Devki Nandan Bindal, New Delhi V. ITO, Ward- 46(3), New Delhi

ITA 4271/DEL/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1169 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 10-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Keywords: Reopening of assessment; Unexplained cash credit; Unexplained expenditure; Depreciation; Period of limitation; Tangible material; Accommodation entries; Assessment record; Reason to believe; Reassessment proceedings; Borrowed satisfaction; Set aside
• Section: 143(3); 143(1); 207; 43; 48; 13; 147; 148; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES B : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER ITA.NO.4271/DEL./2019 ASSESSMENT YEAR 2010-2011 SHRI DEVKI NANDAN BINDAL, DELHI 110 006. PAN AHEPB8698Q C/O. SHRI KAPIL GOEL, ADVOCATE, F-26/124, SECTOR-7, ROHINI, DELHI 110 085. VS THE INCOME TAX OFFICER, WARD 46 (3), NEW DELHI. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI KAPIL GOEL, ADVOCATE. FOR REVENUE : MS. NIDHI SRIVASTAVA, CIT-DR DATE OF HEARING : 05.12.2019 DATE OF PRONOUNCEMENT : 18.12.2019 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-16, NEW DELHI, DATED 28.02.2019 FOR THE A.Y. 2010-2010, CHALLENGING THE REOPENING OF THE ASSESSMENT UNDER SECTION 147 OF TH E I.T. ACT, 1961, ADDITION OF RS.15 LAKHS ON ACCOUNT OF 2 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. ACCOMMODATION ENTRY AND ADDITION OF UNEXPLAINED DE POSIT OF RS.52,91,51,396/-. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD . 3. BRIEFLY THE FACTS OF THE CASE ARE THAT INFORMAT ION IN THIS CASE WAS RECEIVED FROM O/O THE DY. DIRECTOR OF INCOME TAX GURUGRAM. A SEARCH ACTION IN THE CASE OF M/S. SPAZE GROUP, GURUGRAM WAS CARRIED-OUT BY THE INVESTIGATION WING, GURUGRAM. DURING THE COURSE OF SUCH PROCEEDING, STATEMENT OF SH. KISHORI SHARAN GOEL WA S RECORDED ON OATH. THE INVESTIGATION REPORT, STATEME NT AND OTHER DETAILS WERE PERUSED, EXAMINED AND PLACED ON RECORD. AS PER STATEMENT OF SHRI KISHORI SHARAN GOEL RECORD ED UNDER SECTION 131(1A) OF I.T ACT, 1961, HE IS IN BU SINESS OF PROVIDING BOGUS BILLING/ACCOMMODATION ENTRIES OF SA LES/ PURCHASES TO VARIOUS PARTIES/AND THE MODUS OPERANDI WAS RECEIVING CHEQUE FROM BENEFICIAL CONCERN [ THAT BOGUS SALES ] AND RETURNING THE AMOUNT THROUGH THE BANK ACCOUNTS OF THE CONCERN OPERATED BY SHRI KISHORI SHARAN GOEL AND RE TURNING THE SAME IN CASE AFTER WITHDRAWN FROM THE BANK ACCO UNT ON 3 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. THE SAME DAY OR VERY NEXT DAY TO THE BENEFICIAL ENT ITY AFTER DEDUCTING COMMISSION. ALSO RECEIVING CASH FROM BENE FICIAL CONCERNS WHO TOOK BOGUS SALES AND RETURNING THE AMO UNT THROUGH BANK ACCOUNTS OF THE CONCERN OPERATED BY SH RI KISHORI SHARAN GOEL AND HIS