U/s 148 by recording re....
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.... of Pradip Overseas Group as under:- Sr. No. Name of the company Whose share are subscribed No of Share Rate per share including premium Total Amount Paid Date of Allotment 1. Pradip Overseas Ltd ( Formally known as Chetan Textiles Ltd 25,000 40 10,00,000 31.03.06 2. Pradip Enterprise Ltd (Formally known as Pradip Overseas P. Ltd 80,000 25 20,00,000 31.03.06 3. As discussed above Shri Pradip Kumar J. Karla, in his statement recorded u/s. 132(4) of IT Act, has admitted on record that introduction of unaccounted income by the assessee in above two companies in the form of share application and premium money. Since the assessee has subscribed to the shares at huge premium and the aforesaid two complains have failed to prove the genuineness of the above credits received from the assessee, income to the extent of Rs 30,00,000 has escaped assessment within the meaning of section 147 of IT Act I am, therefore, satisfied that this fit case for issue of Notice u/s 148 of IT Act . Issue Notice u/s 148 of IT Act. 5. Referring to the same, the ld. counsel for the assessee contended that while information in the possessi....
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....e appellant's objections to the reasons recorded for reopening are not acceptable." 7. We have heard both the parties, perused the contents of the reasons recorded carefully and also gone through the findings of the Ld. CIT(A).We find merit in the contention of the ld. counsel for the assessee that there was no live nexus between the information with the AO and formation of belief of escapement of income of the assessee by the AO. As has been pointed out by the ld. counsel for the assessee, and is evident from para-1 of the reasons recorded reproduced above, the information which the AO had was regarding unaccounted income of Pradeep Overseas group being introduced back into it by way of investment by shell companies in the share capital of the group companies at premium. The assessee, before us, as per the information with the AO, is an investor in the Pradeep Overseas group of companies having subscribed to share capital of two companies of POL group. Surely, there was no information regarding unaccounted income of the assessee with the AO but on the contrary the information related to unaccounted income of POL group. On the basis of this information the AO could not have poss....
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....d. The AO's act of reopening the cases of the investors of share capital in Pradeep overseas group companies therefore, solely on the basis of this information is premature and not justified even considering the judgement of the Hon'ble apex court in the case of Lovely Exports (supra). 9. Taking up the next argument raised by the ld. counsel for the assessee that the assessment framed under section 147 of the Act was not sustainable in law for the reason that no addition had been made relating to the income which had escaped assessment as per the reasons recorded by the AO. In this regard, he pointed out that though as per the reasons recorded, the amount of Rs.30 lakhs invested by the assessee by way of share capital in two companies of POL group was the income of the assessee which had escaped the assessment, in the assessment framed under section 147 of the Act, no addition was made on this count and the addition made related to the share capital introduced in the assessee-company amounting to Rs. 78 lakhs. The ld. counsel for the assessee drew our attention to para-19 of the assessment order wherein he pointed out that even the AO has noted the fact as under: "19. I....
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.... the appellant in its books of account. It may also be mentioned here that as per the original return of income, the appellant had not shown any income for the AY 2006-07. On enquiry made, the AO found that the bank account had been opened on 01.03.2006 by depositing cash of Rs.1,000/-. Within one month the appellant company had received an amount of Rs.78 lakhs from persons listed in paragraph 15 of the assessment order. Out of such persons, in respect of Ninaram Prajapati, Kheta Ram Himaji Patel and Rajaram Prajapati, it was reported by their jurisdictional AO that they were not available at the addresses given against their name. Further, the appellant did not furnish any confirmation from the investors. Thus, the identities of persons were also not furnished. 4.12.2 Further, the AO found that the appellant could provide copies of the return of income in respect of six persons. But, even in respect of these persons, the income reflected in their returns was very nominal and hence, there capacity of making investment to such share application money could not be established. Thus, the AO held that the identity and creditworthiness of the share applicants could not be esta....
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....s, was rightly believed by the AO to be representing his unaccounted income. And proceeding there from he held that when further investigation regarding the source of investment of Rs.30 lacs was made by the AO, it was revealed that the assessee had issued share capital of Rs. 78 lacs. The assessee thereafter on inquiry of the genuiness of the source of this Rs. 78 lacs was unable to prove the same and accordingly this amount of Rs.78 lacs was added to the income of the assessee. The Ld. CIT(A) therefore held that this addition made by the AO was the origin of and formed part and parcel of the income which the AO believed had escaped assessment. He accordingly rejected the argument of the assessee that the reopening was resorted to for a different income while addition ultimately was not made of the same but some other income. 14. But since we have rejected the basic premise of the Ld. CIT(A), on which he has dismissed this argument of the assessee, that the AO's belief of escapement of income was well founded, the findings of the Ld. CIT(A) are also of no relevance. 15. We shall now deal with the contention raised by the Ld. Counsel for the assessee challenging the validity ....
