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TMI Blog2015 (6) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment proceedings initiated u/s. 147/148 are illegal and is liable to be quashed - Decided in favour of assesse. - I.T.A. Nos. 330, 331, 332 & 334/Del/2015 - - - Dated:- 29-5-2015 - SHRI N.K. SAINI AND SHRI H.S. SIDHU, JJ. For the Appellant : Sh. OP Sapra, Adv. Sh. Pankaj Gupta, CA For the Respondent : S h. P. Dam Kanunjna, Sr. DR ORDER PER BENCH Assessee has filed these appeals against the separate Orders passed by the Ld. Commissioner of Income Tax (Appeals), Ghaziabad pertaining to assessment years 2007-08, 2008-09, 2009- 10 2011-12. Since the issues involved in these appeals are common and identical, we are therefore, proceeding to dispose of these appeals by passing this consolidated order, by dealing with the ITA No. 330/Del/2015 (A.Y. 2007-08) for the sake of convenience. 2. The grounds raised in the assessment year 2007-08 are reproduced hereunder:- 1. That the Learned Additional Commissioner of Income Tax, Range-1, Ghaziabad has erred in law by making an addition of ₹ 1,50,00,000/- to the Income of the Assessee's company being issued capital U/S 68 of the Income Tax Act, 1961. 2. That the Learned A.O. has erred in l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds. 4. That the demand of ₹ 1,22,93420/- created, pursuant to this assessment which is a disputed demand, be kindly stayed till disposal of the Appeal. 5. That the several observations as made and inferences drawn are untenable, incorrect, unwarranted and uncalled for. 6. That the Appellant may take any other Ground or Grounds at the time of hearing of Appeal with the kind permission of the learned I.T.A.T. 5. The grounds raised in the assessment year 2011-12 are reproduced hereunder:- 1. That the Learned Additional Commissioner of Income Tax, Range-1, Ghaziabad has erred in law by making an addition of ₹ 2,00,00,000/- to the Income of the Assessee's company being issued capital U/S 68 of the Income Tax Act, 1961. 2. That the Learned A.O. has erred in law and facts of the case is not considering the various details, pleadings and written submissions made from time to during the course of assessment proceedings. 3. That the interest as charged under Section 234B and 234C is illegal on various factual and legal grounds. 4. That the demand of ₹ 1,22,93,420/- created, pursuant to this assessment which is a disputed demand, be kindly staye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee and completed the assessment at a total income of ₹ 1,77,41,068 u/s. 147/143(3) of the I.T. Act vide his order dated 20.2.2014. 7. Against the order of the Ld. AO, assessee appealed before the Ld. CIT(A), who vide impugned order dated 13.11.2014 has dismissed the appeal of the assessee. 8. Aggrieved with the order of the Ld. CIT(A), Assessee is in appeal before the Tribunal. 9. The aforesaid case came up for hearing before the Bench many times and adjourned on one and another pretext. During the pendency of the appeal, the assesee s counsel filed an additional grounds of appeal. The contents of the additional ground are reproduced as under:- Permission is hereby carved to raise the following ground of appeal: On facts and under the law, notice u/s. 148 issued by the Ld. AO in this case is arbitrary, unjust, illegal and consequently, the impugned assessment order passed u/s. 147 by the Ld. AO is liable to be quashed. The above additional ground of appeal was not raised before the Ld. CIT(A) by assessee s counsel through oversight. Though the issue of notice u/s. 148 of the I.T. Act by the Ld. AO on the basis of informa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estigated and go to the root of the matter. In the interest of justice, we admit the additional ground raised by the assessee, in view of the decision of the Hon ble Supreme Court of India in the case of NTPC Limited 229 ITR 383 and proceed to decide the additional ground first. 13. Ld. Counsel of the assessee stated that on the facts and under the law, notice u/s. 148 issued by the AO in this case is arbitrary, unjust, illegal and consequently, the impugned assessment order passed u/s. 147 by the AO is liable to be quashed. In support of his contention assessee s counsel filed the Written Synopsis. For the sake of convenience, we are reproducing herewith the Written Synopsis filed by the Assessee as under:- Synopsis with regard to additional ground of appeal against the validity and legality of reassessment order passed u/s 147/148 of LT. Act 1. The AO had recorded his reasons for issuing notice u/s 147 of IT. Act as per copy placed at page 41 of the paper book. 2. The appellant had filed its objections against the issue of notice u/s 148, copy placed at pages 42- 49 of the paper book. 3. The AO had not passed any order on the objections raised by the Assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 1,45,OO,000/- from Hillridge Investment Ltd. Nisha Holdings Ltd . and Shalini Holdings Ltd. by check through UTI, HDFC and Axis Bank through Shri Pankaj of Meerut. I have verified the record. It is pertinent to mention here that in A.Y. 2010-11 assessment of above referred company M/s Modi Nagar Rolls Ltd. was passed by the undersigned. On enquiry made by undersigned and non furnishing of complete detail of capacity, credit worthiness and genuineness could not be proved and addition of uls 68 was made in case of entry receive from Mls Shalini Holdings and Mls Apoorva Leasing Finance Investment Pvt. Ltd. Mls Shalini Holdings finds name in