TMI Blog2010 (2) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... d:- 28-2-2010 - J.P. Bansal, K.D. Ranjan, JJ. C.S. Aggarwal, Adv. with Gautam Jain, Adv. for the Appellant Gajanand Meena, CIT DR for the Respondent ORDER K.D. Ranjan:- 1. This appeal by the assessee for Assessment Year 2001-02 arises out of order of ld. CIT(A)-XII, New Delhi. 2. The assessee has taken as many as nine grounds of appeal which, inter alia, include grounds in respect of assumption of jurisdiction under section 147 of the Act. 3. The facts of the case, stated in brief, are that original return of income declaring loss of Rs. 11,481/- was filed on 29/10/2001. The Assessing Officer completed assessment u/s 143(3) on 19/3/2004. Thereafter, the Assessing Officer received information from the office of Director General Investigation to the effect that assessee company was one among entry operators who had given entries to various beneficiaries. The report contained details of amount taken by the beneficiaries from entry operators along with details regarding the modus operandi of the beneficiaries and the entry operators. The Assessing Officer after recording reasons reopened assessment u/s 147 by issue of notice u/s 148 dated 31/3/2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. A.R. of the assessee submitted that original assessment was made u/s 143(3) on 19/3/2004. The Assessing Officer issued notice u/s 148 on 31/3/2008. In other words, notice u/s 148 was issued just on the day when the time limit for issue of notice of six years was going to expire. Since the original assessment was made u/s 143(3), the assessee's case fell in proviso to sec.147. Therefore, the Assessing Officer should have material to reopen the assessment u/s 147. He further submitted that assessee has disclosed all necessary facts and material and there was no failure on the part of the assessee to disclose material facts necessary for making assessment and hence, notice has been issued by the Assessing Officer without any material in his possession. The ld. A.R. of the assessee further submitted that the Assessing Officer while recording reasons for reopening of assessment has not applied her mind. The Assessing Officer while recording the reasons for reopening of assessment has not mentioned that there was a failure on the part of the assessee to disclose fully and truly necessary material for completion of assessment. Therefore, the assessment framed u/s 143(3)/147 is bad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elhi High Court in the case of CIT v. Rainee Singh in ITA No.566/2009 dated 20/8/2009 wherein assessment has been quashed on the ground that there was no basis for initiating proceedings u/s 147 and reopening was made on vague grounds. 8. On the other hand, ld. CIT DR supported the order of ld. CIT(A). 9. We have heard both the parties and gone through the material available on record. In the instant case, original assessment was made u/s 143(3) on 19/3/2004. The Assessing Officer reopened assessment u/s 147 by recording following reasons:- "Addl. Director of Investigation VI, New Delhi, had sent a list containing the details of transactions and particulars of beneficiaries and operators of accommodation entries in Delhi. A perusal of the list shows that M/s Supreme Buttons Manufacturer Pvt. Ltd., whose jurisdiction lies with the undersigned has provided a huge number of entries to other benefiaries from its account number 3072 with Vijaya Bank, Ansari Road, Daryaganj, Delhi. This Company is an associate of Sh. Sanjay Mohan Aggarwal who as per the DIT (inv.) Report, is the oldest and most savvy entry operator of Delhi. The amount of entries given runs into crores of Rup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any information based on which it could be said that there was a failure on the part of the assessee to disclose fully and truly material facts necessary for his assessment. In the absence of recording such facts, the reopening of assessment is bad in law. Hon'ble Delhi High Court in the case of Haryana Acrylic Manufacturing Co. (P) Ltd. v. CIT (supra) has held that where there was no whisper what to speak of any allegation that the assessee had failed to disclose fully and truly all material facts necessary for his assessment and that because of this failure there had been an escapement of income chargeable to tax. Merely having a reason to believe that income had escaped assessment, is not sufficient to reopen the assessment beyond four years period. The escapement of income from assessment must also be considered by the failure on the part of the assessee to disclose material facts fully and truly. This is a necessary condition for overcoming the bar set up by the proviso to sec. 147. Hon'ble Delhi High Court has held that if this condition is not satisfied, the bar would operate and no action u/s 147 could be taken. Similar view has been taken by the Hon'ble Delhi High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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