DCIT, CIRCLE-1, BATHINDA vs. DMR BUILDERS PVT LTD, BATHINDA

4. The Ld. CIT(A) has erred in holding notice issued u/s 148 of the Income-tax Act. 1961 as invalid and illegal by not appreciating the Hon’ble Apex Court’s judgement in Assistant Commissioner of Income Tax v/s. Rajesh Jhaveri Stock Brokers Pvt. Ltd., 291ITR 500, in which the Hon’ble Apex Court in para 17, held that- “In other words, if the Assessing Officer for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment.” Therefore, this reopening notice cannot be challenged. This for the reason that it will be open to the Assessee during reopened proceeding to establish that seeking to tax the additional income was not warranted.”

5. The Ld. CIT(A) has erred in holding notice issued u/s 148 of the Income-tax Act, 1961 as invalid and illegal by not appreciating the Hon’ble Apex Court’s judgement in Raymond Woollen Mills Ltd. v. ITO And Others ([1999] 236 ITR 34 (SC)/[1999] 152 CTR 418 (SC)) in which the Hon’ble Apex Court held that in determining whether commencement of reassessment proceedings was valid it has only to & 293/Asr/2024 4 And C.O. Nos. 01 & 02/Asr/2025

be seen whether there was prima facie some material on the basis of which the department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. 6. The Appellant craves leave to add, amend, alter, vary any or all the above grounds of appeal

7. It is prayed that the order passed by the Ld. CIT(A) may be set aside and that of the AO may be restored.”

5. In response to notices u/s 133(6), replies and explanation has been furnished by the assessee, giving the details of the projects constructed by the assessee, located at (i) New Chandigarh area, Mullanpur at SAS Nagar, where there was construction of fly over and development of Medicity junction on 200 ft wide road and (ii) Construction of ROB in lieu of level crossing on NH-64, Bhatinda, Punjab, supported by copies of billed amount, ledger copy print out, bank statements containing reflection of payments received, amounting to Rs.6.69 crores (pertaining to Asst year 2016-17) and Rs. 23.09 crores ( pertaining to Asst year 2017-18 ) along with the copy of the main contract awarded by the State Government authorities to the principal contractor DRAIPL group, Ahmedabad , with a declaration that the signed copy of the letter of intent with DRAIPL was not immediately available with the assessee, because the same is retained by the principal contractor, and is available & 293/Asr/2024 6 And C.O. Nos. 01 & 02/Asr/2025 at Ahmedabad with the searched person , and the same will be produced at a later date soon. 5.1 Not being satisfied with the explanation of the assessee, the AO proceeded to initiate reassessment proceedings by issue of notice u/s 148 dated 29th March, 2019, the recorded reasons being as follows: “4. The reply of the assessee has duly been considered. It is observed that the assessee has failed to file copy of any agreement with M/s Dineshchandra R Agrawal Infracon Pvt Ltd on the plea that it was retained by the contractee. The plea is not acceptable. Sub contract agreement is a vital legal document, which specifies rights and obligations of both the parties and it is legally enforceable in case of any dispute. By falling to produce a copy of such agreement, the assessee has admitted that in fact there was no agreement. In the absence of such agreement, it cannot be presumed that the assessee was awarded the work of sub contract. Further, no details of work performed by the assessee have been furnished in spite of the fact that it was required specifically to furnish the same vide letter Issued u/s 133(6) of the Act. Further, the fact that M/s Dineshchandra R Agrawal Infracon Pvt Ltd was engaged in booking bogus sub contract expenses has already been established. It is observed that the assessee has shown to have received an amount of Rs 5.71.37,870/- from M/s Dineshchandra R Agrawal Infraçon Pvt Ltd during the financial year 201,5-16. However, in view of the facts stated above, I am of the opinion that the no sub contract work was performed by the, & 293/Asr/2024 7 And C.O. Nos. 01 & 02/Asr/2025 assessee and It introduced Its own unaccounted money in the books of accounts in the garb of sub contract receipts. Hence, the amount of Rs 5,71,37,870/, represents unexplained credits in the books of accounts of the assessee, and its deemed income u/s 68, of the Act for the assessment year 2016-17.

