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TMI Blog2021 (10) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing officer has examined these or not? Hence, plea of the ld Counsel that assessing officer cannot reopen the assessment beyond a period of four years is not tenable. Hence, according to us assessee has not disclosed all the facts necessary for making the assessment; therefore, we dismiss the ground raised by the assessee. Not only there existed new information with the AO from the credible sources, but also he had applied his mind and recorded the conclusion that the purchases claimed were non-genuine/bogus and therefore bogus, (clearly meaning that what was disclosed was false and untruthful). The requirements of section 147 r.w.s. 148 have clearly been met; and the reopening is held justified and legal. The contention of the ld Counsel that the report of the Director of Income Tax (Investigation) -II, Mumbai, cannot constitute a reason to believe within the meaning of section 147 is misplaced in law and facts. Notice u/s 143(2) issued or not? - AO did not issue the notice under section 143(2) of the Act. We note that notice under section 143(2) should be issued by the Assessing Officer to assume the jurisdiction as well as to complete the scrutiny assessment proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 148 of the Act as required u/s 151 of the Act. The assessee pleads that the order passed u/s 143(3) r.w.s. 147 of the Act is bad in law and invalid. 2. The learned Commissioner of Income Tax (Appeal) has erred in law and in facts in upholding the validity of impugned reassessment order passed by assessing officer without considering the fact that notice u/s 143(2) of the Act was not issued and served on the assessee. 3. The learned Commissioner of Income Tax (Appeals) has erred in law and in facts in partially confirming the addition of impugned bogus purchases of ₹ 80,17,790/- (being 12.50% of total alleged bogus purchases of ₹ 6,41,42,308/-) made by assessing officer. The Ld CIT(A) has relied on irrelevant consideration and factor while omitting to consider relevant facts and law in adjudicating the appeal filed by the assessee. 4. The assessee craves leave of Your Honour to add to, alter, amend and/ or delete all or any of the foregoing grounds of appeal. 3. Facts of the issue which can be stated quite shortly are as follows: Assessee before us is an individual and filed his return of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case u/s 147 of the Act and issuing of notice u/s 148 of the I T Act. I have perused the submission of the AR and considered verbal arguments. It is seen from the records that the AO has received report from the Investigation Wing, Mumbai, which indicated that the assessee was beneficiary of accommodation entry operators. The said accommodation entry operator has admitted before the Investigation Wing that he had given bogus purchase bills to many persons including the assessee. Based on this report, the ld. assessing officer had reason to believe that income has escaped the assessment. In the facts and circumstances, I am convinced that the re-opening in this case is justified. Further, in his submission and verbal arguments, the AR contested that the assessment is not made as per Law. The Id assessing officer has not provided the copy of statement, material, etc. which he has relied upon, to the assessee, thereby denying the assessee, an opportunity to counter the same. The AR further submitted that this is against the principle of natural justice and strikes of the validity of the assessment completed. 9.2 On examination of the records and it is seen that the material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e law to buttress his contention, [Commission of Income Tax v. Madhya Bharat Energy Corporation Ltd. (2011) 337 ITR 339 Del], which purported to hold that non-issue of notice under 143(2) of the Act on an assessee prior to completion of the reassessment would not be fatal to the reassessment. Learned DR also sought to distinguish the decision in ACIT v. Hotel Blue Moon 321 ITR 362(SC), on the ground that it pertained to a block assessment. Learned DR also stated that during the assessment proceedings the assessee has participated in the assessment proceedings and did not object the jurisdiction of the assessing officer, so notice under section 143(3) has been deemed to be issued. The ld DR also got report from assessing officer, on the issue whether notice under section 143(2) was issued or not during the assessment stage? The said report of the assessing officer is reproduced below: 2. In this case, on the basis of information available on record that Shri Rajendra Jain, bogus entry provider has given accommodation entries to the tune of ₹ 6,41,42,308/- to the assessee for the year under consideration. Accordingly a proposal for reopening the case was put up with Addl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls brought on record. We note that main grievance of the assessee is that assessing officer has not obtained sanction from Commissioner of Income Tax before issue of notice u/s 148 of the Act as required u/s 151 of the Act, therefore the reassessment proceedings are invalid. However, we examined this fact from the paper book of ld DR and noticed that assessing officer has obtained sanction from Commissioner of Income Tax before issue of notice u/s 148 of the Act as required u/s 151 of the Act, therefore, according to us the reassessment proceedings are valid. The sanction obtained from Commissioner of Income Tax before issue of notice u/s 148 of the Act is reproduced below: OFFICE OF THE COMMISSIONER OF INCOME-TAX - II, ROOM NO.227, 2ND FLOOR, AAYKAR BHAVAN, MAJURAGATE, SUK AT. No.SRT/CIT-II/HQ/Re-open/RNS/151(1)/2013-14 Date: 29.03.2014 To The Income-tax Officer, Ward-6(l), Surat. Sub:- Approval u/s. 151 of the Ad for issuing notice u/s. 148 of the Act in the case of Shri Dipakkumar Sirhama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings and assessing officer has examined these or not? Hence, plea of the ld Counsel that assessing officer cannot reopen the assessment beyond a period of four years is not tenable. Hence, according to us assessee has not disclosed all the facts necessary for making the assessment; therefore, we dismiss the ground raised by the assessee. 