TaxTMI 
TaxTMI 
2026 (8) TMI 357
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..... The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on facts by confirming the addition made by the Learned Assessing Officer, who treated the sale amounting to Rs. 42,61,133 to M/s Ambika Ispat Udyog as an unexplained cash credit under Section 68 of the Income Tax Act, despite the fact that the said amount had already been declared as a sale in the appellant's accounts, leading to a double addition. 3. The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on facts by confirming the addition made by the Learned Assessing Officer, who treated the 3 sale of Rs. 42,61,133 to M/s Ambika Ispat Udyog as an accommodation entry, while simultaneously not rejecting the purchase related to the aforesaid sale, thereby leading to an inconsistent and erroneous conclusion. 4. That the appellant craves to leave, add, amend or adduce any of the grounds of appeal during the course of appellate proceedings." II. ITA No.: 180/KOL/2025; AY 2015-16: "1. That the Order passed u/s 250 is bad in law as well as on facts of the case. 2. The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on f....
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....er of Income Tax (Appeals) erred both in law and on facts by failing to adjudicate the ground that the Learned Assessing Officer issued a show cause notice on issues that were different from those mentioned in the reasons recorded, thereby violating the procedural requirements of the Income Tax Act. 10. The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on facts by failing to adjudicate the ground that the Learned Assessing Officer passed a non-speaking order, devoid of any reasoning, thereby failing to comply with the statutory requirement of providing a reasoned order. 11. The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on facts by failing to adjudicate the ground that the Learned Assessing Officer erroneously treated the amount of Rs. 1,15,00,000 received from M/s Primary Investment Consultants Pvt. Ltd. as a loan, and subsequently classified it as an unexplained cash credit under Section 68 of the Income Tax Act, 1961. 12. The Hon'ble Commissioner of Income Tax (Appeals) erred both in law and on facts by failing to adjudicate the ground that the Learned Assessing Officer treated the amount of Rs. ....
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....om the account has been further debited to many accounts. Notice u/s 131 of the Income Tax Act 1961 was issued to the assessee viz Ambika Ispat Udyog on 24.01.2018 but the same was returned back with the remarks as "Co. Abolished". The amounts were transferred after routing through different layers finally deposited an amount of Rs. 42,61,133/- in the A/c of the assessee company i.e. Nezone Tubes Ltd. in the F.Y. 2010-11. 3.2 The assessee was asked vide notice under section 142(1) to furnish the nature of transaction with the alleged assessee M/s Ambika Ispat Udyog during the year. The assessee company made compliance of the notice under section 142(1) on 21.12.2018 that the assessee company had sold its products to M/s Ambika Ispat Udyog during the year. In relation to the his explanation the assessee furnished the bank statement where the sums were credited and ledger copy and bills issued to the M/s Ambika Ispat Udyog. However, the assessee could not furnish in his support the delivery challan, road challan, details of movement in goods and purchase order received by the assessee regarding the alleged sale. Therefore, in the absence of adequate evidence it cannot be con....
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....mplying with mandatory conditions of section 147 to 151 of the Income Tax Act, 1961. The contention of the appellant has been considered. I have gone through the facts and found that the proceedings against appellant were opened u/s 147 of the Income Tax Act, 1961 after obtaining approval from the competent authority. During the course of proceedings, the Assessing Officer issued the notice u/s 148 on 31.03.2018 and duly served upon appellant through speed post and Email to the appellant. In response to the same, appellant has filed the return of Income. However, the Assessing Officer issued notice u/s 142(1) on various dates. In response to the same, the appellant has filed partially details. In view of the discussion, it is pertinent to note that the Assessing Officer has granted ample opportunities for proving the supporting documents. However, the appellant has furnished partially reply to the notices as discussed supra. I have carefully considered appellant submission. After careful perusal of assessment order, it is seen that the reopening is based on cogent evidence and clear facts brought out by the Assessing Officer while recording satisfaction for issuance of not....
