TMI Blog2021 (8) TMI 1023X X X X Extracts X X X X X X X X Extracts X X X X ..... sustainable. The reasons recorded by the AO are totally vague, scanty and ambiguous. The reasons recorded by the AO do not disclose the AO's mind as to what was the nature and amount of transaction or entries, which had been given or taken by the assessee in the relevant year. The reasons recorded by the AO also do not disclose his mind as to when and in what mode or way the bogus entries or transactions were given or taken by the assessee. From the reasons recorded, nobody can know what was the amount and nature of bogus entries or transactions given and taken by the assessee in the relevant year and with whom the transaction had taken place. There is no live nexus with the information received and the formation of belief by the Ld. AO. At least the reason which is the foundation and edifice for acquiring jurisdiction to reopen the assessment, at least should prima facie indicate that there is live link nexus with the material coming on record with the income escaping assessment. The material should not be specific but also should indicate what is the amount which is escaping assessment. As held above, nowhere the reasons refer what was the nature of accommodation entry, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue and general observation made by the Assessing Officer in the reasons recorded does not confer any jurisdiction to him reopen the case - Decided in favour of assessee. - I.T.A. No.3009 & 3010/DEL/2017, I.T.A. No.3011/DEL/2017, I.T.A. No.3012/DEL/2017 - - - Dated:- 6-7-2021 - Shri Amit Shukla, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Appellant : S/Shri Shantanu Jain, Adv. For the Respondent : Shri H.K. Choudhary, CIT-D.R. ORDER PER AMIT SHUKLA, JM :- The aforesaid Appeals have been filed by the assessee against impugned order dated 14.03.2017 and 17.03.2017, passed by ld. PCIT-VIII, New Delhi u/s 263 of the Income Tax Act, for the Assessment Year 2007-08, 2008-09 and 2009-10, respectively. Since the issues involved in all the appeals are common arising out of almost identical set of facts, therefore, same were heard together and are being disposed off by way of this consolidated order. 2. We will first take up the appeal in the case of Surya Pulses Pvt. Ltd. for the Assessment Year 2007-08 in ITA No.3009/Del/2017. 3. The facts of the case are that original return of Income for this year was filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner, Delhi-III, which was received by him on 15.03.2013, the relevant seized material (containing many thousands of pages) was scanned and sent to the Commissioner of Income Tax in soft copy. However, while completing the assessment under section 147 r.w.s. 143 of the I.T. Act, though the A.O. referred the appraisal report but did not look into the relevant seized material in soft copy. Accordingly, a show cause notice under section 263 of the I.T. Act was issued to the assessee on 13.01.2017 which is reproduced in the impugned order. In the show cause notice it is stated that the case was reopened on the allegation of accommodation entry of ₹ 25 lakhs on account of share application/capital received from M/s. Euro Asia Venture Capital (India) Ltd. a concern of S.K. Jain group of cases. Search and seizure operation was carried out on 14.09.2010 at the premises of Shri Surender Jain and Shri Virender Jain. During the course of search, cash book and bank books of the concerns managed by Shri S.K. Jain group wherein detailed of day-to-day receipts in cash and cheque from/to different persons/firms/companies have been recorded were seized. On perusal of the re-assessment order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llegal or nullity in the eyes of law, then, whether the CIT had a valid jurisdiction to pass the impugned order u/s 263 to revise the non est reassessment order. 6. The Ld. Counsel for the Assessee submitted that additional grounds are legal in nature and no fresh facts are to be investigated. He also submitted that the additional ground goes to the root of the matter and therefore, prayed that the same may be admitted for disposal of the appeal. He has relied upon the decision of Hon ble Supreme Court in the case of NTPC Limited vs. CIT reported in 229 ITR 383 (SC) and Hon ble High Court of Delhi in the case of CIT vs. SPL s Siddhartha Ltd. reported in 345 ITR 223 (Delhi). 7. On the other hand, Learned DR objected to the admission of additional grounds of appeal stating that such grounds were not raised before the lower authorities and as such the same could not be raised at this stage. 