KHANGARAM K. DEWASI, MUMBAI V. DCIT, CC-2(3), MUMBAI

ITA 2805/MUM/2018

• Counselvise Citation: [2022] 107 COUNSELVISE.COM (IT) 0283 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 03-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Bogus purchase; Opportunity of being heard; Principle of natural justice; Peak credit; Tangible material; Difference of opinion; Accommodation entries; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 142(1); 133A; 195; 143(2); 191; 139(1); 48

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA No. 2806/MUM/2018 Assessment Year: 2008-09 & ITA No. 2807/MUM/2018 Assessment Year: 2009-10 & ITA No. 2805/MUM/2018 Assessment Year: 2010-11 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys, Shop No. 5, Sultan Market, Opp. ASH Krishna Bldg. Andheri Ghatkoper Road, Sakinaka, Andheri (East), Mumbai-400072. Vs. The DCIT, Central Circle-2(3), Mumbai-21 PAN No. AEEPD 8897 C Appellant Respondent Assessee by : Mr. Bharat Kumar, AR Revenue by : Mr. Ajeya Kumar Ojha, DR Date of Hearing : 28/06/2022 Date of pronouncement : 05/08/2022 ORDER PER OM PRAKASH KANT, AM These appeals by the assessee are arising, consequent to the order dated 26/07/2021 passed by the Tribunal in Miscellaneous Application Nos. 42 to 44/Mum/2021 for assessment year 2008 to 2010-11 respectively recalled for the limited purpose of adjudication of grounds challenging validity of jurisdiction for assessment i.e to 4 of respective appeals (wrongly mentioned at S. No. 8 to 11 in the grounds of appeal raised) 2. The identical groun captioned appeals. The 2008-09 are only reproduced as under: 1. On the facts and in the circumstances of the case, the l cit (a) erred in rejecti A.O. has fail notice under section 147 of the it. Act. 2. On the facts and the circumstances of the case whether the CIT (A) was correct in holding that return of income on which assessment was made was a valid return 3. 3. On facts and circumstances of the case Whether CIT(A) was correct in holding that assessment in spite of the fact that no noti was issued after filing of return. ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji 42 to 44/Mum/2021 for assessment year 2008 respectively, wherein the captioned appeals have recalled for the limited purpose of adjudication of grounds challenging validity of jurisdiction for assessment i.e to 4 of respective appeals (wrongly mentioned at S. No. 8 to 11 in the grounds of appeal raised). The identical grounds have been raised in all the three captioned appeals. Therefore, for brevity, relevant grounds reproduced as under: On the facts and in the circumstances of the case, the l cit (a) erred in rejecting the contention of the appellant that A.O. has failed to assume a valid and legal jurisdiction to issue notice under section 147 of the it. Act. On the facts and the circumstances of the case whether the CIT (A) was correct in holding that return of income on which assessment was made was a valid return. 3. On facts and circumstances of the case Whether CIT(A) was correct in holding that assessment order was valid in spite of the fact that no notice under section 143(3) of the act was issued after filing of return. ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 2 42 to 44/Mum/2021 for assessment year 2008-09 , wherein the captioned appeals have been recalled for the limited purpose of adjudication of grounds challenging validity of jurisdiction for assessment i.e. ground No. 1 to 4 of respective appeals (wrongly mentioned at S. No. 8 to 11 in ds have been raised in all the three relevant grounds for AY On the facts and in the circumstances of the case, the learned appellant that d to assume a valid and legal jurisdiction to issue On the facts and the circumstances of the case whether the Ld. CIT (A) was correct in holding that return of income on which 3. On facts and circumstances of the case Whether learned order was valid section 143(3) of the act 4. On the facts and the circumstances of the case, whether the Learned CIT(A) was holding that assessment order passed by A.O. was a legal assessment order in spite of violation of natural justice. 5. On the facts and circumstances of the case whether the Learned CIT (A) in co 6. On the facts and circumstances of the case whether the Learned CIT (A) in confirming the addition of income of the appellant and ignoring all the documentary supporting produced by the appellant. 7. The appellant craves leave to add, delete, alter, or modify any of the aforesaid grounds of appeal at or before the hearing of the appeal. 3. As far as grounds of the assessee challenging the addition on merit, same have been 20/12/2019 observing as under: “2. Brief facts of the case are the assessee is engaged in the business of metal and alloys. Disallowance of done on the basis of inquiry u/s. 131 of the Act and conduct by the DDIT (Inv) on the basis of information received from the sales tax department regarding the purchases made by the firm from the list of suspicious dealers who h delivery of goods. In the assessment order the Assessing Officer observed that during enquiry, statement of proprietor of the firm was recorded on oath. In the statement reproduced in the ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji On the facts and the circumstances of the case, whether the Learned CIT(A) was holding that assessment order passed by A.O. was a legal assessment order in spite of violation of natural On the facts and circumstances of the case whether the Learned CIT (A) in confirming the invoking of section 69 of the I. On the facts and circumstances of the case whether the Learned CIT (A) in confirming the addition of ₹11,60,990/ to th income of the appellant and ignoring all the documentary supporting produced by the appellant. The appellant craves leave to add, delete, alter, or modify any of the aforesaid grounds of appeal at or before the hearing of the appeal. rounds of the assessee challenging the addition on , same have been allowed by the Tribunal by the order dated 20/12/2019 observing as under: Brief facts of the case are the assessee is engaged in the business of metal and alloys. Disallowance of bogus purchases was done on the basis of inquiry u/s. 131 of the Act and conduct by the DDIT (Inv) on the basis of information received from the sales tax department regarding the purchases made by the firm from the list of suspicious dealers who have issued false bills without actual delivery of goods. In the assessment order the Assessing Officer observed that during enquiry, statement of proprietor of the firm was recorded on oath. In the statement reproduced in the ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 3 On the facts and the circumstances of the case, whether the Learned CIT(A) was holding that assessment order passed by A.O. was a legal assessment order in spite of violation of natural On the facts and circumstances of the case whether the Learned nvoking of section 69 of the I.T. ACT. On the facts and circumstances of the case whether the Learned ₹11,60,990/ to the total income of the appellant and ignoring all the documentary The appellant craves leave to add, delete, alter, or modify any of the aforesaid grounds of appeal at or before the hearing of the rounds of the assessee challenging the addition on by the order dated Brief facts of the case are the assessee is engaged in the bogus purchases was done on the basis of inquiry u/s. 131 of the Act and conduct by the DDIT (Inv) on the basis of information received from the sales tax department regarding the purchases made by the firm from the without actual delivery of goods. In the assessment order the Assessing Officer observed that during enquiry, statement of proprietor of the firm was recorded on oath. In the statement reproduced in the assessment order the said propriet was a small time trader. That all supporting documents available with it have been furnished to the Assessing Officer. It was submitted in the statement that he had purchased any material from the trader neither in cash nor ob hawala dealers. It was also submitted that the assessee being a small trader it becomes cumbersome to maintain the purchase order, gate pass, lorry receipt, octroi receipt, delivery challan etc. It was further submitted that durin Revenue authority has not find any cash transaction documents or any other illegal documents at the site of the assessee. Despite noting the aforesaid submissions of the assessee on enquiry u/s. 131 of the Act and statement in Assessing Officer proceeded to hold that the purchases to be bogus. In this regard it is noted that the Assessing Officer has not even bothered to issue notice to the assessee who given bogus bills. Th in survey of bogus purchase. Thereafter on the theory of peak credit the disallowances were done. Consequent to learned CIT(A) sustaining the addition, assessee is in appeal before the ITAT. 3. Upon hearing both we find that the assessee has submitted documentary details in the survey and enquiry itself. The assessee has categorically stated in the survey itself that he was not obtaining bogus hawals bills. The assessee reiterated that no evidence of cash purchase or any other incriminating documents have been found at the time of survey. Despite the above even without making any enquiry from the concerned party the Assessing Officer has treated purchase to be ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji assessment order the said proprietor has duly mentioned that he was a small time trader. That all supporting documents available with it have been furnished to the Assessing Officer. It was submitted in the statement that he had purchased any material from the trader neither in cash nor obtained any bills from any hawala dealers. It was also submitted that the assessee being a small trader it becomes cumbersome to maintain the purchase order, gate pass, lorry receipt, octroi receipt, delivery challan etc. It was further submitted that during the enquiry itself that the Revenue authority has not find any cash transaction documents or any other illegal documents at the site of the assessee. Despite noting the aforesaid submissions of the assessee on enquiry u/s. 131 of the Act and statement in the course of survey u/s. 133A, the Assessing Officer proceeded to hold that the purchases to be bogus. In this regard it is noted that the Assessing Officer has not even bothered to issue notice to the assessee who have said given bogus bills. There is no other corroborative material survey of bogus purchase. Thereafter on the theory of peak credit the disallowances were done. Consequent to learned CIT(A) the addition, assessee is in appeal before the ITAT. Upon hearing both the counsel and perusing the records, we find that the assessee has submitted documentary details in the survey and enquiry itself. The assessee has categorically stated in the survey itself that he was not obtaining bogus hawals bills. The rated that no evidence of cash purchase or any other incriminating documents have been found at the time of survey. Despite the above even without making any enquiry from the concerned party the Assessing Officer has treated purchase to be ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 4 or has duly mentioned that he was a small time trader. That all supporting documents available with it have been furnished to the Assessing Officer. It was submitted in the statement that he had purchased any material tained any bills from any hawala dealers. It was also submitted that the assessee being a small trader it becomes cumbersome to maintain the purchase order, gate pass, lorry receipt, octroi receipt, delivery challan etc. g the enquiry itself that the Revenue authority has not find any cash transaction documents or any other illegal documents at the site of the assessee. Despite noting the aforesaid submissions of the assessee on enquiry u/s. the course of survey u/s. 133A, the Assessing Officer proceeded to hold that the purchases to be bogus. In this regard it is noted that the Assessing Officer has not even have said to have ere is no other corroborative material found survey of bogus purchase. Thereafter on the theory of peak credit the disallowances were done. Consequent to learned CIT(A) the addition, assessee is in appeal before the ITAT. the counsel and perusing the records, we find that the assessee has submitted documentary details in the survey and enquiry itself. The assessee has categorically stated in the survey itself that he was not obtaining bogus hawals bills. The rated that no evidence of cash purchase or any other incriminating documents have been found at the time of survey. Despite the above even without making any enquiry from the concerned party the Assessing Officer has treated purchase to be bogus and made d considered opinion it is settled law that statements obtained during the survey, are not conclusively proved for any addition. As a matter of fact, in this case even survey did not against the assessee. The Assessing Officer has not even bothered to issue notice to alleged bogus suppliers. All the purchases are through banking channel. Sales have not at all being doubted. In this view of the matter in our considered opinion addition is totall based upon surmises and conjecture, not sustainable in law. Accordingly, we set aside the orders of the authorities below and delete the additions. 