TaxTMI 
TaxTMI 
2022 (9) TMI 1722
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....n of income was processed under section 143(1) of the Act. Subsequently, a search and seizure operation under section 132 of the Act was conducted at the premises of one Sh. Surender Jain and Sh. Virender Jain on 14.09.2010. In course of such search and seizure operation, it was found that the concerned persons were providing accommodation entries to various other persons. The seized materials indicated that the assessee is a beneficiary of accommodation entries provided by Sh. Surender Jain and Group entities for an amount of Rs. 31,40,000/-. This information along with the seized material as well as the appraisal report was forwarded by the Investigation Wing of the Department to the Assessing Officer of the present assessee through jurisdictional administrative head. Based on the information and materials received from the Investigation Wing, the Assessing Officer formed a belief that the income chargeable to tax for the year under consideration has escaped assessment. Accordingly, after recording reason to belief and obtaining approval from the competent authority, the Assessing Officer reopened the assessment under section 147 of the Act by issuing a notice under section 148 o....
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....d prejudicial to the interest of Revenue. Accordingly, he set aside the assessment order with a direction to the Assessing Officer to frame the assessment afresh after examining the seized material and confronting them to the assessee. 4. Before the Tribunal, in addition to the grounds raised in the memorandum of appeal, the assessee has raised a number of additional grounds in two separate letters filed on 28.08.2019 and 02.09.2019. The additional grounds raised in letter dated 28.08.2019 are as under: 1. Without prejudice to other Grounds of Appeal, whether the lower Authorities erred in law, on facts available on records in not issuing a specific notice u/s 153A r/w section 153C and framing the impugned assessment u/s 147/143(3) of the Act which is without jurisdiction and consequently null and void. 2. Without prejudice to other Grounds of Appeal, whether the lower Authorities erred in law, on facts available on records in not holding the impugned assessment u/s 147/143(3) without issue/service of notice u/s 143(2) of the Act is illegal, arbitrary, unwarranted, uncalled for and against the facts and circumstances of the case. 3. Without prejudice t....
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....is is not a case of no enquiry, as the A.O. has examined each & every aspect during the assessment proceedings. 5. On the facts and circumstances of the case, Pr CIT has erred both on facts and in law in setting aside the issue of share capital amounting to Rs. 31,40,000/- to the file of the A.O. without properly appreciated the explanation of assessee brought on record. 6. On the facts and circumstances of the case, the learned CIT has erred both on facts and in law in ignoring the contention of the appellant that the proceeding under Section 263 cannot be used for substituting option of the A.O. by that of the CIT. 7. On the facts and circumstances of the case, the learned Pr. CIT has erred both on facts and in law in invoking revisionary power under Section 263 of the Act despite the fact that even after thorough examination, no specific findings have been given on the issue of how the order is erroneous and prejudicial to the interest of Revenue. 8. The above grounds of appeal are without prejudice to each other. 9. That the appellant craves leave to add, amend or alter any of the grounds of appeal. 7. At the time of hearing, lear....
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....td. vs. ITO, ITA No. 7791/Del/2018, dated 01.04.2019. 10. In support of his proposition that the disposal of objection by non-speaking order makes the assessment order invalid, learned counsel for the assessee relied upon decisions submitted in case law compilation. 11. Strongly opposing the additional grounds raised by the assessee challenging the validity of the assessment order at this stage, learned Departmental Representative submitted, the assessee had accepted the assessment order without raising any issues on its validity. Therefore, at this stage of appeal proceeding arising out of an order passed under section 263 of the Act, the assessee cannot be permitted to challenge the validity of the assessment order. Further, drawing our attention to additional ground no. 2 dated 28.08.2019, he submitted, whether the Assessing Officer has issued notice under section 143(2) of the Act or not is a purely factual issue which has to be verified with reference to the facts available in the assessment record. He submitted, if the assessee alleges non-issuance of notice under section 143(2) of the Act, it is for the assessee to prove such fact through proper evidence. He submitted,....
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....e learned PCIT. No material has been placed on record before us which can conclusively establish assessee's claim that the Assessing Officer did not issue any notice under section 143(2) of the Act before completion of assessment. In fact, learned Departmental Representative has strongly opposed assessee's contention regarding non-issuance of notice under section 143(2) of the Act. Therefore, the issue whether notice under section 143(2) was actually issued or not, is in the realm of disputed facts, which requires fresh investigation, hence, cannot be decided based on the facts and materials available on record. Therefore, we are unable to admit additional ground no. 2, dated 28.09.2019. However, rest of the additional grounds are admitted for adjudication, as, they can be decided based on facts available on record. 14. Insofar as additional ground no. 3, dated 28.09.2019 is concerned, it is the say of the assessee that learned PCIT has initiated proceeding under section 263 of the Act at the recommendation of the Assessing Officer. In this context, he has drawn our attention to a copy of order-sheet kept in the assessment folder. However, on perusal of the show-cause notice dat....