8. In rebuttal, the Ld. Counsel for the Assessee has submitted that the said grounds challenging the reopening u/s 148 of the Act were raised before the Ld. Pr. CIT as evident from the impugned order but on account of abundant caution, the same were raised again. 9. Considering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. We have considered the rival submissions . It is well settled Law that since re-assessment proceedings are invalid and bad in law, therefore, such proceedings could not be revised under section 263 of the I.T. Act. It is also well settled Law that validity of the re-assessment proceedings are to be judged on the basis of the reasons recorded for reopening of the assessment. 10.1 He further placed reliance upon the following judgments: - M/s Westlife Development Ltd. vs. PCIT in ITA No. 688/Mum/2016 dated24.06.2016 (ITAT, Mumbai) - Krishna Kumar Saraf vs. CIT in ITA No. 4562/Del/2011 dated 24.09.2015 (ITAT, Delhi) - M/s Classic Flour Food Processing (P) Ltd. vs. CIT in ITA No. 764 to 766/Kol/2014 dated 05.04.2017 (ITAT, Kolkata) 11. In this case, the A.O. while reopening the assessment has recorded the following reasons for re-assessment under section 147/148 of the I.T. Act, copy of which is placed at Pg. 18 of the paper book: Information/ documents in the form of CD, appraisal report alongwith relevant details has been received from the office of the CIT-III, New delhi vide letter F.No. CITIII/ Confidential/2012-13 dated 28.03.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n mentioned, date and Mode of transaction whether through bank or cash etc. has not been mentioned, reasons are general in nature, there is no reasons to belief formed by the Ld. AO that there is an income which has escaped assessment, nothing is mentioned whether there is 143(1) or 143(3) order before in the case of Assessee. 13. He placed reliance upon the following judgments, among other judgments: - CIT vs Insecticides (India) Ltd. reported in 357 ITR 330 (High Court of Delhi) 8 .The AO has further stated that the assessee company has failed to disclose fully and truly all material facts and source of these funds routed through bank account of the assessee company. In the reasons recorded, it is nowhere mentioned as to who had given bogus entries/transactions to the assessee or to whom the assessee had given bogus entries or transactions. It is also nowhere mentioned as to on which dates and through which mode the bogus entries and transactions were made by the assessee. What was the information given by the Director of Income-tax (Inv.), New Delhi, vide letter dated 16.06.2006 has also not been mentioned. In other words, the contents of the letter dated 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , cannot be made a basis to say that the reasons recorded by the AO were with reference to those amounts mentioned in the assessment order. The reasons recorded by the AO are totally silent with regard to the amount and nature of bogus entries and transactions and the persons with whom the transactions had taken place. In this respect, we may rely upon the decision of Hon'ble jurisdictional Delhi High Court in the case of CIT v. Atul Jain [2000] 299 ITR 383, in which case the information relied upon by the AO for initiating proceedings u/s 147 of the Act did indicate the source of the capital gain and nobody knew which shares were transacted and with whom the transaction has taken place and in that case there were absolutely no details available and the information supplied was extremely scanty and vague and in that light of those facts, the Hon'ble Jurisdictional Delhi High Court held that initiation of proceedings u/s 147 of the Act by the AO was not valid and justified in the eyes of law. The recent decision of Hon'ble jurisdictional High Court of Delhi in the case of Signature Hotels (P.) Ltd. (supra) also supports the view we have taken above. - ShankerTrad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned, however the reasons recorded are devoid of the same. Therefore we do not have any hesitation in quashing reopening of assessment .In the result ground no [2] [3] of the appeal are allowed. - Supersonic Technologies (P) Ltd. vs. PCIT in ITA No. 2269/D/2017 dated 10.12.2018 (ITAT, Delhi Bench `G ) ..Further A.O. recorded incorrect facts in the reasons for reopening of the assessment because the amount in question is ₹ 2.20 crores but A.O. has mentioned in the reasons the amount of ₹ 2.90 crores which escaped assessment. Further, no names of the parties have been mentioned in reasons under section 147 from whom the amount in question have been received by the assessee as accommodation entry. All the facts brought to the notice of the A.O. by the Investigation Wing have been considered by the A.O. while framing the reassessment and accepted the return of income. Therefore, there was no new material available on record to justify reopening of the assessment or to invoke jurisdiction under section 263 of the I.T. Act, which would also show that there is totally non-application of mind on the part of the A.O. to reopen the assessment in the matter. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the information that he has before him then it is not necessary to write each and every detail in his reasons to believe. He has to just form a prima facie belief that there is an income which has escaped assessment, which he has duly formed in the instant case. The Ld. D.R. also submitted that the Ld. Pr. CIT on going through the record, correctly found it to be an assessment erroneous as well as prejudicial to the interests of the Revenue because Ld. AO has not examined the seized material found during the course of search. The Ld. DR has relied upon below mentioned decisions placed in his paper book: - Surya Jyoti Software P. Ltd. vs PCIT in ITA No. 2158/Del/2017 dated 25.10.2017 (ITAT, Delhi) 19. Now coming to the one of the main contention raised by the ld. counsel of the assessee that the proceedings under section 147 was itself bad in law and therefore, proceedings u/s 263 could not have been invoked. The reasons given for this proposition is that, here in this case, material on the basis of which proceedings for reopening the assessment has been sought to be initiated u/s 147 has been found from the search conducted at the premises of third party and if materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1 crore. Thus, the contention raised by the ld. counsel on this point is out rightly rejected that the proceedings under section 153C should have been initiated instead of under section147. 20. As regards the contention that material or information found during the course of search in the case of S.K. Jain group cannot be held to be a tangible material pertaining to the assessee, we are unable to accept such a contention for the reason that, firstly, there was a categorical information and material coming on record post passing of the original assessment order under section 143(3) that assessee was one of the beneficiaries of accommodation entries provided by one of the group concern of S.K. Jain and not only that, a specific amount (of ₹ 1 Crore) has been mentioned which prima-facie pertained to the assessee. This definitely constitutes a tangible and definite material having live-link nexus with the income chargeable to tax escaping assessment. The judgments relied upon by the ld. CIT D.R. on this point, specifically the judgment of Hon'ble Delhi High Court in the case of PCIT Vs Paramount Communication (P.) Ltd. (supra) is squarely applicable, as in that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the point that validity of reassessment or assessment order can be challenged in the revisionary proceeding under section 263; and secondly, if any material has been found pertaining to the assessee in the case of person searched or covered u/s 153A of the Act, then only recourse was to initiate proceedings under section 153C of the Act and not under section 147 of the Act. At the outset, we do not find any quarrel to the proposition that the validity of assessment or reassessment cannot be challenged in the revisionary proceedings u/s 263, however, on the facts of the present case, the ratio laid down in such judgments would not be applicable at all, because here in this case no document or material belonging to the assessee was found in the course of search proceedings in the case of S.K. Jain group, albeit assessee s name appears as one of the beneficiaries of accommodation entries in the books of account maintained by one of the concern of S.K. Jain group. The entries in the books of account of S.K. Jain group cannot be reckoned as any material or document belonging to the assessee so as to constitute document or asset seized or requisitioned in the case of person searched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examination and hence, in our opinion such a material and information does constitute a tangible and relevant material sufficient enough to form reason to believe that income chargeable to tax has escaped assessment. Apart from that, it is seen from the records that the assessee had raised similar objections after the receipt of reasons recorded before the Assessing Officer during the course of re-assessment proceedings, which have been amply dealt with and discussed by the Assessing Officer inn detail vide his separate order, copy of which has been placed in the paper book. Against the said order, assessee has not sought for any remedy nor has it challenged this issue in appeal after the passing of the