4. The assessee has also challenged the validity of jurisdiction of the assessment. Since, we have already merit, in our considered opinion consideration of validity of jurisdiction of the Assessing Officer is only of academic interest. Hence, we are not engaging the same. 5. In the result, all these appeals of the assessee stand partl allowed.” 4. We have heard rival submission of the parties dispute and perused the relevant material on record including the paperbook containing pages 1 to 131 filed by the assessee. ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji bogus and made disallowances on the theory of peak credit. In our considered opinion it is settled law that statements obtained during the survey, are not conclusively proved for any addition. As a matter of fact, in this case even survey did not reveal anything he assessee. The Assessing Officer has not even bothered to issue notice to alleged bogus suppliers. All the purchases are through banking channel. Sales have not at all being doubted. In this view of the matter in our considered opinion addition is totall based upon surmises and conjecture, not sustainable in law. Accordingly, we set aside the orders of the authorities below and delete the additions. The assessee has also challenged the validity of jurisdiction of the assessment. Since, we have already deleted the additions on merit, in our considered opinion consideration of validity of jurisdiction of the Assessing Officer is only of academic interest. Hence, we are not engaging the same. In the result, all these appeals of the assessee stand partl rd rival submission of the parties dispute and perused the relevant material on record including the paperbook containing pages 1 to 131 filed by the ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 5 isallowances on the theory of peak credit. In our considered opinion it is settled law that statements obtained during the survey, are not conclusively proved for any addition. As reveal anything he assessee. The Assessing Officer has not even bothered to issue notice to alleged bogus suppliers. All the purchases are through banking channel. Sales have not at all being doubted. In this view of the matter in our considered opinion addition is totally based upon surmises and conjecture, not sustainable in law. Accordingly, we set aside the orders of the authorities below and The assessee has also challenged the validity of jurisdiction deleted the additions on merit, in our considered opinion consideration of validity of jurisdiction of the Assessing Officer is only of academic interest. In the result, all these appeals of the assessee stand partly rd rival submission of the parties on the issue in dispute and perused the relevant material on record including the paperbook containing pages 1 to 131 filed by the Ld. counsel of 5. In ground No. 1 ( assessee has challenged validity of reassessment section 147 of the Act issues. The first issue is that there was no information from credible source and no enquiry was carried out by the before recording reasons to believe and therefore there was no application of the mind by the the Ld. counsel has submitted that reasons were recorded subsequent to the issue of notice under section 148 of the 6. While making argument counsel referred to “reasons to believe” recorded by the Officer, which are available on page 25 to 26 of the paperbook. For ready reference, said reason to believe that income Assessment, are reproduced as under: “M/s Shreenathji Metal & Alloys (Prop. Shri Khangaram Dewasi) Reasons for reopening of assessment u/s 147 of the IT Act, 1961 ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji In ground No. 1 (wrongly mentioned as ground No. 8), the assessee has challenged validity of reassessment completed Act. The assessee has assailed the validity on two . The first issue is that there was no information from credible source and no enquiry was carried out by the Assessing Officer before recording reasons to believe and therefore there was no application of the mind by the Assessing Officer. In the second i has submitted that reasons were recorded subsequent to the issue of notice under section 148 of the While making argument in support of the first issue, t referred to “reasons to believe” recorded by the , which are available on page 25 to 26 of the paperbook. For ready reference, said reason to believe that income are reproduced as under: M/s Shreenathji Metal & Alloys (Prop. Shri Khangaram Dewasi) A.Y.-2009-10 reopening of assessment u/s 147 of the IT Act, 1961 ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 6 as ground No. 8), the completed under iled the validity on two . The first issue is that there was no information from credible Assessing Officer before recording reasons to believe and therefore there was no the second issue, has submitted that reasons were recorded subsequent to the issue of notice under section 148 of the Act. in support of the first issue, the Ld. referred to “reasons to believe” recorded by the Assessing , which are available on page 25 to 26 of the paperbook. For ready reference, said reason to believe that income escaped M/s Shreenathji Metal & Alloys (Prop. Shri Khangaram Dewasi) reopening of assessment u/s 147 of the IT Act, 1961 The case of the assessee has been centralized to this circle vide order u/s. 127 of the Act dated 26.04.2013 issued by the CIT Mumbai. Thereafter, the assessee submitted the audit report in this charge on 12/03/2014. Assessee is engaged in the business of trading in Iron and Steel. 2. A enquiry report has been received from the office of DGIT(Inv), Unit has been engaged in bogus purchase activity i.e. accommodation entries from bogus companies/ concerns. The said assessee is a beneficiary of this accomodation transaction as reported by DGIT(Inv) and has obtained accommodation bills for various F.Ys. as under: Sr. No. Name of the concern 1. Aryen Sales Corporation 2. Suryadev Metal India 3. Om Corporation 1. River Gold Elevators 2. Paras Steel India 3. Anand Deep Metal 4. R.J. Metal Industries & M/s Rajlaxmi Corporation & Reliable Metal Works 5. Aaren Sales Corporation 6. Manglik Metal (India) 7. Suryadev Metal (India) 8. N B Enterprises 9. Naman Enterprises 10. Om Corporation 11. Manav Impex 12. Pradeep Metal Syndicate 13. Navratan Impex 14. Ramani Metal Corporation 15. Rishab Metal (India) 16. Shiv Sagar Steel (India) 17. Antriksh Metals 18. Kavita Sales & Jyoti Enterprises ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji The case of the assessee has been centralized to this circle vide order u/s. 127 of the Act dated 26.04.2013 issued by the CIT Mumbai. Thereafter, the assessee submitted the audit report in e on 12/03/2014. Assessee is engaged in the business of trading in Iron and Steel. 2. A enquiry report has been received from the office of DGIT(Inv), Unit-V(1) Mumbai, in respect of the assessee that it has been engaged in bogus purchase activity i.e. taking accommodation entries from bogus companies/ concerns. The said assessee is a beneficiary of this accomodation transaction as reported by DGIT(Inv) and has obtained accommodation bills for various F.Ys. as under: Name of the concern F.Y. Aryen Sales Corporation 2007-08 Suryadev Metal India 2007-08 Om Corporation 2007-08 Total River Gold Elevators 2008-09 Paras Steel India 2008-09 Anand Deep Metal 2008-09 R.J. Metal Industries & M/s Rajlaxmi Corporation & Reliable Metal Works 2008-09 Aaren Sales Corporation 2008-09 Manglik Metal (India) 2008-09 Suryadev Metal (India) 2008-09 Enterprises 2008-09 Naman Enterprises 2008-09 Om Corporation 2008-09 Manav Impex 2008-09 Pradeep Metal Syndicate 2008-09 Navratan Impex 2008-09 Ramani Metal Corporation 2008-09 Rishab Metal (India) 2008-09 Shiv Sagar Steel (India) 2008-09 Antriksh Metals 2008-09 Kavita Sales & Jyoti Enterprises 2008-09 ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 7 The case of the assessee has been centralized to this circle vide order u/s. 127 of the Act dated 26.04.2013 issued by the CIT-21, Mumbai. Thereafter, the assessee submitted the audit report in e on 12/03/2014. Assessee is engaged in the business 2. A enquiry report has been received from the office of V(1) Mumbai, in respect of the assessee that it taking accommodation entries from bogus companies/ concerns. The said assessee is a beneficiary of this accomodation transaction as reported by DGIT(Inv) and has obtained accommodation Amount 10,25,213/- 13,03,536/- 1,54,000/- 24,82,749/- 3,02,162/- 2,34,300/- 21,25,432/- 9,12,750/- 4,51,140/- 50,002/- 97,500/- 10,47,438/- 9,44,213/- 3,25,024/- 10,17,193/- 2,49,670/- 5,46,104/- 9,17,464/- 85,000/- 8,54,409/- 68,690/- 5,03,634/- 1. Anand Deep Metal 2. Valianat Steel Engineering Co. 3. Ramani Metal Corporation 4. Aryen Sales Corporation 5. Krishana Steel Industries Shiv Sagar Steel (India) Asian Metal Industries Rainbow Steel Impex Deep Metal & Tube Prime Steel Impex Shiv Sagar Steel (India) Asian Metal Industries As per information tabulated above, the above named assessee has taken bogus that the assessee had failed to produce 1,07,32,125/- from various parties during F.Y.2008 to the purchase party as well as broker and delivery challan for the purchase made from the above parties, it is emerged that the purchase are not genuine. The actual purchase must have been done from the un and the total amount in each year represents the undisclosed cash/ income in the hands of the assessee. 4. In view of this new piece of information on bogus purchase of Rs.1,07,32,125/ for F.Y.2008 could be easily deduced that income of Rs. 1,07,32,125/ assessable to tax has escaped assessment. ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Total Anand Deep Metal 2009-10 Valianat Steel Engineering Co. 2009-10 Ramani Metal Corporation 2009-10 Aryen Sales Corporation 2009-10 Krishana Steel Industries 2009-10 Total Shiv Sagar Steel (India) 2010-11 Asian Metal Industries 2010-11 Rainbow Steel Impex 2010-11 Deep Metal & Tube 2010-11 Prime Steel Impex 2010-11 Total Shiv Sagar Steel (India) 2011-12 Industries 2011-12 Total As per information tabulated above, the above named assessee has taken bogus A.Y.2009-10. In the enquiry report, it is stated that the assessee had failed to produce purchase bill of Rs. from various parties during F.Y.2008-09 relevant to the purchase party as well as broker and delivery challan for the purchase made from the above parties, it is emerged that the purchase are not genuine. The actual purchase must have been done from the undisclosed parties in the market in cash and the total amount in each year represents the undisclosed cash/ income in the hands of the assessee. 4. In view of this new piece of information on bogus purchase of Rs.1,07,32,125/ for F.Y.2008-09 relevant to A.Y.2009- could be easily deduced that income of Rs. 1,07,32,125/ assessable to tax has escaped assessment. ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 8 1,07,32,125/- 10,97,899/- 11,64,189/- 31,47,840/- 31,47,840/- 2,94,371/- 57,57,264/- 3,69,895/- 5,86,137/- 7,60,419/- 7,79,785/- 6,89,648/- 31,85,884/- 2,14,860/- 6,52,692/- 8,67,552/- As per information tabulated above, the above named assessee 10. In the enquiry report, it is stated purchase bill of Rs. 09 relevant to the purchase party as well as broker and delivery challan for the purchase made from the above parties, it is emerged that the purchase are not genuine. The actual purchase must have disclosed parties in the market in cash and the total amount in each year represents the undisclosed 4. In view of this new piece of information on bogus purchase of -10, it could be easily deduced that income of Rs. 1,07,32,125/- 5. Therefore, I have reason to believe that in the case of assesee, income of Rs. 1,07,32,125/ meaning of se therefore required to be reopened u/s. 147 and notice u/s148 of the IT Act may be issued accordingly. 