TMI Blog2022 (6) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT(A) in quashing the re-assessment proceedings. We, therefore, uphold the same and the grounds raised by the Revenue on this issue are dismissed. - ITA No.5064/Del./2017 - - - Dated:- 31-3-2022 - Shri R.K. Panda, Accountant Member And Shri N.K. Choudhry, Judicial Member For the Revenue : Smt. Sunita Singh, CIT-DR For the Assessee : Shri Gautam Jain, Advocate, Shri Lalit Mohan, C.A. And Ms. Monika Aggarwal, Advocate. ORDER PER R.K. PANDA, A.M. This appeal filed by the Revenue is directed against the order dated 22.05.2017 passed by the Ld. CIT(A) 27, New Delhi, relating to the A.Y. 2009-10. 2. Facts of the case, in brief, are that the assessee is a public limited company incorporated on 13.09.1995 under the Companies Act 1956 and, is engaged in the business of manufacturing of kraft paper and brown paper usually used for packing. The assessee-company had filed its return of income on 26.09.2009 declaring total income of Rs.1,95,97,146/- after claiming deduction of Rs.3,88,42,025/- under section 80IA. The assessment was completed under section 143(3) on 22.11.2011 determining the total income of the assessee at Rs.5,84,39,170/- wherein the A.O. m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Vikaram financial Services Ltd. 40, Strand Road, 2nd floor, R.No.25, Kolkala-1 700001 724,000 36,200,000 2,700,000 2. Critcare financers(P) Ltd. 18A Ramakanta Bose Street, Kqlkata- 100,000 5,000,000 4,000,000 3. Astonish Financers (P) Ltd., 105, Old China Bazar Street, 3r i floor, Kolkata- 700003 140,000 7,000,000 5,600,000 4. Cosmos Real Estates (P) Ltd. 5, Sukhla! Jauhari Lane, Kolkata-700007 100,000 5,000,000 4,000,000 5. Jindal Hire Purchase (P) Ltd. 5, Sukhlal Jauhari Lane, Kolkata-700007 100,000 5,000,000 4,000,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 1,000,000 17. VDR Consultants (P) Ltd. 72/12, Desh Bandhu load, Kolkata-700035 100,000 5,000,000 1,000,000 18 Amber Credit co. Ltd. 115, College Street, Write Tower, Kolkat 700012 100,000 5,000,000 1,000,000 19 Abharani Vinimay(P) Ltd. 85, N.s. Road, Kolkata-700001 60000 3,000,000 2,400,000 20 Adequate Transport tburs Ltd. D-5/3111, 3ri1 floor, Awadh Complex, Laxminagar, Delhi 20000 1,000,000 800,000 21. Agile Conglomerate (P) Ltd. 27, Mullick Street, Kolkala-700007 100000 5,000,000 4,000,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,000,000 32. Ravapuriprabhu Tradecom (P) Ltd. 27, Mullick Street, Kolkata-700007 100000 5,000,000 4,000,000 33 Raj Kavira Mercantile (P) Ltd. 41, Shibtolla Street, Kolkata-700007 100000 5,000,000 4,000,000 34 Rasraj Enclave Maker(P) Ltd. 1 A, Grant Lane, Kolkata-700007 50000 2,500,000 2,000,000 35 S.S. Finvest (India) Pvt. Ltd. F-15, G.K. Bhagat Shopping complex, flaty No.4,1st, floor. Subhash Nagar, Delhi-27 20000 1,000,000 800,000 36 Sekhar Commerce (P) Ltd. 52, Weston Street, Kolkala-700012 200000 1,000,000 8,000,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n made for the relevant assessment year, no action shall he taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub- section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year In other words, the assessing officer is not bound by the restriction impounded by the proviso that no action can be taken unless any income chargeable to tax has escaped income by reason of failure as the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all materials facts necessary for his assessment, for that assessment year. Therefore, I have reason to believe that this amount of Rs.36,64,35,000/-represents income of M/s K R Pulp and Paper Ltd. chargeable to tax which has escaped assessment for A.Y 2009-10. As the case pert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e business has been done by them. From the copies of the return of income filed by these companies, the A.O. noted that they are all showing either NIL or negligible income. The A.O, therefore, issued commission under section 131(1)(d) of the of the I.T. Act, 1961 dated 17.08.2016 to the Investigation Wing Unit-3, Kolkata to enquire about the Kolkata based companies who invested in the shares of the assessee company. In response to the commission issued, a reply was received on 01.12.2016 stating that the following companies are involved in providing accommodation entries through share capital/share premium. S. No. Name of the Share Holder Address 8s Occupation No. of Share Total Amount Share Premium 55 BAHAR PAPER PRIVATE LIMITED 71, CANNING STREET, BAGREE MARKET, 5 TH FLOOR, R. NO. C-556, KOLKATA-700001 100,000 5,000,000 4,000,000 12 PAHARIMATA COMMODITIES (P) LTD. 10A, HOSPITAL STREET, KOLKATA- 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85, WS Road, Kolkata 700001 Union Bank of India Axis Bank, Kankurgachi Br. Kolkata (e) Money in the bank account of applicants were deposited two to three days before the issue of cheque of share application money. It is also interesting that the dates appearing on cheques issued are almost same as those of the dates on which money was deposited in the accounts of the applicants. This means that the applicants have issued the cheques in the favour of the assessee company on the same date on which money was deposited in the bank accounts From the above, it can be seen that all these companies have meager income and are not filing income tax returns regularly. These companies have apparently been incorporated for giving accommodation entries. Copies of balance sheets and P L a/c. were not provided in most of the companies and the source of fund was not explained. In any case, these companies are not going to invest in the assessee company which has neither yielded dividend nor there is any appreciation in share price. Further, from the above, it can be seen that (a) In the cases of most of the share applicants no confirmation was filed. (b) It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onus cast on it by providing the identity and creditworthiness of the share applicants and genuineness of the transaction. So far as the validity of re-assessment proceedings are concerned, the Ld. CIT(A) relying on various decisions quashed the same on the ground that the original assessment was completed under section 143(3) and the case was reopened after a period of 04 years from the end of the relevant assessment year and there is no allegation of any failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of the assessment. Further, no material much less any incriminating material was found during the course of search. The A.O. in a mechanical manner, without application of independent mind and on vague information has reopened the assessment which is not in accordance with law. 4. Aggrieved with such order of the Ld. CIT(A), the Revenue is in appeal before the Tribunal, by raising the following grounds : 1. The CIT(A) has erred on facts and in law and on facts in allowing the appeal of the assessee without truly appreciating the factual matrix of the case. 2. The Ld. CIT (Appeals) has erred in law and on the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Pvt Ltd 221 TAXMAN 0014 (Del.) 7. Globus Securities Finance Pvt Ltd 224 TAXMAN 237 (Delhi) 8. Empire Buittech Pvt. Ltd 366ITR 110 (Delhi) 9. ONASSIS AXLES PRIVATE LIMITED 364 ITR 53 (Delhi) 10. FOCUS EXPORTS PVT. LTD. 111 DTR 0012 (Del) 11. RathiFinlease Ltd 215 CTR 429 MP 12. Kundan Investment Ltd 263 ITR 626 (Cat) 13. Korlay Trading Co. Ltd 232 ITR 820 (Cat) 14. SumatiDayai 214 ITR 801 (SC) 15. Power Drugs Ltd. 245 CTR 623 P H 16. Nova Promoters Finiease (P) Ltd 342 ITR 169 (Del.) 17. AZEEM INVESTMENT PVT LTD 252 CTR 0217 Del.) 18. MAJOR METALS LTD 359 ITR 0450 (Bom) 19. INDEPENDENT MEDIA PVT. LTD. 25 taxmann.com 276 (Delhi) 20. NEELKANTHISPAT UDHYO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 years from the end of the relevant assessment year and there is no allegation by the A.O. of any failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of the assessment. Therefore, in view of First proviso to Section 147 of the I.T. Act, 1961, the reopening is not in accordance with law and is liable to be quashed. Referring to a plethora of decisions placed in the case law compilation, Learned Counsel for the Assessee submitted that when the original assessment has been completed under section 143(3) of the I.T. Act, 1961 and there is no allegation by the A.O. of any failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of the assessment, such reopening after a period of 04 years from the end of the relevant assessment year is null and void. Further, the reasons so recorded do not indicate how and why the assessee had failed to make full and true disclosure of the material facts. 6.3. Even otherwise also he submitted that the reopening made by the A.O. is based on borrowed satisfaction and there is no application of mind by the A.O. Further the approval has been given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oodview Trading Pvt. Ltd., vide ITA.No.377/2016 of Hon ble Delhi High Court. Copy of which is placed at pages 162 to 165 of PB in case law compilation. 2. Decision of Hon ble Delhi High Court in the case of CIT vs., Vrindavan Farms (P) Ltd., vide ITA.No.71/2015. [Pages 156-159 of PB] 3. Decision Coordinate Bench of Delhi Tribunal in the case of Zion Promoters Developers (P) Ltd., vide ITA.No.679/Del./2015 dated 28.02.2018. 