assessment order. In any case, we have already held Assessing Officer has rightly acquired jurisdiction under section 147 of the Act based on the information/material referred to in the reasons recorded . Accordingly, this contention raised by the ld. Counsel of the assessee is also rejected. - ShankerTradexPvt Ltd. vs PCIT in ITA No. 2999/Del/2017 dated 16.04.2018 (ITAT, Delhi) 7. We have heard both the parties and perused all the records. We have taken congniza ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the shares issued at premium were transferred by the investor companies (shell companies) to the directors or their relatives or concerns of the beneficiary company at a very discounted price. What was the face value of the shares at the time of the allotment and transfer. What happened suddenly that the value of such shares went down ranging from 50% to 90%. This unusual even had taken place in most of the cases before the AOs completed the assessment proceedings during financial year 2014-15 but the AO did not make any enquiry whatsoever on this aspect. In this case, the assessee did not furnish the details of shares transferred from the above mentioned companies of SK Jain Group to other persons despite my specific query in the show cause notice. ..... 16. In view of the above discussion, I am satisfied that the reassessment order passed by the AO on 31/3/2015 for Assessment year 2007-08, is not only prejudicial to the interest of the revenue but is also erroneous in so far as the AO has failed to look into the seized material. Therefore, the said order is set aside with a direction to the AO to examine the seized material and confront the same to the assessee. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide the order of the Assessing Officer, simply directed the Assessing Officer to carry thorough and detailed inquiry. It is this order which is upheld by the High Court. We see no reason to interfere with the order of the High Court. The Special Leave Petitions are dismissed. Thus, in the present case the Assessing Officer has though rightly re-opened the Assessment Proceedings has not properly adjudicated the issue for re- opening therefore, the Pr. CIT has rightly invoked Section 263 of the Act and passed the order. Therefore, the Order under Section 263 of the Income Tax Act, 1961 passed by the Principal Commissioner of Income Tax is just and proper. There is no need to interfere with the same. The appeal of the assessee is dismissed. He has relied upon other judgments as under: - ACIT vs Rajesh Jhaveri Stock Broking reported in 291 ITR 500 (SC) - Raymond Wollen Mills Ltd. Vs ITO reported in 236 ITR 34 (SC) - Paramount Communications Ltd. Vs PCIT reported in 84 taxmann.com 300 (SC) - Rajmandir Estate P Ltd vs PCIT reported in 70 taxmann.com 124 (Calcutta) - Rajmandir Estate P Ltd vs PCIT reported in 77 taxmann.com 285 (SC) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enged the validity of reopening u/s.147, then assessee is precluded from agitating this issue especially in the proceedings u/s.263 on the ground that assessment order itself is bad in law. The validity of re-assessment proceedings cannot be judged or challenged in revisionary proceedings. Thus, the main issue before is, firstly , whether the assessee can challenge the validity of assessment order during the revisionary proceedings and also the validity of reopening u/s.147 when it was not challenged by the assessee; and secondly , whether the reopening based on the reasons recorded by the Assessing Officer itself was bad in law or not. 18. This precise issue has been dealt in detail by the Coordinate Bench of ITAT Mumbai Bench in the case of M/s. Westlife Development Ltd. v. Pr. CIT as reported in 49 ITR (T) 406 wherein the Tribunal has observed and held as under: 8. Challenging the jurisdictional defects of assessment order for assailing the jurisdictional validity of the revision order passed u/s 263: The first issue that arises for our consideration is - whether the assessee can challenge the jurisdictional validity of order passed u/s 143(3) in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order passed in the primary (original) proceedings should be allowed to be examined even at the subsequent stages, only for the limited purpose of examining whether the collateral (subsequent) proceedings have been initiated on a valid legal platform or not and for examining the validity of assumption of jurisdiction to initiate the collateral proceedings. If it is not so allowed, then, it may so happen that though order passed in the original proceedings was illegal and thus order passed in the subsequent proceedings in turn would also be illegal, but in absence of a remedy to contest the same, it may give rise to an 'enforceable' tax liability without authority of law. Therefore, the Courts have taken this view that jurisdictional aspects of the order passed in the primary proceedings can be examined in the collateral proceedings also. This issue is not res integra. This issue has been decided in many judgments by various courts, and some of them have been discussed by us in followings paragraphs. 