TMI Blog2022 (3) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... or the Respondents : Umesh Takyar , Sr. DR ORDER Dr. B. R. R. Kumar , Accountant Member The present appeal has been filed by the revenue against the order of the ld. CIT(A)-31, New Delhi dated 31.07.2018. 2. Following grounds have been raised by the revenue: 1. Whether on the facts and circumstances of the case, the Ld, CIT(A) was justified in not sustaining the reopening proceedings for AY 2008-09 on the basis of order of the Hon'ble Delhi High Court in the case of assessee for AY 2009-10 2010-11 despite the facts that circumstances facts for AY 2008-09 were different from AY 2009-10 2010-11. 2. Whether on the facts and circumstances of the case, the Ld, CIT(A) was justified in quashing the reopening proceedings for AY 2008-09 on the basis of order of the Hon'ble Delhi High Court in the case of assessee for AY 2009-10 2010-11 by ignoring the facts that tax evasion petition pertains to AY 2007-08 2008-09 and did not contain any information for AY 2009-10 2010-11 on the basis of which Hon'ble High Court has quashed the proceedings for AY 2009-10 2010-11. 3. The assessee filed return of income declaring income ₹ 10,57,680/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibuted cash in Defence canteens as bribes. As per the Schedule 9 (Direct Expenses) of balance sheet of the assessee for the year ended 31-03-2008 received from tire investigation wing of the department, it has contractor's charges expenses of ₹ 1,89,34,807/-. It was alleged in the TEP that this is the bribe amount distributed by the assessee which it has shown as expenses under the head contractor charges. 2. From the above referred TEP, it appears that contractor's charges amounting to ₹ 1,89,34,807/- claimed as expenses by tire assessee in its profit loss account pertaining to FY 2007-08 relevant to AY 2008-09 and has been used by the assessee for non-business purposes, thus concealing its true income. 3. In view of the additional information/documents received from the Investigation Wing, I have reason to believe that Contractor's charges shown in its balance sheet are bogus and the assessee has willfully and knowingly concealed its particulars of income to avoid tax and that income of ₹ 1,89,34,807/- chargeable to tax has escaped assessment for AY 2008-09, within the meaning of sec. 147 of Income Tax Act, 1961. Raj Singh Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner for the AY 2007-08 was reopened by an order passed by the Commissioner of Income Tax (CIT) under Section 263 of the Act. It was further noted that for the AY 2008-09, proceedings under Section 147 of the Act were in progress. Even for the AY in question i.e. the AY 2009-10, a perusal of the Profit and Loss (P L) Account for the year ending 31st March, 2009 showed that the Petitioner was claiming an expense of ₹ 2,41,79,349/- on account of 'contractor's charges'. This was in fact the bribe amount distributed by it. (ii) The second reason was that the Income Tax Officer (Investigation) [ITO (Inv)] OSD-I, Unit-3, New Delhi issued the summons under Section 131 (1A) of the Act on 4th March, 2015 calling upon the Petitioner to provide the necessary details so that independent enquiries could be conducted from the third parties. The ITO (Inv) in his report stated that the Petitioner has neither provided any justification with documentary evidence nor the details of the parties to whom the contract charges were paid. From both the above documents and the report of the ITO (Inv) it was inferred that 'the modus operandi of the Assessee in the AY 2009-10 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -08) culminated in the revisional and subsequent remand orders by the Assessing Officer (hereafter AO ) finally in the assessee's favour. The order pursuant to the remand was, in fact, accepted after the appellate Commissioner endorsed that view on 08.05.2014. 3. The reassessment for A.Y. 2009-10 was through a notice dated 30.03.2016 which inter alia claimed that upon receipt of a Tax Evasion Petition (TEP), investigation was conducted which showed that for the year ending 31.03.2009, the contract charges claimed were unduly high - ₹ 24,01,79,349/-. The TEP also alleged that these amounts were distribution of illegal gratifications by the assessee. The reassessment notice proceeded to state as follows: 5. From the above referred TEP, and report of the ITO (Inv) OSD-1, Unit-3, New Delhi, the modus operandi of the assessee in the AY 2009-10 is same as was in AY 2007-08 2008-09. It appears that contractor's charges amounting to ₹ 2,41,79,349/- claimed as expenses by the assessee in its profit loss account pertaining to FY 2008-09 relevant to AY 2009-10 has been used by the assessee for non-business purposes, thus concealing its true income. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.2010 received along with above quoted letter of ITO (Inv) OSD-1, Unit-3, New Delhi the assessee is showing Consultancy Income of ₹ 3,31,14,209/- and expenses on account of Contractor's charges amounting to ₹ 3,07,95,559/- and has shown net income only at ₹ 3,10,336/-. It was alleged in the TEP that for the A Y 2007-08 2008-09 the contractor charges being claimed by the assessee is the bribe amount distributed by the assessee. 4. ITO (Inv) OSD-1, Unit-3, New Delhi in his findings has stated that the assessee was provided opportunity to explain the expenses and to provide the necessary details which were called for vide summons u/s. 131 (1A) dated 04.03.2015 so that independent enquiries could be conducted from the third parties. As per his report the assessee has neither provided any justification with documentary evidence nor the details of the parties to whom the contract charges were paid. 5. From the above referred TEP, and report of the ITO (Inv) OSD-1, Unit-3, New Delhi, the modus operandi of the assessee in the A Y 2010-11 was same as was in A Y 2007-08, 2008-09 2009-10. It appears that contractor's charges amounting to ₹ 3,07, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture. It was also stated that no changes were forthcoming and that revisiting sole issues did not constitute a valid ground for invoking the power of reassessment under Sections 147/148. In fact, the mechanical citing of same reasons vitiated and rendered invalid the impugned notice under Section 147. The other grounds, such as failure to mention the fact that though there was mention of substantive addition of ₹ 1,60,94,586/- for A.Y. 2008-09 that was subject matter of an appeal, that relevant facts were not intentionally considered. The assessee complained that re-opening besides being the result of a mechanical exercise, appears to be on the basis of directions of higher authorities. ................................. 14. In this case, the trigger for all the reassessment attempts by the revenue was the same TEP, which led to previous attempts to reopen completed assessments. The material on record show that the AO had conducted inquiries at the time of completion of the original assessments. There is nothing to show that the entities to whom payments were made (by the assessee) were fictitious; in fact TDS amounts were apparently deducted. There was no fresh evid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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