5. In view of the above facts, I have reasons to believe that amounts of Rs. 5,71,37,870/-, which was chargeable to tax in the case of the assessee for the assessment year 2016-17 has escaped assessment within the meaning of section 147 of the Act. To assess this income and also any other income chargeable to tax which comes to my notice subsequently in the course of assessment proceedings under this section, a notice u/s 148 Is Issued for the A.Y. 2016-17. (Arvind Bansal) Dated: 29.03.2019 Dy. Commissioner of Income Tax, Cirde-l, Bathinda

6. On receipt of recorded reasons the assessee raised objections to initiation of proceedings u/s 147 and submitted documentary evidences and explanations praying for dropping of reassessment proceedings, along with copies of letter of intent issued on 21st September, 2015 by DRAIPL group for the fly over construction and LOI dated 17th September, 2016, for the construction of ROB , cash flow summary for the period August 2015 to March 2017, depicting progressive month wise expenditure and receipts from DRAIPL group against work executed at the both the & 293/Asr/2024 8 And C.O. Nos. 01 & 02/Asr/2025 projects, copies of first and last bills raised, supported by copies of measurement books of Government department (diary of record of work done) under signature of the Sub Divisional engineer Central works Sub Division ( PWD ) ( B & R ) Bhatinda , duly authenticated by Executive engineer, CWD, Bhatinda , and in respect of work executed at ROB ( Level Crossing C-184 ) memorandum of payments certified by Superintendent Engineer , Ministry of Roads and Highways, Government of India, Chandigarh, further evidenced by photographs taken at site of work during various stages of construction, in the presence of principal contractor, and representative of Government departments on inspection, along with documents relating to transport and delivery of materials being evidenced by VAT – 12 declaration at check posts , thereby proving movement of goods and delivery of materials at site of work along with other documents and papers contained in the voluminous paper book of 126 pages . 7. (The objections to recorded reasons are reproduced for ready reference): Reasons for Issuance of notice u/s 148 of the Income Tax Act, 1961 Return of Income for the assessment year 2016-17 was filed by the assessee on 16.10.2016 declaring an income of Rs. 1,66,22,771/-. The assessee is a civil contractor.

2. As per Information received ACIT, Central Circle-2(1), Ahmadabad, a search u/s 132 of the Act was conducted at the premises of DRA group of Ahmadabad. During search and post search enquiries, it was revealed that M/s Dineshchandra & Agrawal infracon Pvt Ltd, a group company was engaged in generating unaccounted money by way of booking bogus sub contract expenses as well as by booking bogus purchase expenses for material. A detailed analysis of such bogus booking of sub contract expenses was undertaken, which revealed that many of the entities to whom sub-contractor payments were shown as paid were dummy entities, which were not existing at the given addresses or did not have infrastructure to undertake such sub contract work, it was further observed that many of such entities, to whom large sub contract payments & 293/Asr/2024 9 And C.O. Nos. 01 & 02/Asr/2025 were not made, had not, filed their returns, of income, Hence, it was concluded that M/s Dineshchandra R Agrawal Infracon Pvt Ltd, a group company, was engaged in generating unaccounted money by way of, booking bogus sub-contractor expenses as well as by booking bogus purchase expenses for material.