8.10 Thus, on the basis of aforesaid discussion we can safely hold that as per law, the assessee should be permitted to challenge the validity of order passed u/s.263 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether the decree passed by the trial court can be said to be 'null and 'void'. In our opinion, the law on the point is well settled. The distinction between a decree which is void and a decree which is wrong, incorrect, and irregular or not in accordance with law cannot be overlooked or ignored. Where a court lacks inherent jurisdiction in passing a decree or making an order, a decree or order passed by such court would be without jurisdiction non est and void ab initio. A defect of jurisdiction of the court goes to the root of the matter and strikes at the very authority of the court to pass a decree or make an order. Such defect has always been treated as basic and fundamental and a decree or order passed by a court or an authority having no jurisdiction is nullity. Validity of such decree or order can be challenged at any stage, even in execution or collateral proceedings. 10 Five decades, in Kiran Singh Ors. v. Chaman Paswan Ors., [SCR p. 121) this Court declared; It is a fundamental principle well established that a decree passed by a court without jurisdiction is a nullity and that its invalidity could be set up whenever and wherever it is soug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the right person in the right proceedings and circumstances. The order may be a 'a nullity' and 'void' but these terms have not absolute sense: their meaning is relative, depending upon the court's willingness to grant relief in any particular situation. If this principle of illegal relativity is borne in mind, the law can be made to operate justly and reasonably in cases where the doctrine of ultra vires, rigidly applied, would produce unacceptable results.' (Administrative Law, Wade and Forsyth, 8th Edn., 2000, p. 308). Secondly, there is a distinction between mere administrative orders and the decrees of courts, especially a superior court. 'The order of a superior court such as the High Court must always be obeyed no matter what flaws it may be thought to contain. Thus, a party who disobeys a High Court injunction in punishable for contempt of court even though it was granted in proceedings deemed to have been irrevocably abandoned owing to the expiry of a timelimit.' (ibid., p. 312) 8 A distinction exists between a decree passed by a court having no jurisdiction and consequently being a nullity and not executable and a decree of the court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. (supra) has held as under: Once the original order stands rectified then it loses its identity at least to the extent it stood rectified. In such circumstances, the Commissioner should have invoked his suo motu powers under section 263 of the Act against the subsequent rectified order dated March 14, 1989, if he was of the view that the same is erroneous and prejudicial to the interests of the Revenue. We are, therefore, of the view that the Tribunal made no mistake in coming to the conclusion that the order of the Commissioner passed under section 263 of the Act which had the effect of setting aside the assessment order dated March 13, 1987, is without jurisdiction. Accordingly, and in view of the aforesaid discussion, we answer the r eference against the Revenue and in favour of the assessee. 21. Further, Hon ble Delhi High Court in the case of CIT v. Software Consultants reported in 341 ITR 240 has held as under: 14. For exercise of power under Section 263 of the Act, it is mandatory that the order passed by the Assessing Officer should be erroneous and prejudicial to the interest of the Revenue. In the present case, the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sdictional High Court as discussed herein above. 