the list of entry provider. Hence, I have reason to believe that the share application money taken by company is nothing but their own unaccounted money introduce by way of bogus share application money. Hence, I have reason to believe that income has escaped assessment . From the above, it is evident that the Id. AO had issued notice uls 148 in respect of the share application money of Mls Shalini Holdings Ltd. which had invested share application of ₹ 25,OO,000/- only and therefore, the Id. AO was not justified in making additions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the end of the relevant assessment year. Held, allowing the petitions, that notices issued under section 148 of the Income-tax Act, 1961, seeking to reopen the concluded assessments under section 147 pertaining to the assessment years 1999-2000, 2001-02, 2002-03 and 2003-04 were not valid . - 363 ITR 603, NOT Systems and Another vs. ITO dated 04/12/2012 (Bombay High Court), in which at page 611 612, it was held as under: Therefore, the impugned notice and the reasons in support thereof clearly indicates that it has been issued merely on the basis of change of opinion and would amount to a review of the Assessment Order dated 11/12/2003. Further, the reasons for reopening as communicated by the petitioner is not on the basis of any tangible material but merely on verification of the material and primary facts already on record that the Assessing Officer has duly considered while passing the order dated 11/12/2003 for Assessment Year 2007-08. There is no fresh tangible material which would warrant taking a view different from the one taken during the regular assessment proceedings. In fact even the order dated 15/10/2012 disposing of the objections clearly records that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt cannot be declared void ab initio. In support of his contention, he relied upon the Division Bench decision of the Hon ble Delhi High Court in the case of CIT vs. Nova Promoters and Finlease (P) Ltd. (2012) 342 ITR 169 (Del). 15. We have heard both the parties and perused the records, specially the Paper Book filed by the assessee, orders of the Revenue authorities, Written Submissions filed by the Ld. Counsel of the asessee. As regards the effective ground in this appeal relating to reassessment proceedings u/s. 148 of the I.T. Act is concerned, we are of the view that the AO has issued notice u/s. 148 of the I.T. Act, after recording the following reasons which is at page 41 of the Paper Book. Reasons for the belief that income has escaped assessment Information received from DIT(Inv.)-II, ARA Centre Jhandewalan Extn., New Delhi letter F.No.DIT(Inv.)- II/U/s.148/2012-13/240, Dated 15.03.2013 Regarding accommodation entries provided by Shri Surendra Kumar lain Group of Cases to various beneficiary companies others. The assessee of this Range. M/s. Modi Nagar Rolls Ltd. has taken entries from the concern entry provider Shri Surendra Kumar Jain Group of cases. Duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record or in other words, no fresh evidence was available with the AO for reopening the assessment in dispute. He requested that assessment in dispute may be cancelled, because the AO has wrongly reopened the case of the assessee by issuing the notice u/s. 148 of the I.T. Act without any fresh evidence and similarly the Ld CIT(A) has also upheld the invalid assessment by passing the impugned order which deserves to be cancelled. He also filed the synopsis, as mentioned above in which he has raised various issues for declaring the assessment order invalid and also mentioned various decisions rendered by the Hon ble Supreme Court of India, Hon ble High Court of India and the Tribunal. Ld. Counsel of the assessee further requested that the notice u/s. 148 is illegal and assessment may be cancelled. 15.3 After perusing the Written Submissions filed by the assessee alongwith various decisions rendered by the Hon ble Supreme Court of India and the Hon ble High Court on the issue in dispute. We have perused the order sheet of the AO and we find that while recording the reasons by the AO, the AO has mentioned the names of three firms namely Hillridge Investment Ltd; Nisha Holdings Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eassessment proceedings were not valid and were liable to be quashed. - 357 ITR 646, CIT vs. Viniyas Finance Investment P Ltd (Delhi H.C.), in which it was held that in the reasons for the notice uls 147, there was no mention of the assessee not having made a full and true disclosure of the material facts necessary for assessment. - 362 ITR 72, Sidhi Vinayak Transport vs. ACIT dated 22104/2013 (Gujarat High Court), Head notes are reproduced below: Held, Allowing the petition, that this was not a case where the' Assessing Officer, while framing the original scrutiny assessment, did not examine the assessee's claim to deduction. He was actually conscious of such a claim and was also of the opinion that the entire claim was not required to be granted. He called for an explanation of the assessee and after taking into consideration the explanation, made disallowance to the extent he was convinced it was necessary. If, in the process, he made a legal error, the succeeding Assessing Officer could not correct such an error, through the process of reopening of the assessment. The notice was not valid - 360 ITR 380 NTPC ltd, vs. DCIT dated 7.3.2013 (Delhi HC) (Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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