9911796707
TMI Blog2024 (12) TMI 1167X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Revenue : Shri Sukesh Kumar Jain, CIT DR ORDER PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.335/Del/2019 for AY 2013-14, arises out of the order of the Commissioner of Income Tax (Appeals)-2, Agra [hereinafter referred to as ld. CIT(A) , in short] dated 13.08.2019 against the order of assessment passed u/s 144/147 of the Income-tax Act, 1961 (hereinafter referred to as the Act ) dated 31.12.2019 by the Assessing Officer, DCIT, Circle-2(1)(1), Agra (hereinafter referred to as ld. AO ). 2. Though the assessee has raised various grounds in its appeal before us, the preliminary issue to be decided thereon is as to whether the Learned AO had validly assumed jurisdiction under section 147 of the Act in the facts and circumstances of the instant case. 3. We have heard the rival submissions and perused the materials available on record. The assessee is one of the leading manufacturers of high barrier polymer films exporting to 80 countries worldwide. The assessee caters to clients across industries as the polyester films / slash metallized paper are suitable for various applications such as packaging, adhesive tapes, labeling, and decorations among others. Additionally, the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of bogus sales which are largely unsubstantiated cannot be sustained and should be discarded in limine at the very outset. 4. The return of income for the Assessment Year 2013-14 was filed by the assessee company on 30-11-2013 declaring total income of Rs Nil. The assessment was completed under Section 143(3) of the Act on 24-04-2015 accepting the returned income. Prior to this, a summon dated 29-01- 2013 was issued to the assessee by the Investigation Wing, New Delhi under Section 131(1A) of the Act to which the assessee not only responded, but also explained the transactions entered into with M/s Perfect Polychem Private Limited together with supporting documents such as copy of invoices and respective consignment note substantiating the delivery of goods sold vide reply letter dated 6-2-2013 before the Investigation Wing in response to the summons under Section 131(1A) of the Act. It is pertinent to note that scrutiny assessment proceedings for Assessment Year 2013-14 against the original return filed on 30-11-2013 was completed by the Learned AO under section 143(3) of the Act on 24- 04-2015, accepting the Nil returned income. This scrutiny assessment was framed after looking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO. The assessee also furnished a confirmation letter received from M/s Perfect Polychem Private Limited along with copy of ledger again before the Learned AO on 25-12-2018. 6. On perusal of the reasons recorded, we find that the Learned AO had relied on the statement of Mr. Vijay Goyal who is a director of M/s Perfect Polychem Private Limited which was recorded by the investigation wing on 28-2-2013 along with suspicious transaction report which primarily formed the basis of initiation of reassessment requisition for the first time by the Learned AO. The statement of Vijay Goyal is enclosed in pages 129-131 of the Main Paper Book. We have gone through the entire statement of Mr. Vijay Goyal. In fact, Mr. Vijay Goyal had only stated that his company was engaged in the business of exchange of bills only with five parties and assessee s name did not figure in the said five parties list. Further, no questions whatsoever were even posed by the investigation wing on Mr. Vijay Goyal with regard to transactions carried out by M/s Perfect Polychem Private Limited with the assessee. Hence, there was no occasion at all for Mr. Vijay Goyal to even mention the name of the assessee, much less ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olved in exchange of bills with M/s Perfect Polychem Private Limited, which could have atleast given rise to a suspicion to form a general adverse opinion on M/s Perfect Polychem Private Limited. While this is so, how the Learned AO could have formed a reasonable belief that the income of the assessee had escaped assessment by obtaining accommodation entries through the help of M/s Perfect Polychem Pvt Ltd is not understandable. On the contrary, the assessee had furnished all the possible evidences that could be filed to justify the genuinity of sales made to M/s Perfect Polychem Private Limited. None of those documents and evidences were even sought to be doubted by the Learned AO. Infact these documents were filed by the assessee thrice once at the time of response to summons issued under section 131(1A) of the Act before the investigation wing in 2013; second at the time of scrutiny assessment proceedings under section 143(3) of the Act for the Assessment Year 2013-14 framed for the original return and third during the response to notice under section 133(6) of the Act in the year 2017. After all these evidences, the Learned AO proceeds to reopen the case of the assessee in Marc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfied on the basis of reasons recorded by the Learned AO, when the primary information itself was not available even with the Learned AO at the time of recording reasons. This sort of approval granted under section 151 of the Act was held to be approval granted without application of mind and construed as mechanical by the Hon ble Madhya Pradesh High Court in the case of CIT Vs. S. Goyenka Lime and Chemicals Ltd reported in 56 taxmann.com 390 (MP HC). The Special Leave Petition (SLP) filed by the revenue against this decision was dismissed by the Hon'ble Supreme Court reported in 64 taxmann.com 313. Further, we find that the Hon ble Delhi High court in the case of PCIT Vs. NC Cables Ltd reported in 391 ITR 11 (Del) had also held the same, wherein, the approving authority had merely stated approved in the proforma while granting approval in terms of section 151 of the Act. This approval was held by the Hon ble Delhi and Madhya Pradesh High court to be a mechanical approval. The relevant observation of the Hon ble Delhi High Court in this regard are reproduced herein:- 11. Section 151 of the Act clearly stipulates that the CIT (A), who is the competent authority to authorize ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
