Karan Khurana , Delhi v. ITO, Ward- 48(2), New Delhi

ITA 1783/DEL/2019 | 2010-2011
Pronouncement Date: 17-03-2021 | Result: Allowed

Appeal Details

RSA Number 178320114 RSA 2019
Assessee PAN AGDPK4271C
Bench Delhi
Appeal Number ITA 1783/DEL/2019
Duration Of Justice 2 year(s) 13 day(s)
Appellant Karan Khurana , Delhi
Respondent ITO, Ward- 48(2), New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 17-03-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 17-03-2021
Assessment Year 2010-2011
Appeal Filed On 05-03-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES C : DELHI BEFORE SHRI BHAVNESH SAINI JUDICIAL MEMBER AND SHRI B.R.R KUMAR ACCOUNTANT MEMBER ITA.NO.1783/DEL./2019 ASSESSMENT YEAR 2010-2011 SHRI KARAN KHURANA 113 DILKHUSH BUILDING TILAK BAZAR DELHI 006. PAN AGDPK4271C [ VS. THE INCOME TAX OFFICER WARD-48(2) ROOM NO.115 DRUM SHAPE BUILDING NEW DELHI. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI SURESH GUPTA C.A. FOR REVENUE : SHRI N.K. BANSAL SR. D.R. DATE OF HEARING : 04.03.2021 DATE OF PRONOUNCEMENT : 17.03.2021 ORDER PER BHAVNESH SAINI J.M. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-16 NEW DELHI DATED 07.01.2019 FOR THE A.Y. 2010-2011 ON THE FOLLOWIN G GROUNDS : 1. THE LD CIT(A) HAS ERRED BOTH IN LAW AND IN FACTS OF THE CASE IN UPHOLDING THE REASSESSMENT PROCEEDINGS AND CONSEQUENTIAL REASSESSMENT ORDER ON THE GROUND 2 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. THAT IMPUGNED REASSESSMENT ORDER HAS BEEN PASSED WITHOUT PROVIDING COPY OF REASONS RECORDED ALONG WITH SATISFACTION NOTE OF APPROVING AUTHORITY U/S 1 51 OF IT ACT DESPITE SPECIFIC REQUEST MADE BY THE APPELLANT DURING ASSESSMENT PROCEEDINGS. THEREFORE THE RESULTANT ORDER OF REASSESSMENT IS NON-EST AND NEED TO BE QUASHED. 2. THE IMPUGNED REASSESSMENT IS INVALID AND WITHOUT JURISDICTION AS THE SAID ASSESSMENT IS COMPLETED WITHOUT COMPLYING WITH LEGAL REQUIREMENTS OF THE PROVISIONS OF SECTION 147/148 OF THE INCOME TAX ACT THEREFORE SUCH ASSESSMENT IS VOID AB INITIO AND LIA BLE TO BE QUASHED. 3. THE LD. CIT(A) HAS ERRED BOTH IN LAW AND CIRCUMSTANCES OF THE CASE IN UPHOLDING THE REASSESSMENT PROCEEDINGS INITIATED U/S 147 OF THE I T ACT WITHOUT APPLICATION OF MIND ON THE MATERIAL I F ANY PROVIDED BY THE INV. WING OF THE DEPARTMENT. I N VIEW OF THE ABOVE DEFECTS IN THE COMPLIANCES THE 3 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. RESULTANT REASSESSMENT PROCEEDINGS ARE REQUIRED TO BE SET ASIDE. 4. THE LD. CIT(A) HAS ERRED BOTH IN LAW AND IN FACTS O F THE CASE IN UPHOLDING THE IMPUGNED ASSESSMENT ORDER NEED TO BE SET-ASIDE AS THE SATISFACTION RECORDED BY THE PR CIT-16 NEW DELHI IS MECHANICAL AND WITHOUT APPLICATION OF MIND AS SUCH APPROVAL VITIATES THE ASSESSMENT. 5. THE LD. CIT(A) HAS ERRED BOTH IN LAW AND IN FACTS O F THE CASE IN UPHOLDING THE IMPUGNED REASSESSMENT PROCEEDINGS AND THE CONSEQUENTIAL REASSESSMENT ORDER ON THE GROUND THAT THE REASSESSMENT PROCEEDINGS IN THE PRESENT CASE IS COVERED BY PROVI SO TO SEC 147 AND THERE IS NO ALLEGATION IN THE REASON RECORDED REPRODUCED IN THE ASSESSMENT ORDER BY THE ASSESSING OFFICER THAT THERE IS FAILURE OF THE APPE LLANT IN DISCLOSING FULLY AND TRULY ALL MATERIAL FACTS. 6. THE LD. CIT(A) HAS ERRED BOTH IN LAW AND IN FACTS O F THE CASE IN UPHOLDING LIE REASSESSMENT PROCEEDINGS AND CONSEQUENTIAL REASSESSMENT ORDER ON THE GROUND 4 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. THAT AO HAS FAILED TO ISSUE A VALID NOTICE U/S 148 WITHIN THE TIME LIMIT PRESCRIBED U/S 149(1)(B) OF T HE 11 ACT AS THE NOTICE HAS BEEN ISSUED ON 01.04.2017 WHEREAS THE LIMITATION HAS EXPIRED ON 31.03.2017. THEREFORE THE REASSESSMENT PROCEEDINGS / REASSESSMENT ORDER BOTH NEED TO QUASHED. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVE OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 3. THE LD. D.R. CONTENDED THAT SOME OF THE ABOVE GROUNDS NOW RAISED BEFORE THE TRIBUNAL WERE NOT RAI SED BEFORE THE LD. CIT(A) THEREFORE THE SAME CANNOT B E CONSIDERED FOR DISPOSAL OF THE APPEAL. 4. ON THE OTHER HAND LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ALL THE GROUNDS ARE LEGAL I N NATURE AND ARISE OUT OF THE RECORD. LEARNED COUNSEL FOR TH E ASSESSEE ALSO SUBMITTED THAT THE LD. CIT(A) AT THE APPELLATE STAGE CALLED FOR THE REMAND REPORT AND DECIDED THE ABOVE GROUNDS. THEREFORE THE CONTENTION OF THE LD. DR HA S NO 5 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. MERIT AND THE SAME MAY BE DISMISSED AND APPEAL OF ASSESSEE MAY BE DECIDED ON MERITS ON THE GROUNDS RA ISED ABOVE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND DO NOT FIND ANY FORCE IN THE OBJECTION OF THE LD. D.R. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE PRE SENT APPEAL ARE LEGAL IN NATURE AND ALL THE MATERIAL AND FACTS ARE AVAILABLE ON RECORD WHICH ARE UNDISPUTED ALSO. THE HONBLE PUNJAB & HAYANA HIGH COURT IN THE CASE OF VMT SPINN ING CO. LTD. VS. CIT & ANOTHER [2016] 389 ITR 326 [P& H] CONSIDERING THE JUDGMENT OF HONBLE SUPREME COURT I N THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT [ 1998] 229 ITR 383 (SC) HELD AS UNDER : HELD THAT THE TRIBUNAL COULD DECIDE THE APPEAL ON A GROUND NEITHER TAKEN IN THE MEMORANDUM OF APPEAL NOR BY SEEKING ITS LEAVE. THE ONLY REQUIREMENT WAS THAT THE TRIBUNAL COULD NOT REST ITS DECISION ON ANY OTHER GROUND UNLESS THE PARTY WHO MIGHT BE AFFECTED HAD SUFFICIENT OPPORTUNITY OF BEING HEARD ON THAT GROUND. THEREFORE THE 6 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. TRIBUNAL OUGHT TO HAVE EXERCISED ITS DISCRETION IN VIEW OF THE FACT THAT THE ASSESSEE INTENDED RAISING ONLY A LEGAL ARGUMENT WITHOUT REFERENCE TO ANY DISPUTED QUESTIONS OF FACT. SINCE THERE WERE NO ADDITIONAL EVIDENCE REQUIRED FOR THE DECISION ON TH E NEW GROUND RAISED BY THE ASSESSEE AND SUCH QUESTION AROSE FROM THE FACTS WHICH WERE ALREADY ON THE RECORD OF THE ASSESSMENT PROCEEDINGS AND SINCE A DECISION UPON THE NEW GROUND RAISED BY THE ASSESSEE WOULD ONLY HELP IN DETERMINING THE ASSESSEE'S CORRECT TAX LIABILITY THE MATTER COULD BE REMANDED TO THE TRIBUNAL FOR ADJUDICATING UPON THE ADDITIONAL GROUND ON ITS MERITS. [MATTER REMANDED]. 5.1. WE ALSO FIND THAT THE LD. CIT(A) CALLED FOR T HE REMAND REPORT FROM THE A.O. AND DECIDE THE ISSUES A S WELL. CONSIDERING THE ABOVE FACTS WE REJECT THE CONTENTI ON OF THE LD. D.R. AND PROCEED TO DECIDE THE APPEAL ON THE PO INTS RAISED/ARGUMENTS ADVANCED BY THE ASSESSEE ON THE AB OVE GROUNDS OF APPEALS. 7 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. 6. BRIEFLY THE FACTS OF THE CASE ARE THAT ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED UNDER SECTION 147/ 143(3) OF THE I.T. ACT 1961 ON 24.02.2014 AT AN IN COME OF RS.1 37 43 790/-. SUBSEQUENTLY PROCEEDINGS UNDER SE CTION 147 OF THE I.T. ACT 1961 WERE AGAIN INITIATED AND NOTICE UNDER SECTION 148 OF THE I.T. ACT 1961 DATED 31.03 .2017 WAS ISSUED BY 1T0 WARD 47(1) NEW DELHI. IN RESPON SE TO WHICH THE ASSESSEE FILED RETURN OF INCOME ON 29.04 .2017 DECLARING AN INCOME OF RS.1 37 43 790/-. THE A.O. I SSUED STATUTORY NOTICES AND DISCUSSED THE CASE WITH THE C OUNSEL FOR ASSESSEE. THE A.O. ALSO NOTED IN THE ASSESSMENT ORDER THAT REASONS RECORDED FOR INITIATING PROCEEDINGS UN DER SECTION 147 OF THE I.T. ACT 1961 WERE DULY PROVIDE D TO THE ASSESSEE. THE A.O. REPRODUCED THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT AS UNDER : REASONS TO BELIEVE IN THE CASE OF M/S LAKSHMI TEX PROCESSORS (PROP. SH. KARAN KHURANA PAN : AGDPK4271C FOR A.Y 2010-11 8 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. AN INFORMATION HAS BEEN RECEIVED FROM THE OFFICE OF DY. DIRECTOR OF INCOME TAX (INVESTIGATION)-II GHAZ IABAD THAT THE ASSESSEE HAS DEPOSITED AN AMOUNT OF RS.58 40 171/- DURING ASSESSMENT YEAR 2010-11 IN ACCOUNT OF THE ASSESSEE AS PER FOLLOWING DETAILS : NAME OF THE INDIVIDUAL/FIRM NAME OF BANK ACCOUNT NO. ASSESSMENT YEAR TOTAL CREDIT M/S. LAKSHMI TEX PROCESSORS PROP. SH. KARAN KHURANA. HSBC BANK ACCOUNT NO. 499277531001 2010-11 58 40 171 2. FROM THE RECORDS OF THE CASE IT IS SEEN THAT TH E ASSESSMENT U/S 147/148 FOR THE YEAR UNDER CONSIDERATION HAS BEEN COMPLETED AT AN INCOME OF RS.1 37 43 790/- FOR A. Y. 2010-11 VIDE ORDER U/S 143(30) OF THE INCOME TAX ACT 1961 DATED 24.02.201 4 THE REASONS FOR REOPENING AT THAT TIME WERE THAT ASSESSEE DID NOT DISCLOSE CERTAIN BANK ACCOUNTS. A PER USAL OF THE ORIGINAL RETURN OF INCOME AS WELL AS REASSESSMENT PROCEEDING REVEALS THAT THE ABOVE BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH HSBC NOIDA 9 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. HAS NOT SEEN DISCLOSED BY THE ASSESSEE THEREFORE I HAVE REASONS TO BELIEVE THAT THE INCOME OF THE ASSE SSEE TO THE EXTENT OF RS.58 40 171/- APPROXIMATE FOR A. Y 2010-11 HAS ESCAPED ASSESSMENT AND HENCE IT IS A FI T CASE FOR INITIATION OF PROCEEDINGS IN TERMS OF SECT ION 147 OF THE I.T. ACT 1916. 3. IT IS PERTINENT TO MENTION THAT IN THE CASE OF C IT VS. NOVA PROMOTERS & FIN LEASE PRIVATE LTD [ ITA N O. 342 OF 2011 ] DATED 15.02.2012 THE HON'BLE DELHI HIGH COURT WHICH IS THE JURISDICTION HIGH COURT HA S HELD THAT AS LONG AS THERE IS A 'LIVE LINK' BETWEEN THE DOCUMENT/INFORMATION WHICH WAS PLACED BEFORE THE ASSESSING OFFICER AT THE TIME WHEN REASONS FOR REOPENING WERE RECORDED PROCEEDINGS U/S 147 WOULD BE VALID. THE COURT ALSO HELD ' WE ARE AWARE OF THE LEGAL POSITION THAT AT THE STAGE OF ISSUING THE NOTICE U/S 148 THE MERITS OF THE MATTER ARE NOT RELEVANT AND THE ASSESSING OFFICER AT THAT STAGE IS REQUIRED TO FORM ONLY A 10 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. PRIMA FACIE BEFORE OR OPINION THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT'' 4. FURTHER MORE IN THE CASE OF JYOTI GOYAI VS ITO (ITA.NO.1259/DEL/2010) THE HON'BLE ITAT DELHI HELD THAT : AS REGARDS THE ORDER CONTENTIONS OF THE ASSESSEE THAT THE REOPENING WAS DONE IN A MECHANICAL MANNER WITHOUT APPLICATION OF MIND. WE FIND THERE IS NOTHING ON RECORD TO SUPPORT SUCH A CONTENTION. THERE IS A LIVE LINK BETWEEN THE INFORMATION WHICH WAS AVAILABLE WITH THE ASSESSING OFFICER AND HIS FORMATION OF BELIEF THAT INCOME HAS ESCAPED ASSESSMENT SUFFICIENCY OF SUCH INFORMATION CANNOT BE GONE INTO WHILE DECIDING THE ISSUE OF VALIDITY OF REOPENING. THE ASSESSING OFFICER CAN ALSO NOT MAKE ENQUIRIES AS NO PROCEEDINGS WERE PENDING BEFORE HIM FOR THE RELEVANT ASSESSMENT YEAR. IN THE ABOVE VIEW 11 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. OF THE MATTER WE ARE IN AGREEMENT WITH FINDING OF THE LD. CIT(A) THAT THE REOPENING OF ASSESSMENT U/S 147 OF THE ACT WAS VALID.' 