TaxTMI 
TaxTMI 
2025 (9) TMI 1877
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....he facts, the appeal in ITA No.1106/Hyd/2025 for the A.Y 2015-16 is taken as lead case. 2. The assessee has raised identical grounds for all thee five years except some extra grounds raised for the A.Y 2019-20. The grounds of appeal in ITA No.1106/Hyd/2025 for the A.Y 2015-16 are reproduced as under: "1. On the facts and circumstances of the case, the Learned CIT(A) erred in both law and facts while passing the Order. 2. On the facts and circumstance of the case, Learned CIT(A) is not justified in dismissing the ground that the issue of Notice U/s 148 by the Assessing Officer is without Jurisdiction. 3. On the facts and circumstances of the case, Learned CIT(A) is not justified in dismissing the ground that the issue of Notice U/s 148 by the Assessing Officer is bad in law as the Assessing Officer has not fulfilled the prescribed conditions laid down under Section 148 and consequently the Assessment is void abinitio. 4. On the facts and circumstances of the case, Learned CIT(A) is not justified in dismissing the ground that the notice issued U/s 148 and consequent Assessment is in valid in law as the Assessing Officer has not complied the prov....
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....nother group company of the assessee namely M/s. Ace Tyres (P) Ltd in ITA Nos. 1084 to 1088/Hyd/2025 vide even date order in para Nos. 13 to 41 as under: "13. We have considered the rival contentions as well as the relevant material available on record. The assessee has challenged the validity of notice issued u/s 148 of the Act on various grounds including the ground of limitation, invalid sanction by superior authority and non-satisfaction of the conditions as laid down u/s 149(1)(b) of the I.T. Act. The Assessing Officer has recorded the reasons for reopening the assessment u/s 147 of the Act in pursuant to the search & seizure action u/s 132 of the Act carried in case of the assessee and group concerns on 04/01/2023 as under: "The reasons recorded for reopening of the assessment recorded are as under: 1. A search and seizure operation u/s 132 of the IT Act was carried out by the ADIT(lnv.) Unit-I(1), Hyderabad on 04.01.2023 covering the group cases of M/s Exel Rubber Group and related entities /individuals. The case of the assessee, M/s Ace Tyres Private Limited, a group company, in which search u/s. 132 was conducted on 04.01.2023 was centralized to ....
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....ecorded by the Assessing Officer that the Assessing Officer has given the total amount of undisclosed income as quantified by the ADIT as well as the Additional income admitted by the assessee in the year-wise chart. Based on the amounts as given in said table/chart, the Assessing Officer treated the income escaped assessment in the case of the assessee for the A.Y 2014-15 to 2018-19 amounting to Rs.50 lakhs or more. During the course of the search & seizure operation on 04/01/2023, a Laptop was found and seized from the possession of one Shri Ramesh Kumar Sanaka, Sr. Accounts Manager who used to look after the financial and accounting matters of Exel Rubber Group of assessee's business concerns. On verification of the Laptop, the Department found that there was a FOCUS 5.5 Software and some MS Excel work books containing the details of several 100s of transactions representing receipts and payment in cash from the financial year 2013-14 to 2022-23. A statement of Shri Ramesh Kumar Sanaka was recorded during the course of search wherein he explained the transactions as found in FOCUS 5.,5 Software as unaccounted receipts generated from sale of scraps generated under various pro....
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....eler tires. The company does job work for CEAT, Apollo and TVS Tires. The tires are manufactured with the raw material supplied by these companies and as per their specifications. M/s LMPL is into the business of manufacturing of machinery related to tire industry and also maintenance of machinery of our group companies viz. ATPL and ERPL. M/s STPL is also into the business of manufacturing of two/three tires. The company does job work for the companies Apollo and Michelin tires, It manufactures the tires using the raw material supplied by them and as per their specifications. M/s VPPL is into the business of manufacturing of automotive flaps. The company does the job for the CEAT tire company using the raw material supplied by them and as per their specifications. Further, the company also does the job work for Apollo and Bridgestone using the raw material purchased by us and as per their specifications. Q.9 Please explain your role and responsibilities in the company M/s ERPL and in overall Exel group of business concerns. Ans. I am working as Sr. Manager (Accounts) in the company, M/s Exel Rubber Private Limited. I prepare quotations ....
