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Income Tax Appellate Tribunal, DELHI BENCH - ‘SMC’ NEW DELHI
Before: SHRI BHAVNESH SAINI
This appeal by assessee has been directed against the order of Ld. CIT(A) 28 New Delhi dated 20th December, 2016 for asstt. year 2007-08.
Briefly the facts of the case are that return declaring income of Rs. 21,76,400/- was filed on 31.10.2007. The case was selected for scrutiny and assessment order u/s 143(3) was passed at the returned income of assessee vide order dated 15th May, 2009 (PB 35A). Later, the case was selected for scrutiny u/s 147 / 143(3) of the I.T. Act. The AO passed the reassessment order u/s 147 / 143(3) of the I.T. Act dated
M/s. JPM Tools Ltd. vs. ACIT 3rd January, 2013 at the income of Rs. 22,28,840/- after disallowing an amount of Rs. 52,445/- on account of profit or dividend.(PB 35C)
Thereafter, as per assessment order, again notice u/s 148 of the I.T. Act was issued to the assessee on 29th March, 2014. The Assessing Officer after hearing the assessee noted that during the year under consideration the DDIT (Investigation) New Delhi has sent a report dated 20th January, 2012 giving information about accommodation entry received by assessee. The report is reproduced in the assessment order in which it was briefly explained that name of assessee appeared in list of beneficiaries who have taken accommodation entries in the garb of shares application money, loan gifts, bogus sales / purchase etc. from the entry operators and assessee has taken accommodation entry of Rs. 17,00,000/- (i.e. Rs. 9 lakhs) from M/s. Marrass Industries Pvt. Ltd. and M/s. BSA Fincap Pvt. Ltd. for a sum of Rs. 8 lacs. The Assessing Officer in the light of above made the addition of Rs. 17,00,000/- vide reassessment order u/s 148 of the Act dated 30th March, 2015.
The assessee challenged the addition before Ld. CIT(A) . Ld. CIT(A) confirmed the addition of Rs. 17,00,000/- and dismissed the appeal of assessee.
The assessee in the present appeal challenged the issue of notice u/s 148 / 147 of the I.T. Act and addition of Rs. 17,00,000/- u/s 68 of the I.T. Act.
I have heard Ld. Representative of both the parties and perused the material on record. The assessee filed a copy of the reasons
M/s. JPM Tools Ltd. vs. ACIT recorded u/s 147 of the Act dated 9th March, 2012, copy of which is filed on page 37 of the paper book and reads as under :-
“Dated 09.03.2012
A.Y. 2007-08
M/s. JPM Tools Pvt. Ltd., Plot No. 25, Sector – 37, Pace City -1, Gurgaon, Haryana.
Reasons recorded under section 147 of the Act.
As per the information received from Investigation Wing, Income Tax Department, New Delhi regarding list of Accommodation entries, the above mentioned assessee was found to have take accommodation entries amounting to Rs. 9,00,000/- from M/s. Marrass Industries Pvt. Ltd. vide ABN Amro Bank Cheque No. 116244 dated 18.5.2006 and Rs. 8,00,0000/- from M/s. BSA Fincap Pvt. Ltd. vide ABN Amro Bank Cheque No. 890488 dated 18.5.2006.
In view of the above, I have reasons to believe that the income of Rs. 17,00,000/- chargeable to tax has escaped assessment within the meaning of section 147 / 148 of the Income Tax Act, 1961.
(Amaninder Singh Dhindsa) Assistant Commissioner of Income Tax Circle 4(1), New Delhi.”