4. The reply of the assessee has duly been duly considered. It is observed that the assessee has failed to file copy of any agreement with M/s Dineshchandra R Agrawal Infracon Pvt Ltd on the plea that it was retained by the contractee. The plea is not acceptable. Sub contract agreement is a vital legal document, which specifies rights and obligations of both the parties and it is legally enforceable in case of any dispute. By falling to produce a copy of such agreement, the assessee has admitted that in fact there was no agreement in the absence of such agreement, it cannot be presumed that the assessee, was awarded the work of sub contract. Further, no details of work performed by the assessee have been furnished in spite of the fact that it was required specifically to furnish the same vide letter issued u/s 133(6) of the Act. Further, the fact that M/s Dineshchandra R Agrawal Infracon Pvt Ltd was engaged in booking bogus sub contract expenses has already been established. It is observed that the assessee has shown to have received an amount of Rs 5,71,37,870/- from M/s Dineshchandra R Agrawal Infracon Pvt Ltd during the financial year 2015-16. However, In view of the facts stated above, I am of the opinion that the no sub contract work was performed by the assessee and it introduced its own unaccounted money in the books of accounts in the garb of sub contract receipts. Hence, the amount of Rs. 5,71,37,870/- represents unexplained credits in the books of accounts of the assessee, and its deemed income u/s 68 of the Act for the assessment year 2016-17.

(Arvind Bansal) Dy. Commissioner of Income Tax, Circle-1, Bathinda

Dated 25.11.2019 To, The Dy. Commissioner of Income Tax, Circle-1, Bathinda Subject: Objections to the reasons recorded u/s 147 of the Act for the AY 17-18 and AY 16-17 in the case of M/s DMR Builders Pvt. Ltd – regarding PAN: AABCD3380L Sir, With reference to the copy of reasons recorded and information received from ACIT- CC2(1), Ahmedabad dated 07.02.2019 in the above noted case, it is respectfully submitted as under:

1. 1. In the information received from ACIT, Ahmedabad, following three points have been raised, in general, for the sub-contractor of M/s Dineshchandra R Agarwal Pvt. Ltd. (DRA): 1.1 That subcontractor does not exist or do not have infrastructure to provide the services to DRA 1.2 That discrepancies in the payment made to these sub-contractors. 1.3 That some of the sub-contractors have not filed its return.

2. In regards to the above point, it is submitted as under point-wise: 2.1 That firstly, the assessee company (M/s DMR Builders) is very well in the existence since 2000 and regularly filing its return the Income Tax Department. Further, being regularly assessed with the department. Secondly, the assessee company has sufficient capability to perform such projects and during the relevant year the total turnover and disputed receipts were as under: Description AY 17-18 AY 16-17 Total Turnover 113,26,87,578 51,61,66,134 & 293/Asr/2024 11 And C.O. Nos. 01 & 02/Asr/2025

Disputed project 23,09,45,661 6,69,57,561 receipts

From the above chart, it is clear that the assessee company has performed not just the contracts of DRA but has also performed the other contracts as well of significant value. These figures demonstrate the sufficient financial capability to undertake such projects. 2.2. In the reply submitted under section 133(6) of the Act, there is no irregularity in the payments made by the DRA to the assessee company. As per practice of the industry, the payments were received from the DRA after execution of the work and after the measurement taken by the Govt department. 2.2.1 In the support, copy of the cash flow summary starting from the month of August 2015 till March 2017 covering both the projects of DRA is enclosed herewith (Pg. no. 1). From this sheet, it is clear that the assessee company has incurred the expenditures at the first place and then the payments were received from DRA. Moreover, in the nut shell, net receipts from both the projects were merely Rs. 1,05,15,048/- only i.e. after meeting out the expenditures. 2.2.2 Further, in the support of work execution, copy of the first bill and last bill raised to the DRA along with copy of measurement book (Govt. department diary of record keeping of the work done) is enclosed herewith (Pg. no. 2 to 35). 2.2.3 Furthermore, in the support of work execution, copies of the photographs clicked at both the sites are enclosed herewith (Pg. no. 36 to 48). Hoardings in these pictures covering the name of DMR and Dineshchandra R Agarwal and pictures of DMR founder Sh. Darshan Kumar along with his sons and executives of Govt Departments make clearer that the assessee company has executed these projects. 2.2.4 Further also, in the support of work execution, copies of certain material expenditures are enclosed herewith (Pg. no. 49 to 70) wherein the copy of VAT 12 is enclosed reflecting the location of the goods to be delivered which is Bathinda (one project) and Mullanpur, Near chandigarh (second project). 2.3 Third point is outrightly not applicable of non-filing of income tax returns 3. Now coming to the reasons recorded, it has been assumed that no work has been performed based on the following three points: 3.1 Sub contract agreement has not been furnished. 3.2 No detail of work performed by the assessee furnished even specially asked for.

