DEVKI NANDAN BINDAL,NEW DELHI vs. ITO, WARD- 46(3), NEW DELHI

PER BHAVNESH SAINI, J.M.

The aforesaid Departmental Appeals and Cross

Objections by two different Assessees are directed against

the different Orders of the Ld. CIT(A), Rohtak, Dated 9th

March, 2015 for the assessment year 2007 2008.

both the parties and perused the material made available by

both parties on record. The appeals are decided as under.

20 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

ITA.No.2846/Del./2015 & CO.No.333/Del./2015 M/s. KLF Food (India) Ltd., - A.Y. 2007-2008 :

of information received by Assessing Officer from DIT (Inv.)-II,

New Delhi, Dated 15th March, 2013 that the assessee has

taken accommodation entries amounting to Rs 1.50 crore in

the shape of share capital from various companies, in order to

verify the genuineness of the said investors, notice under

section 148 was issued on 28th March, 2013. The Assessing

Officer asked the assessee to explain the share capital

received from 07 Investors. The Assessing Officer after

considering the material on record, in the light of report of

Investigation Wing, made the addition of Rs.1.50 crores on

account of unexplained credit.

3.1. The assessee challenged the addition before the

the Ld. CIT(A). Ld. CIT(A) noted that all the investor

companies are assessed to tax under section 153C/153A of

the Income Tax Act, 1961 and nothing adverse was found

against the assessee during the course of assessment.

Therefore, addition was deleted.

21 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

3.2. The Revenue is in appeal challenging the deletion

of addition of Rs.1.50 crores and assessee in the cross-

objection challenged initiation of re-assessment proceedings

under section 147/148 of the Income Tax Act, 1961.

3.3. Before considering the issue on merit, we proceed

to decide the legal issue i.e., reopening of assessment in the

matter. Learned Counsel for the Assessee submitted that

validity of the reassessment proceedings is to be determined

with reference to the reasons recorded under section

147/148 of the Income Tax Act, 1961. He has referred to PB

23, which is reasons for reopening of assessment. PB-44 is

assessment order passed under section 143(3), Dated 8th

December, 2009 for assessment year under appeal i.e., 2007-

2008, in which the Assessing Officer has examined the

impugned issue of share capital and share premium. He has

submitted that the reasons recorded are vague and the

Assessing Officer did not verify the return of income, in which

all the particulars on account of share capital/ premium have

been disclosed by the assessee to the Revenue Authorities.

The Assessing Officer did not apply his mind and that the

22 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

Assessing Officer recorded the reasons on borrowed

satisfaction. There is no allegation in the reasons recorded

that there is failure on the part of the assessee to disclose

fully and truly all material facts necessary for assessment

under section 147 of the Income Tax Act. Therefore, notice

issued under section 148 of the I.T. Act after a period of four

years from the end of the relevant assessment year, in case

where the original assessment has been framed under

section 143(3) of the Act is illegal and invalid. He has relied

upon Judgment in the case of Viniyas Finance and

Investment (P) Ltd., 357 ITR 646 and Order of ITAT, Delhi

Bench in the case of M/s. Shiv Sai Infrastructure (P) Ltd., vs.

Pr. CIT ITA.No.2527/Del./2017. He has submitted that since

initiation of reassessment proceedings are based on non-

application of mind and reasons are recorded on borrowed

satisfaction, therefore, reassessment is invalid. In support of

this proposition, he has relied upon the decisions of the Delhi

High Court in the case of G & G Pharma India Limited 384

ITR 147 (Del.) and PCIT vs., Meenakshi Overseas (P) Ltd., 395

ITR 677 (Del.) and PCIT vs., RMG Poly vinyl 396 ITR 5 (Del.).

23 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

He has submitted that the reasons recorded are vague and

no particulars of credit have been mentioned in the reasons.

The reasons also did not say if assessment have already

been framed under section 143(3). Even the nature of the

credit is not mentioned in the reasons. No particulars of

accommodation entries have been mentioned. He has relied

upon decision of Delhi High Court in the case of Signature

Hotels (P) Ltd., 338 ITR 51 (Del.) He has submitted that

reassessment is initiated on mere suspicion only. He has

referred to page-1 of the paper book filed by the Departmental

Representative in which the ACIT of the Investigation Wing

has directed to issue notice under section 147/148 of the

Income Tax Act, 1961 after recording reasons. He has

submitted that all the Investors are assessed to tax and no

material found during the course of search have been

supplied to the assessee. He has submitted that proceedings

are initiated on mere suspicion which is not reason to believe

and based on no tangible material. He has submitted that

reopening of assessment may be quashed.

