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TMI Blog2019 (5) TMI 1552X X X X Extracts X X X X X X X X Extracts X X X X ..... easons recorded is that there was a society at Kolkata named as M/s Society for Welfare of Handicapped Person. The assessee paid the cash of ₹ 50,00,000/- to the said society and got the cheque of donation of ₹ 50,00,000/-. Thus the assessee utilized its undisclosed income to get the accommodation entry in the form of donation of ₹ 50,00,000/-. However, at the time of conclusion of the reasons recorded the Assessing Officer himself has mentioned that the assessee has furnished the list of donation during assessment proceedings but no donor from M/s Society Welfare of Handicapped Person is mentioned. Thus, when the assessee has not claimed to have received any donation from the said society the question of making any cash payment from undisclosed sources by the assessee could not arise. Therefore, we are of the opinion that there was no justifiable reason for arriving at the finding by the Assessing Officer that there was undisclosed income of the assessee which was utilized for obtaining Donation from M/s Society for Welfare of Handicapped Person. Relying upon the decision of Hon ble Jurisdictional High Court in the case of Unitech Limited (supra) and also in H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 018 are bad in law as reasons recorded stated ₹ 50,00,000 is unexplained amount simply where as Ld AO changing basis of reopening in order passed states that assessee has utilized undisclosed funds being cash for clearing of cheque in the bank a/c and Ld CIT-A further changes it to held that assessee could not substantiate the genuineness of transaction of ₹ 50,00,000 being amount reed from SOWHAP which amorphous and fleeting allegation breaks the entire belief formed in reasons recorded. 2. At the time of hearing before us, it is stated by the assessee s counsel that the assessee is a society which has been granted registration under section 12AA of the Income Tax Act. For the year under consideration, the assessment was originally completed under section 143(3) vide order dated 27.2.2013 on nil income. The assessment was reopened vide notice under section 148 dated 28th March, 2017. Thus, admittedly the assessment was reopened beyond the period of four years when the original assessment was completed under section 143(3). Therefore, the proviso to section 147 is clearly applicable. That no finding is recorded by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings. PCIT Vs Paramount Communication (P.) Ltd.[2017] 79 taxmann.com 409 (Delhi)/[2017] 392 ITR 444 (Delhi) where Hon ble Delhi High Court held that Information regarding bogus purchase by assessee received by DRI from CCE which was passed on to revenue authorities was 'tangible material outside record' to initiate valid reassessment proceedings 2. Aradhna Estate (P.) Ltd.Vs DCIT [2018] 91 taxmann.com 119 (Gujarat) (copy enclosed) where Hon ble Gujarat High Court held that where reassessment proceedings were initiated on basis of information received from Investigation wing that assessee had received certain amount from shell companies working as an accommodation entry provider, merely because these transactions were scrutinised by Assessing Officer during original assessment, reassessment could not be held unjustified 3. Pushpak Bullion (P.) Ltd. Vs DCIT[2017] 85 taxmann.com 84 (Gujarat)(copy enclosed) where Hon ble Gujarat High Court held that where investigation wing of department had during course of investigation in case of a third party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for Assessing Officer to come across some fresh tangible material to form 'reasons to believe' that income has escaped assessment 9. Honda Siel Power Products Ltd. v. Dy. CIT [2012] 20 taxmann.com 5 (SC)/[2012] 206 Taxman 33 (SC)(MAG.)/[2012] 340 ITR 64 (SC)/[2012] 247 CTR 316 (SC) (Copy enclosed) where Hon ble Supreme Court held that assessee having not pointed out during assessment proceedings about expenses incurred relatable to tax free income u/s 14A there was omission and failure on its part to disclose fully and truly material facts and hence reopening of assessment was justified 10. Honda Siel Power Products Ltd. v. Dy. CIT [2011] 10 taxmann.com 2 (Delhi)/[2011] 197 Taxman 415 (Delhi)/[2012] 340 ITR 53 (Delhi)/[2012] 247 CTR 322 (Delhi) (Copy enclosed) where Hon ble Delhi High Court held that assessee having not pointed out during assessment proceedings about expenses incurred relatable to tax free income u/s 14A there was omission and failure on its part to disclose fully and truly material facts and hence reopening of assessment was justified 11. New Delhi Tele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipts, was justified. Reasons to be recorded by Assessing Officer for taking decision to reopen escaped assessment does not mean that such reasons are to be communicated along with notice itself; very notice will not provide a cause of action for assessee to file writ petitions. 