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TMI Blog2021 (8) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... edly in the case on hand, the reasons supplied to the assessee are not the same and verbatim. In view of this settled position of law and respectfully following the line of decision in Haryana Acrylic Manufacturing Co. v. Commissioner of Income tax [ 2008 (11) TMI 2 - DELHI HIGH COURT] by the higher forum referred to in the decision of the coordinate Bench of this Tribunal in the case of Wimco Seedlings [ 2020 (6) TMI 586 - ITAT DELHI] we find it difficult to sustain the validity of the reopening of proceedings under section 147 of the Act and consequently quash the same. - Decided in favour of assessee. - ITA No. 3132/Del/2018 - - - Dated:- 12-8-2021 - N.K. Billaiya, Member (A) And K. Narasimha Chary, Member (J) For the Appellant : Kapil Goel, Advocate For the Respondents : Anima Barnwal, Sr. DR ORDER K. Narasimha Chary, Member (J) Aggrieved by the order dated 28/10/2016 passed by the learned Commissioner of Income Tax (Appeals)-5, Delhi ( Ld. CIT(A) ) in the case of M/s. Jansampark advertising and marketing (P) Ltd. ( the assessee ), for the assessment year 2004-05, assessee preferred this appeal. 2. Brief facts of the case as could be culled out fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. CIT(A) with a direction first to decide the objection taken by the assessee to the validity of the reopening proceedings. Pursuant to the directions of the Hon'ble Apex Court, Ld. CIT(A) passed the impugned order on 28/10/2016 dismissing the appeal while holding both the reopening and the addition as valid. Hence this appeal before us, by the assessee. 5. It is argued on behalf of the assessee that it was brought to the notice of the Ld. CIT(A) that the reasons recorded were different from the reasons supplied to the assessee, the reasons supplied to the assessee do not contain any details as to - the transaction, how ₹ 51 Lacs was treated as accommodation entry in the hands of the assessee that could be discernible, there are no clues as to the nature of the transaction, there is no mention of any return filed earlier, there is no Annexures/statements/report enclosed with the reasons, break up of figure of ₹ 51 Lacs is not to be found, there is no tangible material much less the Livelink between the reasons and the addition so on and so forth. He further submitted that the Ld. CIT(A) looked into this aspect, advert to the reasons supplied to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formation provided by the Investigation Wing of IT Department, New Delhi is enclosed as per Annexure. In view of the specific information received as above from Investigation Wing of IT Department, New Delhi, I have sufficient reason to believe that the assessee company M/s. Jansampark Advertising Marketing (P) Ltd. has indulged in receiving accommodation entries and the total amount of payment received by the assessee company amounting to ₹ 51,00,000/- is bogus and represents the undisclosed income/income from other source of the assessee company, which has not been offered to tax by the assessee in is return filed. Accordingly, I have reason to believe that income of ₹ 31,00,000/- chargeable to tax has escaped assessment as the assessee company has understated its returned income for the AY 2004-05 by an amount of ₹ 51,00,000/-. 8. A reading of the above clearly establishes that the reasons supplied to the assessee are not the very same reasons recorded and found in the assessment record. Alienation of the assessee against the Revenue is that it gave few extracts of the reasons to them to defend it against the reopening of the assessment and whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 201845 dated October 17, 1997, amounting to ₹ 5,00,000 during the year relevant to the assessment year 1998-99. I have reason to believe that the income to the extent of ₹ 5,00,000 has escaped assessment. As such, after obtaining the approval of CIT (C)-II to reopen the case, notice under section 148 of the Income-tax Act is issued to the assessee. (Sd) ....... 29-3-2004 ACIT, CC-18, New Delhi. 28. It was further pleaded before Honourable Court that:- 16. Lastly, it was contended that in the counter-affidavit filed by the respondents the reasons which had been indicated for initiation of proceedings under section 147 were entirely different to the reasons which had been supplied to the petitioner. The attention of this court was drawn to paragraph 5(d) of the counter-affidavit wherein it is stated that the true copy of the reasons recorded by the Assessing Officer and the approval granted by the Commissioner of Income-tax is enclosed as annexure A. Annexure A purports to be a form for recording the reasons for initiating proceedings under section 148 and for obtaining approval of the Commissioner of Income-tax. Serial No. 11 of the form pert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was submitted, the bar of taking action within four years would not apply and, consequently, the notice under section 148 was valid. 31. This argument suffers from several infirmities. First of all, the respondents cannot be permitted to gloss over the fact that the reasons which were supplied to the petitioner were different from the reasons purportedly recorded in the said form on which they now seek to rely. If the reasons in the said form were the actual reasons, why were they not communicated to the petitioner? Why was nothing said about these reasons (noted in the form) when the petitioner filed its objections to the reasons which were supplied to it? It must be remembered that in its objections, the petitioner took the specific plea that in the absence of any allegation that the petitioner had failed to disclose fully and truly all material facts necessary for assessment, the Assessing Officer had no jurisdiction to issue the notice under section 148 and initiate action under section 147 after four years from the end of the relevant assessment year. Despite this precise objection, there is no mention of the reasons noted in the said form in the impugned order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf the assessee may point out any objections that he may have with regard to the initiation of action under section 147 of the said Act. The requirement of recording the reasons, communicating the same to the assessee, enabling the assessee to file objections and the requirement of passing a speaking order are all designed to ensure that the Assessing Officer does not reopen assessments which have been finalized on his mere whim or fancy and that he does so only on the basis of lawful reasons. These steps are also designed to ensure complete transparency and adherence to the principles of natural justice. Thus, a deviation from these directions would entail the nullifying of the proceedings. Assuming as we have done that the actual reasons were those as noted in the said form, it is obvious that the reasons were never communicated to the petitioner and it is only for the first time in the course of the present writ petition that those reasons have surfaced. Therefore, if he proceeded on the assumption that the actual reasons were those as noted in the said form, the proper course of action as directed by the Supreme Court in G.K.N. Driveshafts [2003] 259 ITR 19, has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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