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TMI Blog2020 (1) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Shri Naresh Sabharwal which is handed-over to the A.O. of the assessee and addition is made only on that basis. Therefore, there was no justification for the A.O. to have been initiated proceedings under section 147/148. The correct course of action would have been to proceed against the assessee under section 153C. Therefore, initiation of re-assessment proceedings under section 147/148 is wholly invalid, void and bad in Law. Since the correct procedure have not been adopted by the A.O. and there is no justification to initiate the re-assessment proceedings against the assessee, we set aside the Orders of the authorities below and quash the reopening of the assessment. Resultantly, all additions stands deleted. Appeal of Assessee allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... s for notice under section 148. PB-10 is reply of the assessee denying giving any loan to Shri Naresh Sabharwal supported by the affidavit which was filed during the assessment proceedings in the case of Shri Naresh Sabharwal. PB-25 is copy of the loan agreement provided by the Department. PB-27 is assessment order in the case of Shri Naresh Sabharwal under section 153A r.w.s. 143(3) Dated 21.03.2014. PB-32 is reasons for reopening of the assessment. Learned Counsel for the Assessee submitted that since Shri Naresh Sabharwal as well as assessee have denied giving of any cash loan and that no evidence have been found giving loan by assessee to Shri Naresh Sabharwal, therefore, reopening of the assessment is bad in law. Further the loan agreement was found during the course of search in the case of Shri Naresh Sabharwal and assessment under section 153A have been completed in his case, therefore, assessment in the case of assessee should have been made under section 153C only which is a special provision. Therefore, re-assessment in the matter is wholly unjustified, invalid and bad in law. In support of his contention, he relied upon the following decisions : 01. ITO vs., Arun Kum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings have been rightly initiated based on the agreement found during the course of search in the case of Shri Naresh Sabharwal. 8. We have considered the rival submissions. It is well settled Law that validity of the re-assessment proceedings are to be determined with reference to the reasons recorded for reopening of the re-assessment. Learned Counsel for the Assessee filed copy of the reasons recorded for reopening of the assessment as provided under RTI Act, copy of the same is filed at Page-32 of the Paper Book which reads as under : "ANNEXURE- A Sh. Ad arsh Aqqarwal (PAN-AACPA1775E) A.Yr. 2010-11 FORM FOR RECORDING THE REASONS FOR INITIATING PROCEEDINGS U/S 147/148 AND FOR OBTAINING THE APPROVAL OF THE ADDITIONAL COMMISSIONER OF INCOME TAX : COMMISSIONER OF INCOME TAX / CENTRAL BOARD OF DIRECT TAXES : Letter F.No.DCIT/CC/JMU/2014-15/5 dated 09/04/2014 was received from DCIT, Central Circle. Jammu intimating that during the course of search u/s 132 of the I.T. Act on 07/04/2011 in the case of Sh. Naresh Aggarwal, 8/11, Jangcura Extension, Hospital Road, Delhi, it was found that Sh. Adarsh Aggarwal s/o Sh. Murari lal Aggarwal, R / o .N-57, Naveen Shahdra, Delhi-32 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Indian Express Newspapers (Bombay) P. Ltd., & Another vs., Union of India & Others [2008] 300 ITR 351 [Bom.] held as under : "Held that it was the contention of the Revenue that subsequent to the finalization of the assessment of the petitioners for the assessment year 1980-81, it was found that one P was paid interest. When questioned about this, the petitioners had initially denied having any transaction with the party. However, when the evidence pertaining to loans was pointed out to the petitioners and more particularly, they were confronted with the evidence of deduction of tax at source, the petitioners had nothing to say. Further, in the course of search and seizure operation at the premises of the Calcutta party, they had stated on oath that certain loans alleged to have been paid by the petitioners were not genuine and the entries relating thereto were hawala entries. The reasons for the notice of reassessment as contained in the affidavit in reply filed at the stage of admission was based upon the statement of B who expired after retracting the statement. The documentary evidence indicated the existence of the loan and the payment of interest after deduction of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 153C/148. Hence, notice issued under section 148 and proceedings under section 147 by the Assessing Officer were illegal and void ab initio. In view of the provisions of section 153C, section 147/148 stands ousted. In the instant case, the procedure laid down under section 153C has not been followed by the Assessing Officer and, therefore, assessment has become invalid. The Commissioner (Appeals) was justified in following the ratio laid down by the Supreme court in the case of Manish Maheshwari v. Asstt. CIT [2007] 289 ITR 341 / 159 Taxman 258 wherein it has been held that if the procedure laid down in section 158BD is not followed, block assessment proceedings would be illegal. The Commissioner (Appeals) has correctly observed that the provisions of section 153C are exactly similar to the provisions of section 158BD in block assessment proceedings. Thus, considering the entire facts and the circumstances of the case, the Commissioner (Appeals) was fully justified in quashing the reassessment order." 8.3. The other decisions relied upon by the Learned Counsel for the Assessee are on the same proposition. Considering the facts of the case in the light of above dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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