24 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

Representative relied upon order of the Assessing Officer and

referred to information received from Investigation Wing, copy

of which, is filed at Page-1 of the paper book of the

Department, which is supported by letter of the DIT (Inv.)-II,

Wing, New Delhi, Dated 15th March, 2013, which is referred

to in the reasons for reopening of the assessment. The

Learned Departmental Representative referred to the report of

the Investigation Wing in detail and submitted that there was

sufficient material available on record to justify the reopening

of assessment and that Investigation Wing after detailed

enquiry came to know that Jain Group has provided

accommodation entries. So, there is application of mind on

the part of the Assessing Officer to reopen the assessment.

PB-52 is the list of the Investors. The assessee did not

disclose all material facts necessary for the assessment. The

report of the Investigation Wing is tangible material, therefore,

on that basis reopening of the assessment is justified. The

Learned Departmental Representative however submitted

25 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

that report of the Investigation Wing was never supplied to

the assessee being confidential in nature.

perused the material available on record. It is well settled

Law that validity of reassessment proceedings is to be

determined with reference to the reasons recorded for belief.

We, rely upon the decision of the Hon’ble Bombay High Court

in the case of Indivest PTE Ltd., vs. Addl. CIT (2013) 350 ITR

120 (Bom.). The assessee has filed copy of the reasons

recorded for reopening of assessment at Page-23 of the Paper

Book, which reads as under :

“Office of the Assistant Commissioner of Income-tax, Circle, Rohtak.

Reasons in brief for reopening the case under section 147

of the Income-tax Act, 1961 :

In this case, information was received from DIT (Inv.)-II,

New Delhi, vide letter F.No.DIT (Inv.)-II under section

26 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

148/2012-13 dated 15.03.2013. On the basis of search in

the cases of Shri Surendra Kumar Jain group of cases (entry

operator) and further enquiries the DDIT (Inv.) has suggested

the notice under section 148 in following cases for the A.Y.

2007-08 is required to be issued to bring to tax the

undisclosed income regarding the accommodation entries

obtained by the companies.

Foods (India) Ltd., who is assessed with this Circle, has

availed the following accommodation book entries :-

Sr.No. Name of the Company PAN F.Y. 2006-07 Amount (Rs.) 1. M/s. KLA Foods AACCK8299G 1,50,00,000/- (India) Ltd.,

Therefore, I have reason to believe that income to the

tune of Rs.1,50,00,000/- has escaped assessment.

Issue Notice under section 148 of the Income-tax Act,

1961 for the assessment year 2007-2008.

Dated : 25th March, 2013 Sd/- S. Dayal Assistant Commissioner of Income-tax, Rohtak Circle, Rohtak”.

27 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

5.1. The relevant provision of Section 147 of the Income

Tax Act provides as under :

“147. If the [Assessing] Officer [has reason to

believe] that any income chargeable to tax has

escaped assessment for any assessment for any

assessment year, he may, subject to the provisions

of sections 148 to 153, assess or reassess such

income and also any other income chargeable to

tax which has escaped assessment and which

comes to his notice subsequently in the course of

the proceedings under this section, or re-compute

the loss or the depreciation allowance or any other

allowance, as the case may be, for the assessment

year concerned (hereafter in this section and in

sections 148 to 153 referred to as the relevant

assessment year):

“Provided that where an assessment under sub-

section (3) of section 143 or this section has been

made for the relevant assessment year, no action

shall be taken under this section after the expiry of

28 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

four years from the end of the relevant assessment

year, unless any income chargeable to tax has

escaped assessment for such assessment year by

reason of the failure on the part of the assessee to

make a return under section 139 or in response to

a notice issued under sub-section (1) of section 142

or section 148 or to disclose fully and truly all

material facts necessary for his assessment, for

that assessment year.”