ASSOCIATES. IN HIS STAT EMENT, SHRI KISHORI SHARAN GOEL HAS ADMITTED THAT CERTAIN CONCERNS WERE CONTROLLED BY HIM THROUGH THE PROPRIE TORS THAT ARE MERELY SIGNING AUTHORITIES AND WERE USED F OR PROVIDING BOGUS BILLS/ACCOMMODATION ENTRIES OF SALE S/ PURCHASES TO VARIOUS PARTIES. IN HIS STATEMENT, HE HAS SPECIFICALLY ADMITTED IN HIS REPLY TO QUESTION NO.1 7 THAT THE FIRM M/S. JMD INTERNATIONAL WHOSE OPERATOR IS SHRI ANAND SINGH HAS BEEN USED FOR PROVIDING ACCOMMODATION ENT RIES. FURTHER, ON EXAMINATION OF STATEMENT OF BANK A/C. N O. XXXX560939 OF M/S. JMD INTERNATIONAL MAINTAINED WIT H AXIS BANK, IT WAS FOUND THAT M/S. YOGESH TRADING CO ., 6244-C, KUCHA SHIV MANDIR, KATRA BARYAN, FETEHPUR, DELHI HAS ENTERED INTO A TRANSACTION ON 4 TH MARCH, 2010 OF RS.15 LACS. THE A.O, THEREFORE, NOTED THAT THERE IS ESCAP EMENT OF INCOME AND RECORDED REASONS FOR REOPENING OF ASSESS MENT. 4 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. NOTICE UNDER SECTION 148 WAS ISSUED TO THE ASSESSEE , BUT, SAME WAS NOT COMPLIED WITH. THE SHOW CAUSE NOTICE D ATED 11 TH DECEMBER, 2017 WAS ALSO SERVED THROUGH AFFIXTURE O N 11 TH DECEMBER, 2017. SINCE NO COMPLIANCE WAS MADE, A.O. PROCEEDED UNDER SECTION 144 OF THE INCOME TAX ACT, 1961. THE A.O. NOTED THAT THERE ARE DEPOSITS IN BANK FRO M M/S. JMD INTERNATIONAL A SUM OF RS.53,06,51,396/-. FROM THE PERUSAL OF THE INVESTIGATION REPORT AND STATEMENT O F SHRI KISHORI SHARAN GOEL, IT IS EVIDENT THAT M/S. JMD INTERNATIONAL HAS BEEN USED BY HIM FOR PROVIDING BO GUS ACCOMMODATION ENTRIES. DURING THE YEAR M/S. YOGESH TRADING CO. WHOSE PROPRIETOR IS ASSESSEE, HAS MADE PAYMENT OF RS.15 LACS TO M/S. JMD INTERNATIONAL. TH EREFORE, IT IS NOT A GENUINE TRANSACTION. THE ASSESSEE WAS A SKED AS TO WHY THE ABOVE SAID AMOUNT I.E., DEPOSIT IN THE B ANK ACCOUNT AND TRANSACTION AMOUNT OF M/S. JMD INTERNAT IONAL BE NOT TREATED AS HIS INCOME FROM UNDISCLOSED SOURC E. NO REPLY HAVE BEEN FILED BY THE ASSESSEE. THE A.O. ON THE BASIS OF THE REPORT OF INVESTIGATION WING AND STATEMENT O F SHRI KISHORI SHARAN GOEL FOUND THAT M/S. JMD INTERNATION AL WAS 5 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. RUNNING ONLY ON PAPER AND WAS NOT DOING ANY ACTUAL BUSINESS. THEREFORE, PAYMENT OF RS.15 LACS TO M/S. JMD INTERNATIONAL IS NOTHING BUT AN ACCOMMODATION ENTRY TAKEN BY THE ASSESSEE. FURTHER THE ASSESSEE HAS NOT OFFER ED ANY EXPLANATION REGARDING THIS ANOMALY. THEREFORE, IT W AS CONSTRUED THAT ASSESSEE HAS NO EXPLANATION TO OFFER IN THIS REGARD. THEREFORE, A.O. HELD THAT ASSESSEE HAS TAKE N ACCOMMODATION ENTRY OF RS.15 LACS FROM M/S. JMD INTERNATIONAL. THE A.O. ACCORDINGLY MADE ADDITION O F RS.15 LACS ON ACCOUNT OF UNEXPLAINED EXPENDITURE. THE A.O . FURTHER OBSERVED THAT ASSESSEE HAS NO EXPLANATION A BOUT THE DEPOSITS TOTALING TO RS.53,06,51,396/-. THE A.O. SI NCE HAS DISALLOWED RS.15 LACS, THEREFORE, MADE FURTHER ADDI TION OF RS.52,91,51,396/- AND PASSED THE ASSESSMENT ORDER U NDER SECTION 144/147 OF THE INCOME TAX ACT, 1961, DATED 26 TH DECEMBER 2017. 