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....and the same have been seized as Annexure-A/RKS/RES/01 in my presence. Q.59 I am showing you an excel workbook named "CASH ACE 20-21" found in the folder named "CASH" on desktop of your Dell laptop which was found during the course of search and seizure proceedings at this premise. Please confirm the same and explain the contents in it. Please also state that the transaction in the excel workbook were recorded in the books of accounts. Ans. Yes sir, I confirm that an excel workbook named "CASH ACE 20-21" found in the folder named "CASH" on desktop of my Dell laptop. The excel workbook contains the details of receipts and payments made in cash for the FY 2020-21 of M/s ATPL. This excel workbook was created by Sri Jwala Prasad, Asst. Manager (Accounts) and records in it were updated by me and him. The transactions mentioned in this excel workbook were not recorded in the books of accounts of M/s ATPL. These transactions were downloaded from Focus 5.5 software maintained in my laptop and the complete transactions are available in the software. Q.60 I am showing you excel workbooks named "CASH ACE 21-22", "CASH EXEL 20-21", "CASH EXEL 21-22" and "CASH VILAS 2....
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....e authorization and Panchanama for conducting the search & seizure action in case of Shri Ramesh Kumar Sanaka at his residential premises beairng Flat No.401, Chestiya Estates, Rajeev Nagar, Hyderabad during which external harddisk having copied the data from the Lap Top of Shri Ramesh Kumar Sanaka and loose sheets were seized and the same are marked as A/RKS/RES/01, A/RKS/RES/02 and A/RKS/RES/03 as per the list of seized material being Annexuere A to Panchanama reproduced above. It is also clear from the statement that the search was conducted in the personal capacity of Shri Ramesh Kumar Sanaka at his residential premises and his personal belongings, assets, bank account lockers as well as Laptop were subject matter of the search during the action by the Department. There was a simultaneous search & seizure action in case of Exel Group of companies comprising M/s. Exel Rubber (P) Ltd, M/s. Ace Tyres (P) Ltd, M/s. Vilas Polymers (P) Ltd, M/s. Spinmax Tyres (P) Ltd and M/s. Laxes Machine (P) Ltd vide warrant of authorisation and Panchanama as under: 17. In the said search & seizure action in case of Exel Group, statement of Shri Gangaram Raghunath Reddy, M.D of Exel Group ....
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....eceipts' generated at various locations cannot be ascribed to any one entity with certainty as they had a centralized monitoring system to oversee the generation of cash and utilization of the same. Accordingly, the group had apportioned the 'unaccounted cash receipts' and the resultant 'undisclosed incomes' worked out and admitted in the hands of the active entities, in accordance with the turnovers recorded for different assessment years. Following the proportion adopted by the assessee in distribution of additional income of Rs.107,63,08,796/-to different corporate entities of the group, the amount of Rs.154,28,01,275/- was worked out as follows: FIN.YEAR EXEL RUBBERS ACE TYRES VILAS POLYMERS TOTAL 2013-14 28341030 16260027 33453968 78055025 2014-15 45608852 60884018 44627345 151120215 2015-16 123542153 174334114 74429387 372305654 2016-17 72731118 82189996 46872112 201793226 2017-18 97863648 97967978 63320619 259152245 2018-19 41393042 37869796 37616789 116879627 2019-20 51467168 59594164 26131035 137192367 2020-21 42956903 3008298....
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.... considered as income/revenue and all the payments are considered as the expenditure which are business receipts and expenditure and incidental for earning the said income duly recorded in the seized material, then only the net amount of these receipts and payments out of books can be regarded as unaccounted/ undisclosed income of the assessee. Taking only one side of the details on the part of the Department is a highly arbitrary. The Department cannot make an addition over and above the surrender of income made by the assessee during the course of search & seizure action if the said surrender of income itself is not based on the correct facts and backed by the seized material. 22. The question arises whether by initiating the proceedings u/s 148 of the Act, the condition as stipulated u/s 149(1)(b) of the Act are satisfied or not. For ready reference, section 149(1) of the Act is reproduced 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....
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....er section 148 in such case shall be deemed to have been issued on the 31st day of March of such financial year: Provided also that where the information as referred to in Explanation to section 148emanates from a statement recorded or documents imnpounded under section 131 or section 133A, as the case may be, on or before the 31stday of March of a financial year, in consequence of, (a) a search under section 132 which is initiated; or (b) a search under section 132 for which the last of authorisations is executed; or (c) requisition made under section 132A, after the 15th day of March of such financial year, a period of fifteen days shall be excluded for the purpose of computing the period of limitation as per this section and the notice issued under clause (b) of section 148A in such case shall be deemed to have been issued on the 31st day of March of such financial year: Provided also that where the information as referred to in Explanation 1 to section 148 emanates from a statement recorded or documents impounded u/s 131 or section 133A, as the case may be, on or before the 31st day of March of a finacial year, in consequence of: ....
