JAYANTILAL RAJMAL SETH,MUMBAI vs. DCIT-CC-4(3), MUMBAI, MUMBAI

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2.1 In response thereto, the assessee filed return of income on response thereto, the assessee filed return of income on response thereto, the assessee filed return of income on 29.06.2021 declaring the same income as disclosed in the revised 29.06.2021 declaring the same income as disclosed in the revised 29.06.2021 declaring the same income as disclosed in the revised return filed earlier on 03.06.2019 under section 139(5) of the Act. return filed earlier on 03.06.2019 under section 139(5) of the Act. return filed earlier on 03.06.2019 under section 139(5) of the Act. The reassessment was thereafter completed on 25.02.2022, wherein The reassessment was thereafter completed on 25.02.2022, wherein The reassessment was thereafter completed on 25.02.2022, wherein no addition was made in respect of the alleged accommodation no addition was made in respect of the alleged accommodation no addition was made in respect of the alleged accommodation entry from M/s Aneri Fincap Ltd. The Assessing Officer, in fact, entry from M/s Aneri Fincap Ltd. The Assessing Officer, in fact, entry from M/s Aneri Fincap Ltd. The Assessing Officer, in fact, recorded a categorical finding that no unsecured loan had been recorded a categorical finding that no unsecured loan had been recorded a categorical finding that no unsecured loan had been availed by the assessee from the said concern during the year under availed by the assessee from the said concern during the year under availed by the assessee from the said concern during the year under consideration and that only repayment of an earlier loan had been consideration and that only repayment of an earlier loan had been consideration and that only repayment of an earlier loan had been effected.

2.2 Subsequently, the Hon’ble Supreme Court in Subsequently, the Hon’ble Supreme Court in Union of India v. Union of India v. Ashish Agarwal [Civil Appeal No. 3005 of 2022, order dated [Civil Appeal No. 3005 of 2022, order dated [Civil Appeal No. 3005 of 2022, order dated 04.05.2022], while considering the effect of the Finance Act, 2021, 04.05.2022], while considering the effect of the Financ 04.05.2022], while considering the effect of the Financ directed that all notices issued under section 148 of the unamended directed that all notices issued under section 148 of the unamended directed that all notices issued under section 148 of the unamended Act be deemed to have been issued under section 148A of the Act, Act be deemed to have been issued under section 148A of the Act, Act be deemed to have been issued under section 148A of the Act, as amended, and further be treated as show cause notices in terms as amended, and further be treated as show cause notices in terms as amended, and further be treated as show cause notices in terms of section 148A(b). In consequence thereof, of section 148A(b). In consequence thereof, the Assessing Officer the Assessing Officer appears to have regarded the earlier reassessment order dated appears to have regarded the earlier reassessment order dated appears to have regarded the earlier reassessment order dated 25.02.2022 as having become infructuous and, accordingly, 25.02.2022 as having become infructuous and, accordingly, 25.02.2022 as having become infructuous and, accordingly, proceeded to issue a fresh notice under section 148A(b) of the Act proceeded to issue a fresh notice under section 148A(b) of the Act proceeded to issue a fresh notice under section 148A(b) of the Act on 25.05.2022. The assessee, in turn, filed his on 25.05.2022. The assessee, in turn, filed his objections to the objections to the said notice on 07.06.2022. said notice on 07.06.2022. The relevant part of his objection is The relevant part of his objection is reproduced as under: reproduced as under:

“In the notice your goodself has alleged that Information was In the notice your goodself has alleged that Information was In the notice your goodself has alleged that Information was received from JCIT(OSD) received from JCIT(OSD)- Central Circle-7(2), Mumbai that I have 7(2), Mumbai that I have received Loan from M/s A received Loan from M/s Aneri Fincap Ltd amounting to Rs. neri Fincap Ltd amounting to Rs. 12,63,011/- which is non-genuine. The allegations were made genuine. The allegations were made solely on the basis of statement of one Shri Rajesh G. Mehta. In solely on the basis of statement of one Shri Rajesh G. Mehta. In solely on the basis of statement of one Shri Rajesh G. Mehta. In the said statement he claimed that he was controlling the affairs of the said statement he claimed that he was controlling the affairs of the said statement he claimed that he was controlling the affairs of the company namely Mr. Aneri the company namely Mr. Aneri Fincap Ltd. and this company was Fincap Ltd. and this company was only paper company. On the basis of these allegations the loan only paper company. On the basis of these allegations the loan only paper company. On the basis of these allegations the loan taken by me was held as non taken by me was held as non-genuine and my case was reopened. genuine and my case was reopened. Madam, I reject all the allegations made in the reasons for Madam, I reject all the allegations made in the reasons for Madam, I reject all the allegations made in the reasons for reopening. I do not know any Rajesh G reopening. I do not know any Rajesh G Mehta, I taken loan during Mehta, I taken loan during the year A.Y. 2017 the year A.Y. 2017-18 on 24-11-2016 amounting to Rs. 2016 amounting to Rs. 11,00,000/- which was repaid in the current year i.e. 2018 which was repaid in the current year i.e. 2018 which was repaid in the current year i.e. 2018-19 on 26-05-2017. The transaction of loan was done during regular 2017. The transaction of loan was done during regular 2017. The transaction of loan was done during regular course of business through proper banking channels. course of business through proper banking channels. course of business through proper banking channels. The Loan was taken in the earlier year i.e. in the AY 2017 was taken in the earlier year i.e. in the AY 2017-18 and repaid in 18 and repaid in current year i.e. AY 2018 current year i.e. AY 2018-19. Since the loan was not received in 19. Since the loan was not received in the current year therefore there is no question of reopening in this the current year therefore there is no question of reopening in this the current year therefore there is no question of reopening in this year. This clearly shows that the information year. This clearly shows that the information is vague and faulty is vague and faulty and reopening in this year is totally wrong therefore, should be and reopening in this year is totally wrong therefore, should be and reopening in this year is totally wrong therefore, should be dropped immediately. Further, the allegations were made on the dropped immediately. Further, the allegations were made on the dropped immediately. Further, the allegations were made on the basis of statement of one Shri Rajesh G Mehta who is neither basis of statement of one Shri Rajesh G Mehta who is neither basis of statement of one Shri Rajesh G Mehta who is neither Director nor Shareholder of the company. The a Director nor Shareholder of the company. The allegations cannot llegations cannot be made on the basis of statement of unrelated third party. He is be made on the basis of statement of unrelated third party. He is be made on the basis of statement of unrelated third party. He is not authorized to give statement on behalf of the company. His not authorized to give statement on behalf of the company. His not authorized to give statement on behalf of the company. His statement does not hold any value and cannot be relied. Further in statement does not hold any value and cannot be relied. Further in statement does not hold any value and cannot be relied. Further in the entire statement he hasn't specify as the entire statement he hasn't specify as to how he used to provide to how he used to provide accommodation entries. The modus accommodation entries. The modus-operandi wasn't explained in operandi wasn't explained in the statement. From reading of the statement it clearly appears the statement. From reading of the statement it clearly appears the statement. From reading of the statement it clearly appears that the person who has taken statement has put his words in the that the person who has taken statement has put his words in the that the person who has taken statement has put his words in the answers. I am not aware as to how Mr. M answers. I am not aware as to how Mr. Mehta has made this ehta has made this statement and under what circumstances he has given his statement and under what circumstances he has given his statement and under what circumstances he has given his statement. The allegations are baseless which were made without statement. The allegations are baseless which were made without statement. The allegations are baseless which were made without any supporting evidences and made arbitrarily. This makes the any supporting evidences and made arbitrarily. This makes the any supporting evidences and made arbitrarily. This makes the entire reopening proceedings void entire reopening proceedings void-ab-initio. In the sta initio. In the statement he has not said even once that he has given accommodation entries in has not said even once that he has given accommodation entries in has not said even once that he has given accommodation entries in the nature of "Loan". Madam, your goodself shall appreciate that the nature of "Loan". Madam, your goodself shall appreciate that the nature of "Loan". Madam, your goodself shall appreciate that my transaction with M/s Aneri Fincap Ltd. is in the nature of my transaction with M/s Aneri Fincap Ltd. is in the nature of my transaction with M/s Aneri Fincap Ltd. is in the nature of repayment of Unsecured Loan this year and not in the repayment of Unsecured Loan this year and not in the repayment of Unsecured Loan this year and not in the nature of Purchase/Sale/Capital Gain. Further, M/s Aneri Fincap Ltd. is Purchase/Sale/Capital Gain. Further, M/s Aneri Fincap Ltd. is Purchase/Sale/Capital Gain. Further, M/s Aneri Fincap Ltd. is RBI authorized Non Banking Financial Company (NBFC) who has RBI authorized Non Banking Financial Company (NBFC) who has RBI authorized Non Banking Financial Company (NBFC) who has been authorized by the Reserve Bank of India to do lending been authorized by the Reserve Bank of India to do lending been authorized by the Reserve Bank of India to do lending business. This strengthen my claim of genuineness of transaction. business. This strengthen my claim of genuineness of transaction. business. This strengthen my claim of genuineness of transaction. It is therefore submitted that, the reopening in this case is purely It is therefore submitted that, the reopening in this case is purely It is therefore submitted that, the reopening in this case is purely due to change of opinion and illegal. I therefore request your due to change of opinion and illegal. I therefore request your due to change of opinion and illegal. I therefore request your goodself to kindly drop the reopening proceedings and oblige. goodself to kindly drop the reopening proceedings and oblige. goodself to kindly drop the reopening proceedings and oblige. Madam, I have disclosed all details of my books of accounts Madam, I have disclosed all details of my books of accounts Madam, I have disclosed all details of my books of accounts in the return of income filed for the year under consideration. None of the return of income filed for the year under consideration. None of the return of income filed for the year under consideration. None of the facts/details facts/details facts/details remains remains remains undisclosed. undisclosed. undisclosed. Further Further Further the the the transaction transaction transaction mentioned in the notice is factually wrong and no such transaction mentioned in the notice is factually wrong and no such transaction mentioned in the notice is factually wrong and no such transaction was entered by the assessee during the year under cons was entered by the assessee during the year under cons was entered by the assessee during the year under consideration. From the above it is clear that the reopening in my case is totally From the above it is clear that the reopening in my case is totally From the above it is clear that the reopening in my case is totally based on assumptions and presumptions hence invalid and liable based on assumptions and presumptions hence invalid and liable based on assumptions and presumptions hence invalid and liable to be quashed. Your goodself has simply relied on the assumption to be quashed. Your goodself has simply relied on the assumption to be quashed. Your goodself has simply relied on the assumption drawn by other officer, which is totally wrong. drawn by other officer, which is totally wrong. As per the provision of Sec. 148A(a), the AO is mandated to s per the provision of Sec. 148A(a), the AO is mandated to s per the provision of Sec. 148A(a), the AO is mandated to conduct an inquiry with respect to the information which suggest conduct an inquiry with respect to the information which suggest conduct an inquiry with respect to the information which suggest that income chargeable to tax has escaped assessment and such that income chargeable to tax has escaped assessment and such that income chargeable to tax has escaped assessment and such inquiry shall be conducted only after obtaining the prior approval inquiry shall be conducted only after obtaining the prior approval inquiry shall be conducted only after obtaining the prior approval of the specified authority. The impugned notice issued u/s 148A(b) the specified authority. The impugned notice issued u/s 148A(b) the specified authority. The impugned notice issued u/s 148A(b) does not suggest of any inquiries conducted by your office and does not suggest of any inquiries conducted by your office and does not suggest of any inquiries conducted by your office and that too after obtaining the prior approval of the specified authority that too after obtaining the prior approval of the specified authority that too after obtaining the prior approval of the specified authority prescribed u/s.151 of the Act. It is a trite law that the prescribed u/s.151 of the Act. It is a trite law that the prescribed u/s.151 of the Act. It is a trite law that the notice u/s.148A cannot be issued merely relying on the general u/s.148A cannot be issued merely relying on the general u/s.148A cannot be issued merely relying on the general information received from the investigation department. However, information received from the investigation department. However, information received from the investigation department. However, such information must necessarily be linked to the case of such information must necessarily be linked to the case of such information must necessarily be linked to the case of assessee and only thereafter, the notice u/s.148A(b) could be assessee and only thereafter, the notice u/s.148A(b) could be assessee and only thereafter, the notice u/s.148A(b) could be issued, if such inquiry, with respect to the information suggest that if such inquiry, with respect to the information suggest that if such inquiry, with respect to the information suggest that the income chargeable to tax has escaped the assessment. The the income chargeable to tax has escaped the assessment. The the income chargeable to tax has escaped the assessment. The words "if required" incorporated under section 148A(a) would not words "if required" incorporated under section 148A(a) would not words "if required" incorporated under section 148A(a) would not mean that the AO would not conduct any inquiry, however it mean that the AO would not conduct any inquiry, however it mean that the AO would not conduct any inquiry, however it clearly suggest that the AO shall necessarily conduct an inquiry to suggest that the AO shall necessarily conduct an inquiry to suggest that the AO shall necessarily conduct an inquiry to verify the information that suggest that the income chargeable to verify the information that suggest that the income chargeable to verify the information that suggest that the income chargeable to tax has escaped assessment. The non tax has escaped assessment. The non-conducting of inquiry with conducting of inquiry with the prior approval of specified authority prior to issuance of show the prior approval of specified authority prior to issuance of show the prior approval of specified authority prior to issuance of show cause notice u/s.148A(b) would make the specified provision of cause notice u/s.148A(b) would make the specified provision of cause notice u/s.148A(b) would make the specified provision of sec.148A(b) redundant and such is not the intention of the sec.148A(b) redundant and such is not the intention of the sec.148A(b) redundant and such is not the intention of the legislation. As the show cause notice u/s.148A(b) does not legislation. As the show cause notice u/s.148A(b) does not legislation. As the show cause notice u/s.148A(b) does not disclose of any inquiry conducted by your office, thus the disclose of any inquiry conducted by your office, thus the disclose of any inquiry conducted by your office, thus the impugned notice impugned notice u/s.148A(b) is not tenable in law. The assessee submits that the impugned notice u/s.148A(b) had The assessee submits that the impugned notice u/s.148A(b) had The assessee submits that the impugned notice u/s.148A(b) had been issued merely relying on the information received from the been issued merely relying on the information received from the been issued merely relying on the information received from the JCIT(OSD)- Central Circle Central Circle-7(2), Mumbai and there does not exist 7(2), Mumbai and there does not exist any material/ evidence which c any material/ evidence which could suggest ould suggest the income the income chargeable to tax having escaped assessment. The mere receipt of chargeable to tax having escaped assessment. The mere receipt of chargeable to tax having escaped assessment. The mere receipt of the general information not supported with any material/evidence the general information not supported with any material/evidence the general information not supported with any material/evidence would not constitute as a reliable information which could lead to would not constitute as a reliable information which could lead to would not constitute as a reliable information which could lead to the escapement of income. Further t the escapement of income. Further the transaction reported in the he transaction reported in the information is factually wrong, therefore the information cannot be information is factually wrong, therefore the information cannot be information is factually wrong, therefore the information cannot be relied. This proves that the allegations were made in prejudice relied. This proves that the allegations were made in prejudice relied. This proves that the allegations were made in prejudice manner and cannot be relied. manner and cannot be relied. The assessee had entered into bonafide and genuine transactions The assessee had entered into bonafide and genuine transactions The assessee had entered into bonafide and genuine transactions of Loan with M/s Aneri Fincap Ltd. (a registered NBFC) in of Loan with M/s Aneri Fincap Ltd. (a registered NBFC) in of Loan with M/s Aneri Fincap Ltd. (a registered NBFC) in preceeding which was repaid in the current year, However the preceeding which was repaid in the current year, However the preceeding which was repaid in the current year, However the Show Cause Notice alleges that the accommodation entries were Show Cause Notice alleges that the accommodation entries were Show Cause Notice alleges that the accommodation entries were made, which is completely incorrect and without proper application made, which is completely incorrect and without proper application made, which is completely incorrect and without proper application of mind, as the basis for issuance of the Show Cause Notice is as the basis for issuance of the Show Cause Notice is as the basis for issuance of the Show Cause Notice is misconceived. misconceived. Sir, the allegations made in the notice are factually wrong, Sir, the allegations made in the notice are factually wrong, Sir, the allegations made in the notice are factually wrong, misleading and incorrect. The nature of transactions mentioned in misleading and incorrect. The nature of transactions mentioned in misleading and incorrect. The nature of transactions mentioned in the notice are purchase/sale/sharecapital/LTCG and no where the notice are purchase/sale/sharecapital/LTCG and no where the notice are purchase/sale/sharecapital/LTCG and no where mentioned that loan provided by the said concern are non mentioned that loan provided by the said concern are non mentioned that loan provided by the said concern are non-genuine. Further in the said statement, Mr. Rajesh G Mehta has nowhere Further in the said statement, Mr. Rajesh G Mehta has nowhere Further in the said statement, Mr. Rajesh G Mehta has nowhere mentioned the name of the assessee specifically. This proves that mentioned the name of the assessee specifically. This proves that mentioned the name of the assessee specifically. This proves that the allegations made by your goodself are wrong and misleading the allegations made by your goodself are wrong and misleading the allegations made by your goodself are wrong and misleading and information received by your goodself cannot be relied. and information received by your goodself cannot be relied. and information received by your goodself cannot be relied. The assessee to substantiate the genuineness of Loan repaid to The assessee to substantiate the genuineness of Loan repaid to The assessee to substantiate the genuineness of Loan repaid to Aneri Fincap Ltd., relies on understated documents (copies Aneri Fincap Ltd., relies on understated documents (copies Aneri Fincap Ltd., relies on understated documents (copies enclosed) as under : enclosed) as under :- a) Name, address and PAN of loan party. a) Name, address and PAN of loan party. b) Confirmation of account; tion of account; c) Bank statements of party and assessee evidencing the loan Bank statements of party and assessee evidencing the loan Bank statements of party and assessee evidencing the loan receipt and subsequent repayment by A/c payee cheques/RTGS; receipt and subsequent repayment by A/c payee cheques/RTGS; receipt and subsequent repayment by A/c payee cheques/RTGS; d) NOC from party that loan taken in preceeding year was repaid. d) NOC from party that loan taken in preceeding year was repaid. d) NOC from party that loan taken in preceeding year was repaid. e) NBFC certificate of Aneri Fincap Ltd. issued by t e) NBFC certificate of Aneri Fincap Ltd. issued by t e) NBFC certificate of Aneri Fincap Ltd. issued by the Reserve Bank of India. Bank of India. f) Affidavit by assessee with regard to his transaction with M/s f) Affidavit by assessee with regard to his transaction with M/s f) Affidavit by assessee with regard to his transaction with M/s Aneri Fincap Ltd. Aneri Fincap Ltd. The assessee on furnishing the above stated documents hereby The assessee on furnishing the above stated documents hereby The assessee on furnishing the above stated documents hereby discharges its onus to prove the genuineness of the disputed loan, discharges its onus to prove the genuineness of the disputed loan, discharges its onus to prove the genuineness of the disputed loan, which has been alle which has been alleged to be accommodation entries in the Show ged to be accommodation entries in the Show Cause Notice. There is no falsity in the above stated documents Cause Notice. There is no falsity in the above stated documents Cause Notice. There is no falsity in the above stated documents which proves the genuineness of the transactions and thus which proves the genuineness of the transactions and thus which proves the genuineness of the transactions and thus information received by your office not supported with any information received by your office not supported with any information received by your office not supported with any material/evidence and contrary material/evidence and contrary to the actual fact, would not to the actual fact, would not constitute as a reliable information which could lead to the constitute as a reliable information which could lead to the constitute as a reliable information which could lead to the escapement of income. escapement of income. The assessee submits that the bonafide loan transaction of the The assessee submits that the bonafide loan transaction of the The assessee submits that the bonafide loan transaction of the assessee cannot be held as non assessee cannot be held as non-genuine solely relying on the genuine solely relying on the information receive information received from JCIT(OSD)- Central Circle- 7(2), Mumbai, 7(2), Mumbai, which is alleged to be accommodation entries. The Investigating which is alleged to be accommodation entries. The Investigating which is alleged to be accommodation entries. The Investigating authority had provided the incorrect information only on the basis authority had provided the incorrect information only on the basis authority had provided the incorrect information only on the basis of general statements of 3rd parties recorded at back of the of general statements of 3rd parties recorded at back of the of general statements of 3rd parties recorded at back of the assessee. Assess assessee. Assessee also demand to provide details as to whether ee also demand to provide details as to whether the statements of 3rd parties specify the name of the assessee or the statements of 3rd parties specify the name of the assessee or the statements of 3rd parties specify the name of the assessee or any sort of assessee's involvement in non any sort of assessee's involvement in non-genuine transactions? genuine transactions? The assessee submits that the department cannot pick and choose The assessee submits that the department cannot pick and choose The assessee submits that the department cannot pick and choose as per its whi as per its whims and fancies, when one set of transaction is ms and fancies, when one set of transaction is genuine, the other cannot be alleged to be mere accommodation genuine, the other cannot be alleged to be mere accommodation genuine, the other cannot be alleged to be mere accommodation entire. The assessee hereby makes a prayer to provide the entire. The assessee hereby makes a prayer to provide the entire. The assessee hereby makes a prayer to provide the opportunity of cross examination of Mr. Rajesh G Mehta on the opportunity of cross examination of Mr. Rajesh G Mehta on the opportunity of cross examination of Mr. Rajesh G Mehta on the basis of whose statement no basis of whose statement notice issued to the assessee. tice issued to the assessee.

