Sushil Hiralal Jain, Ahmedabad V. ITO, Ward-1(2)(4), Ahmedabad

ITA 212/AHD/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 8260 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC-2
• Assessment Year: 2008-2009
• Appeal Filed On: 12-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Accommodation entries
• Section: 148; 6; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC-2” BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & Ms. MADHUMITA ROY, JUDICIAL MEMBER I .T .A . N o s . 2 12 & 2 1 3 / Ah d/2 0 1 9 ( A s s e s s me nt Y ea r : 20 0 8- 09 ) Su s h il H i r a la l J a i n & Su s h il Ja i n( H U F ) , B - 6 0 2, Sh ila le kh , O p p . P oli c e S ta di u m , S h ah ib au g, A h m e da ba d - 3 8 0 00 4 V s . In c o me Ta x Of f ic e r , Wa r d- 1( 2) ( 4 ) , Ah me da b ad [ P AN N o. A C XP J8 8 18 N ] (Appellant) .. (Respondent) Appellant by : Shri M. S. Chhajed, A.R. Respondent by : Shri Rakesh Jha, Sr. DR D a t e of H ea r i ng 29.07.2022 D a t e of P r o no u n ce me nt 12.08.2022 O R D E R PER Ms. MADHUMITA ROY - JM: Both the appeals filed by the assessee are directed against the order both dated 09.01.2019 passed by the Commissioner of Income Tax (Appeals)-10, Ahmedabad arising out of the order both dated 30.03.2016 passed by the ITO, Ward-1(2)(4), Ahmedabad under Section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for A.Y. 2008-09. 2. We have heard the rival submissions made by the respective parties and we have also perused the relevant materials available on record. ITA Nos. 212&213/Ahd/2019 Sushil Hiralal Jain & Sushil Jain (HUF) vs. ITO Asst.Year –2008-09 - 2 - 3. The Ld. Counsel appearing for the assessee submitted before us that the very basis of the reopening of the assessment is factually incorrect and thus, the entire proceeding is liable to be quashed. In this regard, he has relied upon the judgment passed by the Hon’ble Jurisdictional High Court in the case of Sunrise Education Trust vs. ITO(E), reported in (2018) 92 taxmann.com 74 (Gujarat). 4. The assessee has filed an application for additional ground under Rule 35A of the Income Tax Appellate Tribunal Rules, 1963 wherein the validity of the reassessment proceeding initiated under Section 148 of the Act has been challenged. 5. On 01.10.2013 a search was carried out in the case of Shri Praveen Kumar Jain Group by the Director General of Income Tax (Investigation), Mumbai wherein it was noticed that this groups are indulging in issuance of bills for commission etc. and providing accommodation entries. Further it was noticed that the assessee is one of the beneficiaries of such accommodation entries. The assessee has shown to have made total accommodation entries of Rs. 7,50,000/- during the year under consideration and therefore, the ITO has reason to believe that the income of more than 1 lakh chargeable to tax for the year under consideration has escaped assessment as the fact appearing from the reasons recorded by the concerned ITO on 30.03.2015. The fact for recording the reasons for issuing proceeding under Section 148 Column 7 whereof speaks that the same is on the basis of Section 147 Explanation ITA Nos. 212&213/Ahd/2019 Sushil Hiralal Jain & Sushil Jain (HUF) vs. ITO Asst.Year –2008-09 - 3 - 2(b) of the Act whereas Column 9 states that no return has been filed by the assessee for A.Y. 2008-09. 6. Thus, that the very basis of the recording of reasons dated 30.03.2015 is contradictory. In this regard, the Ld. A.R. also drawn our attention to Page 1 of the Paper Book filed before us being the Income Tax Return of the assessee. Thus, the basis of the reasons recorded for issuance of proceeding under Section 148 is full of contradiction as the notice is factually incorrect. In this regard, we have considered the judgment passed by the Hon’ble Jurisdictional High Court in the case of Sunrise Education Trust vs. ITO(Exemption), reported in (2018) 92 taxmann.com 74(Gujarat) wherein on the self-same issue the reasons recorded by the Ld. Officer and proceeded on an erroneous footing that the assessee has not filed return. The reopening of assessment, therefore, has been quashed. 7. Having heard the Ld. Counsel appearing for the assessee and having regard to the facts and circumstances of the case we find that the reasons recorded for initiation of reassessment under Section 148 is factually incorrect by stating that the assessee has not filed the return of income whereas the records reveals otherwise. The entire reassessment proceeding is thus found to be bad in law and thus liable to be quashed. Our view has also been strengthen by the ratio laid down by the Hon’ble Jurisdictional High Court as mentioned hereinabove and respectfully relying upon the same we quash the impugned reassessment proceeding ITA Nos. 212&213/Ahd/2019 Sushil Hiralal Jain & Sushil Jain (HUF) vs. ITO Asst.Year –2008-09 - 4 - initiated under Section 148 of the Act. Hence, the appeal of the assessee is allowed. ITA No. 213/Ahd/2019 (A.Y. 2008-09):- 8. The identical issue involved in the case has already been dealt with by us in ITA No. 212/Ahd/2019 for A.Y. 2008-09 and in the absence of any changed circumstances the same shall apply mutatis mutandis. Hence, the appeal preferred by the assessee is allowed. 9. In the result, both the appeals preferred by the assessee are allowed. This Order pronounced in Open Court on 12/08/2022 Sd/- Sd/- (WASEEM AHMED) (Ms. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 12/08/2022 True Copy TANMAY, Sr. PS TRUE COPYTrue आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad