TMI Blog2020 (1) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... on of proceedings is also based on non application of mind much less independent application of mind but is a case of borrowed satisfaction. Nothing is independently examined or considered by the AO which can demonstrate application of mind by him. There is nothing to show that the cash is paid from coffers of the assessee. Reasons do no indicate as to who AO reached to the conclusion that the assessee received accommodation entry and escaped assessment - Proceedings initiated by invoking the provisions of section 147 of the Act by the AO and upheld by the Ld. CIT(A) are nonest in law and without jurisdiction, hence, the assessment is quashed and ground no. 1 is allowed. - ITA No. 1284/Del/2018 - - - Dated:- 1-1-2020 - Shri H.S. Sidhu, Judicial Member For the Assessee : Sh. Deepak Ostwal, FCA For the Department : Sh. Pradeep Singh Gautam, Sr.DR.. ORDER This appeal filed by the assessee is directed against the order passed by the Ld. CIT(A)-35, New Delhi on 09.11.2017 in relation to the assessment year 2008-09 on the following grounds:- 1. On the facts and in the circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed as unsustainable both on facts and in law. 8. The appellant craves leave to raise additional grounds and file necessary paper book before the Hon'ble Tribunal takes up hearing of the case and records of both lower authorities be directed to be placed before the Tribunal by the Revenue. 2. The facts in brief are that assessee filed its return of income at Rs. NIL on 29.9.2008 and the assessment was completed u/s. 143(3) of the Income Tax Act, 1961 (in short Act ). Subsequently, notice u/s. 148 of the Act was issued on 13.3.2015 after recording reasons. In response to the same, the assessee vide its letter dated 02.04.2015 submitted that return filed u/s. 139 of the Act on 29.9.2008 may be treated as filed u/s. 148 of the Act. The assessee requested to provide the reasons for reopening u/s. 147/148 which were provided to the assessee. The assessee has filed the objections for initiating the proceedings u/s. 147/148 of the Act which was disposed of by passing a speaking order dated 26.2.2016. Further, notice u/s. 143(2) and 142(1) of the Act were also issued to the assesee. In response to the various statutory notices, issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s do no indicate as to who AO reached to the conclusion that the assessee received accommodation entry and escaped assessment. AO jumped on the conclusion the money is unaccounted money of the assessee without any basis. It was further submitted that AO has never alleged the failure of the assessee to disclose true and correct facts. To support his aforesaid contention, he relied the case law of Hon ble Supreme Court of India in the case of ACIT vs. Dhariya Construction Co. (2011) 197 Taxman 202 (SC); Delhi High Court in the case of Pr. CIT vs. RMG Polyvinyls (I) Ltd. (2017) 83 taxmann.com 348 (Delhi); Pr. CIT vs. Meenakshi Overseas () Ltd. vs. ITO 395 ITR 677 (Del.); Signature Hotels Pvt. Ltd. vs. ITO (2012) 20 taxmann.com 797 (Del.); Pr. CIT vs. G G Pharma India Ltd. 384 ITR 147 (Del.) and CIT vs. Sfil Stock Broking Ltd. 2010) 435 ITR 285 (Delhi). In view of above, he requested to quash the re-assessment. 5. On the contrary, Ld. DR relied upon the orders of the authorities below and the case laws referred therein and stated that Assessing Officer issued the notice u/s. 148 after due application of mind. He further stated that the AO has followed due procedure bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. PCIT, Vs Paramount Communication (P.) Ltd. Delhi High Court [2017] 79 taxmann.com 409 (Delhi)/[2017] 392 ITR 444 (Delhi) Information regarding bogus purchase by assessee received by DRI from CCE which was passed on to revenue authorities was 'tangible material outside record to initiate valid reassessment proceedings. 6. Paramount Communication (P.) Ltd. Vs PCIT Supreme Court 2017-TIQL-253- SC-IT SLP of assessee dismissed. Information regarding bogus purchase by assessee received by DRI from CCE which was passed on to revenue authorities was tangible material outside record to initiate valid reassessment proceedings. 7. Amit Polyprints (P.) Ltd. Vs PCIT Gujarat High Court [2018] 94 taxmann.com 393 (Gujarat) Where reassessment proceedings were initiated on basis of information received from Investigation wing that assessee had received certain amount from shell companies working as an accommodation entry provider, reassessment could not be held unjustified. 8. Aaspas Multimedia Ltd. Vs PCIT Gujarat High Court [2017] 83 taxmann.com 82 (Gujarat) Where reassessment was made on basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while recording the reasons for the belief that income has escaped assessment has recorded the reasons as under:- 6.1 After perusing the aforesaid reasons recorded, I find that it is a case where action has been taken mechanically on the basis of information received from investigation wing, and, not on an independent application of mind and therefore on this ground, the proceedings are without jurisdiction. It is apparent from the fact that according to the AO, Investigation Wing has informed that assessee company has received accommodation entry of ₹ 8 lacs in the garb of share application money which is said to be as per inquiry made by the Directorate of Investigation (DI) on the persons said to be involved providing accommodation entries/ bogus share application. Based on inquiries made, DI is said to have provided details of persons who are beneficiaries of such accommodation entries and one such beneficiary is said to be the assessee. In this case notice u/s. 148 of the Act was issued merely on the basis of information from D.I. that the assessee has received accommodation entry of ₹ 8 lak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per se is not an information for purposes of reopening of an assessment under section 147; Assessing Officer has to apply his mind to information, if any, collected and must form a belief thereon Held, yes. ii) Pr CIT v. RMG Plyvinyl (I) Ltd. (2017) 83 taxmann.com 348 (Hon ble Delhi High Court has observed as under:- 11. There can be no manner of doubt that in the instant there was a failure of application of mind by the AO to the facts. In fact he proceeded on two wrong premises - one regarding alleged non-filing of the return and the other regarding the extent of the so-called accommodation entries. 12. Recently, in its decision dated 26th May, 2017 in ITA NO.692/20l6 (Principal Commissioner of Income Tax-6 v. Meenakshi Overseas Pvt. Ltd.), this Court discussed the legal position regarding reopening of assessments where the return filed at the initial stage was processed under Section 143(1) of the Act awl not under Section 143(3) of the Act. The reasons for the reopening of the assessment in that case were more or less similar to the reasons in the present case, viz., information was received from the Investigation W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act to reopen the assessments for the AYs in question does not satisfy the requirement of law. 38. The question framed is answered in the negative, i.e., in favour of the Assessee and against the Revenue. The appeal is, accordingly, dismissed but with no orders as to costs. 6.2 Keeping in view of the facts and circumstances of the case as explained above and respectfully following the precedents, as aforesaid, the proceedings initiated by invoking the provisions of section 147 of the Act by the AO and upheld by the Ld. CIT(A) are nonest in law and without jurisdiction, hence, the assessment is quashed and ground no. 1 is allowed. The judicial decisions relied upon by the Ld. Sr. DR, have been duly considered. In my considered view, I do not find any parity in the facts of the decisions relied upon with the peculiar facts of the case in hand. Since no other grounds were raised by the Assessee s counsel, the same are dismissed as such. Accordingly, the assessee s appeal is partly allowed. 7. In the result, the Appeal filed by the Assessee stands partly allowed. Order pronounced on 01-01-202 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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