7. The Ld. counsel source of information for the dealer published on the website of Government of Maharashtra. has formed belief merely on the basis of the list displayed by the Sales-tax Authorities not applied his mind on the said information and did not gather any other information or evidence to support the formation of his belief. According to the Ld. counsel did not make any further enquiry for recording reasons to believe that income escaped assessment. The decision of the Hon’ble Delhi High Court in the case of Hotels Private Limited vs ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji 5. Therefore, I have reason to believe that in the case of assesee, income of Rs. 1,07,32,125/- has escaped assessment within the meaning of section u/s147 of the IT Act, 1961. The case is therefore required to be reopened u/s. 147 and notice u/s148 of the IT Act may be issued accordingly.” Ld. counsel of the assessee submitted that presumably the source of information for the Assessing Officer is a list of suspicious dealer published on the website of Sales-tax of Maharashtra. According to him the Assessing Officer has formed belief merely on the basis of the list displayed by the Authorities on their website and the Assessing Officer not applied his mind on the said information and did not gather any other information or evidence to support the formation of his belief. Ld. counsel of the assessee, the Assessing Officer any further enquiry for recording reasons to believe that income escaped assessment. The Ld. counsel decision of the Hon’ble Delhi High Court in the case of Private Limited vs. ITO 338 ITR 51 (Delhi ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 9 5. Therefore, I have reason to believe that in the case of assesee, has escaped assessment within the ction u/s147 of the IT Act, 1961. The case is therefore required to be reopened u/s. 147 and notice u/s148 of of the assessee submitted that presumably the is a list of suspicious tax Department of Assessing Officer has formed belief merely on the basis of the list displayed by the Assessing Officer has not applied his mind on the said information and did not gather any other information or evidence to support the formation of his belief. Assessing Officer any further enquiry for recording reasons to believe Ld. counsel relied on the decision of the Hon’ble Delhi High Court in the case of Signature Delhi). According to the Ld. counsel the Hon’ble Delhi High Court in the said case quashed the reassessment proceeding in view of vague information received from the reopening of the assessment that in the case of Signature Hotels Private Limited of the main reason for quashing the reassessment by the Hon’ble High Court, is not referring the relevant material in the reasons recorded. The only material which was referred by the Officer was an annexure. High Court is reproduced as under: “17. In the counter affidavit it is stated that M/s Swetu Stone Pvt. Ltd. had applied for allotment of shares worth Rs.5 lacs and the same were allotted by the p Garg and Shubhash Gupta were recorded by the Director of Income (Investigation) and on the basis of the statements they have come to the conclusion that the said persons were entry operators. Co statements of Mahesh Garg and Shubhash Gupta have not been placed on record by the respondent. The petitioner, has, however, enclosed copy of statements of Mahesh Garg and Shubhash Gupta recorded on different dates. The said persons W.P. (C) NO. ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji the Hon’ble Delhi High Court in the said case quashed the reassessment proceeding in view of vague information ed from the Director of Income-tax (Investigation reopening of the assessment is in mechanical manner. Signature Hotels Private Limited of the main reason for quashing the reassessment by the Hon’ble not referring the relevant material in the reasons recorded. The only material which was referred by the was an annexure. The relevant finding of the Hon’ble Delhi High Court is reproduced as under: 17. In the counter affidavit it is stated that M/s Swetu Stone Pvt. Ltd. had applied for allotment of shares worth Rs.5 lacs and the same were allotted by the petitioner. It is further stated that statements of Mahesh Garg and Shubhash Gupta were recorded by the Director of Income (Investigation) and on the basis of the statements they have come to the conclusion that the said persons were entry operators. Co statements of Mahesh Garg and Shubhash Gupta have not been placed on record by the respondent. The petitioner, has, however, enclosed copy of statements of Mahesh Garg and Shubhash Gupta recorded on different dates. The said persons W.P. (C) NO. 8067/2010 Page 14 have ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 10 the Hon’ble Delhi High Court in the said case quashed the reassessment proceeding in view of vague information Investigation) and mechanical manner. But we find Signature Hotels Private Limited (supra), one of the main reason for quashing the reassessment by the Hon’ble not referring the relevant material in the reasons recorded. The only material which was referred by the Assessing The relevant finding of the Hon’ble Delhi 17. In the counter affidavit it is stated that M/s Swetu Stone Pvt. Ltd. had applied for allotment of shares worth Rs.5 lacs and the same were etitioner. It is further stated that statements of Mahesh Garg and Shubhash Gupta were recorded by the Director of Income-Tax (Investigation) and on the basis of the statements they have come to the conclusion that the said persons were entry operators. Copy of the statements of Mahesh Garg and Shubhash Gupta have not been placed on record by the respondent. The petitioner, has, however, enclosed copy of statements of Mahesh Garg and Shubhash Gupta recorded on 8067/2010 Page 14 have not specifically named the petitioner though other parties have been named and details have been given and it is stated that they were provided accommodation entries. However, it is stated that the entries were made by giving cheque/ expenses entries were provided. The reasons recorded by the Officer do not make reference to any statement of Mahesh Garg or Shubhash Gupta. This may not also be necessary, if the statements were on record and it is claimed and prima facie established that they were examined by the reasons. On the other hand, in the present case, information as enclosed as Annexure, has been referred. This is the only mat the Assessing Officer connection, we may notice that M/s Swetu Stone Pvt. Ltd. is an incorporated company and the petitioner has pleaded and stated that the said company has a paid incorporated on 4th January, 1989 and was also allotted a permanent account number in September, 2001. To this extent, there is no dispute. In these circumstances, we feel the judgments of the Delhi High Court in Commissioner of Income W.P. (C) NO. 8067/2010 Page 15 Tax versus SFIL Stock Broking Limited, [2010] 325 ITR 285 (Delhi) and Sarthak Securities Company Private Limited versus Income Tax Officer, 2010 (329) ITR 110 (Delhi), in which CIT versus Lovely Exports (P) (2009) 216 CTR 195 (SC) has been applied and followed, are applicable. We may notice here that the respondent in their counter affidavit have stated that Swetu Stone Pvt. Ltd. is unidentifiable and, therefore, the aforesaid decisions should not be dated 7th January, 2011 in Writ Petition (Civil) No. 7517/2010, AGR Investment Limited versus Additional Commissioner of Income Tax and ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji not specifically named the petitioner though other parties have been named and details have been given and it is stated that they were provided accommodation entries. However, it is stated that the entries were made by giving cheque/DD/PO after receiving cash and sometimes expenses entries were provided. The reasons recorded by the do not make reference to any statement of Mahesh Garg or Shubhash Gupta. This may not also be necessary, if the statements were and it is claimed and prima facie established that they were examined by the Assessing Officer before or at the time of recording reasons. On the other hand, in the present case, information as enclosed as Annexure, has been referred. This is the only material relied upon by Assessing Officer. The said Annexure has been quoted above. In this connection, we may notice that M/s Swetu Stone Pvt. Ltd. is an incorporated company and the petitioner has pleaded and stated that the said company has a paid-up capital of Rs.90 lacs. The company was incorporated on 4th January, 1989 and was also allotted a permanent account number in September, 2001. To this extent, there is no dispute. In these circumstances, we feel the judgments of the Delhi High Court in ssioner of Income W.P. (C) NO. 8067/2010 Page 15 Tax versus SFIL Stock Broking Limited, [2010] 325 ITR 285 (Delhi) and Sarthak Securities Company Private Limited versus Income Tax Officer, 2010 (329) ITR 110 (Delhi), in which CIT versus Lovely Exports (P) (2009) 216 CTR 195 (SC) has been applied and followed, are applicable. We may notice here that the respondent in their counter affidavit have stated that Swetu Stone Pvt. Ltd. is unidentifiable and, therefore, the aforesaid decisions should not be applied and the ratio of the decision dated 7th January, 2011 in Writ Petition (Civil) No. 7517/2010, AGR Investment Limited versus Additional Commissioner of Income Tax and ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 11 not specifically named the petitioner though other parties have been named and details have been given and it is stated that they were provided accommodation entries. However, it is stated that the entries DD/PO after receiving cash and sometimes expenses entries were provided. The reasons recorded by the Assessing do not make reference to any statement of Mahesh Garg or Shubhash Gupta. This may not also be necessary, if the statements were and it is claimed and prima facie established that they were before or at the time of recording reasons. On the other hand, in the present case, information as enclosed erial relied upon by . The said Annexure has been quoted above. In this connection, we may notice that M/s Swetu Stone Pvt. Ltd. is an incorporated company and the petitioner has pleaded and stated that apital of Rs.90 lacs. The company was incorporated on 4th January, 1989 and was also allotted a permanent account number in September, 2001. To this extent, there is no dispute. In these circumstances, we feel the judgments of the Delhi High Court in ssioner of Income W.P. (C) NO. 8067/2010 Page 15 Tax versus SFIL Stock Broking Limited, [2010] 325 ITR 285 (Delhi) and Sarthak Securities Company Private Limited versus Income Tax Officer, 2010 (329) ITR 110 (Delhi), in which CIT versus Lovely Exports (P) Limited, (2009) 216 CTR 195 (SC) has been applied and followed, are applicable. We may notice here that the respondent in their counter affidavit have stated that Swetu Stone Pvt. Ltd. is unidentifiable and, therefore, the applied and the ratio of the decision dated 7th January, 2011 in Writ Petition (Civil) No. 7517/2010, AGR Investment Limited versus Additional Commissioner of Income Tax and Another should be applied. In the said decision, decisions in the case of Sarthak Securities Company Private Limited (supra) and SFIL Stock Broking Limited (supra) was distinguished by giving the following reasons: "22. ....In SFIL Stock Broking Ltd. (supra), the bench has interfered as it was not discernible whether the to the information and independently arrived at a belief on the basis of material which he had before him that the income had escaped assessment. In our considered opinion, the decision rendered therein is not applicable to the fac Sarthak Securities Co. Pvt. Ltd. (supra), the Division Bench had noted that certain companies W.P. (C) NO. 8067/2010 Page 16 were used as conduits but the Assessee had, at the stage of original assessment, furnished the names of the companies with which it had entered into transaction and the and further the reason recorded does not indicate application of mind. That apart, the existence of the companies was no companies had bank accounts and payments were made to the Assessee company through the banking channel. Regard being had to the aforesaid fact situation, this Court had interfered. Thus, the said decision is also distinguishable on the 18. The facts indicated above do not show that M/s Swetu Stone Pvt. Ltd. is a non-existing and a fictitious entity/person. Decision in AGR Investment Limited (supra), therefore, does not help the case of the respondent.” ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Another should be applied. In the said decision, decisions in the case of Securities Company Private Limited (supra) and SFIL Stock Broking Limited (supra) was distinguished by giving the following "22. ....In SFIL Stock Broking Ltd. (supra), the bench has interfered as it was not discernible whether the Assessing Officer had applied his mind to the information and independently arrived at a belief on the basis of material which he had before him that the income had escaped assessment. In our considered opinion, the decision rendered therein is not applicable to the factual matrix in the case at hand. In the case of Sarthak Securities Co. Pvt. Ltd. (supra), the Division Bench had noted that certain companies W.P. (C) NO. 8067/2010 Page 16 were used as conduits but the Assessee had, at the stage of original assessment, rnished the names of the companies with which it had entered into transaction and the Assessing Officer was made aware of the situation and further the reason recorded does not indicate application of mind. That apart, the existence of the companies was not disputed and the companies had bank accounts and payments were made to the Assessee company through the banking channel. Regard being had to the aforesaid fact situation, this Court had interfered. Thus, the said decision is also distinguishable on the factual score." 