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TMI Blog2021 (7) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... me tax assessment for the A.Y. 2013-14. 3. Facts for the A.Y. 2013-14 :- Briefly stated the facts are that, the assessee being a private limited company engaged in the business of manufacturing starch and its derivatives. On 30.11.2013, the company filed its return of income declaring total income at Rs.Nil. The case of the assessee was selected for scrutiny and the assessment was completed under Section 143 (3) of the Act and the income was assessed at Rs. 12,01,830/- during the course of the assessment proceedings. Thereafter, the assessing officer reopened the assessment under Section 147 of the Act by issuing the impugned notice dated 15.03.2018 under Section 148 of the Act. The writ applicant filed its return of income in response to the impugned notice and requested to supply the copy of the reasons recorded for reopening and the same was supplied by the revenue vide its communication dated 10.04.2018. Vide letter dated 14.05.2018, the assessee had raised the objections and the same was rejected by the revenue vide its order dated 13.07.2018. The assessment for the year under consideration is sought to be reopened by the revenue mainly on the ground that the assessee compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rics Pvt. Ltd. (vi) M/s. Victory Sales Private Ltd. (vii) M/s. Lunked Textiles Private Ltd. (viii) M/s. Eager Corporation (ix) M/s. Vikrant Marketing (x) M/s, Acute Consultancy Ltd. &(xi) M/s. Dulex Commercial Pvt. Ltd. on 05.02.2016. During the search action the statement of Mr. Vipul Vidur Bhatt was recorded on 29.02.2016 under Section 132(4) of the Act. In the statement, Mr. Vipul Vidur Bhatt has accepted that he is an entry operator and all the above mentioned entities/companies are bogus entities/ companies, which are used by him for providing various bogus accommodation entries to the various beneficiaries for commission. Mr. Vipul Vidur Bhatt also accepted that he is director in these entities/companies and all other directors of these entities/companies are dummy directors appoitned by him. Mr. Vipul Vidur Bhatt also accepted that he controls the entire activities /affairs of these entities /companies and these entities/companies were incorporated for providing bogus accommodation entries only. In the statement recorded under Section 132(4) of the IT Act, 1961, Mr. Vipul Vidur Bhatt also accepted that he has controlled, managed and operated as many as 347 bogus entities whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the F.Y.2011-12, the assessee company purchased certain quantity of maize amounting to Rs. 9,96,24,737/- from M/s. Sampada Chemicals Ltd. (for short "SCL") for manufacturing of starch and made part payment of Rs. 1.50 crore and remaining outstanding amount Rs. 8,46,24,737/- being made during F.Y. 2012-13 and the same was reflected in the books of accounts for relevant year of the transaction. In the background of the aforesaid facts, it was submitted that, for the A.Y.20122013, the assessee company had no liability so far as outstanding of SCL is concerned and thereafter, the company had not entered into any transaction with the SCL. (ii) It was submitted that, the impugned notice is illegal, bad in law and against the statutory provisions of the Act. (iii) It was submitted that the impugned order of disposing of the objections against the notice was without considering the objections raised by the assessee company as the assessee had specifically stated that, the company had not entered into any transactions with SCL during A.Y 2013-14 and to substantiate the same, the company had submitted the ledger account showing the part payment as well as final payment. Relying on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ises of Mr. Vipul Bhatt and his related entities and during the aforesaid proceedings, the statement of Mr. Bhatt was recorded, wherein, he admitted that, the SCL was bogus and paper company and was used for providing various accommodation entries to various beneficiaries and from the ledger account of the company, it was noticed that, the assessee is one of the beneficiary for A.Y. 2013-14 and 205-16 and therefore, AO based on the information made independent enquiries and formed a belief that, the income has escaped assessment. Under such circumstances, it was submitted that, the revenue is justified in reopening the assessment for the year under consideration. It was submitted that, the AO while passing the order of disposing of the objections, had considered the issue raised by the assesse and detail order came to be passed. Thus, the decision arrived at by the authority to reopen the assessment for both the years are just and proper. 11. In view of the aforesaid contentions, Mrs. Mauna Bhatt, the learned Sr. Standing Counsel appearing for the revenue submits that, there being no merits in the writ applications, the same deserve to be dismissed. 12. Considered the submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he has the reason to believe that Rs. 14,71,24,737/- has escaped assessment. 2.2.7 During the year under consideration, it had not entered into any transactions with Sampada Chemicals Ltd. And hence there is no question of the transactions being bogus. 2.2.8 Without prejudice to contentions of the assessee with respect to the validity of reassessment proceedings for FY 2012-13 and the fact that the above transaction is not bogus, in lieu of clarifying the facts the assessee submits as under:- - As per the books of account of assessee of FY 2012-13, theopening payable balance to Sampada Chemicals ltd. Was Rs. 8,46,24,737/-; - The assessee had actually paid Rs. 8,46,24,737/- to Sampada Chemicals Ltd during FY 2012-13; - Accordingly as per the books of accounts of the assessee of FY 2012-13 both debit total and credit totals in the ledger account of Sampada Chemicals ltd is Rs. 8,46,24,737/-. - For the reference of your goodself, copy of ledger account of Sampada Chemicals Limited for FY 2011-12 and FY 2012-13 is enclosed herewith vide Annexure-3. 2.2.10 The assessee also submits that the purchases from Sampada Chemicals Ltd have been made in the preceding year i.e. 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pement would be/not be added back in terms of the relevant provision of the Act and for the assessment year for which the case of the assessee is reopened, but the fact remains that it could not be examined at the time of the original assessment finalized if there would be concrete belief or material." Objections for A.Y. 2015-16 :- 2.8 In the reasons for reopening assessment proceedings for the FY 2012-13, your goodself has mentioned the following facts for the alleged accommodation entries: Name of the bogus entity FY Amount Debit Credit Sampada Chemicals Ltd. 2012-13 8,46,24,737 6,25,00,000 Without prejudice to contentions of the assessee with respect to the validity of reassessment proceedings for FY 2012-13 and the fact that the above transactions is not bogus, in liey of clarifying the facts the assessee submits as under: - As per the books of accounts of assessee of FY 2012-13, the opening payable balance to Sampada Chemicals ltd. Was Rs. 8,46,24,737/-; - The assessee had actually paid Rs. 8,46,24,737/- to Sampada Chemicals Ltd during FY 2012-13; - Accordingly as per the books of accounts of the assessee of FY 2012-13 both debit total and cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia) Ltd Vs. Income tax Officer & Ors. [(2003) 259 ITR 19], the Apex Court held that, while disposing off the objections against the notice issued under Section 148 of the Act, it is an obligatory on the part of the assessing officer to deal with the issues raises therein and pass speaking order. The reason behind is that the filing of the objections and passing of the order thereon is not an empty formality. The object behind the assessee to file objection and passing a speaking order by the AO thereon, is to ensure that, if assessee is in position to impress upon the AO that, there is no reasonable ground for reopening of the assessment, the AO may drop the proceedings and not proceed further. 17. In view of the aforesaid, we are of the considered view that, the preliminary objections raised by the writ applicant in both the cases having not been properly dealt with the by AO. The lapses is in clear violation of the Apex Court. Thus, it appears that, the AO has passed the order disposing of the objections mechanically and without application of mind. In other words, not in a meaningful manner. We are conscious that disposing of the objections raised by the assessee, against the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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