5. THE LIVE LINK BETWEEN THE MATERIAL PROVIDED BY THE INVESTIGATION WING AND THE REASONS FOR BELIEF THAT INCOME HAS ESCAPED ASSESSMENT HAS BEEN SUFFICIENTLY DEMONSTRATED. SINCE NO ASSESSMENT HAS BEEN COMPLETED U/S 143(3) OF THE ACT AND PERIOD OF 4 YEARS HAS ELAPSED HENCE FORWARDED TO THE PR. COMMISSIONER OF INCOME TAX-16. NEW DELHI FOR CONSIDERATION AND NECESSARY APPROVAL IN ACCORDANCE WITH THE PROVISO APPENDED WITH SECTION 151(1) OF THE IT ACT 1961 FOR ISSUANCE OF NOTICE U/S 148 OF THE ACT. 12 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. 6.1. THE A.O. ALSO NOTED IN THE ASSESSMENT ORDER T HAT EARLIER ALSO PROCEEDINGS WERE REOPENED ON THE BASIS OF INFORMATION THAT ASSESSEE HAD MAINTAINED VARIOUS BA NK ACCOUNTS WHICH HAVE NOT BEEN ACCOUNTED FOR IN THE R EGULAR BOOKS OF ACCOUNT AND THE ASSESSEE HAD OFFERED THE A MOUNT FOR TAXATION WHILE FILING THE RETURN OF INCOME UNDE R SECTION 148 OF THE I.T. ACT 1961. THE ASSESSEE FILED THE R EPLY WHICH IS QUOTED IN THE ASSESSMENT ORDER IN WHICH THE ASSE SSEE EXPLAINED THAT ASSESSEE WAS TRYING TO ENTER IN THE CHEMICAL BUSINESS AND FOR THAT PURPOSE HE HAD JOINED FOR TRA INING WITH THE PERSONS ALREADY OPERATING IN THE MARKET. T HE ASSESSEE AT THE INSTANCE OF SUCH PERSONS WAS MADE T O OPEN THE BANK ACCOUNT BUT WAS NOT AWARE OF THE TRANSAC TION MADE IN SUCH BANK ACCOUNT AND IT WAS ALSO NOT CONNE CTED WITH THE REGULAR BUSINESS OF ASSESSEE. SUCH BANK A CCOUNT WAS MISUSED BY OTHERS. THE ASSESSEE ALSO MADE SUBMISSIONS WITH REGARD TO REOPENING OF THE ASSESSM ENT. 6.2. THE A.O. NOTED THAT DETAILS WERE CALLED FOR F ROM THE BANKS FOR ITS STATEMENT UNDER SECTION 133(6) OF THE I.T. ACT 1961. PERUSAL OF THE BANK STATEMENTS IT SHOWS THAT 13 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. THERE ARE DEPOSITS OF RS.30 74 006/- DURING FINANCI AL YEAR RELEVANT TO ASSESSMENT YEAR UNDER APPEAL. SINCE THE ASSESSEE FAILED TO EXPLAIN THE SOURCE OF THE SAME THEREFORE A.O. MADE ADDITION OF RS.30 74 006/-. THE CHALLENG ED THE REOPENING OF THE ASSESSMENT BEFORE THE LD. CIT(A) A ND SUBMISSIONS OF THE ASSESSEE WERE FORWARDED TO THE A .O. WHO HAS FILED THE REMAND REPORT WHICH IS ALSO NOTED IN THE IMPUGNED ORDER. THE LD. CIT(A) HOWEVER DISMISSED THE APPEAL OF ASSESSEE. 7. BOTH THE PARTIES ARGUED ON VARIOUS ISSUES WHICH WE DECIDE AS UNDER: 7.1 ISSUE NO. 1 : WHETHER AO HAS SUPPLIED COPY OF THE REASONS RECORD ED U/S 148 OF THE I.T. ACT? 7.2 LD. COUNSEL FOR ASSESSEE SUBMITTED THAT ASSESSE E VIDE LETTER DATED 01.05.2017 ACKNOWLEDGED ON 03.05.2017 (PB1) REQUESTED THE AO TO PROVIDE COPY OF THE REASONS REC ORDED PERFORMA FOR OBTAINING SANCTION U/S 151 AND EVIDENC E OF SATISFACTION GIVEN BY THE AUTHORITY U/S 151 OF THE ACT. THE AO ACKNOWLEDGED THIS FACT IN THE REMAND REPORT DATE D 14 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. 28.11.2018 (PB 40). THE ASSESSMENT WAS COMPLETED WITHOUT PROVIDING THE ABOVE DOCUMENTS. THE AO WAS U NDER OBLIGATION TO PROVIDE REASONS IN VIEW OF THE DECISI ON OF THE SUPREME COURT IN THE CASE OF GKN DRIVESHAFT INDIA L TD. VS. ITO 259 ITR 19 JUDGMENT OF DELHI HIGH COURT IN THE CASE OF M/S SABH INFRASTRUCTURE LTD. VS. ACIT 398 ITR 198 M/S HARYANA ACRYLIC MANUFACTURING CO. VS. CIT 308 ITR 3 8 AND JUDGMENT OF BOMBAY HIGH COURT IN THE CASE OF M/S AL LANA COLD STORAGE LTD. VS. ITO 287 ITR 1. THE LD. CIT(A ) REQUIRED THE AO TO GIVE COMMENTS ON THIS GROUND AND AO IN THE REMAND REPORT DATED 28.11.2018 (PB 40) DEALT WI TH THE ABOVE OBJECTION ON THE PREMISES THAT THE ASSESSEE H AD ATTENDED THE ASSESSMENT PROCEEDINGS ON VARIOUS DATE S BUT HAS NOT MENTIONED ANYTHING THAT HE WAS NOT PROVIDED COPY OF THE REASON AND HENCE THE AO REMAINED UNDER THE APPARENT ILLUSION THAT COPY OF THE REASON WAS PROVI DED TO THE ASSESSEE BY THE EARLIER INCUMBENT BEFORE WHOM R EQUEST WAS MADE BY THE ASSESSEE PRIOR TO THE TRANSFER OF T HE JURISDICTION. THE LD. CIT(A) BASED ON THE ABOVE RE MAND REPORT WAS OF THE VIEW THAT THE ASSESSEE WAS IN POS SESSION 15 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. OF THE INFORMATION OF THE INVESTIGATION WING AND T HEREFORE IT WAS APPARENT THAT THE ASSESSEE WAS AWARE OF THE REA SONS RECORDED. LD. COUNSEL FOR ASSESSEE THEREFORE SUB MITTED THAT AO HAS NEVER PROVIDED COPY OF THE REASONS U/S 148 AS WELL AS SANCTION U/S 151 OF THE ACT. THEREFORE EN TIRE ASSESSMENT ORDER IS NULL AND VOID AB INITIO. IN SUPPORT OF HIS CONTENTION HE HAS RELIED UPON FOLLOWING DECISI ONS: PCIT VS. JAGAT TALKIES DISTRIBUTORS 85 TAXMANN.COM 