5.2. In the aforesaid reasons, the Assessing Officer on

the basis of the report of Investigation Wing recorded that the

enquiries conducted by Investigation Wing suggested notice

under section 148 is required to be issued. Similarly, Learned

Counsel for the Assessee referred to page-1 of the

Department Paper Book, in which, ACIT has required the

Assessing Officer to issue notice under section 148 of the

Income Tax Act after recording reasons. These facts clearly

suggested that the Assessing Officer merely acted on the

advice of the Investigation Wing. Though the report of the

Investigation Wing is tangible material, but, Assessing Officer

29 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

did not mention any details or particulars of credits in the

reasons as to how he came to the conclusion that there is

escapement of income in this case. No details as to what

information was received have been mentioned in the

reasons. In what manner share capital/premium have been

received have not been mentioned in the reasons. No details

of accommodation entry and accommodation provider have

been mentioned in the reasons. It is not mentioned in the

reasons, if there was any failure on the part of the assessee

to disclose fully and truly all material facts necessary for

assessment under section 147/148 of the Income Tax Act. It

is an admitted fact that assessee prior to the reopening of

assessment has already been assessed for the same year

i.e., 2007-2008 under section 143(3) of the I.T. Act, 1961 vide

order dated 8th December, 2009. Copy of the assessment

order is filed Page-44 of the Paper Book in which it is

mentioned that assessee filed original return of income on 8th

November, 2007. The Assessing Officer examined the issue of

share capital and charging of share premium and ultimately

assessed the income at NET LOSS, without making any

30 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

addition on account of share capital/share premium. The

Assessing Officer did not mention in the reasons if assessee

filed original return of income and whether assessee has

been assessed under section 143(3) of the Income Tax Act.

The Investigation Wing has required the Assessing Officer to

reopen the assessment. It, therefore, appears that re-

assessment proceedings are initiated on mere suspicion and

that reason to suspect is not the same thing as “reason to

believe”. The A.O. recorded vague reasons based on no

evidence at the dictate of Investigation Wing only. Thus, there

is totally non- application of mind on the part of the Assessing

Officer to record reasons for reopening of the assessment. The

Assessing Officer did not mention any material facts in the

reasons, therefore, reopening of assessment is clearly illegal

and bad in law. In the case of Signature Hotels P. Ltd., vs.,

Income Tax Officer And Another (2011) 338 ITR 51 (Del.) the

Hon’ble Delhi High Court held as under :

“Held allowing the petition, that the reassessment

proceedings were initiated on the basis of

information received from the Director of Income-

31 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

tax (Investigation) that the petitioner had

introduced money amounting to Rs. 5 lakhs during

financial year 2002-03 as stated in the annexure.

According to the information, the amount received

from a company, S, was nothing but an

accommodation entry and the assessee was the

beneficiary. The reasons did not satisfy the

requirements of section 147 of the Act. There

was no reference to any document or statement,

except the annexure. The annexure could not be

regarded as a material or evidence that prima

facie showed or established nexus or link which

disclosed escapement of income. The annexure

was not a pointer and did not indicate escapement

of income. Further, the Assessing Officer did not

apply his own mind to the information and

examine the basis and material of the information.

There was no dispute that the company, S, had a

paid-up capital of Rs. 90 lakhs and was

incorporated on January 4, 1989, and was also

32 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

allotted a permanent account number in

September, 2001. Thus, it could not be held to be a

fictitious person. The reassessment proceedings

were not valid and were liable to be quashed”.

5.3. The Hon’ble Madras High Court in the case of Sri

Sakthi Textiles Ltd., vs. JCIT and Another (2012) 340 ITR 144

(Mad.) held that “reasons for notice must specify that there

was failure to disclose material facts necessary for

assessment.”

5.4. The Hon’ble Madras High Court in the case of Karti

P. Chidambaram & Others vs. ACIT (2018) 402 ITR 488

(Mad.) observed that “When original assessment passed after

scrutiny, granting exemption - Notice after four years on the

ground that claim for exemption was not examined properly -

No failure to disclose material facts necessary for

assessment.”

5.5. The Hon’ble Delhi High Court in the case of Avtec

Ltd., vs. DCIT (2017) 395 ITR 434 (Del.) noted that “In case of

notice after four years, the conditions precedent for

33 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

reassessment is that in what manner assessee failed to

disclose material facts fully and fresh or tangible material

must be disclosed in reasons.”