18. The facts indicated above do not show that M/s Swetu Stone Pvt. Ltd. existing and a fictitious entity/person. Decision in AGR Investment Limited (supra), therefore, does not help the case of the ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 12 Another should be applied. In the said decision, decisions in the case of Securities Company Private Limited (supra) and SFIL Stock Broking Limited (supra) was distinguished by giving the following "22. ....In SFIL Stock Broking Ltd. (supra), the bench has interfered as it had applied his mind to the information and independently arrived at a belief on the basis of material which he had before him that the income had escaped assessment. In our considered opinion, the decision rendered therein is tual matrix in the case at hand. In the case of Sarthak Securities Co. Pvt. Ltd. (supra), the Division Bench had noted that certain companies W.P. (C) NO. 8067/2010 Page 16 were used as conduits but the Assessee had, at the stage of original assessment, rnished the names of the companies with which it had entered into was made aware of the situation and further the reason recorded does not indicate application of mind. t disputed and the companies had bank accounts and payments were made to the Assessee company through the banking channel. Regard being had to the factual score." 18. The facts indicated above do not show that M/s Swetu Stone Pvt. Ltd. existing and a fictitious entity/person. Decision in AGR Investment Limited (supra), therefore, does not help the case of the 8. The Ld. counsel Delhi High Court in the case of ITA No. 545/2015. We find that in the said case, the to produce before the Hon’ble High Court by the Assessing Officer relevant finding of the Hon’ble High Court is reproduced as under: “When this appeal was first listed on 7th August 2015, the Court enquired from Mr. Kamal Sawhney, learned Senior Standing counsel for the Revenue, whether he could produce the materials on the basis of which the assessment was reopened. He sought and was granted three weeks time for this purpose. The matter was next listed on 10 September 2015 when on account of the fact that the date had wrongly noted by the for today. It was made clear on 10 dated 7 th August 2015 must be complied with positively before the next date of hearing. Today when the case was calle the Court the very which has been reproduced in its entirely in the impugned order of the ITAT. He submitted that the AO was himself present in the Court and further efforts basis of which the AO formed his opinion regarding reopening of the ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Ld. counsel also referred to the decision of the Hon’ble Delhi High Court in the case of PCIT Vs G & G Pharma India Ltd in We find that in the said case, the e before the Hon’ble High Court, the material relied upon essing Officer for reopening of the assessment. The relevant finding of the Hon’ble High Court is reproduced as under: When this appeal was first listed on 7th August 2015, the Court enquired from Mr. Kamal Sawhney, learned Senior Standing counsel Revenue, whether he could produce the materials on the basis of which the assessment was reopened. He sought and was granted three weeks time for this purpose. The matter was next listed on 10 September 2015 when on account of the fact that the date had wrongly noted by the Ld. Standing counsel, the case was adjourned for today. It was made clear on 10 th September 2015 that the order August 2015 must be complied with positively before the next date of hearing. Today when the case was called out, Mr. Sawhney produced before the Court the very same letter of the AO dated 15th September 2010 which has been reproduced in its entirely in the impugned order of the ITAT. He submitted that the AO was himself present in the Court and further efforts would be made to locate the materials on the basis of which the AO formed his opinion regarding reopening of the ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 13 also referred to the decision of the Hon’ble PCIT Vs G & G Pharma India Ltd in We find that in the said case, the Revenue failed , the material relied upon or reopening of the assessment. The relevant finding of the Hon’ble High Court is reproduced as under: When this appeal was first listed on 7th August 2015, the Court enquired from Mr. Kamal Sawhney, learned Senior Standing counsel Revenue, whether he could produce the materials on the basis of which the assessment was reopened. He sought and was granted three weeks time for this purpose. The matter was next listed on 10 th September 2015 when on account of the fact that the date had been , the case was adjourned that the order August 2015 must be complied with positively before the d out, Mr. Sawhney produced before th September 2010 which has been reproduced in its entirely in the impugned order of the ITAT. He submitted that the AO was himself present in the Court would be made to locate the materials on the basis of which the AO formed his opinion regarding reopening of the assessment. The Court was not prepared to grant for this purpose since it was not clear that the materials were, in fact, available with the Department. 8.1 Whereas in the instant case before us there is no such doubts have been raised by the assessee on the existence of the material relied upon i.e. enquiry report of the DGIT 9. The Ld. counsel Hon’ble Delhi High Court and submitted that reasons and information referred in the case of the assessee is being extremely vague and scanty and therefore reopening is invalid in law. However, in the instant case before us the being scanty and vague counsel of assessee. 9.1 The Ld. counsel information as website of Assessing Officer has r ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji assessment. The Court was not prepared to grant 10.1 Further, for this purpose since it was not clear that the materials were, in fact, vailable with the Department.” Whereas in the instant case before us there is no such doubts have been raised by the assessee on the existence of the material relied upon i.e. enquiry report of the DGIT Investigation Ld. counsel has also referred to the other decisions of Hon’ble Delhi High Court and submitted that reasons and information referred in the case of the assessee is being extremely vague and scanty and therefore reopening is invalid in law. in the instant case before us the claim of information being scanty and vague has not been substantiated by the Ld. counsel of the assessee has presumed the source of information as website of Government of Maharashtra, whereas the has reopened the assessment on the basis of ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 14 Further, time for this purpose since it was not clear that the materials were, in fact, Whereas in the instant case before us there is no such doubts have been raised by the assessee on the existence of the material Investigation. to the other decisions of Hon’ble Delhi High Court and submitted that reasons and information referred in the case of the assessee is being extremely vague and scanty and therefore reopening is invalid in law. claim of information as not been substantiated by the Ld. of the assessee has presumed the source of of Maharashtra, whereas the eopened the assessment on the basis of enquiry report forwarded by the tax Department, which is based on Act carried out by the investigation wing and on the basis of the enquiry report of the reopened the assessment. The report of the based on verification one of the credible source, on which the upon for reopening of the assessment from Investigation Wing a reasonable person can make requisite belief assessment as held by the Hon’ble Sup v. Rajesh Jhaveri Stock Broker P. Ltd. Therefore, we reject the contention of the source of information on the website of the Government. ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji enquiry report forwarded by the Investigation Wing , which is based on survey under section 133A of the carried out by the investigation wing and on the basis of the enquiry report of the Investigation Wing, the Assessing Officer reopened the assessment. The report of the Investigation Wing based on verification carried out after due inquiries one of the credible source, on which the Assessing Officer upon for reopening of the assessment. In our opinion from Investigation Wing is one of the relevant information on which a reasonable person can make requisite belief that income escaped s held by the Hon’ble Supreme Court in the case v. Rajesh Jhaveri Stock Broker P. Ltd. [2007] (7 we reject the contention of the Ld. counsel source of information was only a list of suspicious dealers available on the website of the Sales-tax Department of Maharashtra ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 15 Investigation Wing of the Income- survey under section 133A of the carried out by the investigation wing and on the basis of the said Assessing Officer has Investigation Wing is carried out after due inquiries, therefore, it is Officer has relied our opinion said report is one of the relevant information on which that income escaped reme Court in the case ACIT [2007] (7 SCR 765). Ld. counsel that the list of suspicious dealers available Department of Maharashtra 10. As far as the contention of the Officer did not carry out further inquiries before forming believe is concerned, we are of the opi period the Assessing Officer investigation either from the assessee or from outside before reopening the assessment, therefore the expected to verify those purchases from the assessee or the relevant suppliers. Now by way of Finance relevant section 148A has been introduced, under which the Assessing Officer shall conduct an enquiry if required for issuing notice under section 148 of the section 148A is reproduced as under: “148A. The Assessing Officer shall, before issuing any notice under section 148, - (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji far as the contention of the Ld. counsel did not carry out further inquiries before forming believe is concerned, we are of the opinion that during the relevant ing Officer was not empowered for carrying out an investigation either from the assessee or from outside before reopening the assessment, therefore the Assessing Officer expected to verify those purchases from the assessee or the relevant Now by way of Finance Act 2021, w.e relevant section 148A has been introduced, under which the shall conduct an enquiry if required for issuing notice under section 148 of the Act. Relevant provision under is reproduced as under: The Assessing Officer shall, before issuing any notice under (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests income chargeable to tax has escaped assessment; ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 16 that Assessing did not carry out further inquiries before forming reasons to uring the relevant was not empowered for carrying out an investigation either from the assessee or from outside before Assessing Officer cannot be expected to verify those purchases from the assessee or the relevant e.f. 01/04/2021, relevant section 148A has been introduced, under which the shall conduct an enquiry if required for issuing . Relevant provision under The Assessing Officer shall, before issuing any notice under (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests chargeable to tax has escaped assessment; (b) provide an opportunity of being heard to the assessee, with the prior approval of specified authority, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the bas which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in respons show-cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approva authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to (b) expires: Provided that the provisions of this section shall not apply in a case where, - (a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A case of the assessee on or after the 1st day of April, 2021; or ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji (b) provide an opportunity of being heard to the assessee, with the prior approval of specified authority, by serving upon him a notice to show cause within such time, as may be specified in the notice, being less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in respons cause notice referred to in clause (b); (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approva authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause that the provisions of this section shall not apply in a case (a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A case of the assessee on or after the 1st day of April, 2021; or ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 17 (b) provide an opportunity of being heard to the assessee, with the prior approval of specified authority, by serving upon him a notice to show cause within such time, as may be specified in the notice, being less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice is of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry (c) consider the reply of assessee furnished, if any, in response to the (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in furnish a reply as per clause that the provisions of this section shall not apply in a case (a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, se section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information conta therein, relate to, the assessee. 