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....or other documents or evidence reveals that the income chargeable to tax is represented in the form of an asset, expenditure in respect of transaction or in relation to an event or an occasion, or an entry or entries in the books of account and further such income which has escaped the assessment amount to or likely amounts to fifty lakh rupees or more. In the case in hand, undisputedly the notice issued u/s 148 of the Act for the A.Y 2014-15 to 2018-19 were issued after 3 years from the end of the relevant A.Y. Therefore, until and unless the conditions as stipulated in clause (b) of section 149(1) of the Act are satisfied, the notice issued u/s 148 of the Act would be invalid being bartred by limitation provided u/s 149(1) of the Act. 23.The Assessing Officer in the reasons recorded for reopening of the assessment stated that the income chargeable to tax represented in the form of an asset and an entry/entries in the books of account as per the provisions of section 149(1)(b) of the Act. Therefore, the Assessing Officer proposed to bring the case of the assessee in sub- clause(i) and sub-clause (iii) of clause (b) of section 149(1) of the Act. From the details of the tra....
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....is presumed that the quantum of escaped income for each A.Y was more than Rs.50 lakhs and the Assessing Officer at the time of recording the reasons was not supposed to undertake a detailed or depth examination of evidence collected during the search, the prima facie undisputed fact is that the details of unaccounted cash receipts and cash payments found during the course of search & seizure action were not specifically attributed to each of the group companies and further only the receipts found in the said seized material are taken into consideration for arriving to the conclusion that the income of more than Rs.50 lakhs for each of the companies has escaped assessment. The Assessing Officer has proceeded on the basis of the details provided by the ADIT (Inv) and not proceeded on the basis of the seized material containing these transactions of unaccounted cash receipts and payments. The reasons recorded by the Assessing Officer manifest that no such minimum verification was done by the Assessing Officer regarding the nature of the transaction, the net outcome of the receipt and payment as recorded in the said seized material, apportionment of the amounts of receipts and payments....
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.... constitute as entry or entries in the books of account. 26. One more contention and point raised by the learned Counsel for the assessee is that the seized material was found from the possession of Shri Ramesh Kumar Sanaka in a separate search & seizure action and therefore, the case of the assessee does not fall in the first proviso to section 148A of the I.T. Act. We have already reproduced the search warrant/ authorization separately issued in the name of Shri Ramesh Kumar Sanaka for conducting a search at his residential premises. The search in the case of the assessee and other group concerns was carried out under a separate authorization and warrant of search. It is evident from the Panchanama and authorization separately given that there are two search and seizure operations conducted by the Department, one in the case of 5 companies of Exel Group of Companies including the assessee and another in the case of Shri Ramesh Kumar Sanaka, Sr.Accounts Manager of the Exel Group at his residential premises. Both these searches were also conducted at different placed. The only common thread between these 2 search operations is that Shri Ramesh Kumar Sanaka is a Sr. Account....
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....f material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under authority, section 148, by passing an order, with the prior approval of specified authority within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such which reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: Provided that the provisions of this section shall not apply in a case where, (a) search is initiated u/s 132 or books of account, other documents or any assets are requisitioned u/s 132A in the case of the assessee on or after the 1st day of April, 2021: or (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, Jewellery or other valuable article or thing, seized in a search under Section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st Day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied with the prior appro....
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....d 148A of the Act. The term used in the heading of section 151 is "sanction for issue of notice". Therefore, the approval u/s 151 of the Act is not a mere permission but it is a sanction for issuing notice u/s 148. In the case in hand, the DGIT (Inv) has granted the sanction to the proposal in the proforma sent by the Assessing Officer placed at page Nos. 35 to 37 of the paper book as under: 28. Though there is a recommendation by the Pr. CIT, however, the sanction/ approval granted by the DG reveals that it has concurred with the proposal that the impugned matter covered u/s 149(1)(b) of the Act and issue of notice u/s 148 is approved. This sanction/ approval granted by the DGIT (Inv) Hyderabad in the light of the facts as discussed in the preceding part of this order clearly shows that the crucial aspects of the matter were overlooked while granting the sanction/ approval. The seized material was found and seized from the possession of one Shri Ramesh Kumar Sanaka in a separate search & seizure operation which is the very basis of the initiation of the proceedings. However, the proceedings are initiated on the premises that the seized material is found from the possessio....
