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TMI Blog2012 (9) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... shifted from U.P. to Delhi. The change was approved by the Company Law Board by its order dated 24.1.2003. It is alleged that upto the assessment year 2000-01, the income tax returns were filed at Agra, and the assessments were made at Agra. For the year 2002-03, the return was filed at Delhi. 2. By this writ petition the petitioner has prayed for writ of certiorari quashing the assessment order dated 28.3.2005 passed by the Asstt. Commissioner of Income Tax-4 (1), Agra and to quash the letter/order dated 19.9.2003 issued by the Asstt. Commissioner of Income Tax-4 (1), Agra. The petitioner has also prayed for directions to the respondents to restrain to proceed with penalty proceedings against the petitioner pursuant to the assessment order dated 28.3.2005, for assessment year 2002-03. 3. We have heard Shri R.P. Agarwal, learned counsel for the petitioners. Shri Ashok Kumar appears for the Income Tax Department. 4. It is admitted that an appeal lies against the assessment order dated 28.3.2005 whereby the income of the petitioner was assessed at Rs. 29,41,19,380/- on protective basis. The substantive assessment whereof was made in the hands of Shri Ravindra Kumar Agrawal and for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computation. 7. Shri R.P. Agrawal submits that the respondent no.1 had summoned several persons under Section 131 of the Act and made enquiries from the banks, stock exchanges, SEBI, clients/parties with whom the petitioner was having business dealings, and made enquiries. He relied upon the material and evidence so collected and has drawn adverse inferences for the default of the parties, who did not respond to the summons. All the enquiries were made without any information to the petitioner. The petitioner was neither informed nor the statements of persons, who responded to the summons, were recorded in his presence. The evidence allegedly collected could not be relied upon as it was collected in violation of principle of natural justice. The identities of the persons were known and their PAN numbers were disclosed and thus no adverse inference could be drawn against the assessee under Section 68 of the Act. Shri R.P. Agrawal submits that the substantive assessment in the hands of Shri Ravindra Kumar Agrawal, who is assessed at Delhi, and is not within the jurisdiction of respondent no.1. The orders are thus grossly illegal and also suffers from malafides. 8. In the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords were not produced. Since on test check basis the moneys were found to be deposited in the banks, opportunity was given again to the petitioner to produce the accounts. The Assessing Officer found that the assessee is absolutely unfair, wrong and unjustified in saying that he has furnished all the names, addresses of his client. The A.O. observed that by obtaining PAN numbers and filing the returns in the name of such persons does not prove identity of the person and genuineness of the transactions. The signed blank cheqeus and cheque books in the name of various clients caused enquiries to be made by A.O. by issuing summons under Section 131, and notices under Section 133(6) to about 36 clients. The A.O. after considering the record, and going through the transactions discovered the modus operandi of the petitioner assessee as follows:- "Considering the facts and circumstances of the case and evidences and material available on record, it is clear beyond doubt- (i)(a) The modus operandi is that any person who wants to take such entries goes to these persons with the equivalent cash (and commission in cash, which they must be charging) and takes the draft of the required amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redits on account of cheques/drafts the A.O. discovered the amount of deposit of the credits of Rs. 26,35,20,792. The assessee was required to furnish complete addresses of persons to prove their identity, creditworthiness and genuineness of receipt of cash and cheques/drafts with supporting evidence and to which a reply was given that some of these persons were coming to business office on their own, and hence the assessee does not have their complete address. The transaction details were unavailable. The A.O. found the reply to be evasive and deliberate to avoid to furnish the proof of identity of the creditors, their creditworthiness of the transactions. He found the amounts to be unexplained and added the entire amount to the assessee's income. The assessee also found a number of discrepancies in the account books namely unrecorded entry charges receiving from Shri Ashok Gupta, liability shown in the name of customer/clients of Rs. 1,91,46,410/- in the balance sheet of which assessee only furnished list of creditors and did not provide their complete addresses. The total credits were found to be Rs. 2,03,39,485/- and this amount was also added under Section 68 of the Act. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 396 (All.); CIT v. Shital Prasad Kharad Prasad, 2006 (280) ITR 541 (All.); CIT v. Mascomptel India Ltd., 2012 (345) ITR 58 (Delhi); R.K. Upadhyaya v. Shanbhai P Patel, 1987 (166) ITR 163 (SC); Delhi Development Authority v. H.C. Khanna, AIR 1993 SC 1488 in submitting that notice under Section 148 issued after 6 years was barred by time under Section 149; it was also issued without any valid approval of JCIT/ACIT under Section 151(2) of the Act and CIT v. Rajeev Sharma, 2011 (336) ITR 678 (All) that since there was no return before the ITO, there was no question of issuing any notice under Section 143(3) dated 8.12.2006, nor any assessment under Section 143(2) could be made. 12. Shri Ashok Kumar appearing for the revenue submits that the petitioner company filed income tax returns at Agra upto the assessment year 2000-01, and without any intimation filed return at Delhi for the assessment year 2002-03. The respondent no.1 proceeded in accordance with law requiring the petitioner to furnish return/information. It was only at end of the assessment period, the petitioner company, on the asking of the A.O. intimated that his office has been shifted from Agra to Delhi, and that he ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Authority, Agra. It is only when the assessment order was made on protective basis against the companies and on substantive basis against Shri Ravindra Kumar Agrawal, who was found to have indulged in large scale of fictitious and bogus transaction, that the petitioner filed writ petitions in this Court. 16. The petitioner has also filed Writ Petition No.1490 of 2005 challenging the penalty notice dated 26.9.2005 issued by the Asstt. Commissioner of Income Tax, Circle-4 (1), Agra dated 26.9.2005 for levying penalty of Rs. 10,50,00,620/- under penalty order for the assessment year 2002-03. The operative portion of the order reads as follows:- "The reply of the assessee has been considered but there is no merit in the reply of the assessee. Firstly, because the assessee has not filed any appeal against the assessment order, that means it is accepting concealment on its part, secondly there is no order of the Hon'ble High Court staying the proceedings in this case and the penalty proceedings are getting barred by limitation on 30.9.05. In view of the above facts and circumstances of the case, it is clearly established that the assessee had deliberately concealed the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice under sub-section (1) of Section 142, of sub-section (2) of Section 143 or after the completion of the assessment, whichever is earlier. under sub-section (3)(b) where he has made no such return after the expiry of time allowed by notice under Section 142(1) or under Section 148 for the making of the return or by notice under the first proviso to Section 144 or show cause as to why assessment should not be completed to the best of the judgment of the Assessing Officer, whichever is earlier. Sub-section (4) provides that where the assessee calls in question the jurisdiction of the Assessing Officer, then Assessing Officer shall, being not satisfied with the correctness of the claim, refer the matter for determination under sub-section (2). 18. Sub-section (5) of Section 124 provides that, notwithstanding anything contained in the Section or in any direction or order issued under Section 120 every Assessing Officer shall have all the powers conferred by or under this Act on an Assessing Officer in respect of income accruing or arising or received within the area, if any over which he has been vested with the jurisdiction by virtue of the directions or orders issued under sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s suo-moto change of place of filing of return at Delhi. 22. The petitioner is a share broker. A survey was conducted under Section 133-A of the Act on 24.4.2001 in which a large number of incriminating documents were found. The AO proceeded to make enquiries in which it was found that there were serious defects in the books of accounts. Shri Ravindra Kumar Agrawal-the Director had created large number of fictitious concerns, which were not doing any business. In the circumstances the AO completed the assessment on protective basis. 23. Shri Ravindra Kumar Agarwal appeared and filed reply to the notice and clearly stated before the AO that his company was assessed to tax with Company Circle-1 (2) at Agra. The petitioner thus acquiesced to the jurisdiction which the AO at Agra already possessed and allowed him to complete the assessment proceedings for the assessment year 2001-02. 24. In the circumstances, we do not find any error in exercise of jurisdiction by the Asstt. Commissioner of Income Tax, Circle-IV (1) Agra. It is, however, made clear that we have not decided any question other than the question of jurisdiction of the Assessing Authority at Agra. 25. The writ petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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