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TMI Blog2017 (5) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... tal income of ₹ 96,895/- on 15.11.2007. The case was reopened by issuing notice u/s 148 of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short] on 27.03.2014 because of the information received from INV Wing of the department in Delhi to the effect that the assessee had taken accommodation entries from the entry operators. The A.O has observed in the assessment order that search and seizure operation u/s 132 of the Act was conducted on the office premises of Shri Tarun Goyal, Chartered Accountant, 13/34, W.E.A, Arya Samaj Road, Karol Bagh, New Delhi by the Investigation Wing of the Department on 15.09.2008. During the course of post search investigation, it had emerged that Shri Tarun Goyal was engaged in the business of providing accommodation entries in lieu of cash to a large number of beneficiaries through numerous dummy companies floated and controlled by him. He pointed out that it was unearthed that Shri Tarun Goyal was providing accommodation entries through more than 90 companies/proprietary concerns/ partnership firms. 3. The A.O had recorded the following reasons for initiating the proceedings u/s 148 of the Act: "It has been reported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital/premium/loan has escaped taxation. Hence, I have a reason to believe that income of ₹ 10 lacs as per table in preceding paragraphs has escaped assessment in the case of assessee relevant to A.Y. 2007-08. As per records of this ward, scrutiny assessment u/s 143(3) was completed 13.11.2009 for the A.Y. 2007-08 in this case, hence if approved, in terms of provisions of sec. 151(1) sanction may kindly be accorded for issue of notice under section 148 for A.Y 2007-08 in the case of assessee company." 4. The A.O, after considering the assessee's objections and relying on the decision of the Hon'ble Allahabad High Court in the case of Brij Mohan Agarwal Vs. ACIT reported in 268 ITR 400 held that the report of the Investigation Wing was sufficient material on the basis of which notice under section 148 could be issued. He, accordingly, held that the proceedings had validly been initiated. 5. Before the ld. CIT(A), the assessee had requested for admission of the following additional grounds of appeal: "1. Under the facts and circumstances of the case, the A.O has grossly erred in assuming the jurisdiction of reopening the concluded assessment after the expiry of four y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at law. 2. Under the facts and circumstances of the case, Id. First Appellate Authority has grossly erred in confirming the action of Id. A.O. re-opening the concluded assessment and making addition amounting to ₹ 10,00,000/- u/s 68 of the Act, which was merely change of opinion which is not permissible as per law." 8. The ld. counsel for the assessee referred to page 56 of the paper book wherein notice u/s 142(1) of the Act dated 15.01.2009 issued during the course of original assessment proceedings is contained wherein the A.O, inter alia, had required the assessee to furnish complete list of share holders with their respective share holding as on 31.03.2007. The ld. counsel for the assessee referred to page 58 of the paper book wherein notice u/s 143(2) of the Act dated 17.07.2009 is contained wherein again the A.O, inter alia, had required the assessee to furnish complete list of share holders with their respective share holding as on 31.03.2007. 9. The ld. counsel for the assessee referred to pages 60 to 64 of the paper book wherein the reply of the assessee for A.Y 2007-08 is contained in response to notice issued u/s 142(1) of the Act and pointed out that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circle/ward where assessed to tax. The above information may be furnished this office on or before 21.10,2009. In case of any failure to submit the above information by the designated date, suitable action under the law shall be initiated against you." 12. The ld. counsel for the assessee further referred to page 35 onwards of the paper book wherein the required informations were furnished before the A.O. The said informations contains the copy of the Income-tax return of Sadguru Finman [P] for A.Y 2007-08; confirmation from Sadguru Finman [P] regarding subscribed 10000 equity shares of ₹ 1 each at a premium of ₹ 9/ each of M/s Commitment Commodities Pvt. Ltd vide cheque No. 51278 dated 08.09.2006 alongwith PAN. Copy of bank statement of Sadguru Finman [P] is also contained at page 33 of the paper book depicting withdrawal of ₹ 10 lakhs from their account. The ld. counsel for the assessee further referred to the Annual Report of Sadguru Finman [P] contained from page 40 onwards and pointed out at page 51 where the details of share holding of Sadguru Finman [P] is contained, the name of the assessee appears. The ld. counsel for the assessee submitted that af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing the decision in the case of Haryana Acrylic Manufacturing Company Vs. Commissioner Of Income-tax reported in [2009] 308 ITR 38 that initiation of proceedings was without jurisdiction when there was no allegation of any failure on the part of the assessee to disclose fully and truly all material facts in the reasons recorded by the A.O. He, therefore, submitted that the present case is fully covered by the decision of the Hon'ble Delhi High Court on all four corners. 