TaxTMI 
TaxTMI 
2025 (3) TMI 1687
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....ard 1(1)(1), Surat. Subsequently, the case was transferred to Income Tax Officer, 9(1)(2), Mumbai, who issued statutory notices specifically dated 10.07.2018 u/s 142(1) as well, however, the same was returned by the Postal Authority with the remarks "no such address is found". Thereafter, various other statutory notices were issued to the Assessee, however, the Assessee made no reply. In the meantime, a notice u/s 133(6) of the Act on dated 27.06.2018 was issued to Union Bank of India, Bank: Surat Branch, requesting to provide bank statements of the Assessee for the period from 01.04.2011 to 31.03.2018. The Union Bank of India vide its reply dated 05.07.2018 furnished copy of the bank statements for the aforesaid period. On perusal of the bank statements, it was observed by the Assessing Officer (AO) that on dated 20.03.2012, an amount of Rs. 25,00,000/- has been credited to the Assessee's bank account through RTGS. Thereafter, in response to the notice u/s 148 of the Act, the Assessee filed its return of income on dated 21.04.2018 declaring total income at Rs. "Nil" and also sent a letter dated 25.09.2018 to the AO requesting to provide copy of the reasons recorded u/s 148 of the ....
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.... Therefore, you are requested to furnish your reply in writing on the next date of hearing. A notice u/s 142(1) of the IT Act is enclosed herewith for your compliance." 9. However, in response to the said show cause notice, no reply was received from the assessee. Therefore, another show cause notice dated 26.10.2018 was issued to the assessee and also the said show cause notice was duly sent through the e-mail address of the assessee on 11.6.2018 However, in response to these show cause notices, there was no reply from the assessee. Hence, a final opportunity was provided to the assessee vide another show cause letter dated 15.11.2018 requiring the assessee to furnish its reply on or before 26.11.2018. However, in response to this show cause notice also no reply was received from the assessee till date. 10. In view of the facts it is clearly established beyond doubt that M/s Harsharatna Finance & Investments P Ltd is one of such concern which is engaged in the business of providing accommodation entries and controlled by entry operator Shri Manohar Lala Nangalia. On the basis of fund/cash trail prepared, it is found that the assessee company M/s Ambaji Av....
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....y the AO that a letter dated 28.09.2018 was sent to the Assessee along with reasons recorded u/s 148 of the Act. 7. Heard the parties and perused the material available on record. In the instant case, the case of the Assessee was initially reopened u/s 147/148 of the Act, by issuing notice dated 30.03.2018 u/s 148 of the ACT by the ITO, Ward 1(1)(1), Surat. The Assessee, in response to the said notice, filed its return of income on dated 21.04.2018 and intimated the same to the ITBA portal on dated 24.04.2018. Thereafter, the case of the Assessee was transferred to the AO/ITO ward 9(1)(2), who issued notice u/s 142(1) of the Act, in response to the same, the Assessee vide its reply dated 04.09.2018 intimated the AO that the Assessee has already filed its return of income on dated 21.04.2018 in response to the notice dated 30.03.2018 u/s 148 of the Act and enclosed the copy of the same. The Assessee further requested the AO to provide the copies of the reasons recorded u/s 147/148 of the Act. Thereafter, on 19.09.2018, another show cause notice was issued by the AO to the Assessee, by mentioning the fact that the case of the Assessee for the A.Y.2011-12 was reopened by issuing th....
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....r own unaccounted income in the garb of a bank entry and you have channelized its own unaccounted funds through this tained concern. Therefore, I, propose to make an addition of Rs 25,00.00/- u/s 68 of the IT Act. Therefore, you are requested to furnish your reply in writing on the next date of hearing. A notice u/s 142(1) of the IT Act is enclosed herewith for your compliance" 9. Thereafter the AO vide letter dated 26.10.2018 issued final show cause notice to the Assessee, in response to which the Assessee vide email dated 26.11.2018 furnished its reply along with documentary evidence. 10. Thereafter, the AO considering the case of the Assessee, ultimately made the addition of Rs. 25,00,000/- by passing the assessment order. 11. The Assessee has claimed and demonstrated that vide letter dated 28.09.2018, the AO intimated the following reasons for reopening: "The reason recorded for reopening the assessment for the AY 2012-13 was provided vide this office letter dated 28.9.2018. Information was received from the office of the DDIT (Inv) Unit 4(2), Kolkata vide letter bearing No DDIT (Inv)/U 4(2)/KOL/S.A. securities Pvt Ltd/2017-18/6753 dated 14.1....