10.1 The relevant provision of section 148A was not during the assessment year in consideration before us, and therefore we reject the contention of the that no enquiry was carried out by the forming requisite belief that income escaped assessment. 11. The Ld. CIT(A) has rejected the ground of the assessee challenging the validity of the jurisdiction ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the (c) the Assessing Officer is satisfied, with the prior approval of the missioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information conta therein, relate to, the assessee.” relevant provision of section 148A was not during the assessment year in consideration before us, and therefore we reject the contention of the Ld. counsel that no enquiry was carried out by the Assessing Officer belief that income escaped assessment. The Ld. CIT(A) has rejected the ground of the assessee challenging the validity of the jurisdiction observing ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 18 (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, ized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the (c) the Assessing Officer is satisfied, with the prior approval of the missioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained relevant provision of section 148A was not in operation during the assessment year in consideration before us, and Ld. counsel of the assessee Assessing Officer before belief that income escaped assessment. The Ld. CIT(A) has rejected the ground of the assessee as under: “8. Ground no.2: In this ground assessee has challenged the jurisdiction of AO to issue notice u/s 148 and assume jurisdiction. To adjudicate this case, it would be relevant to 1. Original return of income was fi processed u/s 143(1)(a) of the Act. 2. No scrutiny of original return u/s 143(3) was done. 3. AO got information from Director General IT (Investigation) that assessee had got accommodation bills from various parties for vario financial years including F.Y. 2007 and 2011-12. The enquiry report was received by DGIT(Inv), Unit V(1) in respect of assessee that it has been engaged in bogus purchase activity, i.e. taking accommodation entries from was found to be beneficiary of accommodation transactions as reported by DGIT (Inv). There was a detailed list given from which companies bogus purchases have been made. It was mentioned that assessee had taken bogus parties during F.Y. 2007 report, it was stated that the assessee had failed to produce the purchase party as well as broker and delivery challan for the purchase made from the above parties, it is emerged that the purchase are not genuine. 4. The information from office of DGIT was based on an elaborate exercise and field inquiries, collection of information and recording of scores of statements of the parties involved and in collaboration with ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji 8. Ground no.2: In this ground assessee has challenged the jurisdiction issue notice u/s 148 and assume jurisdiction. To adjudicate this case, it would be relevant to bring out all the facts of the case. 1. Original return of income was filed on 11-08-2009 and it was 143(1)(a) of the Act. No scrutiny of original return u/s 143(3) was done. 3. AO got information from Director General IT (Investigation) that assessee had got accommodation bills from various parties for vario financial years including F.Y. 2007-08, 2008-09, 2009-10 and 2010 The enquiry report was received by DGIT(Inv), Unit V(1) in respect of assessee that it has been engaged in bogus purchase activity, i.e. taking accommodation entries from bogus companies/concerns. The assessee was found to be beneficiary of accommodation transactions as reported by DGIT (Inv). There was a detailed list given from which companies bogus purchases have been made. It was mentioned that assessee had taken bogus purchase bill of Rs.24,82,749/ parties during F.Y. 2007-08 relevant to A.Y. 2008-09. In the enquiry report, it was stated that the assessee had failed to produce the purchase party as well as broker and delivery challan for the purchase rom the above parties, it is emerged that the purchase are not 4. The information from office of DGIT was based on an elaborate exercise and field inquiries, collection of information and recording of scores of statements of the parties involved and in collaboration with ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 19 8. Ground no.2: In this ground assessee has challenged the jurisdiction issue notice u/s 148 and assume jurisdiction. To adjudicate bring out all the facts of the case. 2009 and it was 3. AO got information from Director General IT (Investigation) that assessee had got accommodation bills from various parties for various 10 and 2010-11 The enquiry report was received by DGIT(Inv), Unit V(1) in respect of assessee that it has been engaged in bogus purchase activity, i.e. taking bogus companies/concerns. The assessee was found to be beneficiary of accommodation transactions as reported by DGIT (Inv). There was a detailed list given from which companies bogus purchases have been made. It was mentioned that purchase bill of Rs.24,82,749/- for various 09. In the enquiry report, it was stated that the assessee had failed to produce the purchase party as well as broker and delivery challan for the purchase rom the above parties, it is emerged that the purchase are not 4. The information from office of DGIT was based on an elaborate exercise and field inquiries, collection of information and recording of scores of statements of the parties involved and in collaboration with other government departments. The entire exerci indepth investigation and not a casual and superficial one. 5. Based on such elaborate and extensive investigating report, AO had recorded reasons to believe that since assessee had failed to produce the purchase party as well as purchase made from the above parties, it is emerged that the purchase are not genuine. The actual purchase must have been done from the undisclosed parties in the market in cash and the total amount in each year which represe assessee. Hence, satisfaction regarding income escaped was recorded on reasonable belief and notices u/s 148 were issued by AO. 8.1 There were new facts before the AO: Reasons to believe: (i) The require believe that income has escaped assessment. It has been held in plethora of case laws that at the time of reopening, A.O. is not required to establish the escapement of income. The existence of reason enough. In this regard, reliance is placed on following case laws of the Apex Court: a. Kalyanji Mavji & Co. vs CIT (SC) 102 ITR 287 b. ITO vs Lakhmani Mewal Das (SC) 103 ITR 437 c. Phool Chand Bajrang Lal and Another vs ITO & Anr. (SC)203 ITR 456 d. Sri Krishna e. Central Provinces Manganese Ore Co. Ltd. vs ITO (SC) 191 ITR 662 ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji other government departments. The entire exercise was laborious and indepth investigation and not a casual and superficial one. Based on such elaborate and extensive investigating report, AO had recorded reasons to believe that since assessee had failed to produce the purchase party as well as broker and delivery challan for the purchase made from the above parties, it is emerged that the purchase are not genuine. The actual purchase must have been done from the undisclosed parties in the market in cash and the total amount in each year which represents the undisclosed cash/ income in the hands of the assessee. Hence, satisfaction regarding income escaped was recorded on reasonable belief and notices u/s 148 were issued by AO. 8.1 There were new facts before the AO: Reasons to believe: (i) The requirement of Sec. 147 is only to have prima-facie reason to believe that income has escaped assessment. It has been held in plethora of case laws that at the time of reopening, A.O. is not required to establish the escapement of income. The existence of reason enough. In this regard, reliance is placed on following case laws of the Kalyanji Mavji & Co. vs CIT (SC) 102 ITR 287 ITO vs Lakhmani Mewal Das (SC) 103 ITR 437 Phool Chand Bajrang Lal and Another vs ITO & Anr. (SC)203 ITR 456 Sri Krishna (P) Ltd. ys CIT (SC)221 ITR 538 Central Provinces Manganese Ore Co. Ltd. vs ITO (SC) 191 ITR ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 20 se was laborious and indepth investigation and not a casual and superficial one. Based on such elaborate and extensive investigating report, AO had recorded reasons to believe that since assessee had failed to produce r and delivery challan for the purchase made from the above parties, it is emerged that the purchase are not genuine. The actual purchase must have been done from the undisclosed parties in the market in cash and the total amount in each nts the undisclosed cash/ income in the hands of the assessee. Hence, satisfaction regarding income escaped was recorded on reasonable belief and notices u/s 148 were issued by AO. 8.1 There were new facts before the AO: Reasons to believe: facie reason to believe that income has escaped assessment. It has been held in plethora of case laws that at the time of reopening, A.O. is not required to establish the escapement of income. The existence of reason is enough. In this regard, reliance is placed on following case laws of the Phool Chand Bajrang Lal and Another vs ITO & Anr. (SC)203 Central Provinces Manganese Ore Co. Ltd. vs ITO (SC) 191 ITR (ii) A close reading of reasons recorded by A.O. shows that A.O. had perused and understood the facts discovered in the extensive inquiries conducted by Inves parties, brokers or any delivery challans of goods, etc. (iii) Not a case of change of opinion: no opinion was formed in 143(1)(a) processing. There was no 143(3) earlier in these cases. New tangible facts, in the form of elaborate inquiries by Investigation (iv) It is not intended by law that each officer should be working in a silo, The sharing and flow of information from one department to another or from one officer to another is very much within the legal framework of an integrated government set up. Thus, to use the information gathered by Inv. Wing and re basis is very much valid. (v) Once a specific investigation government, the same information can be used by other officers for initiating necessary legal actions in their jurisdiction. 8.2 Reopening on information from Investigation Wing as valid has been held in a large number of cases that AO is fully authorized as per law to use the information received from Investigation Wing to reopen the assessments. 1. ITO vs Purshottam Das Bangur 90 Taxmann.com 541 (SC) it was propounded by Ho of Directorate of investigation could be said to be definite information and ITO could act upon for taking action u/s 147(b) and ITO could ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji (ii) A close reading of reasons recorded by A.O. shows that A.O. had perused and understood the facts discovered in the extensive inquiries conducted by Investigation Wing and failure of assessee to produce the parties, brokers or any delivery challans of goods, etc. Not a case of change of opinion: It is not a case of change of as no opinion was formed in 143(1)(a) processing. There was no 143(3) in these cases. New tangible facts, in the form of elaborate inquiries by Investigation-Wing-had come before A.O. (iv) It is not intended by law that each officer should be working in a silo, The sharing and flow of information from one department to her or from one officer to another is very much within the legal framework of an integrated government set up. Thus, to use the information gathered by Inv. Wing and re-open the assessment on its basis is very much valid. Once a specific investigation has been done by a particular Wing of government, the same information can be used by other officers for initiating necessary legal actions in their jurisdiction. Reopening on information from Investigation Wing as valid has been held in a large number of cases that AO is fully authorized as per law to use the information received from Investigation Wing to reopen the assessments. 1. ITO vs Purshottam Das Bangur 90 Taxmann.com 541 (SC) it was propounded by Hon'ble SC that information contained in letter of Directorate of investigation could be said to be definite information and ITO could act upon for taking action u/s 147(b) and ITO could ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 21 (ii) A close reading of reasons recorded by A.O. shows that A.O. had perused and understood the facts discovered in the extensive inquiries tigation Wing and failure of assessee to produce the It is not a case of change of as no opinion was formed in 143(1)(a) processing. There was no 143(3) in these cases. New tangible facts, in the form of elaborate (iv) It is not intended by law that each officer should be working in a silo, The sharing and flow of information from one department to her or from one officer to another is very much within the legal framework of an integrated government set up. Thus, to use the open the assessment on its has been done by a particular Wing of government, the same information can be used by other officers for Reopening on information from Investigation Wing as valid It has been held in a large number of cases that AO is fully authorized as per law to use the information received from Investigation Wing to 1. ITO vs Purshottam Das Bangur 90 Taxmann.com 541 (SC) - wherein n'ble SC that information contained in letter of Directorate of investigation could be said to be definite information and ITO could act upon for taking action u/s 147(b) and ITO could have formed opinion that there was reason to believe that income had escaped. 