TMI Blog2023 (10) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... rrived at a belief that the income of the assessee chargeable to tax had escaped assessment. We concur with the view taken by the CIT(Appeals) that as the A.O had neither in the reasons to believe or in the body of the assessment order or in the course of the proceedings before the CIT(Appeals) placed on record any material/ evidence which would reveal that he had any tangible material available before him to arrive at a bonafide believe that income of the assessee chargeable to tax had escaped assessment, therefore, in absence of any such tangible material justifying the formation of bonafide belief, the very jurisdiction assumed by him u/s. 147 of the Act cannot be sustained. No infirmity in the view taken by the CIT(Appeals), who had rightly observed that in the absence of any tangible material that would have justified the formation of a bonafide belief on the part of the A.O that the income of the assessee chargeable to tax had escaped assessment, the assumption of jurisdiction by the A.O u/s. 147 of the Act was devoid and bereft of any force of law. Admittedly, the notice u/s. 143(2) of the Act could have been issued to the assessee by 30.09.2016. As observed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of law and without providing due proper opportunity of hearing. 3. The cross objector reserves the right to add, amend, or alter any of the ground/s of cross objection. 2. At the threshold of hearing of the appeal, we find that the appeal filed by the revenue is time-barred by 53 days. The Ld. Departmental Representative (for short DR ) has filed a letter dated 29.08.2022 seeking condonation of delay involved in the filing of the appeal, stating as under: Sub: Condonation of delay in filing appeal-Akshay Lodha, Pandri, Raipur PAN : ACIPL3634P for A.Y.2012-13 -reg. Kindly refer to the above subject. 2. In the case of Akshay Lodha, Pandri, Raipur PAN: ACIPL3634P for A.Y.2012-13 Order u/s 250 was passed by. NFAC on 15/03/2022 and the appeal order was received in the Office of the Pr.CIT-1, Raipur on 09/05/2022. Accordingly, limitation to file appeal before [TAT subsisted upto 07/06/2022. However, second appeal could not be filed before the Hon'ble ITAT due to voluminous orders received from NFAC through online portal. It would be worth mentioning here that the introduction of online receipt of appeal created instant delay on the part of this office which may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut as follows: 7. During the assessment proceedings, the A.O observed that as per the information shared by the DCIT, Central Circle, Raipur, a document viz. LPS- 3 that was seized from the premises of Kundanani Group in the course of the search proceedings conducted in the case of Sharma Group Others including Kundanani Group, revealed that Shri Rakesh Kundanani, a commission agent for purchase of sarees, was primarily rendering his service as a commission agent of two concerns, viz. (i) Prakash Saree Kendra; (ii) Prakash Trading Centre. Also, the A.O observed that purchase bills/payment vouchers of sarees that were found in the course of search proceedings from the business premise of Shri Ramesh Kundanani revealed that the aforementioned concerns, viz. (i) Prakash Saree Kendra; (ii) Prakash Trading Centre had made total payments aggregating to Rs. 3,67,86,194/- for purchase of sarees through Shri Ramesh Kundanani (supra). 8. After culling out the complete details of the purchases of Rs. 3,67,86,194/- (supra), which, as per the A.O were purchased by Shri Ramesh Kundanani as commission agent for the aforementioned concerns, viz. (i) Prakash Saree Kendra; ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record a copy of the letter of DCIT, Central Circle, Raipur, who was stated to have shared with the A.O information a/w. documentary evidence linked or corroborated that the alleged cash purchases pertained to the assessee. However, the A.O., despite two reminders, did not revert and filed a remand report as was directed by the CIT(Appeals). 10. Considering the aforesaid facts, the CIT(Appeals) held a firm conviction that the A.O. had no tangible material that would justify the formation of a bonafide belief for initiating proceedings u/s. 147 of the Act in the case of the assessee. Also, the CIT(Appeals) was of the view that reopening of the assessee s case was based on a non-application of mind by the A.O. It was further observed by the CIT(Appeals) that the assessee had in the course of the assessment proceedings filed various letters with the A.O requesting for a copy of the document/evidence found and seized from the premise of Shri Ramesh Kundanani (supra), on the basis of which, the impugned cash purchase transactions were being linked with him but all his requests had gone in vain. Referring