5.6. Considering the facts of the case, in the light of

reasons recorded above and discussion, it is clear that the

Assessing Officer did not mention any material facts in the

reasons. The Assessing Officer did not mention that assessee

was already assessed under section 143(3) in the original

assessment, in which, Assessing Officer has already

examined the issue of share capital/premium and what was

the material produced before him regarding accommodation

entry. The Assessing Officer did not record as to who has

provided accommodation entry to assessee in the reasons.

Thus, there was no failure on the part of the assessee to

disclose fully and truly all material facts necessary for

assessment under section 147 of the Income Tax Act, 1961.

5.7. In view of the above, it is clear that in the instant

case the Assessing Officer reopened the assessment after 04

years from the end of the assessment year and Assessing

Officer has failed to specify if there is any failure on the part

34 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

of the assessee to disclose fully and truly all material facts

necessary for assessment under section 147 of the Income

Tax Act, therefore, conditions of Section 147 of the Income

Tax Act are not satisfied in this case. Further, the reasons are

vague and do not disclose any incriminating material against

the assessee. The decisions relied upon by Learned Counsel

for the Assessee squarely apply to facts of case. Therefore,

reopening of the assessment is wholly unjustified in the

matter. We are, therefore, of the view that assumption of

jurisdiction under section 147/148 of the Income Tax Act is

clearly illegal and bad in Law. We, accordingly, set aside the

orders of the authorities below and quash the reopening of

the assessment under section 147/148 of the Income Tax

Act, 1961. Resultantly, all additions stand deleted. The cross-

objections of the assessee is allowed. In view of these

findings, there is no need to decide the Departmental Appeal

on merits, in which, Ld. CIT(A) has already deleted the

addition.

allowed and Departmental Appeal is dismissed.

35 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

ITA.No.2845/Del./2015 & C.O.No.372/Del./2015 Param Exim Limited – Assessment Year – 2007-2008.

information from DIT (Inv.)-II, New Delhi vide letter dated 15th

March, 2013 that assessee has taken accommodation entry

of Rs.3.20 crores in the shape of share capital from various

companies. The Assessing Officer issued notice under section

148 of the Income-Tax Act on 28th March, 2013. The

Assessing Officer examined the issue with reference to 08

Investors made investments in assessee company and made

the addition of Rs.3.20 crores against the assessee. The Ld.

CIT(A) on the same reasoning as given in the case of M/s.

KLF Food (India) Ltd., deleted the addition on merit.

of addition of Rs.3.20 crores and Assessee is in cross

objection challenging the reopening of the assessment in the

matter. Learned Representatives of both the parties

submitted that the issue is same as have been considered in

the case of M/s. KLF Food (India) Ltd., except that in this

36 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

case the return was processed under section 143(1) of the

Income Tax Act, 1961.

reasons recorded for reopening of assessment, copy of which

is filed at Page-20 of the paper book which reads as under :

“Office of the Assistant Commissioner of Income-tax, Circle, Rohtak.

Reasons in brief for reopening the case under section 147

of the Income-tax Act, 1961 :

In this case, information was received from DIT (Inv.)-II,

New Delhi, vide letter F.No.DIT (Inv.)-II under section

148/2012-13 dated 15.03.2013. On the basis of search in

the cases of Shri Surendra Kumar Jain group of cases (entry

operator) and further enquiries the DDIT (Inv.) has suggested

the notice under section 148 in following cases for the A.Y.

2007-08 is required to be issued to bring to tax the

37 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

undisclosed income regarding the accommodation entries

obtained by the companies.

Param Exim Ltd., who is assessed with this Circle, has

availed the following accommodation book entries :-

Sr.No. Name of the Company PAN F.Y. 2007-08 Amount (Rs.) 1. M/s. Param Exim AACCP9669B 3,20,00,000/- Ltd.,

Therefore, I have reason to believe that income to the

tune of Rs.3,20,00,000/- has escaped assessment.

Issue Notice under section 148 of the Income-tax Act,

1961 for the assessment year 2007-2008.

Dated : 25th March, 2013 Sd/- S. Dayal Asst. Commissioner of Income-tax, Rohtak Circle, Rohtak”.

