TMI Blog2016 (8) TMI 1547X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground no. 1 2 raised by the Assessee. - ITA No. 5203/Del/2013 - - - Dated:- 8-8-2016 - SHRI H.S. SIDHU, JUDICIAL MEMBER, AND SHRI O.P. KANT, ACCOUNTANT MEMBER For The Assessee : Sh. Somil Aggarwal, Adv. For The Revenue : Shri Surender Pal, Sr. DR ORDER PER H.S. SIDHU, J.M. The Assessee has filed the Appeal against the Order dated 23.5.2013 of the Ld. CIT(A)-IX, New Delhi pertaining to assessment year 2003-04 and raised the following grounds:- 1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing impugned assessment order without assuming jurisdiction as per law and without serving the mandatory notices uls 148 and 143(2) of Income Tax Act, 1961. 2. That having regard to the facts and circumstances of the case Ld. CIT(A) has erred in law and on fact in confirming the action of Ld. AO in assuming jurisdiction U/S 147 and that too without complying with the mandatory conditions as prescribed under section 147 to 151 of the Income Tax Act, 1961 and the reasons recorded are invalid and contrary to law and facts and there is no satisfaction as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 455/-. 3. Against the Order of the Ld. AO, assessee appealed before the Ld. CIT(A), who vide impugned order dated 23.5.2013 has dismissed the appeal of the assesseee. 4. Aggrieved with the aforesaid order of the Ld. CIT(A), Assessee is in appeal before the Tribunal. 5. Ld. Counsel for the assessee has only argued the legal grounds raised vide ground no. 1 2 stating that Ld. CIT(A) has erred in confirming the action of the AO in framing the impugned assessment order without assuming jurisdiction as per law and without serving the mandatory notices u/s. 148 and 143(2) of the I.T. Act, 1961 and also erred in confirming the action of the AO in assuming jurisdiction u/s. 147 and that too without complying with the mandatory conditions as prescribed under section 147 to 151 of the I.T. Act, 1961 and the reasons recorded are invalid and contrary to law and facts and there is no satisfaction as per law u/s. 151 of the Act. He further draw our attention towards the copy of reasons for reopening the case u/s. 148 and stated that no proper reasons were recorded; no nexus between the materials relied upon and the belief formed for escapement of income; no application of mind; no pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stigation), New Delhi that during the relevant assessment year, the assessee has received the cheque amounts in the nature of accommodation entry (as shown in Annexure-A). On this amount of ₹ 24,23,42,612/-, the commission @2% comes out to be at ₹ 48,46,852/- The quantum of escaped income is summarized as under:- ( A) Above ₹ 20,01,67,820/- ( B) Above ₹ 48,46,852/- Total ₹ 20,50,14,672/- On the basis of this information, I have reason to believe that the income described above have escaped assessment and the case is fit for issuing notice u/s. 148 of the Income Tax Act, 1961. 7.1 On going through the above reasons recorded by the AO, we are of the view that AO has not applied his mind so as to come to an independent conclusion that he has reason to believe that income has escaped during the year. In our view the reasons are vague and are not based on any tangible material as well as are not acceptable in the eyes of law. The AO has mechanic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. 13. Mr. Sawhney took the Court through the order of the CIT(A) to show how the CIT (A) discussed the materials produced during the hearing of the appeal. The Court would like to observe that this is in the nature of a post mortem exercise after the event of reopening of the assessment has taken place. While the CIT may have proceeded on the basis that the reopening of the assessment was valid, this does not satisfy the requirement of law that prior to the reopening of the assessment, the AO has to, applying his mind to the materials, conclude that he has reason to believe that income of the Assessee has escaped assessment. Unless that basic jurisdictional requirement is satisfied a post mortem exercise of analysing materials produced subsequent to the reopening will not rescue an inherently defective reopening order from invalidity. 14. In the circumstances, the conclusion reached by the ITAT cannot be said to be erroneous. No substantial question of law arises. 15. The appeal is dismissed. (b) Signature Hotels (P)_ Ltd. vs. ITO and another reported in 338 ITR 51 (Del) has under similar circumstances as follows:- For the A.Y. 2003-04, the return of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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