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TMI Blog2013 (5) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... It is well-settled that in order to invoke the provisions of Section 147 after a period of four years from the end of the relevant assessment year, in addition to the AO having reason to believe that any income has escaped assessment, it must also be established that the income has escaped assessment on account of the assessee failing to make returns under Section 139 or on account of failure on the part of the assessee to disclose, fully and truly, the necessary material facts. See Wel Intertrade P. Ltd. & Anr. v. ITO (2008 (8) TMI 18 - HIGH COURT DELHI) and Haryana Acrylic Manufacturing Company v. CIT &Anr (2008 (11) TMI 2 - DELHI HIGH COURT) Also see Duli Chand Singhania v. Asstt. CIT (2003 (12) TMI 23 - PUNJAB AND HARYANA High Court) wherein noted that absence of the finding that the escapement in income had occurred by reason of failure on the part of the assessee to disclose fully and truly all material facts which is the sine qua non for assuming jurisdiction under section 147 in a case falling under the proviso thereto, makes the action taken by the AO wholly without jurisdiction. Further the mere statement that the DRI has seized certain goods of the assessee and lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed that, during the relevant previous year, the assessee had received an aggregate sum of Rs. 4,82,01,000/- as share application money from various persons and the same was outstanding, pending allotment of shares. The Assessing Officer issued a detailed questionnaire to inquire into the said share application money and sought details of the share applicants who had paid the share application money to the assessee company. The Assessing Officer thereafter conducted an inquiry to determine the genuineness and creditworthiness of the transactions relating to the share applications. The assessee produced confirmations from the concerned share applicants during the course of the assessment proceedings. In order to make further inquiries, the Assessing Officer issued summons under Section 131 of the Act to 25 parties from whom the share application money had been received. Initially, some of the summons were received back unserved and the assessee was asked to furnish fresh addresses, which were provided by the assessee. However even thereafter summons to certain persons were received back and the assesse again provided a fresh set of addresses with respect to those persons. The hearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er evidence in relation to those persons, who the Assessing Officer had found to be suspect. 6. It is the case of the revenue that during certain investigation proceedings, a statement of one Shri Deepak Gupta was recorded on 25.09.2004 (that is, while the assessment proceedings were still pending). Shri Deepak Gupta has allegedly admitted that he was providing accommodation entries to the assessee. It has been contended on behalf of the revenue, that based on the statement made by the said Deepak Gupta, the Assessing Officer came to believe that income during the relevant previous year had escaped assessment and the Assessing Officer issued the notice dated 25.03.2009 under Section 148 of the Act, seeking to reassess the income of the assessee under Section 147 of the Act. The assessee requested for the reasons for issuance of notice under Section 148 of the said Act which were furnished by the Assessing Officer. The assessee objected to the reasons, however the same were rejected by the Assessing Officer. 7. The reasons for issuance of the notice under Section 148, inter alia, alleged that the assessee had taken certain accommodation entries. The reasons for reopening of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JUL-01 --DO- --DO- --DO- 19 250000 142208 30-JUN-01 DINESH GUPTA JAILAXMI COOP BANK FATEHP URI 11246 250000 142208 30-JUN-01 --DO-- --DO-- --DO-- 11246 250000 142208 30-JUN-01 --DO-- --DO-- --DO-- 11246 250000 142208 30-JUN-01 --DO-- --DO-- --DO-- 11246 250000 142208 30-JUN-01 --DO-- --DO-- --DO-- 11246 250000 142208 30-JUN-01 --DO-- --DO-- --DO-- 11246 500000 257601 6-JUL-01 ENPOL(PVT) --DO-- --DO-- 3340 500000 257601 6-JUL-01 --DO-- --DO-- --DO-- 3340 500000 257601 6-JUL-01 --DO-- --DO-- --DO-- 3340 500000 257601 6-JUL-01 --DO-- --DO-- --DO-- 3340 500000 257601 6-JUL-01 --DO-- --DO-- --DO-- 