189 (DEL.) PCIT VS. RAMAIAH 103 TAXMANNCOM 201 (KAR.) CIT VS. M/S TREND ELECTRONICS 61 TAXMANN.COM 308 (BOM.) CIT VS. VIDESH SANCHAR NIGAM LTD. (340 ITR 66) (BOM.) CIT VS. FOMENTO RESORTS AND HOTELS LTD. DATED 27.11.2006 (BOM.) CIT VS. IDBI LTD. DATED 19.09.2016 (BOM.) 8. ON THE OTHER HAND LD. DR SUBMITTED THAT IT IS A CASE OF HSBC BANK ACCOUNT AT NOIDA. THE CONDUCT OF THE ASSESSEE IS RELEVANT THAT ASSESSEE DID NOT SHOW THI S BANK ACCOUNT TO THE REVENUE DEPARTMENT AND IN OTHER YEAR ALSO ASSESSEE DID NOT DECLARE OTHER BANK ACCOUNTS TO THE 16 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. REVENUE DEPARTMENT. THE REASONS WERE SUPPLIED TO T HE ASSESSEE AS PER THE REMAND REPORT. AFTER CONCLUSIO N OF THE HEARING LD. DR WAS DIRECTED TO PRODUCE EVIDENCE OF SUPPLY OF THE COPY OF THE REASONS TO THE ASSESSEE AT REASS ESSMENT PROCEEDINGS I.E. IN THE FORM OF COPY OF THE ORDER S HEET OR OTHER MATERIAL TO PROVE THAT COPY OF THE REASONS AN D SATISFACTION HAVE BEEN SUPPLIED TO THE ASSESSEE AS PER REQUEST FOR THE ASSESSEE DATED 01.05.2017 (PB 1). 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE HONBLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS. JAGAT TALKIES DISTRIBUTORS 389 ITR 13 FOLLOWING THE DECIS ION OF HONBLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFT INDIA LTD. VS. ITO 259 ITR 19 (SC) AND JUDGMENT OF HONBL E BOMBAY HIGH COURT IN THE CASE OF CIT VS. VIDESH SAN CHAR NIGAM LTD. 340 ITR 66 HELD AS UNDER: HELD DISMISSING THE APPEALS THAT THE APPELLATE TRIBUNAL WAS RIGHT IN HOLDING THAT ON ACCOUNT OF FAILURE ON THE PART OF THE ASSESSING OFFICER TO FURNISH THE COPY OF THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENTS UNDER SECTION 147 TO THE ASSESSEE THE REASSESSMENT PROCEEDINGS STOOD VITIATED. FAILURE BY THE ASSESSING OFFICER TO 17 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. PROVIDE THE ASSESSEE THE REASONS RECORDED FOR REOPENING THE ASSESSMENT COULD NOT BE TREATED AS A MERE PROCEDURAL LAPSE. THE ASSESSMENTS FOR THE ASSESSMENT YEARS 1999-2000 ONWARDS FOR FIVE YEARS WERE SOUGHT TO BE REOPENED. HAVING CONTESTED THOSE PROCEEDINGS FOR NEARLY TWO DECADES THE DEPARTMENT WAS NOT FAIR IN MAKING THE OFFER TO CONSIDER THE ASSESSEES OBJECTIONS TO THE REOPENING AND PASS ORDERS THEREON. NO REASON COULD BE DISCERNED WHY THE ASSESSING OFFICER HAD FAILED TO FURNISH TO THE ASSESSEE THE REASONS FOR REOPENING THE ASSESSMENTS. IT WAS NOT DISPUTED THAT THE ASSESSEE HAD MADE REQUESTS IN WRITING FOR THE REASONS IN RESPECT OF EACH OF THE ASSESSMENT YEARS IN QUESTION. MERELY BECAUSE THE ASSESSEE DID NOT REPEAT THE REQUESTS DID NOT MEAN THAT IT HAD WAIVED ITS RIGHT TO BE PROVIDED WITH THE REASONS FOR REOPENING THE ASSESSMENTS. ACCORDING TO THE PROVISO TO SECTION 292BB(1) THERE WAS NO ESTOPPEL AGAINST AN ASSESSEE ON ACCOUNT OF PARTICIPATING IN THE PROCEEDINGS AS LONG AS IT HAD RAISED AN OBJECTION IN WRITING REGARDING THE FAILUR E BY THE ASSESSING OFFICER TO FOLLOW THE PRESCRIBED PROCEDURE. NO QUESTION OF LAW AROSE. 10. IT IS NOT IN DISPUTE THAT ASSESSEE MADE A WRITT EN REQUEST ON 01.05.2017 (PB 1) TO THE AO TO SUPPLY CO PY OF 18 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. THE REASONS RECORDED U/S 147/148 OF THE ACT AND PER FORMA AND SANCTION U/S 151 OF THE ACT WHICH IS RECEIVED B Y THE AO ON 03.05.2017 WHICH FACT IS ALSO ADMITTED BY THE AO IN THE REMAND REPORT DATED 28.11.2018 (PB 40). THE AO IN THE REMAND REPORT DID NOT MENTION AS TO HOW THE COPY OF THE REASONS AND SANCTION HAVE BEEN PROVIDED TO THE ASSE SSEE AT REASSESSMENT PROCEEDINGS. THE AO MERELY MENTIONED IN THE REMAND REPORT THAT ASSESSEE ATTENDED THE ASSESSMENT PROCEEDINGS ON VARIOUS DATES BUT NEVER MENTIONED AN YTHING THAT HE WAS NOT PROVIDED THE COPY OF THE REASONS. THE AO WAS THEREFORE OF THE VIEW THAT IT IS APPARENT THA T COPY OF THE REASONS WERE PROVIDED BY THE EARLIER AO. THE A O DID NOT BRING ANY EVIDENCE ON RECORD OR TO REFER ANY EV IDENCE IN THE REMAND REPORT AS TO WHEN COPY OF THE REASONS FO R REOPENING OF THE ASSESSMENT AND SATISFACTION HAVE B EEN PROVIDED TO THE ASSESSEE. THE LD. CIT(A) ALSO IN H IS FINDINGS ON GOING THROUGH THE REMAND REPORT MERELY MENTION T HAT SINCE ASSESSEE WAS IN POSSESSION OF THE INFORMATION RECEIVED FROM THE INVESTIGATION WING WOULD MEAN THAT REASONS WERE DISCLOSED TO THE ASSESSEE DURING REASSESSMENT PROCE EDINGS. 