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2020 (1) TMI 856 - AT - Income TaxReopening of assessment u/s 147 - Jurisdiction of ITO Ward 4(1), Jaipur in issuing the notice - legal entity holding two PAN - as per assessee assessment order has been passed in wrong name and address and there is non-application of mind by the Assessing officer while recording reasons before issuance of notice u/s 148 - change in name of company - Addition u/s 68 - HELD THAT:- There has been only a change in name of the entity and besides that, there is no change in the corporate identity of the assessee company. It is therefore not a case where the assessee company ceases to exist and/or amalgamated with any other existing/new entity. Therefore, it is not a case where the notice u/s 148 has been issued and assessment u/s 143(3) r/w 147 has been completed in the name of non- existent entity. Notice u/s 148 dated 27.03.2015 has been issued in name of Shree Silica Products Private Limited (PAN No. AACCS4046D) and the assessee company had earlier filed its return of income for A.Y 2009-10 on 30.03.2010 in name of Badaya Ispat Private Limited (PAN No. AADCB4084H). Therefore, it is a strange to note that the same legal entity has been holding two PAN numbers though in two different names and both continue to exist in Income Tax Department database as on the date of issuance of notice u/s 148 and passing of the assessment order u/s 143(3) r/w 147 of the Act. Under section 139A of the Act, it has been provided that “No person who has already been allotted a permanent account number under the new series shall apply, obtain or possess another permanent account number.” Therefore, where the assessee is prohibited from applying for a new PAN where a PAN has already been issued to it, the fact that such a new PAN has been applied and thereafter issued, to our mind, the new PAN and filing of return of income doesn’t confer any jurisdiction to the Assessing officer over such matter with such new PAN and the Assessing officer with earlier PAN continues to exercise jurisdiction over the assessee company. In the present case, therefore, the ITO Ward 4(1), Jaipur continues to exercise jurisdiction over the assessee company and not ITO Ward 1(1), Jaipur. Therefore, we donot find any infirmity in the action of ITO Ward 4(1), Jaipur in issuing the notice u/s 148 and completing the assessment u/s 143(3) r/w 147 of the Act. It is a case where no return of income has been originally filed by the assessee company and on perusal of reasons, we find that the Assessing officer has received tangible information from Investigation wing that the assessee has obtained accommodation entries basis which he has come to believe that income to the extent of ₹ 45 lacs has escaped assessment. There is a linkage between the material and formation of belief that income has escaped assessment. At the stage of recording reasons, the Assessing officer has to record his prima facie opinion that the income has escaped assessment. It is not the case of the assessee company that the details of the transaction recorded by the Assessing officer was not correct or false in terms of name of entity, nature of transaction and the amount involved. In the instant case, where the Assessing officer has received information that the assessee has obtained accommodation entries, the same constitute a tangible material and basis examination thereof, where he has held that income has escaped assessment, we donot see any infirmity in the action of the Assessing officer in exercising jurisdiction u/s 148 Addition u/s 68 - Communication received from DIT (Inv.)-II, New Delhi wherein the certain details have been given regarding bogus accommodation entries obtained by the assessee company BUT by the time of issuance of notice u/s 148 on 28.03.2015, the assessment in case of all these three entities were already completed on 28.03.2013 and in the assessment so completed, there is no finding that these entities have provided any accommodation entries to the assessee company. Investment made by these three entities in the assessee company was accepted as genuine investments. Therefore, once the assessee company has furnished necessary documentation as we noted above and the assessment in case of these share holder entities have been completed whereby there is no finding recorded by the Assessing Officer that they have provided accommodation entries to the assessee company and investment thus made have been accepted as genuine investment, we find that no adverse view can be taken in the hands of the investee assessee company u/s 68 Assessing Officer has stated in the assessment order that the assessee has introduced its unaccounted cash in the form of share capital through racket of entry providers operated in New Delhi, however the said finding has not been corroborated by any material on record and therefore, the said finding recorded by the Assessing Officer cannot be accepted in absence of clear linkage/nexus established by the Revenue that the money belonging to the assessee company has been advanced and routed back in the form of share capital. Addition so made by the Assessing Officer u/s 68 of the Act is hereby directed to be deleted - Decided in favour of assessee.
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