It is well settled law that validity of reassessment proceedings is tobe determined with reference to the reasons recorded u/s 147 of the I.T. Act. Ld. Counsel for assessee contended that the report of the DDIT (Investigation) sent to the Assessing Officer on dated 20th January, 2012 was already available to the Assessing Officer at the time of passing of the first reassessment order u/s 147 of the I.T. Act dated 3rd January, 2013. No new material has been brought on record and the Assessing Officer without application of mind and in mechanical manner recorded the reasons for reopening of the assessment. Therefore the reassessment of the assessee is bad in law as well as based on change of opinion. In support of its contention, he has relied upon decision of the Delhi High Court in the case of Rasalilka Trading and Investment Pvt. Ltd 365 ITR 447 and G & G Pharma India Limited 384 ITR 147. He has also submitted that report of investigation wing dated 20th January, 2012 was already on record at the time of reopening of the assessment in first instance. Therefore report is not sacrosanct on which no inquiry has been conducted by the Assessing Officer. He has further submitted that the Assessing Officer has not obtained any approval from JCIT at the time of reopening of the assessment. He has submitted that addition is made without any basis. On the other hand Ld. DR objected to the legal issue raised by the assessee because it was not raised before the Assessing Officer as well as before Ld. CIT(A). Ld. DR submitted that these issues were not raised in the ground of appeal before Ld. CIT(A) and no facts are available on record. Ld. DR further submitted that the new information was obtained by the Assessing Officer from DDIT (Investigation) at the time of second reopening of the assessment which was credible. Therefore prima facie case was made out for reopening of the assessment. Ld. DR relied upon following decisions :-
Rajat Export Import India Ltd. WP (c) 8341/11 2. Pratibha Finvest P Ltd. WP(C) 7538/12 3. CIT vs. Navodya Castle P Ltd. 50/taxman/110(D) 4. Tarika Properties Investment P Ltd. 40/taxman 525 (D)
Ld. DR also submitted that addition on merit has correctly been made.
I have considered the rival submissions and material available on record. I am of the view the matter requires consideration at the level of the Assessing Officer. It is not in dispute earlier reassessement was done vide order dated 3rd January, 2013. Therefore at that time the report of DDIT (Investigation) New Delhi dated 20th January, 2012 be available to the Assessing Officer on record regarding accommodation entry allegedly received by the assessee. Therefore, no new tangible material has been brought on record at the time of second reopening of the assessment.
The contention of Ld. DR that new information was received is devoid of merit. The Assessing Officer noted in the impugned reassessment order the notice u/s 148 of the I.T. Act has been issued to the assessee company on 29th March, 2014 and passed the reassessment order u/s 148 of the I.T. Act on 30th March, 2015. The assessee, has however, produced the copy of the reasons recorded u/s 148 of the I.T. Act dated 9th March, 2012.Copy of which is filed at page 37 of the paper book and reproduced above. Copy of the notice u/s 148 of I. T. Act is filed on page 36 of the paper book which dated 9/12th March 2012. Therefore Assessing Officer has incorrectly recorded in the assessment order that notice u/s 148 was issued on 29th March, 2014. This issue shall have looked into by verifying facts from the record. Further whether, Assessing Officer has obtained sanction from Joint Commissioner of Income Tax on reasons recorded u/s 148 of the Act shall have tobe verified from the record for deciding the issue of reopening of the assessment. The issue of validity of reopening is raised for the first time before the Tribunal and since the facts requires verification regarding date on which reasons u/s 147 has been recorded and sanction by JCIT, therefore the matter requires consideration at the level of the Assessing Officer. It may also be noted here that if reasons are recorded on 9th March, 2012, perhaps the Assessing Officer shall have to explain whether reassessment order dated 30th March, 2015 has been passed within the period of limitation. It may also be noted here that the Assessing Officer did not discuss anything on merit of the addition in assessment order and merely by gone through the report of the investigation wing made the addition of Rs. 17,00,000/- in the hands of the assessee without discussing the evidences and material brought on record by the assessee. Since the report of the DDIT dated 20th January, 2012 was also available on record at the time of first reassessment proceedings vide order dated 3rd January, 2013 therefore it may be a case of availability of the same material on record of the Assessing Officer and may have some impact on the reopening of the assessment in the matter as well. In order to decide all these points, particularly when these points were never raised before authorities below, I am of the view the matter should be remanded to the Assessing Officer for determination of all the issues in accordance with law. I set aside the orders of the authorities below and restore the above issues to the file of the Assessing Officer with direction to re decide all the above points of the assessee raised above in accordance with law by verifying the facts from the record and in the light of submissions made by the assessee.
The Assessing Officer shall give reasonable sufficient opportunity of being heard to the assessee.
In the result appeal of assessee is allowed for statistical purpose.
Pronounced in the Open Court.