2. Nickunj Eximp Enterprise vs ACIT 48 Taxmann.com 20 (Bombay HC) -Since genuineness of purchase bills was not subject matter of original assessment u/s 143(3) and these bills being bogus was discovered subsequently to 143(3) during survey. (Present better footings as only 143(1)(a) had been done in this case). 3. Paramount Communication (P) Ltd vs PCIT 2017 (SC) - wherein it was held, (SLP of assessee dismissed) that information regarding bogus purchase by a was passed on to revenue authorities was 'tangible material outside record' to initiate valid reassessment proceedings. 4. Aaspas Multimedia Ltd. vs DCIT 2017 assessment was made on basis of inf DIT (Inv) that assessee way of share application provided by a third party, 5. Indu Lata Rangwala vs DCIT 80 Taxmann.com 102 (Delhi)[2016] 384 ITR 337 Del High processed u/s 143(1), it is not necessary in such a case for AO to come across some fresh tangible material to form 'reasons to believe' that income has escaped assessment." 6. Pushpak Bullion (P) Ltd vs DCIT (Entr 84 Gujarat High Court during course of investigation in case of a third party found that he was indulged in providing accommodation entries and bogus bills and ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji have formed opinion that there was reason to believe that income had 2. Nickunj Eximp Enterprise vs ACIT 48 Taxmann.com 20 (Bombay HC) Since genuineness of purchase bills was not subject matter of original assessment u/s 143(3) and these bills being bogus was discovered subsequently to 143(3) during survey. (Present case in appeal is on still better footings as only 143(1)(a) had been done in this case). 3. Paramount Communication (P) Ltd vs PCIT 2017-TIOL wherein it was held, (SLP of assessee dismissed) that information regarding bogus purchase by assessee received by DRI from CCE which was passed on to revenue authorities was 'tangible material outside record' to initiate valid reassessment proceedings. Aaspas Multimedia Ltd. vs DCIT 2017-83 Taxmann.com 82(Guj) assessment was made on basis of information received from Principal DIT (Inv) that assessee was beneficiary of accommodation entries by way of share application provided by a third party, same was justified. 5. Indu Lata Rangwala vs DCIT 80 Taxmann.com 102 (Delhi)[2016] 384 ITR 337 Del High Court- where initial return of income is processed u/s 143(1), it is not necessary in such a case for AO to come across some fresh tangible material to form 'reasons to believe' that income has escaped assessment." 6. Pushpak Bullion (P) Ltd vs DCIT (Entry Receiver) 85 Taxmann.com 84 Gujarat High Court - where Investigation Wing of department had during course of investigation in case of a third party found that he was indulged in providing accommodation entries and bogus bills and ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 22 have formed opinion that there was reason to believe that income had 2. Nickunj Eximp Enterprise vs ACIT 48 Taxmann.com 20 (Bombay HC) Since genuineness of purchase bills was not subject matter of original assessment u/s 143(3) and these bills being bogus was discovered case in appeal is on still better footings as only 143(1)(a) had been done in this case). TIOL-253-SC-IT wherein it was held, (SLP of assessee dismissed) that information ssessee received by DRI from CCE which was passed on to revenue authorities was 'tangible material outside 83 Taxmann.com 82(Guj) ormation received from Principal was beneficiary of accommodation entries by same was justified. 5. Indu Lata Rangwala vs DCIT 80 Taxmann.com 102 (Delhi)[2016] where initial return of income is processed u/s 143(1), it is not necessary in such a case for AO to come across some fresh tangible material to form 'reasons to believe' that y Receiver) 85 Taxmann.com where Investigation Wing of department had during course of investigation in case of a third party found that he was indulged in providing accommodation entries and bogus bills and assessee had made sizeab against assessee was justified. 8.4 Cases relied upon by assessee distinguished: The case laws relied upon by assessee are distinguishable as the facts of assessee's case are different, in so far as there was specifi partywise/amountwise which was available with AO. Also, assessee had failed to produce the parties and he did not have any contemporary evidences of purchase stock register, etc. Thus, on the basis of such information including statements of persons supplying bogus bills without actual delivery of goods by assessee in its defence. In view of difference in facts and AO's case being on much stronger footings and various specific case laws quoted above in the order, the case laws relied upon rejected and do not come to rescue of assessee. 8.5 Thus, there is no force in the arguments of assessee, ground no.2 is, therefore, dismissed. 11.1 In view of our discussion above, we do not find any infirmities in the finding of the Ld. CIT(A) on the issue in dispute. 12. As far as second issue of whether the reasons were recorded prior to issue a notice under section 148 of the of the assessee drawn our attention to ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji assessee had made sizeable purchases from him, reopening notice against assessee was justified. 8.4 Cases relied upon by assessee distinguished: The case laws relied upon by assessee are distinguishable as the facts of assessee's case are different, in so far as there was specific information partywise/amountwise which was available with AO. Also, assessee had failed to produce the parties and he did not have any contemporary evidences of purchase like delivery challans, octroi and stock register, etc. Thus, on the basis of such detailed and specific information including statements of persons supplying bogus bills without actual delivery of goods - all distinguish the case laws quoted by assessee in its defence. In view of difference in facts and AO's case being on much stronger footings and various specific case laws quoted above in the order, the case laws relied upon rejected and do not come to rescue of assessee. Thus, there is no force in the arguments of assessee, ground no.2 is, dismissed.” view of our discussion above, we do not find any infirmities in the finding of the Ld. CIT(A) on the issue in dispute. second issue of whether the reasons were recorded prior to issue a notice under section 148 of the Act, the the assessee drawn our attention to notice issued under section ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 23 le purchases from him, reopening notice 8.4 Cases relied upon by assessee distinguished: The case laws relied upon by assessee are distinguishable as the facts of assessee's case are c information- partywise/amountwise which was available with AO. Also, assessee had failed to produce the parties and he did not have any like delivery challans, octroi and detailed and specific information including statements of persons supplying bogus bills all distinguish the case laws quoted In view of difference in facts and AO's case being on much stronger footings and various specific case laws quoted above in the order, the case laws relied upon rejected and do not come to rescue of assessee. Thus, there is no force in the arguments of assessee, ground no.2 is, view of our discussion above, we do not find any infirmities in the finding of the Ld. CIT(A) on the issue in dispute. second issue of whether the reasons were recorded , the Ld. counsel notice issued under section 148 of the Act, which is available on page 23 of the paperbook. For ready reference, said notices reproduced as under: ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji , which is available on page 23 of the paperbook. For ready reference, said notices reproduced as under: ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 24 , which is available on page 23 of the paperbook. For 13. The Ld. counsel recorded, which we have reproduced above. According to the counsel reasons were three observations. Firstly reasons recorded. Secondly recorded which reads as “ report in this charge on 12/03/2014”. According to the when there is a mention of the audit report submitted by the assessee on 12/03/2014, which according “Tapal”, therefore he is of the view that reasons have been recorded only after 12/03/2014 whereas notice has been issued on 12/03/2014. Thirdly, the inspection of the assessment record and found 10/03/2014, which says that reasons were recorded on 10/03/2014. ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Ld. counsel of the assessee referred to the reasons recorded, which we have reproduced above. According to the were recorded after issue of the notic three observations. Firstly, there is no date mentioned Secondly, he referred to the line 3 of the re recorded which reads as “thereafter, the assessee submitted audit report in this charge on 12/03/2014”. According to the when there is a mention of the audit report submitted by the assessee on 12/03/2014, which according to him was submitted in “Tapal”, therefore he is of the view that reasons have been recorded only after 12/03/2014 whereas notice has been issued on Thirdly, the Ld. counsel submitted that he took inspection of the assessment record and found a note sheet dated 10/03/2014, which says that reasons were recorded on ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 25 to the reasons recorded, which we have reproduced above. According to the Ld. recorded after issue of the notice in view of mentioned, on the line 3 of the reasons thereafter, the assessee submitted audit report in this charge on 12/03/2014”. According to the Ld. counsel when there is a mention of the audit report submitted by the to him was submitted in “Tapal”, therefore he is of the view that reasons have been recorded only after 12/03/2014 whereas notice has been issued on submitted that he took a note sheet dated 10/03/2014, which says that reasons were recorded on 14. In our opinion, above conclusion assessee merely on basis of on record, which could support his view that recorded on 12/03/2014. reasons recorded in itself is not sufficient to establish that sam recorded after 12/03/2014 after going through the audit report Assessing Officer gone through the said report and recorded the reasons to believe. authorities are produced before us which could establish that reasons were recorded on 10/03/2014. of the assessee, it cannot be held that reasons were recorded after 12/03/2014. Accordingly we reject the contention of the of the assessee. The ground No. 1 of the appeal is accordingly dismissed. ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji In our opinion, above conclusions have been drawn by the basis of presumptions and there is no evidence on record, which could support his view that reasons recorded on 12/03/2014. Firstly, not mentioning date on the reasons recorded in itself is not sufficient to establish that sam recorded after 12/03/2014. Secondly, it is very much possible that after going through the audit report on date of its filing gone through the said report and recorded the Thirdly, no evidence duly certified from the authorities are produced before us which could establish that reasons were recorded on 10/03/2014. Merely on the presumption it cannot be held that reasons were recorded after 12/03/2014. Accordingly we reject the contention of the The ground No. 1 of the appeal is accordingly ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 26 been drawn by the and there is no evidence reasons were not mentioning date on the reasons recorded in itself is not sufficient to establish that same was t is very much possible that on date of its filing, the gone through the said report and recorded the Thirdly, no evidence duly certified from the authorities are produced before us which could establish that Merely on the presumption it cannot be held that reasons were recorded after 12/03/2014. Accordingly we reject the contention of the Ld. counsel The ground No. 1 of the appeal is accordingly 15. In the ground N to 11), the assessee has passed by the Assessing Officer 16. In ground No. 2 ( assessee has raised the issue as to whether filed on 12/08/2014 can be considered as a and an assessment made on the basis of sa be considered as valid and legal assessment 17. In ground No. 3 ( assessee has submitted that no notice under section 143(2) of the Act was issued after filing of the return of income and assessment completed 18. The Ld. CIT(A) has rejected the contention of the assessee that no notice under section 143(2) of the return of income by the assessee. The Ld. CIT(A) has observed that ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji he ground No. 2 to 4 (wrongly mentioned as Ground No has challenged validity of the assessment order Assessing Officer. 