23. Now coming to issue whether the assessment order itself was valid or not. The reasons recorded by the Assessing Officer for reopening the assessment u/s.147 have already been incorporated in the foregoing paragraph. From a bare perusal of the same, it is seen that assessee s case has been reopened on the basis of information of CIT-III, New Delhi vide letter F.No. CIT-III/Confidential/2012-13 dated 28.03.2013 that the above assessee, M/s Suraj Pulses Private Limited has received and is a beneficiary of accommodation entries provided by the group of Shri Surendra Kumar Jain, Sh. Rakesh Gupta Sh. Vishesh Gupta and Sh. Navneet Jain Vaibhav Jain and hundreds of bogus companies of his group and many other related entry providers. On perusal of the reason it is apparent that, firstly, the learned assessing officer has no where mentioned the details about the entry operators. Secondly, the learned assessing officer has noted that from the verification of the documents seized it appears to him that accommodation entries has been taken from various paper companies which were obtained by the assessee. However in the reasons record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount which is escaping assessment. As held above, nowhere the reasons refer what was the nature of accommodation entry, the quantum of the amount of entry which has escaped assessment. In fact the reason is purely based on general observation and the modus operandi without any live link nexus with the assessee. 24. As already noted above in various judgements cited above, it is well settled that only the reasons recorded by the AO for initiating proceedings u/s 147 of the Act are to be looked at or examined for sustaining or setting aside a notice issued u/s 148 of the Act. The reasons are required to be read as they were recorded by the AO. No substitution or deletion is permissible. No addition can be made to those reasons. Therefore, the details of entries or amount mentioned in the assessment order and in respect of which ultimate addition has been made by the AO, cannot be made a basis to say that the reasons recorded by the AO were with reference to those amounts mentioned in the assessment order. The principles laid down is covered by the judgment passed by Hon ble High Court of Delhi in the case of Insecticides (India) Ltd. reported in 357 ITR 330 and this Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri S.K. Jain during the course of search. The Investigation Wing, Delhi, forwarded the hard copy of appraisal report to the then Commissioner, Delhi-III, which was received by him on 15.03.2013, the relevant seized material (containing many thousands of pages) was scanned and sent to the Commissioner of Income Tax in soft copy. However, while completing the assessment under section 147 r.w.s. 143 of the I.T. Act, though the A.O. referred the appraisal report but did not look into the relevant seized material in soft copy. This was one of the case where the A.O. did not examine the seized material. Accordingly, a show cause notice under section 263 of the I.T. Act was issued to the assessee on 13.01.2017 which is reproduced in the impugned order. In the show cause notice it is stated that the case was reopened on the allegation of accommodation entry of ₹ 70 lakhs on account of share application/capital received from M/s Hum Tum Marketing Pvt Ltd, M/s Virgin Capital Services Pvt Ltd, M/s Eagle Infratech Pvt Ltd, M/s Victory Software Pvt Ltd, M/s Mega Top Promoters Pvt Ltd, M/s Finance Leasing Finance India Ltd, M/s Brite Industrial Resources Ltd, M/s Sunny Cast Forge Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings is being challenged on facts and law. ii) Because the continuation and conclusion of reassessment proceedings is being challenged on facts and law while there being erroneous disposal of preliminary objection raised pursuant to judgment of GKN Driveshafts 259 ITR 19 SC iii) Because the action for initiation of re-assessment proceedings is unreasonable since while recording reasons, there is non application of mind much less independent application of mind and merely relying upon investigation report by AO, further reasons recorded are vague, lacking tangible material/reasonable cause and justification iv) Because the action is being challenged on facts law for challenging that the reassessment order passed u/s 147/143(3) was illegal or nullity in the eyes of law, then, whether the CIT had a valid jurisdiction to pass the impugned order u/s 263 to revise the non-est reassessment order. 28. Considering the facts of the case, we are of the view that additional grounds are legal in nature and goes to the root of the matter. Therefore the same are admitted for the purpose of disposal of the appeal. We, accordingly, admit the additional grounds of ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein. Further, he submitted that Ld. AO has mentioned amount of ₹ 70,00,000/- which is escaped assessment in the proforma of approval u/s 151 of the Act, which is placed Paper Book Pg. no. 2, while Pr. CIT has mentioned in his order at Pg. 2that the amount received is ₹ 90,00,000/- by assessee instead of ₹ 70,00,000/- as per reasons recorded for reopening of assessment. Therefore, he submitted that the reopening is made on wrong sets of facts. He also placed on record the order dated 06.12.2017 passed by Ld. AO u/s 263/147/143(3) of the Act wherein the addition is also made of ₹ 90,00,000/-. 