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....ed an amount of Rs. 42,61,133/- in the appellant bank account for the F.Y. 2010-11. One of the most common ways to reduce profits is by inflating the purchase/ raw material cost, expenses like labour charges, entertainment expenses and commission. In such cases, bogus bills may be prepared to show inflated expenses in the books. It involves obtaining bogus or inflated invoices from the so called 'bill masters', who make bogus vouchers and charge nominal commission for this facility. Bogus Purchases: Bogus purchase entries are made in the books of account for purchases made, where in fact, no actual purchases have been made by the purchaser of goods. Bogus purchases invariably also provoke bogus sales as well in most of the cases. They are merely transactions on paper with no exchange of goods. In case where an assessee is called upon to establish the genuineness of purchase transactions recorded in its books of account, requisite evidences have to be brought on record to establish authenticity of purchases. Whether a transaction of purchase is proved or not is a question of fact and the primary onus is on the assessee to prove the genuineness of p....
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....g general in nature does not require separate adjudication. In the end result, the appeal is DISALLOWED." 5. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal. 6. Rival contentions were heard and the submissions made have been examined. It was submitted by the Ld. AR that the original assessment in this case was made on 29.08.2014 u/s 143(3)/153A of the Act assessing the returned total income of Rs. 8,75,36,416/-. Subsequently, a notice u/s 148 of the Act was issued on 31.03.2018. The assessee is a manufacturer of M.S. Pipes and Galvanized Pipes. The sales of Rs. 42.61 Lakh were made to M/s. Ambika Ispat Udyog which have been treated as bogus transactions. The reasons for reopening are mentioned at page 57 of the paper book filed and the same are as under: "Assessee is a company. In the instant case, return of income for A.Y. 2011-12 was filed on 23.09.2011, declaring total income of Rs. 8,79,96,137/- The case was assessed u/s 143(3) on 29.08.2014, assessing total income of Rs. 8,75,36,420/- Information has been received from ADIT (Inv.). Unit 5, Kolkata vide Letter No.ADIT (Inv.)/U-5/Kol/10011802/2017....
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.... merely because the company was not in existence on the date of enquiry does not make the transactions bogus. The transactions are mentioned at page 69 of the paper book which is the party ledger and sale proceeds from 07.07.2010 to 10.09.2010 were made and the sale proceeds have been received on 07.07.2010 being the payment of opening balance of Rs. 11,75,082/- and subsequently by two cheques on 18.02.2011 and 24.02.2011 for Rs. 15 Lakh and Rs. 15,86,133/-, respectively. The sale took place during 26.07.2010 to 10.09.2010 through six bills and the opening balance of Rs. 11,75,082/- as on 01.04.2010 was received on 07.07.2010. Our attention was also drawn to page 70 of the paper book which contains a sample bill of the assessee issued to M/s. Ambika Ispat Udyog, J.N. Mukherjee Road, Ghusuri, Howrah and pages 72 to 73 contain the invoice and the consignment note; however it is noted that the address of Delivery office is not mentioned on the consignment note no. 5280 dated 26.07.2010 and page 74 is the weighment certificate dated26.07.2010 and contain the details of 10.280 Kg. of the goods. 8. The Ld. AR has also placed reliance upon the decision of the Hon'ble Calcutta High ....
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.... the basis of which the return was filed. Hence, in order to be fair to both the assessee as well as the Ld. Assessing Officer, the order of the Ld. CIT(A) is hereby set aside as apparently double addition has been made and the issue is remanded to the Ld. AO to allow an opportunity to the assessee to furnish the required details of transportation expenses supported by the transportation receipt as the only ground on which the addition was made was the absence of these documents coupled with the fact that the summons issued to the party to whom the sales were made was retuned unserved with the remark 'Co. abolished'. The Ld. AO shall grant an opportunity of being heard to the assessee and after considering the details to be filed, including the amount paid and transportation expenses and after verifying the same, if required, recompute the turnover and the total income of the assessee. Hence, for statistical purposes the grounds raised by the assessee are partly allowed. 11. In the result, the appeal filed by the assessee in ITA No. 179/KOL/2025 for AY 2011-12 is partly allowed for statistical purposes. B. Now, we shall take up ITA No. 180/KOL/2025 for AY 2015-16 for adjudica....