2 (wrongly mentioned as ground No. nine) has raised the issue as to whether the return of income filed on 12/08/2014 can be considered as a valid return of income and an assessment made on the basis of said return of income can be considered as valid and legal assessment. 3 (wrongly mentioned as ground No. 10), assessee has submitted that no notice under section 143(2) of the was issued after filing of the return of income and assessment completed is void ab initio. The Ld. CIT(A) has rejected the contention of the assessee that nder section 143(2) of the Act was issued after filing a return of income by the assessee. The Ld. CIT(A) has observed that ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 27 as Ground No. 9 challenged validity of the assessment order y mentioned as ground No. nine), the the return of income valid return of income d return of income can wrongly mentioned as ground No. 10), the assessee has submitted that no notice under section 143(2) of the was issued after filing of the return of income and therefore The Ld. CIT(A) has rejected the contention of the assessee that was issued after filing a return of income by the assessee. The Ld. CIT(A) has observed that the Assessing Officer 12/03/2014, asking the assessee to file days. The assessee chose not to file prescribed time period. The assessee alternatively did not ask for extension of the time for filing return of income also and therefore in absence of the return of income filed by the asse Assessing Officer issued notice under section 142(1) of the 15/07/2014 and ask the assessment. In view of the Ld. CIT(A) the jurisdiction to make assessment as per section 142(1) of the the assessee failed to file return of income. Subsequent to notice under section 142(1), the assessee intimated the Assessing Officer section 139(1) of the return in response to notice under section 148. The Ld. CIT(A) further observed that notice under section 143(2) of the ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Assessing Officer issued notice under section 148 of the 12/03/2014, asking the assessee to file return of income within days. The assessee chose not to file return of income within time period. The assessee alternatively did not ask for extension of the time for filing return of income also and therefore in absence of the return of income filed by the asse issued notice under section 142(1) of the 15/07/2014 and asked the assessee information for completion of the assessment. In view of the Ld. CIT(A) the Assessing Officer jurisdiction to make assessment as per section 142(1) of the the assessee failed to file return of income. Subsequent to notice under section 142(1), the assessee vide letter dated 11/08/2014 Assessing Officer that the original return section 139(1) of the Act (On 11/08/2009) might be treated as in response to notice under section 148. The Ld. CIT(A) further observed that notice under section 143(2) of the ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 28 issued notice under section 148 of the Act on of income within 10 of income within the time period. The assessee alternatively did not ask for extension of the time for filing return of income also and therefore in absence of the return of income filed by the assessee the Ld. issued notice under section 142(1) of the Act on the assessee information for completion of Assessing Officer has jurisdiction to make assessment as per section 142(1) of the Act as the assessee failed to file return of income. Subsequent to notice letter dated 11/08/2014 that the original return filed under (On 11/08/2009) might be treated as in response to notice under section 148. The Ld. CIT(A) further observed that notice under section 143(2) of the Act was actually served on the assessee on 12/08/2014 i.e. the assessee regarding return of income was received and therefore 143(2) notice was served upon the assessee subsequent to his filing return of income vide reproduced both the letter of the ass notice under section 143(2) served on the assessee on 12/08/2014. The Ld. CIT(A) also distinguish assessee observing as under: “9.1 Cases relied upon by assessee distinguished The case laws relied upon by assessee are studied and it is seen that the facts being different in those cases than facts of assessee's case, the case laws do not support the contention of assessee. In fact, in case of Delhi High Court decision in the case of Pr.CIT vs Shri Shi Appeal no. 519 of 2015) relied upon by assessee, actually supports the stand of AO as the deficiency of not serving any notice in that case is fully met with in assessee's case as has been brought out above in the para 9. Since, AO had actually served notice to assessee on 12/08/2014 after return of income was purportedly filed vide letter dated 11/08/2014 submitted on 12/08/2014, the requirement of law was fully met with. Hence, case laws quoted by assessee do not support this cause. ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji actually served on the assessee on 12/08/2014 i.e. af the assessee regarding return of income was received and therefore 143(2) notice was served upon the assessee subsequent to his filing vide letter dated 11/08/2014. The Ld. CIT(A) has reproduced both the letter of the assessee dated 11/08/2014 and notice under section 143(2) served on the assessee on 12/08/2014. The Ld. CIT(A) also distinguished the cases relied upon by the assessee observing as under: 9.1 Cases relied upon by assessee distinguished The case laws relied pon by assessee are studied and it is seen that the facts being different in those cases than facts of assessee's case, the case laws do not support the contention of assessee. In fact, in case of Delhi High Court decision in the case of Pr.CIT vs Shri Shiv Shankar Traders (P) Ltd (IT Appeal no. 519 of 2015) relied upon by assessee, actually supports the stand of AO as the deficiency of not serving any notice in that case is fully met with in assessee's case as has been brought out above in the e, AO had actually served notice to assessee on 12/08/2014 after return of income was purportedly filed vide letter dated 11/08/2014 submitted on 12/08/2014, the requirement of law was fully met with. Hence, case laws quoted by assessee do not support this ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 29 after the letter of the assessee regarding return of income was received and therefore 143(2) notice was served upon the assessee subsequent to his filing letter dated 11/08/2014. The Ld. CIT(A) has 11/08/2014 and notice under section 143(2) served on the assessee on 12/08/2014. the cases relied upon by the 9.1 Cases relied upon by assessee distinguished The case laws relied pon by assessee are studied and it is seen that the facts being different in those cases than facts of assessee's case, the case laws do not support the contention of assessee. In fact, in case of Delhi High Court v Shankar Traders (P) Ltd (IT Appeal no. 519 of 2015) relied upon by assessee, actually supports the stand of AO as the deficiency of not serving any notice in that case is fully met with in assessee's case as has been brought out above in the e, AO had actually served notice to assessee on 12/08/2014 after return of income was purportedly filed vide letter dated 11/08/2014 submitted on 12/08/2014, the requirement of law was fully met with. Hence, case laws quoted by assessee do not support this Thus, on totality of facts, jurisdiction of AO is very much valid in the light of facts and conduct of assessee. Hence, ground no. 3 of appeal is dismissed.” 19. Before us, the section 148 of the Act return of income within the time period p notice and any return of income filed after expiry of the prescribed period should be treated as invalid return. The assessee submitted that in the notice under section 148 ( above), the Assessing Officer filing a return of income. Said notice was issued on 12/03/2014 whereas the assessee has filed return of income on 12/08/2014 and therefore the return has been filed much beyond the prescribed period and thus according to the assessee it was a belated return and the Assessing Officer said return. According to him the said return was not a valid return filed and therefore ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Thus, on totality of facts, jurisdiction of AO is very much valid in the light of facts and conduct of assessee. Hence, ground no. 3 of appeal is , the Ld. counsel of the assessee submitted that Act requires that assessee should furnish his income within the time period prescribed in the said notice and any return of income filed after expiry of the prescribed period should be treated as invalid return. The assessee submitted ice under section 148 (which we have reproduced Assessing Officer had specified period filing a return of income. Said notice was issued on 12/03/2014 whereas the assessee has filed return of income on 12/08/2014 and e return has been filed much beyond the prescribed period and thus according to the assessee it was a belated return Assessing Officer could not have taken cognizance of the said return. According to him the said return was not a valid return and therefore Assessing Officer cannot make ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 30 Thus, on totality of facts, jurisdiction of AO is very much valid in the light of facts and conduct of assessee. Hence, ground no. 3 of appeal is of the assessee submitted that requires that assessee should furnish his rescribed in the said notice and any return of income filed after expiry of the prescribed period should be treated as invalid return. The assessee submitted which we have reproduced specified period of 10 days for filing a return of income. Said notice was issued on 12/03/2014 whereas the assessee has filed return of income on 12/08/2014 and e return has been filed much beyond the prescribed period and thus according to the assessee it was a belated return could not have taken cognizance of the said return. According to him the said return was not a valid return make assessment thereon under section 143(3) of the case, the Assessing Officer section 144 of the Act 20. On the issue of requirement of notice under section 143(2) to be issued and served subsequent Ld. counsel relied on the decision of the Mumbai Tribunal in the case of Sudhir Menon Vs ACIT 1744 of 2016 dated 3/10/2018) on the decision of the Hon’ble Supreme Court in the case of Blue Moon 132 ITR 362 (SC) framed without issuing invalid. 21. The Ld. DR on the other hand submitted that it is the assessee who defaulted in filing return of income in response to notice under section 148, whereas ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji thereon under section 143(3) of the Act. He submitted that in such a Assessing Officer could have made the assessment under Act. On the issue of requirement of notice under section 143(2) to be issued and served subsequent to filing of return of income, the relied on the decision of the Mumbai Tribunal Sudhir Menon Vs ACIT Central Circle 1744 of 2016 dated 3/10/2018). Further, the Ld. counsel on the decision of the Hon’ble Supreme Court in the case of Blue Moon 132 ITR 362 (SC) to support that any assessment issuing notice under section 143(2) of the on the other hand submitted that it is the assessee who defaulted in filing return of income in response to notice under as the Assessing Officer has accepted the delayed ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 31 . He submitted that in such a could have made the assessment under On the issue of requirement of notice under section 143(2) to ing of return of income, the relied on the decision of the Mumbai Tribunal ‘E’ Bench Central Circle (Appeal No. Ld. counsel relied on the decision of the Hon’ble Supreme Court in the case of Hotel to support that any assessment notice under section 143(2) of the Act is on the other hand submitted that it is the assessee who defaulted in filing return of income in response to notice under has accepted the delayed filing of the return of income by the a served notice under section 143(2) on 12/08/2014, which is subsequent to the filing of return of income by the assessee and therefore there is no error in the finding of the Ld. CIT(A) on the issue in dispute. 