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TMI Blog2020 (9) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... at Ld. AO has erred in assuming jurisdiction under section 147/148 on the satisfaction of higher officer which makes assessment bad in law. 5. That Ld. AO has erred in passing order in breach of principle of natural justice i.e. without providing the material on the basic of which Ld. AO has formed his reason to believe in spite of specific request of assessee vide letter dated 29.12.2014. 6. That order passed by the Ld. AO is bad in law because the whole assessment is based on the change of opinion on the same facts and information provided at the time of original assessment proceedings u/s. 143(3). 7. That Ld. AO has erred in making addition only on the premise of non-production of Director of M/s Clax Marketing Pvt. Ltd. which cannot be a reason for making addition as held by Hon'ble Supreme Court and / or various High Courts and therefore assessment made is bad in law. 8. That AO has erred in making addition without appreciating that the documents submitted by assessee are proving identity, creditworthiness and genuineness of transaction with M/s Clax Marketing Pvt. Ltd. and no addition is warranted. 9. That order passed by AO is bad in law. 2. The assessee com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee company was issued at a premium of Rs. 90/- each to M/s Calx Marketing Pvt. Ltd. Neither the assessee nor the share applicant provided with any justification for issue of share at premium. According to the AO, the assessee has given the share-holding pattern of M/s Calx Marketing Pvt.Ltd. and as per this 50% of shares are held by Sh. Ranjeet Kumar who signed the Share Application Form and the Affidavit. Notice u/s. 133(6) of the Act was issued on 13.02.2015 to Sh. Ranjeet Kumar, Director of M/s Calx Marketing Pvt. Ltd. and he was asked to furnish information/ documents in respect of the share transaction with M/s Vikas Strips for AY 2007-08, but Sh. Ranjeet Kumar has not responded to the notice. Further, a notice u/s. 133(6) of the Act was issued by the AO to the Bank Manager, Jammu & Kashmir Bank Ltd., Vikas Marg, New Delhi on 13.02.2015 to furnish the copy of account of M/s Calx Marketing Pvt. Ltd.; copy of account opening form and person authorised to operate the bank account. On 23.02.2007 the amount of Rs. 15,20,600/- has been shown as by clearing cheque and the cheque no. was shown as 3702. The AO requested to give the photocopy of cheque and the name of the drawer o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed out that the receipts are bogus; they are mere accommodation entries and this channel has been utilized by the assessee to introduce its own unaccounted money in its books of accounts. 2.2 Keeping in view of the aforesaid facts and circumstances, the AO was of the view that assessee has failed to discharge its onus of proving the creditworthiness of concerned party, and genuineness of the transactions in terms of provisions of section 68 of the Act. Therefore, the amount of Rs. 10,00,000/- received from the above entry operator represents the credit entry whose nature and source could not be satisfactorily proved by the assessee and hence, it is covered within the mischief of section 68 of the Act and the same was held to be the income of the assessee company u/s. 68 of the Act and further the company M/s Calx Marketing Pvt. Ltd. is not assessee group company or of anyone known to it. Such transaction are carried out by the accommodation entry operators who charge commission upto 3.5% of the transactions. Therefore, Rs. 35,000/- was added to the income of the assessee u/s. 69C of the Act being unexplained expenditure being spent from undisclosed sources being given infuse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter which no valid notice u/s. 143(2) of the Act was issued and served upon the assessee, as per law, so as to frame lawful assessment u/s. 143(3) of the Act and nowhere section 144 was invoked in assessment order by which the assessment framed by the AO u/s. 147/148 of the Act and confirmed by the Ld. CIT(A) deserve to be quashed, void abinito and ultra-vires to section 143(2) of the Act which was issued prior to the filing of return u/s. 148 of the Act. In support of this contention, he draw our attention towards the following cases laws:- - Recent Apex Court decision in Singhad Technical Society (order dated 29.8.2017) 397 ITR 344. - Hon'ble Delhi High Court decision in the case of Fast Booking (I) Pvt. Ltd. order dated 02.09.2015 (ITA No. 334/2015) (378 ITR 693) - Hon'ble Delhi High Court decision in the case of Silver Line, order dated 04.11.2015 (ITA No. 578/2015) (383 ITR 455) - Hon'ble Punjab and Haryana High Court decision in case of M/s VMT Spinning Co. Ltd, order dated 16.09.2016 (ITA No. 445/2015) (389 ITR 326). - Hon'ble Gujarat High Court in the case of Jolly Fantasy World Ltd. 373 ITR 530. - Decision of Hon'ble Bombay High Court in CIT vs. Lalitkuma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 148 of the Act on 21.08.2014. That notice u/s. 143(2) of the Act is prior to the filing of the return which is illegal and against the provisions of law and is not sustainable in the eyes of law. In support of this contention, he cited the above mentioned case laws. In view of above, he requested that the additional ground filed may be admitted and the assessment passed on illegal notice which needs to be quashed. 6. On the contrary, Ld. DR relied upon the orders of the revenue authorities and stated that additional ground raised by the assessee is not sustainable in the eyes of law, because this issue has already been adjudicated and decided in favour of the Revenue by the various Hon'ble High Courts, which the AO as well as Ld. CIT(A) has discussed in detail in their respective impugned orders. He further stated that assessee remained non-cooperative before the revenue authorities and has not filed proper evidences in support of its claim. The AO has disposed of the objections raised by the assessee by passing an elaborate order, because in this year the case of the assessee has been reopened on the information received from the Investigation Report which is made after thorough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etter dated 21.08.2014 filed the return of income in response to these notices. But the AO has issued notices u/s. 143(2) of the Act dated 11.08.2014 i.e. prior to the filing of the return of income i.e. on 21.08.2014. We are of the view that notice u/s. 143(2) of the I.T. Act dated 11.08.2014 was issued by the AO before the date when the assessee filed his return of income i.e. 21.08.2014. We are of the view that the assessment framed by the AO on the basis of these notices is not sustainable in the eyes of law, hence, we quash the same. Our view is supported by the various following judgments/decisions especially the Hon'ble Supreme Court Decision in the case of Laxman Das Khandelwal order dated 13th August, 2019 in which the Hon'ble Court has observed as under:- ".....7. A closer look at Section 292BB shows that if the assessee has participated in the proceedings it shall be deemed that any notice which is required to be served upon was duly served and the assessee would be precluded/rom taking any objections that the notice was (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner. According to Mr. Mahabir Singh, learned Sen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... returns filed pursuant to notice under section 148 of the Act after October 1, 2005, it is mandatory to serve notice under section 143(2) of the Act, within the stipulated time limit. Section 292BB incorporates the principles of estoppels. It stipulates that an assessee, who has appeared in any proceeding and cooperated in any enquiry relating to assessment or reassessment shall be deemed to be served with any notice which was required to be served and would be precluded from objecting that the notice was not served upon him or was served upon him in an improper manner or was not served upon him in time. However, the proviso states that the principles of estoppels incorporated in the main section would not apply, if the assessee has raised objection in reply to the notice before complation of assessment or reassessment." 7.2 We further note that assessee has filed the return on 21.08.2014 and thereafter no notice u/s. 143(2) of the Act was issued by the AO, however, the same is mandatory requirement under the provisions of law and in view of the case laws as referred above. 7.3 Keeping in view of the facts and circumstances of the present case as well as on the anvil of the j ..... 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