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....e assessee company e-filed its return of income Baroda for the assessment year 2006-07 on 21.01.2008 declaring total income at Rs. NIL. The same was processed under section 143(1) on 24.03.2009. On verification of the return filed by the assessee on ITD it was found that though the assessee has shown share capital of Rs. 83,00,000/- and investments of Rs 78,00,000/- there was no income offered to tax. It is pertinent to mention that a search u/s 132 of the I. T. Act was carried out in the case of Pradip Overseas group on 21.09.2010 by the investigation wing Ahmedabad. During the course of search proceedings Shri Pradip Kumar J Karla, in his statement recorded u/s 132(4); of the I T Act admitted that he had introduced unaccounted income through Bhavi Leasing & Finance Pvt. Ltd in the following two companies in the form of share application and premium money, to the extent mentioned against each company 1 Rs. 10,00,000/- in 25000 shares of Pradip Overseas Ltd. formerly known as Chetan Textiles. 2 Rs 20,00,000/- in 80000 shares of Pradip Enterprise Ltd. 3. Subsequently the assessment was re-opened by issue of notice u/s 148 of the IT Act on 25/03/2013, after....
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....elevant information. On 14.03.2014 a report was received from the Assessing Officers to whom commission was issued stating that the directors Mr Ninaram Prajapati and Mr Rajaram Prajapntt could not be found at the given address. Inquiries made by their ward inspectors revealed that no such persons existed and no company by the name of Bhavi Leasing & Finance Pvt. Ltd. presently existed there. Meanwhile in the first week of March a telephone call was received from one Mr. Vasudev Upadhyay CA from Ahmedabad inquiring whether ex-parte order had been reused, or whether lie still had the opportunity to submit his case. He was informed that he could furnish any details in support of the case by 10.03.2014. On the stipulated date Shri Upadhyay attended furnished an authority letter as well as response to the notice under section 142(1) the gist of which is as follows :- The assesses claimed to have received the notices on 11.01.2014 and stated that the registered office of the company was shifted to Ahmedabad on 20/06/2006 at present address of 36/3 Sindhi Comm Market since 05/04/2013. A request for transfer if case record from Baroda to Ahmedabad had been submitted on 2....
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....ies with the undersigned. Beyond writing a single letter the assesses has not bothered to pursue the issue of transfer of case records either with the AO at Ahmedabad or before ITO 1(1) Baroda. Hence now when proceedings u/s 148 have been initiated the assesses is objecting to the jurisdiction on 26.03.2014; at the eleventh hour. Knowing very well that it is not possible to get the PAN transferred afford due opportunity etc as the limitation for assessment will expire on 31.03.2014. By the assessee's own admission, it had received the notice ON 11.01.2014. The assessee did not raise this objection when it had more than 11 weeks to get the case transferred, when it would have been possible for the undersigned to accede to its request for transfer. Now the same cannot be done even if the undersigned wants to for fear that the limitation for finalization may expire pausing a loss to revenue." 20. We have heard the rival contentions. We do not find any merit in the assesses challenge to the validity of the reopening in the present case u/s 147 of the Act on the ground of notice u/s 148 issued for assuming jurisdiction to frame assessment u/s 147 of the Act was issued by AO who d....
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....ase of PAN is must, in case of change in the name of the company and/or any change in the registered office or the corporate office and the same has to be intimated to the Registrar of Companies in the prescribed format 12 (Form 18) and after completing with the said requirement, the assessee is required to approach the Department with the copy of the said document and the assessee is also required to make an application for change of address in the departmental database of PAN, which in the present case the assessee has failed to do so. 8. Now so far as the submission on behalf of the assessee that with respect to the Assessment Years 2004-05 and 200506, communications and the assessment orders were sent at the new address and therefore the Assessing Officer was in the knowledge of the new address is concerned, the same has been sufficiently explained by the Revenue. 9. In view of our findings, recorded hereinabove, the impugned judgment and order passed by the High Court as well as the orders passed by the learned C.I.T (Appeals) and the I.T.A.T holding the assessment order bad in law on the aforesaid ground cannot be sustained and the same deserve to be quashed....