TMI Blog2023 (12) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot take advantage of his own wrong and plead for bar of any law to frustrate the lawful trial by a Competent Court. The principle of Latin Maxim Nullus Commodum Capera Potest De Injuria Sua Propria applies to the assessee. Thus, the notice issued u/s 143(2) of the Act issued on 12/09/2017 is a valid notice given to the assessee so as to frame the assessment u/s 143(3) read with Section 147 of the Act. Decided against assessee. Application of independent mind on the material or not? - Relevant assessment year as escaped assessment. In the present case, the A.O. has cause or justification to know that the income had escaped assessment. After going through the facts and circumstances of the case, and the reasons recorded by the A.O., found that the income had been escaped from the assessment and at the stage of reopening, the final outcome of the proceedings is irrelevant. At the initiation stage, what is required is reason to believe but not the established facts of escapement of income. At the stage of issuance of notice u/s 148 of the Act, the only question is whether there was relevant materials on record on which reasonable person could frame a requisite belief whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(2) of the Act on 12.09.2017 before return of income was filed on 02.11.2017 in response to notice u/s 148 of IT Act and such issue of mandatory notice u/s 143(2) before filling of return in response to notice 148 makes the resultant assessment order in appeal null and void-ab-initio. 3. The Ld. CIT(A) has erred both in law and circumstances of the case in upholding the reassessment proceedings initiated us 147 of the IT Act ignoring the contention of appellant that the proceedings have been initiated by the AO without application of independent mind on the material, if any, provided by the Inv. Wing of the department. In view of the above defects in the compliances the resultant reassessment proceedings are required to be set aside. 4. The Ld. CIT(A) has erred both in law and in facts of the case in upholding the impugned reassessment proceedings ignoring the fact that the sanction u/s 151 of IT Act as provided with the copy of the reason recorded shows mechanical satisfaction by sanctioning authority. 5. The impugned assessment is invalid and without jurisdiction as the said assessment is completed without complying with legal requirements of the provisions of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al on the ground mentioned above. 4. In Ground No. 1 2 the assessee challenged the reopening of the case u/s 147/148 of the Act. The Ld. Counsel for the assessee submitted that, the A.O. erred in law in completing the assessment u/s 147/143(3) by issuing the notice u/s 143(2) of the Act against the return of income filed on 02/11/2017 in response to notice u/s 148 of the Act issued by the A.O. and no such compliance of the above mandatory requirement of law to issue notice u/s 143(2) of the Act against return of income filed makes the impugned Assessment Order null and void. Further submitted that the A.O. erred in issuing notice u/s 143(2) of the Act on 12/09/2017 declared return of income was filed on 02/11/2017 in response to notice u/s 148 of the Act and such issuance of mandatory notice u/s 143(2) before filing of return in response to notice 148 makes the impugned assessment order null and void. 5. Per contra, the Ld. Departmental Representative relied on the orders of the Lower Authorities and submitted that the reopening has been done in accordance with law which requires no interference at the hands of the Tribunal. 6. We have heard both the parties and perused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of the assessee, accordingly, the Ground No. 1 2 of the assessee are dismissed. 7. In Ground No. 3 pleaded that the Ld. CIT(A) has erred both in law and circumstances of the case in upholding the reassessment proceedings initiated u/s 147 of the IT Act ignoring the contention of appellant that the proceedings have been initiated by the AO without application of independent mind on the material, if any, provided by the Inv. Wing of the department and in view of the above defects in the compliances the resultant reassessment proceedings are required to be set aside. 8. In our opinion, while reopening the assessment, there is no requirement of conclusive satisfaction of the escapement of income and only prima facie opinion of escapement of income is required. In the present case, the A.O, had in his possession the primary facts supported by materials and it was for the A.O. to draw proper inference, whether there was any escapement of income or not. The Section 147 of the Act authorizes the A.O. to assess or reassess the income chargeable to tax if the A.O. has reason to believe the income for the relevant assessment year as escaped assessment. In the present case, the A.O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee submitted that the Ld. CIT(A) erred in upholding the addition of Rs. 7,54,01,000/- u/s 68 of the Act ignoring the fact that the said provision is not applicable on the realization from sale of investments and without prejudice the same submitted that the CIT(A) has erred in law in upholding the addition of Rs. 8,18,01,000/- u/s 68 of the Act including share application of Rs. 64,00,000/- holding the credits as unexplained cash credit ignoring the fact that the assessee has discharged the initial onus u/s 68 of the Act explaining the nature and source of the credits by filing requisite documents during the assessment proceedings. 13. The Ld. Departmental Representative submitted that the assessee has not proved the three conditions of Section 68 of the Act by proving the burden of identity of the creditor, capacity of such creditor to advance/investor the amount and the genuineness of the transaction, therefore, the Ld. A.O. rightly made the addition u/s 68 of the Act which has been confirmed by the CIT(A) which requires no interference. 14. We have heard both the parties and perused the material available on record. There was a credit of Rs. 8.18 crore which has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess as that of appellant. Some other companies have some other same address. 5. The bank account also has a pattern that money does not stay for some reasonable time but usually withdrawn or transferred to another account either on the same day or with few days. 6. Most of the time, just before the issue of cheque, almost same amount is deposited by way of cash or by way of cheque (trail of which may ultimately lead to cash deposit in some account). The assessee had also filed copy of the confirmation before the CIT(A) and also other documents, the CIT(A) took the case of M/s Devmuni Lease and Finance Ltd. and based on the verification of the documents found as under:- (i) It has same address as that of appellant. (ii) The confirmation is undated. (iii) The return has been filed belatedly on 19.03.2011 (in the same week in which appellant filed its return on 16.03.2011) (iv) The returned income is only Rs. 10.480/- whereas investment made is Rs. 6,00,000/-. (v) Cheque of Rs 6,00,000/- was given to the appellant on 28.05.2009. On the same day, before presenting this cheque cash amount of Rs. 5,00,000/- deposited in bank account. (vi) This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e considered in isolation with the ground realties. By analogy, this ratio would be applicable to any credit in books (ix) PAN is not conclusive proof of identity as it is issued without de facto verification. (x) Decision in case of Lovely Exports is not a binding precedent under Article 141. (xi) In application of s.68 only explanation given by the assessee is not sufficient. The Assessing Officer is also required to be satisfied about the explanation offered by the assessee. (xii) Doctrines of human probability, substance over form and colourable device as a method of tax evasion are valid principles. 18. Considering the fact that the assessee had failed to prove the three conditions wiz:- (i) The identity of the creditor, (ii) The capacity such creditor to additions the amount (iii) The genuineness of the transaction, in our considered opinion, the CIT(A) committed no error in confirming the addition made by the A.O. u/s 68 of the Act, accordingly we find no merit in the Ground No. 6 7 of the Assessee s appeal, thus, Ground No. 6 7 of the assessee is dismissed. 19. In the result, the appeal of the assessee is dismissed. Order Pronounced in the Open C ..... 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