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....et or expenditure, both these phrases have been issued in the Page | 30 ITA No.545- 547, 581, 723-724/Rjt/2024 A.Ys16-17 to 19-20 Mukesh M.Sheth SCN. The reason and the belief as also the information leading to allegation of escapement of income must be clear and explicit at the initial stage itself prior to recording of the reasons and then issue of notice pursuant to the reasons. The show cause notice(SCN) having used both the phrases at a time, it suffers from vagueness and demonstrates absence of initial judgment itself, as to whether the information represents assessee's asset or expenditure. As a result, the notice becomes bad in law and assessment order deserves to be quashed. The exercise of jurisdiction u/s the new sections 147 and 148 of the Act, is not meant to determine during reassessment, as to whether an item represents an asset or an expenditure or whether it exceeds the threshold of Rs. 50 lakhs. The said exercise is required to be carried out prior to or at the time of recording the satisfaction and the reasons and while obtaining the requisite approvals of higher authorities. Obviously, this has not been done and hence the notice suffers from an inherent juri....
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....missioner did not apply his mind at all while granting sanction. The satisfaction has to be with objectivity on objective material." 8. If the case in hand is analysed on the basis of the aforesaid principle, the mechanical way of recording satisfaction by the Joint Commissioner, which accords sanction for issuing notice under section 148, is clearly unsustainable and we find that on such consideration both the appellate authorities have interfered into the matter. In doing so, no error has been committed warranting reconsideration. 9. As far as explanation to Section 151, brought into force by Finance Act, 2008 is concerned, the same only pertains to issuance of notice and not with regard to the manner of recording satisfaction. That being so, the said amended provision does not help the revenue. 10. In view of the concurrent findings recorded by the learned appellate authorities and the law laid down in the case of Arjun Singh (supra), we see no question of law involved in the matter, warranting reconsideration." 31.Thus, the Hon'ble High Court has held that granting the sanction mechanically in order to discharge the statutory obligation g....
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....upon by the Assessing Officer. The said power cannot be exercised casually and in a routine manner. Therefore, the notice issued u/s 148 of the Act was quashed by the Hon'ble High Court on the ground of non- application of mind by the authorities before granting the approval. 34. In the case of SBC Minerals (P.) Ltd. v. Assistant Commissioner of Income-tax (Supra), the Hon'ble Delhi High Court while considering an identical issue has held in para 14 and 15 as under: "14. Perusal of the record reveals that the request for approval under section 151 of the Act in a printed format was placed before the Principal Chief Commissioner of Income-tax ["PCCIT"] on 20-3-2023. PCCIT granted the approval the same day. The approval accorded by the PCCIT in Column No. 22 is extracted below :- 22 Reasons for according approval/ rejection by the specified authority to order u/s 148A(d) AND/OR issuance of notice under section 148 of the Income-tax Act, 1961? Remarks: Approved u/s 148A(d) as a fit case. Name: RAJAT BANSAL Designation: PCCIT, DELHI Date: 20/03/2023 15. It is evident that the approval order is bereft of any reasons. It does not even ....
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....is a fit case to issue notice under section 148. He vaguely referred to certain communications received by him from the Commissioner of Income-tax, Bihar and Orissa, without mentioning the facts contained in those communications. All that he has said was that from those communications it appeared that the alleged creditors are name-lenders and the transactions are bogus. The Income- tax Officer did not even come to a prima facie conclusion that the transactions to which he referred to are not genuine transactions. He appeared to have only a vague feeling that they may be bogus transactions. Further, in his report he stated, "hence proper investigation regarding these loans is necessary". In those circumstances the Supreme Court pointed out that the conclusion of the Income-tax Officer was that there was a case for investigation as to the truth of the alleged transactions which is not the same thing as saying that there are reasons to issue notice under section 148. In this case, however, the Income-tax Officer refers to the order of the sales tax authority determining a turnover at a higher figure and levying penalty for the suppression of turnover. On the basis that the turnover h....
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....hould be satisfied, it does not require he should record his reasons for his satisfaction. It is true that if this court comes to the conclusion that the Commissioner could not have been satisfied at all having regard to the facts and circumstances of the case, the court would not hesitate to say that the requirements of section 151(2) are not satisfied even though the Commissioner might have said against column 8 that he was so satisfied. But, in this case, I am unable to say that the Commissioner could not have applied his mind or could not have been satisfied. The form like the one which is being used containing an endorsement merely saying "Yes" would justifiably cause apprehension that the act of the Commissioner is a mechanical act. In order to obviate this impression and to infuse more confidence in the assessee, it would be proper if the Commissioner also briefly states why he has given his sanction to the proceedings under section 147, thus avoiding all arguments in courts of law whether he applied his mind or he would have been satisfied in the circumstances of the case or not. The writ petition is dismissed but in the circumstances without costs." 37. I....
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.... record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. In so far the claim of the learned AR, that the AO had in the body of the "reasons to believe" stated that the approval u/s 151 of the Act was to be obtained from the Commissioner of Income-tax (OSD), Range-VI, Pathankot, while for the same as per the form of approval was obtained from the Additional CIT, Range-VI, Pathankot is concerned, we are of the considered view, that the said assertion of the ld AR is based on misconceived and half- baked facts. As stated by the Ld DR, and rightly so, as the Commissioner of Income-tax Range-VI, Pathankot was at the relevant point of time holding the charge as that of the Additional CIT, Range-VI, Pathankot, therefore, it was incorrect on the part of the ld AR to claim that the AO had obtained the approval from an authority different from that as stated in the body of the "reasons to believe". We, thus, finding no substance in the aforesaid claim of the ld AR are constrained to reject the same. 8. Adverting to the claim of the ld AR, that the authority granting the sanction u/s 151 of the ....
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....only after being satisfied that it is a fit case for issuance of notice u/s 148, approve the same. In fact, the approving authority in discharge of his aforesaid statutory duty is obligated to record his satisfaction as regards the reasons recorded by the AO for reopening the case of the assessee, in a manner, which would reveal that as per him it is a fit case for issuance of notice u/s 148 of the Act. In our considered view, mere scribbling of "Yes" by the approving authority can by no means suffice the statutory obligation cast upon him for granting approval after due application of mind for issuance of notice u/s 148 of the Act by the AO, because, if that be so, then, the said statutory check on the part of the superior authorities would be rendered as mere an idle formality, nugatory or in fact nothing better than an eye wash, which would beyond any doubt defeat the very purpose for which the said supervisory jurisdiction of the superior authorities had been made available on the statute by the legislature. Our aforesaid conviction is supported by the recent order of this Tribunal in the case of Shri Charanjiv Lal Aggarwal, Prop. M/s. Premier Rubber Mills, Amritsar Vs. ITO, Wa....
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.... Sd/- (Umesh Takyar) Joint Commissioner of Income Tax Range-1, Jalandhar" From the aforesaid approval it is clear that the JCIT, Range-1, Jalandhar recorded the satisfaction in a mechanical manner without application of mind. He accorded the sanction for issuing notice under section 148 of the Act in a mechanical manner. 14.1 On a similar issue the Hon'ble Guwahati High Court in the case of Ladhuram Laxmi narayan Vs. ITO, Additional 102 ITR 595 (supra) held as under: 22. Sub-section (2) of Section 151 requires that before issuing a notice under Section 148, the Commissioner must be satisfied on the reasons recorded by the Income-tax Officer that it is a fit case for the issue of such notice. The submission of the learned counsel is that in the instant case there was no real satisfaction of the Commissioner or in other words there could not be satisfaction of the Commissioner as contemplated under Subsection (2) in the facts and circumstances of the case. In the column of the report whether the Commissioner was satisfied, the Additional Commissioner said " Yes ". 23. We have already found that the first ground given by the Income-tax....
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....ical manner, without application of mind to accord sanction for issuing notice under section 148 of the Act. On an identical issue the Hon'ble M.P. High Court in the case of CIT Jabalpur Vs. S. Goyanka Lime & Chemical Ltd. reported at (2015) 56 Taxmann.com 390 by following its own decision in the case of Arjun Singh Vs. ADIT (2000) 246 ITR 363 (M.P) held as under: 7. We have considered the rival contentions, and we find that while according to sanction, the Joint Commissioner, Income Tax has only recorded so "Yes, I am satisfied". In the case of Arjun Singh (supra), the same question has been considered by a Coordinate Bench of this Court, and the following principles are laid down :-- The Commissioner acted, of course, mechanically in order to discharge is statutory obligation properly in the matter of recording sanction as he merely wrote on the format "Yes, 1 am satisfied" which indicates as if he was to sign only on the dotted line. Even otherwise also, the exercise is shown to have been performed in less than 24 hours of time which also goes to indicate that the Commissioner did not apply his mind at all while granting sanction. The satisfaction has to be....