22. We have heard ri dispute and perused the relevant material on record. the assessee is claiming that return of income filed by the assessee on 11/08/2014 is not valid because it was filed too late period of 10 days as specified in notice dated 12/03/2014 issued under section 148 of the under section 143(3) of the understanding of the assessee is based on the presumption that return filed by the assessee has been held to be invalid by the Assessing Officer. But from the record, we do not find any such action taken by the ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji filing of the return of income by the assessee on 11/08/2014 and served notice under section 143(2) on 12/08/2014, which is subsequent to the filing of return of income by the assessee and therefore there is no error in the finding of the Ld. CIT(A) on the have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. the assessee is claiming that return of income filed by the assessee on 11/08/2014 is not valid because it was filed too late s specified in notice dated 12/03/2014 issued under section 148 of the Act, and therefore assessment completed under section 143(3) of the Act is invalid. In our opinion, the understanding of the assessee is based on the presumption that return filed by the assessee has been held to be invalid by the . But from the record, we do not find any such action taken by the Assessing Officer. On the other hand, the ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 32 ssessee on 11/08/2014 and served notice under section 143(2) on 12/08/2014, which is subsequent to the filing of return of income by the assessee and therefore there is no error in the finding of the Ld. CIT(A) on the val submission of the parties on the issue in dispute and perused the relevant material on record. We find that the assessee is claiming that return of income filed by the assessee on 11/08/2014 is not valid because it was filed too late after the s specified in notice dated 12/03/2014 issued , and therefore assessment completed is invalid. In our opinion, the understanding of the assessee is based on the presumption that return filed by the assessee has been held to be invalid by the . But from the record, we do not find any such . On the other hand, the Assessing Officer has taken cognizance of the return of income filed by the assessee on 11/08/2014 though with a delay and thereafter issued notice under section 143(2) of the therefore in our opinion the assessment under section 143(3) of the error in the order of the Ld. CIT(A) on this is ground No. 2, of the appeal is accordingly dismissed. 23. As regards to ground facts brought on record, we find that notice under section 143(2) of the Act has been served upon the assessee on 12/08/2014, which is after the filing of return of income by the assessee. The assessee has been put to notice only after the filing of the return of income and therefore, the contention of the assessee that the notice bear the date of 14/07/2014 is of no relevance, which may be due to any typographical error covered under section 292B of the our finding of the fact that notice under section 143(2) has ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji has taken cognizance of the return of income filed by the assessee on 11/08/2014 though with a delay and thereafter issued notice under section 143(2) of the Act on 12/08/2014 and therefore in our opinion the Assessing Officer has validly completed the assessment under section 143(3) of the Act. We do not find any error in the order of the Ld. CIT(A) on this issue in dispute. The , of the appeal is accordingly dismissed. As regards to ground No. 3 of the appeal, it is evident from the facts brought on record, we find that notice under section 143(2) of has been served upon the assessee on 12/08/2014, which is after the filing of return of income by the assessee. The assessee has to notice only after the filing of the return of income and the contention of the assessee that the notice bear the date of 14/07/2014 is of no relevance, which may be due to any typographical error covered under section 292B of the of the our finding of the fact that notice under section 143(2) has ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 33 has taken cognizance of the return of income filed by the assessee on 11/08/2014 though with a delay and thereafter on 12/08/2014 and has validly completed . We do not find any sue in dispute. The , of the appeal is accordingly dismissed. of the appeal, it is evident from the facts brought on record, we find that notice under section 143(2) of has been served upon the assessee on 12/08/2014, which is after the filing of return of income by the assessee. The assessee has to notice only after the filing of the return of income and the contention of the assessee that the notice bear the date of 14/07/2014 is of no relevance, which may be due to any of the Act. In view of the our finding of the fact that notice under section 143(2) has been issued after filing return of income and therefore the decisions relied upon by the assessee are of no assistance because in those decisions either no notice under section 143(2) h served or same has been issued or served prior to filing of return of income and therefore facts of those cases are distinguishable. 24. Further, we find that in this case on 11/08/2014 has only submitted a letter that ori assessee might be treated as return of income filed in response to notice under section 148 of the income was already available with the therefore it does not take much time in going through the said return and thereafter issue notice under section 143(2) of the Therefore, the contention of the assessee that even notice issued under section 143(2) of the income is also invalid above discussion, the ground No. ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji been issued after filing return of income and therefore the decisions relied upon by the assessee are of no assistance because in those decisions either no notice under section 143(2) has be been issued or served prior to filing of return of income and therefore facts of those cases are distinguishable. we find that in this case on 11/08/2014 has only submitted a letter that original return of income filed by the assessee might be treated as return of income filed in response to notice under section 148 of the Act. The said original return of income was already available with the Assessing Officer therefore it does not take much time in going through the said return and thereafter issue notice under section 143(2) of the the contention of the assessee that even notice issued under section 143(2) of the Act on the day of filing income is also invalidate the assessment, is rejected. In view of the above discussion, the ground No. 3 of the appeal is also dismissed. ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 34 been issued after filing return of income and therefore the decisions relied upon by the assessee are of no assistance because in those been issued and been issued or served prior to filing of return of income and therefore facts of those cases are distinguishable. we find that in this case on 11/08/2014, the assessee ginal return of income filed by the assessee might be treated as return of income filed in response to . The said original return of Assessing Officer, and therefore it does not take much time in going through the said return and thereafter issue notice under section 143(2) of the Act. the contention of the assessee that even notice issued on the day of filing of return of ate the assessment, is rejected. In view of the of the appeal is also dismissed. 25. In ground No. 4 ( assessee is claiming that documents in rel were impounded by the investigation wing of the Department & not returned back and therefore, the assessment has been completed in violation of the principle of natural justice and hence it should be held invalid. 26. The Ld. DR on the other hand submitted that the assessee has produced copy of a single letter dated 08/09/2014 filed before the Assessing Officer. According to him photo copies of books of accounts and vouchers of the survey action and if original books of accounts and vouchers are impounded than photo copies are immediately provided to the assessee even during the c submitted that assessee has not filed any letter to show that he raised this issue with the ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji In ground No. 4 (wrongly mentioned as ground No. 11), assessee is claiming that documents in relation to bogus purchases were impounded by the investigation wing of the & not returned back and therefore, the assessment has been completed in violation of the principle of natural justice and hence it should be held invalid. on the other hand submitted that the assessee has produced copy of a single letter dated 08/09/2014 filed before the . According to him photo copies of books of accounts and vouchers are normally impounded during the course e survey action and if original books of accounts and vouchers are impounded than photo copies are immediately provided to the assessee even during the course of the survey proceedings submitted that assessee has not filed any letter to show that he ised this issue with the Investigation Wing of the Department. He ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 35 wrongly mentioned as ground No. 11), the ation to bogus purchases were impounded by the investigation wing of the Income-tax & not returned back and therefore, the assessment has been completed in violation of the principle of natural justice and on the other hand submitted that the assessee has produced copy of a single letter dated 08/09/2014 filed before the . According to him photo copies of books of are normally impounded during the course e survey action and if original books of accounts and vouchers are impounded than photo copies are immediately provided to the ourse of the survey proceedings. He submitted that assessee has not filed any letter to show that he of the Department. He further submitted that this issue of violation of the principle of the natural justice was not raised before the Ld. CIT(A) also. 27. We have heard rival submission of the parties and perus relevant material on record. assessee, we find that assessee has filed copy of ledger account in respect of the all alleged bogus purchase parties, copy of stock registers, bank statements et are available with the assessee also certified that same therefore contention of the assessee that same were not available with him is ill founded. Further merit of the addition is concerned, the 20.12.2019 has already allowed relief to the assessee and deleted the addition and therefore in our opinion this issue is an academic and infructuous upon. ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji further submitted that this issue of violation of the principle of the natural justice was not raised before the Ld. CIT(A) also. We have heard rival submission of the parties and perus relevant material on record. From the paperbook filed by the assessee, we find that assessee has filed copy of ledger account in respect of the all alleged bogus purchase parties, copy of stock registers, bank statements etc. and therefore it is evident that same are available with the assessee. In the paperbook, the assessee also certified that same were produced before the lower therefore contention of the assessee that same were not available founded. Further, we find that on the issue of the merit of the addition is concerned, the Tribunal has already allowed relief to the assessee and deleted the addition and therefore in our opinion this issue is cademic and infructuous. Accordingly, we are not adjudicating ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 36 further submitted that this issue of violation of the principle of the natural justice was not raised before the Ld. CIT(A) also. We have heard rival submission of the parties and perused the the paperbook filed by the assessee, we find that assessee has filed copy of ledger account in respect of the all alleged bogus purchase parties, copy of stock and therefore it is evident that same the assessee has lower authorities therefore contention of the assessee that same were not available e find that on the issue of the Tribunal in order dated has already allowed relief to the assessee and deleted the addition and therefore in our opinion this issue is rendered only we are not adjudicating 28. The ground No. 1 to 4 (wrongly mentioned as ground No. 8 to 11) of the appeal of assessee related to challenging assumption of jurisdiction under section 147 and validity of the assess dismissed. 29. In the result, the appeal are dismissed. Order pronounced in the Court on Sd/- (SANDEEP SINGH KARHAIL JUDICIAL MEMBER Mumbai; Dated: 05/08/2022 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji ground No. 1 to 4 (wrongly mentioned as ground No. 8 to 11) of the appeal of assessee related to challenging assumption of jurisdiction under section 147 and validity of the assess In the result, the appeals to the extent of the ground recalled, ounced in the Court on 05/08/2022. Sd/- SANDEEP SINGH KARHAIL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary ITAT, Mumbai ITA Nos. 2805 to 2807/M/2018 Mr. Khangaram K. Dewasi, Prop. Of Shreenathji Metal & Alloys 37 ground No. 1 to 4 (wrongly mentioned as ground No. 8 to 11) of the appeal of assessee related to challenging assumption of jurisdiction under section 147 and validity of the assessment are to the extent of the ground recalled, - OM PRAKASH KANT) MEMBER Sr. Private Secretary) ITAT, Mumbai