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TMI Blog2024 (5) TMI 1009X X X X Extracts X X X X X X X X Extracts X X X X ..... s 147 to 151 of Income-tax Act, 1961, and following the principles laid down by Hon'ble Supreme Court in the case of GKN Driveshaft (I) Ltd. (2003) 259 ITR 19(S.C.). (ii) That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of ld. AO in passing the impugned reassessment order u/s 144/147, is beyond jurisdiction, bad in law, illegal, unjustified, against the principles of natural justice, void ab initio and barred by limitation also. (iii) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of ld. AO in making aggregate addition of Rs. 124,39,76,000/- on account of share capital/share application money/share premium by treating it as alleged unexplained cash credit u/s 68 and that too by recording incorrect facts and finding and in violation of principles of natural justice and without appreciating/considering the submissions of the assessee company. (iv) That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of ld. AO in making aggregate addition of Rs. 124,39,76,000/- on account of share capital/share application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same is not sustainable on various legal and factual grounds. (x) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of ld. AO in charging the interest u/s 234A, 234B and 234C of the Income-tax Act, 1961." 2. Heard the learned Representatives of both sides at length and case- records perused. 3. The registry has informed that that the present appeal is filed after a delay of 116 days and therefore time-barred. The Ld. AR prayed that the delay has occurred due to Covid-19 Pandemic. The Ld. AR further placed reliance on the order of Hon'ble Supreme Court in Suo Motu Writ Petition (C) No. 3 of 2020 read with Misc. Applications, by which suo motu extension of the limitation-period for filing of appeals w.e.f. 15.03.2020 under all laws has been granted and hence there is no delay in fact. We confronted the Ld. DR who agreed to the submission of Ld. AR. In view of this, the appeal is proceeded with for hearing, there being no delay. Original assessment - matter pending before ITAT, Kolkata Bench: 4. Brief facts, as submitted by Ld. AR for assessee in his Written-Submission, are such that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 5,11,00,000/-. Then, in next Para 3 of reasons, the AO has noted that the assessee has not shown the transactions relating to M/s Bhagya. Thus, referring to all these paras of reasons, Ld. AR submitted that the sole basis of re-opening assessee's case adopted by AO is that the assessee had entered into sham transactions of Rs. 5,11,00,000/- with M/s Bhagya whereas the correct position is such that the assessee did not enter into any transaction with M/s Bhagya whatsoever. Therefore, the reasons recorded by AO are altogether strange and irrelevant to assessee. Hence, the assessee objected to AO's notice u/s 148 vide letter dated 17.04.2019. But the AO rejected assessee's objection vide letter dated 23.09.2019 by taking a side route and relying upon 3rd Proviso to section 147 so as to contend that the AO is empowered to look into issues other than one mentioned in the reasons recorded. The said letter dated 23.09.2019 of AO is re-produced below for an immediate reference: 8. Thereafter, the assessee again filed one more letter dated 22.11.2019 to AO and vide Point No. 2 thereof, categorically informed the AO that there was no transaction undertaken by assessee with M/s Bhagya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7900 & 7901/Mum/2010 (iv) Saif Alikhan Mansurali Vs. ACIT in ITA No. 1093/Mum/2009 10. Therefore, Ld. AR contended, the order passed by AO u/s 147 is not sustainable and the same must be quashed. 11. Per contra, Ld. DR for revenue strongly supported the orders of lower- authorities and submitted that the AO has extracted statements of Shri Sharad Darak who also happens to be a director of assessee-company although those statements were recorded in a search in the case of "Asnani Group'. Ld. DR submitted that in his statements, Shri Sharad Darak has clearly accepted having been engaged in providing/arranging accommodation entries. Further, the statements of Shri Sharad Darak are also corroborated by AO from other material as mentioned in assessment- order. Since Shrad Darak is also a director of assessee-company, the AO is very much justified in concluding that the share capital/share premium shown by assessee was also bogus. Ld. DR further emphasized AO's stand that even in the worst case that the additions made in assessment-order are found to be newer additions not emanating from reasons recorded by AO, then also the AO is right in contending that he is empowered to make addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g question came up before Hon'ble Bombay High Court: "Where upon the issuance of a notice under section 148 of the Income-tax Act, 1961 read with section 147, the Assessing Officer does not assess or, as the case may be reassess the income which he has reason to believe had escaped assessment and which formed the basis of a notice under section 148, is it open to the Assessing Officer to assess or reassess independently any other income, which does not form the subject-matter of the notice?" While deciding, the Hon'ble High Court interpreted the main body of section 147, more particularly the words "and also" appearing therein, as well as the Explanation to section 147 and came to following conclusions: "16. Explanation 3 lifts the embargo, which was inserted by judicial interpretation, on the making of an assessment or reassessment on grounds other than those on the basis of which a notice was issued under section 148 setting out the reasons for the belief that income had escaped assessment. Those judicial decisions had held that when the assessment was sought to be reopened on the ground that income had escaped assessment on a certain issue, the Assessing Officer could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Rajasthan High Court in Shri Ram Singh's case (supra). Parliament has not taken away the basis of that decision. While it is open to Parliament, having regard to the plenitude of its legislative powers to do so, the provisions of section 147(1) as they stood after the amendment of 1-4-1989 continue to hold the field. 18. In that view of the matter and for the reasons that we have indicated, we do not regard the decision of the Tribunal in the present case as being in error. The question of law shall, accordingly, stand answered against the revenue and in favour of the assessee. The appeal is, accordingly, dismissed. There shall be no order as to costs." 14. Thus, the Hon'ble High Court held that if the AO does not assess or reassess the income which he has reason to believe had escaped assessment and which formed the basis of a notice u/s 148, it is not open to AO to assess or reassess independently any other income which does not form the subject-matter of the notice. As far as 3rd Proviso to section 147 is concerned, in our considered interpretation, it does not give any authority to AO to assessee independent incomes, rather it places one more restriction upon AO t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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