9.1. Learned Counsel for the Assessee submitted that

apart from the fact that the issue is same as have been

considered in other case, but, in the present case the amount

in question as mentioned in the reasons at Rs.3.20 crores

have been wrongly mentioned because the amount in

38 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

question is Rs.2.20 crores [PB-10]. He has also submitted that

the Assessing Officer in the reasons has mentioned that

income escaped for assessment for F.Y. 2007-2008 instead of

F.Y. 2006-2007. He has, therefore, submitted that since

wrong facts have been mentioned in the reasons for

reopening of assessment, therefore, on this reason alone the

reopening of the assessment is invalid and bad in Law.

Representative relied upon Orders of the authorities below

and submitted that reassessment was done by the Assessing

Officer on the basis of the information received from

Investigation Wing, which is tangible material, which is

sufficient to initiate reassessment proceedings against the

assessee.

that the issue is same as have been considered in the case of

M/s. KLF Food (India) Ltd., (supra) except that in this case

there is no assessment under section 143(3) of the Income-

Tax Act, 1961. The Hon’ble Bombay High Court in the case of

Siemens Information System Ltd., vs. ACIT & Others (2007)

39 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

293 ITR 548 (Bom.) held that “when notice for reassessment

basing on non-existing reasons and provisions inapplicable at

relevant time – Not constituting reasons to believe. Notice

invalid.” The Hon’ble Punjab and Haryana High Court in the

case of CIT vs., Atlas Cycle industries (1989) 180 ITR 319

(P&H) held as under :

“Held, (i) that the Tribunal was right in cancelling

the reassessment as both the grounds on which

the reassessment notice was issued were not

found to exist, and, therefore, the Income-tax

Officer did not get jurisdiction to make a

reassessment.”

11.1. The Hon’ble Bombay High Court in the case of

Ankita A. Choksey vs. Income Tax Officer And Others (2019)

411 ITR 207 (Bon.) held that “Condition precedent for issue of

notice for reassessment is that the reason to believe that

income has escaped assessment must be based on correct

facts. Notice based on wrong facts is without jurisdiction and

is to be quashed.”

40 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

11.2. In the instant case, the Assessing Officer has

recorded vague reasons based on wrong facts. The

escapement of income based on accommodation entry

as informed by Investigation Wing have been mentioned

at Rs.3.20 crores which in fact was Rs 2.20 crores.

Such fact is mentioned in the balance sheet of the

assessee, copy of which is, filed at Page-10 of the paper

book, which is also supported by the list of Investors

filed at Page-21 of the paper book. The Assessing

Officer in the reasons for reopening has also mentioned

incorrect F.Y. 2007-2008 instead of F.Y. 2006-2007.

Therefore, the reasons are based on wrong facts, which

clearly show that there was no application of mind on

the part of the Assessing Officer while recording

reasons for reopening of the assessment. We, therefore,

considering the above discussion and following the

reasons for decision in the case of M/s. KLF Food (India)

Ltd., (supra), hold that assumption of jurisdiction by the

Assessing Officer for reopening of the assessment is

illegal and bad in Law. We, accordingly, set aside the

41 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

orders of the authorities below and quash the reopening

of assessment in the matter. Resultantly, all additions

stand deleted. In view of the above, there is no need to

decide the Departmental Appeal on merit in which Ld.

CIT(A) has already deleted the addition.

dismissed and the cross-objection of the Assessee is

allowed.

Assessees are allowed and both Departmental Appeals

are dismissed.”

7.2. According to Section 148(1), before making

reassessment under section 147 of the Income Tax Act,

1961, A.O. shall have to serve the notice under section 148

upon the assessee requiring him to furnish the return as

specified in the notice. However, in the present case it is an

admitted fact that the notice issued under section 148 of

Income Tax Act returned back to the A.O. Even in the record

the address of the assessee is not completely mentioned.

42 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

The report submitted by the Learned Counsel for the

Assessee shows that postal authorities have mentioned

against the registered cover issued by the A.O. containing

notice under section 148 of Income Tax Act “item delivery

attempted - addressee moved”. It would show that notice

under section 148 have not be served upon the assessee

and no further evidence have been produced on record, if

any attempt have been made to serve the notice upon the

assessee personally. The A.O. in the assessment order has

noted that notice under section 148 have been served later

on through affixture for which no record have been

produced to satisfy the requirements of Law whether notice

through affixture have been served in accordance with Law.

These facts considering the fact that incorrect address have

been recorded in the speed post record would clearly reveal

that no notice under section 148 have been served upon the

assessee. Therefore, assumption of jurisdiction under

section 147 of the Income Tax Act is clearly illegal and bad

in Law.