7.1. Learned Counsel for the Assessee submitted that there is no material to even allege much less conclude that such funds have originated from the coffers of the assessee company. In absence of such allegation, no addition can be made under section 68 of the I.T. Act, 1961. In support of this contention, the Learned Counsel for the Assessee relied upon the following decisions: 1. CIT vs., Value Capital Services Ltd., 307 ITR 334 (Del.) 2. CIT vs., Real Time Marketing (P) Ltd., 306 ITR 55 (Del.) 3. CIT vs., Kamdhenu Steel and Alloys Ltd., 361 ITR 220 (Del.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. Ms. Malti Ghan Shyambhai Patadia vs. ITO ITA.No.3400/Ahd/2015 dated 06.02.2017. 12. M/s Rainbow International (P) Ltd vs. ITO ITA.No.3104/DeI/2013 dated 10.05.2016. 7.4. Learned Counsel for the Assessee referring to the following decisions submitted that lack of enquiry by the A.O. to rebut the fundamental facts on record by the assessee company makes the addition a nullity. 1. CIT vs., Gangeshwari Metal (P) Ltd., 361 ITR 10 (Del.). 2. CIT vs., Fair Finvest Ltd., 357 ITR 146 (Del.). 3. CIT vs., Goel Sons Golden Estate (P) Ltd., ITA.No.212/2012 dated 11.04.2012 (Del.). 7.5. Further the A.O. in the instant case has not made any enquiry in respect of each of the subscribers of share capital to falsify the various documents filed by the assessee. He accordingly submitted that the Ld. CIT(A) is legally and factually correct in quashing the re-assessment proceedings and also deleting the addition on merit. 8. We have considered the rival arguments made by both the sides, perused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngredients of provisions of Section 68 of the I.T. Act, 1961. 8.1. Before deciding the appeal on merit, we would first like to decide the validity of the re-assessment proceedings. As stated earlier, the assessment year involved in the instant case is A.Y. 2009-10 and the original assessment was completed under section 143(3) on 22.11.2011. We find the assessee in response to Question No.10 issued by the A.O. during original assessment proceedings has given the following reply in respect of subscribed and paid-up share capital. 10. (Q.No.10) Details of Subscribed and Paid-up Share Capital i. Details of Subscribed paid up Share Capital as on 31.03.2009 is attached in Annexure - I. ii. Share Application Forms in respect of Shares allotted/applied during the period 01.04.2008 to 31.03.2009 are attached. During the year the Company has issued 5064700 Equity Shares of Rs.10 each at a premium of Rs.40 per share. Detailed Chart showing the Name of the subscriber, PAN, Address, name of Bank, cheque No, date of Application and date of allotment along with the following is attached Share Application Form Proof of Identity (Incorporation certificate issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atively be made to the decision dated 8th October, 2015 of this court in W.P.(C) 1873 of 2013 (Oracle System Corporation vs. Dy. Director of Income Tax) and the decision dated 18th December, 2008 in W.P. (C) No. 17719-20 of 2006 (Silver Oak Laboratories Pvt. Ltd. vs. DCIT). 8.5 We further find there are certain errors in the reasons recorded. The reasons recorded stated the figure of share capital / share premium at Rs. 36,64,35,000/- which includes Rs. 11,32,00,000/- representing share capital raised in AY 2008-09 which stand accepted in the order passed u/s. 143(3) of the I.T. act, 1961. 8.6 We find the assessments have been framed u/s. 153A of the I.T. Act, 1961 for the AY 2010-11 to 2015-16 as a result of search u/s. 132(1) on 08.7.2015 and addition of an amount of Rs. 3,50,00,000/- was made on account of alleged unexplained share capital in AY 2010-11. However, the said addition was deleted by the Tribunal vide order dated 11.1.2022 passed in ITA No. 6177/Del/2018 on the ground that there is no incriminating material found as a result of search to support the addition made. 8.7 We find although certain references were made in the reasons recorded to various enquirie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Wing and all the companies were found bogus and non-existent. - That in the statement of entry providers along with bogus directors, it has been admitted that they are in the business of providing accommodation entries. - M/s KR Pulp and Paper Ltd is one of them which has received shares capital at exorbitant premium from large numbers of these non- descript companies mainly based in Delhi and Kolkata amounting to Rs.36,64,35,000/- in the financial year 2008-09 and, - That since, on the basis of enquiries conducted and statements recorded, it has been established that the above companies are bogus and nonexistent, the share capital received by M/s K R Pulp, and Paper Ltd. amounting to Rs.36,64,35,000/- in the F.Y. 2008-09 from these large number of non-descript companies is nothing but its own unaccounted income through these companies. 