9911796707
TMI Blog2025 (1) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... statements recorded from various persons. We further emphasize here that the department s allegation against the assessee right from the beginning is that he had indulged in various accommodation entries outside India in collusion with the searched person Shri Manish Jain. CIT-DR vehemently submits that the appellant herein has not even filed his bank statement right from scrutiny till date resulting this factual position. She also quotes Section 124(3) of the Act that even the assessee is precluded from challenging the Assessing Officer s jurisdiction as per Abishek Jain [ 2018 (6) TMI 211 - DELHI HIGH COURT] . We find merit in the Revenue s instant arguments that the learned assessing authority not only went by the relevant tangible materials initiating section 148/147 proceedings but also it s jurisdiction could not be questioned at this stage in the foregoing terms. Departmental authorities herein had not served any notice during the course of assessment, and therefore, the same deserves to be quashed - No substance therein as he has neither challenged the AO s action taking recourse to Section 144 proceedings by filing all the relevant notice, nor his passport details form par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019-20 Dated 19.12.2023 271(1)(C) 17. 2015-2016 747/Del/2024 CIT(A),Kanpur-4/10382/2019-20 Dated 18.12.2023 147/144 18. 2015-2016 748/Del/2024 CIT(A),Kanpur-4/10383/2019-20 Dated 19.12.2023 271(1)(C) 2. Heard both the parties at length. Case files perused. 3. Both the parties are ad-idem during the course of hearing the Assessee(s) instant eighteen appeals involve identical questions of law and on facts; as the case may be. Faced with this situation, we treat the first and foremost Assessment Year 2007-2008 herein as the lead Assessment Year involving the assessee(s) quantum appeal ITA No.695/Del/2024 raising the following substantive grounds: 1. The Impugned Order dated 18.12.2023 passed u/s 250(6) by Ld.CIT(A), NOIDA(UP) upholding the assessment order dated 06.08.2018 passed by the Ld.A.O. under Sections 144/147 of the Income Tax Act for the A.Y. 2007-08 is baseless, frivolous and against the settled principles of law. 2. The Hon ble CIT(A) has failed to consider that the notice issued by the Ld. AO under Section 147 of the IT Act is not valid and non est in the eyes of law. Therefore, the proceedings emanating therefrom are also bad in law and thus the notice along with the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te. c. Applicability of Section 147/148 IT Act is unwarranted in the present facts and circumstances as laid down by the Ld. AO himself. d. The present proceedings have been initiated in a mechanical manner without any application of mind and no reasons have been given for the same. e. The non-application of mind on the part of the Ld. AO and further affirmation by the Hon ble CIT(A) are illegal and liable to be set aside on this ground alone. f. The basis for initiation for re-assessment proceedings is statements made by the third-parties, i.e. Mr. Manish Jain and Mr. Rakesh Jain, and reliance has also been placed upon the material seized during such investigations- wherein certain allegations have been made against the Assessee. g. The Ld. AO has also placed reliance upon the search conducted upon the Assessee and the materials seized during the search. It is pertinent to state that the material made available to the Ld. AO has not been supplied to the Assessee and only copy of the statements have been supplied. h. It is pertinent to state that the Assessee has not been arrayed as an accused in pursuance of the investigations referred by the Ld. AO. Mere mentioning of the name by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was revealed during the search that Sh. Manish Kumar Jain was engaged in the business of transfer of Foreign exchange. It was further revealed that Sh. Manish Kumar Jain had opened various bogus and Benami firms registered from different addresses at Ghaziabad. It has further been reported that huge cash was deposited on daily basis in various bank accounts after which the money was remitted to other four to five bank accounts from where the said money was finally remitted to companies concerns based in Hong Kong controlled directly/indirectly by 5h. Manish Kumar Jain. 66 firms/concerns were identified which were operated by Sh. Manish Kumar Jain as reported by the AO in the assessment order. Further, it has been reported by the AO that information was also received from DRI Lucknow through Investigation Wing Ghaziabad wherein, it was reported that Sh. Manish Kumar Jain in his statement recorded before the DRI Authorities stated that the remittances to Hong Kong were made as per the directions of Shri Sanjeev Wadhwa of M/s. Kamakhya Forex Pvt. Ltd. Karol Bagh, New Delhi and Sh. Aj y Goyal Prop. M/s. Brother Impex Krishna