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TMI Blog2016 (5) TMI 1223X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment and assumption of jurisdiction illegally by the Respondent that too without issue/ served notice u/s 148 and without following the statutory requirements of section 147 to 153 of the Income Tax Act, therefore the entire proceedings of reassessment is void ab initio, illegal and unauthorized by law. 3. On the facts and in the circumstances of the case, the CIT (A)- XVIII, New Delhi has erred both on facts and in law, in upholding assumption of jurisdiction in spite of the fact that the case is of after four year and the AO not recorded any satisfaction that there was escapement of any income by reason of failure on the part of the assessee that too without issue/served notice u/s 148 is void-ab-initio, illegal and unauthorized by law. 4. The order of Re-assessment having been passed in violation of natural justice and hastily by obtaining behind the back of the appellant on the basis of some alleged statements/information none of which had been made available to the appellant nor any opportunity provided to rebut the same and without providing opportunity of cross-examination of different persons specifically asked by the appellant and there was not even a show cause no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee company, so hereinafter the company is addressed as assessee. The return of income filed by the 'Company' was processed under section 143(1) of the Income-tax Act, 1961 (for short "the Act") on 04/01/2005. Subsequently, on receipt of information from the Investigation Wing, New Delhi, that the assessee company was one of the beneficiaries of the bogus accommodation entries totalling to Rs. 7.5 lakh, the Assessing Officer (AO) after recording reasons to believe that income escaped assessment, issued notice under section 148 of the Act dated 30/03/2011 and supplied reasons for reopening of the assessment along with the notice. No compliance of the said notice under section 148 was made by the assessee. However, on 20/10/2011, the assessee submitted that no notice under section 148 of the Act was received and hence the proceeding might be withdrawn. The Assessing Officer sent reply to the assessee vide letter dated 22.11.2011 and 14/12/2011. Looking to the non-compliance, the re-assessment was completed by the Assessing Officer on 27/12/2011 making addition of Rs. 30 lakh, which was subsequently rectified to Rs. 7.5 lakh. Aggrieved, the assessee filed appeal before the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer and therefore the addition was even not justified on merit. 5. On the other hand, the ld. Departmental Representative (DR) relying on the order of the authorities below submitted that the assessee received accommodation entry from Mr. Mukesh Gupta, who is a known entry provider and the information received was specific to the assessee, the AO after verification, reopened the relevant assessment year and therefore it cannot be said that the AO has not applied his mind while reopening the assessment. She further submitted that sufficiency or adequacy of reasons cannot be examined at the stage of recording of reasons and at the stage of recording of reason a prima facie satisfaction of having link of the information with the income escaped is sufficient. In support of the proposition, she relied on the judgment of the Hon'ble Supreme Court in the case of Raymond Woollen Ltd. reported in 236 ITR 34 (SC). 6. We have heard the rival submissions and perused the material on record. In the case of the assessee, reasons recorded by the Assessing Officer for reopening of assessment, enclosed by the assessee in the paper book at pages 20 to 21 , are reproduced as under: " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee received accommodation entry from M/s. Zigma Telecom Private Limited, but in the assessment order there is no mention of the said party. The relevant part of the order of the Assessing Officer mentioning the name of the parties in respect of whom, he made addition is as under: "3.1 The information received from the Investigation Wing, New Delhi, indicated that the assessee had received bogus accommodation entries from the following parties:- i. M/s. RSG Marketing P. Ltd. - Rs. 10,00,000/- ii. M/s. Maple Sales Pvt. Ltd. - Rs. 3,00,000/- iii. M/s. Milansaar Impex & Traders Pvt. Ltd. - Rs. 5,00,000/- iv. M/s. Acoot India P. Ltd. - Rs. 5,00,000/- v. M/s. Bilz. Metals P. Ltd. - Rs, 5,00,000/- 8. In view of the above facts, we are in agreement with the contention of the learned AR that no addition has been made by the AO in respect of the reasons recorded for income escaped. 9. In the case of Ranbaxy laboratories Ltd versus Commissioner of Income Tax (supra), the Hon'ble Delhi High Court has held that "AO had jurisdiction to reassess income other than the income in respect of which proceedings under s. 147 were initiated but he was not jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the items viz., club fees, gifts and presents and provision for leave encashment, but, however, during the assessment proceedings, he found the deduction under ss. 80HH and 80-I as claimed by the assessee to be not admissible. He consequently while not making additions on those items of club fees, gifts and presents, etc., proceeded to make deductions under ss. 80HH and 80-I and accordingly reduced the claim on these accounts. 20. The very basis of initiation of proceedings for which reasons to believe were recorded were income escaping assessment in respect of items of club fees, gifts and presents, etc., but the same having not been done, the AO proceeded to reduce the claim of deduction under ss. 80HH and 80-I which as per our discussion was not permissible. Had the AO proceeded not (sic) to make disallowance in respect of the items of club fees, gifts and presents, etc., then in view of our discussion as above, he would have been justified as per Expln. 3 to reduce the claim of deduction under ss. 80HH and 80-I as well. 21. In view of our above discussions, the Tribunal was right in holding that the AO had the jurisdiction to reassess issues other than the issues in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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