27.3. It has been then concluded as under : Keeping in view all above, I have reason to believe that an amount at least of Rs.36,64,35,000/- has escaped assessment in the case of M/s KR Pulp and Paper Ltd. for the A.Y. 2009-10 within the meaning of Section 147/148 of Income Tax Act, 1961. The re-assessment proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere initiated by AO after expiry of four years from the end of relevant assessment year. The proviso to section 147 of the Act, as also noted by AO stipulates as under: Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year 27.5 In view of the foregoing, merely having a reason to believe that income had escaped assessment, is not suffice to reopen assessment beyond the stipulated period of four years, unless it is alleged and proved that a particular income has escaped assessment due to failure on the part of assessee to disclose fully and truly all material facts necessary for assessment. 27.6 In the instant c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent/ lucid/explained from the record . b) 381 ITR 387(Del) Sun Pharmaceutical Industries Ltd. vs. DCIT In the present case, the Assessee had already made a full and true disclosure of all the relevant materials in the first instance when the original assessment was framed. This included the account books, tax audit reports etc. The return was picked up for scrutiny and after two questionnaires were answered to the AO's satisfaction by the Assessee, the assessment was framed under Section 143 (3) of the Act. In the circumstances, the reference by the AO to Explanation I to Section 147 of the Act is, misconceived for the simple reason that once the original return was picked up for scrutiny and the accounts and other documents were subjected to a detailed examination by the AO, the question of there being no full and true disclosure of the material facts did not arise. Significantly, the reasons for re-opening fail to mention which material was failed to be disclosed by the Assessee. In similar circumstances in Global Signal Cables (India) [P.) Ltd. vs, Dy- CIT 12014} 368 ITR 609/120151 229 Taxman 608/54 taxmann.com 114 (Delhi) this Court invalidated the re-opening of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 143(3) of the Act failing which there should not be any reopening of the assessment. In Oracle Systems Corporation y Asstt. PIT 120151 62 taxmann.com 291/235 Taxman 337 (Dehli) this Court reiterated the settled legal position that once a regular assessment is completed in terms of Section 143 (3) a presumption can be raised that such an order was passed by the AO on a proper application of mind. In the present case apart from a bland statement at the end of the reasons that the assessee failed to truly disclose the material particulars, it is not pointed out which material particular was not disclosed in the course of the original assessment by the assessee. Consequently, the Court has no hesitation in holding that reason (2) for reopening the assessment is based merely on a change of opinion and not on any tangible material warranting reopening of the assessment under Section 147/148 of the Act. 27.7 Apart from the above the assumption of jurisdiction u/s 147 of the Act is stated to be based on the enquiries conducted by Inspectors of the Investigation Wing at Delhi and Kolkata to form an opinion albeit prima-facie that appellant company has received share capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of them which has received shares capital at exorbitant premium from large numbers of these non- descript companies mainly based in Delhi and Kolkata amounting. The reasons do not mention the name of the entry provider who confirmed that assessee-company had received accommodation entries. Further no date of such statement has been mentioned, nor have the modes of such receipt or any details in terms of cheque number or bank been mentioned. vii) Further the reasons do not mention the modus operandi of alleged routing of unaccounted money of the assessee through shareholder companies. It was highlighted that reasons recorded suffer following factual infirmities and errors which prove that the reasons have been drafted without application of mind: During the year under consideration assessee has issued share capital including share premium to the tune of Rs.36,64,35,000/ - to various parties, out of which Rs.11,32,00,000/- was received in the immediately preceding previous year i.e. during the financial year 2007-08, detail of Share Application Money was already submitted during the course of assessment proceedings vide submission dated 05.08.2011. However, the Ld. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isdictional requirement for reopening of the assessment under Section 147/148 of the Act by referring to two decisions of the Supreme Court. In Chhugamal Rajpal v. SP Chaliha (1971) 79 ITR 603, the Supreme Court was dealing with a case where the AO had received certain communications from the Commissioner of Income Tax showing that the alleged creditors of the Assessee were name-lenders and the transactions are bogus. The AO came to the conclusion that there were reasons to believe that income of the Assessee had escaped assessment. The Supreme Court disagreed and observed that the AO had not even come to a prima facie conclusion that the transactions to which he referred were not genuine transactions. He appeared to have had only a vague felling that they may be bogus transactions'. 12. In the present case, after setting out four entries, stated to have been received by the Assessee on a single date i.e. 10th February 2003, from four entities which were termed as accommodation entries, which information was given to him by the Directorate of Investigation, the AO stated : I have also perused various materials and report from Investigation Wing and on that basis it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of law. In the case at hand, as is evincible, the assessing officer was aware of the existence of four companies with whom the assessee had entered into transaction. Both the orders clearly exposit that the assessing officer was made aware of the situation by the investigation wing and there is no mention that these companies are fictitious companies. Neither the reasons in the initial notice nor the communication providing reasons remotely indicate independent application of mind. True it is, at that stage, it is not necessary to have the established fact of escapement of income but what is necessary is that there is relevant material on which a reasonable person could have formed the requisite belief. To elaborate, the conclusive proof is not germane at this stage but the formation of belief must be on the base or foundation or platform of prudence which a reasonable person is required to apply. As is manifest from the perusal of the supply of reasons and the order of rejection of objections, the names of the companies were available with the authority. Their existence is not disputed. What is mentioned is that these companies were used as conduits. In that view of the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in the present case falls within the same category. At the time of the original assessment all the facts relating to the cash credits in question were fully disclosed. This has been found by the learned Judge at page 960 (of 118 ITR) and indeed this is the accepted position on the basis of which even the proposal of the ITO to the Commissioner (set out at page 964) proceeded. Thereafter, the only material received by the ITO appears to be that the revenue authorities had carried out certain investigations, that they had discovered the existence of bogus hundi brokers who were allegedly lending their names to assessee and that a list had been circulated to various ITOs of the hundi brokers who were allegedly indulging in malpractices. The internal audit party appears to have discovered that some of the creditors whose credits had been accepted in the assessee's case fell within this category and raised an audit objection which was the immediate provocation for the reopening of the assessment. In this case also, as in the case before the Supreme Court, there is no live connection or link established between the information or the facts, in the possession of the ITO, and the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther or not any income had escaped assessment. 27.12. Likewise in the case of CIT v. Suren International (P) Ltd. 357 ITR 24 (Del), it was held as under: 14. The learned counsel for the appellant contended that even though there is no specific allegation that the assessee had failed to disclose all the material facts but the same can be gleaned from the reasons itself. We are unable to accept this contention. In the first instance, we do not find the reasons as recorded by the Assessing Officer to be reasons in law, at all. A bare perusal of the table of alleged accommodation entries included in the reasons as recorded, discloses that the same entries have been repeated six times. This is clearly indicative of the callous manner in which the reasons for initiating reassessment proceedings are recorded and we are unable to countenance that any belief based on such statements can ever be arrived at. The reasons have been recorded without any application of mind and thus no belief that income has escaped assessment can be stated to have been formed based on such reasons as recorded. 