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....ical to the facts involved in the aforesaid referred to case of Shri Satnam Singh, Jalandhar Vs. ITO, Ward-1(4), Jalandhar in ITA No. 579/ ASR/2019 for the A.Y. 2013-14, so respectfully following the aforesaid referred to order dt. 29/06/2021 the reopening of the assessment under section 147 of the Act by issuing the notice under section 148 of the Act is quashed. Since we have decided the legal issue in favour of the assessee therefore no finding is given on the other grounds raised by the assessee on merit." Also, we find that a similar view had been taken by the ITAT, Chandigarh Bench in the case of Shri. Tek Chand Vs. The ITO, Ward-2, Karnal, ITA No. 255/Chd/2020, dated 15.03.2021. In the said case the approving authority, i.e., Principal CIT, Karnal had granted the approval for issuance of notice u/s 147 of the Act, as under :- "Yes, satisfied, it is a fit case for issue of notice under section 148 -Sd/- Pr. CIT, Karnal" The Tribunal by drawing support from the judgments of the Hon'ble High Court of Madhya Pradesh in case of CIT Vs. S. Goyanka Lime & Chemical Ltd (2015) 56 taxmann.com 390 (MP) and that in the case of Arjun Singh....
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....nd is liable to be vacated on the said count itself. Accordingly, for want of valid assumption of jurisdiction by the AO the assessment framed by him u/s 147/143(3) of the Act, dated 24.02.2014 is herein quashed." 41. Therefore, in view of the fact that notice issued u/s 148 of the Act in respect of A. Ys 2014-15 to 2018-19 after the expiry of 3 years from the end of the A.Y, the approval of the specified authority granted in a mechanical way renders the reopening of the assessment itself bad in law. Accordingly, in view of the facts and circumstances as cited above and various decisions as stated above, we hold that the reopening of the assessment is not valid and liable to be set aside. Apart from the invalid approval/ sanction u/s 151 of the Act, the Assessing Officer has also failed to bring the case in the category where mandatory conditions u/s 149(1)(b) of the Act are satisfied for initiation of proceedings u/s 147/148 of the Act after the expiry of 3 years from the end of the relevant A. Ys and therefore, the reopening of the assessment for want of the satisfaction of mandatory condition u/s 149(1)(b) of the Act is also invalid and liable to be quashed. We order ac....
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....d circumstance of the case, Learned CIT(A) is not justified in sustaining the addition of Rs.3,27,23,774/-. 10. On the facts and circumstance of the case, Learned CIT(A) is not justified in confirming the addition of Rs.63,89,444/-. 11. Any other ground or grounds that may be urged at the time of hearing of the appeal." 8. Identical issues have been considered by us in case of M/s. Ace Tyres (P) Ltd in ITA No. 1207/Hyd/2020 for the A.Y 2019-20 vide even date order as under: "43. So far as the facts and circumstances leading to the initiation of the proceedings u/s 147/148 of the Act are concerned, the same are common for all the A. Ys from 2014-15 to 2019-20. Therefore, the same are not required to be repeated here. Only new fact for the year under consideration is that initially, the Assessing Officer issued notice u/s 148 on 18/03/2023 in response to which the assessee has filed the return of income on 15/11/2023. However, the Assessing Officer dropped the re-assessment initiated vide notice u/s 148 dated 18/03/2023 and issued a fresh notice u/s 148 on 14/11/2024. Thus, the assessee has challenged the notice issued by the Assessing Officer u/s 148 on....
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....s initially issued on 18/03/2023 was dropped by the Assessing Officer and thereafter, a fresh notice u/s 148 was issued on 14/11/2024. Undisputedly, the re-assessment order passed by the Assessing Officer is in pursuant to the notice u/s 148, dated 14/11/2024 and therefore, the reopening of the assessment for the A.Y 2019-20 was also after the expiry of 3 months from the end of the A.Y under consideration. The Assessing Officer has given identical reasons for reopening of the assessment as recorded for the reopening of the assessments for the A. Y 2014-15 to 2018-19. Therefore, so far as the validity of the reopening of the assessment for the A. Y 2019-20 as considered to the extent of the common facts and circumstances to the reopening of the assessment for the A. Y 2014-15 to 2018-19 is concerned, our finding on this issue for the A.Y 2014-15 is applicable mutatis-mutandis for the year under consideration and consequently, the notice issued u/s 148 of the Act on 14/11/2024 is held as invalid and liable to be quashed. 48. Since this notice u/s 148 of the Act, dated 14/11/2024 was issued after dropping the proceedings initiated by the Assessing Officer vide notice u/s 148 ....