15. CIT Vs P.V.S. Beedies (P.) Ltd.[1999] 103 Taxman 294 (SC)/[1999] 237 ITR 13 (SC)/[1999] 155 CTR 538 (SC) (Copy enclosed) where Hon ble Supreme Court held that Audit party had merely pointed out a fact which had been overlooked by Assessing Officer and this was not a case of information on a question of law. Reopening of case under section 147(b) on basis of factual information given by internal audit party was valid in law 16. PranawaLeafin (P.) Ltd. Vs DCIT [2013] 33 taxmann.com 454 (Bombay)/[2013] 215 Taxman 109 (Bombay)(MAG.)(Copy enclosed) where Hon ble Bombay High Court held that where there was failure on part of assessee to make true and complete disclosure in respect of share transactions entered into by it, in view of proviso to section 147, Assessing Officer was justified in initiating reassessment proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 35(l)(ii) of the income Tax Act. It transpires that one chartered Accountant based in Kolkata by fraudulent means opened a bank account in the name of this society in Axis Bank Limited. Prince Anwar Shah Road, Kolkata branch vide A/c No. 255010100128834 which carried the transfer of several crores of rupees. Contributions were received u/s 25(l)(ii) of the Income Tax Act, 1961from various corporate/non - corporate entities in this fraudulent account and these amount were either withdrawn in cash through two or more layers, which happed to be societies/trusts or bogus donations were paid in lieu of cash to the societies /trusts, who are beneficiaries to these transactions of bogus donation, which are situated all over India. The mediators, who are generally Chartered Accountants, get commission of 15-20% in cash out of the contributions received u/s 35(l)(ii) of the I.T. Act and 2-5% out of the bogus donation paid. By way of this mediators get benefit from both parties. This facts relating to fraudulent bank account opened by the Chartered Account, are further confirmed from the letter filed by the President of the society before various enforcement agen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, assessee filed return showing NIL income on 11.11.2010 and assessment was completed u/s 143(3) on 27.02.2013 on NIL income. The assessee furnished the list of donation during assessment proceedings, but no name of donor M/s Society for Welfare of Handicapped Persons located at 27 Tagore Avenue, Durgapur is mentioned. Keeping in view the above facts, the above amount of ₹ 50,00,000/- being amount of donation in lieu of cash is assessable in the hands of assessee. I have therefore reason to believe that the income of ₹ 50,00,000/- has escaped the assessment within the meaning of section 147 of the Income Tax Act, 1961 and is chargeable to tax for the A.Y 2010-11. 8. We find that the identical issue is considered by the Hon ble Jurisdictional High Court in the case of Unitech Limited vs. DCIT in W.P. (C) 12324/2015 wherein their Lordships of Jurisdictional High Court vide order dated 24.7.2017quashed the notice under section 148. Their Lordships followed the decision of the same court i.e. Hon ble Delhi High Court in the case of HCL Technologies Limited vs. DCIT in W.P. (C) 8164/2010 order dated 20.7.2017 wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reasons recorded the Assessing Officer himself has mentioned that the assessee has furnished the list of donation during assessment proceedings but no donor from M/s Society Welfare of Handicapped Person is mentioned. Thus, when the assessee has not claimed to have received any donation from the said society the question of making any cash payment from undisclosed sources by the assessee could not arise. Therefore, we are of the opinion that there was no justifiable reason for arriving at the finding by the Assessing Officer that there was undisclosed income of the assessee which was utilized for obtaining Donation from M/s Society for Welfare of Handicapped Person. 11. After considering the above facts and also relying upon the decision of Hon ble Jurisdictional High Court in the case of Unitech Limited and also in HCL Technologies Limited (supra), we quash the notice issued for reopening of assessment under section 148. 12. Once the notice for reopening of assessment u/s 148 is quashed, the assessment order passed in pursuance to such notice cannot survive the same is also quashed. Since the assessment order itself has been quashed, the other ..... X X X X Extracts X X X X X X X X Extracts X X X X
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