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2011 (1) TMI 689 - AT - Income TaxReassessment - Accommodation entries - validity of issuance of notice u/s 148 - completion of assessment barred by limitation - Initiation of proceedings u/s 147/148 during the pendency of the earlier year assessment - notices under section 148 of the Act for assessment years 2000-01 to 2004-05 were issued on 23-9-2005, the assessments for these years were to be completed by 31-12-2006. However, the assessments have been framed on 24-12-2007. - whether issue of notice under section 148 during the period when assessment/reassessment is pending is a 'nullity' or an 'irregularity'. - Held that:- The safest rule of distinction between 'irregularity' and 'nullity' is to see whether "a party can waive the objection; if he can waive, it amounts to irregularity and if he cannot, it is nullity." Further a waiver is an intentional relinquishment of a known right, but obviously an objection to jurisdiction cannot be waived, for consent cannot give a court jurisdiction where there is none. As discussed above the power to assess get vested in the Assessing Officer the moment he issues notice under section 148. The assessment is re-opened when notice is issued under section 148. It is for the completion of the assessment the notice under section 148 should be served on the assessee. From these judicial pronouncements referred to above it is clear that where the reassessment proceedings initiated under section 147 were not concluded to a logical end the Assessing Officer cannot issue fresh reassessment notice under section 148. Therefore, in our considered opinion, the assessments for assessment years 2001-02 to 2004-05 framed with reference to the notice issued under section 148 on 24-11-2006 during the pendency of assessment are bad in law. Entry providing business - commission on accommodation entries by way of purchase and sale bills to the needy parties - AO has simply taken all cash entries in the bank account and the total of the same had been assessed as income from undisclosed sources - while taking the above entries, the AO had not considered withdrawals made by the assessee before the cash deposits in the bank account. - Held that:- assessee was engaged in the business of providing accommodation entries and, therefore, the amounts deposited in the account of dummy concerns was to be treated as total receipts on which commission was to be determined. - only commission can be determined on the deposits made in the bank accounts of the dummy concerns. - commission is taxable as 25p however credit of 5p out of 25p received as commission has to be allowed. - AO directed to estimate commission income by applying 0.2 per cent net commission on turnover
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