& 293/Asr/2024 12 And C.O. Nos. 01 & 02/Asr/2025 3.3 It is already established that DRA is involved in booking of bogus sub contracts.

4. In regards to the above points, it is respectfully submitted as under: 4.1 It was requested then also that the agreement (letter of intent copy) currently is not available with the assessee company. At that time also, request was placed with DRA to provide copy of LOI covering the required information of margins and terms and conditions. Further, no second opportunity was provided to the assessee company to furnish the same. Therefore, making such belief is not valid and against the principles of natural justices specially when all other required information ie. details of project including location and scope of work, copies of the work allocation order from the Govt department was submitted. 4.2 This is misstated facts that the assessee company has not provided the detail of work performed whereas the information called for u/s 133(6) was duly furnished vide letter dated 25.03.2019. 4.3 Since the point no. 3.1 and 3.2 are address in the reply no. 4.1 and 4.2 and information received from ACIT Ahmedabad has duly replied in the point no. 2 above. Therefore, this point is not relevant to draw conclusion in context of assessee appellant. In view of the above facts and circumstances of the case, it is requested that the proceedings so initiated under section 147/148 may kindly be dropped as there is no valid basis for conducting assessment and reasons u/s 147 of the Act. This is submitted as required. Thanking you, Yours faithfully, M/s DMR Builders Pvt. Ltd.

7.1 Subsequently, in course of assessment proceedings various notices were issued u/s 142(1) , raising various queries and replies to such queries were made by the assessee, necessary directions issued by Additional CIT u/s 144A were considered, and after elaborate discussion of all material facts, the AO arrived at a conclusion that the assessee company has never executed actual construction work & 293/Asr/2024 13 And C.O. Nos. 01 & 02/Asr/2025 as sub-contractor, allotted to them by the principal contractor DRAIPL group, Ahmedabad, and the assessee has simply introduced its unaccounted money in its books of accounts under the head sub contract receipts and consequently the assessment was completed on a total income of Rs.10,06,72,420/- by taking recourse to section 145(3) of the Act 61 , with estimation of total income @ 8% on Gross receipts of Rs. 44.71 crores (excluding the receipts of Rs. 6.69 crores from DRAIPL group) and the disputed sub contract receipt of Rs. 6.69 crores has been separately added back u/s 68 of the Act 61. 7.2 The relevant paragraph of the order is reproduced for ready reference: “5.1 It is pertinent to note that the Add. CIT directed me u/s 144A of the Act to completely examine all the details filed by the assessee to ascertain whether the assessee had actually done the work on behalf of contractee, to examine bills, vouchers especially purchases of steel, sand stone, cement should be verified in view of low profit at 3.14% shown by the assessee, to call for stock register site wise and to call for muster roll of each site to verify whether the assessee had actually done the work on behalf of the contractee. The directions are binding upon me and hence the assessee was again required to file the requisite details vide notice u/s 142(1) dated 27.12.2019 along with the information called for vide earlier notices issued u/s 142(1) of the Act from time to time. However, the assessee failed to file the requisite information/details/evidences.

