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TMI Blog2019 (4) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment under section 147 of the Income Tax Act, therefore, conditions of Section 147 are not satisfied in this case. Further, the reasons are vague and do not disclose any incriminating material against the assessee. The decisions relied upon by Learned Counsel for the Assessee squarely apply to facts of case. Therefore, reopening of the assessment is wholly unjustified in the matter. Assumption of jurisdiction under section 147/148 of the Income Tax Act is clearly illegal and bad in Law Reopening of assessment - received information from DIT (Inv.)-II, New Delhi that assessee has taken accommodation entry - AY 2007-2008 - HELD THAT:- AO has recorded vague reasons based on wrong facts. The escapement of income based on accommodation entry as informed by Investigation Wing have been mentioned at ₹ 3.20 crores which in fact was ₹ 2.20 crores. Such fact is mentioned in the balance sheet of the assessee, copy of which is, filed at which is also supported by the list of Investors filed. The Assessing Officer in the reasons for reopening has also mentioned inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. Therefore, addition was deleted. 3.2. The Revenue is in appeal challenging the deletion of addition of ₹ 1.50 crores and assessee in the cross-objection challenged initiation of re-assessment proceedings under section 147/148 of the Income Tax Act, 1961. 3.3. Before considering the issue on merit, we proceed to decide the legal issue i.e., reopening of assessment in the matter. Learned Counsel for the Assessee submitted that validity of the reassessment proceedings is to be determined with reference to the reasons recorded under section 147/148 of the Income Tax Act, 1961. He has referred to PB 23, which is reasons for reopening of assessment. PB-44 is assessment order passed under section 143(3), Dated 8th December, 2009 for assessment year under appeal i.e., 2007-2008, in which the Assessing Officer has examined the impugned issue of share capital and share premium. He has submitted that the reasons recorded are vague and the Assessing Officer did not verify the return of income, in which all the particulars on account of share capital/ premium have been disclosed by the assessee to the Revenue Authorities. The Assessing Officer did not apply his mind and tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to information received from Investigation Wing, copy of which, is filed at Page-1 of the paper book of the Department, which is supported by letter of the DIT (Inv.)-II, Wing, New Delhi, Dated 15th March, 2013, which is referred to in the reasons for reopening of the assessment. The Learned Departmental Representative referred to the report of the Investigation Wing in detail and submitted that there was sufficient material available on record to justify the reopening of assessment and that Investigation Wing after detailed enquiry came to know that Jain Group has provided accommodation entries. So, there is application of mind on the part of the Assessing Officer to reopen the assessment. PB-52 is the list of the Investors. The assessee did not disclose all material facts necessary for the assessment. The report of the Investigation Wing is tangible material, therefore, on that basis reopening of the assessment is justified. The Learned Departmental Representative however submitted that report of the Investigation Wing was never supplied to the assessee being confidential in nature. 5. We have considered the rival submissions and perused the material available on record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or re-compute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): Provided that where an assessment under subsection (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. 5.2. In the aforesaid reasons, the Assessing Officer on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer to record reasons for reopening of the assessment. The Assessing Officer did not mention any material facts in the reasons, therefore, reopening of assessment is clearly illegal and bad in law. In the case of Signature Hotels P. Ltd., vs., Income Tax Officer And Another (2011) 338 ITR 51 (Del.) the Hon ble Delhi High Court held as under : Held allowing the petition, that the re-assessment proceedings were initiated on the basis of information received from the Director of Income-tax (Investigation) that the petitioner had introduced money amounting to ₹ 5 lakhs during financial year 2002-03 as stated in the annexure. According to the information, the amount received from a company, S, was nothing but an accommodation entry and the assessee was the beneficiary. The reasons did not satisfy the requirements of section 147 of the Act. There was no reference to any document or statement, except the annexure. The annexure could not be regarded as a material or evidence that prima facie showed or established nexus or link which disclosed escapement of income. The annexure was not a pointer and did not indicate escapement of income. Further, the Assessing Officer d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all material facts necessary for assessment under section 147 of the Income Tax Act, therefore, conditions of Section 147 of the Income Tax Act are not satisfied in this case. Further, the reasons are vague and do not disclose any incriminating material against the assessee. The decisions relied upon by Learned Counsel for the Assessee squarely apply to facts of case. Therefore, reopening of the assessment is wholly unjustified in the matter. We are, therefore, of the view that assumption of jurisdiction under section 147/148 of the Income Tax Act is clearly illegal and bad in Law. We, accordingly, set aside the orders of the authorities below and quash the reopening of the assessment under section 147/148 of the Income Tax Act, 1961. Resultantly, all additions stand deleted. The cross-objections of the assessee is allowed. In view of these findings, there is no need to decide the Departmental Appeal on merits, in which, Ld. CIT(A) has already deleted the addition. 6. In the result, Cross Objection of the assessee is allowed and Departmental Appeal is dismissed. ITA.No.2845/Del./2015 C.O.No.372/Del./2015 Param Exim Limited Assessment Year 2007-2008. 7. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Name of the Company PAN F.Y. 2007-08 Amount (Rs.) 1. M/s. Param Exim Ltd., AACCP9669B 3,20,00,000/- Therefore, I have reason to believe that income to the tune of ₹ 3,20,00,000/- has escaped assessment. Issue Notice under section 148 of the Income-tax Act, 1961 for the assessment year 2007-2008. Dated : 25th March, 2013 Sd/- S. Dayal Asst. Commissioner of Income-tax, Rohtak Circle, Rohtak . 9.1. Learned Counsel for the Assessee submitted that apart from the fact that the issue is same as have been considered in other case, but, in the present case the amount in question as mentioned in the reasons at ₹ 3.20 crores have been wrongly mentioned because the amount in question is ₹ 2.20 crores [PB-10]. He has also submitted that the Assessing Officer in the reasons has mentioned that income escaped for assessment for F.Y. 2007-2008 instead of F.Y. 2006-2007. He has, therefore, submitted that since wrong facts have been mentioned in the reasons for reopening of assessment, therefore, on this reason alone the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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