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....68 intermediary/beneficiary concerns all maintained with UCO Bank, 60 cash deposit bank accounts were identified. 2.1. Summons u/s.131 of the Act could not be served on these concerns. All concerns are related/interlinked and controlled by entry operator Manohar Lal Nangalia and engaged in the business of providing accommodation entries in the form of bogus share capital/share premium, pre-arranged bogus LTCG/STCG and unsecured loan etc. to various concerns in lieu of commission. On the basis of statement of Shri Manohar Lal Nagalia before the Directorate of Investigation Wing (Kolkata) and various other persons who happen to be dummy Directors in various concerns, it is evident that these were mere paper/shell companies controlled by Shri Manohar Lal Nangalia. Out of the these concerns in whose cases enquiry was conducted by Investigation Wing, Kolkata, it is found that M/s. Harsharatna Finance & Investments Pvt Ltd. is one of such concern which is engaged in the business of providing accommodation entries and controlled by entry operator Shri Manohar Lal Nangalia. Investigation Wing prepared a trail of flow of cash/funds and identified 134 ultimate beneficiaries. On the ....
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....der consideration but no assessment as stipulated u/s.2(40) of the Act was made and the return of income was only processed u/s. 143(1) of the Act. In view of the above, provisions of clause (b) of explanation 2 to section 147 are applicable to facts of this case and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped assessment. 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 has been obtained separately from Principal Commissioner of Income Tax as per the provisions of section 151 of the Act." 13. The Assessee further claimed that from the letter dated 28.09.2018 i.e. notice u/s 143(2) of the Act by which the AO has claimed that the copy of the reasons recorded were provided to the Assessee, goes to show that the complete reasons for reopening of the case were not provided to the Assessee. The Assessee further by drawing the attention of this Court to e-proceedings and demonstrated that in spite of making clear cut allegations, the Revenue Department has failed to provide the copy of complete reasons, as claimed alon....
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....mpany and its related company. The copy of said letter which is self-explanatory which is forwarded to Your Honour. From verification of blue book, it is found that there is no such Assessee is assessed in his charge. Similarly, no PAN is furnished. However, the Assessee has jurisdiction in this charge and the action is going by bar by its of limitation of time. I have reason to believe that there is escapement of the income within meaning of under s. 147 of the IT Act, 1961. As per proviso to s. 151(2) of the IT Act, no notice under s. 148 issued by the AO below the rank of the Jt. CIT after the expiry of 4 years from the end of relevant assessment year unless the JL. CIT is satisfied on the assessee recorded by the AO that it is fit case for the issue of such notice. In view of the above, sanction of issue of notice under s. 148 of the IT Act, 1961 for asst. yr. 2003-04 may be accorded if deemed fit." On the basis of the above reasons as recorded, the impugned order of the Tribunal found that the reasons proceed on the basis that there was no Assessee such as respondent in its charge. Nevertheless, the reopening notice was issued to th....
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.... reasons for reopening notice as recorded being made available to an assessee, is to enable the AO to have a second look at his reasons recorded before he proceeds to assess the income, which according to him, has escaped assessment. In fact, non-furnishing of reasons would make an assessment order bad as held by this Court in CIT vs. Videsh Sanchar Nigam Ltd. (2012) 340 ITR 66 (Bom). In fact, partial furnishing of reasons will also necessarily meet the same fate i.e.. render the assessment order on reopening notice bad. Therefore, on the above ground itself, the question as proposed does not give rise to any substantial question of law as it is covered by the decision of this Court in Videsh Sanchar Nigam Ltd. (supra) against the Revenue in the present facts." {Highlighted relevant part by us for clarity and better understanding} 16. The Hon'ble Jurisdictional High Court in PCIT vs. Shodiman Investment (P) Ltd. has held that non-providing the complete reasons for reopening are contrary to and in defiance of the decision of the Hon'ble Apex Court in GKN Driveshafts (India) Ltd. (supra). Entire objects of the reasons for reopening notice as recorded being made available to an ....