TMI Blog2018 (2) TMI 871X X X X Extracts X X X X X X X X Extracts X X X X ..... s case is not sustainable in the eyes of law, hence hereby quashed. - Decided in favour of assessee - ITA No.89/Del./2012, CO No.57/Del/2012 - - - Dated:- 9-2-2018 - SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER For The ASSESSEE : Shri Ashwani Taneja, Advocate Shri Shantanu Jain, Advocate For The REVENUE : Shri Vijay Verma, CIT DR Shri Amit Jain, Senior DR ORDER PER KULDIP SINGH, JUDICIAL MEMBER : The aforesaid appeal filed by the Revenue and cross objections filed by the assessee are being disposed off by way of consolidated order to avoid repetition of discussion. 2. The Appellant, Income-tax Officer, Ward 17 (4), New Delhi (hereinafter referred to as the Revenue ) by filing the present appeal sought to set aside the impugned order dated 31.10.2011 passed by the Commissioner of Income-tax (Appeals)-XIX, New Delhi qua the assessment year 2005-06 on the grounds inter alia that :- 1. On the facts and circumstances of the case and in law the learned CIT (A) as erred in deleting the addition of ₹ 1,04,50,0001- made u/s 68 of the Income Tax Act, 1961 treating the credit in the books of the assessee as unex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l issue of reopening of the assessment challenged by the assessee company. Feeling aggrieved, the Revenue has come up before the Tribunal by filing the appeal challenging the deletion of additions made by the AO and the assessee company filed cross objection challenging the reopening of the assessment by the AO. 6. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 7. Undisputedly, the assessment of the assessee for AY 2005- 06 was framed u/s 143 (3) vide order dated 04.12.2007. It is also not in dispute that ld. CIT (A) has given a relief to the assessee company on merits without deciding the legal issue of reopening. The AO on receipt of information from Addl.CIT, Range-1, New Delhi reopened the assessment by issuing a notice dated 25.03.2010 u/s 148 of the Act by recording following reasons :- Reasons recorded under section 147 for issue of notice under section 148 of the IT Act in the case of M/s Virat Holding Credit Pvt Limited (AAACV3010G) for Assessment Year 2005-06 The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng accommodation entries Amount of share application money received through accommodation entry (Rs) 1. Instant Traveling and Tours Pvt. Ltd. 9 lac 2. Luster Finlease Investment Pvt. Ltd. 5 lac 3. Junnon Capital services Pvt. Ltd. 10 lac 4. Aanchal Buildcon Pvt. Ltd. 27.50 lac 5. Juneja Nagpal Construction Pvt. Ltd. 8 lac 6. Prasandi Leasing Finance Pvt. Ltd. 5 lac 7. Dume Footwear Pvt. Ltd. 25lac 8. Akik Education Centre Pvt. Ltd. 5 Lac 9. Gaurav Holding Pvt. Ltd. 10 lac Total 104.50 lac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. No doubt, columns of reasons recorded was there and it is also mentioned in column no.12 that reasons for belief that income has escaped assessment are as per annexure enclosed but such annexure has not been produced before the Bench for perusal. 12. Apparently, from the approval recorded and words used that Yes. I am satisfied. , it has proved on record that the sanction is merely mechanical and Addl.CIT has not applied independent mind while according sanction as there is not an iota of material on record as to what documents he had perused and what were the reasons for his being satisfied to accord the sanction to initiate the reopening of assessment u/s 148 of the Act. 13. Even AO while recording the reasons for initiating the reopening of assessment has not applied his mind independently. When we peruse the reasons recorded, available at pages 31-32 of the paper book, the entire reasons have been based on the statement of one Shri P.K. Jindal, who has furnished the list of companies stated to be not doing any business activities but engaged in providing accommodation entries. Before issuing the notice AO appeared to have not examined the profile of the said co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authorities interfered into matter- No error was committed warranting reconsideration-As far as explanation to S. 151, brought into force by Finance Act, 2008 was concerned, same only pertained to issuance of notice and not with regard to manner of recording satisfaction-Amended provision did not help Revenue-No question of law involved in matter, that warranted reconsideration-Revenue's Appeals dismissed. 15. The Hon ble Delhi High Court has also decided this legal issue in case cited as Pr. CIT vs. N.C. Cables Ltd. in ITA 335/2015 order dated 11.01.2017 by returning following findings :- Reassessment-Issuance of Notice-Sanction for issue of Notice-Assessee had in its return for A Y 2001-02 claimed that sum of ₹ 1 Crore was received towards share application amounts and a further sum of Thirty Five Lakhs was credited to it as an advance towards loan-Original assessment was completed u/s 143(3)-However, pursuant to reassessment notice, which was dropped due to technical reasons, and later notice was issued and assessments were taken up afresh-After considering submissions of assessee and documents produced in reassessment proceedings, AO added back a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Revenue authorities while deciding the issue of reopening u/s 147/148 of the Act. Operative part of which is reproduced as under:- 19. Before parting with the case, the Court would like to observe that on a routine basis, a large number of writ petitions are filed challenging the reopening of assessments by the Revenue under Sections 147 and 148 of the Act and despite numerous judgments on this issue, the same errors are repeated by the concerned Revenue authorities. In this background, the Court would like the Revenue to adhere to the following guidelines in matters of reopening of assessments: ( i) while communicating the reasons for reopening the assessment, the copy of the standard form used by the AO for obtaining the approval of the Superior Officer should itself be provided to the Assessee. This would contain the comment or endorsement of the Superior Officer with his name, designation and date. In other words, merely stating the reasons in a letter addressed by the AO to the Assessee is to be avoided; ( ii) the reasons to believe ought to spell out all the reasons and grounds available with the AO for reopening the assessment - especial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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