43 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

7.3. It may also be noted here that the A.O. in the

reasons recorded for reopening of the assessment has

merely recorded that Rs.15 lacs accommodation entry taken

by the assessee has escaped assessment. However, at the

re-assessment stage, A.O. made further addition of Rs.52.91

crores on account of deposits in the bank account of the

assessee. No reasons have been mentioned as to why such

addition have been made and what was the purpose in

making the addition. The entire deposit in the Bank account

of the assessee could never be unexplained. Even the

Investigating Agency have not made any allegation against

the assessee if that amount was an accommodation entry

taken by the assessee ? The Ld. D.R. admitted that no

notice have been issued by the A.O. while proposing to

make this addition of Rs.52.91 crores. The issue is,

therefore, covered in favour of the assessee against the

Department by Judgment of Hon’ble Delhi High Court in the

case of Ranbaxy Laboratories Limited vs., CIT [2011] 336

ITR 136 (Del.) in which in para 18 it was held as under :

44 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

“We are in complete agreement with the

reasoning of the Division Bench of the Bombay

High Court in the case of CIT vs., Jet Airways

(I) Limited [2011] 331 ITR 236 (Bom.). We may

also note that the heading of section 147 is

"income escaping assessment" and that of

section 148 "issue of notice where income

escaped assessment". Sections 148 is

supplementary and complimentary to section

reasons for issuance of notice by the Assessing

Officer and sub-section (1) thereof mandates

service of notice to the assessee before the

Assessing Officer proceeds to assess, reassess

or re-compute the escaped income. Section 147

mandates recording of reasons to believe by

the Assessing Officer that the income

chargeable to tax has escaped assessment. All

these conditions are required to be fulfilled to

45 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

assess or reassess the escaped income

chargeable to tax. As per Explanation 3 if

during the course of these proceedings the

Assessing Officer comes to conclusion that

some items have escaped assessment, then

notwithstanding that those items were not

included in the reasons to believe as recorded

for initiation of the proceedings and the notice,

he would be competent to make assessment of

those items. However, the Legislature could not

be presumed to have intended to give blanket

powers to the Assessing Officer that on

assuming jurisdiction under section 147

regarding assessment or reassessment of the

escaped income, he would keep on making

roving inquiry and thereby including different

items of income not connected or related with

the reasons to believe, on the basis of which he

assumed jurisdiction. For every new issue

46 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

coming before the Assessing Officer during the

course of proceedings of assessment or

reassessment of escaped income, and which

he intends to take into account, he would be

required to issue a fresh notice under section

148.”

7.4. Similar view is taken by the ITAT, Mumbai G-

Bench in the case of Juliet Industries Ltd., Mumbai vs., ITO

6(3)(3), Mumbai (supra). Considering the totality of the facts

and circumstances, we are of the view that A.O. has

recorded non-existing, incorrect and wrong facts in the

reasons recorded for reopening of the assessment. The A.O.

did not applied his mind to the report of Investigation Wing.

The A.O. merely believed report of Investigation Wing

without making further scrutiny at the assessment. The

A.O. merely reproduced report of Investigation Wing without

making further scrutiny of the same. The A.O. merely

reproduced report of Investigation Wing and crux of

statement of Shri Kishori Sharan Goel for reopening of the

47 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

assessment in the matter. Therefore, it was merely a

borrowed satisfaction without application of mind. We,

therefore, held that initiation of re-assessment proceedings

in the instant case is illegal, bad in law and is liable to be

quashed. In this view of the matter, we set aside the orders

of the authorities below and quash the reopening of

assessment under section 147/ 148 of the Income Tax Act,

1961. Resultantly, all additions stand deleted. In view of the

above, there is no need to adjudicate the issues on merit

which are left with academic discussion only.

Order pronounced in the open Court.

Sd/- Sd/- (B.R.R. KUMAR) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER Delhi, Dated 18th December, 2019 VBP/- Copy to 1. The appellant 2. The respondent 3. CIT(A) concerned 4. CIT concerned 5. D.R. ITAT “B” Bench 6. Guard File

48 ITA.No.4271/Del./2019 Shri Devki Nandan Bindal, Delhi.

// BY Order //

Asst. Registrar : ITAT Delhi Benches : Delhi.