19 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. THE LD. CIT(A) IN HIS FINDINGS DID NOT MENTION ANYT HING SPECIFICALLY WHETHER COPY OF THE REASON AND SATISFA CTION HAS BEEN PROVIDED TO THE ASSESSEE BY ANY OF THE ASSESSI NG OFFICER. THUS THE IMPUGNED ORDER IS SILENT AS TO WHEN COPY OF THE REASONS AND SATISFACTION WERE SUPPLIED TO TH E ASSESSEE ON MAKING A DEMAND BY THE ASSESSEE IN WRIT ING. THEREFORE IN ORDER TO VERIFY THIS FACT LD. DR WAS DIRECTED TO FILE COPY OF THE ORDER SHEET OR ANY OTHER DOCUMENT FROM RECORD TO SHOW THAT ACTUALLY COPY OF THE REASONS RE CORDED FOR REASSESSMENT AND SATISFACTION U/S 151 HAVE BEEN SUPPLIED TO THE ASSESSEE AT REASSESSMENT PROCEEDING S. HOWEVER TILL DATE LD. DR DID NOT PRODUCE ANY EVIDE NCE IN THIS REGARD. THEREFORE CONSIDERING THE TOTALITY O F THE FACTS AND CIRCUMSTANCES IT IS CLEAR THAT ASSESSEE WAS NO T PROVIDED COPY OF THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT AND SATISFACTION U/S 151 OF THE ACT DESP ITE DEMAND IS MADE BY THE ASSESSEE IN WRITING BEFORE AO . THE ASSESSEE IS THUS PRECLUDED FROM RAISING OBJECTION AGAINST REOPENING OF THE ASSESSMENT AT ASSESSMENT PROCEEDIN GS. THE VALUABLE RIGHT OF THE ASSESSEE HAS BEEN DENIED BY THE 20 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. AUTHORITIES BELOW IN THIS REGARD. THEREFORE THE E NTIRE REASSESSMENT PROCEEDINGS ARE NULLITY INVALID AND B AD IN LAW. THE ENTIRE REASSESSMENT PROCEEDINGS ARE VITIA TED AND AS SUCH LIABLE TO BE QUASHED. 11. IN VIEW OF THE ABOVE FINDINGS WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND QUASH THE REOPENING OF TH E ASSESSMENT. 12. ISSUE NO. 2 : WHETHER AO RECORDED WRONG INCORRECT AND NON- EXISTING REASONS IN THE REASONS RECORDED FOR REOPEN ING OF THE ASSESSMENT AND AS SUCH DID NOT APPLY HIS MIND? 12.1 LD. COUNSEL FOR ASSESSEE SUBMITTED THAT AO HAS RECORDED WRONG INCORRECT AND NON-EXISTING REASONS IN THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT. AO HAS MENTIONED INCORRECT AMOUNT OF RS. 58 40 171/- IN HS B BANK ACCOUNT AT NOIDA. THE AO HOWEVER LATER ON M ADE A REQUEST TO THE BANK U/S 133(6) OF THE ACT AND CALLE D FOR THE BANK STATEMENT AND FOUND THAT ACTUAL AMOUNT DEPOSIT ED WAS OF RS. 30 74 006/-. THE AO WITHOUT APPLYING HI S MIND TO THE INFORMATION RECEIVED FROM INVESTIGATION WING RECORDED 21 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. WRONG AND INCORRECT FACTS IN THE REASONS FOR REOPEN ING OF THE ASSESSMENT. THE AO ALSO RECORDED WRONG FACTS IN TH E REASONS THAT NO ASSESSMENT HAS BEEN COMPLETED U/S 1 43(3) OF THE ACT PRIOR TO THE REASONS BECAUSE IN THE REAS ONS ITSELF AO HAS MENTIONED THAT EARLIER ALSO REASSESSMENT ORD ER HAS BEEN PASSED U/S 147/148 READ WITH SECTION 143(3) AN D INCOME WAS DETERMINED AT RS. 1 37 43 790/-. HE HAS FURTHER SUBMITTED THAT AO HAS ALSO RECORDED INCORRE CTLY THE PROVISIONS OF LAW FOR OBTAINING THE SANCTION FROM T HE PR. CIT BY MENTIONING PROVISO TO SECTION 151(1) OF THE ACT WHICH DOES NOT EXIST IN THE INCOME TAX ACT FROM 01.06.201 5 AFTER THE AMENDMENT THROUGH FINANCE ACT 2015. HE HAS THEREFORE SUBMITTED THAT AO HAS RECORDED WRONG IN CORRECT AND NON-EXISTING FACTS IN THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT AND HAS NOT APPLIED HIS MIND FOR FORMING THE BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPE D ASSESSMENT. IN SUPPORT OF HIS CONTENTION HE HAS RE LIED UPON FOLLOWING DECISIONS: PR. CIT VS. MEENAKSHI OVERSEAS PVT. LTD. 395 ITR 677 (DEL.) PR. CIT VS. RMG POLYVINYL (I) LTD. 396 ITR 5 (DEL.) 22 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. PR. CIT VS. G&G PHARMA INDIA LTD. 384 ITR 147 (DEL.) SIGNATURE HOTELS P. LTD. VS. ITO 338 ITR 51 (DEL.) 13. LD. COUNSEL FOR ASSESSEE SUBMITTED THAT IT IS THEREFORE CLEAR THAT REOPENING IS BASED ON INCORRE CT FACTS. IT IS WELL SETTLED LAW THAT IF WRONG FACTS AND WRON G REASONS ARE RECORDED FOR REOPENING OF THE ASSESSMENT SUCH ASSESSMENT IS BAD IN LAW. IN SUPPORT OF HIS CONTEN TION HE HAS RELIED UPON ORDER OF THE ITAT DELHI BENCH IN TH E CASE OF M/S GANESH GANGA INVESTMENTS P. LTD. VS. ITO IN ITA NO. 1579/DEL/2019 DATED 07.11.2019 ONLY IN PARAS 8.5 TO 9 ARE REPRODUCED AS UNDER: 8.5. THE STATEMENT OF SHRI HIMANSHU VERMA IS ALSO FILED ON RECORD WHICH DID NOT FIND MENTION IF M/S. SHUBH PROPBUILD PVT. LTD. AS MENTIONED IN THE REASONS BELONG TO SHRI HIMANSHU VERMA. THERE IS NO INVESTOR EXIST IN THE NAME OF M/S. MANAGEMENT SERVICES PVT. LTD. AND NO ADDITION IN RESPECT OF T HE SAME COMPANY HAVE BEEN MADE BY THE A.O. THE A.O THEREFORE RECORDED INCORRECT FACTS IN THE REASONS FOR REOPENING OF THE ASSESSMENT. THUS THE SAME CANNOT BE APPROVED UNDER THE LAW. IT IS WELL SETTLED LAW I F WRONG FACTS AND WRONG REASONS ARE RECORDED FOR REOPENING OF THE ASSESSMENT REOPENING OF THE 23 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. ASSESSMENT WOULD BE INVALID AND BAD IN LAW. WE RELY UPON JUDGMENT OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF ATLAS CYCLE INDUSTRIES 18 0 ITR 319 (P&H). IT IS WELL SETTLED LAW THAT NOTE ALREADY FILED WITH RETURN DISCLOSING NATURE OF CAPI TAL RECEIPT AND NO OTHER TANGIBLE MATERIAL FOUND THEREFORE REOPENING OF THE ASSESSMENT UNDER SECTIO N 148 WAS QUASHED. WE RELY UPON JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. AT UL KUMAR SWAMI [2014] 362 ITR 693 (DEL.) AND JUDGMENT OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF KANPUR TEXEL P. LTD. 406 ITR 353 (ALLD.). SIMILARLY IN THE CASE OF CIT VS. VARDHAMAN INDUSTRIES [2014] 363 ITR 625 (RAJ.) THE HONBLE RAJASTHAN HIGH COURT HAS HELD THAT REASONS MUST BE BASED ON NEW AND TANGIBLE MATERIALS. NOTICE BASED ON DOCUMENTS ALREADY ON RECORD 148 NOT VALID. IN THE INSTANT CASE