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2021 (9) TMI 1417 - AT - Income TaxReopening of assessment u/s 147 - service of notice issued u/s 148 - assessee has submitted that the approval granted by the Pr. CIT as well as ACIT is not valid as only the Competent Authority can grant an approval after recording the satisfaction on the reasons recorded by the AO before issuing the notice u/s 148 - HELD THAT - The assessee did not raise any objection before the Assessing Officer and particularly before the assessment order was passed regarding non receipt of notice or disputing the service of notice issued u/s 148 - Once the assessee has not raised any objection against the service of notice issued u/s 148 and participated in the proceedings then after the completion of the assessment order the assessee is not allowed to dispute the service when the issuance of notice u/s 148 is not in dispute. Accordingly, in the absence of any argument on this issue as well as the facts as discussed above, we do not find any substance or merits in ground no. 1.1 on the assessee s appeal. The same is dismissed. Validity of notice issued u/s 148 due to invalid approval granted u/s 151 - satisfaction recorded by the Pr. CIT is separate and independent not having any influence. Hence, even if there is a satisfaction recorded by the Addl. CIT who is not a Competent Authority for granting sanction for issuing notice u/s 148 in this case the said satisfaction of Addl. CIT would not vitiate the satisfaction recorded by the Pr. CIT. Therefore, the satisfaction as recorded by the Pr. CIT at the time of granting the approval/sanction u/s 151 of the Income Tax Act manifests that it was an independent satisfaction based on the reasons recorded by the Assessing Officer. Even otherwise, the reasons recorded by the Assessing Officer prima facie makes out the case to form a belief that income assessable to tax as reflected in Form 26AS has escaped assessment because the assessee did not file any return of income u/s 139 of the Income Tax Act. From the Paper Book of the assessee, we further note that the sanction accorded by the Pr. CIT was communicated to the Assessing Officer through Addl. CIT vide letter dated 31.03.2017. Thus, it appears that the movement of the file from the ITO to Pr. CIT is rooted through Addl. CIT. Hence, we do not find any error or illegality in the sanction granted u/s 151 by the Pr. CIT. Validity of the reassessment order for want of valid notice u/s 143(2) - Where the assessment was reopened due to the reasons that the assessee has not filed any returned income u/s 139 and Form No. 26AS shows the receipt of Rs. 65,02,171/- as contract receipt subjected to TDS u/s 194C of the Act from M/s E-X Seed Technologies Device P. Ltd. which is a party to a contract dated 6th August, 2009 entered into for having business/contract transactions then the details available in Form 26AS would constitute an incriminating material disclosing an income escaped assessment. Therefore, the notice issued by the Assessing Officer u/s 143(2) cannot be said to be without verification of the return of income filed by the assessee because the AO had to examine the issue which is subject matter of the reasons recorded for reopening of the assessment. Hence, we do not find any merit or substance in the additional ground no. 3 4 raised by the assessee. The same are dismissed. Addition based on the details of payment reflected in the Form 26AS - assessee has contended before the AO as well as CIT(A) that the payment shown in Form 26AS was not received by the assessee from M/s E-X Seed Technologies Device P. .Ltd. as the cheque issued by the said company got dishonored and assessee has filed a police complaint - Complete facts reflecting the true state-of-affairs between the parties have not come on record. AO has not conducted a proper enquiry during the assessment proceedings to ascertain the correct facts regarding the amount reflected in Form 26AS even, during the remand proceedings as directed by the CIT(A) nothing has come out conclusively. Therefore, it is apparent that the addition made by the AO is solely based on the details of Form 26AS and not on the basis of any facts detected as a result of an enquiry conducted by the AO. Hence, in the facts and circumstances of the case and in the interest of justice, we are of the considered view that this matter requires a proper verification and enquiry to ascertain the correct facts regarding the actual amount received by the assessee from the other contracting party namely E-X Seed Technologies Device P. Ltd. Accordingly, in the interest of justice, we set aside this issue to the record of the Assessing Officer for deciding the same afresh after conducting a proper enquiry on this point. Needless to say the assessee be granted and appropriate opportunity of hearing before passing the fresh order. Appeal is partly allowed for statistical purposes.
Issues Involved:
1. Condonation of delay in filing the appeal. 2. Validity of initiation of reassessment proceedings under Section 147. 3. Validity of addition of Rs. 65,02,177/- based on Form 26AS. Detailed Analysis: 1. Condonation of Delay in Filing the Appeal The appeal by the assessee was delayed by 10 days. The assessee filed an application for condonation of delay supported by an affidavit. After hearing both parties and reviewing the reasons provided, the tribunal was satisfied that the delay was due to a reasonable cause. Thus, in the interest of justice, the delay was condoned. 2. Validity of Initiation of Reassessment Proceedings Under Section 147 Grounds: - The notice under Section 148 was not served upon the assessee. - Approval from the Pr. CIT under Section 151 was obtained mechanically and without application of mind. Discussion: - The tribunal noted that the assessee did not raise any objections regarding the service of the notice during the assessment proceedings and participated without dispute. Therefore, the argument about the non-service of notice was dismissed. - The assessee argued that the approval for reassessment was invalid as it was granted by the Addl. CIT, who did not have the authority, and the approval by the Pr. CIT was mechanical. The tribunal examined the approval process and found that the Pr. CIT recorded independent satisfaction based on the reasons provided by the Assessing Officer (AO). The tribunal concluded that the satisfaction recorded by the Pr. CIT was independent and not influenced by the Addl. CIT, thus validating the approval under Section 151. 3. Validity of Addition of Rs. 65,02,177/- Based on Form 26AS Grounds: - The addition was made solely based on Form 26AS without concrete evidence. - The CIT(A) ignored the remand report which stated that the actual payment to the assessee was not confirmed by the director of the deductor company. Discussion: - The assessee contended that the amount shown in Form 26AS was not entirely received, as one of the cheques was dishonored. The tribunal found that the AO did not conduct a proper enquiry to ascertain the actual amount received by the assessee. The tribunal noted that the remand proceedings did not conclusively establish the facts. - The tribunal emphasized that the addition should not be solely based on Form 26AS without proper verification and enquiry. Therefore, in the interest of justice, the tribunal set aside the issue to the AO for fresh examination and proper enquiry to determine the actual amount received by the assessee. Conclusion The appeal was partly allowed for statistical purposes, with the tribunal directing a fresh examination of the addition based on Form 26AS by the AO after conducting a proper enquiry. The tribunal upheld the validity of the reassessment proceedings and the approval process under Section 151. The delay in filing the appeal was condoned.
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