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TMI Blog2020 (12) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... holding the reassessment proceedings u/s 147 of the IT Act which is not properly initiated and therefore need be quashed as the appellants case is covered by proviso to section 147 of the IT Act and that being the case the AO has failed to give a finding as which material facts the appellant failed to disclose fully and truly during original proceedings and in the absence of any such finding, the initiation of reassessment proceedings and the impugned assessment order both are bad in law because such proceedings are as a result of change of mind by the successor incumbent on the same set of facts. 3. The Ld. CIT(A) has erred both in law and circumstances of the case in upholding the reassessment proceedings initiated u/s 147 of the IT Act ignoring the contention of appellant that the proceedings have been initiated by the AO without application of independent mind on the material, if any, provided by the Inv. Wing of the department. In view of the above deficiencies the resultant reassessment proceedings are required to be set aside. 4. The Ld. CIT(A) has erred both in law and in facts of the case in upholding the impugned reassessment proceedings ignoring the fact that the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the office of SFIO in the case of money laundering operation conducted by Jain Brothers through proper channel and also a Report of DDIT (Inv.) UnitITA VI(2), New Delhi. The money laundering operation was conducted by Jain Brothers with the help of 56 professionals who worked as mediators to bring the potential beneficiaries to Jain Brothers for laundering their unaccounted cash. The report has identified 559 beneficiaries during the financial year 2009-10 and the total quantum has been estimated at a minimum of Rs. 11,970 crores. The modus operandi for laundering money during pre and post search period has been clearly brought out in the report. Investigation needs to be expanded to cover all the beneficiaries and the professional mediators and the name of company engaged in providing accommodation entries, the mediator / middle man, bank etc. noted from scrutiny of the seized documents, which the Assessing Officer has reproduced at page no. 2 of the assessment order. On the basis of this information the approval obtained from the Pr. Commissioner of Income Tax-02, New Delhi which was duly served upon the assessee. A copy of the reasons recorded for reopening the case u/s. 148 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. 133(6) of the Income Tax Act, 1961 of M/s sunny Cast and Forge Ltd. was received in the office of Assessing Officer on 21.12.2017. AR of the assessee was asked vide office noting dated 28.11.2017; 3.12.2017 & 19.12.2017 to produce the Directors. However, the AR of the assessee has expressed his inability to produce the said Directors for confirmation of the alleged investments made with the assessee company. After examining the aforesaid documentary evidences and reply filed by the assessee and the other companies, the Assessing Officer is of the view that assessee has not discharged its primary onus to prove the identity, creditworthiness and genuineness of the share capital subscription and on the basis of various judgements mentioned in the assessment order, he has held that the credits of Rs. 2,60,00,000/- are directly hit by section 68 of the Income Tax Act, 1961 and onus is on the assessee to prove the genuineness of the transaction and creditworthiness of the person who has given credit to the assessee. The assessee has failed to discharge its onus and finally an amount of Rs. 2,60,00,000/- was added to the income of the assessee as unexplained credit u/s. 68 of the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riginal proceedings and in the absence of any such finding, the initiation of reassessment proceedings and the impugned assessment order both are bad in law because such proceedings are as a result of change of mind by the successor incumbent on the same set of facts and without application of independent mind and the same deserve to be cancelled. Ld. Counsel for the assessee further challenged the impugned order by stating that sanction u/s. 151 of the Income Tax Act, 1961 as provided with the copy of the reasons recorded shows mechanical satisfaction by the Pr. Commissioner of Income Tax, Delhi-2, New Delhi. He further stated that the Assessing Officer is not entitled to take cognizance of the material seized from the third party by invoking provisions of section 147/148 of the Income Tax Act, 1961 ignoring the specific provision u/s. 153C of the Income Tax Act, 1961 dealing with such material. 3.1 As regards to the merits of the case the Ld. Counsel for the assessee stated that the addition in dispute u/s. 68 of the Income Tax Act, 1961 holding that the assessee share capital as unexplained cash credit ignoring the fact that assessee has discharged its initial onus u/s. 68 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has placed at page no. 49. The ITO, Ward 4(4), New Delhi has issued this notice on the basis of information provided by the Director of Income Tax (Investigation), Unit VI(2), New Delhi that post search investigation carried out on in the case of Sh. SK Jain group that the said group was involved in carrying out the activities of accommodation entries and as per the above information the Assessee has accepted accommodation entries of Rs. 2,60,00,000/- from 5 entities. Copy of the reasons recorded dated 24.11.2014, the Assessee has placed in the paper book at page no. 50-52. After completing the necessary formalities, the ITO, War 4(4), New Delhi completed the reassessment u/s. 148/143(3) of the Act vide order dated 11.3.2015 accepting the above cash credit of Rs. 2,60,00,000/- in the form of share capital from the 5 entities named in the reasons recorded. Assessee has attached this assessment order at page no. 57-58 of paper book. Thereafter the AO has again for the second time reopened the assessment of the assessee for the assessment year in dispute on the information received from the Office of the CIT-2, New Delhi dated 05.01.2017 which has been forwarded by Serious Fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion about the same accommodation entries and on the same amount of Rs. 2.60 crores which the assessee has received from the 5 entities. But in second time also the same AO has also issued notice u/s. 148 of the Act for the same accommodation entries and for the same amount of Rs. 2.60 crores from the same 5 entities, which is not permissible in view of the Judgement of the Hon'ble Delhi High Court passed in ITA No. 54/2017 in the case of Pr. CIT, Central (1), New Delhi vs. Aditya Khanna. He has also filed the copy of the same decision and requested that the AO has no jurisdiction to reopen the case of the assessee on the same material. Second time, AO has not applied his mind as well as by obtaining the approval from the competent authority, who has also not applied his mind before giving approval for issue of notice u/s. 148 of the Act. AO has also not noticed these facts pointed out by the Assessee in its objection raised in response to the notice u/s. 148 of the Act and completed the assessment by making the addition in dispute which has already been examined, enquired and appreciated by the AO in the reassessment order dated 11.3.2015 passed u/s. 148/143(3) of the Act and seco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame facts. 6. In this case, the Assessing Officer (A.O.) appears to have completely ignored the earlier re-assessment order - framed under Section 148/143(3) on 31.12.2007. The first reassessment order noticed all the relevant facts and accepted the net income at Rs. 1,03,890/- . The assessment made in the course of assessment proceeding, in the present case, does not refer to any subsequent material other than the Directorate of Enforcement's letter of 28.03.2006; instead the A.O. appears to have just made a Chart as the basis even while acknowledging that the earlier re-assessment proceedings were concluded on 31.12.2007, clearly stated that "perusal in assessment records reveals that the remittances received are not considered in the return of income filed by the Assessee and in the course of the assessment proceedings for the Assessment Years 2003-2004 & 2006-2007". That clearly shows that the A.O. ignored that the material, which led the Revenue to re-open the Assessment, in the first instance, was the same that he sought to resuscitate in order to make substantial additions. 7. Having regard to these facts, the Court is of the opinion that no substantial question of law a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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