UNDER APPEAL THE A.O. HAS REPRODUCED THE INFORMATION RECEIVED FROM INVESTIGATION WING AND REPRODUCED THE SAME IN THE REASONS RECORDED UNDER SECTION 148 OF THE I.T. ACT. THIS INFORMATION SHOWS THAT ASSESSEE HAS RECEIVED THE AMOUNT OF CREDIT FROM 06 PARTIES BUT ONE OF T HE PARTY I.E. M/S. MANAGEMENT SERVICES PVT. LTD. DO NOT EXIST AND THAT M/S. SHUBH PROPBUILD PVT. LTD. DO NOT BELONG TO SHRI HIMANSHU VERMA. IT THEREFORE APPEARS THAT A.O. HAS NOT GONE THROUGH THE DETAILS OF 24 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. THE INFORMATION AND HAS NOT EVEN APPLIED HIS MIND AND MERELY CONCLUDED THAT HE HAS REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IN THE REASONS A.O. HAS RECORDED THAT ASSESSEE HAS RECEIVED ACCOMMODATION ENTRY OF RS.2.45 CRORES BUT ULTIMATELY MADE AN ADDITION OF RS.11.05 CRORES WITHOUT BRINGING ANY MATERIAL AGAINST THE ASSESSEE. THE REASONS TO BELIEVE ARE THEREFORE NOT IN FACT REASONS BUT ONLY CONCLUSIO N OF THE A.O. IN THE CASE OF MEENAKSHI OVERSEAS PVT. LTD . (SUPRA) THE A.O. IN THE REASONS HAS EVEN MENTIONED THAT HE HAS GONE THROUGH THE INFORMATION RECEIVED WHICH IS LACKING IN THE PRESENT CASE. THE A.O. BEIN G A QUASI-JUDICIAL AUTHORITY IS EXPECTED TO ARRIVE AT SUBJECTIVE SATISFACTION INDEPENDENTLY ON HIS OWN. T HE A.O. HOWEVER MERELY REPEATED THE REPORT OF THE INVESTIGATION WING IN THE REASONS AND FORMED HIS BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WITHOUT ARRIVING AT HIS SATISFACTION. THUS THERE IS NO INDEPENDENT APPLICATION OF MIND B Y THE A.O. TO THE REPORT OF INVESTIGATION WING TO FOR M THE BASIS FOR RECORDING THE REASONS. THE REASONS RECORDED BY THE A.O. ARE ALSO INCORRECT AS NOTED ABOVE. THE REASONS FAILED TO DEMONSTRATE THE LINK BETWEEN THE ALLEGED TANGIBLE MATERIAL AND THE FORMATION OF REASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE 25 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. DECISIONS RELIED UPON BY THE LEARNED COUNSEL FOR TH E ASSESSEE IN THE CASES OF PR. COMMISSIONER OF INCOME TAX VS. RMG POLYVINYL (I) LTD. 396 ITR 5 (DEL.) PR. COMMISSIONER OF INCOME TAX VS. MEENAKSHI OVERSEAS (P) LTD. 395 ITR 677 (DEL.) PR. COMMISSIONER OF INCOME TAX VS. G AND G PHARMA INDIA LTD. 384 ITR 147 (DEL.) AND SARTHAK SECURITI ES CO. (P) LTD. 329 ITR 110 (DEL.) CLEARLY APPLY TO THE FACTS AND CIRCUMSTANCES OF THE CASE. LEARNED COUNSEL FOR THE ASSESSEE ALSO RELIED UPON ORDER OF ITAT DELHI BENCH IN THE CASE OF PIONEER TOWN PLANNERS PVT. LTD. (SUPRA) IN WHICH ON IDENTICAL F ACTS REOPENING OF THE ASSESSMENT HAVE BEEN QUASHED. THE LD. D.R. RELIED UPON CERTAIN DECISIONS IN SUPPORT O F THE CONTENTION THAT REOPENING OF THE ASSESSMENT IS JUSTIFIED BUT THE SAME ARE DISTINGUISHABLE ON FAC TS OF THE PRESENT CASE. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF ABOVE DISCUSSION AND DECISIONS REFERRED TO IN THE ORDER WE ARE OF THE VIEW THAT REOPENING OF THE ASSESSMENT IS BAD IN LAW AND THAT SANCTION/APPROVAL GRANTED BY PR. COMMISSIONER OF INCOME TAX IS ALSO INVALID. WE MAY ALSO NOTE THAT VIDE ORDER SHEET DATED 23.08.2019 THE CASE WAS RE-FIXED FOR HEARING BECAUSE THE LD. D.R. ARGUED THAT APPROVAL HAVE BEEN GRANTED BY COMMISSIONER OF INCOME TAX AFTER DUE DISCUSSION OF THE MATTER AND PERUSAL OF THE RELEVAN T 26 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. INFORMATION AND THEREAFTER APPROVAL IN PRESCRIBED PROFORMA SENT TO THE A.O. AND HE HAS MENTIONED THAT I AM SATISFIED. HOWEVER NO RECORD WAS PRODUCED. THEREFORE THIS CASE WAS RE-FIXED FOR FRESH HEARING . HOWEVER ON THE DATE OF HEARING NO SUCH RECORD HAVE BEEN PRODUCED FOR THE INSPECTION OF THE BENCH. THEREFORE SATISFACTION RECORDED BY THE PR. COMMISSIONER OF INCOME TAX IS INVALID AND WITHOUT APPLICATION OF MIND. THEREFORE THE REOPENING OF TH E ASSESSMENT IS INVALID AND BAD IN LAW AND CANNOT BE SUSTAINED 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 I.T. ACT 1961. RESULTANTLY ALL ADDITIONS S TANDS DELETED. SINCE WE HAVE QUASHED THE REOPENING OF THE ASSESSMENT THEREFORE THERE IS NO NEED TO DECIDE T HE ADDITION ON MERIT WHICH IS LEFT WITH ACADEMIC DISCUSSION ONLY. 9. IN THE RESULT APPEAL OF ASSESSEE ALLOWED. 14. IN SUPPORT OF THE SAME PROPOSITION HE HAS ALSO RELIED UPON ORDER OF THE ITAT DELHI BENCH IN THE CASE OF M /S KEY COMPONENTS (P) LTD. VS. ITO ITA NO. 366/DEL/2016 DA TED 12.02.2019 IN WHICH THE REASSESSMENT PROCEEDINGS HA VE BEEN QUASHED BECAUSE THE REOPENING WAS BASED ON 27 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. INCORRECT FACTS. THE FINDINGS OF TRIBUNAL IN PARA 6.3 TO 7 ARE REPRODUCED AS UNDER: 6.3 CONSIDERING THE ABOVE DISCUSSION IT IS CLEAR THAT THERE IS A TOTAL NON-APPLICATION OF MIND ON TH E PART OF THE AO WHILE RECORDING THE REASONS FOR REOPENING OF THE ASSESSMENT. HE HAS RECORDED INCORRECT AMOUNT WHICH ESCAPED ASSESSMENT. HIS CONCLUSION WAS MERELY BASED ON OBSERVATIONS AND INFORMATION RECEIVED FROM DIT(INV.) NEW DELHI WHI CH IS NOT BROUGHT ON RECORD AND HIS CONCLUSION IS MERE LY BASED ON DOUBTS BECAUSE HE WAS NOT SURE WHETHER TRANSACTION IN QUESTION IS GENUINE OR NOT. THEREFO RE THE DECISIONS RELIED UPON BY THE LD. COUNSEL FOR TH E ASSESSEE SQUARELY APPLY TO THE FACTS AND CIRCUMSTANCES OF THE CASE. THE DECISIONS RELIED UP ON BY THE LD. DR WOULD NOT SUPPORT THE CASE OF THE REVENUE. SINCE THERE IS A TOTAL LACK OF MIND WHIL E RECORDING THE REASONS FOR REOPENING OF THE ASSESSMENT THEREFORE ASSUMPTION OF JURISDICTION UNDER SECTION 147/148 OF THE I.T. ACT 1961 IS BAD AND ILLEGAL. THE AO WAS NOT JUSTIFIED IN ASSUMING JURISDICTION UNDER SECTION 147/148 OF THE I.T. ACT 1961. WE THEREFORE HOLD THAT REOPENING OF THE ASSESSMENT IN THE MATTER IS BAD IN LAW AND ILLEGAL AS SUCH SAME CANNOT BE SUSTAINED IN LAW. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORITIE S 28 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. BELOW AND QUASH THE REOPENING OF THE ASSESSMENT. RESULTANTLY ALL ADDITIONS STAND DELETED. 14.1 LD. COUNSEL FOR ASSESSEE IN SUPPORT OF THE AB OVE CONTENTION ALSO RELIED UPON FOLLOWING DECISIONS: 1. SHAMSHAD KHAN VS. ACIT 395 ITR 265 (DEL.) 2. PR. CIT VS. M/S SNG DEVELOPERS LTD. 404 ITR 312 (DEL.). 3. CIT VS. ATLAS CYCLE INDUSTRIES 180 ITR 319(P&H) 4. SIEMENS INFORMATION SYSTEM LTD. VS. ACIT 293 ITR 548 (BOM.). 15. ON THE OTHER HAND LD. DR RELIED UPON THE ORDER S OF THE AUTHORITIES BELOW AND SUBMITTED THAT SINCE THE ASSESSEE DID NOT DISCLOSE BANK ACCOUNT SO AO APPLIED HIS MIN D TO THE INFORMATION RECEIVED FROM INVESTIGATION WING. EXAC T AMOUNT CANNOT BE DETERMINED AT THE TIME OF INITIATI ON OF REASSESSMENT PROCEEDINGS. PRIMA FACIE OPINION TO BE FORMED AT THE STAGE OF INITIATION OF REASSESSMENT PROCEEDI NGS AND THAT SUFFICIENCY OF THE REASONS IS NOT RELEVANT FOR REOPENING OF THE ASSESSMENT AND RELIED UPON JUDGMENT OF THE S UPREME COURT IN THE CASE OF RAYMOND WOOLEN MILLS LTD. VS. ITO 236 ITR 34. 29 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. 16. WE HAVE CONSIDERED THE RIVAL SUBMISSION. HONB LE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. ATLAS CYCLE INDUSTRIES 180 ITR 319 HELD AS UNDER: HELD (I) THAT THE TRIBUNAL WAS RIGHT IN CANCELLIN G 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 N OT GET JURISDICTION TO MAKE THE REASSESSMENT. 17. HONBLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS. SNG DEVELOPERS LTD. [2018] 404 ITR 312 (DEL.) HELD AS UNDER: HELD DISMISSING THE APPEAL THAT THE REASONS RECORDED BY THE ASSESSING OFFICER FOR REOPENING THE ASSESSMENT UNDER SECTION 147 ISSUING A NOTICE UNDE R SECTION 148 DID NOT MEET THE STATUTORY CONDITIONS. AS ALREADY HELD BY THE APPELLATE TRIBUNAL THERE WAS A REPETITION OF AT LEAST FIVE ACCOMMODATION ENTRIES A ND THE TOTAL AMOUNT CONSTITUTING THE SO-CALLED ACCOMMODATION ENTRIES WOULD THEREFORE NOT WORK OUT TO RS.95 65 510. IT WAS UNACCEPTABLE THAT THE ASSESSING OFFICER PERSISTED WITH HIS 'BELIEF' THAT THE AMOUNT HAD ESCAPED ASSESSMENT NOT ONLY AT THE STAGE OF REJECTING THE ASSESSEES OBJECTIONS BUT ALSO IN THE REASSESSMENT PROCEEDINGS WHERE HE PROCEEDED TO ADD THE ENTIRE AMOUNT TO THE INCOME OF THE ASSESSEE. 30 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. THEREFORE THERE WAS NON-APPLICATION OF MIND ON THE PART OF THE ASSESSING OFFICER. THE APPELLATE TRIBUN AL WAS JUSTIFIED IN CONFIRMING THE ORDER OF THE COMMISSIONER (APPEALS) AND HOLDING THAT THE REOPENING OF THE ASSESSMENT WAS BAD IN LAW. 18. HONBLE DELHI HIGH COURT IN THE CASE OF SHAMSHA D KHAN VS. ACIT [2017] 395 ITR 265 (DEL.) HELD AS UND ER: HELD ALLOWING THE PETITION THAT THE FORM FOR RE CORDING THE REASONS FOR INITIATING THE PROCEEDINGS UNDER SE CTION 148 OF THE ACT FOR OBTAINING APPROVAL OF THE COMMISSIONER ITSELF PROCEEDED ON THE ERRONEOUS BASI S THAT THE QUANTUM OF INCOME WHICH HAD ESCAPED ASSESSMENT WAS RS.28 75 000 WHEREAS THE ASSESSEE HAD FILED RETURNS SHOWING INCOME OF MERELY RS.20 56 145 AND IT WAS ON THIS BASIS THAT THE ADDITIONAL COMMISSIONER AND THE COMMISSIONER GRANTED THEIR APPROVAL FOR REOPENING THE ASSESSMENT . EVEN THOUGH THE ASSESSEE HIGHLIGHTED THIS FUNDAMENT AL ERROR AT THE INITIATION OF THE CASE BY STATING THAT HIS INCOME WAS MENTIONED AS RS.20 56 145 INSTEAD OF RS.69 71 191 THIS WAS SUMMARILY REJECTED STATING T HAT IT WAS A CLERICAL MISTAKE AND THAT THE LATTER FIGUR E WOULD BE TREATED AS HIS INCOME. IF THE CORRECT INCOME I.E . RS.69 71 191 WAS PUT BEFORE THE COMMISSIONER AT THE TIME OF SEEKING HIS APPROVAL HE MIGHT HAVE TAKEN A DIFFERENT VIEW. THERE WAS NOTHING ON RECORD TO SHOW 31 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. THAT THE CLERICAL MISTAKE OF SUBSTITUTING RS.20 56 145 FOR RS.69 71 191 WAS EVER BROUGHT TO THE NOTICE OF THE COMMISSIONER EITHER BEFORE OR AFTER APPROVAL OR SAN CTION UNDER SECTION 151(1) OF THE ACT. THE INITIATION OF THE CASE FOR REOPENING OF THE ASSESSMENT WAS ERRONEOUS AND WITHOUT APPLICATION OF MIND ESPECIALLY SINCE THE ASSESSING OFFICER HAD NOT EXAMINED THE RETURN FILED WHICH WOULD HAVE REVEALED THAT THE ASSESSEE HAD FIL ED REGULAR RETURNS HAD SUFFICIENT OPENING BALANCE IN HIS ACCOUNT AND THE WITHDRAWALS