9911796707
TMI Blog2018 (11) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... eals. The first three additional grounds raised by the assessee are against the jurisdiction of the AO to reopen the assessment u/s. 147 of the Act without any independent application of mind, merely based upon the change of opinion and without any live link between the materials relied by the AO and escapement of income. (4) Facts in brief are that the assessment was framed u/s. 143(3) of the Act on 24.11.2011 assessing the income of Rs..12.69,050/- against the returned the income of Rs..11,94,930/- and the only addition was made of Rs..74,120/- towards disallowance of certain expenses. Thereafter, the Assessing Officer received information that assessee has received some bogus purchase entries from thirteen parties aggregating to Rs..11,31,51,580/- the details whereof were given in Para No.2 of the Assessment Order and the said information was supplied by the Sales Tax Department to DGIT (inv) who in turn supplied the same to the assessee. The Assessing Officer observed from the Sales Tax Department website of Mumbai, Government of Maharashtra that Sales Tax Department has carried detailed enquiries in respect of the said 13 parties and also recorded their statements/depositions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. Thus, the Learned Counsel for the assessee submitted that in view of the Hon'ble Apex Court decision where all the facts of the case are on record and Tribunal is only required to consider a question of law arising from the facts, the Tribunal has jurisdiction to examine the same which arising from the facts before the authorities below and decide the case on merits, although the grounds were not raised before. Finally, the Ld. Counsel for the assessee prayed that the same should be admitted and adjudicated as per provisions of law. (7) Ld.DR on the other hand opposed the additional ground filed by the assessee, on the ground that the same was not raised before the Ld.CIT(A) and was raised for the first time before the Tribunal. (8) Hearing both the parties and perusing the material on record, we observe that the legal issue challenged by the assessee for the reopening of assessment is raised out of the facts on record which were not raised before the Authorities below and therefore we are inclined to admit the same pursuant the ratio laid down by the Hon&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by these parties to their customers and they issued bogus bills after charging small commission. In the present case, assessee purchased goods worth Rs. 11,31,51,580/- from above thirteen parties. In view of detailed enquiries made by the Sales Tax Department it is evident that the assessee took bogus bills worth Rs. 11,31,51,580/- at least from above thirteen parties to inflate his purchases. The details like deposition, affidavit, enquiry report, statement, other enquiries etc. extracted from the Sales Tax Website and other information received from the DG1T (Inv.), Mumbai is enclosed as per Annexure 'A'. So I have reason to believe that income chargeable to tax has escaped assessment for A.Y. 2009-10 in the case of the assessee. Notice under section 148 of the I.T. Act, 1961 is issued to the assessee." (10) Ld. AR submitted before the Bench that it is the basic requirement of law for reopening of assessment that Assessing Officer must apply his mind on material coming in its possession in order to entertain and form a belief that assessable income of the appellant has escaped assessment. Ld.AR submitted that from the reasons recorded it is clear and evident that As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. G & G Pharma India Ltd., [384 ITR 147 (Del)] b. JCIT v. George Willamson (Assam) Ltd., [258 ITR 0126 (Gau)] c. Banke Bihari Properties Pvt. Ltd. v. ITO [(2016) 46 CCH 0546 Del Trib dated 22.04.2016] d. DCIT v. Shri Bharat Chandra Seth in ITA.No. 622/LKW/2014 (14) Ld.AR prayed for the Bench that since the Assessing Officer has not applied his mind, the reopening as made by the Assessing Officer is not a valid and deserved to be quashed. (15) Secondly the reopening of assessment cannot be made on mere change of opinion. The Ld.AR submitted that the issue of purchases from these 13 parties were examined in the Assessment Proceedings u/s.143(3) of the Act. In order to reopen the assessment, the Assessing Officer has to record "reasons to believe" that income has escaped assessment. The said reasons to believe have to be formed out of the entirely new material on record on the basis of which the Assessing Officer came to the conclusion that the income has escaped assessment and that material should be something which was not available with the Assessing Officer during the original Assessment Proceedings. Unless and until it is done the mere reexamining of the records which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts, the so called suppliers never uttered a word about the bogus sales bills to the assessee and nowhere assessee name appeared in those statements. Thus, where the name of the appellant is not appeared in the statement recorded, no live link or even a close nexus established between the said statements and escapement of income. The Ld.AR relied on the series of decisions in support of his contentions: - a. Income Tax Officer v LakhmaniMewaql Das [103 ITR 437] b. Income Tax Officer v. M/s. Desire Jewels Pvt Ltd., [ITA.No. 136/Mum/2015] c. Andaman Timber Industries v. CCE [127 DTR 241] (20) Finally, the ld.AR prayed for the Bench in view of the said facts, the reopening of assessment by the ld. AO is bad in law and has to be quashed. (21) Ld. DR on the other hand relied heavily on the order of the Assessing Officer and submitted that the reopening of assessment was validly made by the Assessing Officer on the basis of the material which came to the possession of the Assessing Officer from the DGIT(Inv.), Mumbai who got the information/material from the Sales Tax Department Website, Government of Maharashtra. Ld. DR stated that the thirteen bogus suppliers in their statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional requirement is satisfied a post mortem exercise of analyzing materials produced subsequent to the reopening will not rescue an inherently defective reopening order from invalidity. In the case of JCIT v. George Williamson (Assam) Ltd. (supra) the Hon'ble Gujarat High Court has held that in the absence of any specific material before the Assessing Authority as to the transactions which had taken place between the assessee and the four parties named above and any material or record to prima facie satisfy the assessing authority that the amount paid by cheques were ultimately returned in cash after routing it through four or five bank accounts, there does not appear to be a link between facts found and the satisfaction arrived at by the assessing authority. Therefore, in the absence of application of mind to the facts alleged to have been found, the decision arrived at that income escaped assessment is not allowable in law. (23) We have also found merit in the second limb of the submissions of the assessee that reopening on the basis of the same material which was before the Investigating Officer at the time of original Assessment Proceedings is nothing but a change of op ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
