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TMI Blog2021 (8) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... e Aseem Gupta, CA was subject matter of the earlier assessment framed u/s 147 read with section 143 (3) of the Act. Last sentence of the reasons recorded apparently goes to prove that AO has reopened assessment u/s 147/148 of the Act to verify the genuineness, identification and creditworthiness of the aforesaid transaction. It is settled principle of law that jurisdiction u/s 147 can only be assumed to enquire into the escapement of income or on the basis of some tangible material - See M/S SBS REALTORS (P) LTD. VERSUS INCOME TAX OFFICER, WARD-22 (4) , NEW DELHI [ 2019 (4) TMI 357 - ITAT DELHI] Assessment framed in this case is not sustainable since the very jurisdiction assumed by the AO u/s 147 of the Act is bad in law and assessment framed on the basis of change of opinion u/s 147/143 (3) is void ab initio and is not sustainable in the eyes of law, hence quashed. Since assessment framed is not sustainable in the eyes of law on legal grounds, grounds raised on merits are not required to be disposed off.- Decided in favour of assessee. - ITA No.3762/Del./2018 - - - Dated:- 9-8-2021 - Shri Anil Chaturvedi, Accountant Member And Shri Kuldip Singh, Judicial Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10. Without prejudice to the above the sanction accorded by the CIT was mechanical as is evident from the sanction granted u/s 151 of the Act. 11. The CIT (A) has erred in sustaining the addition of ₹ 50,00,000/- as unexplained cash credit u/s 68 ignoring that the assessee has successfully discharged his burden and the AO failed to enforce the attendance as per the provisions of section 131 of the Act. 12. The CIT (A) has erred in law and on facts in sustaining the additions made by the AO ignoring that AO has failed to refute the documentary evidence filed by assessee vis-a-vis establishing the ingredients of section 68. 13. The CIT (A) has erred in sustaining the direction to charge interest u/s 234B and 234A. 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessee company filed return of income for AY 2009-10 on 29.09.2009 which was processed under section 143 (1) of the Income-tax Act, 1961 (for short the Act ). Thereafter, assessee s case was reassessed at the returned income of ₹ 58,49,432/- on 27.03.2014 u/s 147/143(3) of the Act. Again, AO received information from Investigation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recording the reasons for reopening has recorded incorrect facts; that AO has reopened the assessment without applying independent mind; that there was no failure on the part of the assessee to disclose the material facts fully and truly during the assessment proceedings; that the ld. CIT (A) has also not applied his independent mind rather accorded mechanical approval; that reopening in this case amounts to change of opinion and relied upon the decisions rendered by Hon ble Supreme Court, Hon ble High Courts and coordinate Bench of the Tribunal to be discussed in the succeeding paragraphs. 7. Ld. DR for the Revenue, on the other hand, relied upon the order passed by the AO as well as ld. CIT (A) and further contended inter alia that when the assessee has not disclosed share premium receipt, the information supplied by Investigation Wing from the case of Aseem Gupta was an additional fact on the basis of which assessment has been framed; and that valid approval has been accorded by the ld. Addl. CIT/Pr.CIT after perusing the entire record. 8. Undisputedly, original return of income filed by the assessee on 29.09.2009 was processed u/s 143(3) of the Act and thereafter, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Investigation wing of the department that from the verification of the documents seized, it clearly appears that the following accommodation entries were provided from various paper companies of Sh. Aseern Kumar Gupta group to the above assessee: Name of the Company used for providing accommodating Entry Cheque/Instrument Cheque Date Bank Name Address Amount Moderate Credit Corp Ltd. RTGS 09.03.2009 Corp Bank, CP, New Delhi 17,00,000 Moderate Credit Corp Ltd. RTGS 12.03.2009 Corp Bank, CP, New Delhi 8,00,000 Moderate Credit Corp Ltd. RTGS 24.03.2009 Corp Bank, CP, New Delhi 25,00,000 TOTAL 50,00,000/- I have gone through information of the CIT, Central Circle-II, New Delhi and hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purpose of reopening of the case u/s 147 of the LT. Act. 1961. The limitation for issuing the notice is expiring on 31.03.2016. Submitted for kind perusal and approval please. Sd/- 22.03.2016 (RAGHUNATH) Deputy commissioner of Income tax Circle-23(2), New Delhi 10. Ld. AR for the assessee contended that first of all, he would argued on the legal ground that, the assessment framed by AO u/s 147/143(3) of the Act is void ab initio as the jurisdiction assumed by the AO u/s 147 is bad in law and on facts. 11. Challenging the impugned reopening, ld. AR for the assessee contended that factually incorrect facts have been recorded by the AO in the reasons recorded just to justify the reopening that, this case was not selected for scrutiny , whereas it is admitted fact that this case was subjected to scrutiny and assessment was framed vide order dated 30.03.2003 u/s 147 read with section 143(3) of the Act. Bare perusal of the reasons recorded, available at pages 5 6 of the paper book, shows that AO has categorically recorded the fact that, this case was not selected for scrutiny . At the same time, AO recorded in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice has been sent on the old address and the company M/s. Moderate Credit Corporation Ltd. has changed its address and the new address will be communicated to you by 13.03.2014. Thereafter, you may sought details from them from the new address. 13. Aforesaid questions and answers given thereto apparently bring on record the fact that due enquiry was made by the AO regarding share capital received from M/s. Moderate Credit Corporation Ltd. and after being satisfied, he accepted the returned income of the assessee vide order dated 27.03.2014 passed u/s 147/143(3) of the Act. AO while framing assessment order dated 27.03.2014 by way of first reopening recorded the fact that, the statement of assessee has been recorded u/s 131(1) of the Act and the facts were again verified during the course of statement under oath. These facts again go to prove that AO has reopened the assessment second time without application of mind solely on the basis of information received from the Investigation Wing which is bad in law. 14. Perusing of the reasons recorded and assessment order framed in this case further shows that, the entire reopening and assessment proceedings have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om Moderate Corporate Corp. belonging to one Aseem Gupta, CA was subject matter of the earlier assessment framed u/s 147 read with section 143 (3) of the Act. 17. Ld. DR for the Revenue contended that return of income filed by the assessee company does not disclose the factum of share premium received, so this issue was not discussed earlier. We are of the considered view that when assessment was reopened for the first time this issue was before the AO who recorded statement of Jasdeep Singh qua the issue in question and has also during the assessment proceedings perused balance sheets, statement of accounts, ITR, bank statements, to enquire into the share capital received by the assessee from M/s. Moderate Corporate Corp., reopening on the same issue certainly amounts to change of opinion which is not permissible under the law. 18. Hon ble Supreme Court in the case of CIT vs. Kelvinator of India Ltd. (2010) 320 ITR 561 (SC) w hile examining the identical issue as to reopening on the basis of change of opinion has held that it would give arbitrary power to the AO to reopen assessment u/s 147 on the basis of mere change of opinion , which cannot be per se reason to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 549 dated October 31, 1989 ([1990] 182 ITR (St.) I, 29), which reads as follows: 7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression 'reason to believe' in section 147.-A number of representations were received against the omission of the words 'reason to believe' from section 147 and their substitution by the 'opinion' of the Assessing Officer. It was pointed out that the meaning of the expression, 'reason to believe' had been explained in a number of court rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 147 to reintroduce the expression 'has reason to believe' in place of the words 'for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the new section 147, however, remain the same. For the aforestated reasons, we see no merit in these civil appeals filed by the Department; hence, dismissed with no order as to costs. 19. Furthermore, it is conte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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