& 293/Asr/2024 14 And C.O. Nos. 01 & 02/Asr/2025 5.2 However, the assessee uploaded some more bills on 29.12.2019 i.e. only two days before the time limitation expires. The bills are relating to various sites and are neither site wise nor in a chronological order and hence cannot be cross verified with the copies of purchase accounts submitted by the assessee earlier nor can be cross verified from the vendors in such a short span of time. It is observed that the assessee was requested to furnish such information as early as on 06.08.2019 but the assessee chose to furnish the bills on 29.12.2019 when the lime limitation to complete the assessment proceedings is just to expire. Further, the other information as detailed above has still not been furnished by the assessee. 5.3 In view of the above facts, the books of accounts of the assessee do not reflect true state of affairs of the assessee and true profits of the assessee cannot be deduced from the books of accounts of the assessee. Hence, the books of accounts of the assessee are rejected as provided u/s 145(3) of the Act. Taxable income of the assessee is being worked out on the basis of material available on record.

Act. Penalty proceedings u/s 271 (1)(c) of the Act for concealing particulars of income are simultaneously initiated.”

supporting evidences during enquiry u/s 133(6) and while-filing objection to the notice u/s 148. The mere fact that the copy of sub-contract agreement was not submitted cannot form the sole reason for reopening an assessment. Not only did the AO fail to provide another opportunity to the Appellant, he also did not exercise his authority u/s 133(6) to obtain the copy directly from DRAIPL. He also ignored all the other supporting documents provided in this respect as discussed supra. The information received from the ACIT, Central Circle-2(1). Ahmedabad itself is not that there is any escaped assessment but rather to make further inquiries in respect of Certain sub-contractors who are non-existent, not capable, not disclosed of payments received and not filing Returns of Income. The Appellant does not fall under any of these Categories and this was fully clarified by the Appellant at the enquiry stage itself. The case has been reopened merely on presumption and surmises by misstating the facts and without any material in the possession of the AO. No proper verification of facts on the file has been done by the AO. No proper inquiry has been conducted by the AO. Merely issuing 133(6) to the Appellant cannot be considered as conduct of enquiry. It is the application of mind which is more important Reason to suspect cannot override reason to believe and there is not even a single evidence to form reason to believe before the reopening of this case. In view of the above, the notice issued u/s 148 of the Act is invalid and illegal and the subsequent assessment framed in response to such notice is void ab initio. These grounds are allowed.”

& 293/Asr/2024 17 And C.O. Nos. 01 & 02/Asr/2025

& 293/Asr/2024 18 And C.O. Nos. 01 & 02/Asr/2025 11.2 Relying on the aforesaid two decisions , and drawing our attention to the letter dated 7th February, 2019 ( received on 18th Feb 2019 ) issued by the ACIT Central Circle, Ahmedabad, addressed to the DCIT- Bhatinda, the Ld. DR submitted, that in the instant case information has been received ,from Ahmedabad AO - office, regarding search operation conducted u/s 132 at the premises of the searched person, and seized materials indicates , booking of bogus expenses through bogus sub- contractors relating to bogus payments, made by the searched person to various parties and the assessee is one such party in the list, and since the assessee could not produce the sub contract agreement or the LOI , in course of inquiry u/s 133(6) by the AO , to prove the genuineness of the work executed , the AO has rightly arrived at a reason to believe that income has escaped assessment and was fully justified in initiating proceedings vide notice u/s 148 dated 29th March, 2019. 11.3 The Ld. DR concluded his arguments praying for upholding the legal validity of the notice issued u/s 148 of the Act and for restoration of the assessment order. 11.4 Before the Tribunal, the assessee has filed written submissions along with a paper book containing 171 (One hundred seventy one) pages consisting of audited accounts, audit report, copies of ITR for both the assessment years, inquiry letters issued u/s 133(6) and assessee replies, along with documentary evidences, including bills copies, measurement details, records of work execution diary, containing signature of various Government department officials, copies of recorded reasons, & 293/Asr/2024 19 And C.O. Nos. 01 & 02/Asr/2025 notice u/s 148, assessee objections, copies of letter of intent, submissions filed before Ld. CIT(A) and various other documents connected with the case.

a. In the pre search investigation, it was found by the investigation wing that many of these entities either do not exist at the given address or do not have the infrastructure to provide service on such large scale for the infrastructure projects undertaken by Dineshchandra R Aggarwal Infracon Pvt Ltd. b. There is a huge discrepancy in the payments made to these subcontractors by Dineshchandra R Aggarwal Infracon Pvt Ltd in various financial years and their ROI turnover of their respective assessment years. c. Many of the subcontractors have not filed returns even though they have received huge payments from Dineshchandra R Aggarwal Infracon Pvt Ltd.