Overseas. He further stated that most of the remittances wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies i.e., Income Tax, The Customs and the Enforcement Directorate, It is further important to emphasize that the statements recorded before the Income Tax Authorities and Enforcement Directorate Authorities are admissible as evidence in the court of law. No doubt it has been held in various judicial pronouncements that the statements must be supported by the corroborative evidence. In the present case; bogus the plethora of evidence in the nature of multiple bogus entities, multiple bogus accounts, forged voter ID cards and PAN cards, remittances abroad against bogus imports supported with the detailed statements of various persons discussed above clearly establishes that the case has been reopened on the basis of sound and clear evidence. 6,1.6 Reopening of case It is seen from the assessment order that the case has been reopened u/s 148 after issuance of notice on 31.03.2018 and hence the contention of the AR that the issuance of notice is beyond time is without basis. The proceedings u/s 148/147 in this case were initiated on the basis of the information shared by the Investigation Wing/DRI/Enforcement Directorate and record available with the AO. A perusal of the reasons record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from Investigation Wing regarding bogus entries of gifts and capital gains - Whether, intonation from enquiry by Investigation Wing formed reason 10 believe that income had escaped assessment and reopening of assessment under section 147 was justified. Held, yes It has further been held by the Hon'ble High Court of Rajasthan in the case of Ankit Agrochem (P.) Ltd. vs. Joint Commissioner of Income-tax, Range-1, Bikaner reported at [2018] 89 taxmann.com 45 (Rajasthan)as under: *Section 68, read with section 148, of the Income-tax Act, 1981 - Cash credit (Share capital) - Assessment year 2013-14 - Directorate of Investigation (DI) informed Assessing Officer that assessee-company had received share application money from several entities which were companies with no real business and were only engaged in business of providing bogus accommodation entries to beneficiary concerns - It was noted that said information was further confirmed by directors/dummy directors/key persons of said entities in their respective statements - Whether reassessment notice against assessee on basis of said information was justified - Held, yes [Para 14) [in favour of revenue) Further, the Hon'ble H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of information received from other agencies, though the Assessing Officer has reopened the case on the basis of documents on record as well as the information received from the Investigation Wing. 6.1.8 As highlighted in the judgments quoted above, the AO has power to reopen a case, provided there is tangible material to come to the conclusion that there is escapement of income of the assessee. The reason must have a live link with the formation of belief. At the stage when the AO reopens an assessment, it is not necessary that the material should conclusively prove or establish that the income has escaped assessment. Only a reason to believe at the stage of reopening is all that is relevant. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the material would conclusively prove the escapement of income is not the concern at that stage. This is so because the formation of belief by the AO is within the realm of subjective satisfaction. Reliance in this regard is placed on the judgment of the Hon'ble Apex Court In the case of ACIT Vs. Rajesh Jhavri, Stock Bro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has clearly conveyed that all the notices were duly served upon the assessee at his declared and last known addresses. The AO has further contended that the assessee did not intimate/update any change of address in the database of the department and it was expected of the AO to issue the notices at the last known addresses of the assessee in the Departmental Database. The Hon'ble Supreme Court in the case of Priyanka Kumari vs. Shailendra Kumar in IA No. 126261/2019 in order dated 13.10.2023 has held as under: As per the office report the notice issued to the sole respondent has returned with the remarks unclaimed . As it was held by the Hon'bla Supreme Court in K. Bhaskaran VS. Sankaran Valdyan Balan and Another. /1999) 7 Supreme Court Cases 510 that when notice is returned as 'unclaimed. it shall be deemed to be duly served upon the addressee and it is a proper service of notice. In the case of Ajeet Seeds Limited Vs K. Gopala Krishnaiah (2014)12 SCC 685 (2014), the Hon'ble Court while interpreting Section 27 of General Clauses Act 1897 and also Section 114 al Evidence Act 1872 held as under: Section 114 of the Evidence Act, 1872 enables the court to presume that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(2) could not be Issued to the assessee. The contention of the AO is found to be correct and the submissions of the appellant on this count also does not carry any merit. 6.1.11 Wrong assumption of jurisdiction The AR has further submitted that the shifting of jurisdiction of the appellant to Ghaziabad was wrong. The AO in above respect has submitted in his remand report dated 20.10.2023 that the case of the assessee was centralized us 127 by order of PCIT, Delhi dated 03.10.2017 meaning thereby that the changed of jurisdiction was done after following the due procedure of law. Hence these contentions of the appellant also do not carry any substance. In view of above discussion, the reopening of the case u/s 148 of the Income Tax Act, 1961 is held to be valid and these grounds of appeal of the assessee are dismissed. 6.2 Grounds of Appeal Nos. 7, 8 9: In these grounds the AR has challenged the addition of Rs. 33,61,82,374/- plus disallowance of expenses wherein, the appellant has stated that the additions have been made without giving adequate opportunity of hearing, the addition being made arbitrarily. During the course of appellate proceeding the submissions of the appellant w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncies was not allowed to the appellant. it is not a compulsive requirement to allow cross-examination of the persons whose statements have been recorded against the assessee. The Hon'ble Supreme Court in the case of R. L. Traders vs. Income-tax Officer, Ward 47(1) reported at [2018) 100 taxmann.com 332 (SC) has held as under: Where High Court upheld Tribunal's order rejecting assessee's application for rectification of order on ground that while making addition under section 68, assessee was not given an opportunity to cross examine person who allegedly gave accommodation entries, SLP filed against decision of High Court was lo be dismissed* Further, the Ld. ITAT Bombay Bench E In the case of GTC Industries Ltd. VS. Assistant Commissioner of Income-tax reported at [1998) 65 ITD 380(BOM) has held as under: - Whether right to cross-examine witness who made adverse report is an invariable attribute of requirement of dictum audi alteram partem - Held, no - Whether where statements of witnesses were only secondary and of subordinate material used to buttress main matter connected with amount of - additions, it had to be held that there was no denial of principles of natural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar right. Judged by this principle, in the background of the facts and circumstances mentioned before, we are of the opinion that there has been no real prejudice caused by infraction of any particular rule of natural justice of which appellant before us complained in this case. See in this connection observations of this Court in the case of Union of India Anr. v. P.K. Roy Ors. where this Court reiterated that the doctrine of natural justice cannot be imprisoned within the strait-jacket of a rigid formula and its application depends upon the nature of the jurisdiction conferred on the administrative authority, upon the character of the rights of the persons affected, the scheme and policy of the statute and other relevant circumstances disclosed in a particular case . See also in this connection the observations of Hidayatullah, C.J., in the case of Channabasappa Basappa Happali v. State of Mysore. In our opinion, in the background of facts and circumstances of this case, the nature of investigation conducted in which the appellant was associated, there has been no infraction of that principle. In the premises, for the reasons aforesaid, there has been in the facts and circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s based on tangible material comprising of the evidence collected in post such enquiries and statements recorded from various persons. We further emphasize here that the department s allegation against the assessee right from the beginning is that he had indulged in various accommodation entries outside India in collusion with the searched person Shri Manish Jain. The Learned CIT-DR vehemently submits that the appellant herein has not even filed his bank statement right from scrutiny till date resulting this factual position. She also quotes Section 124(3) of the Act that even the assessee is precluded from challenging the Assessing Officer s jurisdiction as per Abishek Jain Vs ITO (2018) 405 ITR-I(Delhi). 7. We find merit in the Revenue s instant arguments that the learned assessing authority not only went by the relevant tangible materials initiating section 148/147 proceedings but also it s jurisdiction could not be questioned at this stage in the foregoing terms. 8. Learned Counsel s next contention is that the departmental authorities herein had not served any notice during the course of assessment, and therefore, the same deserves to be quashed. Assessee seeks to highlight th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sh. Manish Kumar Jain had opened various bogus and Benami firms registered from different addresses at Ghaziabad. It has further been reported that huge cash was deposited on daily basis in various bank accounts after which the money was remitted to other four to five bank accounts from where the said money was finally remitted to companies concerns based in Hong Kong controlled directly/Indirectly by Sh. Mango Kumar Jain. 66 firms/concerns were identified which were operated by Dish Kumar Jain as reported by the AO In the assessment order. Further, it has been reported by the AO that information was also received from DRI, Lucknow through Investigation Wing Ghaziabad wherein, It was reported that Sh. Manish Kumar Jain in his statement recorded before the DRI Authorities stated that the remittances to Hong Kong were made as per the directions of Sh. Sanjeev Wadhwa of M/s. Kamakhya Forex Pvt. Ltd. Karol Bagh, New Delhi and Sh. Ajay Goyal Prop. M/s. Brother Impex Krishna Overseas. He further stated that most of the remittances were made on the directions of Sh. Sanjeev Wadhwa, Similar information was also reported in the Investigation Carried out by Enforcement Directorate against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;ble Supreme Court in K. Bhaskaran Vs. Sankaran Vaidhyan Balan and Another, (1999) 7 Supreme Court Cases 510 that when notice is returned as 'unclaimed', it shall be deemed to be duly served upon the addressee and it is a proper service of notice, In the case of Ajeet Seeds Limited Vs. K. Gopala Krishnaiah (2014)12 SCC 685 (2014), the Hon ble Count while interpreting Section 27 of General Clauses Act 1897 and also Section 114 of Evidence Act 1872 held as under: Section 114 of the Evidence Act, 1872 enables the court to presume that in the common course of natural events, the communication sent by post would have been delivered at in address of the addressee. Further, Section 27 of the General Clauses Act, 1897 gives rise to a presumption that service of notice has been affected when it is sent to the correct address by registered post. it is not necessary to aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addresses is deemed to have knowledge of the notice. Unless and until the contrary is proved by the addresses, service of notice is deemed to have been affected at the time at which the letter would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh bank accounts of bogus entities before being remitted abroad. The statement of various persons as already discussed under the heading of brief facts, clearly highlights the nexus and modus operandi of the activities of the appellant. It has also been reported that against the remittances made to Hong Kong, actual imports did not happen. In result, the whole of transactions routed through bank accounts during the said year was rightly treated by the AO as income of the assessee and consequently, the penalty was also levied. The appellant has not been able to explain the sources of cash and the credits in the accounts of various bogus entities being managed by him under his directions through Sh. Manish Kumar Jain. The circumstances of the case and the evidences mentioned in the penalty order, make it a fit case for levy of penalty. The Hon'ble Supreme Court in the case of MAK Data (P.) Ltd. Vs CIT reported at [2013] 38 taxmann.com 448 (SC)/[2013] 358 ITR 593 (SC)/{2013] 263 CTR 1 (SC) has held that since the assessee did not offer any explanation for the difference between the returned income and the assessed income, the explanation to Section 271(1)(c) clearly applies and pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AR during the course of appellate proceedings. 12. We have given our thoughtful consideration to assessee s instant penalty appeal as well. Suffice to say, the assessee has admittedly not filed any reasonable explanation; much less a convincing u/s 271(1)(c) Explanation 1(A) (B) so as to get out of the rigor of concealment and furnishing of inaccurate particulars of income therein. We thus quote MAK Data (P) Limited Vs CIT(2013) 358 ITR 593(SC) to conclude that the learned lower authorities have rightly levied the impugned penalty in his case this lead penalty appeal ITA No.694/Del/2024 which also stands upheld therefore. 13. Same order to follow in the assessee s remaining sixteen corresponding quantum and penalty appeals as well since raising identical questions in Law and on facts; as the case may be. To sum up these assessee s eighteen appeals ITA Nos. 694/Del/2024, 695/Del/2024, 707/Del/2024, 708/Del/2024, 735/Del/2024, 736/Del/2024, 737/Del/2024, 738/Del/2024, 739/Del/2024, 740/Del/2024, 741/Del/2024, 742/Del/2024, 743/Del/2024, 744/Del/2024, 745/Del/2024, 746/Del/2024, 747/Del/2024 and 748/Del/2024 are dismissed in above terms. A copy of these common order be placed in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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