TMI Blog2021 (5) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... d from the department without application of his mind. In our considered view, the assessee's case is covered by the decisions rendered by the coordinate Bench in the case of M/s. century Fiscal Services Ltd. Vs. ITO [ 2020 (11) TMI 766 - ITAT CHANDIGARH ] and M/s. Indo Global Techno Trade Limited vs. ITO [ 2020 (6) TMI 375 - ITAT CHANDIGARH ] Hence we hold that the AO has assumed the jurisdiction under section 147 of the Act in a mechanical manner, therefore the order passed by the AO is liable to be quashed. Allow the appeal of the assessee. - ITA No. 1374/CHD/2019 - - - Dated:- 16-4-2021 - IN THE ITAT, CHANDIGARH BENCH, CHANDIGARH N.K. Saini, Vice President And R.L. Negi, Member (J) For the Appellant : Ashwani Kumar, CA For the Respondents : Meenakshi Vohra, Addl. CIT ORDER Per R. L. Negi , Judicial Member The assessee has filed the present appeal against the order dated 16.09.2019 passed by Commissioner of Income Tax (Appeals)-5, Ludhiana [for short 'the CIT(A)'] whereby the Ld. CIT(A) has dismissed the appeal filed by the assessee against the assessment order passed u/s. 143(3) read with section 147 of the Income Tax Act, 1961 (f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 250(6) of the Income Tax Act, 1962 by the Ld. Commissioner of Income Tax (Appeals)-5, Ludhiana is against law and facts on the file in as much as he was not justified to arbitrarily uphold the action of the Ld. Assessing Officer in resorting to provisions of Sec. 148. 2. That the Ld. Commissioner of Income Tax (Appeals)-5, Ludhiana was further not justified to arbitrarily uphold the action of the Ld. Assessing Officer in making an addition of ₹ 20,00,000/- received by the appellant company as share capital by resort to provisions of Sec. 68 of the Income Tax Act, 1961. 6. At the outset, the Ld. Counsel for the assessee submitted that the action of reopening is bad in law as there is no independent application of mind by the AO and the notice u/s. 148 was issued on the basis of information received from the department. Referring to the reasons recorded by the AO, the Ld. Counsel contended that AO had formed belief on the basis of information received from ITO, Ward-15(3), Mumbai, without applying his mind and that the satisfaction recorded is borrowed satisfaction, therefore the assessment order passed u/s. 143 read with section 147 of the Act is liable to be qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore the Ld. CIT(A) has erred in upholding the action of the AO. As contended by the Ld. Counsel, the contents of the reasons recorded suggest that the AO has formed the belief that income of the assessee has escaped, on the basis of the information received from the department. The relevant paras of the reasons recorded read as under: It is also noted from the records that M/s. Real Time Consultants Limited has made investments inter-alia in the following concern: S. No PAN Name Amount (In Rs. ) 1. AABCK6909J M/s Kaur Sain Spinning Weaving Mills Limited 20,00,000/- As the investments made in this concern are out of the bogus share capital and share application money received by M/s. Real Time Consultants Private Limited and it is the beneficiary of these transactions. I have therefore reasons to believe that the income of ₹ 20,00,000/- which otherwise is chargeable to tax for the assessment in the hands of M/s. Kaur Sain Spinning 8s Weaving Mills Limited, for the A.Y. 2011-12 for which a notice u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, we find, talks about some information with the Department regarding the assessee having availed accommodation entries of ₹ 20 lacs from M/s. Virgin Capital Services Pvt. Ltd. a paper company of M/s. Surinder Kumar Jain Group, which is engaged in providing such entries, through cheque in lieu of cash. There is nothing in the reasons revealing application of mind by the AO to the information in his possession, as to whether he had verified that any such amount was actually received during the year and if so in what mode or manner i.e. as share capital or unsecured loan etc. The A.O. has formed his belief solely on this information without even verifying and cross checking the same with the facts on record available with him. The belief of escapement of income as recorded in the reasons, is clearly not that of the A.O. but, as rightly pointed out by the Ld. Counsel for the Assessee, it is a borrowed belief. The Ld. CIT(A), we find, has dismissed assesses contention and held that the A.O. had applied his mind independently while recording satisfaction without pointing out how, when the fact as demonstrated before us is to the contrary. In view of the above, since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al which we note infact are entirely distinguishable has further compounded the mistake by meandering through the case laws and decisions in entirely different set of facts and circumstances and instead attempted to write a thesis on what would constitute information . Instead of referring in the reasons recorded to the specific facts of assessee's case for justifying the assumption of jurisdiction, the AO addresses the legal position on what would constitute information. 11. In view of the above discussion, in our view, the Assessing Officer has wrongly and illegally assumed jurisdiction in this case to reopen the assessment. The reasons pointed out by the Assessing Officer cannot be said to be the reasons to form the belief that income of the assessee had escaped assessment. In view of this, since the assessment order framed by the Assessing Officer is not sustainable in the eyes of law, the same is accordingly quashed. Since we have decided the legal issue in favour of the assessee, whereby, we have quashed the assessment order, hence, at this stage, we do not deem it appropriate to go into the merits of the case which have been rendered academic in nature. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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