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2019 (10) TMI 389

..... In light of these facts, coming back to the reasons recorded for reopening of the assessment as mentioned elsewhere, it can be seen that the AO has borrowed the information received from the Director [INV] and on the basis of this information, he had reason to belief that income has escaped assessment and it is a fit case for reopening. Considering the facts of the case in totality, in light of the judicial decisions discussed hereinabove and keeping in mind the first proviso to section 147 of the Act, we are of the considered view that the notice issued u/s 148 of the Act is without jurisdiction and deserves to be set aside. - ITA No. 6366/DEL/2013 - 17-9-2019 - Shri N.K. Billaiya, Accountant Member, And Shri Kuldip Singh, Judicial Member .....

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..... ived from Director of Income lax. (Investigation), New Delhi that (.luring the relevant assessment year, this assessee had received cheque amount(s) of ₹ 10,20.000/- in the nature of accommodation entry. These accommodation entries are received in lien ol payment of cash of equivalent amount plus commission thereon to the entry operator. For obvious reasons, these cash transactions are not routed through the books of account of the assessee. Therefore, 1 have reason to believe that an income of ₹ 10,20,000/- and commission @ 2% amounting to ₹ 20,400/- has escaped assessment in the assessment year-2001-02. In addition to this, as per the information supra, the assessee was also engaged in the activity of providing accommoda .....

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..... ction (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. 7. The mandate of this proviso is that income that has to be taxed must have escaped assessment by reasons of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. 8. There is not even a whisper in the reasons recorded for the reopening of the assessee relating to non disclosure of full and true facts by the assessee. The Hon ble High Court of Delhi in the case of Haryana Acrylic Manufacturing Company 308 ITR 38 had the occasion to consider a similar issue and observed as under:- 20. In the reasons supplied to the petitioner, there is .....

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..... ut jurisdiction. Reiterating our viewpoint, we hold that the notice dated 29-3-2004 under section 148 based on the recorded reasons as supplied to the petitioner as well as the consequent order dated 2-3-2005 are without jurisdiction as no action under section 147 could be taken beyond the four year period in the circumstances narrated above. 9. A similar view was taken by the Hon ble High Court of Punjab and Harayana in the case of Dulichand Singhania 269 ITR 192, the relevant part reads as under:- 13. The entire thrust of the findings recorded by the AO in his order dt. 13th March, 2003 is to justify his satisfaction about escapement of income. According to him, it was a clear case of escapement of income as defined in Expln. 2 to Section .....

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..... d within a period of four years from the end of the relevant assessment year is the belief reasonably "entertained by the AO that any income chargeable to tax has escaped assessment for that assessment year. However, when the power is invoked after the expiry of the period of four years from the end of the assessment year, a further precondition for such exercise is imposed by the proviso namely, that there has been a failure on the part of the assessee to make a return under Section 139 or in response to a notice issued under Section 142 or Section 148 or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year. Unless, the condition in the proviso is sati .....

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..... ilure to fully and truly disclose the material facts. The reasons referred to in the main paragraph of Section 147 would, in cases where the proviso is attracted, include reasons referred to in the proviso and it is necessary for the AO to record that anyone or all the circumstances referred to in the proviso existed before the issue of notice under Section 147." Similarly, in Aivind Mills Ltd. v. Dy. CTT (2000) 242 ITR 173 (Guj) it was held as under: "It is a clear case where the AO has no reason to link escapement of income from assessment with non-disclosure of any material fact necessary for his assessment at the time of original assessment but is due to an erroneous decision on the question of law by the AO. Thus, the case is .....

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