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TMI Blog2021 (10) TMI 394X X X X Extracts X X X X X X X X Extracts X X X X ..... ) -44, New Delhi is against law and facts on the file in as much as he was not justified to uphold the action of the Learned Income Tax Officer, Ward - 12(3), New Delhi in adding back a sum of Rs. 7,90,50,000/- received by the Appellant Company from M/s Abhinandan Trafin Pvt Ltd as Unsecured Loan by holding that the Appellant Company has failed to prove the genuineness, identity and credit worthiness of the transaction by invoking the provisions of Section 68 of the Act 3. That the order dated 14.11.2019 passed u/s 250(6) of the Act by the Learned Commissioner of Income-Tax (Appeals) -44, New Delhi is against law and facts on the file and contrary to the established and duly accepted principles of natural justice in as much as the same has been passed without issuing any notice to the Appellant Company or providing it an opportunity of presenting its case in the matter." 3. The representatives of both the sides were heard at length, the case records carefully perused and with the assistance of the ld. Counsel, we have considered the documentary evidences brought on record in the form of Paper Book in light of Rule 18(6) of ITAT Rules. 4. The reasons for issuing of notice u/s 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove, it can be inferred that the out of beneficiary companies took entries from these shell companies which do not have any real business and was operated only to bring their unaccounted money in the books. In this process these beneficiary companies gradually brought their unaccounted cash back in the books without paying any lax. As per the information received from Investigation wing, it is noticed that the above mentioned assessee has routed its unaccounted income to the tune of Rs. 40,00,000/- and, took bogus accounts entry/entries for non-existent transactions from M/s Divya Drishti group who are in the business of providing accommodation entries to various beneficiaries through cheques/DD/RTGS/NEFT in lieu of cash, through various paper and dummy companies floated and controlled by them. The benefit of accommodation entry has been taken by the assessee to bring the unaccounted money back to its business without paying any tax on the same. Enquiries made by the AQ and Findings subsequent to information received: 4.. On receipt of information from Investigation Wing, return of income was extracted from the ITD Module. The information received from investigation wing ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return of income was only processed (not assessed) u/s 143(1) of the Act. In view of the above, provisions of clause (b) of explanation 2 to section 147 are applicable to facts of this case and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped assessment. 6.4 In this case, four years but not more than six years have elapsed from the end of the assessment year under consideration and income chargeable to tax which has escaped assessment is more than Rs one lakh, necessary sanction a. issue notice u/s 148 of the Act is being obtained separately from the Pr. CIT Delhi-4, as per amended provisions of section 151 of the Act w.e.f. 01.06.2015 (Narendra Kumar) Income Tax Officer Ward- 12(3), New Delhi 5. A perusal of the assessment order shows that during the course of assessment proceedings itself, the assessee made it clear that it has not received Rs. 40 lakhs from Divya Drishti Group and pointed out that the credit entry of Rs. 40 lakhs represents the amount received from sister concern Abhinandan Trafin Pvt Ltd. Perusal of the aforesaid order states that the Assessing Officer has made the addition of Rs. 7.90 crores as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue comes to his notice subsequently in the course of the proceedings. The reasons for the insertion of Explanation 3 are to be found in the Memorandum explaining the provisions of Finance (No. 2)Bill of 2009. The Memorandum treats the amendment to be clarificatory and contains the following Explanation : "Some courts have held that the Assessing Officer has to restrict the reassessment proceedings only to issues in respect of which the reasons have been recorded for reopening the assessment. He is not empowered to touch upon any other issue for which no reasons have been recorded. The above interpretation is contrary to the legislative intent. With a view to further clarifying the legislative intent, it is proposed to insert an Explanation in section147 to provide that the Assessing Officer may assess or reassess income in respect of any issue which comes to his notice subsequently in the course of proceedings under this section, notwithstanding that the reason for such issue has not been included in the reasons recorded under sub-section (2) of section 148." 7. In order to appreciate the reasons for the amendment inserting Explanation 3, it would be necessary to advert to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under sub-section (2) of section 148 would be sufficient if the escaped income on the second head comes to the knowledge of the officer in the course of the proceedings. But if both the items are unconnected and totally alien then the assessing authority has to follow sub-section (2)of section 148 with regard to the escaped income which comes to his knowledge during the course of the proceedings." Hence, the view of the Punjab and Haryana High Court and the Kerala High Court was that, once the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment and proceeds to issue a notice under section 148, it is not open to him to assess or, as the case may be, reassess the income under an independent or unconnected issue, which was not the basis of the notice for reopening the assessment. 8. Parliament stepped in to correct what it regarded as an incorrect interpretation of the provisions of section147. The Memorandum explain-ing the provisions of Finance (No. 2) Bill of 2009 states in this background that some courts had held that the Assessing Officer has to restrict the reassessment proceedings only to issues in respect of which reasons have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovision should not result in diluting the effect of these words or rendering any part of the language used by Parliament otiose .Parliament having used the words "assess or reassess such income and also any other income chargeable to tax which has escaped assessment", the words "and also" cannot be read as being in the alternative. On the contrary, the correct interpretation would be to regard those words as being conjunctive and cumulative. It is of some significance that Parliament has not used the word "or". The Legislature did not rest content by merely using the word "and". The words "and", as well as "also" have been used together and in conjunction. The Shorter Oxford Dictionary defines the expression "also" to mean 'further, in addition, besides, too'. The word has been treated as being relative and conjunctive. Evidently, therefore, what Parliament intends by use of the words "and also" is that the Assessing Officer, upon the formation of a reason to believe under section147 and the issuance of a notice under section 148(2) must assess or reassess: (i) 'such income'; and also (ii )any other income chargeable to tax which has escaped assessment and which c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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