TMI Blog2020 (11) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... ed:- 18-11-2020 - Shri J.Sudhakar Reddy, AM And Smt. Madhumita Roy, JM For the Appellant : Shri Miraj D.Shah, FCA, Ld.AR For the Respondent : Shri Supriyo Paul, Addl. CIT, Ld.Sr. DR ORDER PER SMT. MADHUMITA ROY, JM The instant appeal filed by the assessee is directed against the order dated 16-07-2019 passed by the Ld. CIT(A)-3, Kolkata arising out of the assessment order dated 31-12-2018 passed by the ACIT, Circle 7(1), Kolkata u/s. 144 r.w.s 147/143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) for the Assessment Year 2011-12. 2. The assessee before us mainly challenges the re-opening of assessment made u/s. 147/148 of the Act by the Ld. AO. According to the assessee such assessment is bad in law and the same is liable to be quashed. Apart from that on merit, the assessee has challenged the confirmation of addition of ₹ 3,79,25,000/- made on account of unexplained cash credit in the books of the assessee being cash deposit u/s. 68 of the Act. Also the confirmation of addition of ₹ 79,71,424/- made on account of suppression of income based on gross profit ratio of the total turnover of the assessee has been challe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed back in the hands of the assessee u/s. 68 of the Act. However, the AO upon rejecting the reply dated 14-12-2018 filed by the assessee finalised such re-assessment proceedings with additions of ₹ 79,71,424/- on account of suppression of income based on gross profit ratio of the turnover of the assessee and further addition of ₹ 3,79,25,000/- made on account of cash credit in the books of the assessee being cash deposit u/s. 68 of the Act, which were in turn, confirmed by the Ld. CIT(A). Hence, the instant appeal before us. 6. At the time of hearing of the instant appeal the Ld. Counsel appearing for the assessee vehemently argued on the point of maintainability of the re-assessment u/s. 147/148. In fact, it was brought to our notice that the original scrutiny assessment proceedings was finalised on 27-03-2014 u/s. 143(3) of the Act, whereas the notice u/s. 148 of the Act was issued upon the assessee on 24-03-2018 i.e. after the expiry of 4 years of the scrutiny assessment done by the Revenue/Ld.AO. He further relied on the statutory provisions u/s. 147 of the Act, the proviso of which clearly stipulates the pre-conditions of re-opening of assessment after the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment on the basis of information obtained from investigation wing to the AO. 8. The Ld. Counsel appearing on behalf of the assessee in reply to such arguments as advanced by the Ld.DR submitted that none of the judgments as relied upon by him has any manner of application to the instant case since the basic fact is completely different from that of the fact available in the case in hand. 9. We have heard submissions made by the respective parties. We have also perused the relevant materials available on record. It is the case of the assessee that during the course of original scrutiny assessment proceedings u/s. 143(3) on 27.03.2014 books of account and other related documents were produced before the Ld. AO upon verification of which the assessment was finalized, which has not been confronted by the Ld.DR. Accordingly, it has been argued that the re-assessment proceedings, initiated against the assesse, thereafter on the same set of facts, is a change of opinion. It further appears that the original scrutiny assessment u/s. 143(3) of the Act was completed on 27-03-2014 and notice u/s. 148 of the Act was issued on 24-03-2018 i.e much after completion/expiry of four year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y have provided accommodation entry in the form of bogus billings/share capital/unsecured loans etc. to its various beneficiaries through these paper/shell companies. In fact, during FY 2010-11 in the above mentioned bank account of the assessee huge cash to the tune of ₹ 3.41 crores were deposited on different dates, which needs to be verified as was the ultimate finding/observation of the Ld. AO as it reflects from the reasons so recorded for re-opening of assessment of the assessee. 12. Thus, we find no allegation made by the revenue upon the assessee being escaped assessment. Neither we find any allegation that the assessee has failed to disclose fully and truly all material facts for the assessment, as it appears from the reasons so recorded for such re-opening in the absence of which no power has been vested upon the AO to reopen/re-assess or re-compute income or etc. Therefore, under the presence facts and circumstances of the case, we do not find any justification for such re-opening of assessment after expiry of four years from the end of the relevant to assessment year. 13. We have further considered the two judgments as relied upon by the Ld. DR, one of wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act categorically observes that reopening is bad in law, if there is no recording in the reason for re-opening that there was failure on the part of the assessee truly and fully in disclosing material facts required for the assessment. In fact this judgment as relied by the Ld. AR further relied upon the ration laid down in the judgment passed by the Hon ble Calcutta High Court in the case of Amiya Sales Industries Anr vs. ACIT reported in 2004) (9) TIMI 332-Cal. High Court//(2005) 274 ITR 25 (Cal.). Relevant portion of the said judgment is as follow:- In a case where assessment is made under section 143(3) and is sought to be reopened after the expiry of four years from the end of the relevant assessment year, in order to assume jurisdiction under section 147, one of the conditions precedent is that the recorded reasons should point out the failure on the part of the assessee to disclose fully and truly the material facts necessary for assessment. Once the Assessing Officer comes to a finding that there was failure or there was no improper disclosure on the part of the assessee, he forms the better which is recorded and assumes jurisdiction under section 147. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d proper for the writ Court to intervene. In the instant case, as there was no omission or failure on the part of the assessee to disclose truly and fully all material facts in the return, as the Assessing Officer sought to reopen the assessments due to wrong interpretation of accounts by the Assessing Officer which was not permissible under section 147 to assume jurisdiction, the assessee was justified in invoking the writ petition. Thus, the instant petition was to be allowed and, consequently impugned notices under section 147/148 were to be quashed. 11. Respectfully following the decision of the jurisdictional High Court on this issue and applying the propositions of law cited in the case law referred above we hold that the reopening is bad in law as it is nowhere recorded in the reasons for reopening that there was the failure on the part of the assessee truly and fully disclose material facts required for the assessment. The Ld. DR relied on the judgment of the Hon ble Delhi High Court in the case of A.G Holdings Pvt. Ltd (supra). This case is not at all applicable to the facts of the case on hand. In the case of A.G Holdings Pvt. Ltd (supra) the proviso to Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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