15. The ld. DR, on the other hand, referring to para 3.1.2 of the ld. CIT(A)'s order pointed out that since the income escaped was more than ₹ 1 lakhs, therefore, in view of the provisions of section 149(1)(b) of the Act, the reassessment proceedings were rightly initiated within six years. The ld. Sr. DR referred to page 20 of the paper book wherein the assessment order passed u/s 143(3) of the Act dated 13.11.2009 in the case of the assessee is contained wherein the A.O had, inter alia, observed as under: "Necessary details and information as called for have been filed and placed on record. Bank details have been called for and examined. Books of accounts consisting of cashbook, bank book, ledger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of original assessment proceedings, qua the issue with reference to which reassessment proceedings have been initiated. In this regard I may refer to the decision of the Hon'ble Delhi High Court in the case of AGR Investment Ltd Vs. Addl. CIT & Anr 333 ITR 146 wherein it has been held as under: "The transactions involving ₹ 27 lakhs constituted fresh information in respect of the assessee as a beneficiary of bogus accommodation entries provided to it and represented undisclosed income. There was specific information received from the office of the Directorate of Investigation as regards the transactions entered into by the assessee with a number of concerns which had made accommodation entries and they were not genuine transactions. It was neither a change of opinion nor did it convey a particular interpretation of a specific provision which was done in a particular manner in the original assessment and sought to be done in a different manner in the proceedings under section 147 of the Act. The reason to believe had been appropriately understood by the Assessing Officer and there was material on the basis of which the notice was issued. In exercise of the jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome was filed on 16.11.2007. On 15.07.2009 a detailed questionnaire was issued by the Assessing Officer during the original proceedings under Section 143(3) of the Act raising specific queries with regard to share application money. The specific query raised by the questionnaire dated 15.07.2009 pertaining to the share application money is as under:- "B.1 For share capital, loans other than banks and inter corporate deposits, introduced/taken during the year and also in the period after passing of last order U/s' 1 43(3) give list, source genuineness, identity of the same. Please note you are to give confirmed copy of ledger A/c. from the credit or/party including confirmation of mode, date, address and acknowledgement of return etc' from the said party along with source and relevant bank entries. Same information may please be given in respect of squared up loans if any during the year. Please give a detailed note with regard to advance from customer vis-a-vis the policy of company with regards to recognition of income and treatment in accounts. Complete detail of fresh security deposits made by you during the year. File copy of ledger account and purpose of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. A-4/181, Sector-17, Rohini, Delhi-110085 AACCM0826H 40000 M/s Polo Leasing & Finance Pvt. A-24, IInd Floor, Tagore Market, Kirti Ltd. Nagar, New Delhi-110015 AABCP8345D 23400 M/s Shashi Sales & Mktg. Pvt.Ltd. RZ-41A, Mohan Nagar, Pankha Road New Delhi AAFCS8352R 83400 M/s Rajkar Electri & Elect (P) Ltd.New Delhi-110018 5012, Ashok Vihar, New Delhi-110018 AABCR4897G 70000 M/s Shattarchi Finance & Leasing Ltd. 726, Pocket IIIrd Sector-19, Dwarka, New Delhi-110045. AAFCS8159Q 15900 1000000 5. The confirmation letters issued by the shareholders are similar and one such letter is extracted herein below. The same reads as under: "TO WHOM SO IT MAY CONCERN This is confirm that we have made investment in shares, the particulars of which are given hereunder, our own declared sources. Name of Company Allied Strips Ltd. No. of Shares No. of Shares 26700 Equity Shares of ₹ 10/- each At a premium of ₹ 20/- per share Amount invested in Rupees 8,01,000/- Particulars of Remittance Cheque /DD/Pay Order No. 453976, 453977 Dated 29/01/2007 Amount 4,00,000/- each and 1,000/- each Bank Particulars PAN/GIR Share Certificate Received The Bank of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use the Assessing Officer had formed an opinion in the original assessment, though he had not recorded his reasons." 24. The facts being identical, it is held that the present case is one of change of opinion. Further, as regards the requirement of true and correct disclosure by the assessee, I find that in the reasons recorded, reproduced above, the A.O has nowhere made any allegation on this count. 25. In the case of Allied Strips [supra] the Hon'ble Delhi High Court has held as under: "12. Another reason why the impugned notice under Section 148 and the proceedings consequent thereto have to be set aside is that the pre-condition of there being a failure on part of the assessee to fully and truly disclose all the material particulars necessary for assessment has not been made out. 13. Perusal of the reasons for initiating re-assessment shows that there is not even an allegation that there has been failure on the part of the petitioner/assessee to fully and truly disclose all the material particulars necessary for re-assessment. 14. In Haryana Acrylic Manufacturing P. Ltd. Co. Vs. CIT 2009 (308) ITR 38 (Delhi), this Court held as under:- "29. In the reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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