3340 500000 257601 6-JUL-01 --DO-- - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5035 500000 311122 18-JUL-01 SUMA FINANCE INVESTME NT LTD. CORPN KB 2919 500000 311122 18-JUL-01 --DO-- --DO-- --DO-- 2919 500000 311122 18-JUL-01 --DO-- --DO-- --DO-- 2919 500000 311122 18-JUL-01 --DO-- --DO-- --DO-- 2919 500000 311122 18-JUL-01 --DO-- --DO-- --DO-- 2919 500000 311122 18-JUL-01 --DO-- --DO-- --DO-- 2919 500000 311122 18-JUL-01 --DO-- --DO-- --DO-- 2919 500000 311122 18-JUL-01 --DO-- --DO-- --DO-- 2919 250000 135415 30-JUN-01 SUSHIL GOYAL JAILAXMI COOP BANK FATEH PURI 10081 250000 135415 30-JUN-01 --DO-- --DO-- --DO-- 10081 250000 135415 30-JUN-01 --DO-- --DO-- --DO-- 10081 250000 135415 30-JUN-01 --DO-- --DO-- --DO-- 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g accommodation entries as described above, it is seen that the assesee has diverted its own money into the business by way of taking accommodation entries. Thus the amounts stated in table above taxable u/s 68 of the Act and hence, I have reason to believe that an amount of Rs 3,65,80,000/- has escaped assessment within the meaning of section 147 of the IT Act 1961. Since 4 years have been elapsed, the assessment record is being submitted for kind perusal and approval of the Commissioner of Income-Tax, Delhi-III, New Delhi according to section 151 (1) of the IT Act, 1961 for issuance of notice u/s 148 of I.T. Act. -sd/- (D.D. YADAV) Asstt. Commissioner of Income Tax Circle 9(1), New Delhi 8. The alleged accommodation entries, tabulated in the reasons for issuance of the notice under section 148, totaling Rs. 3,65,80,000/- formed the basis of initiating the reassessment proceedings. The Assessing Officer recorded that he had reason to believe that the amount of Rs. 3,65,80,000/- has escaped assessment. It is relevant to state that the reasons as furnished by the Assessing Officer, first of all, did not disclose any allegation that the assessee had failed to make any di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings were illegal and without jurisdiction. 12. The Tribunal also noted that the statement of Shri Deepak Gupta was recorded on 25.03.2004 that is, prior to the framing of the first assessment and subsequently the matter had traversed its course in appeal before the CIT(A). The Tribunal also noted that a sum of Rs. 3,59,85,000/- had also been stated to be refunded by the assessee to the share applicants. The Tribunal concluded that the conditions for reopening the assessment under Section 147 were not satisfied and hence, the reassessment proceedings initiated pursuant to the notice dated 25.03.2009 were illegal and quashed the same by the impugned order. 13. We have heard counsels for the parties at length. 14. The learned counsel for the appellant contended that even though there is no specific allegation that the assessee had failed to disclose all the material facts but the same can be gleaned from the reasons itself. We are unable to accept this contention. In the first instance, we do not find the reasons as recorded by the Assessing Officer to be reasons in law, at all. A bare perusal of the table of alleged accommodation entries included in the reasons as recorded, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant assessment year, in addition to the Assessing Officer having reason to believe that any income chargeable to tax has escaped assessment, it must also be established as a fact that such escapement of assessment has been occasioned by either the assessee failing to make a return under section 139, etc., or by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, for that assessment year. In the present case, the question of making of a return is not in issue and the only question is with regard to the second portion of the proviso, which relates to failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. Insofar as this precondition is concerned, there is not a whisper of it in the reasons recorded by the Assessing Officer. In fact, as indicated above, the Assessing Officer could not have made this a ground because the Assessing Officer had required the petitioner to furnish details with regard to loss occasioned by foreign exchange fluctuation which the petitioner did by virtue of the reply dated February 5, 2002. Since the petitioner had fully and tru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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