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....earch and seizure operation u/s 132 of the IT Act was carried out by the ADIT(Inv.) Unit-1(1), Hyderabad on 04.01.2023 covering the group cases of M/s Excel Rubber Group and related entities /individuals. The case of the assessee, M/s Exel Rubber Private Limited, a group company, in which search u/s.132 was conducted on 04.01.2023 was centralised to this office ACIT-CC-1(2), Hyderabad. 2. During the Search proceedings, details of various unaccounted cash receipts, viz., scrap sales, cash generated from adjustment purchase transactions, cash received on sale of lands, etc. were found and seized in certain cases. After analysis of the seized material and investigation, the ADIT (Inv.), Unit-I(1) has quantified the undisclosed income detected in the hands of the assessee company M/s Exel Rubber Private Limited, as under: Asst. Year Undisclosed Income Quantified by ADIT Additional Income admitted by the assessee out of the Undisclosed Income Detected 2014-15 3,46,53,599 1,98,15,318 Note: If digitally signed, the date of digital signature may be taken as date of document. AAYKAR BHAWAN, OPPOSITE LB STADIUM, BASHEER BAGH, HYDERABAD, HYDERABAD, Telangana, 500004 Email: HYDERABAD....
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....48A(b) NA 14. Date by which assessee was required to submit reply to show-cause notice u/s148A(b) or the final extended date. NA 15. Whether any reply received from assessee u/s 148A(b)? [Yes/No/NA] 16. Whether personal hearing requested by assessee [Yes/No/NA] If yes, date(s) of hearing 17. Whether the provision of Sec.150(1) are applicable. [Yes/No/NA] If yes, relevant facts to be provided 18. Reasons for the belief that income has escaped assessment. As per enclosed Annexure Date: 05.09.2023. (S. SHYAM KUMAR) Asst. Commissioner of Income Tax, Central Cirefe-1(2), Hyderabad 20. Recommendations of the CIT / PCIT as per musique attached. (YOGESH KUMAR VERMA, IRS) Principal Commissioner of Income Tax (Central), Hyderabad. Date: 21. Reasons for according approval / rejection by the specified authority to order u/s 148A(d) and / or issuance of notice under section 148 of the Income Tax Act, 1961 Impugnawant is covered up/3/49(1)(s) Devefare issue of notice w/ 148 in agym Date: 6/10/23 (SANJAY BAHADUR, IRS) Director General of Income Tax (Inv). Hyderabad. Document 3 Party No. H O : M/s Ramesh Kuma Flat No. 401, Chestiya Estates, Near Nagarju....
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.... on solemn affirmation/ oath, in ou presence, No coercion, threat, inducement, promise or other una und to bear on the above deponent. The statement was read over / explained-in-the-local language vis to the deponent's, Who had been correctly recorded. via 7. The following other important persons were present in the place of search an either took an active part or helped the search proceedings Name Relationship Wife Jhansi Rani Sanaka . The search commenced on 04.01.2023 at 06.50 a.m./p.m. The proceedings were losed 06.01.2023 at 10.15 a.m./prm as finally concluded / temporarily concluded for the day to be commenced subsequcoated inside Almirah in the Bed room, situated at the North-west corner of the residence remises at Flat No. 401, Chestiya Estates, Near Nagarjuna High School, Rajeev Nagar, Finnerbad in our presence. . Orders under 132(3) of the I. T. Act 1961 in respect of the sealed locker inside Almirah in he Bed room, situated at the North-west corner of the residence premises at Flat No. 401, thestiva Estates, Near Nagarjuna High School, Rajeev Nagar, Khairatabad was served on DDIT(Inv.], Unit-1(3), Hyderabad. 10. Before leaving the above mentioned plac....
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....tes, Near Nagarjuna, amesh Rajeev Nagar, Khairatabad, Hyderabad - 500045, the asses Ch Sche sh Kumar Sanaka was sent to the corporate office of M/s Exel Rubber Private Limited at Plot No.7, Thrushna Building, TGIIC /s 500081. Authorised Officer वी. दिनेश अदितà¥à¤¯à¤¾ à¤à¤¾.रा.से. B TTF. '90 MA, IRS. D.H. .. . .. Lyx (Iv ) que-[ . .. Cat 13), Hyderabad Assessee Witness-1 0 Witness-2 /23 PANCHANAMA A) Warrant in the case of (B) Warrant to search : perused the same. S1. DESCRIPTION Total Pages Written Pages Period written of which year of Pages on ME lon marks placed 01 External Hard Disks - Seagate One Touch 2TB S No. NACNFL5K Master 215 Seagate One Touch 1TB S No. NABWSJJ2 Working Copy! annexed and Copy) marked as AIRKS/RES/01 containing the back up of Mobile phones and email. - . 02 oose sheets annexed and marked s Annesure - A/RKS/RES/02 130 01-130 - - - 03 Loose sheets annexed and marked annencd mark 61 01-61 - - - Total upto this page 03 Document 4 PANCHANAMA Party No. MARS- 1 (A) Warrant in the ense of : M/s Excl Rubber Priv....