& 293/Asr/2024 20 And C.O. Nos. 01 & 02/Asr/2025

Submission of the assessee on such information relied upon by the AO without any enquiry is being reproduced :

It is submitted before your goodself that, the information relied upon in the case of the assessee as per information letter dated 18.02.2019 does not commensurate with the facts placed on record before the AO and Ld. CIT(A) as per facts as follows: a) The assessee reputed company is engaged business of civil contractor since 20.08.2000 and the total turnover declared by the assessee in AY 2016-17 was of Rs. 51,61,66,134/- and in AY 2017-18 was of Rs. 113,26,87,578/-. Therefore, the existence of the assessee company cannot be doubted. b) Details of payments made by the DRAI Group to assessee have been filed before the Ld. AO in response to the notice issued u/s 133(6) and the same was made through proper banking channels and even project wise copy of account of work done as a Sub-Contractor and also proper linkage of the payments received by the assessee is enclosed as (per page 125 to 126 of the PB) and no defects have been pointed out by the AO as well as CIT(A). Therefore, the allegation of discrepancy in payments is not proved. c) The assessee company is regularly filing its return of income from past many years and for the year under consideration the assessee had declared income of Rs. 1,66,22,770/- for AY 2016-17 and amount of Rs. 6,00,82,031/- in AY 2017-18 and paid taxed accordingly. Therefore, the allegation of returns not being filed by the sub-contractors are not applicable on assessee.

& 293/Asr/2024 21 And C.O. Nos. 01 & 02/Asr/2025

From perusal of above, your good-self will appreciate the fact the information relied upon by the assessee is not applicable on assessee, as per facts and evidences filed , placed on record and the Ld. CIT(A) had appreciated the above said facts. Thus, allegation of accommodation entry in this case is not sustainable compared with the audited return.

6. The findings given by the Ld. CIT(A) is as under: - Issue against which AY 2016-17 (relevant AY 2017-18(relevant findings given by pages pages Ld. CIT(A) Observation on Page 24 para 3.10 Page 20 para 3.10 below in information below in the order of the order of CIT(A) passed received from ACIT, CIT(A) 24.04.2024 dated 24.04.2024 Central circle-2(1) vide letter dated 07.02.2019

Thus, it can be clearly said that in the order passed by the CIT(A) that “The AO did not provide a second opportunity to the appellant to produce the copy of agreement which was a gross violation of the principal of natural Justice specially when all other required information like details of projects including location, scope of work, copy of contract awarded by the Government authority to DRAIPL amount of Contract receipts received from DRAIPL Project-wise were furnished to the AO” in order and CIT(A) has rightly quashed the notice u/s 148.

case of the assessee, therefore the escapement of income , cannot be confirmed in anyway.

Thus, the addition made by Ld. AO was rightly deleted by the Worthy CIT(A) on legal issue, after considering the fact that no reasonable opportunity was given to assessee, and the case of the assessee was selected merely on the basis of suspicion without making adequate enquiry, therefore, it cannot be treated as valid reason to believe for reopening. Moreover, the Worthy CIT(A) has accepted the fact that the sub-contract work performed by the assessee belongs to Government allocated project, and Officials of Government Authorities verify the fact of completion of project, then, make payments accordingly as per Work done and further, findings has been given about the work undertaken by the assessee as sub-contractor as per Page 25 of the order of CIT(A), which is being reproduced as under: “The AO did not provide a second opportunity to the appellant to produce the copy of agreement which was a gross violation of the principal of natural Justice specially when all other required information like details of projects including location, scope of work, copy of contract awarded by the Government authority to DRAIPL amount of Contract receipts received from DRAIPL Project-wise were furnished to the AO” Thus, the Sub-contract work done by the assessee cannot be doubted. g. Copy of photograph clicked during execution of both the projects. (Placed at page 99-110) h. Brief facts of the case for both the years AY 2016-17, 2017-18 filed before CIT (A) (Placed at page 169-171).”

