2018 (4) TMI 1353 - AT - Income Tax

Reopening of assessment - no notice u/s 143(2) have been served upon the assessee - Held that - The reply received by assessee under RTI Act reveal that no notice have been served upon the assessee under section 143(2). The Director of the Assessee-Company has specifically pleaded before us that returns are filed in response to notice issued under section 148. Therefore, the matter requires factual verification from the record because such fact was not brought on record before the authorities below and the A.O. mentioned in the assessment orders that no return u/s 148 have been filed by the assessee. The assessee also pleaded that the objections filed in response to initiation of proceeding under section 148 have not been disposed of by the A.O. This was also not decided by the authorities below. Therefore, it requires factual verification because it would also have significant impact of passing of the assessment orders by the A.O. As assessee pleaded that no amounts in question have been received by assessee-company in its bank account requires reconsideration of the above issues at the level of the A.O. In view of the above discussion, we set aside the orders of the authorities below and restore both the assessments to the file of A.O. with a direction to redecide all the above grounds of the assessee - Decided in favour of assessee for statistical purposes.

Summary

Issues:
Challenging additions and assessment orders based on accommodation entries in A.Ys 2005-2006 and 2006-2007. Dismissal of appeals by CIT(A) due to lack of compliance and failure to prove genuineness of transactions. Reconsideration of the matter required based on fresh grounds of appeal, non-receipt of notices, and lack of factual findings.

Analysis:
In the case, the Assessee challenged the additions and assessment orders concerning accommodation entries in A.Ys 2005-2006 and 2006-2007. The Assessing Officer (A.O.) added ?5 lakhs for each assessment year based on information about accommodation entries provided by a third party. The Assessee denied receiving these entries and claimed lack of verification by the A.O. The CIT(A) dismissed both appeals, emphasizing the Assessee's failure to prove the genuineness of the transactions and non-compliance with notices and requests for evidence.

In response, the Assessee raised fresh grounds of appeal, contesting the non-service of notices under sections 143(2) and 148, lack of disposal of objections against reopening, and unjustified additions. The Assessee provided evidence, including bank statements, to support their claims of non-receipt of the entries and non-service of notices. The Assessee also cited legal precedents to support their arguments.

The A.O. and the Departmental Representative (D.R.) argued for upholding the lower authorities' decisions due to the Assessee's lack of cooperation. However, the Tribunal found that the matter required reconsideration. The Tribunal noted discrepancies in the factual findings and directed the A.O. to reexamine all grounds raised by the Assessee. The A.O. was instructed to provide reasoned decisions, ensure proper verification of facts, and address all objections raised by the Assessee. The Assessee was directed to cooperate and refrain from unnecessary adjournments.

Conclusively, the Tribunal allowed both appeals for statistical purposes, setting aside the lower authorities' orders and remanding the case to the A.O. for a fresh decision based on verified facts and compliance with legal procedures.