TMI Blog2020 (2) TMI 1336X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. See RMG POLYVINYL (I) LTD. [ 2017 (7) TMI 371 - DELHI HIGH COURT] and DHARIYA CONSTRUCTION CO. [ 2010 (2) TMI 612 - SC ORDER] Hon ble Bombay High Court in the case of Coronation Agro Industries Ltd. [ 2017 (1) TMI 904 - BOMBAY HIGH COURT] has held that mere client code modification by broker does not mean that any income has 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 and needs to be quashed. Reasons recorded and its approval, wherein the ITO has recorded the reasons undated and Ld. Pr. CIT, Delhi-1 has granted the approval by mentioning that I am satisfied , which shows that Ld. Pr. CIT-1, New Delhi has not recorded proper satisfaction and without application of mind gave the approval in a mechanical manner - no application of mind by the Addl. CIT before granting the approval. - Decided in favour of assessee. - ITA No. 4395/Del/2019 - - - Dated:- 27-2-2020 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T and the Hon ble High Courts. He argued that the impugned order passed by the Ld. CIT(A) is without jurisdiction, erroneous and wrongly been passed, because the reassessment passed by the AO u/s. 143(3)/147 of the I.T. Act, 1961 is invalid on the basis of the notice u/s. 148 of the Act which is invalid and has been issued without applying his mind only on the basis of the information received from the ADIT(Inv.), Unit-1(3), Ahmedabad through CD wherein, it was informed that assessee company has claimed fictitious losses and profits by misusing the CCM facility in F O segment amounting to ₹ 2,18,73,416/-. He submitted that AO has blindly relied upon the Investigation Wing which itself is not based on any material against the assessee. The mere recording of reasons on the basis of information from Investigation Wing and issuing notice for initiation of reassessment proceedings does not constitute application of mind much less independent application of mind. Therefore, the proceeding is without jurisdiction. In this regard, he relied upon the decision of the Hon ble Bombay High Court in the case of M/s Coronation Industries Ltd. vs. DCIT (2017) 82 taxmann.com 75 (Bombay) where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. In view of above, he requested to delete the addition in dispute. 4. Ld. DR on the other hand, heavily relied upon the order of the Ld. CIT(A). As regards jurisdiction of the assessee is concerned, he submitted that the Ld. CIT(A) has already decided the issue against the assessee which is self-explanatory and, therefore, the ground raised by the assessee on this issue should be dismissed. So far as the merit of the case is concerned, he submitted that here also the Ld. CIT(A) has given a clear cut finding that assessee has misused the facility of client code modification for creating artificial loss which came to light on the basis report of the Investigation Wing. Therefore, he requested to upheld the order of the Ld. CIT(A) on jurisdiction as well as on merits. 5. We have heard both the parties and carefully considered the rival submissions and perused the orders of the authorities below alongwith Paper Book filed by the assessee of the case laws relied upon. We note that in this case the AO while recording the reasons for the belief that income has escaped assessment has recorded the reasons as under:- 5.1 After perusing the aforesaid reasons rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer (DVO) 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 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 Wing regarding accommodation entries provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 5.1.1 We further find that the Hon ble Bombay High Court in the case of Coronation Agro Industries Ltd. (Supra) has held that mere client code modification by broker does not mean that any income has escaped assessment. 5.2 We have heard rival contentions and perused the orders of the revenue authorities, case laws relied by the ld. Counsel for the assessee, we are of the considered view that the jurisdictional issue has already been adjudicated and decided in favour of the Assessee by the various decisions of the Hon ble Supreme Court and the Hon ble High Courts, in the cases discussed above, which have been respectfully followed by the Tribunal. Therefore, we have no other alternative except to respectfully follow the same case laws, because no contrary decision has been brought to my knowledge by the Ld. DR under the similar facts and circumstances of the case. 5.3 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
