9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (9) TMI 533 - AT - Income TaxReopening of the assessment u/s 147/148 - validity of reason to believe - HELD THAT - There was no justification for the authorities below to reopen the assessment in these four cases. Since no material was supplied to the assessee which is the basis for reopening of the assessment and no statements recorded during the course of search in the case of Shri Pramod Kumar Jindal were confronted to allow cross-examination on behalf of the assessee, therefore, such material could not be used in evidence against the assessee for making any addition. As noted here that assessee raised the objections against the reopening of the assessment on 27/28/29/30.11.2018, but, the objections of the assessee have not been disposed of by the A.O. prior to passing of the re-assessment orders. CIT(A) clearly show that objections of the assessee have been dealt by the A.O. in the assessment order by passing the composite order. Thus it is clear that objections of all the Assessees were not disposed of prior to passing of the re-assessment order. Thus, it is clearly in violation of Judgment of Hon ble Supreme Court in the case of M/s. GKN Drive Shafts 2002 (11) TMI 7 - SUPREME COURT , Haryana Acleric Delhi-HC , Fomento Resorts Hotels Ltd., 2008 (11) TMI 2 - DELHI HIGH COURT relied upon by the Learned Counsel for the Assessee. Reopening of the assessment is clearly bad in Law and is liable to be quashed. The A.O. did not assume the jurisdiction under sections 147/148 in accordance with Law and as such, the re-assessment proceedings are liable to be quashed. The addition is also liable to be deleted. In view of the above discussion, we set aside the Orders of the authorities below and quash the reopening of the assessment under sections 147/148 - Resultantly, all additions stand deleted. Appeals of the Assessee are allowed.
Issues Involved:
1. Reopening of assessment under sections 147/148 of the Income Tax Act, 1961. 2. Addition of ?5,12,500/- on account of unexplained accommodation entry and commission. Issue-wise Detailed Analysis: 1. Reopening of Assessment under Sections 147/148: The primary issue was the validity of the reopening of assessment under sections 147/148. The assessee argued that the reasons recorded for reopening were based on incorrect and non-existing facts. The Assessing Officer (A.O.) relied on information from the Investigation Wing, which indicated that the assessee received accommodation entries from Shri Pradeep Kumar Jindal. However, it was later found that the entry was ?5 lakhs instead of the recorded ?15 lakhs. The material relied upon by the A.O. was not supplied to the assessee, and no opportunity for cross-examination was provided. The Tribunal noted that the A.O. did not verify the information and recorded reasons based on incorrect facts, showing a lack of application of mind. The objections raised by the assessee against the reopening were not disposed of before passing the reassessment order, violating the principles laid down by the Supreme Court in GKN Driveshafts (India) Ltd. Thus, the reopening of the assessment was deemed unjustified and quashed. 2. Addition of ?5,12,500/- on Account of Unexplained Accommodation Entry and Commission: The A.O. made an addition of ?5 lakhs as unexplained accommodation entry and ?12,500/- as commission paid for obtaining the entry. The assessee contended that the addition was based on unverified information from the Investigation Wing and that no material evidence was provided to support the addition. The Tribunal observed that the A.O. did not supply the material or allow cross-examination of the statements relied upon. Consequently, the addition was based on incorrect and non-existing facts. Since the reopening of the assessment was quashed, the addition was also deleted. Separate Judgments: The Tribunal delivered a common consolidated order for all the appeals, following the decision in the case of Shri Hanuman Prasad Aggarwal. The reopening of assessments and the additions were quashed for all the assessees involved. Conclusion: The Tribunal quashed the reopening of assessments under sections 147/148 due to incorrect and non-existing reasons recorded by the A.O. and the failure to provide material evidence to the assessees. Consequently, all additions were deleted, and the appeals of the assessees were allowed.
|