4. THE ASSESSEE CHALLENGED THE REOPENING OF THE ASSESSMENT AS WELL AS BOTH THE ADDITIONS BEFORE THE LD. CIT(A). THE DETAILED WRITTEN SUBMISSIONS OF THE ASS ESSEE IS REPRODUCED IN THE APPELLATE ORDER. THE ASSESSEE IN THE SAME 6 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. HAS SUBMITTED THAT NOTICE ISSUED UNDER SECTION 148 IS BARRED BY TIME AND THAT NOTICE ISSUED UNDER SECTION 148 HAVE RETURNED TO THE A.O. AND HAVE NOT BEEN SERVED UPON THE ASSESSEE. IT WAS ALSO SUBMITTED THAT THE REASON S TO BELIEVE RECORDED ARE NOT REASONS BUT CONCLUSION OF THE A.O. ONLY BY REPRODUCING REPORT OF THE INVESTIGATION WIN G. IT WAS A BORROWED SATISFACTION ONLY. IT WAS SUBMITTED THAT NO NOTICE HAVE BEEN SERVED UPON THE ASSESSEE ON LAST K NOWN ADDRESS. IT WAS SUBMITTED THAT ALL THE ADDITIONS AR E BASED ON INCORRECT FACTS. THE A.O. IN THE REJOINDER REITE RATED THE FACTS STATED IN THE ASSESSMENT ORDER. COPY OF THE S PEED POST RECORD IS REPRODUCED IN THE APPELLATE ORDER, IN WHI CH, AT SL. NO.9 NAME OF THE ASSESSEE HAVE BEEN MENTIONED WITH THE FOLLOWING DETAILS DEVKI NANDAN BINDAL, PROPRIETOR, M/S. YOGESH TRADING COMPANY, KATRA, DELHI-110006. THE LD. CIT(A), THEREFORE, FOUND THAT NOTICE HAVE BEEN ISS UED TO THE ASSESSEE AT THE CORRECT ADDRESS AND NO CHANGE OF AD DRESS HAVE BEEN INTIMATED TO THE DEPARTMENT. THE LD. CIT( A), THEREFORE, CONFIRMED THE REOPENING OF THE ASSESSMEN T BECAUSE IT IS BASED ON INFORMATION RECEIVED FROM 7 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. INVESTIGATION WING, THE ADDITIONS ON MERIT ARE ALSO CONFIRMED. THE LD. CIT(A) ALSO NOTED THAT ASSESSEE HAS RECEIVED ACCOMMODATION ENTRY OF RS.15 LACS. THE ADD ITIONS ON MERIT WERE ALSO CONFIRMED AND APPEAL OF ASSESSEE HAS BEEN DISMISSED. 5. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE H AS REFERRED TO PAGE 3 OF THE PAPER BOOK, WHICH ARE REA SONS RECORDED FOR REOPENING OF THE ASSESSMENT, IN WHICH A.O. HAS MENTIONED THAT ASSESSEE HAS TAKEN ACCOMMODATION ENT RY OF RS.15 LACS, BUT, A.O. MADE ADDITION ON ACCOUNT OF UNEXPLAINED EXPENDITURE INCURRED BY THE ASSESSEE BY MAKING PAYMENT TO M/S.JMD INTERNATIONAL. THEREFORE, WRONG AND INCORRECT REASONS HAVE BEEN RECORDED BY T HE A.O. THE A.O. MERELY REPEATED THE REPORT OF THE INVESTIG ATION WING AND DID NOT APPLY HIS MIND. THEREFORE, IT IS A BORROWED SATISFACTION ONLY. THE ASSESSEE HAS NOT RECEIVED AN Y AMOUNT FROM M/S. JMD INTERNATIONAL. THE ASSESSEE HAS FURTH ER PAID THE AMOUNT. THE ADDITION IS WRONGLY MADE BY THE A.O . HE HAS SUBMITTED