NIRMAL BAJAJ,LUDHIANA vs. DCIT, LUDHIANA

ITA 1243/CHANDI/2010Status: DisposedITAT Chandigarh09 July 2018AY 2001-022 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reopening of assessment was not justified as the Assessing Officer did not provide any evidence or discussion regarding the alleged bogus entries in the assessment order. Consequently, the additions made were deleted.

What were the facts?

The Assessing Officer reopened the assessment based on information that the assessee received bogus accommodation entries. The assessee challenged the reopening on legal grounds and the additions made on merits.

What were the issues?

Whether the reopening of assessment under Section 147 was justified when the Assessing Officer failed to substantiate the reasons for reopening with evidence in the assessment order.

Which sections of the Income-tax Act were involved?

Section 147

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

CIT v. Jet Airways (I) Ltd.
331 ITR 236 · 2011 · HC
694 citing
Revenue, CIT v. Ahmedabad Manufacturing and Calico Printing Co. Ltd. 1976 CTR (Gui) 214
106 ITR 159 · 1977 · HC
11 citing

ITA Nos. 1242 & 1243/Chd/2010- Preeti Bajaj & Nirmal Bajaj, Ludhiana 2

Since the facts and the issues involved in these appeals are

identical, hence, these were heard together and are being disposed of

by this common order. ITA No. 1242/Chd/2010 is taken as a lead

case for narration of facts.

ITA No. 1242/Chd/2010 : The assessee in this appeal apart from challenging the 3.

reopening of the assessment u/s 147 of the Income-tax Act, 1961 (in

short 'the Act') on legal ground has also agitated the additions made

by the Assessing officer on merits in the re-assessment order passed

u/s 147 of the Act.

The brief facts of the case are that the assessment was

reopened by the Assessing officer observing that as per the

information received from the D.I., New Delhi, the assessee had

received bogus accommodation entries for a total sum of Rs.

19,03,800/- on 13.5.2000 from Shri Mukesh Gupta from Account

No.2334 of Vijay Bank, Ram Nagar, New Delhi. Further, that the

assessee had not filed the return of income for assessment year 2001-

02, therefore, he observed that he had reason to believe that the

amount of Rs. 19,03,800/- introduced by the assessee in her books of

account through accommodation entries was undisclosed income of

the assessee, which had escaped assessment.

At the outset, Ld. Counsel for the assessee has invited our

attention to the impugned order of the Assessing officer to show that

neither the assessee was confronted with any such evidence of any

ITA Nos. 1242 & 1243/Chd/2010- Preeti Bajaj & Nirmal Bajaj, Ludhiana 4

Manufacturing and Calico Printing Co. Ltd. [1977] 106 ITR 159, a decision of the Gujarat High Court was cited. On a consideration of the matter, we are of the view that in view of the aforesaid Supreme Court decisions, the view taken by the Rajasthan High Court is correct and the view taken by the Gujarat High Court is not, correct. Accordingly, we dissent from the view taken by the Gujarat High Court and in view of the decisions of the Supreme Court and Rajasthan High Court, we hold that the Income-tax Officer did not have the jurisdiction to proceed with the reassessment, the moment he found the two grounds mentioned in the reassessment notice incorrect or non- existent. Accordingly, we answer the referred question in favour of the assessee, in the affirmative, that the Tribunal was right in cancelling the reassessment.”

Identical view has also been taken by the Hon'ble Bombay High

Court in the case of CIT Vs. Jet Airways (I) Ltd (2011) 331 ITR 236

(Bom.) holding that where the Assessing officer does not assess

income for which reasons were recorded u/s 147 of the Act, he

cannot assess other income u/s 147 of the Act.

In this case, though the Assessing officer in the reasons for

reopening of the assessment recorded that the assessee had received

bogus accommodation entries for a total sum of Rs. 19,03,800/-,

however, in the assessment order, neither any evidence nor any

discussion has been made in this respect. In view of this, the

reopening of the assessee in this case cannot be held to be justified,

the same is, therefore, quashed and consequential additions made by