M/S SUNMOON ENTERPRISES,MUMBAI vs. ASST CIT 19 (3), MUMBAI

ORDER PER PAVAN KUMAR GADALE, J.M. The assessee has filed an appeal against the order of Commissioner of Income Tax (Appeals)-3 passed u/s 271(1)(c) and 250 of the Income Tax Act, 1961. The assessee has raised following grounds of appeal:

1. The Ld. CIT(A) failed to appreciate thatthe Assessing Officerdid not specify that under which limb the notice under section 274 read with section 271 was issued to the Appellant i.e. whether the notice was issued for non-filing of return under section 139(2)/148 or for failing to comply with notices u/s 142(1)/ 143(2) or for concealment of particulars of income or for furnishing of inaccurate particulars of income and as such the AO was not clear about M/s Sunmoon Enterprises Appellant made was made aware about the charge.

2. The Ld. CIT (A) failed to appreciate that the AO firstly had erred in reopening assessment under section 147 on the basis of information / material which is vague, general, non-specific and distant; having no direct link or direct nexus between the material and the reasons recorded more so when the Appellants matter was already finalized under scrutiny assessment. The AO also did not independently apply his mind to the information received from the DGIT (Inv.) and also did not make any independent enquiry lo arrive at a belief whether or not any income had escaped assessment.

3. The Ld. CIT(A) failed to appreciate that the AO has neither given an opportunity of being heard nor did the AO give the Appellant the opportunity of cross-examination of the parties on whose reliance there was a re-opening of assessment.

4. The Ld. CIT (A) failed to appreciate that the AO also erred in not informing hisproposed action to make an ad-hoc addition without pin-pointing the defects in the books of accounts/rejecting the books of accounts, which were already accepted by the AO at the time of earlier scrutiny assessment and thus not according any opportunity to the appellant to put its case and make submissions,

5. The Ld. CIT (A) failed to appreciate that the addition was made due to certain information from some person. The Appellant in the course of proceedings had given complete and accurate details, which constituted the genuineness of thepurchases. No penalty can be levied on the assessee under section 271(1)(c) unless the Assessee's is dishonest, mala fide and amounts to concealment of facts.

6. The Ld. CIT-A erred in appreciating that the AO had made the addition only on an estimate basis, which cannot be considered as a deliberate attempt to evade tax.

7. The Ld. Assessing Officer has passed an erroneous Order which is clearly evident from the Order itself as the PAN No. and Address mentioned on the Order is not that of the Appellant and as such it is not a valid Order been M/s Sunmoon Enterprises AO and the said order is void ab intio and liable to be seaside.

5 At the time of hearing, the Ld. AR submitted that the Assessing Officer erred in levying the penalty on estimated income and supported the arguments with submissions and paper book. Contra, the Ld. DR supported the order of Assessing Officer.