& 293/Asr/2024 23 And C.O. Nos. 01 & 02/Asr/2025 12.1 Thereafter , the Ld. AR relied upon various decisions to submit that in the instant case there has not been any proper application of mind by the AO to materials and documentary evidences submitted by the assessee in response to notices issued u/s 133(6) of the Act , and brushing aside all relevant evidences , he proceeded to initiate proceedings u/s 148 , for absence of inconsequential documents , like absence of letter of intent in favour of the assessee , when the same could have been easily obtained from the searched person and for all practical purposes the same was a part of seized documents ( considering the fact that the assessee name has been incorporated in the list of sub-contractors).

& 293/Asr/2024 24 And C.O. Nos. 01 & 02/Asr/2025 vi. ITO vs. Baba Kartar Singh Dukki Educational Trust as reported in (2016) 158 ITD 965 (CHD) vii. DCIT vs. Kissan Fats Limited, Hazi Rattan Link Road, Bathinda as reported in (CHD).

& 293/Asr/2024 26 And C.O. Nos. 01 & 02/Asr/2025 Regarding the issue of discrepancy in figures, as per intimation of AC - Central Circle, the figures for the Asst year 2016-17 was Rs. 5.71 crores (against actual figures disclosed by assessee Rs. 6.69 crores) and for Asst year 2017-18 informed figure was Rs. 17.07 crores ( against disclosed figure of Rs.23.09 crores ) .As such on this count also there is non application of mind of the AO , while recording of reasons post enquiry , when the entire facts of the case and actual figures were laid bare before him by the assessee ( supported by audited accounts ) in its reply to notice u/s 133(6) of the Act 61 and the third issue regarding non filing of the return by sub contractors ( as alleged in the information letter dated 07/02/2019 ) does not arise in this case, because returns filed are all on record.

& 293/Asr/2024 28 And C.O. Nos. 01 & 02/Asr/2025 supported by all relevant materials and documentary evidences, included financials contained in regular returns filed, in support of execution of work. The AO has not even made any attempt to verify the genuineness or authenticity of the documentary evidences submitted by the assessee, neither from the Government authorities issuing the contract nor from the principal contractor. 18.1 Moreover, the reasons recorded by the AO are also based on factually incorrect figures of Gross Receipts received on intimation vis a vis disclosure in audited accounts, returns and bank statements ( already discussed in earlier paragraphs ) and as such relying on the decision of the coordinate bench in the case of KMV Collegiate Senior Secondary School vs ITO [2017] 163/ ITD 653 ( ASR ) and also on the decision in the case of Sukhvir Singh vs ITO [2024] 165 taxmann.com197 ( ASR ) we hold that there has been non application of mind by the AO to the facts and materials on record and since the reopening is based on factual errors the notice issued u/s 148 is legally not sustainable. 18.2 Moreover, there is nothing in the intimation forwarded by the ACIT – Central Circle, Ahmedabad, to suggest escapement of income, in fact the three parameters laid out in the letter was for causing an enquiry based on the parameters from different angles, and in the instant case the assessee has been found to be absolutely clear on all parameters from various angles, which has established actual execution of contract work.

& 293/Asr/2024 29 And C.O. Nos. 01 & 02/Asr/2025

CO / 1 / ASR / 2025 Asst Year : 2016-17 And CO / 2/ ASR / 2025 Asst Year : 2017-18 23. These two cross objections are filed by the assessee in form 36A, against the order of the Ld. CIT (A) NFAC dated 23/04/2024 and 24/04/2024, for the Asst years 2016-17 and 2017-18, respectively.