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TMI Blog2019 (9) TMI 857X X X X Extracts X X X X X X X X Extracts X X X X ..... ns filed by the assessee, which is against the law and facts on the file. AO has completed the assessment and Ld. CIT(A) has wrongly upheld the order of the Ld. CIT(A) without appreciating that the reasons in this case are based on borrowed satisfaction and without independent application of mind - See M/S SBS REALTORS (P) LTD. VERSUS INCOME TAX OFFICER, WARD-22 (4) , NEW DELHI [ 2019 (4) TMI 357 - ITAT DELHI] - Decided in favour of assessee. - ITA No. 6677/Del/2018, 1268/Del/2019, 2009/Del/2019 - - - Dated:- 14-8-2019 - SH. H.S. SIDHU, JUDICIAL MEMBER Assessee by Sh. Kapil Goel, Advocate Department by Sh. S.L. Anuragi, Sr. DR. ORDER These 03 appeals have been filed by the separate assessees against the respective orders passed by the different Ld. CIT(A)s pertaining to respective assessment years. 2. The facts narrated by the revenue authorities are not disputed by both the parties, hence, the same are not repeated here for the sake of convenience. 3. These are 03 appeals filed by the different assesses by raising various grounds of appeal in each appeal challenging addition in dispute on merit as well as on legal. However, Ld. Counsel for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly draw my attention towards the page no. 100-112. He requested that in this case the Bench has elaborately discussed the various case laws rendered by the Jurisdictional High Court and quashed the assessment on the legal similar issue. He further requested that in view of the order dated 01.04.2019 passed in the case of M/s SBS Realtors (P) Ltd. Vs. ITO (Supra) the legal ground involved in this appeal may be decided in favour of the assessee and notice u/s. 148 of the Act may be quashed and accordingly assessment in pursuance of the notice may also be quashed by accepting the appeal of the assessee. 4. On the contrary, Ld. DR relied upon the orders of the authorities below. 5. I have heard both the parties and perused the records, especially the orders of revenue authorities as well as the Paper Book filed by the Ld. Counsel for the assessee in which the assessee has filed the copies of the various decisions rendered by the Hon ble Jurisdictional High Court as well as Tribunal. Since similar legal issue has been raised in all the appeals, hence, the appeals were heard together and disposed of by this common order for the sake of convenience, by dealing with ITA no. 6677/Del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendered by the Jurisdictional High Court and declared the invalid assessment. He further requested that in view of the order dated 01.04.2019 passed in the case of M/s SBS Realtors (P) Ltd. Vs. ITO (Supra) the legal ground involved in this appeal may be decided in favour of the assessee and notice u/s. 148 of the Act may be quashed and accordingly assessment in pursuance of the notice may also be quashed by accepting the appeal of the assessee. For the sake of convenience, I am reproducing the findings of the Tribunal in the case of M/s SBS Realtors (P) Ltd. Vs. ITO (Supra) as under, in which various case laws of the Hon ble Courts have been discussed elaborately:- 5. We have carefully considered the arguments of both the sides and perused the material placed before us. The reasons recorded for issue of notice under Section 148 read as under :- Name of the assessee : M/s SBS Realtors P.Ltd. A.Y. 2009-10 PAN : AALCS5106R Assessment Year : 2009-10 Reasons for Issue of Notice u/s 148 of the Income Tax Act, 1961 The return of income for the A.Y. 2009-10 has been filed by the assessee company on 20.09.2009 declaring NIL total income. The same was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t.Ltd. Axis P.O. No.025622 10.06.2008 2,500,000/- Rajesh Aggarwal 5 Virgin Capital Services P.Ltd. SBS Realtors Pvt.Ltd. Axis P.O. No.025711 13.06.2008 1,000,000/ - Rajesh Aggarwal 6 Victory Software P.Ltd. SBS Realtors Pvt.Ltd. Axis P.O. No.026398 09.07.2008 2,500,000/ - Rajesh Aggarwal 7 Humtum Marketing P.Ltd. SBS Realtors Pvt.Ltd. Axis P.O. No.026397 09.07.2008 2,000,000/ - Rajesh Aggarwal 8 Eagle Infatech SBS Realtors Pvt.Ltd. Axis P.O. No.027056 02.08.2008 1,500,000/ - Rajesh Aggarwal 9 Victory Software P.Ltd. SBS Realtors Pvt.Ltd. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above cheques paid by S.K. Jain group companies were accommodation entries to M/s SBS Realtors Pvt.Ltd. i.e., the assessee. However, what is the material found during the course of search of S.K. Jain group cases which had led to form the belief that all those companies are providing accommodation entries is not mentioned in the reasons recorded. It is also not mentioned whether any of the directors of the above companies have provided accommodation entries to M/s SBS Realtors Pvt.Ltd. It is also not mentioned whether any document was found which led to the belief of giving of accommodation entries by those twelve companies to the assessee. On receipt of above information, the Assessing Officer compared the figures in the balance sheet of the assessee filed for assessment year 2009-10 and he found that the share capital has increased by ₹ 2,35,00,000/-. After recording the above factual finding, the Assessing Officer has concluded The same has escaped assessment on account of failure on the part of the assessee to truly and fully disclose all material facts necessary for assessment for the AY 2009-10. In order to verify the genuineness, identification and creditworthiness o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... months from the end of the financial year in which the return is furnished. 7. Thus, if the Assessing Officer considered it necessary to ensure that the assessee has not understated the income, he can issue the notice under Section 143(2). However, proviso to above Section provides the time limit within which such notice can be issued. Once that time limit is expired, in our opinion, the Assessing Officer cannot invoke Section 148 just for the purpose of verification. Therefore, in our opinion, in the case under consideration, the reopening of assessment for the purpose of verification of genuineness, identification and creditworthiness of the transaction is not permissible under law and is liable to be quashed. 8. The learned counsel for the assessee has also mentioned that the notice has been issued mechanically without application of mind and the satisfaction by the Assessing Officer is only the borrowed satisfaction of the Investigation Wing. The Assessing Officer, without applying his mind, has simply on the basis of information of the Investigation Wing jumped to the conclusion that there is escapement of income. From a perusal of the aforesaid reasons, we do no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions or reasons that the Officer authorizing the notice would have to discuss in the note or decision was beyond the purview of the courts and was not justified. The orders of the Appellate Tribunal could not be sustained. The Appellate Tribunal was directed to hear the Department s appeals on their merits. 9. On the other hand, learned counsel for the assessee has relied upon the catena of judgment before and after the date of above judgment of Hon'ble Delhi High Court wherein the notice under Section 148 simply on the basis of report of the Investigation Wing has been quashed. The same is as under:- (i) Sarthak Securities Co.P.Ltd. Vs. ITO [2010] 329 ITR 110 (Delhi). (ii) Signature Hotels P.Ltd. Vs. ITO [2011] 338 ITR 51 (Delhi). (iii) PCIT Vs. G And G Pharma India Ltd. [2016] 384 ITR 147 (Delhi). (iv) PCIT Vs. RMG Polyvinyl (I) Ltd. [2017] 396 ITR 5 (Delhi). (v) PCIT Vs. Meenakshi Overseas Pvt.Ltd. [2017] 395 ITR 677 (Delhi). 10. Learned DR has also relied upon few decisions of Hon ble Gujarat High Court. However, when there are large number of decisions of Hon'ble Jurisdictional High Court, the same would be binding o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmation made available to the Assessing Officer and the formation of belief of escapement of income. There is no basis for coming to the conclusion that the assessee received accommodation entries. The Investigation Wing alleged that the companies which issued cheques to the assessee company are companies of Shri S.K. Jain group and they are entry providers. However, the basis for such conclusion is missing. There is no mention that any document was seized from Shri S.K. Jain group or any director of the 12 companies which have given cheques to the assessee has given the statement that they have provided accommodation entries to the assessee. The Assessing Officer has simply reopened the case on the basis of information provided by the Investigation Wing without any independent application of mind. There is no tangible material which formed the basis for the belief that income has escaped assessment. 12. While taking the above view, we derive support from the latest decision of Hon'ble Jurisdictional High Court in the case of RMG Polyvinyl (I) Ltd. (supra) and Meenakshi Overseas Pvt.Ltd. (supra). In view of the above, we quash the notice issued under Section 148 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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