The Hon'ble Apex Court and Jurisdictional High Court in the cases The Hon'ble Apex Court and Jurisdictional High Court in the cases The Hon'ble Apex Court and Jurisdictional High Court in the cases of Andaman Timber Industries v. Comm. of Central Excise (Civil of Andaman Timber Industries v. Comm. of Central Excise (Civil of Andaman Timber Industries v. Comm. of Central Excise (Civil Appeal No.4288/2006), H.R Mehta v. ACIT (Bom), Kishandchand Appeal No.4288/2006), H.R Mehta v. ACIT (Bom), Kishandchand Appeal No.4288/2006), H.R Mehta v. ACIT (Bom), Kishandchand Chellaram vs. CIT (125 ITR 713 (SC), C Chellaram vs. CIT (125 ITR 713 (SC), CIT vs. JMD Communications IT vs. JMD Communications Pvt Ltd (320 ITR 17(St) (SC), R.W. Promotions Pvt Ltd vs. ACIT Pvt Ltd (320 ITR 17(St) (SC), R.W. Promotions Pvt Ltd vs. ACIT Pvt Ltd (320 ITR 17(St) (SC), R.W. Promotions Pvt Ltd vs. ACIT (Bom-HC), Sunil Aggarwal 64 taxmann.com 107 (Del HC), Sunil Aggarwal 64 taxmann.com 107 (Del-HC) had HC), Sunil Aggarwal 64 taxmann.com 107 (Del decided that the statements of other parties cannot be relied decided that the statements of other parties cannot be relied decided that the statements of other parties cannot be relied unless an opportunity of cross examination is pr unless an opportunity of cross examination is provided to the ovided to the aggrieved aggrieved aggrieved party. party. party. Further, Further, Further, CBDT CBDT CBDT vide vide vide circular circular circular no- no no F. no.286/2/2003 dated 10/3/2003 had directed the assessing no.286/2/2003 dated 10/3/2003 had directed the assessing no.286/2/2003 dated 10/3/2003 had directed the assessing authorities not to make the additions merely relying only on the authorities not to make the additions merely relying only on the authorities not to make the additions merely relying only on the statements recorded during search/survey actions. In any case, statements recorded during search/survey actions. In any case, statements recorded during search/survey actions. In any case, the presumption u/s 292C applies to the case of the person in resumption u/s 292C applies to the case of the person in resumption u/s 292C applies to the case of the person in whose custody the alleged books of accounts and/or documents whose custody the alleged books of accounts and/or documents whose custody the alleged books of accounts and/or documents are found in his possession and does not apply to other persons are found in his possession and does not apply to other persons are found in his possession and does not apply to other persons not covered u/s 132(1) or u/s 133A of the Act. Further, Sec. 292C not covered u/s 132(1) or u/s 133A of the Act. Further, Sec. 292C not covered u/s 132(1) or u/s 133A of the Act. Further, Sec. 292C is a rebuttable presumption. However, in instant case, there is no uttable presumption. However, in instant case, there is no uttable presumption. However, in instant case, there is no contrary documents found in custody of the assessee or anywhere contrary documents found in custody of the assessee or anywhere contrary documents found in custody of the assessee or anywhere as the notice is silent on that issue. Therefore, the information on as the notice is silent on that issue. Therefore, the information on as the notice is silent on that issue. Therefore, the information on the basis of which the income chargeable to tax is presumed to the basis of which the income chargeable to tax is presumed to the basis of which the income chargeable to tax is presumed to have escaped assessment is totally incorrect. ave escaped assessment is totally incorrect. The assessee had received/repaid the loan through banking The assessee had received/repaid the loan through banking The assessee had received/repaid the loan through banking channel by A/c payee cheques/RTGS from the said party. The channel by A/c payee cheques/RTGS from the said party. The channel by A/c payee cheques/RTGS from the said party. The name of the same is duly reflected in the bank statements (copies name of the same is duly reflected in the bank statements (copies name of the same is duly reflected in the bank statements (copies enclosed) of the assessee. A enclosed) of the assessee. Also, the bank statements (copies lso, the bank statements (copies enclosed) of the said party discloses the payment of amount to the enclosed) of the said party discloses the payment of amount to the enclosed) of the said party discloses the payment of amount to the assessee and such fact proves that the assessee had received the assessee and such fact proves that the assessee had received the assessee and such fact proves that the assessee had received the loan and subsequently repaid. The assessee does not have any loan and subsequently repaid. The assessee does not have any loan and subsequently repaid. The assessee does not have any source of unaccounted funds, t source of unaccounted funds, thus the possibility of taking non hus the possibility of taking non- genuine loan would not arise. The heavy onus is cast on the genuine loan would not arise. The heavy onus is cast on the genuine loan would not arise. The heavy onus is cast on the assessing authority to justify, with cogent documentary evidence, assessing authority to justify, with cogent documentary evidence, assessing authority to justify, with cogent documentary evidence, to prove the allegation made by them. In absence of contrary to prove the allegation made by them. In absence of contrary to prove the allegation made by them. In absence of contrary credible documentary evidence, acco credible documentary evidence, accordingly the Loan taken by the rdingly the Loan taken by the assessee cannot be held as non assessee cannot be held as non-genuine and therefore, the genuine and therefore, the information on the basis of which the income chargeable to tax is information on the basis of which the income chargeable to tax is information on the basis of which the income chargeable to tax is presumed to have escaped assessment in erroneous. presumed to have escaped assessment in erroneous. As regards the transactions the show cause notice u/ As regards the transactions the show cause notice u/ As regards the transactions the show cause notice u/s 148A(b) does not disclose the manner and the amounts on the basis of does not disclose the manner and the amounts on the basis of does not disclose the manner and the amounts on the basis of which income chargeable to tax of the assessee has escaped which income chargeable to tax of the assessee has escaped which income chargeable to tax of the assessee has escaped assessment. The mere general remarks stated in different Para of assessment. The mere general remarks stated in different Para of assessment. The mere general remarks stated in different Para of annexure attached to notice u/s.148A(b) would not empower the annexure attached to notice u/s.148A(b) would not empower the annexure attached to notice u/s.148A(b) would not empower the authority to issue the notices u/s.148 and that too without authority to issue the notices u/s.148 and that too without authority to issue the notices u/s.148 and that too without conducting any enquiries and without establishing the live link conducting any enquiries and without establishing the live link conducting any enquiries and without establishing the live link and nexus of information with the income chargeable to tax having and nexus of information with the income chargeable to tax having and nexus of information with the income chargeable to tax having escaped assessment. escaped assessment.

