TMI Blog2017 (1) TMI 1410X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 of the Ld. CIT(A)- 12, New Delhi pertaining to assessment year 2003-04. Since the issues involved in these appeals are common and identical, hence, the appeals were heard together and are being disposed of by this consolidated order for the sake of convenience, by dealing with ITA No. 3895/Del/2016 (AY 2003-04). 2. The grounds raised in ITA No. 3895/Del/2016 (AY 2003-04) read as under:- 1. That the order passed by the Hon'ble CIT(A) is bad in Law, wrong on facts and against the principles of natural justice. 2(a) That the proceedings initiated under section 147 of the Income Tax Ac 1961 are void-ab-initio and the reassessment is bad in law. The assessment u/s 147 has been completed on wholly erroneous interpretation of section 147 of the Income Tax Act. The conditions precedent imperative for the issuance of a notice u/s 147 of the Income Tax Act were wholly conspicuous by their absence in the facts and circumstances of this case and as a consequence thereof, all imminent proceedings and the assessment order are wholly illegal, without the authority of law, null and void. (b) The Hon'ble CIT(A) has failed to consider the fact that the learned Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r passed by the Hon'ble CIT(A) is bad in Law, wrong on facts and against the principles of natural justice. 2(a) That the proceedings initiated under section 147 of the Income Tax Ac 1961 are void-ab-initio and the reassessment is bad in law. The assessment u/s 147 has been completed on wholly erroneous interpretation of section 147 of the Income Tax Act. The conditions precedent imperative for the issuance of a notice u/s 147 of the Income Tax Act were wholly conspicuous by their absence in the facts and circumstances of this case and as a consequence thereof, all imminent proceedings and the assessment order are wholly illegal, without the authority of law, null and void. (b) The Hon'ble CIT(A) has failed to consider the fact that the learned Assessing Officer has exercised his powers under section 147 of the Income Tax Act on mere surmises and suspicions and on wholly unreasonable and speculative premises and he had no reason to believe that income chargeable to tax for the aforesaid relevant year has escaped assessment either by reason of the appellant company failing to make a return u/s 139 of the Income Tax Act or by its failure by omission or failure to disclo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 14.3.2007 was issued and served upon the assessee and in response to the same, assessee s counsel attended the proceedings and filed the documents. Thereafter, the AO made the addition of ₹ 4,00,000/- being the unexplained gift and completed the assessment at ₹ 5,32,770/- vide his order dated 17.2.2017 passed u/s. 143(3)/147 of the I.T. Act, 1961. 5. Against the Order of the Ld. AO, assessee appealed before the Ld. CIT(A), who vide impugned order dated 12.4.2016 has dismissed the appeal of the assesseee and affirmed the action of the AO on the legal issue i.e. reopening of the case u/s. 147/148 of the I.T. Act, 1961 as well as on merits. 6. Aggrieved with the aforesaid order of the Ld. CIT(A), Assessee is in appeal before the Tribunal. 7. Ld. Counsel of the assessee has filed the two Paper Books one is containing pages 1 to 40 attaching therewith the copy of Return of income for AY 2003-04; copy of reply to AO dated 25.10.2007; copy of reasons recorded provided by AO; copy of reply to AO dated 19.11.2007 alongwith annexures; copy of written submission filed before CIT(A); copy of remand report dated 20.1.2010 and copy of rejoinder filed before the CIT(A). H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Phase-I, Delhi In this case an information is received from the O/o the DI (Inv.-I, ARA Centre, Jhandewalan Extension, New Delhi vide office letter No. DIT(Inv)/I/2006-07/AE/1543 dated 5.2.2007 Smt. Bindiya Ahuja has taken bogus accommodation entries from the following parties in lieu of unaccounted money paid by the above named assessee. As per Annexure enclosed with the above letter DIT(Inv. Unit- I), New Delhi dated 5.2.2007 the detail of transaction made by the above assessee is as under:- Date Amount Cheque No. Name of the party 400600 00874601 Renu Maini 400600 00874501 Renu Maini (SBI Indore) The relevant assessment year involved is 2003-04. In view the above facts, I am satisfied that Smt. Bindiya Ahuja, R/o Ashok Vihar, Phase-I, New Delhi has concealed his income ₹ 8,01,200/- for taxation. Since the aount income which has escaped assessment more than 100000/-, therefore, notice u/s. 148 of the I.T. Act, 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 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 assessment is missing in the present case. 13. Mr. Sawhney took the Court through the order of the CIT(A) to show how the CIT (A) discussed the materials produced during the hearing of the appeal. The Court would like to observe that this is in the nature of a post mortem exercise after the event of reopening of the assessment has taken place. While the CIT may have proceeded on the basis that the reopening of the assessment was valid, this does not satisfy the requirement of law that prior to the reopening of the assessment, the AO has to, applying his mind to the materials, conclude that he has reason to believe that income of the Assessee has escaped assessment. Unless that basic jurisdictional requirement is satisfied a post mortem exercise of analysing materials produce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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