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TMI Blog2018 (3) TMI 1948X X X X Extracts X X X X X X X X Extracts X X X X ..... f the matter, we take up the cross objection first. In this case, the original assessment was framed u/s. 153A r.w.s. 143(3) of the Act vide order dated 31.12.2008. A notice u/s. 148 was issued and served on 31.03.201. Since the impugned assessment year is 2004-05, therefore, it can be safely concluded that the notice u/s. 148 of the Act was issued beyond 4 years from the end of the assessment years. 4. The reasons for reopening the assessment are as under:- Annexure-'A' In the Course of investigation made by the Investigation Wing under the DIT (Investigation), New Delhi into the cases of various entry operators and had circulated a CD containing the statement and details of the entry operators and the beneficiaries. The date in the CD shows that M/s Maruti Clean Coal & Power Ltd. PAN No. AADCH4810C has taken accommodation entries of Rs. 35,00,000/- during the F.Y. 2003-04 relating to A.Y. 2004-05 from the Laboratories Overseas (P) Ltd., Parkash Punit Commerce & Consultant, Rubik Export Ltd, Satwant Singh Sodhi Construction, Mestro Marketing & Advertising (P) Ltd, Ethnic Creations (P) Ltd. and Baldev Harish Electricals (P) Ltd. The ACIT has made assessment u/s 153A with secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic Manufacturing Company 308 ITR 38 had the occasion to consider a similar issue and observed as under:- 20. In the reasons supplied to the petitioner, there is no whisper, what to speak of any allegation, that the petitioner had failed to disclose fully and truly all material facts necessary for assessment and that because of this failure there has been an escapement of income chargeable to tax. Merely having a reason to believe that income had escaped assessment, is not sufficient to reopen assessments beyond the four year period indicated above. The escapement of income from assessment must also be occasioned by the failure on the part of the assessee to disclose material facts, fully and truly. This is a necessary condition for overcoming the bar set up by the proviso to section 147. If this condition is not satisfied, the bar would operate and no action under section 147 could be taken. We have already mentioned above that the reasons supplied to the petitioner does not contain any such allegation. Consequently, one of the conditions precedent for removing the bar against taking action after the said four year period remains unfulfilled. In our recent decision in Wel Intertr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CTT (2000) 241 ITR 672 (Mad), similar matter had come up for consideration before the Madras High Court and it has been held as under: "The precondition for the exercise of the power under Section 147 in cases where power is exercised within a period of four years from the end of the relevant assessment year is the belief reasonably "entertained by the AO that any income chargeable to tax has escaped assessment for that assessment year. However, when the power is invoked after the expiry of the period of four years from the end of the assessment year, a further precondition for such exercise is imposed by the proviso namely, that there has been a failure on the part of the assessee to make a return under Section 139 or in response to a notice issued under Section 142 or Section 148 or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year. Unless, the condition in the proviso is satisfied, the AO does not acquire jurisdiction to initiate any proceeding under Section 147 of the Act after the expiry of four years from the end of the assessment year. Thus, in cases where the initiation of the proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mes/addresses/PAN details for A.Y. 2001-02 to 2007-08. 10. Coming back to the reasons recorded for reopening of the assessment as mentioned elsewhere, it can be seen that there is no independent application of mind by the A.O. It appears that the A.O. has borrowed the investigation made by the Investigation Wing under the DIT (Investigation), New Delhi. The Hon'ble High Court of Delhi in the case of G & G Pharma India Ltd. 384 ITR 147 has observed as under: 12. In the present case, after setting out four entries, stated to have been received by the Assessee on a single date i.e. 10th February 2003, from four entities which were termed as accommodation entries, which information was given to him by the Directorate of Investigation, the AO stated: "I have also perused various materials and report from Investigation Wing and on that basis it is evident that the assessee company has introduced its own unaccounted money in its bank account by way of above accommodation entries." The above conclusion is unhelpful in understanding whether the AO applied his mind to the materials that he talks about particularly since he did not describe what those materials were. Once the date on which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , except Annexure, which has been quoted above. Annexure cannot be regarded as a material or evidence that prima facie shows or establishes nexus or link which discloses escapement of income. Annexure is not a pointer and does not indicate escapement of income. Further, it is apparent that the Assessing Officer did not apply his own mind to the information and examine the basis and material of the information. The Assessing Officer accepted the plea on the basis of vague information in a mechanical manner. The Commissioner also acted on the same basis by mechanically giving his approval. The reasons recorded reflect that the Assessing Officer did not independently apply his mind to the W.P. (C) NO. 8067/2010 Page 13 information received from the Director of Income-Tax (Investigation) and arrive at a belief whether or not any income had escaped assessment. 12. Considering the facts of the case in hand in totality qua the reasons for reopening the assessment in the light of the judicial decisions discussed hereinabove, we have no hesitation to hold that the notice issued u/s. 148 of the Act is without jurisdiction and the same is set aside. 13. ITA No. 98/Ahd/2012 is the appeal by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partly on evidence and partly on suspicion. The ld. CIT(A) concluded by holding that the A.O. relied upon the material without conducting the enquiry prescribed by the Tribunal and proceeded by deleting the additions made by the A.O. 19. Aggrieved by this, the revenue is before us. The ld. D.R. strongly supported the findings of the A.O. It is the say of the ld. D.R. that it is incorrect to say that the A.O. disregarded the directions of the Tribunal. The ld. D.R. vehemently stated that the A.O. issued notice to Shri Neeraj Jain at the last available address and the same returned unserved. The ld. D.R. continued by saying that the A.O. did afford the opportunity of cross examination of Shri Neeraj Jain but since the notices/summons could not be served upon Shri Neeraj Jain, it cannot be said the A.O. has violated the directions of the Tribunal. 20. Replying to the submissions of the ld. D.R. the ld. Counsel for the first time took the plea that the entire assessment is bad in law as it has been framed u/s. 153A r.w.s. 143(3) of the Act without there being any incriminating material found at the time of search. Strong reliance was placed in on the decision of the Hon'ble High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld as under:- "that as a jurisdictional provision which was mandatory and enacted in public interest could never be waived and the want of jurisdiction was discovered by the Appellate Assistant Commissioner, there was no question of waiver by the assessee. No question of finality of the remand order of the Tribunal could arise because the mandatory conditions for founding jurisdiction for initiating reassessment proceedings had not been fulfilled. The order of reassessment was, therefore, not valid." In view of the ratio of the above decision of Hon'ble Gujarat High Court, it is evident that jurisdictional provision, which is mandatory, can be taken up in the second round of litigation. We, therefore, respectfully following the above decision of Hon'ble Gujarat High Court permit the assessee to raise the issue relating to validity of the order in second round of litigation. Accordingly, we proceed to examine the assessee's contention on merits." 23. Coming to the merits of the case as mentioned elsewhere, there is no dispute that no incriminating material has been found at the time of search and therefore it is now settled proposition of law that no assessment u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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