9911796707
TMI Blog2015 (11) TMI 1801X X X X Extracts X X X X X X X X Extracts X X X X ..... hi that the assessee had received accommodation entries amounting to Rs. 92,00,000/- from various parties. The reasons recorded for issuance of notice u/s 148 of the Act are as under: "DIT (lnv) during the course of investigation in the case of Mukesh Gupta group along with its close confidants Shri Rajan Jassai and Shri Surinder Pal Singh found that the group have operated multiple accounts in various branches to plough back unaccounted black money for the purpose of business or for personal needs such as purchase of assets etc. in the form of gifts, share application money loans etc. During the course of investigations by the DIT(lnv) it was discovered that the assesses who have unaccounted money (hereinafter called as entry takers or beneficiaries) and want to introduce the same in the books of accounts without paying tax approach another person (entry operator) and hand over cash (plus commission) and take cheques/DDS/POs. The cash is deposited by the entry operator in a bank account either in his own name or in the name of relative/friends or other person hired by him, for the purpose of opening bank account. The entry operator thereafter issues cheque/DD/PO in the name of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d his mind in forming a belief which would result in the 'reason to believe' as required to proceed u/s 147 and 148 of the Income Tax Act, 1961. Ld. Counsel vehemently contended that the copy of the reasons recorded given to the assessee clearly shows that the AO simply proceeded in a mechanical manner and that there was a clear lack of application of independent mind by the AO prior to the issuance of notice u/s 148 of the Act, 1961. 6. Ld. DR on the other hand stated that the AO had reopened the case on the basis of various documentary evidences relating to the assessee and submitted that the AO has rightly reopened after due application of mind. 7. We have heard both the parties and perused the records available with us and after perusing the reasons records we find that the reopening is based entirely by making a reference to the information received from the investigation wing. The reasons are at best vague and the satisfaction of the AO is not based on any tangible material. The AO has mechanically issued notices u/s 148 of the Income Tax Act, 1961 on the basis of information received by him from the investigation wing of the Income Tax Department. Therefore, we are of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 147 and therefore could not have issued notice under Section 148. 10. In ACIT v. Dhariya Construction Co.(2010) 328 ITR 515 the Supreme Court in a short order held as under: "Having examined the record, we find that in this case, the Department sought reopening of the assessment based on the opinion given by the DVO. Opinion of the DVO per se is not an information for the purposes of reopening assessment under s. 147 of the IT Act, 1961. The AO has to apply his mind to the information, if any, collected and must form a belief thereon. In the circumstances, there is no merit in the civil appeal. The Department was not entitled to reopen the assessment." 11. The above basic requirement of Sections 147/148 has been reiterated in numerous decisions of the Supreme Court and this Court. Recently, this Court rendered a decision dated 22nd September 2015 in ITA No. 356 of 2013 (Commissioner of Income Tax I I v. Multiplex Trading and Industrial Co. Ltd.) where the assessment was sought to be reopened beyond the period of four years. This Court considered the decision of the Supreme Court in Phool Chand Bajrang Lal v. Income-tax Officer ( s u p r a ) as well as the decision of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts bank account by way of above accommodation entries." The above conclusion is unhelpful in understanding whether the AO applied his mind to the materials that he talks about particularly since he did not describe what those materials were. Once the date on which the so called accommodation entries were provided is known, it would not have been difficult for the AO, if he had in fact undertaken the exercise, to make a reference to the manner in which those very entries were provided in the accounts of the assessee, which must have been tendered along with the return, which was filed on 14th November, 2004 and was processed under Section 143(3) of the Act. Without forming a prima facie opinion, on the basis of such material, it was not possible for the AO to have simply concluded: "it is evident that 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 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