31. On the other hand, Ld. D.R. relied upon the Order of the Ld. Pr. CIT. He has relied upon same submission and Judgments as relied in the case of Suraj Pulses (P) Ltd. for AY 2007-08 in ITA No. 3009/D/2017. Therefore, he submitted that the Ld. Pr. CIT rightly considered re-assessment order to be erroneous and prejudicial to the interests of the Revenue. 32. We have considered the rival submissions and perused the material available on record. We have perused that the identical grounds has been dealt with by us in appeal in the case of Suraj Pulses (P) Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Investigation Wing cannot be said to be tangible material per se without a further inquiry being undertaken by the AO. In the present case the AO deprived himself of that opportunity by proceeding on the erroneous premise that Assessee had not filed a return when in fact it had. 14. To compound matters further the in the assessment order the AO has, instead of adding a sum of ₹ 78 lakh, even going by the reasons for reopening of the assessment, added a sum of ₹ 1.13 crore. On what basis such an addition was made has not been explained. 34. Here also AO had reason to believe that ₹ 70 lakhs has escaped assessment, which was ultimately was found to be incorrect and non-existent, therefore, there was complete failure of any application of mind on the part of the Ld. AO to proceed to initiate the re-assessment proceedings. There is no other material available on record except the information received from the Investigation Wing. The Ld. AO on the basis of the information and material received from Investigation Wing has recorded reasons for reopening of the assessment which are ultimately found to be incorrect and non-existent. Further also, following th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to the Commissioner of Income Tax in soft copy. However, while completing the assessment under section 147 r.w.s. 143 of the I.T. Act, though the Ld. AO referred the appraisal report but did not look into the relevant seized material in soft copy. This was one of the case where the Ld. AO did not examine the seized material. Accordingly, a show cause notice under section 263 of the I.T. Act was issued to the assessee on 13.01.2017 which is reproduced in the impugned order. In the show cause notice it is stated that the case was reopened on the allegation of accommodation entry of ₹ 2.60 Crores on account of share application/capital received from M/s Shalini Holding Ltd., M/s Nisha Holding Ltd., M/s S.R. Cable Pvt Ltd., M/s Finge Leasing Finance Ltd. M/s Vogue Leasing Finance Pvt Ltd., M/s Pelicon Finance Leasing Ltd., M/s Sunny Cast Forge Ltd, M/s Pitambra Securities Pvt Ltd. M/s Parisudh Finance Co. Pvt Ltd., M/s Hillridge Investment Ltd. , M/s Singhal Securities Pvt Ltd, M/s KDG Proper Construction Pvt Ltd. and M/s Brite Indu. Resources Ltd, various concerns of S.K. Jain group of cases. However, on perusal of records and annexures of cash book and cheque book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged on facts and law while there being erroneous disposal of preliminary objection raised pursuant to judgment of GKN Driveshafts 259 ITR 19 SC iii) Because the action for initiation of re-assessment proceedings is unreasonable since while recording reasons, there is non application of mind much less independent application of mind and merely relying upon investigation report by AO, further reasons recorded are vague, lacking tangible material/reasonable cause and justification iv) Because the action is being challenged on facts law for challenging that the reassessment order passed u/s 147/143(3) was illegal or nullity in the eyes of law, then, whether the CIT had a valid jurisdiction to pass the impugned order u/s 263 to revise the non-est reassessment order. 39. Considering the facts of the case, we are of the view that additional grounds are legal in nature and goes to the root of the matter. Therefore the same are admitted for the purpose of disposal of the appeal as done in the other two appeals. We, accordingly, admit the additional grounds of appeal. 