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TMI Blog2016 (5) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... ening of assessment. The Revenue, however, has preferred the present appeal questioning the action of the Learned CIT(Appeals) in deleting the addition of Rs. 40,02,780. In such a situation, the applicantassessee seeks permission of the ITAT through the present application under Rule 27 of the ITAT Rules to raise the above mentioned ground. The Learned AR submitted that the above issue on the validity of reopening of assessment was raised before the Learned CIT(Appeals) but it was decided by him against the assessee. 4. The Learned Senior DR on the other hand opposed the application. 5. Considering the above submissions, we find that as per Rule 27 of ITAT Rules, a respondent in the appeal, though may not have appealed, may support the order appealed against on any of the grounds decided against him. In the present case, undisputedly a similar issue was raised before the Learned CIT(Appeals) regarding the validity of reopening of the assessment and the Learned CIT(Appeals) decided the issue against the assessee but deleted the addition made by the Assessing Officer questioned by the assessee before him. Thus, the assessee though is not in appeal before the ITAT but it fulfills al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Department with this averment that the assessee company was one of the beneficiaries and had taken entry from the entry operator, details of which were provided. He submitted that here in the present case though there was repetition of same entry in the reasons recorded but no such repetition was there in the assessment order passed under sec. 147/143(3) of the Act. The Assessing Officer applied his mind on the information received from the Investigation Wing of the Department and thereafter only he has formed his reasons to belief that there was escapement of assessment of taxable income. He submitted that the decisions relied upon by the Learned AR having distinguishable facts are not helpful to the assessee. He placed reliance on the decision in the case of CIT vs. Navodaya Castles Pvt. Ltd. - ITA No. 320/2012 - decision dated 25.8.2014 (367 ITR 306 - Del ) - upheld by the Hon'ble Supreme Court - reported in (2015) - 230 Taxman 268 (S.C). 8. The Learned AR rejoined with the submission that the decision in the case of CIT vs. Navodaya Castles Pvt. Ltd., (supra) replied upon by the Learned Senior DR is not helpful to the Revenue as in that case the ITAT had decided the iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to have had only a vague felling that they may be '"bogus transactions'." It was further explained by the Supreme Court that: "Before issuing a notice under S. 148, the ITO must have either reasons to believe that by reason of the omission or failure on the part of the assessee to make a return under S. 139 for any assessment year to the ITO or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year or alternatively notwithstanding that there has been no omission or failure as mentioned above on the part of the assessee, the ITO has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year. Unless the requirements of cl. (a) or cl. (b) of S. 147 are satisfied, the ITO has no jurisdiction to issue a notice under S. 148." The Supreme Court concluded that it was not satisfied that the ITO had any material before him which could satisfy the requirements under Section 147 and therefore could not have issued notice under Section 148. 10. In ACIT v. Dhariya Construction Co.(2010)328 ITR 515 the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to reopen an assessment which is beyond the period of four years from the end of the relevant assessment year, the condition that there has been a failure on the part of the Assessee to truly and fully disclose all material facts must be concluded with certain level of certainty. It is in the aforesaid context that this Court in M/s Haryana Acrylic Manufacturing Co. (P) Ltd. (supra) explained that the ratio of the decision in Phool Chand Bajrang Lal (supra) may not be entirely applicable since the same was in respect of Section 147(a) as it existed prior to the amendment." 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 is evident that the assessee company has introduced its own unaccounted money in its bank account by way of above accommodation entries." The above conclusion is unhelpful in understanding whether the AO applied his mind to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commodation entry: "Assessee has filed return of income declaring an income of NIL on 02.12.2003. The return was processed u/s. 143(3) on 11.03.2004. An information regarding entry operators and their beneficiaries was received from DIT(Inv.I), New Delhi vide D. No. 1399 dated 02.03.2006 and No. DIT(Inv)-I/2006-07AE/1536 dated 05.02.2007 that the assessee company is one of the beneficiaries and took entry from the entry operator as detailed below: As a result of above, I am convinced that assessee has evaded income chargeable to tax and has not declared proper source of income or expenditure for which accommodation has been taken as referred to above. The assessment for A.Y. 2003-04 was not made. The return has only been processed u/s. 143(1) and no action u/s. 143(3) has been taken in this case. As a result of above income chargeable to tax has escaped assessment. Hence, a notice u/s. 147 read with sec. 148 for reopening for assessment is required to be sent in this case." 11. The Assessing Officer in the present case has not bothered himself to apply his mind independently on the information received from the Investigation Wing of the Department regarding the assessee being a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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