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TMI Blog2021 (4) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, such reassessment proceedings are not in accordance with law and has to be quashed. - Appeal of the assessee is allowed. - ITA No. 4540/Del/2019 - - - Dated:- 16-4-2021 - SHRI R. K. PANDA, ACCOUNTANT MEMBER Appellant by : Sh. Akhilesh Kumar, Advocate Respondent by : Sh. Farat Khan, Sr. DR ORDER PER R. K. PANDA , AM : This appeal filed by the assessee is directed against the order dated 11.03.2019 of the learned CIT(A)-34, New Delhi, relating to Assessment year 2008-09. 2. Fact of the case, in brief, are that the assessee is a private limited company and filed its return of income on 27.09.2008, declaring income of ₹ 42,396/-. In this case, information was received from the Investigation Wing that the assessee has obtained accommodation entries of ₹ 30 lakhs on account of share capital. The Assessing Officer, thereafter initiated reassessment proceedings u/s 147 of the Act after recording the reasons and with the approval of the competent authority. The reasons so recorded were provided to the assessee and the objections to the reopening filed by the assessee were disposed of by the Assessing Officer. Subsequently, during the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, in alternative, Id. CIT(A) erred in sustaining the validity of notice u/s 148 which is issued with vague/wrong reasons without any application of mind and satisfaction of Id. AO and/or of approving authority sheerly to conduct roving enquiries only, hence notice is beyond jurisdiction. 6. Because, without prejudice to above, in alternative, on merits, ld. CIT(A) erred in sustaining the addition of ₹ 30.6 lakhs u/s 68/69C being the share application in whole disregard of the material on record merely on the basis of a general third party unilateral statement that too without providing opportunity to cross examine in terms of M/s Andaman Timber Ind. (SC) and without conducting any enquiry. 5. The learned counsel for the assessee strongly challenged the order of the learned CIT(A) in confirming the addition on merit as well as upholding the validity of reassessment. The learned counsel for the assessee submitted that the notice u/s 148 has not been issued within the limitation period ended on 31.03.2015 and in any eventuality notice u/s 148 was never served on the assessee before completion of assessment. Despite the objection of the assessee repeatedly that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above objection made before him. The learned CIT(A) has stated that since the assessee has not raised this objection before the Assessing Officer and complied with notice u/s 143(2), hence, in terms of section 292BB of the Act, the assessee cannot raise this issue in appellate proceedings. Referring to the following decisions, the learned counsel for the assessee submitted that non-issue of notice or invalid issue of notice u/s 143(2) is not curable defect and the assessment so made has to be quashed. i. ASSTT. CIT V. HOTEL BLUE MOON [2010] 321 ITR 362/188 TAXMAN 113 (SC) ii. CIT V. RAJEEV SHARMA [2011] 336 ITR 678 (ALL) iii. PR. CIT SHRI JAI SHIV SHANKAR TRADERS (P.) LTD. [2015] 64 TAXMANN.COM 220 (DELHI) iv. GULAB BADGUJAR (HUF)V ITO [2019] 111 TAXMANN.COM 90 (PUNE - TRIB.) v. JYOTI PAT RAM VS ITO (2005) 92 ITD 423 ((LKO) 7. The learned counsel for the assessee in his next plank of argument submitted that the reasons were stated to be recorded on 31.03.2015 on the basis of letter dated 31.03.2009 of ADIT about an accommodation entry of ₹ 30 lakhs of M/s Karol Bagh Trading Ltd. as per statement of one Mr. Tarun Goyal. But the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmation, bank statement and balance sheet of both the parties in support of such transactions. It was also submitted before the Assessing Officer that none of the directors of M/s Karol Bagh Trading Ltd. is present. Hence, it is not possible to produce them for personal deposition. However, the Assessing Officer never conducted any enquiry from the said party nor rejected evidences placed before him. Relying on the following decisions, the learned counsel for the assessee submitted that the addition made by the Assessing Officer and sustained by the learned CIT(A) is not in accordance with law and should be deleted. i. CIT V GANGESHWARI METALS P. LTD [2014] 361 ITR 10 (DEL) ii. PSYCHOTROPICS LEASING FINANCE (P) LTD. V. ITO (ITA NO. 1122/D/14) (DATED11.10.2018) iii. RATHI CERAMICS PVT. LTD. V. ITO (ITA NO. 4540/DEL/2014) (04.02.2019) iv. GREEN INFRA LTD. V ITO 145 ITD 240(MUMBAI)--AFFIRMED IN [2017] 78 TAXMANN.COM 340 (BOMBAY)/[2017] 392 ITR 7 (BOMBAY) 9. He accordingly submitted that both legally and factually, the addition made by the Assessing Officer and upheld by the learned CIT(A) is not justified. 10. The learned DR on the other hand, heav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has held as under:- (short notes) Reassessment-Issuance of Notice-Sanction for issue of Notice- Assessee had in its return for AY 2001-02 claimed that sum of ₹ 1 Crore was received towards share application amounts and a further sum of Thirty Five Lakhs was credited to it as an advance towards loan-Original assessment was completed u/s 143(3)- However, pursuant to reassessment notice, which was dropped due to technical reasons, and later notice was issued and assessments were taken up afresh-After considering submissions of assessee and documents produced in reassessment proceedings, AO added back a sum of ₹ 1,35,00,000-CIT(A) held against assessee on legality of reassessment notice but allowed assessee's appeal on merits holding that AO did not conduct appropriate enquiry to conclude that share inclusion and advances received were from bogus entities-Tribunal allowed assessee's appeal on merits-Revenue appealed against appellate order on merits-Assessee's cross appeal was on correctness of reopening of assessment- Tribunal upheld assessee's cross objections and dismissed Revenue's appeal holding that there was no proper application of mind by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead of first attempting to serve the same in person or through post. I, therefore, find merit in the arguments of the learned counsel for the assessee that no notice u/s 148 of the Act was ever served to the assessee and even if it is accepted that such a notice is served through affixture even then also the same is not valid service being served after office hours and the notice so affixed does not bear the name of any witness of the localities other than the Ward Inspector who accompanied the notice server. The chronology of events that has taken place clearly shows that no notice u/s 148 was ever served upon the assessee before 31.03.2015 and therefore, I find force in the arguments of the learned counsel for the assessee that since no notice u/s 148 of the Act was served on the assessee before 31.03.2015, therefore, such reassessment proceedings are not in accordance with law and has to be quashed. In this view of the matter, I quash the reassessment proceedings. Since, the assessee succeeds on the above two legal grounds i.e. giving approval by the Addl. CIT in a mechanical manner and non-service of notice u/s 148 of the Act before the specified date, the other plank of argume ..... X X X X Extracts X X X X X X X X Extracts X X X X
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