40. The Ld. Counsel for the Assessee contended that the submissions with respect to the present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has mentioned amount of ₹ 2,60,00,000/- which is escaped assessment in Proforma for reasons recorded which is placed at Page no. 5 of the paper book, while Ld. Pr. CIT has mentioned in his order at Pg. 27that the amount received is ₹ 2,15,00,000/- by assessee as against ₹ 2,60,00,000/- as per proforma of reasons recorded for reopening of assessment. Therefore, he submitted that the reopening is made on wrong sets of facts. He also placed on record the order dated 08.12.2017 passed by Ld. AO u/s 263/147/143(3) of the Act wherein the addition is also made of ₹ 2,15,00,000/-. 42. On the other hand, Ld. DR relied upon the Order of the Ld. Pr. CIT. He has relied upon same submission and Judgments as relied in the case of Suraj Pulses (P) Ltd. for AY 2007-08 in ITA No. 3009/D/2017 Suraj Pulses (P) Ltd. for AY 2008-09 in ITA No. 3010/D/2017. Therefore, he submitted that the Ld. Pr. CIT has rightly considered re-assessment order to be erroneous and prejudicial to the interests of the Revenue. 43. We have considered the rival submissions and perused the material available on record. Here in this case also similar facts and issues are permeating and the ide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the returned income and passed the re- assessment order under section 147/143(3) of the I.T. Act, 1961, on dated 27.01.2015. 46. The Ld. Pr. CIT on examining the assessment record noticed that though the assessment was reopened under section 148 of the I.T. Act on the allegation of accommodation entry taken from Shri S.K. Jain group of concerns who were searched on 14.09.2010 by the Investigation Wing of the Income Tax Department, some of the A.O s did not examine the seized material in the form of cash book and books containing the details of cheques issued by such concerns seized from the premises of Shri S.K. Jain during the course of search. The Investigation Wing, Delhi, forwarded the hard copy of appraisal report to the then Commissioner, Delhi-III, which was received by him on 15.03.2013, the relevant seized material (containing many thousands of pages) was scanned and sent to the Commissioner of Income Tax in soft copy. However, while completing the assessment under section 147 r.w.s. 143 of the I.T. Act, though the A.O. referred the appraisal report but did not look into the relevant seized material in soft copy. This was one of the case where the Ld. AO did not ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee in the present appeal also has challenged the Order under section 263 of the I.T. Act. The assessee also moved an application for admission of the following additional grounds which are as under: i) Because the action for initiation, continuation and conclusion of reassessment proceedings is being challenged on facts and law. ii) Because the continuation and conclusion of reassessment proceedings is being challenged on facts and law while there being erroneous disposal of preliminary objection raised pursuant to judgment of GKN Driveshafts 259 ITR 19 SC iii) Because the action for initiation of re-assessment proceedings is unreasonable since while recording reasons, there is non application of mind much less independent application of mind and merely relying upon investigation report by AO, further reasons recorded are vague, lacking tangible material/reasonable cause and justification iv) Because the action is being challenged on facts law for challenging that the reassessment order passed u/s 147/143(3) was illegal or nullity in the eyes of law, then, whether the CIT had a valid jurisdiction to pass the impugned order u/s 263 to revise th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the above assessment year, the income chargeable to tax to the tune of ₹ 20,50,000/- has escaped assessment with the meaning of Section 147of the I.T. Act, 1961. 50. He drew our attention towards the written submissions alongwith documentary evidences filed by the assessee before the authorities below and also the written synopsis. He submitted that the issue in the said appeal is identical as the aforesaid appeal in the case of Suraj Pulses (P) Ltd. for AY 2007-08 in ITA No. 3009/D/2017. Therefore, reliance was placed upon the same. 51. On the other hand, Ld. D.R. relied upon the Order of the Ld. Pr. CIT. He has relied upon same submission and Judgments as relied in the case of Suraj Pulses (P) Ltd. for AY 2007-08 in ITA No. 3009/D/2017. Therefore, he submitted that the Ld. Pr. CIT has rightly considered re-assessment order to be erroneous and prejudicial to the interests of the Revenue. 52. After hearing both the parties and on perusal of the material placed on record, we find that as far as the reasons recorded, though there is a specific mention about amount of ₹ 20,50,000/- received by way of accommodation entry, however neither there is any me ..... X X X X Extracts X X X X X X X X Extracts X X X X
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