THAT NO SEPARATE NOTICE HAVE BEEN ISS UED 8 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. UNDER SECTION 148 BEFORE MAKING OTHER ADDITION OF R S.52.91 CRORES WHICH IS NOT RECORDED IN THE REASONS, THOUGH NO SEPARATE REASONS ARE RECORDED. HE HAS SUBMITTED THA T NO NOTICE HAVE BEEN SERVED UPON THE ASSESSEE. HE HAS F ILED COPY OF THE RECORD OBTAINED FROM THE ASSESSMENT REC ORD TO SHOW THAT EVEN IN THE SPEED POST RECORD NO CORRECT ADDRESS OF THE ASSESSEE IS MENTIONED AND THAT NOTICE SENT B Y THE A.O. UNDER SECTION 148 HAVE RETURNED BACK TO THE A. O. NO FURTHER ATTEMPT HAVE BEEN MADE TO SERVE THE ASSESSE E OF THE NOTICE UNDER SECTION 148 WITHIN THE PERIOD OF LIMIT ATION. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ISS UE IS COVERED BY ORDER OF ITAT, DELHI D-BENCH IN THE CASE OF M/S. KLA FOODS (INDIA) LTD., IN ITA.NO.2846/DEL./2015 ET C., DATED 8 TH APRIL 2009, IN WHICH ON NON-EXISTING, WRONG AND INCORRECT REASONS, THE REOPENING OF THE ASSESSMENT HAVE BEEN HELD TO THE BAD IN LAW. COPY OF THE SAME IS FI LED ON RECORD. HE HAS ALSO RELIED UPON JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF RANBAXY LABORATORIES LTD. , VS. CIT 336 ITR 136 (DEL.) ON THE PROPOSITION THAT FOR SECOND ADDITION WHICH IS NOT MENTIONED IN THE REASONS, IF NO FRESH 9 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. NOTICE HAVE BEEN ISSUED UNDER SECTION 148, REOPENIN G WOULD BE BAD IN LAW. HE HAS RELIED UPON ORDER OF ITAT, MUMBAI G-BENCH IN THE CASE OF JULIET INDUSTRIES LIMITED, M UMBAI VS., ITO 6(3)(3), MUMBAI IN ITA.NO.5452 & 5975/MUM/ 2016 DATED 4 TH APRIL, 2018, IN WHICH THE TRIBUNAL FOLLOWING THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF RANBAXY LABORATORIES LIMITED (SUPRA) IN SIMILAR CIRCUMSTANCES QUASHED THE REOPENING OF ASSESSMENT. HE HAS ALSO RELIED UPON THE ORDER OF ITAT, KOLKATA B-B ENCH IN THE CASE OF M/S. ARATI ENGINEERING & CONSTRUCTION C O., HOOGHLY VS., ITO, WARD-1(2), HOOGHLY IN ITA.NO.2152/KOL./2014, DATED 22.11.2019 IN WHICH TH E APPEAL OF ASSESSEE HAS BEEN ALLOWED BY HOLDING THAT WE NOTE THAT IF THE RECORDED REASONS SHOUT CONTRADICTI ON AND INCONSISTENCY, IT MEANS NECESSARY SATISFACTION IN T ERMS OF STATUTORY PROVISION HAS NOT BEEN RECORDED AT ALL. LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT REOPENING OF THE ASSESSMENT IS BAD IN LAW, ILLEGAL AND IS LIABLE TO BE QUASHED. 10 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. 