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....he assessing officer passed the assessment order and brought out all the relevant facts. It is stated by the assessing officer that the assessee company is engaged in the business of manufacturing M S Pipes and Galvanized pipes and filed its return of income on 26.09.2015 declaring total income at Rs. 11,95,32,380/- and book profit u/s 115JB at Rs. 12,68,24,795/- for the A.Y. 2015-16. In the instant case, the Assessing officer received the information as the assessee had received accommodation entry totaling of Rs. 1,15,00,000/- from M/s Primary Investment Consultants Pvt Ltd (Rs. 40,00,000/- + 25,00,000/- + 50,00,000/-), and Rs. 75,00,000/- received from M/s Mangal Chand Property & Investment Pvt Ltd. It is also stated by the Assessing officer that the company controlled and managed by Shri Dilip Kumar Gupta for the said year. The assessee failed to discharge his onus of proofing the creditworthiness of the transaction and same was added by the assessing officer to the total income of the assessee for the said year. 9.3 During the course of appeal proceedings, the appellant has filed the submission and same has been carefully examined. It is stated by the appellant that t....
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....2015-16 and furnished various documents such as ledger of the said vendors, return of income, Balance sheet, source of fund investment, Bank statement, loan confirmation and MCA data. I have considered the rival submission of the appellant and have gone through the order passed by the Assessing Officer. I find that the Assessing Officer passed the assessment order by making addition in absence of proper reply on behalf of the appellant. 9.6 With respect to the addition made by the AO on account of unexplained cash credit without examining the facts. As the Assessing officer failed to provide the information and statement on the basis of which the case of the appellant was reopened. And also failed to provide an opportunity to cross examination with Mr. Dilip Kumar Gupta and also not provided reasonable time of hearing to the appellant company. Therefore, in view of the power conferred as per clause (a) of sub-section (1) of section 251 of the act applicable with effect from 01.10.2024, I hereby set aside the impugned assessment order passed u/s. 147 r.w.s. 144B of the Income Tax Act to the file of the AO for fresh assessment. Therefore, the considering the facts and circum....
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....e heard the rival contentions and also gone through the facts and circumstances of the case. Ground nos. 1, 4, 5 and 8 relate to the reopening being bad in law, specifically in ground no. 1 in which it is averred that the notice u/s 148 of the Act was barred by limitation since the notice u/s 148A(b) of the Act having been initiated after six years from the assessment year, the assessment year in question was not covered by TOLA as admitted by the Ld. ASG in the case of Rajeev Bansal (supra) and so held in the said judgement. The Ld. AR has filed a brief note on the arguments in which ground nos. 2, 6, 7, 8 and 9 are not pressed and ground nos. 11 to 15 are in relation to merits of the case. As regards ground nos. 1, 3, 4 and 5 the submissions are reproduced as under: "The appeal is filed against reassessment order framed by AO. The assessee is firstly agitating Ground No. 1 regarding the validity of the reassessment proceedings as the same is barred by limitation. Reference in this connection is invited to the judgement of Hon'ble Apex Court in the case of Rajeev Bansal pronounced on 03.10.2024. Attention is invited to page 52 para f where the revenue conceded before ....
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....e the materials were forwarded after the deadline fixed by the Hon'ble Apex Court and further complete materials were never sent along with the show cause notice. Hence the entire reassessment is liable to be quashed." 6. We have gone through the submissions made. Hon'ble Supreme Court in the case of Rajeev Bansal (supra) have held as under: "52. In Ashish Agarwal (supra), this Court held that the benefit of the new regime must be provided for the reassessment conducted for the past periods. The increase of the monetary threshold from Rupees one lakh to Rupees fifty lakh is beneficial for the assessees. Mr Venkataraman has also conceded on behalf of the Revenue that all notices issued under the new regime by invoking the six year time limit prescribed under section 149(1)(b) of the old regime will have to be dropped if the income chargeable to tax which has escaped assessment is less than Rupees fifty lakhs. . . 64. When enacting a statute, the legislature often endeavours to ensure that the provisions of one legislation do not conflict with provisions of another legislation. Interplay (supra) [between Arbitration Agreements unde....