THEREFROM SUBSTANTIATED THE DONATION MADE. THEREFORE THE REOPENING OF THE ASSESSMENT WAS UNSUSTAINABLE IN LAW AND THE NOTICE ISSUED UNDER SECTION 147 OF THE ACT WAS TO BE QUASH ED. 19. HONBLE BOMBAY HIGH COURT IN THE CASE OF SIEMEN S INFORMATION SYSTEMS LTD. VS. ACIT & OTHERS [2007] 2 93 ITR 548 (BOM.) HELD AS UNDER: THE PETITIONER HAD SEVERAL EOU/STP UNITS ENGAGED IN THE BUSINESS OF EXPORT OF SOFTWARE. IN RESPONSE TO THE NOTICE FOR REOPENING THE ASSESSMENT FOR THE ASSESSM ENT YEAR 1999-2000 THE PETITIONER OBJECTING TO THE IS SUANCE OF THE NOTICE STATED THAT THE REASONS FURNISHED BY THE AUTHORITY HAD QUOTED THE PROVISIONS OF SECTION 10A AS AMENDED BY THE FINANCE ACT 2000 WITH EFFECT FROM THE ASSESSMENT YEAR 2001-02 AND AS SUCH COULD NOT HAVE BEEN MADE APPLICABLE TO THE ASSESSMENT YEAR 1999- 32 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. 2000 AND THE NOTICE HAD BEEN ISSUED UNDER THE MISTAKEN BELIEF ABOUT THE CORRECT POSITION OF LAW. HOWEVER OPPORTUNITY TO SHOW CAUSE WAS GIVEN TO THE PETITIONER AS TO WHY THE LOSS CLAIMED SHOULD NOT BE DISALLOWED TO BE CARRIED FORWARD. ON A WRIT PETITIO N : HELD ALLOWING THE PETITION (I) THAT IT WOULD BE CLEAR F ROM THE REASONS GIVEN THAT THE AUTHORITY PROCEEDED ON T HE PRESUMPTION THAT THE LAW APPLICABLE WAS THE LAW AFT ER THE AMENDMENT AND NOT THE LAW IN RESPECT OF WHICH T HE PETITIONER HAD FILED THE RETURN FOR THE YEAR 1999-2 000. THIS BY ITSELF CLEARLY DEMONSTRATED THAT THERE WAS TOTAL NON-APPLICATION OF MIND ON THE PART OF THE AUTHORIT Y AND CONSEQUENTLY THE NOTICE BASED ON THAT REASON WOULD AMOUNT TO NON-APPLICATION OF MIND. (II) THAT THE INCOME DERIVED BY THE ASSESSEE FROM AN INDUSTRIAL UNDERTAKING TO WHICH SECTION 10A APPLIES COULD NOT BE INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE. THEREFORE THE PETITIONER WAS RIGHT IN FI LING THE RETURN BY EXCLUDING THE INCOME IN TERMS OF SECTION 10A. 19.1 THE CRUX OF THE ABOVE JUDGMENTS AND THE JUDGME NT OF THE TRIBUNAL RELIED ON THE ABOVE HAD BEEN THAT IN C ASE INCORRECT WRONG AND NON-EXISTING REASONS ARE RECOR DED BY THE AO FOR REOPENING OF THE ASSESSMENT AND THAT AO FAILED TO VERIFY THE INFORMATION RECEIVED FROM INVESTIGATION WING THE 33 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. REOPENING OF THE ASSESSMENT WOULD BE UNJUSTIFIED AN D IS LIABLE TO BE QUASHED. 19.2 IN THE PRESENT CASE THE AO RECORDED WRONG FAC TS ON MANY COUNT IN THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT I.E. AO RECORDED INCORRECT AMOUNT OF RS. 58 40 171/- CREDITED IN HSBC ACCOUNT NOIDA DESPITE HE HAS ADMITTED IN THE ASSESSMENT ORDER THAT IT WAS RS. 30 74 006/-. THE AO IN THE REASONS ALSO RECORDED I NCORRECT FACT THAT NO ASSESSMENT HAS BEEN COMPLETED IN THIS CASE U/S 143(3) BUT IN THE REASON ITSELF AO RECORDED THAT EA RLIER REASSESSMENT HAS BEEN DONE U/S 147/148 READ WITH SE CTION 143(3) OF THE ACT. THE AO ALSO INCORRECTLY RECORDE D THAT SANCTION FOR REOPENING OF ASSESSMENT IS REQUIRED UN DER PROVISO TO SECTION 151(1) OF THE ACT DESPITE SUCH P ROVISO DOES NOT EXIST IN THE STATUTE AS IT WAS AMENDED IN 2015. THE AO THEREFORE RECORDED WRONG INCORRECT AND NON-EXISTI NG REASONS FOR REOPENING OF THE ASSESSMENT. IT MAKES CLEAR THAT THERE IS A TOTAL NON-APPLICATION OF MIND ON THE PAR T OF THE AO WHILE RECORDING THE REASONS FOR REOPENING OF THE AS SESSMENT. THE AO HAS RECORDED INCORRECT AMOUNT WHICH ESCAPED 34 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. ASSESSMENT. THE REASONS FAILED TO DEMONSTRATE THE LIVE LINK BETWEEN THE ALLEGED TANGIBLE MATERIAL AND THE FORMA TION OF BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE DECISIONS RELIED UPON LD. COUNSEL FOR ASSESSEE IN THE CASES OF PR. CIT VS. MEENAKSHI OVER SEAS (P) LTD. 395 ITR 677 (DEL.) PR. CIT VS. RMG POLYVINYL (I) LTD. 396 ITR 5 (DEL.) PR. CIT VS. G&G PHARMA INDIA LTD. [2016] 384 ITR 147 (DEL.) AND SIGNATURE HOTELS P. LTD. VS. ITO (SUPRA) SQUARELY APPLY TO THE FACTS AND CIRCUMSTANC ES OF THE CASE. CONSIDERING THE FACTS AND CIRCUMSTANCES OF T HE CASE IN THE LIGHT OF THE ABOVE DISCUSSION AND DECISIONS REFERRED TO IN THE ORDER WE ARE OF THE VIEW THAT REOPENING OF THE ASSESSMENT IS INVALID AND BAD IN LAW AND THAT SANCTION/APPROVAL GRANTED IS ALSO WITHOUT ANY APPLI CATION OF MIND. THEREFORE THE REOPENING OF THE ASSESSMENT C ANNOT BE SUSTAINED IN LAW. WE ACCORDINGLY SET ASIDE THE O RDERS OF THE AUTHORITIES BELOW AND QUASH THE REOPENING OF TH E ASSESSMENT. RESULTANTLY ALL THE ADDITIONS STAND DE LETED. 20. SINCE WE HAVE QUASHED THE REOPENING OF THE ASSESSMENT THEREFORE THERE IS NO NEED TO DECIDE T HE 35 ITA.NO.1783/DEL./2019 SHRI KARAN KHURANA DELHI. REMAINING GROUNDS WHICH ARE LEFT WITH ACADEMIC DISC USSION ONLY. 21. IN THE RESULT THE APPEAL OF ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (B.R.R. KUMAR) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI DATED 17 TH MARCH 2021 *VBP/- *KAVITA ARORA COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT C BENCH DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.