10. We have also gone through the reasons recorded by the assessing officer, which is placed at assessee`s paper book page No.2 and 3, and noticed that there is no any defect in the reasons recorded by the assessing officer. The assessing officer took the approval from the commissioner and issued notice in accordance with law. Having gone through the reasons recorded , we are of considered opinion that not only there existed new information with the AO from the credible sources, but also that he has applied his mind and recorded the conclusion that assessee took accommodation entries of bogus purchases, and therefore bogus, (clearly meaning that what was disclosed was false and untruthful). The Hon'ble Supreme Court in the case of Phul Chand Bajrang Lal and another vs. ITO 203 ITR 456, was considering the question of reassessment beyon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pined that the jurisdiction of the Income Tax Officer to reassess income arises if he has in consequence of specific and relevant information coming into his possession subsequent to the previous concluded assessment, reason to believe, that income chargeable to tax and had escaped assessment. It was held that even if the information be such that it could have been obtained by the I.T.O. during the previous assessment proceedings by conducting an investigation or an enquiry but was not in fact so obtained, it would not affect the jurisdiction of the Income Tax Officer to initiate reassessment proceedings, if the twin conditions prescribed under Section 147 of the Act are satisfied. 13. As observed earlier not only there existed new information with the AO from the credible sources, but also he had applied his mind and recorded the conclusion that the purchases claimed were non-genuine/bogus and therefore bogus, (clearly meaning that what was disclosed was false and untruthful). The requirements of section 147 r.w.s. 148 have clearly been met; and the reopening is held justified and legal. The contention of the ld Counsel that the report of the Director of Income Tax (Investiga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee of that case that there was no independent application of mind on the part of Assessing Officer and just based upon said information provided by the Excise Department, the authority resorted to Section 148 of the Act to reopen the assessment. This issue in extenso dealt with by the Division Bench and by a detailed judgment, came to conclusion that the Assessing Officer has merely relied upon the show cause notice issued by the Excise Department and has not concluded finally and therefore, there is no illegality or irregularity in arriving at a belief that assessment deserves to be reopen. Relying upon the decision delivered by the Apex Court in the case of Purushottam Das Bangur Another, 224 ITR 362 (SC), it was held that action of reopening of assessment was found to be justified. Similar view has been held in the case of Pushpak Bullion (P) Ltd [2017] 85 taxmann.com 84 (Gujarat) wherein the court held that the AO had tangible materials at his command to form a bonafide belief on the basis of the information received from Investigation Wing. At the stage of issuance of notice the only question is whether there was the relevant material on which a reasonable per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /148 of IT Act, 1961 as per the provisions of the Act and all the conditions laid down for reopening has been fulfilled. Hence, this ground of the assessee fails and the ground of appeal is dismissed. 15. The next stand of assessee is that notice under section 143(2) of the Act was not issued. In this regard, ld DR submits before us that assessee has been participating in the assessment proceedings before the Assessing Officer and he did not raise this issue before the Assessing Officer, therefore at this point the assessee cannot raise this issue. On the perusal of the details it is observed that the assessee has never raised any objection during the assessment proceedings regarding the reopening of the assessment. The assessee had not filed the return of income in compliance to the notice u/s 148 of the Act however participated in the re-assessment proceedings. This issue of reopening being bad in law was raised for the first time during appellate proceedings. The objection raised by the assessee regarding the assumption of jurisdiction by AO by issuance of notice u/s 148 of the Act, is devoid of merits and facts. The AO reopened u/s 147 of the Act. The notice u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed on 02/03/2015 and issued at the assessee's given address which had received back from the postal authorities with remark left. 3. From the above it is apparent that the assessee has raised unsustainable arguments which are not tenable on the basis of documents brought on record. Necessary approval was duly accorded by CIT-II, Surat before issuing notice u/s 148 of the I.T. Act. Further assessee s contention is that no notice u/s 143(2) was issued in its case. Here on perusal of record it is seen that in response to notice issued u/s 148 of the I.T. Act, the assessee did not e-file a revised return of income a copy of e-filling profile the assessee is attached. Accordingly, there is no case for issuance of notice u/s 143(2) of the IT Act. Order under section 144 r.w.s. 147 was accordingly passed. 4. Necessary documents are submitted as paper book. The facts of the case may be appreciated and necessary order may be passed on merit. After going through the report of the Assessing Officer, we have observed that Assessing Officer did not issue the notice under section 143(2) of the Act. We note that notice under section 143(2) should be issued by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the field, therefore, we do not agree with the contention of ld DR to the effect that non-issuance of notice under section 143(2) of the Act does not render the reassessment invalid. 18. We note that Ld. DR for the Revenue also sought to distinguish the decision in ACIT v. Hotel Blue Moon (supra) on the ground that it pertained to a block assessment. We note that Ld Counsel of the Assessee had referred plethora of judgments laid down by Hon'ble High courts following the judgment of the Apex court where in the facts were similar to case at hand and it was held that for completing the assessment under section 148 of the Act, compliance with the procedure of issue of notice under Section 143 (2) was mandatory. This position of law has been further clarified by Delhi high Court in the case of Alpine Electronics Asia Pvt. Ltd. v/s. DCIT (2012) 341 ITR 247 (Del). 19. It has been also contended by ld DR that assessee attended the assessment proceedings regularly and never objected regarding issue and service of notice u/s143(2) so the default can be treated as procedural irregularity u/s 292BB of the Act. We note that as per the provision of section 292BB where an assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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