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TMI Blog2024 (10) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... AO under Section 148(2) and thereafter, by the PCIT u/s 151 of the Act, the assessee points out that the financial year is wrongly mentioned, approval granted by the PCIT based on incomplete Performa and also satisfaction of the Addl. CIT that the case requires verification which is not the same expression as the chargeable income has escaped assessment referred to in the main provision of Section 148 of the Act. On perusal of the objections raised on behalf of the assessee, we find that for multiple reasons, on standalone and cumulative basis, the reopening under Section 147 of the Act does not meet the strict requirement of law at all and thus, jurisdiction usurped under Section 147 is apparently without sanction of law. We thus find overwhelming potency in the plea of the assessee that reasons recorded and approval granted thereon u/s 151 do not meet the requirement of law and hence the issuance of notice under Section 148 based on cryptic reasons combined with a mechanical approval of the Pr.CIT under Section 151 do not pass the test of judicial scrutiny. We thus have no hesitation to hold that the notice issued under Section 148 is without jurisdiction and consequently reasse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditional ground, the prayer of admission of additional ground which is not set forth in memorandum of appeal is being admitted for adjudication in terms of Rule 11 of Income Tax [Appellate Tribunal] Rules, 1963. The additional ground so raised is reproduced hereunder: In the facts and circumstances of the case and under law, the Revenue was not justified in assuming jurisdiction u/s 147/148 of the Act in order to take cognizance of the alleged incriminating material found in the search of the other assessee in complete disregard of the provisions of specific section 153C(1) of the Act clearly applicable in the case. 4. Briefly stated, the assessee company filed return of income for the Assessment Year 2010-11 in question on 15.11.2010 declaring total income of Rs. 1,42,060/-. The return filed was processed under section 143(1) of the Act on 16.04.2011. Thereafter, certain information was received by the AO from the office of the director of Income Tax (Investigation-II), New Delhi vide communication dated 12.03.2013 mentioning therein that a search operation was carried out in the case of Surender Kumar Jain group of cases, wherein it came to light that such group is engaged in pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO for exercising powers available under Section 147 of the Act rather than the legal recourse available under section 153C of the Act as per the scheme of the Act. The learned Counsel for the assessee made wide ranging objections towards lack of jurisdiction which are dealt with at appropriate place in the succeeding paragraphs. The learned Counsel also assailed the action of the AO and CIT(A) on aspects of merits. 9. The Revenue on the other hand, defended the action of the Assessing Officer and CIT(A) both on the point of jurisdiction as well as merits of the additions amounting to Rs. 60 lakhs under Section 68 of the Act and Rs. 1,20,000/- under Section 69C of the Act carried out by the AO. 10. As noted above, the assessee has inter alia challenged the jurisdiction of the Assessing Officer assumed under Section 147 r.w.s 148 r.w.s 151 of the Act. 10.1 Since, the challenge to the legality of reopening being jurisdictional one and goes to the root of the whole controversy, it may be appropriate to adjudicate this aspect of the appeal first. 10.2 The approval granted by the PCIT under Section 151 r.w.s 148 of the Act being germane to the adjudication of jurisdictional issue, are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nformation received from Investigation Wing. return of income, copies of relevant seized documents, findings of the Assessing Officer and CIT(A) in the case of Sh. S.K. Jain. After making further investigation, the AO has formed his belief that income amounting to at least Rs. 60,00,000/- has escaped assessment. Hence, from the reasons recorded by the AO, it is inferred that income to the extent of Rs. 60,00,000/- has escaped assessment. This issue needs detailed verification In view of reasons recorded by AO and records, it is requested that the proposal to issue notice u/s 148 for A.Y. 2010-11 may kindly be approved. 12. Whether the Pr. CIT is satisfied on the reasons on the reasons recorded by the AO that it is a fit case for the issue of notice under section 148 of the Income Tax Act, 1961 Perused reasons recorded by the AO. For the reasons recorded by me separately in Annexure-1 (copy attached), I am satisfied that this is a fit case for issue of notice u/s 148 of the I.T. Act. Accordingly. Approval is accorded. Sd/- Pr. Commissioner of Income Tax Delhi-06, New Delhi Dated: 21/3/2017 10.3 The List of Credits received by way of share application money/loan etc. under dispute re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on 28.03.2013 prior to initiation of reassessment proceedings on 25.03.2017. The obvious reason of action under Section 147 of the Act is some material found in the course of search on S.K. Jain Group. The information received by the AO was on 12.03.2013 whereas action under Section 147 of the Act was initiated in March, 2017 i.e. after a gap of 4 years or thereabout. In the meantime, the assessment of the lender / subscriber companies have naturally been completed which requires to be taken into account. The AO totally ignored such circumstances showing non-application of mind to the subject matter. A reference was made to the judgment of the Jurisdictional High Court in the case of Rajiv Agarwal vs. ACIT 395 ITR 0255 (Del) wherein it was observed that even in cases where the AO comes across certain unverified information, it is necessary for him to take further steps, make inquiries and garner further material and if such material indicates that income of an Assessee has escaped assessment, form a belief that income of the Assessee has escaped assessment. Thus, there is non-application of mind by the AO and the AO could not be said to have reason to believe as to justify reopen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53C of the Act as the material relied upon has been collected from the premises of the searched person who is susceptible to assessment under Section 153A of the Act. The assessee contends that in identical facts, re-assessment proceedings based on seized material from S.K. Jain Group initiated under Section 147/148 of the Act were quashed in view of independent Code of Section 153C of the Act. The decisions rendered by the Co-ordinate Benches include ; (i). Shyam Sunder Khandelwal vs. ACIT D.B. W.P.(C) No. 18363/2019 dated 19.03.2024 (Raj.), (ii). Shri Dinakara Suvarna vs. DCIT [2022(7) TMI 800 - Kar] (iii). Shri Karshni Metals P. Ltd. vs. ITO 2024 (8) TMI 1366 (ITAT Del) (iv). M/s. Mah Impex Pvt. Ltd. [2024 (1) TMI 411 ITAT Delhi] (v). M/s. City Life Projects P. Ltd. ITA No.2668/Del/2019 (vi). M/s. Saurashtra Color Tones Pvt. Ltd. vs. ITO ITA 6276/Del/2018 dated 22.01.2020 (SMC) relying on Shri Adarsh Arawal vs. ITO 2020 ITA No.777/Del/2019 dated 14.01.2020 (DB) and (vii). Nawal Oils Containers P. Ltd. vs. ITO ITA No.852/Del/2019 dated 04.03.2020 (SMC). 13. We shall address ourselves with the main objections raised on account of wrongful assumption of jurisdiction under section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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