The several High Courts and ITATs have decide The several High Courts and ITATs have decided that suspicion of d that suspicion of highest degree cannot partake the direct documentary evidences highest degree cannot partake the direct documentary evidences highest degree cannot partake the direct documentary evidences filed on record. {P.K. Noorjahan 237 ITR 570 (SC) and Pooja Bhatt filed on record. {P.K. Noorjahan 237 ITR 570 (SC) and Pooja Bhatt filed on record. {P.K. Noorjahan 237 ITR 570 (SC) and Pooja Bhatt v. ACIT (73 ITD 205 Mum v. ACIT (73 ITD 205 Mum-ITAT)). There is no contrary documentary ITAT)). There is no contrary documentary evidence available on record to disprove t evidence available on record to disprove the loan transactions. The he loan transactions. The assessee also request to provide an opportunity of cross assessee also request to provide an opportunity of cross assessee also request to provide an opportunity of cross examination of Shri Rajesh G Mehta having regard to the principal examination of Shri Rajesh G Mehta having regard to the principal examination of Shri Rajesh G Mehta having regard to the principal of natural justice. of natural justice. Prayer A humble and respectful prayer is made to positively consider the A humble and respectful prayer is made to positively consider the A humble and respectful prayer is made to positively consider the reply of the a reply of the assessee and drop the proposed issuance of notice ssessee and drop the proposed issuance of notice u/s.148 for which the assessee shall ever remain grateful and u/s.148 for which the assessee shall ever remain grateful and u/s.148 for which the assessee shall ever remain grateful and oblige. The assessee has not taken any new loan from Aneri oblige. The assessee has not taken any new loan from Aneri oblige. The assessee has not taken any new loan from Aneri Fincap Ltd. during the year. There was only repayment of loan Fincap Ltd. during the year. There was only repayment of loan Fincap Ltd. during the year. There was only repayment of loan taken in preceding year taken in preceding year and no fresh loan was taken as alleged in and no fresh loan was taken as alleged in the information. The assessee requests that a personal hearing in the information. The assessee requests that a personal hearing in the information. The assessee requests that a personal hearing in the above facts and circumstances will be expedient, for the the above facts and circumstances will be expedient, for the the above facts and circumstances will be expedient, for the purposes purposes of purposes of of effective effective effective adjudication adjudication adjudication of of of the the the issues, issues, issues, in in in the the the interest of justice. justice.” 2.3 However, the said object However, the said objection for the assessee for the assessee was rejected by the Assessing Officer by way of order dated 29.07.2022 passed u/s the Assessing Officer by way of order dated 29.07.2022 passed u/s the Assessing Officer by way of order dated 29.07.2022 passed u/s 148A(d) of the Act. The relevant finding of the Assessing Officer is 148A(d) of the Act. The relevant finding of the Assessing Officer is 148A(d) of the Act. The relevant finding of the Assessing Officer is reproduced as under: reproduced as under:

“9.1 The assessee has submitted that th 9.1 The assessee has submitted that the show cause notice u/s. e show cause notice u/s. 148A(b) does not disclose of any inquiry, thus the impugned notice 148A(b) does not disclose of any inquiry, thus the impugned notice 148A(b) does not disclose of any inquiry, thus the impugned notice u/s.148A(b) is not tenable in law. In this regard, Hon'ble Supreme u/s.148A(b) is not tenable in law. In this regard, Hon'ble Supreme u/s.148A(b) is not tenable in law. In this regard, Hon'ble Supreme court in Civil Appeal No. 3005/2022, vide order dated 04.05.2022, court in Civil Appeal No. 3005/2022, vide order dated 04.05.2022, court in Civil Appeal No. 3005/2022, vide order dated 04.05.2022, has directed to dispensed with has directed to dispensed with enquiry u/s 148A(a) of the Act as a enquiry u/s 148A(a) of the Act as a one-time measure (para 8 of Hon'ble Supreme Court order). time measure (para 8 of Hon'ble Supreme Court order). time measure (para 8 of Hon'ble Supreme Court order). 9.2 The assessee submits that the impugned notice u/s. 148A(b) 9.2 The assessee submits that the impugned notice u/s. 148A(b) 9.2 The assessee submits that the impugned notice u/s. 148A(b) had been issued merely relying on the information received from had been issued merely relying on the information received from had been issued merely relying on the information received from the JCIT(OSD) the JCIT(OSD)- Central Circle-7(2), Mumbai. In this regard, it is Mumbai. In this regard, it is submitted that reassessment is valid if there is prima facie reason submitted that reassessment is valid if there is prima facie reason submitted that reassessment is valid if there is prima facie reason to believe that income has escaped assessment. AO is not required to believe that income has escaped assessment. AO is not required to believe that income has escaped assessment. AO is not required to conclusively prove escapement of income at the stage of to conclusively prove escapement of income at the stage of to conclusively prove escapement of income at the stage of issuance of notice under section issuance of notice under section 148. It is not the requirement of 148. It is not the requirement of law that at the stage of the reopening the assessment, the law that at the stage of the reopening the assessment, the law that at the stage of the reopening the assessment, the Assessing Officer must have conclusive evidence to establish Assessing Officer must have conclusive evidence to establish Assessing Officer must have conclusive evidence to establish escapement of income. A bonafide reasonable belief for holding the escapement of income. A bonafide reasonable belief for holding the escapement of income. A bonafide reasonable belief for holding the belief that income has escaped ass belief that income has escaped assessment is good enough for essment is good enough for reopening the assessment, and the law is well settled on that reopening the assessment, and the law is well settled on that reopening the assessment, and the law is well settled on that aspect. In the instant case, information was received by the AO aspect. In the instant case, information was received by the AO aspect. In the instant case, information was received by the AO and reasons were recorded that there was escapement. The and reasons were recorded that there was escapement. The and reasons were recorded that there was escapement. The assessment was reopened on the basis of reason assessment was reopened on the basis of reasons recorded by the s recorded by the Assessing Officer, which constituted reasonable basis for coming Assessing Officer, which constituted reasonable basis for coming Assessing Officer, which constituted reasonable basis for coming to the conclusion that income has escaped assessment, and that it to the conclusion that income has escaped assessment, and that it to the conclusion that income has escaped assessment, and that it did not suffer from any legal infirmity. In the case of ACIT Vs did not suffer from any legal infirmity. In the case of ACIT Vs did not suffer from any legal infirmity. In the case of ACIT Vs Rajesh Jhaveri Stock Brokers Pvt Ltd [(2007 Rajesh Jhaveri Stock Brokers Pvt Ltd [(2007) 291 ITR 500 (SC)], ) 291 ITR 500 (SC)], Hon'ble Supreme Court has, inter alia, observed as follows: Hon'ble Supreme Court has, inter alia, observed as follows: Hon'ble Supreme Court has, inter alia, observed as follows: ......... If the Assessing Officer has cause or justification to know or ......... If the Assessing Officer has cause or justification to know or ......... If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to suppose that income had escaped assessment, it can be said to suppose that income had escaped assessment, it can be said to have reason to believe that an income ha have reason to believe that an income had escaped assessment. d escaped assessment. The expression cannot be read to mean that the Assessing Officer The expression cannot be read to mean that the Assessing Officer The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or should have finally ascertained the fact by legal evidence or should have finally ascertained the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer conclusion. The function of the Assessing Officer is to administer conclusion. The function of the Assessing Officer is to administer the statute with solicitude for the publ the statute with solicitude for the public exchequer with an inbuilt ic exchequer with an inbuilt idea of fairness to taxpayers. As observed by the Supreme Court idea of fairness to taxpayers. As observed by the Supreme Court idea of fairness to taxpayers. As observed by the Supreme Court in Central Provinces Manganese Ore Co. Ltd. v. ITO [1991] 191 ITR in Central Provinces Manganese Ore Co. Ltd. v. ITO [1991] 191 ITR in Central Provinces Manganese Ore Co. Ltd. v. ITO [1991] 191 ITR 662, for initiation of action under section 147(a) (as the provision 662, for initiation of action under section 147(a) (as the provision 662, for initiation of action under section 147(a) (as the provision stood at the relevant time) stood at the relevant time) fulfilment of the two requisite conditions fulfilment of the two requisite conditions in that regard is essential. At that stage, the final outcome of the in that regard is essential. At that stage, the final outcome of the in that regard is essential. At that stage, the final outcome of the proceeding is not relevant. In other words, at the initiation stage, proceeding is not relevant. In other words, at the initiation stage, proceeding is not relevant. In other words, at the initiation stage, what is required is "reason to believe", but not the established fact what is required is "reason to believe", but not the established fact what is required is "reason to believe", but not the established fact of escapement of income. At the stage of issue of notice, the only capement of income. At the stage of issue of notice, the only capement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a question is whether there was relevant material on which a question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether reasonable person could have formed a requisite belief. Whether reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the the materials would conclusively prove the escapement is not the the materials would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belief by n at that stage. This is so because the formation of belief by n at that stage. This is so because the formation of belief by the the the Assessing Assessing Assessing Officer Officer Officer is is is within within within the the the realm realm realm of of of subjective subjective subjective satisfactionITO v. Selected Dalurband Coal Co. (P.) Ltd. [1996] 217 satisfactionITO v. Selected Dalurband Coal Co. (P.) Ltd. [1996] 217 satisfactionITO v. Selected Dalurband Coal Co. (P.) Ltd. [1996] 217 ITR 597 (SC); Raymond Woollen Mills Ltd. v. ITO [1999] 236 ITR 34 ITR 597 (SC); Raymond Woollen Mills Ltd. v. ITO [1999] 236 ITR 34 ITR 597 (SC); Raymond Woollen Mills Ltd. v. ITO [1999] 236 ITR 34 (SC). What essentially follows is that the Assessing Officer easonable What essentially follows is that the Assessing Officer easonable What essentially follows is that the Assessing Officer easonable cause or justification to "know or suppose that income has escaped cause or justification to "know or suppose that income has escaped cause or justification to "know or suppose that income has escaped assessment. As long as the Assessing Officer has that assessment. As long as the Assessing Officer has that assessment. As long as the Assessing Officer has that justification, he is legally permitted to reopen the assessment. justification, he is legally permitted to reopen the assessment. justification, he is legally permitted to reopen the assessment. Hon'ble Supreme Court in the case of Calcutta Discount Co. Ltd. on'ble Supreme Court in the case of Calcutta Discount Co. Ltd. on'ble Supreme Court in the case of Calcutta Discount Co. Ltd. ((1961) 41 ITR 191 (SC)] has observed that "It is for him (i.e. the ((1961) 41 ITR 191 (SC)] has observed that "It is for him (i.e. the ((1961) 41 ITR 191 (SC)] has observed that "It is for him (i.e. the Assessing Officer) to decide what inferences of facts can be Assessing Officer) to decide what inferences of facts can be Assessing Officer) to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be reasonably drawn and what legal inferences have ultimately to be reasonably drawn and what legal inferences have ultimately to be drawn." It is not for somebody else to tell the assessing authority drawn." It is not for somebody else to tell the assessing authority drawn." It is not for somebody else to tell the assessing authority what inferences, whether of facts or law, should be drawn. The what inferences, whether of facts or law, should be drawn. The what inferences, whether of facts or law, should be drawn. The question, therefore, that is required to be examined whether on the question, therefore, that is required to be examined whether on the question, therefore, that is required to be examined whether on the basis of material available at the time of forming, or a basis of material available at the time of forming, or approving, the pproving, the opinion that income has escaped assessment, a reasonable person opinion that income has escaped assessment, a reasonable person opinion that income has escaped assessment, a reasonable person would come to that conclusion. would come to that conclusion. 9.3 The assessee in its submission has stated that M/s Aneri 9.3 The assessee in its submission has stated that M/s Aneri 9.3 The assessee in its submission has stated that M/s Aneri Fincap Ltd. is RBI authorized Non Banking Financial Company Fincap Ltd. is RBI authorized Non Banking Financial Company Fincap Ltd. is RBI authorized Non Banking Financial Company (NBFC). However, Shri Urvi (NBFC). However, Shri Urvil A. Jani, one of the key persons of the l A. Jani, one of the key persons of the Oneworld group of companies has admitted in his statement Oneworld group of companies has admitted in his statement Oneworld group of companies has admitted in his statement recorded on 08.02.2020, that various Oneworld group entities recorded on 08.02.2020, that various Oneworld group entities recorded on 08.02.2020, that various Oneworld group entities have made bogus purchase/bogus sale transactions with the have made bogus purchase/bogus sale transactions with the have made bogus purchase/bogus sale transactions with the various entities controlled and manage various entities controlled and managed by Shri Rajesh G. Mehta. d by Shri Rajesh G. Mehta. Shri Rajesh G. Mehta, in his statement has provided the details of Shri Rajesh G. Mehta, in his statement has provided the details of Shri Rajesh G. Mehta, in his statement has provided the details of the entities controlled and managed by him and the lender the entities controlled and managed by him and the lender the entities controlled and managed by him and the lender company- M/s. Aneri Fincap Ltd was one of the entities controlled M/s. Aneri Fincap Ltd was one of the entities controlled M/s. Aneri Fincap Ltd was one of the entities controlled andmanaged by Shri Rajesh G. Mehta.lt andmanaged by Shri Rajesh G. Mehta.lt is evident from the above is evident from the above that the company that the company - M/s. AneriFincap Ltd. is a paper company and M/s. AneriFincap Ltd. is a paper company and not doing any genuine business activity, and is only engaged in not doing any genuine business activity, and is only engaged in not doing any genuine business activity, and is only engaged in providing bogus accommodation entries to various beneficiaries. providing bogus accommodation entries to various beneficiaries. providing bogus accommodation entries to various beneficiaries. 9.4 Further, the assessee has submitte 9.4 Further, the assessee has submitted that the loan was taken d that the loan was taken during the year A.Y. 2017 during the year A.Y. 2017-18 amounting to Rs. 11,00,000/ 18 amounting to Rs. 11,00,000/- which was repaid in the current year i.e. A.Y.2018 was repaid in the current year i.e. A.Y.2018- 19.In this regard, the 19.In this regard, the assessee has not explained the source of such repayment. Further, assessee has not explained the source of such repayment. Further, assessee has not explained the source of such repayment. Further, the assessee has not commented the assessee has not commented on the differential amount i.e. Rs. on the differential amount i.e. Rs. 1,63,011/- (12,63,011 (12,63,011- 11,00,000). Hence, income to that extent 11,00,000). Hence, income to that extent has escaped assessment. It may be mentioned here that re has escaped assessment. It may be mentioned here that re has escaped assessment. It may be mentioned here that re- opening of cases is only the initiation of proceedings for re opening of cases is only the initiation of proceedings for re opening of cases is only the initiation of proceedings for re- assessment based on the information a assessment based on the information available/collected, which vailable/collected, which indicates that the assessee's income for the relevant year has indicates that the assessee's income for the relevant year has indicates that the assessee's income for the relevant year has escaped assessment. However, the decision on whether or not escaped assessment. However, the decision on whether or not escaped assessment. However, the decision on whether or not income has actually escaped assessment will be taken only at the income has actually escaped assessment will be taken only at the income has actually escaped assessment will be taken only at the conclusion of re conclusion of re-assessment proceedings after duly considering all ter duly considering all submissions made by the assessee and after affording the submissions made by the assessee and after affording the submissions made by the assessee and after affording the assessee reasonable opportunity of being heard. assessee reasonable opportunity of being heard.

Regarding, the accommodation entry from M/s Aneri Fincap Ltd., Regarding, the accommodation entry from M/s Aneri Fincap Ltd., Regarding, the accommodation entry from M/s Aneri Fincap Ltd., the assessee replied as under: the assessee replied as under:

“11. Madam, my case for the year under consideration was 11. Madam, my case for the year under consideration was 11. Madam, my case for the year under consideration was reopened for the allegation that I have taken Loan amounti reopened for the allegation that I have taken Loan amounti reopened for the allegation that I have taken Loan amounting to Rs. 12,63,011/ Rs. 12,63,011/- from M/s Anerifincap Ltd. In response to the from M/s Anerifincap Ltd. In response to the same, at the outset I oppose the allegation of your goodself same, at the outset I oppose the allegation of your goodself same, at the outset I oppose the allegation of your goodself regarding this loan. Madam, during the year under consideration I regarding this loan. Madam, during the year under consideration I regarding this loan. Madam, during the year under consideration I have not received any loan from M/s Anei Fincap Ltd. I had tak have not received any loan from M/s Anei Fincap Ltd. I had tak have not received any loan from M/s Anei Fincap Ltd. I had taken loan during the year A.Y. 2017 loan during the year A.Y. 2017-18 on 24-11-2016 amounting to Rs. 2016 amounting to Rs. 11,00,000/- which was repaid in the current year i.e. 2018 which was repaid in the current year i.e. 2018 which was repaid in the current year i.e. 2018-19 on 26-05-2017. The transaction of loan was done during regular 2017. The transaction of loan was done during regular 2017. The transaction of loan was done during regular course of business through proper banking channels. The Loan course of business through proper banking channels. The Loan course of business through proper banking channels. The Loan was taken in the earlier year i.e. in the AY 2017 s taken in the earlier year i.e. in the AY 2017-18 and repaid in 18 and repaid in current year i.e. AY 2018 current year i.e. AY 2018-19. Since the loan was not received in 19. Since the loan was not received in the current year therefore there is no question of reopening of this the current year therefore there is no question of reopening of this the current year therefore there is no question of reopening of this assessment. In support of my claim I am submitting an aff assessment. In support of my claim I am submitting an aff assessment. In support of my claim I am submitting an affidavit cum indemnity bond which affirms that I have not taken any loan cum indemnity bond which affirms that I have not taken any loan cum indemnity bond which affirms that I have not taken any loan from M/s Aneri Fincap Ltd. during the year under consideration. I from M/s Aneri Fincap Ltd. during the year under consideration. I from M/s Aneri Fincap Ltd. during the year under consideration. I also submit No also submit No- Dues Certificate from M/s Aneri Fincap Ltd. for Dues Certificate from M/s Aneri Fincap Ltd. for your goodself's kind perusal your goodself's kind perusal and record.” 2.5 Again on 17.01.2023 Again on 17.01.2023 a fresh notice u/s 142(1) was issued and fresh notice u/s 142(1) was issued and in response to which in response to which, the reply of the assessee is reproduced as the reply of the assessee is reproduced as under:

“12. Copy of confirmation of Loan repaid to M/s Aneri Fincap Ltd.

