TaxTMI 
TaxTMI 
2026 (8) TMI 1828
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....ssee at Rs. 31,19,850/-. A search, seizure and survey operation u/s 132/133A of the Act was conducted by the investigation wing of the department on 17.12.2015 of Mr. Anand Jain and Mr. Naresh Jain group of cases. During the course of survey, some incriminating documents such as ledgers and invoices were found and seized by the department. (ii) It was found that assessee had taken accommodation entries of bogus purchases of Rs. 1,04,33,780/- from M/s Cream Sales Pvt. Ltd. and M/s Sunshine Inn Pvt. Ltd. paper/ shell concerns of Shri Anand Kumar Jain and Shri Naresh Kumar Jain (entry operators) during the year under consideration. Assessee's case was reopened u/s 147 by issuance of notice u/s 148 of the Act on 14.03.2019 after taking prior approval/ sanction u/s 151(1) of the Act from the Pr. CIT (Central)-03, New Delhi. Assessee filed return in response thereof. (iii) Statutory notices u/s 143(2) and 142(1) of the Act were issued, seeking assessee to furnish details regarding accommodation entries for bogus purchases in lieu of cash of Rs. 1,04,33,780/- from aforesaid two entities along with the confirmations and bank statements. Assessee filed reply in response thereof, howev....
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.... 7. On the facts and circumstances of the case, the CIT(A) erred in upholding the addition of Rs. 1,04,33,780/- made by the AO on account of alleged bogus purchases made during the relevant AY, without rejecting the books of accounts in terms of Section 145(3) of the Act and without doubting the corresponding sales for the relevant AY. 7.1 On the facts and circumstances of the case, the CIT(A) erred in upholding the addition of Rs 1,04,33,780/- on account of bogus purchases without considering that the Appellant has made purchase of Rs 34,50,150 only and no purchase from M/s Sunshine Inn Pvt Ltd while there is sale of Rs 57,70,688/-. Appellant discharge its primary onus by placing all necessary documents evidencing the genuineness of the said purchases. 8. On the facts and circumstances of the case, the CIT(A) erred in invoking the provisions of Section 251 and making enhancement of Rs. 64,00,706/-(Rs 45,12,248, and Rs 18,88,458) as bogus purchase without alleging any failure on the part of Appellarit in disclosing full and truly all primary relevant facts during the remand proceedings under Section 251(1)(a) of the Income Tax Act, 1961. Even the amount of en....
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....roforma is reproduced as under. 10. The perusal of proforma over which the approval for reopening the case was accorded u/s 151 of the Act shows that there is no mention of earlier assessment order dated 08.02.2016 passed u/s 143(3) of the Act against the appropriate column no. 9. The satisfaction note of the sanctioning authority recorded by ld PCIT against column no. 17 of the proforma, reads as under: "perused reasons recorded. Satisfied that it is a fit case for notice u/s 148". Ld PCIT has not referred any material record before arriving at the said satisfaction. In the reasons recorded, also there is no mention of earlier assessment order dated 08.02.2016 passed u/s 143(3) of the Act. It speaks only of intimation dated 13.03.2015 passed u/s 143(1) of the Act only. The said approval is signed but undated. The aforesaid facts are sufficient to suggest that the sanction u/s 151 of the Act was granted by the sanctioning authority in a mechanical manner without application of mind. 11. The law is well settled that even the administrative orders, are required to be supported with reasons. Hon'ble Supreme Court in State of H.P. V. Mustaque Ahmad, 2007 (58) ACC 382 (SC), has he....
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....ce u/s 148", however, Ld. PCIT has not referred any material/records before reaching to such satisfaction proceedings u/s 147 of the Act should be initiated though the order u/s 143(3) has already been passed. Further the assessment order u/s 143(3) was passed at a date much later than the date when the survey was carried out at the business premises of the assessee thus it cannot be said that the material found during the survey was fresh material. From the perusal of first para of the reasons recorded we find that AO stated that return of income filed was processed and there is no reference of assessment order passed u/s 143(3) of the Act in the case of the assessee. These facts, clearly suggests that reopening was made without any application of mind. 8. The Hon'ble High Court of Delhi in case cited as SABH Infrastructure Ltd. vs. ACIT in WP (C) 1357/2016 order dated 25.09.2017 has issued guidelines to the Revenue authorities while deciding the issue of reopening u/s 147/148 of the Act. Operative part of which is reproduced as under:- "19. Before parting with the case, the Court would like to observe that on a routine basis, a large number of writ petitions are....
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....ons of assessee and documents produced in reassessment proceedings, AO added back a sum of Rs. 1,35,00,000/- - CIT(A) held against assessee an legality of reassessment notice but allowed assessee's appeal on merits holding that AO did not conduct appropriate enquiry to conclude that share inclusion and advance received were from bogus entities-Tribunal allowed assessee's appeal on merits-Revenue appealed against appellate order on merits- Assessee's cross appeal was on correctness of reopening of assessment- Tribunal upheld, assessee's cross-objections and dismissed Revenue's appeal holding that there was no proper application of mind by concerned sanctioning authority u/s Section 151 as a pre-condition for issuing notice u/s 147/148-Held, Section 151 stipulates that CIT (A), who was competent authority to authorize reassessment notice, had to apply his mind and form opinion- Mere appending of expression 'approved' says nothing-It was not as if CIT (A) had to record elaborate reasons for agreeing with noting put up-At same time, satisfaction had to be recorded of given case which could be reflected in briefest possible manner-In present case, exercise ap....
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.... the approval in the instant case was mechanical, without either application of mind to the law and the facts or even a modicum of how the ingredients of the law had been met. In short, the machinery under section 151 completely failed. 24. The imperative requirement of compliance with the ingredients of section 147 and section 148 is underlined in innumerable judgments. However, we note with respect and approval, a judgment of a Division Bench of this court cited on behalf of the petitioner, in the case of Hindustan Lever Ltd. v. R. B. Wadkar (per V. C. Daga and J. P. Devadhar JJ.), and profitably extract the following (page 337 of 268 ITR): "Reading of the proviso to section 147 makes it clear that if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceeding under section 147, or recompute the loss or the depreciation allowance or any other allowance, as the case....
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....e to justify the same based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. The reasons recorded by the Assessing Officer cannot be supplemented by filing affidavit or making oral submission, otherwise, the reasons which were lacking in the material particulars would get supplemented, by the time the matter reaches to the court, on the strength of the affidavit or oral submissions advanced. Having recorded our finding that the impugned notice itself is beyond the period of four years from the end of the assessment year 1996-97 and does not comply with the requirements of the proviso to section 147 of the Act, the Assessing Officer had no jurisdiction to reopen the assessment proceedings which were concluded on the basis of assessment under section 143(3) of the Act. On this short count alone the impugned notice is liable to be quashed and set aside." (emphasis¹ supplied) ....