6. ON THE OTHER HAND, LD. D.R. RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT AT THE STAGE OF INITIATION OF REOPENING OF THE ASSESSMENT, A.O. NEED NOT TO SEE ENTIRE TRANSACTION IN DETAIL. THE A.O. H AS GONE THROUGH THE INVESTIGATION REPORT AND BASED ON THE INVESTIGATION REPORT, CORRECTLY RECORDED REASONS FO R REOPENING OF THE ASSESSMENT. THE ASSESSEE HAS NOT INTIMATED ABOUT CHANGE OF ADDRESS TO THE DEPARTMENT . THE ASSESSEE DID NOT CO-OPERATE WITH THE A.O. THEREFORE , MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF THE A.O. T HE LD. D.R. ALSO PRODUCED ASSESSMENT RECORD AND AFTER GOING THR OUGH THE SAME SUBMITTED THAT NO SECOND NOTICE UNDER SECT ION 148 HAVE BEEN ISSUED FOR MAKING ADDITION OF SECOND ITEM OF RS.52.91 CRORES. THE LD. D.R. STATED THAT NOTICE IS SUED UNDER SECTION 148 WITHIN THE PERIOD OF LIMITATION H AS RETURNED BACK TO THE A.O. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS WEL L SETTLED LAW THAT VALIDITY OF REASSESSMENT PROCEEDINGS ARE T O BE DETERMINED WITH REFERENCE TO THE REASONS RECORDED U NDER 11 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. SECTION 148 FOR REOPENING OF ASSESSMENT. COPY OF TH E REASONS RECORDED FOR REOPENING OF ASSESSMENT IN THE INSTANT CASE IS FILED AT PAGE-3 OF THE PAPER BOOK WHICH REA DS AS UNDER : ANNEXURE-A DEVKI NANDAN BINDAL (PAN-AHEPB8698Q) PROP. OF YOGESH TRADING CO. ASSTT. YEAR 2010-2011. INFORMATION IN THIS CASE WAS RECEIVED FROM O/O THE DY. DIRECTOR OF INCOME TAX (INV.)-III, GURUGRAM VID E F.NO.DDIT (INV.)-III/GURUGRAM/2016-17/1232 DATED 28.03.2017 [FILE NO. IN HINDI TRANSLATED INTO ENGLISH]. A SEARCH ACTION IN THE CASE OF M/S SPAZE GROUP, GURUGRAM WAS CARRIED OUT BY THE INVESTIGATIO N WING, GURUGRAM. THE MAIN ALLEGATION WAS THAT ASSESSEE M/S SPAZE GROUP HAS TAKEN NON-GENUINE PURCHASE ACCOMMODATION ENTRIES FROM VARIOUS CONCERN CONTROLLED AND MANAGED BY SH. KISHORI SHARAN GOEL. DURING THE COURSE OF SUCH PROCEEDING, STATEMENT OF SH. KISHORI SHARAN GOEL AND PROPRIETORS/PARTNERS OF THE 12 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. CONCERNS USED FOR PROVIDING NON-GENUINE ACCOMMODATION ENTRIES WERE RECORDED ON OATH WHEREIN THEY HAVE ADMITTED TO THE FACT THAT THE THESE FIRMS WERE MERE PAPER CONCERN AND NOT DOING ANY ACTUAL BUSINES S. I HAVE ANALYZED THE DETAILS AND FOUND THAT AS PER STATEMENT OF SH. KISHORI SHARAN GOEL, RECORDED ON 17.02.2016 TO 18.02.2016 U/S 131(1A) OF LT ACT, 196 1, HE IS IN THE BUSINESS OF PROVIDING BOGUS BILLING/ ACCOMMODATION ENTRY OF SALES/PURCHASE TO VARIOUS PARTIES AND THE MODES OPERANDI WAS RECEIVING CHEQUE FROM BENEFICIARY CONCERN (THAT BOOKED BOGUS PURCHAS E) IN THE BANK ACCOUNTS OF HIS CONCERNS AND RETURNING THE SAME IN CASE AFTER WITHDRAWING FROM THE BANK ACCOUN T ON THE SAME DAY OR THE VERY NEXT DAY TO THE BENEFIC IARY ENTITY AFTER DEDUCTING COMMISSION. ALSO, RECEIVING CASH FROM BENEFICIARY CONCERNS (THAT BOOKED BOGUS SALES) AND RETURNING THE AMOUNT TROUGH THE BANK ACCOUNTS O F THE CONCERNS OPERATED BY MR. KISHORI SHARAN GOEL AN D HIS ASSOCIATES. 