12. Copy of confirmation of Loan repaid to M/s Aneri Fincap Ltd.

Madam, my case for the year under consideration was reopened Madam, my case for the year under consideration was reopened Madam, my case for the year under consideration was reopened for the allegation that I have taken Loan amounting to Rs. for the allegation that I have taken Loan amounting to Rs. for the allegation that I have taken Loan amounting to Rs. 12,63,011/- from M/s Anerifincap Ltd. In response to the same, at from M/s Anerifincap Ltd. In response to the same, at from M/s Anerifincap Ltd. In response to the same, at the outset I oppose the allegation of your g the outset I oppose the allegation of your goodself regarding this oodself regarding this loan. Madam, during the year under consideration I have not loan. Madam, during the year under consideration I have not loan. Madam, during the year under consideration I have not received any loan from M/s Anei Fincap Ltd. I had taken loan received any loan from M/s Anei Fincap Ltd. I had taken loan received any loan from M/s Anei Fincap Ltd. I had taken loan during the year A.Y. 2017 during the year A.Y. 2017-18 on 24-11-2016 amounting to Rs. 2016 amounting to Rs. 11,00,000/- which was repaid in the current year i.e which was repaid in the current year i.e. 2018 . 2018-19 on 26-05-2017. The transaction of loan was done during regular 2017. The transaction of loan was done during regular 2017. The transaction of loan was done during regular course of business through proper banking channels. The Loan course of business through proper banking channels. The Loan course of business through proper banking channels. The Loan was taken in the earlier year i.e. in the AY 2017 was taken in the earlier year i.e. in the AY 2017-18 and repaid in 18 and repaid in current year i.e. AY 2018 current year i.e. AY 2018-19. Since the loan was not re 19. Since the loan was not received in the current year therefore there is no question of reopening of this the current year therefore there is no question of reopening of this the current year therefore there is no question of reopening of this assessment. In support of my claim I am submitting an affidavit assessment. In support of my claim I am submitting an affidavit assessment. In support of my claim I am submitting an affidavit cum indemnity bond which affirms that I have not taken any loan cum indemnity bond which affirms that I have not taken any loan cum indemnity bond which affirms that I have not taken any loan from M/s Aneri Fincap Ltd. during the year under from M/s Aneri Fincap Ltd. during the year under consideration. I consideration. I also submit No also submit No- Dues Certificate from M/s Aneri Fincap Ltd. for Dues Certificate from M/s Aneri Fincap Ltd. for your goodself's kind perusal and record. Since there is no loan your goodself's kind perusal and record. Since there is no loan your goodself's kind perusal and record. Since there is no loan received during the year under consideration, question of making received during the year under consideration, question of making received during the year under consideration, question of making any addition in this regard does not any addition in this regard does not arise at all.” 2.6 After considering the submission of the assessee, the After considering the submission of the assessee, the After considering the submission of the assessee, the reassessment order u/s 147 of the Act was passed by the Assessing reassessment order u/s 147 of the Act was passed by the Assessing reassessment order u/s 147 of the Act was passed by the Assessing Officer on 09.03.2023 Officer on 09.03.2023, wherein he accepted the contention of the wherein he accepted the contention of the assessee and no addition in respect of M/s Aneri Fincap Ltd. was assessee and no addition in respect of M/s Aneri Fincap Ltd. assessee and no addition in respect of M/s Aneri Fincap Ltd. made. The relevant finding of the Assessing Officer is reproduced as made. The relevant finding of the Assessing Officer is reproduced as made. The relevant finding of the Assessing Officer is reproduced as under:

“(a). In support of the submission assessee also submitted an (a). In support of the submission assessee also submitted an (a). In support of the submission assessee also submitted an Affidavit wherein he has affirmed that during the year no fresh Affidavit wherein he has affirmed that during the year no fresh Affidavit wherein he has affirmed that during the year no fresh loan was taken from M/s Aneri Fincap Ltd. During t loan was taken from M/s Aneri Fincap Ltd. During the year under he year under consideration, assessee only repaid the loan, which was taken in consideration, assessee only repaid the loan, which was taken in consideration, assessee only repaid the loan, which was taken in the preceding year i.e. AY. 2017 the preceding year i.e. AY. 2017-18, for which addition was made 18, for which addition was made in that year. Assessee also submitted No Dues Certificate from in that year. Assessee also submitted No Dues Certificate from in that year. Assessee also submitted No Dues Certificate from Aneri Fincap Ltd. and also submitted his bank sta Aneri Fincap Ltd. and also submitted his bank statements for the tements for the year under consideration. year under consideration. (b). The reply of the assessee alongwith Affidavit and Certificate (b). The reply of the assessee alongwith Affidavit and Certificate (b). The reply of the assessee alongwith Affidavit and Certificate form Aneri Fincap Ltd. was carefully considered and after form Aneri Fincap Ltd. was carefully considered and after form Aneri Fincap Ltd. was carefully considered and after verification and assessee's submission/contention was found verification and assessee's submission/contention was found verification and assessee's submission/contention was found correct. The assessee has not correct. The assessee has not taken any unsecured loan from taken any unsecured loan from Aneri Fincap Ltd. during the year under consideration. Only Aneri Fincap Ltd. during the year under consideration. Only Aneri Fincap Ltd. during the year under consideration. Only repayment of loan was made during the year. Also no Interest repayment of loan was made during the year. Also no Interest repayment of loan was made during the year. Also no Interest Expenses were claimed on the said loan. All the evidences Expenses were claimed on the said loan. All the evidences Expenses were claimed on the said loan. All the evidences submitted by assessee was carefully examined a submitted by assessee was carefully examined and his claim of nd his claim of no new loan taken was accepted. no new loan taken was accepted. 8.In view of the above discussion, it is clear that the assessee has 8.In view of the above discussion, it is clear that the assessee has 8.In view of the above discussion, it is clear that the assessee has not taken any loan from Aneri Fincap Ltd. during the year under not taken any loan from Aneri Fincap Ltd. during the year under not taken any loan from Aneri Fincap Ltd. during the year under consideration, therefore no addition is warranted consideration, therefore no addition is warranted in this this year.” 2.7 Subsequent to the framing of the assessment order uent to the framing of the assessment order uent to the framing of the assessment order, the Ld. Principal Commissioner of Income Principal Commissioner of Income-tax (PCIT) called for and tax (PCIT) called for and examined the records of the assessee. Upon such examination, he examined the records of the assessee. Upon such examination, he examined the records of the assessee. Upon such examination, he formed the view that the information received from the Joint formed the view that the information received from the Joint formed the view that the information received from the Joint Commissioner of Income Commissioner of Income-tax (OSD), Central Circle tax (OSD), Central Circle–7(2), Mumbai, clearly indicated that the assessee was a beneficiary of a bogus clearly indicated that the assessee was a beneficiary of a bogus clearly indicated that the assessee was a beneficiary of a bogus accommodation entry from M/s Aneri Fincap Ltd. However, accommodation entry from M/s Aneri Fincap Ltd. However, accommodation entry from M/s Aneri Fincap Ltd. However, according to him, the Assessing Officer had failed to conduct the according to him, the Assessing Officer had failed to conduct the according to him, the Assessing Officer had failed to conduct the requisite inquiry into the source of repayment of loan made to M/s requisite inquiry into the source of repayment of loan made to M/s requisite inquiry into the source of repayment of loan made to M/s Aneri Fincap Ltd. In particular, it was noticed that the assessee had eri Fincap Ltd. In particular, it was noticed that the assessee had eri Fincap Ltd. In particular, it was noticed that the assessee had received a sum of Rs. 31 lakhs from M/s Earth Star, out of which received a sum of Rs. 31 lakhs from M/s Earth Star, out of which received a sum of Rs. 31 lakhs from M/s Earth Star, out of which an amount of Rs. 11 lakhs was paid to M/s Aneri Fincap Ltd. The an amount of Rs. 11 lakhs was paid to M/s Aneri Fincap Ltd. The an amount of Rs. 11 lakhs was paid to M/s Aneri Fincap Ltd. The Assessing Officer, however, neither examined the relevant bank Assessing Officer, however, neither examined the relevant b Assessing Officer, however, neither examined the relevant b account nor verified the source from which the funds were received account nor verified the source from which the funds were received account nor verified the source from which the funds were received and subsequently applied. and subsequently applied.