27.13. Also Hon ble Delhi High Court in the case of Allied Strips Ltd. v. AC1T 384 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 148 of the Act. Kelvinator s case (supra) is also authority to the proposition that the material should have a live or proximate link with the assessee s suspected/concealed income or nondisclosure of a material fact. Precisely that kind of live link is absent in the facts of this case. 27.15 Further Gujarat High Court in the case of Orient News Prints Ltd. v. DCIT 393 ITR 527 has held as under: Similar information of material / details were supplied by the assessee with respect to the share application money. It appears that thereafter the learned Assessing Officer having satisfied with the genuineness with respect to the increase in the share capital as well as share application money and also with respect to the income of the assessee from trading in the fabrics framed scrutiny assessment under Section 143(3) of the IT Act. Therefore, subsequent reopening on the aforesaid grounds can certainly be said to be on a mere change of opinion by the subsequent Assessing Officer. As held by the Hon ble Supreme Court in the case of Kelvinator India Ltd. (Supra) and the Division Bench of this Court in the case of Gujarat Power Corporation Ltd. (Supra), on mere change of opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to apply his mind and form an opinion. The mere appending of the expression 'approved' says nothing. It is not as if the CIT (A) has to record elaborate reasons for agreeing with the noting put up. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. In the present case, the exercise appears to have been ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer. For these reasons, the Court is satisfied that the findings by the IT AT cannot be disturbed 27.17 Similar view has also been expressed in the case of Chhugamal Rajpal vs. S. P. Chaliha and Others 79 ITR 603 (SC). It has held therein as under: In his report the Income-tax Officer does not set out any reason for coming to the conclusion that this is a fit case to issue notice under section 148. The material that he had before him for issuing notice under section 148 is not mentioned in the report. In his report he vaguely refers to certain communications received by him from the Commissioner of Income-tax, Bihar and Orissa. He does not mention the facts contain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer had any material before him which could satisfy the requirements of either clause (a) or clause (b) of section 147. Therefore, he could not have issued a notice under section 148. Further, the report submitted by him under section 151(2) does not mention any reason for coming to the conclusion that it is a fit case for the issue of a notice under section 148. We are also of the opinion that the Commissioner has mechanically accorded permission. He did not himself record that he was satisfied that this was a fit case for the issue of a notice under section 148. To question No. 8 in the report which reads Whether the Commissioner is satisfied that it is a fit case for the issue of notice under section 148 , he just noted the word Yes and affixed his signature thereunder. We are of the opinion that if only he had read the report carefully, he could never have come to the conclusion on the material before him that this is a fit case to issue notice under section 148. The important safeguards provided in sections 147 and 151 were lightly treated by the Income-tax Officer as well as by the Commissioner. Both of them appear to have taken the duty imposed on them under these pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of assessment, but the reasons do not indicate how the assessee has failed to make full and true disclosure of all material facts, therefore, such reopening in our opinion is in violation of First proviso to Section 147 of the I.T. Act, 1961 in the light of the decisions of Hon ble Delhi High Court cited (supra). The Ld. D.R. also could not controvert the finding given by the Ld. CIT(A) on this issue while quashing the reassessment proceedings. Since the order of the Ld. CIT(A) is based on judicial precedents including the decisions of Hon ble jurisdictional Delhi High Court cited (supra) and the Ld. D.R. could not bring any material to controvert the findings given by the Ld. CIT(A) on this issue, therefore, we do not find any infirmity in the detailed order of the Ld. CIT(A) in quashing the re-assessment proceedings. We, therefore, uphold the same and the grounds raised by the Revenue on this issue are dismissed. 9. Since we are upholding the order of the Ld. CIT(A) in holding the assessment order passed under section 147 read with section 143(3) of the I.T. Act, 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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