TaxTMI 
TaxTMI 
2025 (3) TMI 1825
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....by the Assessing Officer that the assessee had made transaction of Rs. 80,50,000/- during Financial Year 2015-16 with one Shri Pradeep Kumar Jindal and the assessee is one of the ultimate beneficiaries. This allegation of the Assessing Officer is based on the information available with the Department which are flagged by the Directorate of Income-tax (systems) as per risk profiling. During the course of reassessment proceedings, the Assessing Officer vide letter dated 15.03.2022 along with notice u/s 142(1) of the Act asked the assessee to explain the transaction of Rs. 80,50,000/- made with M/s Jar Metal Industries Private Limited a company controlled by Shri Pradeep Kumar Jindal with proper supporting documents. In reply, the assessee vide letter dated 21.03.2022 stated that the transaction of Rs. 80,50,000/- during financial year 2015-16 is misleading as the assessee has made no such huge transaction with M/s Jar Metal Industries Private Limited. In fact, the assessee was having transaction of Rs. 17,50,000/- as a loan taken from that company out of which Rs. 7 lakhs was repaid within few day and left over amount of Rs. 10,50,000/- remained outstanding at the end of the previous....
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....e, Ld. Pr. CIT has erred in law and on facts in assuming jurisdiction us 263 which is bad in law inter alia for this reason that the reassessment order passed u/s 143(3)/147 dated 31-03-2022 which is sought to be revised u/s 263 itself was invalid inter alia on various grounds as mentioned below and thus proceedings initiated us 263 against the invalid reassessment order is clearly bad in law. (a) That assumption of jurisdiction u/s 147 is itself bad in law as the reason recorded would not have led to the formation of belief of escapement of income. (b) That the notice sent u/s 148 is time barred, as it was sent after 31/3/2021 (c) That no valid satisfaction/approval us 151 was obtained (d) That impugned reassessment order was passed without complying with the mandatory conditions of section 147 to 151. 5. During the course of hearing, the Ld. AR submits that the notice in the present case as issued u/s 148 on 31.03.2021 was served upon the assessee only on 01.04.2021. The law with respect to the reassessment u/s 148 stood amended w.e.f. 01.04.2021, where the section 148A was inserted, according to which, before issue of notice u/s 148, the no....
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....ee, a notice u/s 148A(a) and (b) were issued on 22.02.2023. In response, the assessee has filed a detailed reply on 04th March, 2023, which is also part of the paper book and thereafter, the AO has passed order u/s 148A(d) on 21.03.2023, whereby the proceedings so initiated were dropped by observing that issue of loan of Rs. 80,50,000/- from M/s Jar Metal Industries Private Limited has already been considered and discussed in the assessment proceedings u/s 147 of the Act vide order dated 31.03.2022. He thus prayed that the issue of loan of Rs. 80,50,000/- as alleged by the Department has been examined on two occasions, first when the reassessment order was passed by the AO on 31.03.2022 and thereafter when order u/s 148A(d) was passed on 21.03.2023. It is thus prayed that when this issue has already been examined and found that the information available with the Department was not correct and the assessee is having a transaction of Rs. 17,50,000/- only with M/s Jar Metal Industries Private Limited and, therefore, the AO has taken a conscious decision, the order of the Ld. PCIT u/s 263 is nothing but mere change of opinion. It is not a case where no enquiry or verification was carri....
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....out by the Directorate. Further, the reasons for reopening the assessment were duly recorded, and it was found that the Assessee had received accommodation entries which led to reopening of the case. The AO, based on specific details relating to the accommodation entries, was well within his jurisdiction to reopen the case and initiate proceedings under Section 147. Reliance is being placed upon decision in case of Priya Blue Industries (P.) Ltd. [2022] 138 taxmann.com 69 (SC) wherein SLP of Assessee was dismissed against the High Court ruling that where Assessing officer had reason to believe that income chargeable to tax has escaped assessment as assessee was beneficiary of accommodation entries and basis for formation of such belief were several inquiries and investigation by investigation wing that there had been escarpment of income of assessee from assessment, reopening of assessment was justified. (Copy Enclosed as ANNEXURE-A) It is also humbly submitted that if quantification of escaped income is found or part of it is found not correct at the time of final re-assessment, the same would not render the reopening u/s 148 void ab-initio. In the present case a....
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....f sections 147 2.3. Contention of Assessee: That the order of Ld. PCIT is due to change of opinion. Submission of Department: It is most respectfully submitted that S. 263 of the Act grants the PCIT the power to revise any order passed by an Assessing Officer (AO) if in the opinion of the Ld. PCIT, such order is found to be erroneous and prejudicial to the interests of the revenue. In the present case, the Ld. PCIT on perusal of the assessment records and assessment orders, was satisfied that the order passed by the AO is erroneous in so far as it is prejudicial to the interest of the Revenue and hence, the Ld. PCIT passed the order u/s 263 of the Act dated 23.03.2024. The Ld. PCIT has categorically brought out his finding at Para 7, Pg. No. 5, of his order u/s 263 of the Act dated 23.03.2024. It is pertinent to mention here that the AO failed to consider statements recorded u/s 132 & 131(1A), where the dummy Directors of front companies revealed that Sh. Pradeep Kumar Jindal was involved in providing accommodation entries for cash to various beneficiaries, which was critical to the assessment. This failure in the assessment process rendered the ....
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....axmann.com 180 (Madras) wherein the impugned reopening notice was digitally signed on 31-03-2021, before limitation expired, and was delivered to assessee via email on following day on 01-04-2021. It was held that the said notice was not time barred and thus, challenge to the notice was dismissed. (Copy Enclosed as ANNEXURE-D) 2.5. Contention of Assessee: Objection raised by the assessee for reopening was not disposed by the Ld. AO. Submission of Department: It is most respectfully submitted that the objections raised by the assessee for reopening was duly disposed by the Ld. AO vide order dated 18.03.2022 & duly communicated to assessee with DIN (Refer Assessee's Paper Book Pg. No. 24-27). Therefore, the contention of the Assessee in this regard is devoid of merits and liable to be dismissed. 2.6. Contention of Assessee: Revision proceedings were initiated on the basis of Audit objection. Submission of Department: It is most respectfully submitted that there is no bar under the Act for Ld. PCIT on taking action u/s 263 of the Act based upon audit objection, specifically when the ld. PCIT has considered facts and applied his mind, after consi....
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....me of reopening. Hence, this case is not applicable. Even the case Arb Hotels Resorts (P) Ltd Vs. PCIT is also misplaced as this case is reopened u/s 148A(d) after due diligence with specific information and complete details of all transactions whereas in the assessee's case there is no enquiry was conducted by the Ld. AO or obtained any relevant material at the time of reopening. In Fena (P.) Ltd. v. ACIT [2022] 445 ITR 434 (Delhi) it was held that a reassessment notice is not valid in law where it was issued relying upon the information of the risk management strategy of the Department but without conducting an independent enquiry. Similar view could be found in Digil Electronics (P) Ltd v. Asstt. CIT [2023] 458 ITR 478 (Bom). 2. Reply to Para 2.2 The approval u/s 151 is given mechanically and without application of mind and 'Reason to believe' is formulated on the basis of information given by DIT (System) without any material in hand or any enquiry made by the Ld. AO. Thus, the alleged reopening of assessment is not valid as decided by Delhi ITAT Bench in the case of Sh. Birpal Vs. ITO. ITA No.8849/Del/2019 on 20.11.2024. ....
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....tiated vide notice issued u/s 148 of the Act dated 31.03.2022 and after examining the details filed by the assessee was of the view that the transactions with M/s Jar Metal Industries Private Limited was genuine transaction and took no adverse view in the matter. It is also a matter of fact that the proceedings u/s 148A were also initiated at a later stage, where the Revenue after considering the fact that the issue of transaction with M/s Jar Metal Industries Private Limited of Rs. 80,50,000/- has already been considered in the order passed u/s 147 r.w.s. 144B of the Act dated 31.03.2022 and therefore, the proceedings were dropped in terms of the order passed u/s 148A(d) of the Act. Now, the Ld. PCIT vide impugned order passed u/s 263 of the Act alleged that the AO has not made proper inquiries and verification with respect to the loan transaction with M/s Jar Metal Industries Private Limited. From the perusal of the details asked for by the AO during the course of reassessment proceedings and the reply submitted by the assessee, we find that the AO has made a specific query with regard to the transaction in terms of notice issued u/s 142(1) dated 15.03.2022. The assessee vide rep....
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.... vide order dated 17.02.2025 has observed as under:- "Delay condoned. This special leave petition is misconceived and is completely contrary to the law pertaining to Section 263 of the Income Tax Act, 1961. The notice under Section 148 of the 1961 Act referred to two reasons. The first reason was with regard to non-declaration of the account in ING Vysya Bank with a credit of Rs. 70,13,43,319/- (Rupees seventy crores thirteen lakhs forty three thousand three hundred and nineteen only). The second reason was with regard to the claim of deduction under Section 10AA of the 1961 Act. It is accepted that a reassessment order under Section 148 read with Section 143(3) of the 1961 Act was passed. Addition was not made for the first reason. In the given facts, the assertion by the Revenue that inquiry and verification in re the bank account was not made is ex-facie incorrect. This being the position, this is not a case of failure to investigate, but as no addition was made, the Revenue can argue that it is a case of wrong conclusion and decision in the re-assessment proceedings. Therefore, to exercise jurisdiction under Section 263 of the 1961 A....