2019 (8) TMI 891 - ITAT PATNA

Reopening of assessment u/s.147 - addition u/s.68 - AR contended that reopening is time barred because the notice u/s.143(2) of the Act was issued beyond six months from the prescribed period - HELD THAT:- Notice u/s.147/148 of the Act was issued on 31.03.2014, which was duly served on the assessee on 03.04.2017 and the assessee stated by way of written submission on 03.04.2017 stated that the original return filed on 11.10.2010 may be treated as return filed in response to notice u/s.147/148 of the Act. Therefore, the return would be deemed to be filed in the financial year 2017-2018. The AO can issue notice within six months from the end of the financial year in which the return has been filed. In the present case, the AO issued notice u/s.143(2) of the Act on 22.11.2017 which is under limitation period and the reassessment has also been completed on 29.12.2017, which is under the limitation period and the reassessment has also been completed on 29.12.2017, which is under the time limit as prescribed u/s.153 of the Act. Therefore, this ground of assessee is rejected.

CIT(A) has passed the ex-parte order without giving reasonable opportunity of hearing and violated the provisions of natural justice - We noted from the order of CIT(A) that he has issued notice to the assessee for compliance but it is clear from the order of CIT(A) that the assessee has not complied the notice issued by the CIT(A) even reasonable opportunity has been given to him. Therefore, the CIT(A) has contested the issue on the basis of material before him. Accordingly, the ground of assessee is also rejected.

Proper approval has not been obtained from the appropriate authority before initiating the proceedings u/s.147/148 - we perused the copy of ITNS-10 which is placed at paper book at page 41 & 42 at column Sl. No.12 & 13 which is blank and this form has been certified by Manish Verma, ITO Ward-2(1), Patna without dated. We also noted from the ITNS -10, which is filed by the CITDR that column No.12 & 13 has duly been filled by the appropriate authority. We are in agreement with the contention of ld. DR that the proposal copy for approval might have been given to the assessee as certified copy which was kept in the file of the AO at the time of sending for approval as one office copy. Therefore, this argument of the ld. AR of the assessee is also rejected.

Reassessment is not sustainable as there is a difference in figure in reasons recorded and in the findings recorded by the AO - we are of opinion, that if there is any difference of figure mentioned in the reasons recorded and the findings recorded by the AO, that will not amount to non-sustainability of the reassessment proceedings. Accordingly, we reject this ground of assessee.

Reasons for issuing notices - In this case, the Assessing Officer has given the reasons to the assessee for reopening of the assessment and after considering the objection to the reopening of assessment, has disposed of the objection of the assessee to the initiation of proceedings by way of speaking order passed which has been incorporated in the assessment order. Therefore, the conditions precedent in the decision of Hon’ble Supreme Court in the case of GKN Driveshafts [2002 (11) TMI 7 - SUPREME COURT] has been complied with by the Assessing Officer. We also find that the CIT(A) has given a categorical finding with regards to the reopening of assessment and referred various judicial pronouncements on this issue and rejected the ground of initiation of assessment proceedings. We, therefore, uphold the same and dismiss this part of ground of appeal of the assessee.

Addition u/s 68 - Mere confirmation or the fact that the money has been received through the banking channel is not sufficient enough to establish the creditworthiness of these shareholders. It is not a case of establishing the source of source but at least basic documentation to establish the creditworthiness of these shareholders should have been brought on record which assessee has failed in the instant case. Whether share subscribers have their own profit making apparatus and were involved in any tangible business activity or were they merely rotated money, which was coming through the bank accounts. These are some of the questions which remain unanswered in the present case. creditworthiness of the share applicants, in the present case in hand, have not been proved by the assessee, therefore, we do not find any error in the findings recorded by the CIT(A) and, hence, the same are upheld and appeal of the assessee is dismissed.