TMI Blog2017 (1) TMI 1374X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 2962/DEL/2015 - - - Dated:- 3-1-2017 - SHRI H.S. SIDHU, JUDICIAL MEMBER For Assessee : Shri Anil Kr. Jain, CA For The Department : S h . Anil Kumar Sharma, Sr. DR ORDER These are 05 Appeals are filed by different assesses which is against the separate orders of the Ld. CIT(A) for the same asstt. year i.e. 2006-06. Since the issues involved in all the 05 appeals are identical and common, hence, these appeals are being consolidated by this common order for the sake of convenience, by dealing with ITA No. 2960/Del/2015 (AY 2005-06). 2. Since the grounds in all the 05 appeals are exactly similar, except the figure, therefore, for the sake of brevity, I am only reproducing the grounds raised in the Assessee s Appeal No. 2960/Del/2015 (AY 2005- 06) as under:- 1. That on the facts and circumstances of the case and the provision of law the Ld CIT(Appeal) has failed to appreciate that the notice u/s 148 is illegal, bad in law, time barred and without jurisdiction and as such the assessment order passed u/s 148 is illegal and bad in law. 2. That on the facts and circumstances of the case and the provision of law the Ld CIT(Appeal) has failed to appreciate tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessed to tax is one of the beneficiaries and has received accommodation entries from Suresh Kumar Gupta husband of Anjali Gupta. In view of the facts and circumstances of the case, the case of the assessee was reopened u/s. 147 of the I.T. Act, 1961 and accordingly, notice u/s. 148 of the Act was issued to the assessee on 29.3.2012 and in response thereto assessee has submitted its reply. Thereafter, after considering the reply of the assessee the AO assessed the income of the assessee at ₹ 19,67,010/- u/s. 143(3)/148 of the I.T. Act, 1961 on 28.3.2013. 4. Aggrieved with the aforesaid assessment order dated 28.3.2008, Assessee was in appeal before the Ld. CIT(A), who vide impugned order dated 30.3.2015 has dismissed the appeal of the assessee. 5. Against the aforesaid order of the Ld. CIT(A), Assessee is in appeal before the Tribunal. 6. Ld. Counsel of the assessee reiterated the contention raised in the Grounds of Appeal. He further submitted that the AO has mechanically issued the notice on the basis of letter received from the office of the CIT Central-3. There is no live link in the reasons recorded between the information obtained and the belief formed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the issue in dispute. 8. I have heard both the parties and perused the records. I find that the AO has recorded the reasons for belief that income has escaped assessment as under. The same is reproduced in the impugned order which read as under:- REASONS. TO BELIEVE FOR REOPENING U/S 147 MIs K.K. Arora Sons HUF, B-4/48, Paschim Vlhar, New Deihl. (A.Y.2005-06) A search seizure action u/s 132 was carried out in Wings Group of cases on 14.02.2008. The .case was centralized with Central Circle- 2 vide order uls 127 by CIT-IX, New Delhi on 24.10.2008. 2. The assessment in the case of MIs K.K. Arora Sons HUF was completed vide order u/s 143(3)/153A of the Act, 1961 dated 24.12.2009 at the returned income of ₹ 4,61 ,863/-. 3. A letter has been received from the CIT(Central)-III, New Delhi forwarding therewith copy of letter of the ACIT, Central Circle-22, New Delhi. As per information vide this letter (supra), a Survey u/s 133'A was conducted on 20.11.2007 in the case of Sh. S.K. Gupta and the companies operated by him at 308, Arunanchal Building, 19, Barashamba Read, New Delhi- 110001. S.K. Gupta is basically a charted accountant but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s necessary for his assessment for that assessment year. 7. In view of above facts and circumstances of the case, I have reason to believe that the income of the assessee of more than ₹ 1.0 lac has escaped from assessment. Sd/- (Janardan Das) ACIT, Central Circle-2, New Delhi 9. In the background of the aforesaid discussions, I am of the considered view that only legal ground involved in this Appeal is whether the reassessment proceedings u/s. 148 of the I.T. Act are illegal and without jurisdiction in the absence of any tangible evidence or material in respect of any undisclosed income and recording of requisite satisfaction in respect of any such undisclosed income or not. I am of the view that AO has not applied his mind so as to come to an independent conclusion that he has reason to believe that income has escaped during the year. In my view the reasons are vague and are not based on any tangible material as well as are not acceptable in the eyes of law. The AO has mechanically issued notice u/s. 148 of the Act, on the basis of information allegedly received by him from the Income Tax Department. Keeping in view of the facts and circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f above accommodation entries. The above conclusion is unhelpful in understanding whether the AO applied his mind to the materials that he talks about particularly since he did not describe what those materials were. Once the date on which the so called accommodation entries were provided is known, it would not have been difficult for the AO, if he had in fact undertaken the exercise, to make a reference to the manner in which those very entries were provided in the accounts of the Assessee, which must have been tendered along with the return, which was filed on 14th November 2004 and was processed under Section 143(3) of the Act. Without forming a prima facie opinion, on the basis of such material, it was not possible for the AO to have simply concluded: it is evident that the assessee company has introduced its own unaccounted money in its bank by way of accommodation entries . In the considered view of the Court, in light of the law explained with sufficient clarity by the Supreme Court in the decisions discussed hereinbefore, the basic requirement that the AO must apply his mind to the materials in order to have reasons to believe that the income of the Assessee escaped a ..... 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