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TMI Blog2023 (3) TMI 712X X X X Extracts X X X X X X X X Extracts X X X X ..... ible material and the formation of reason to believe that income had escaped assessment, then, the information received from Investigation Wing cannot be said to be tangible material per se without further inquiry being undertaken by the AO. In the present case also the AO initiated reassessment proceedings on the wrong premise that the assessee has not filed return of income for AY 2009-10 and the AO, without verifying and creating a link between the information received from the Investigation Wing and the formation of reason to believe that income has escaped assessment, initiated reassessment proceedings u/s 147 of the Act and issued notice u/s 148 of the Act and, therefore, the issue is squarely covered in favour of the assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... ven. In view of above, in the interest of justice it is most humbly prayed that the order of the Ld. CIT-Appeals Ghaziabad is an undue hardship upon the appellant and be quashed. The appellant craves to add, altar or amend any or entire of the grounds of appeal." Application for admission of additional ground 3. The ld. Counsel of the assessee submitted that the assessee wants to raise ground No.7.2 as additional legal ground wherein the assessee has challenged the issuance of notice u/s 148 of the Act without proper application of mind and without conducting independent inquiry by the AO to have reason to believe that income has escaped assessment for the relevant assessment year. Placing reliance on the judgement of the Hon'ble Supreme Court in the case of NTPC vs. CIT, 229 ITR 383 (SC), the ld. Counsel submitted that the Hon'ble Supreme Court has held that where the issues are purely legal in nature which goes to the root of the matter and where no new facts are required to be invoked, should be admitted for adjudication being legal objection of the assessee. 4. Replying to the above, the ld. Sr. DR strong opposed the admission of additional ground. However, he did not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.7437/Del/2018 for AY 2009-10 in the case of Shri Omvir Singh vs. ITO, the ld. Counsel submitted that the issue is squarely covered by the said order of the coordinate Bench of the ITAT wherein the Tribunal, relying on the judgement of the Hon'ble jurisdictional High Court of Delhi in the case of RMG Polyvinyl (I) Ltd. (supra) has held that the AO has wrongly assumed the jurisdiction and, accordingly, notice u/s 148 of the Act and consequent reassessment order u/s 143(3)/147 of the Act have been quashed. 7. Replying to the above, the ld. Sr. DR submitted that on receipt of AIR information the AO issued notice to the assessee which was delivered on 04.11.2015, but, the assessee did not make any compliance of the said letter. Therefore, the AO was right in having reason to believe that income has escaped assessment for AY 2009-10 and, thus, he assumed valid jurisdiction to issue notice u/s 148 of the Act and to initiate reassessment proceedings. 8. On careful consideration of the above rival submissions, first of all, from the copy of return of income filed by the assessee, I clearly note that the assessee did file return of income for AY 2008-09 on 24.02.2010 showing the total in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he grab of share application money/ expenses/gift/purchase of shares etc. They have worked for commission. The assessee is a company incorporated on 11.09.1998. It is noticed that there is no return of come is available in the AST database of Income-tax Department. Therefore. it is clear that the assessee has not filed return of income for the A. Y. 2004-05 and consequently has not offered any income for taxation. Sources of the transactions are not explained. I, therefore, have reason to believe that on account failure on the part of the assessee to disclose truly and fully all the material facts necessary for assessment for the above assessment year, the income chargeable to tax to the extent of accommodation entry of Rs. 1,56,00,000 has escaped assessment within the meaning of section 147 of I.T. Act. 1961. To bring to tax the income which has escaped assessment, I proposed to issue notice u/s. 148 of the I.T. Act. 1961. Since, four years has expired from the end of the relevant assessment year, and no scrutiny assessment was completed under Section 143(3) in this case for the said assessment year, the reasons recorded above for the purpose of reopening of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... done if he was aware, even at the stage of consideration of reopening of the assessment that a return had in fact been filed by the Assessee and that the extent of the accommodation entries was to the tune of Rs.78 lakh and not Rs.1.56 crore would be a matter of pure speculation at this stage. He may or may not have come to the same conclusion. But that is not the point. The question is of application of mind by the AO to the material available with him before deciding to reopen the assessment under Section 147 of the Act. ------- ------- 13. As in the above case, even in the present case, the Court is unable to discern the link between the tangible material and the formation of the reasons to believe that income had escaped assessment. In the present case too, the information received from the Investigation Wing cannot be said to be tangible material per se without a further inquiry being undertaken by the AO. In the present case the AO deprived himself of that opportunity by proceeding on the erroneous premise that Assessee had not filed a return when in fact it had." 11. In view of the above, I respectfully note that their lordships, speaking for the jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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