2.8 The Ld. PCIT, therefore, held that the Assessing Officer had The Ld. PCIT, therefore, held that the Assessing Officer had The Ld. PCIT, therefore, held that the Assessing Officer had omitted to carry out inquiries and verifications which were omitted to carry out inquiries and verifications which were omitted to carry out inquiries and verifications which were warranted in the circumstances of warranted in the circumstances of the case. He accordingly invoked the case. He accordingly invoked clause (a) of Explanation 2 to section 263 of the Act, wherein an clause (a) of Explanation 2 to section 263 of the Act, wherein an clause (a) of Explanation 2 to section 263 of the Act, wherein an assessment order is deemed to be erroneous and prejudicial to the assessment order is deemed to be erroneous and prejudicial to the assessment order is deemed to be erroneous and prejudicial to the interests of the Revenue if it has been passed without making interests of the Revenue if it has been passed without making interests of the Revenue if it has been passed without making inquiries or verifications wh inquiries or verifications which should have been made. ich should have been made.

2.9 The assessee’s contention that during the relevant year no The assessee’s contention that during the relevant year no The assessee’s contention that during the relevant year no fresh unsecured loan had been taken from M/s Aneri Fincap Ltd. fresh unsecured loan had been taken from M/s Aneri Fincap Ltd. fresh unsecured loan had been taken from M/s Aneri Fincap Ltd. and that only repayment was made, and hence there was no and that only repayment was made, and hence there was no and that only repayment was made, and hence there was no occasion for the Assessing Officer to make any occasion for the Assessing Officer to make any further inquiry, was further inquiry, was rejected by the Ld. PCIT. He held that the assessment order suffered rejected by the Ld. PCIT. He held that the assessment order suffered rejected by the Ld. PCIT. He held that the assessment order suffered from the vice of error, being prejudicial to the interests of the from the vice of error, being prejudicial to the interests of the from the vice of error, being prejudicial to the interests of the Revenue. Consequently, he set aside the assessment order with a Revenue. Consequently, he set aside the assessment order with a Revenue. Consequently, he set aside the assessment order with a direction to the Assessing Officer direction to the Assessing Officer to frame a fresh assessment after to frame a fresh assessment after affording due opportunity of hearing to the assessee and after affording due opportunity of hearing to the assessee and after affording due opportunity of hearing to the assessee and after considering such submissions and evidence as may be placed on considering such submissions and evidence as may be placed on considering such submissions and evidence as may be placed on record.

5.1 Before us, the Ld. counsel for the assessee relied on the Before us, the Ld. counsel for the assessee relied on the Before us, the Ld. counsel for the assessee relied on the following decisions: i. CIT v. Usha Martin Ventures Ltd. [2023] 150 CIT v. Usha Martin Ventures Ltd. [2023] 150 CIT v. Usha Martin Ventures Ltd. [2023] 150 taxmann.com 491 (Calcutta) taxmann.com 491 (Calcutta) ii. PCIT v. Naga Dhunseri Group Ltd. [2023] 146 PCIT v. Naga Dhunseri Group Ltd. [2023] 146 PCIT v. Naga Dhunseri Group Ltd. [2023] 146 taxmann.com 424 (Calcutta) taxmann.com 424 (Calcutta) iii. Incorp Advisory Services Pvt. Ltd. v. Pr. CIT (ITA No. Incorp Advisory Services Pvt. Ltd. v. Pr. CIT (ITA No. Incorp Advisory Services Pvt. Ltd. v. Pr. CIT (ITA No. 4864/Mum/2024 for assessment year 2020 4864/Mum/2024 for assessment year 2020- -21) 6. We have carefully heard the rival submissions and perused the We have carefully heard the rival submissions and perused the We have carefully heard the rival submissions and perused the material placed on record. The admitted factual background is that material placed on record. The admitted factual background is that material placed on record. The admitted factual background is that the Assessing Officer received credible information from the Joint the Assessing Officer received credible information from the Joint the Assessing Officer received credible information from the Joint Commissioner of Income Commissioner of Income-tax (OSD), Central Circle tax (OSD), Central Circle–7(2), Mumbai, that the assessee was a beneficiary of accommodation entries that the assessee was a beneficiary of accommodation entries that the assessee was a beneficiary of accommodation entries routed through M/s Aneri Fincap Ltd., an entity admittedly routed through M/s Aneri Fincap Ltd., an entity admittedly routed through M/s Aneri Fincap Ltd., an entity admittedly controlled by one Shri Rajesh G. Mehta, who, during the course of controlled by one Shri Rajesh G. Mehta, who, during the course of controlled by one Shri Rajesh G. Mehta, who, during the course of search proceedings conducted by the Income search proceedings conducted by the Income-tax Department, tax Department, confessed that the said concern was being utilised for the purpose ssed that the said concern was being utilised for the purpose ssed that the said concern was being utilised for the purpose of providing accommodation entries to various entities. of providing accommodation entries to various entities. of providing accommodation entries to various entities.

6.1 It is an undisputed position that during the reassessment It is an undisputed position that during the reassessment It is an undisputed position that during the reassessment proceedings, the Assessing Officer issued notices under section proceedings, the Assessing Officer issued notices under section proceedings, the Assessing Officer issued notices under section 142(1) of the Act on 10.01.2023 and 17.01.2023, which were duly e Act on 10.01.2023 and 17.01.2023, which were duly e Act on 10.01.2023 and 17.01.2023, which were duly responded to by the assessee. However, the inquiry conducted by responded to by the assessee. However, the inquiry conducted by responded to by the assessee. However, the inquiry conducted by the Assessing Officer was confined only to the aspect of repayment the Assessing Officer was confined only to the aspect of repayment the Assessing Officer was confined only to the aspect of repayment of loan to M/s Aneri Fincap Ltd., and he failed to extend the inquiry of loan to M/s Aneri Fincap Ltd., and he failed to extend the inquiry of loan to M/s Aneri Fincap Ltd., and he failed to extend the inquiry to the crucial question of the source of such repayment. In fact, the crucial question of the source of such repayment. In fact, the crucial question of the source of such repayment. In fact, while disposing of the objections under section 148A(d), the while disposing of the objections under section 148A(d), the while disposing of the objections under section 148A(d), the Assessing Officer himself recorded that the assessee had not Assessing Officer himself recorded that the assessee had not Assessing Officer himself recorded that the assessee had not satisfactorily explained the source of repayment made to M/s Aneri satisfactorily explained the source of repayment made to M/s Aneri satisfactorily explained the source of repayment made to M/s Aneri Fincap Ltd. In such circumstances, the Assessing Officer was duty ap Ltd. In such circumstances, the Assessing Officer was duty ap Ltd. In such circumstances, the Assessing Officer was duty- bound to conduct further verification and enquiry into the source of bound to conduct further verification and enquiry into the source of bound to conduct further verification and enquiry into the source of such repayment, which he failed to undertake. such repayment, which he failed to undertake. The decisions relied The decisions relied upon by the assessee are distinguishable on facts. upon by the assessee are distinguishable on facts.

6.2 In view of the above factual position, we find that the n view of the above factual position, we find that the n view of the above factual position, we find that the assessment order suffers from a clear lack of inquiry into a matter assessment order suffers from a clear lack of inquiry into a matter assessment order suffers from a clear lack of inquiry into a matter which went to the root of the issue. Therefore, the invocation of the which went to the root of the issue. Therefore, the invocation of the which went to the root of the issue. Therefore, the invocation of the revisional jurisdiction by the Ld. PCIT under clause (a) of revisional jurisdiction by the Ld. PCIT under clause (a) of revisional jurisdiction by the Ld. PCIT under clause (a) of Explanation 2 to section 263 of the Act is fully justified. lanation 2 to section 263 of the Act is fully justified. lanation 2 to section 263 of the Act is fully justified. Accordingly, ground No. 1 raised by the assessee is dismissed. Accordingly, ground No. 1 raised by the assessee is dismissed. Accordingly, ground No. 1 raised by the assessee is dismissed.

7.1 Per contra, the Ld. Departmental Representative submitted Per contra, the Ld. Departmental Representative submitted Per contra, the Ld. Departmental Representative submitted that at the stage of reopening, what is to be examined is whether that at the stage of reopening, what is to be examined is that at the stage of reopening, what is to be examined is the information received was relevant to the assessee and whether, the information received was relevant to the assessee and whether, the information received was relevant to the assessee and whether, on such information, a reasonable person could form the belief that on such information, a reasonable person could form the belief that on such information, a reasonable person could form the belief that income chargeable to tax had escaped assessment. She relied upon income chargeable to tax had escaped assessment. She relied upon income chargeable to tax had escaped assessment. She relied upon the authoritative pronouncements of the Hon’ble the authoritative pronouncements of the Hon’ble Supreme Court in Supreme Court in ACIT v. Rajesh Jhaveri Stock Brokers Pvt. Ltd. ACIT v. Rajesh Jhaveri Stock Brokers Pvt. Ltd. [(2007) 291 ITR 500 [(2007) 291 ITR 500 (SC)] and Raymond Woollen Mills Ltd. v. ITO Raymond Woollen Mills Ltd. v. ITO [(1999) 236 ITR 34 [(1999) 236 ITR 34 (SC)], wherein it has been categorically held that sufficiency or (SC)], wherein it has been categorically held that sufficiency or (SC)], wherein it has been categorically held that sufficiency or correctness of the material cannot be gone correctness of the material cannot be gone into at the stage of into at the stage of reopening.

