TMI Blog2014 (12) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 148 was invalid. Section 147 and 148 are charter to the Revenue to reopen earlier assessments and are protected by safeguards against unnecessary harassment of the assessee - They are sword for the Revenue and shield for the assessee. Section 151 guards that the sword of Sec. 147 may not be used unless a superior officer is satisfied that the AO has good and adequate reasons to invoke the provisions of Sec. 147 - The superior authority has to examine the reasons, material or grounds and to judge whether they are sufficient and adequate to the formation of the necessary belief on the part of the assessing officer - the Commissioner has simply put "approved" and signed the report thereby giving sanction to the AO - Nowhere the Commissioner has recorded a satisfaction note not even in brief - it cannot be said that the Commissioner has accorded sanction after applying his mind and after recording his satisfaction – thus, the contention of the assessee that the reopening is bad in law is upheld – Decided in favour of assessee. - ITA no.2499/Del/2011 - - - Dated:- 14-11-2014 - SMT. DIVA SINGH AND SHRI J.SUDHAKAR REDDY, JJ. For the Appellant : Shri Rakesh Kumar Khiwani, C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . That there is no material leave alone fresh material or even the circular in record on the basis of which the reasons to believe have been formed to initiate the reassessment proceedings despite a clear finding given by the Ld.CIT(A). b. That the AO has wrongly assumed jurisdiction u/s 148 on the basis of reasons to believe which are (1) vague, (2) based on the general circular (3) unsupported with any evidence, (4) to make roving and fishing inquiries, thus the initiation of proceedings is bad in law. c. Non specification of purpose of issuing the notice to assess/reassess/compute the income/loss/depreciation (1) renders the notice bad with an incurable defect, further (2) shows non-clarity in recording the reasons to believe, and thus the assessment framed on such illegal notice is void ab initio. 4. That the Ld.CIT(A) has erred in holding the assessment valid despite giving a clear finding that the assessment has been framed by not confronting the information material or any statement to the assessee, thus violating the fundamental principles of natural justice, as also the provisions of s.142(3), which is fatal and hence the assessment so framed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g bank Account no. Of entry giving bank Rs.50,000 178565 13.1.2000 Vijay Aggarwal Corp.Bank Kamla Nagar 11808 Rs.50,000 181755 13.1.2000 Bhagwan Swaroop Jain Corp.bank Kamla Nagar 14569 As per the information received, the assessee paid cash of ₹ 1,00,000/- to receive cheque of the same amount plus some more money ranging from 0.5% to 1% to receive this accommodation entry. Since the cash has been paid out of unaccounted money, I have reason to believe that income amounting to ₹ 1,00,750/- (Rs.1,00,000 + commission ₹ 4,750 estimated at 0.75%) has escaped assessment. Sd/- (Rajesh Dhingra) ITO Ward 6(1), New Delhi 7.3. In response to the letter addressed by the Income Tax Officer, Ward- 6(1), New Delhi, the ACIT, Range 6, New Delhi replied as follows. ACIT/R 6/06-07 Office of the ACIT, Range 6, New Delhi 110 002 Dt. 28.3.2007 To: The ITO, Ward 6(1), New Delhi Sub: Proposal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) A notice u/s.148 can be quashed if the belief is not bona fide, or one based on vague, irrelevant and non-specific information. The basis of the belief should be discernible from the material on record, which was available with the Assessing Officer, when he recorded the reasons. There should be a link between the reasons and the evidence/material available with the Assessing Officer. (iii) The reassessment proceedings were initiated on the basis of information received from the Director of Income-tax (Investigation) that the petitioner had introduced money amounting to ₹ 5 lakhs during F.Y. 2002-03 as stated in the annexure. According to the information, the amount received from a company, S, was nothing but an accommodation entry and the assessee was the beneficiary. The reasons did not satisfy the requirements of section 147 of the Act. There was no reference to any document or statement, except the annexure. The annexure could not be regarded as a material or evidence that prima facie showed or established nexus or link which disclosed escapement of income. The annexure was not a pointer and did not indicate escapement of income. (iv) Furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial evidences brought on record from both sides. We have also the benefit of perusing the order sheet entries by which the Ld. CIT has granted sanction. Let us first consider the relevant part of the provisions of Sec. 151 of the Act. 151. (1) In a case where an assessment under sub-section (3) of section 143or section 147 has been made for the relevant assessment year, no notice shall be issued under section 148 [by an Assessing Officer, who is below the rank of Assistant Commissioner [or Deputy Commissioner}, unless the [Joint} Commissioner is satisfied on the reasons recorded by such Assessing Officer that it is a fit case for the issue of such notice} : Provided that, after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued unless the Chief Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer aforesaid, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-section (1), no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of [Joint} Commissioner, after the expiry of four years from the en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the year Shri Amar G. Bajaj, Prop. Of Mohan Brothers, 712, Linking Road, Khar (W), Mumbai-52 was the beneficiary of such loans, expenses and gifts. The modus-operandi was to collect cash from the parties to whom loans were given and cash was deposited into account of Shri Nitin 1. Rugani and cheques were issued to the beneficiary of the loan transaction. In order to ensure that the money reached by cheques to the beneficiary Shri Nitin 1. Rugani kept blank cheques of the third parties. The assessee Shri Amar G. Bajaj had taken benefit of such entries of loans, commission ad bill discounting of ₹ 8,00,000/-, 11,21,243/- and 9,64,739/- respectively. The assessment was completed u/s. 143(3) of the 1. T. Act on 3Ft March, 1998 by DCIT-Spl. Rg. 40, Mumbai. It is seen from records that the aforesaid points have not been verified in the assessment. I have therefore reason to believe that by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, income has escaped assessment within the meaning of proviso to Sec. 147 and explanation 2 (c)(i) of the income-tax Act, 1961. 7. In the light of the above m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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