to the reasons to believe on the basis of which proceedings u/s. 147 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant when the search was conducted in the case of Shri Ramesh Kundnani and the list of purchase parties in the scanned copy of assessment order pages 3 to 10 do not indicate either appellant's name or the name appellant's Proprietary concern M/s Prakash Saree Kendra. Even in the assessment order the A.O has not stated as to what documentary evidence or any specific statement of Shri Ramesh Kundnani indicated that these purchases were pertaining to the appellant. During the course of appellant proceedings, the A.O was issued remand notice to furnish the copy of letter of DCIT, CC- Raipur and any other documentary evidence which linked/corroborated the alleged cash purchases as per scanned documents as belonging to the appellant. Despite two reminders issued to the A.O, there was no compliance. This prima facie proves that the appellant s contention that the A.O had no tangible material to form reason to believe for reopening of the assessment under section 147 of the I.T Act, 1961. It is also proves a case of non application of mind on the part of the A.O not only in the reasons recorded but also in the assessment order. 2. The appellant has demonstrated 'throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot require adjudication. In the result, the appeal is hereby allowed. 12. The revenue being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. 13. We have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 14. At the threshold of hearing of the appeal, Shri R.B Doshi, Ld. authorized Representative (for short AR ) for the assessee took us through a letter dated 06.05.2016, Page 29-30 of APB AND dated 13.07.2016, Page 31-32 of APB. Referring to the contents of the aforesaid letter(s), it was submitted by the Ld. AR that during the assessment proceedings, the assessee had specifically requested the A.O. for a copy of the information/material, on the basis of which his case was reopened u/s. 147 of the Act. Referring to the aforesaid letter(s), it was submitted by the Ld. AR that it was specifically brought to the notice of the A.O. that he required the aforesaid information for filing objections as regards the val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee and submitted that as the impugned assessment u/s. 147 r.w.s. 143(3) dated 28.10.2016 had been framed on the basis of notice u/s. 143(2) of the Act, dated 13.10.2016, i.e., issued beyond the stipulated period, which lapsed on 30.09.2016; therefore, the assessment was even otherwise, on the said count itself liable to the quashed for want of valid assumption of jurisdiction by the A.O. 18. Per contra, the Ld. Departmental Representative (for short DR ) relied on the assessment order. The Ld. D.R submitted that as the information that had surfaced in the course of the search proceedings revealed that the assessee had made unaccounted cash purchases of Rs. 2,32,24,493/- from Shri Ramesh Kundanani (supra), therefore, the A.O had rightly reopened the case and made addition on the said amount in the hands of the assessee. Apropos the claim of the Ld. AR that the impugned assessment u/s. 147 r.w.s. 143(3) of the Act dated 28.10.2016 had been framed on the basis of a notice u/s 143(2), dated 13.10.2016, i.e., issued beyond the stipulated period prescribed u/s. 143(2) of the Act, the Ld. DR could not controvert the same. During the hearing, we called for the assessment r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of proceedings before the CIT(Appeals) placed on record any material/evidence which would evidence that the assessee had made the impugned unaccounted cash purchases of Rs. 2,32,24,493/- from/through Shri Ramesh Kundanani (supra), therefore, as observed by the CIT(Appeals) and, rightly so, it can safely or in fact inescapably be inferred that there was no tangible material available with the A.O, on the basis of which, he could have arrived at a belief that the income of the assessee of Rs. 2,32,24,493/- chargeable to tax had escaped assessment. We concur with the view taken by the CIT(Appeals) that as the A.O had neither in the reasons to believe or in the body of the assessment order or in the course of the proceedings before the CIT(Appeals) placed on record any material/ evidence which would reveal that he had any tangible material available before him to arrive at a bonafide believe that income of the assessee chargeable to tax had escaped assessment, therefore, in absence of any such tangible material justifying the formation of bonafide belief, the very jurisdiction assumed by him u/s. 147 of the Act cannot be sustained. We, thus, in terms of our aforesaid observatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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