7.2 We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused the relevant materials on record. The Ld. counsel for the assessee the relevant materials on record. The Ld. counsel for the assessee the relevant materials on record. The Ld. counsel for the assessee has assailed the order u/s 263 on the ground that reassessment has assailed the order u/s 263 on the ground that reassessment has assailed the order u/s 263 on the ground that reassessment order dated 09.03.20203 09.03.20203 passed under section 147 is passed under section 147 is itself is invalid as in the reasons recorded only allegation was of the receipt the reasons recorded only allegation was of the receipt the reasons recorded only allegation was of the receipt of accommodation entry from of accommodation entry from M/s Aneri Fincap Ltd. but in the M/s Aneri Fincap Ltd. but in the factual matrix of the case actually the assessee only repaid the loan factual matrix of the case actually the assessee only repaid the loan factual matrix of the case actually the assessee only repaid the loan of Rs.11 lakhs during the year under consideration and no loan was ring the year under consideration and no loan was ring the year under consideration and no loan was received during the year under consideration, t g the year under consideration, therefore, the g the year under consideration, t reassessment proceedings are bad in law and liable to be quashed reassessment proceedings are bad in law and liable to be quashed reassessment proceedings are bad in law and liable to be quashed and hence the subsequent proceedings u/s 263 of the Act also bad and hence the subsequent proceedings u/s 263 of the Act also bad and hence the subsequent proceedings u/s 263 of the Act also bad in law.

7.3 However, we do not agree with the above arguments of the Ld. wever, we do not agree with the above arguments of the Ld. wever, we do not agree with the above arguments of the Ld. Counsel for the assessee for the reason that for the assessee for the reason that for the assessee for the reason that the earlier reassessment order made was under old provisions of section 148 reassessment order made was under old provisions of section 148 reassessment order made was under old provisions of section 148 has been rendered infructuous in view of the finding of Hn’ble has been rendered infructuous in view of the finding of Hn’ble has been rendered infructuous in view of the finding of Hn’ble Supreme court in the case of Ashish Agrawal (suprs) in the case of Ashish Agrawal (suprs) in the case of Ashish Agrawal (suprs), whereas, the impugned assessment order has been passed under the amended impugned assessment order has been passed under the amended impugned assessment order has been passed under the amended provisions of section 147/148A of the Act. provisions of section 147/148A of the Act.

7.4 In pre amended section 147 of the Act In pre amended section 147 of the Act, before issue of notice , before issue of notice under section 148 of the Act, under section 148 of the Act, the AO was required to record reason the AO was required to record reason to believe on the basis of information or material received by him to believe on the basis of information or material received by him to believe on the basis of information or material received by him 7.5 But under the amended provisions of section related to But under the amended provisions of section related to But under the amended provisions of section related to reassessment, the section 147 now reads as under: reassessment, the section 147 now reads as under: “Section - 147, Income 147, Income-tax Act, 1961 - FA, 2025 2025 85 [Income escaping assessment Income escaping assessment86.

7.7 In this backdrop, the contention that reassessment was In this backdrop, the contention that reassessment was In this backdrop, the contention that reassessment was invalid merely because the information originally referred to invalid merely because the information originally referred to invalid merely because the information originally referred to “receipt” of loan rather than “repayment” is devoid of merit. What is “receipt” of loan rather than “repayment” is devoid of merit. What is “receipt” of loan rather than “repayment” is devoid of merit. What is material is that the assessee was found connected with M/s Aneri that the assessee was found connected with M/s Aneri that the assessee was found connected with M/s Aneri Fincap Ltd., an accommodation entry provider, and that the source Fincap Ltd., an accommodation entry provider, and that the source Fincap Ltd., an accommodation entry provider, and that the source of repayment remained unexplained. Thus, the reassessment of repayment remained unexplained. Thus, the reassessment of repayment remained unexplained. Thus, the reassessment proceedings cannot be invalidated on such hyper proceedings cannot be invalidated on such hyper-technical ground. technical ground. In view of the aforesaid discussion, we reject the contention of the e aforesaid discussion, we reject the contention of the e aforesaid discussion, we reject the contention of the assessee that proceedings u/s 147 of the Act are bad in law. assessee that proceedings u/s 147 of the Act are bad in law. assessee that proceedings u/s 147 of the Act are bad in law.

7.8 Further, argument was made on the part of the assessee that Further, argument was made on the part of the assessee that Further, argument was made on the part of the assessee that one, the reassessment order dated 25.02.2022 was passed by the one, the reassessment order dated 25.02.2022 was passed by the one, the reassessment order dated 25.02.2022 was passed by the Assessing Officer, he was not justified in issuing a fresh notice u/s he was not justified in issuing a fresh notice u/s he was not justified in issuing a fresh notice u/s 148A(b) of the Act under under amended provisions of the reassessment provisions of the reassessment procedure and passed a fresh assessment order on 09.03.20203 procedure and passed a fresh assessment order on 09.03.20203 procedure and passed a fresh assessment order on 09.03.20203 which has been subjected to revisional proceedings by the Ld. PCIT. which has been subjected to revisional proceedings by the Ld. PCIT. which has been subjected to revisional proceedings by the Ld. PCIT. He submitted that the Assessing Officer cannot continue ubmitted that the Assessing Officer cannot continue with such ubmitted that the Assessing Officer cannot continue proceedings.

7.9 We have carefully considered rival submissions and examined We have carefully considered rival submissions and examined We have carefully considered rival submissions and examined the material available on record. The argument of the Ld. Counsel the material available on record. The argument of the Ld. Counsel the material available on record. The argument of the Ld. Counsel proceeds on the footing that the earlier reassessm proceeds on the footing that the earlier reassessment proceedings ent proceedings were invalid. However, such contention overlooks the fact that the were invalid. However, such contention overlooks the fact that the were invalid. However, such contention overlooks the fact that the initial reassessment order passed on 25.02.2022 under the initial reassessment order passed on 25.02.2022 under the initial reassessment order passed on 25.02.2022 under the unamended provisions of section 147/148 has been rendered unamended provisions of section 147/148 has been rendered unamended provisions of section 147/148 has been rendered infructuous by virtue of the judgment of the Hon’ble Supreme Court infructuous by virtue of the judgment of the Hon’ble Supr infructuous by virtue of the judgment of the Hon’ble Supr in Union of India v. Ashish Agarwal Union of India v. Ashish Agarwal [Civil Appeal No. 3005 of 2022, [Civil Appeal No. 3005 of 2022, dated 04.05.2022]. Pursuant to the ratio therein, all notices issued dated 04.05.2022]. Pursuant to the ratio therein, all notices issued dated 04.05.2022]. Pursuant to the ratio therein, all notices issued during the period 01.04.2021 to 30.06.2021 under the old regime during the period 01.04.2021 to 30.06.2021 under the old regime during the period 01.04.2021 to 30.06.2021 under the old regime stood transmuted into notices under section 1 stood transmuted into notices under section 148A(b) of the Act, 48A(b) of the Act, requiring the Assessing Officer to follow the amended procedure requiring the Assessing Officer to follow the amended procedure requiring the Assessing Officer to follow the amended procedure under sections 147/148A. under sections 147/148A. As regards the contention that once an As regards the contention that once an order dated 25.02.2022 was passed under the old provisions, the order dated 25.02.2022 was passed under the old provisions, the order dated 25.02.2022 was passed under the old provisions, the Assessing Officer could not have continued pr Assessing Officer could not have continued proceedings under the oceedings under the amended provisions, we are unable to accept the same. By amended provisions, we are unable to accept the same. By amended provisions, we are unable to accept the same. By operation of the law declared in operation of the law declared in Ashish Agarwal (supra), the earlier (supra), the earlier order became infructuous, and the Assessing Officer was fully order became infructuous, and the Assessing Officer was fully order became infructuous, and the Assessing Officer was fully justified in continuing and completing proceedings under the justified in continuing and completing proceedings under the justified in continuing and completing proceedings under the amended framework, culminating in the reassessment order dated amended framework, culminating in the reassessment order dated amended framework, culminating in the reassessment order dated 09.03.2023.

7.11 For the foregoing reasons, we f For the foregoing reasons, we find no substance in the plea ind no substance in the plea that reassessment proceedings are invalid in law. Consequently, the that reassessment proceedings are invalid in law. Consequently, the that reassessment proceedings are invalid in law. Consequently, the challenge to the assumption of jurisdiction under section 263, being challenge to the assumption of jurisdiction under section 263, being challenge to the assumption of jurisdiction under section 263, being premised upon such plea, must also fail. Accordingly, Ground Nos. premised upon such plea, must also fail. Accordingly, Ground Nos. premised upon such plea, must also fail. Accordingly, Ground Nos. 2 and 3 raised by the as 2 and 3 raised by the assessee are dismissed.

7.12 The order of ld PCIT passed u/s 263 of the Act is accordingly The order of ld PCIT passed u/s 263 of the Act is accordingly The order of ld PCIT passed u/s 263 of the Act is accordingly upheld