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....observations of the Hon'ble Jurisdictional High Court in case of PCIT Vs. Paramount Communication (P.) Ltd., [2017] 79 taxmann.com 409 (Delhi): ".......At the same time, the court notices that for both AYs 2004-05 and 2005-06, the note discloses the source of the information, i.e. DR1 Local Unit at Jaipur, sending information based upon the Commissioner of Central Excise's investigations. To require the Revenue to disclose further details regarding the nature of documents or contents thereof would be virtually rewriting the conditions in section 147. After all, Section 147 merely authorizes the issuance of notice to reopen with conditions. If the Court were to dictate the manner and contents of what is to be written, the statutory conditions would be added as it were. In this context, it needs to be emphasized that the court would interpret the statute as they stand in their own terms, but at the same time being conscious of the rights of the citizens. So viewed, Kelvinator of India (supra) strikes just balance. To add further conditions to the nature of discussion/reasons that the officer authorising the notice would have to discuss in the note or decision would be be....
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.... possibly invoked and employed only for the purpose of setting right distortions and prejudice caused to the revenue on account of impugned order passed, which is a unique conception and needs to be understood in the context of and in the interest of revenue administration. Such power cannot, in any manner, be equated to an ordinary appellate jurisdiction. The revisional proceedings are supervisory in nature and not like that of appellate authority. As a corollary, doctrine of merger would not thus apply. A reference may be made to the judgment rendered in the case of B.C. Nawn and Bros P. Ltd. vs. CIT [1977] 109 ITR 632 (Cal)(HC). Where the revisional proceedings are initiated, the Assessee retains the statutory right to seek remedy on issues adverse to it qua the assessment, unaffected by the later revisional proceedings. The superior appellate authority can express view on the assessment order passed unaffected by the revisional order. Besides, the powers of the revisional authority is limited to the issue which are not the subject matter of appeal and simultaneously operates adverse to the revenue. 20.4 The revisional power under Section 263 is a quasi-judicial power hedged ....
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....gree for the plain reasons indicated in the preceding paragraphs. Such determination of lack of jurisdiction resulting in effacing of subject order runs contrary to the statutory scheme of revision itself. The line of reasoning noted above were not placed before the Co-ordinate bench for examination and thus are of no moment. Hence, the arguments placed on the issue are not found to be persuasive and thus discarded. 21. As regards the main grounds, learned counsel for the assessee submitted that the assumption of jurisdiction under section 263 of the Act is unjustified as the assessment order cannot be considered to be erroneous and prejudicial to the interest of Revenue. Drawing our attention to the reasons recorded for reopening of assessment, learned counsel submitted, the assessment was reopened for examining the genuineness of investment made by some parties in share capital of the assessee company. He submitted, in course of assessment proceeding, the Assessing Officer made specific and detailed inquiry with regard to investment of Rs. 31,40,000/- in share capital of the assessee. In this context, learned counsel drew our attention to notice dated 11.06.2014 issued under s....
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....such inquiry with reference to the seized material. Thus, he submitted, since the Assessing Officer passed the assessment order without making proper inquiry, the order passed is erroneous and prejudicial to the interest of Revenue necessitating initiation of proceeding under section 263 of the Act. 23. We have considered rival submissions and perused the materials on record. We have also applied our mind to the decisions cited before us. Undisputedly, in course of a search and seizure operation conducted in case of Sh. Surender Jain and group entities certain incriminating materials were found indicating that the assessee has availed accommodation entries from certain group entities of Sh. Surender Jain Group towards investment in share capital. As could be seen from detailed discussion made by learned PCIT in the impugned order, the seized materials indicated that the assessee, through one of its persons paid cash to Sh. Surender Jain and group entities and the cash was again routed back through banking channel to the assessee by way of investment in share capital. As observed by learned PCIT, though, the Assessing Officer had in his possession the entire seized material, howe....
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....seized material indicated that the concerned entities issued cheques to the assessee after receipt of cash through some intermediary of the assessee. Various details relating to such circular transaction was found mentioned in the seized material. When the assessment was reopened for the very purpose of examining the said transaction between the assessee and the entities belong to Sh. Surender Kumar Jain group, the Assessing Officer was expected to be more circumspect and conduct a thorough and full-blown inquiry by examining in details the seized material and confronting them to the assessee. There is nothing on record to suggest that the Assessing Officer has conducted any such inquiry. The so-called inquiry conducted by the Assessing Officer is simply an eye wash and more of a routine and general nature, just for the sake of inquiry. That being the factual position emerging on record, in our view, the assessment order passed is not only erroneous but also prejudicial to the interest of Revenue. Since, both the conditions of section 263(1) of the Act are satisfied in the present case, learned PCIT was justified in exercising powers under section 263 of the Act. We refrain from di....
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....GS / Cheques / PO / DD in view of cash through various papers and dummy company run & control by him 2 On the basis of the information/documents received it is seen that Shri Surender Kumar Jain and Shri Virendra Jain were providing accommodation entries to a large number of companies The modus operandi is revealed from various documents seized during the course of search. For example, no documents were found at the addresses of the dummy companies in Patel Nagar and Paharganj areas of Delhi. The mobile number of Shri Surender Kumar Jain and Shri Virendra Jain were provided to the banks for the purposes of operating various company accounts with Axis Bank. The Annexure seized from the residence of Shri Surender Kumar Jain contains one account in respect of commission calculation for a period spread over three financial years from April 2007 to March 2010. Date wise entries have been made in respect of various accommodation entry related transactions For example page no 28 of Annexure A-13 shows such entries for one date, i.e. 02.03 2010 Various other seized annexures yincluding A-53, etc also clearly indicate to the fact that the assessee has been providing accommodation entries....