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....otice is issued. This plays out as follows under the old regime: (i) If income escaping assessment was less than Rupees one lakh: (a) a reassessment notice could be issued under section 148 within four years after obtaining the approval of the Joint Commissioner; and (b) no notice could be issued after the expiry of four years; and (ii) If income escaping was more than Rupees one lakh: (a) a reassessment notice could be issued within four years after obtaining the approval of the Joint Commissioner; and (b) after four years but within six years after obtaining the approval of the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. 75. After 1 April 2021, the new regime has specified different authorities for granting sanctions under section 151. The new regime is beneficial to the assessee because it specifies a higher level of authority for the grant of sanctions in comparison to the old regime. Therefore, in terms of Ashish Agarwal (supra), after 1 April 2021, the prior approval must be obtained from the appropriate authorities specified under section 151 of the new regime. The effect of Section 151 of the new r....
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.... falls between 20 March 2020 and 31 March 2021, then the specified authority under section 151(2) has time till 31 March 2021 to grant approval. The time limit for Section 151 of the old regime expires on 31 March 2021 because the new regime comes into effect on 1 April 2021. 78. For example, the three year time limit for assessment year 2017-2018 falls for completion on 31 March 2021. It falls during the time period of 20 March 2020 and 31 March 2021, contemplated under section 3(1) of TOLA. Resultantly, the authority specified under section 151(i) of the new regime can grant sanction till 30 June 2021. 79. Under Finance Act 2021, the assessing officer was required to obtain prior approval or sanction of the specified authorities at four stages: a. Section 148A(a) - to conduct any enquiry, if required, with respect to the information which suggests that the income chargeable to tax has escaped assessment; b. Section 148A(b) - to provide an opportunity of hearing to the assessee by serving upon them a show cause notice as to why a notice under section 148 should not be issued based on the information that suggests that income chargeable to tax ha....
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....ope of Article 142 113. In Ashish Agarwal (supra), this Court allowed the assesses to avail all the defences, including the defence of expiry of the time limit specified under section 149(1). In the instant appeals, the reassessment notices pertain to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018. To assume jurisdiction to issue notices under section 148 with respect to the relevant assessment years, an assessing officer has to: (i) issue the notices within the period prescribed under section 149(1) of the new regime read with TOLA; and (ii) obtain the previous approval of the authority specified under section 151. A notice issued without complying with the preconditions is invalid as it affects the jurisdiction of the assessing officer. Therefore, the reassessment notices issued under section 148 of the new regime, which are in pursuance of the deemed notices, ought to be issued within the time limit surviving under the Income-tax Act read with TOLA. A reassessment notice issued beyond the surviving time limit will be time-barred. G. Conclusions 114. In view of the above discussion, we conclude that: a. After 1 A....
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.... date as per TOLA would be applicable only to the notices issued between 01.04.2021 to 30.06.2021 if the limitation for issuing such notices was expiring between 20 March 2020 and 31 March 2021 The limitation for A.Y. 2015-16 was expiring on 31.03.2022, i.e. beyond the period of 20.03.2020 to 31.03.2022, therefore, the benefit of TOLA would not be applicable. Further, in view of the first proviso to section 149(1) of the Act. The time limit for reopening assessments has been reduced from four years to three years. However, in cases where income that escaped assessment amounts to Rs. 50 lakhs or more, assessments can be reopened within ten years. The new regime prohibits reopening of assessments that were time-barred under the old regime. The provisions of section 149 of the new regime are as under: 149. (1) No notice under section 148 shall be issued for the relevant assessment year,- (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession ....