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TMI Blog2019 (4) TMI 2162X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. [ 2010 (10) TMI 92 - DELHI HIGH COURT] , and in the case of the assessee are similar and de void of any iota of satisfaction derived by the Assessing Officer. Assessee appeal allowed. - Shri Laliet Kumar, Judicial Member And Shri B.R.R. Kumar, Accountant Member For the Assessee : Sh. Vinit Kumar Bindal, CA Ms. Sweety Kothari, CA. For the Revenue : Shri P.V. Gupta, Sr. DR. ORDER PER LALIET KUMAR, JUDICIAL MEMBER : This appeal is preferred by the assessee against order dated 27.02.2015 passed by the Ld. CIT (Appeals)-7, New Delhi for assessment year 2002-03 on the following grounds reads as under :- I. The CIT (A) erred in law and on facts in upholding the reassessment order passed u/s 147 and notice issued u/s 148 as valid ignoring the fact that the notice u/s 148 has been issued merely on the basis of the information received from Investigation Wing. Thus, the assessment so made should be cancelled. II. The CIT (A) erred in law and on facts in confirming the addition of Rs. 12,50,000/- for the amount received towards the share capital from five limited companies ignoring the facts, evidences and submissions placed on record. Thus, the addition so made should be deleted. III. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or reassessed to confer jurisdiction under section 147(a) two conditions were required to be satisfied, firstly the AO must have reason to believe that income profits or gains chargeable to income tax have escaped assessment, and secondly he must also have reason to believe that such escapement has occurred by reason of either (i) omission or failure on the part of the assessee to disclose filly or truly di material facts necessary for his assessment of that year. Both these conditions were conditions precedent to be satisfied before the AO could have jurisdiction to issue notice under section 148 read with section 147(q). But under the substituted section 147 existence of only the first condition suffices. In other words if the AO for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. 18. So long as the ingredients of section 147 are fulfilled, the AO is free to initiate proceeding under section 147 and, failure to take steps under section 143(3) with the AO powerless to initiate reassessment proceedings even when intimation 143(1) had been issued. 5.5 The Hon'ble Courts in the judgments mentioned above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment proceedings before the Tribunal in the second round of litigation, when in the first round, the Tribunal had remanded the order for limited purpose? 5. In the matter of investments Corp. Ltd. Vs. CIT (1992) 194 ITR 548 (Bom) (556) wherein paragraph 23 to 28 it was held as under :- 23. We, therefore, hold that a ground by which the jurisdiction to make assessment itself is challenged can be urged before any authority for the first time 24. This, however, does not solve the problem before us. All the cases referred to by us above are the cases dealing with same round of litigation In the case before us, the new ground was raised for the first time not in appeals arising out of the same proceedings. It was taken in collateral proceedings. Reassessment under section 147 was made on August 27,1959. More or less a consent order was obtained in appeal there against as a result of which the order of reassessment stood set aside for the purpose of giving an opportunity to the assessee to prove the genuineness of certain cash credits. The grounds questioning jurisdiction to reassess was not raised even in the second round of proceedings before the Income-tax Officer who completed rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly on the issued in appeal and, in that event also, the Income-tax Officer cannot re-examine other issues. Consequently, the assessee may not be able to raise contentions which were not raised him in the original proceedings. 25. However, in this case, it is not really necessary to go into this questions. The impugned ground raised before the Appellate Assistant Commissioner admittedly goes to the very root of the Income-tax Officer's jurisdiction to make reassessment. 26. In our view, the jurisdiction of the Income-tax Officer to initiate reassessment proceedings under section 34 of the Act depends solely on the existence of the conditions precedent prescribed by law and the jurisdiction defect, if any, cannot be made good be relying on the order of remand passed by the Appellate Assistant Commissioner. In fact, the Appellate Assistant Commissioner has no jurisdiction under section 31 of the 1922 Act to issue directions to the extent of conferring jurisdiction upon the Income-tax Officer which he is not lawfully seized of. This view was taken by the Madras High Court in the case of N. Naganatha Iyer v. CIT [1966] 60 ITR 647. The said decisions was followed by the Gujarat High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e additions. The AO at page 1 of the assessment order had recorded that the reopening was done pursuant to recording of the reasons by the assessing officer on the basis of information received from investigation Wing . The Ld. AR for the assessee has drawn our attention to the reasons recorded for reopening and in the said reasons it was mentioned that : Reason recorded for reopening The Investigation Wing, New Delhi has sent details information. As per information, the assessee company s name appears in the list of beneficiaries who have obtained accommodation entries from the following parties: Beneficiary Name Beneficiary Bank Branch Value of entry taken Date on which entry taken Name of account holder of entry giving account Bank from which entry given Standard Chartered Bank Connaught Place 2,50,000/- 12, January, 2002 Enpol (P) Ltd. Jai Laxmi Cooperative Bank Standard Chartered Bank Connaught Place 2,50,000/- 12, January, 2002 Amba Alloys (P) Ltd. Jai Laxmi Cooperative Bank Standard Chartered Bank Connaught Place 2,50,000/- 12, January, 2002 Landmark Communication (P) Ltd. Jai Laxmi Cooperative Bank Standard Chartered Bank Connaught Place 2,50,000/- 12, January, 2002 Saurabh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly different from the provisions as they stood prior to such substitution. Under the old provisions of section 147, separate clauses (a) and (b) laid down the circumstances under which income escaping assessment, for the past assessment years could be assessed or reassessed to confer jurisdiction under section 147(a) two conditions were required to be satisfied, firstly the AO must have reason to believe that income profits or gains chargeable to income tax have escaped assessment, and secondly he must also have reason to believe that such escapement has occurred by reason of either (i) omission or failure on the part of the assessee to disclose filly or truly di material facts necessary for his assessment of that year. Both these conditions were conditions precedent to be satisfied before the AO could have jurisdiction to issue notice under section 148 read with section 147(q). But under the substituted section 147 existence of only the first condition suffices. In other words if the AO for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. 20. So long as the ingredients of section 147 are fulfilled, the AO i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n done in the present case by the AO and therefore reopening done by the assessing officer is liable to be set-aside. The assessee relied upon judgment of Delhi High Court in the matter of Dharamveer Singh Rao Vs ACIT 2017 TIOL 2447. In the said matter it was held that the satisfaction based on the borrowed satisfaction is no satisfaction in the eyes of law and hence the assessment made by assessing officers based on such satisfaction is liable to set aside. Further the assessee relied upon the decision in the matter of Sarthak securities 329 ITR 110, wherein in the identical facts the High Court has quashed the notice under section 148 of the act. 13. On the other hand the Ld. DR, had submitted that the reasoning given by the lower authorities is correct and the issue is not required to be decided against the revenue as there is proper application of mind by the lower authorities. 14. We have heard the rival contention of the parties and perused the material available on record and the Judgments relied upon by the parties before us. The reasons for reopening are given in the paperwork by the assessee and the content of which are reproduced herein above which clearly shows that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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