TMI Blog2022 (3) TMI 828X X X X Extracts X X X X X X X X Extracts X X X X ..... rd from which he could have found out who are the accommodation entry providers to the assessee. Other than the report of the INV Wing, there is not even a reference to any document on the basis of which the AO was satisfied that the assessee company has taken accommodation entry. As mentioned elsewhere, the names of the 99 share applicants, as mentioned in the assessment order, do not find any place in the list of accommodation entry providers. While recording the reasons for reopening the assessment, the AO did not even care to look into the assessment records. Had the AO seen the assessment record, then he would have found that during the year under consideration, the assessee had issued share capital including share premium to various parties and has also received sufficient unsecured loans from various parties and details of share application money and unsecured loans were already submitted during the course of assessment proceedings. In our considered view, the case was reopened only on the directions of the DIT, INV II, New Delhi and no reason to believe was formed for reopening of the assessment. W e hold that assumption of jurisdiction by issuing notice under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that section 153C of the Act was applicable to the facts of the case of the appellant company and not section 147 of the Act and therefore the AO was illegal, invalid and untenable -do-- I 3 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that even otherwise there was no failure on the part of assessee to disclose fully and truly all material facts necessary for assessment and as such action u/s 147 was in excess of jurisdiction; -do-- 1.4 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that reasons recorded mechanically without application of mind do not constitute valid reasons to believe for assumption of jurisdiction u/s 147 of the Act -do- 1.5 That in absence of any valid approval obtained under section 151 of the Act, initiation of proceedings u/s 147 of the Act and assessment framed u/s 147/143(3) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - detail of construction const incurred during the year - basis of valuation of closing stock 18.11.2009-. Present Sh. Madhu Mohan CA. he has filed letter. He has been reminded that primary onus regarding the share application money/share capital/premium received has not been discharged and once again asked to prove the genuineness and also file a chart of all such person and evidences as filed by the assessee till date. 2. Similarly once again asked to prove genuineness of advances received from customers, unsecured loans and security deposit from ICICI showing ₹ 83,79,924/- by furnishing all necessary details of advances. 3. Details and partywise opening balances and closing balance of unsecured loan showing in the, balance sheet and copies of account of all parties/persons. 4. Names of the person from whom squared up unsecured loans taken during the year. 04.12.2009:Sh. Madhu Mohan CA. present he has file a letter with details. Asked to show cause as to why % completion method be not applied to booking of sales. Once more asked to prove genuineness in respect of U. Loans, share application money. 10.12.2009: Present Sh. Madhu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub- section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year. 12. A perusal of the reasons recorded for reopening the assessment exhibited elsewhere clearly show that there is no mention by the Assessing Officer that there was failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment. In our understanding of law, this is the pre-requisite condition for reopening the assessment after the expiry of four years from the end of the relevant Assessment Year. 13. The Hon ble Jurisdictional High Court of Delhi in the case of Wel Inter Trade (P) Ltd 308 ITR 22 has made the following observations, which are very relevant to the facts of the case in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot discharged the duty. Where the assessee has discharged his duty and the assessment completed under section 143(3) is reopened within the period of 4 years from the end of the assessment year, the assessing officer has to either show that the disclosure is not full and true or he has come into possession of some tangible material4', to borrow with respect the expression used by the supreme courl in Kelvinator (supra), to come to the conclusion that there is escapement of income. When there is no failure on the part of the assessee to furnish fid I and true particulars and there is no tangible material on the basis of which the assessing officer can allege escapement of income, the only consequence would be that the assessing officer was exercising the power of review on the very same materials which he is presumed to have examined This would amount to abuse of power to reassess and has to be checked. 17. As per the facts mentioned elsewhere, original assessment was completed under section 143(3) of the Act and during the course of assessment proceedings, the assessee has disclosed all material facts necessary for its assessment and the same were duly verified and taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l to the tune of ₹ 16.88 crores including share premium to various parties and has also received sufficient unsecured loans amounting to ₹ 10.63 crores from various parties and details of share application money and unsecured loans were already submitted during the course of assessment proceedings. In our considered view, the case was reopened only on the directions of the DIT, INV II, New Delhi and no reason to believe was formed for reopening of the assessment. 23. For the sake of repetition and since this is very pertinent, we have to again mention that in the reasons to believe, there is no mention of any party/concern and the amount thereof from whom the assessee has taken accommodation entries. 24. Considering the facts of the case in totality, in light of the judicial decisions discussed hereinabove, we hold that assumption of jurisdiction by issuing notice under section 148 of the act is bad in law which makes the notice under section 148 liable to be quashed thereby annulling the assessment order framed under section 147 of the Act. Cross objections of the assessee are allowed. 25. Since we have quashed the assessment order, we do not find i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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