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....ctor of Income- tax [Inv.], Hyderabad to Shri Satendra Sharma (Security incharge) who was present in the said place at the time and after reading the seid authorization/ after the authorization was explained to him in local language vix. Hindi by Shri Rajesh: Kumar Meena, Inspector of Income Tax, signed it in our presence and along with us, in token of having perused the same and to Shri Jwala Prasad, Asst Accounts Manager of M/s Excl Rubber Private Limited subsequently, who, after reading the said authorization, signed it in our presence in token of having perused the same. 2 .- Ac1000y% search was-contiminnee-of-the-proceeding- we-long-with-the placevand butbortset officers before the commencement of proceedings today inspected the seals which had been placed mm that-date +e. and found them to be intact / tempered-with-as nerrated in the encinmires 3 The above mentioned search party offered themselves for personal search before commencing the search which was taken / declined 4 A search of the above mentioned place was carried out by the said party in our presence in an orderly manner without hurting the sentiments of any of the occupants of premises Nothing untoward / t....
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....ी. à¤. टी. बी. कà¥à¤®à¤¾à¤°, मो.रा. रे, V.A.T.V. KUMAR, IR S. Name 313 1 (41) Deputy Director of income Tax (Inv.) Design (0mm(2), Fonate / Und-il (2), Hyderabad. Date : 2. 16ans Por Ties Signature of the person receiving the copy of the panchariama Name : S. RAMESH KUMAR position in / relationship to 'A' Su Mompar Formance Date Exil Rubber (8) kg) . Document 5 Q.13 Please refer to the Q.No.60 of your statement recorded at your residence during the course of Search and Seizure u/s 132 of the I.T. Act, 1961 which is reproduced below. Q.60 I am showing you excel workbooks named "CASH ACE 21-22", "CASH EXEL 20-21", "CASH EXEL 21-22" and "CASH VILAS 21-22" found in the folder named "CASH" on desktop of your Dell laptop which was found during the course of search and seizure proceedings at this premise. Please confirm the same and explain the contents in them. Please also state that the transactions in the excel workbooks were recorded in the books of accounts. Ans. Yes sir, I confirm that an excel workbooks named "CASH ACE 21-22", "CASH EXEL 20-21", "CASH EXEL....
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....actions as recorded above contain details of cash generated from sale of scrap, purchase adjustments/accommodations, sale of raw materials, sale of immovable property, interest received on loans advanced, repayment of such loans advanced by M/s Exel Group and its Management in their individual capacity. I would like to further state that amounts mentioned in the table above for different financial years include amounts realized from the debtors to whom either the Group concerns or the individual directors have advanced loans earlier which have to be adjusted for arriving at the actual cash generated over years. day 06/123 Document 6 Annexure-A2 Proforma for approval by the Specified Authority 1. Name of the assessee M/s Ace Tyres Private Limited 2. Address & e-Mail of the assessee 314 & 315, Coca Cola Road, Ameenpur Road, Bachupally Village, Hyderabad 3. PAN AADCA2210N 4. Status Company 5. Circle/Ward/Range/CITCharge Central Circle-1(2), Hýd 6. Assessment year 2015-16 7. The quantum of income which has escaped assessment Rs.6,08,84,018/- 8. Approval needed for (tick appropriate box) Order u/s148A(d) required for issuance of notice u/s148 Order u/s 148A(....
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.... annexque attached. Date: योगà¥à¤°à¥‡à¤¶ वरà¥à¤®à¤¾ (YOGESH KUMAR VERMA, IRS) Principal Commissioner of Income Tax (Central), Hyderabad. 21. Reasons for according approval / rejection by the specified authority to order u/s 148A(d) and / or issuance of notice Imprigent uwant is coveren w/c149(1) (b). under section 148 of the Income Tax Act, 1961 I some of motive w/5/98 in ayund. Date: 6/10/23 (SANJAY BAHADUR, IRS) Director General of Income Tax (Inv), Hyderabad. Document 7 GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE-1(2) HYDERABAD To. ACE TYRES PRIVATE LIMITED SY NO.314/315 AMEENPUR ROAD,QUTUBULLAPUR MANDAL BACHUPALLY VILLAGE HYDERABAD 500072.Telangana India PAN: Assessment Year: Dated: DIN & Letter No : AADCA2210N 2019-20 28/12/2024 ITBA/AST/F/17/2024-25/1071655232(1) Sir/ Madam/ M/s, Subject: Reasons for reopening of assessment proceedings u/s.147 Notice u/s.148 was issued originally on 18.03.2023 requiring the assessee to file return of income within 30 days from the receipt of the notice. Howe....