13 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. IN HIS STATEMENT SH. KISHORI SHARAN GOEL HAS ADMITTED THAT CERTAIN CONCERNS WERE CONTROLLED BY H IM THROUGH THE PROPRIETORS THAT ARE MERELY SIGNING AUTHORITIES AND WERE USED FOR PROVIDING BOGUS BILLING/ACCOMMODATION ENTRY OF SALES/PURCHASE TO VARIOUS PARTIES. IN HIS STATEMENT HE HAS SPECIFICAL LY ADMITTED IN HIS REPLY TO QUESTION NO.17 THAT THE FI RM M/S JMD INTERNATIONAL WHOSE PROPRIETOR IS SH. ANAND SINGH HAS BEEN USED FOR PROVIDING BOGUS ACCOMMODATION ENTRIES. I HAVE EXAMINED THE STATEMENT OF THE BANK ACCOUNTS NO. 910020000560939 OF M/S. JMD INTERNATIONAL MAINTAINED WITH AXIS BANK, AND FOUND THAT M/S YOGESH TRADING CO., 6244-C, KUCHA SHIV MANDIR, KATRA BARYAN, FATEHPURI, DELHI-110006 HAS ENTERED INTO A TRANSACTION AS BELOW : DATE OF TRANSACTION AMOUNT NAME OF CONCERN/FIRM USED FOR PROVIDING ACCOMMODATION ENTRIES A/C NO. &BANK OF THE CONCERN/FIRM USED FOR PROVIDING ACCOMMODATION ENTRIES 04.03.2010 15,00,000 M/S. JMD INTERNATIONAL 910020000560939 14 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. IN VIEW OF THE ABOVE FACTS AND AFTER PERUSING THE DETAILS I AM SATISFIED THAT THIS IS A ACCOMMODATION ENTRY WHICH M/S YOGESH TRADING CO. HAS TAKEN THROUGH M/S JMD INTERNATIONAL AND THEREFORE, AMOUNT OF RS.15,00,000/- HAS ESCAPED ASSESSMENT. IN VIEW OF THE ABOVE, EXPLANATION 2(B) TO SECTION 147 OF THE I. T. ACT IS APPLICABLE IN THE C ASE WHICH LAYS DOWN AS : EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, THE FOLLOWING SHALL ALSO BE DEEMED TO BE CASES WHERE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, NAMELY :- (A) (B) WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE BUT NO ASSESSMENT HAS BEEN MADE AND IT, IS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS UNDERSTATED THE INCOME OR 15 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. HAS CLAIMED EXCESSIVE LOSS, DEDUCTION, ALLOWANCE OR RELIEF IN THE RETURN. IT IS PERTINENT TO MENTION HERE THAT NO ASSESSMENT U/S 143(3) AND U/S 147 OF THE I.T ACT FOR THE A.Y. 2010-11 HAS BEEN MADE IN THIS CASE. IN VIEW OF THE ABOVE FACT, I HAVE REASON TO BELIEVE THAT A SUM OF RS.15,00,000/- CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT SINCE FOUR YEARS HAVE ESCAPED BUT NOT MORE THAN SIX YEARS FROM THE END OF THE ASSESSMENT YEAR, IT IS THEREFORE, PROPOSED AS PER THE PROVISIONS OF SECTION 149(1) (B) ACT, 1961 MAY BE GRANTED IN THE CASE. SD/-AMIT KUMAR INCOME TAX OFFICER WARD 46(3), NEW DELHI. 7.1. IN THE AFORESAID REASONS THE A.O. HAS REDUCED THE CRUX OF THE INVESTIGATION REPORT AND STATEMENT OF S HRI 16 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. KISHORI SHARAN GOEL AND CAME TO THE CONCLUSION THAT ASSESSEE HAS ENTERED INTO TRANSACTION ON 4 TH MARCH, 2010 FOR A SUM OF RS.15 LACS WITH M/S. JMD INTERNATIONAL . THE A.O, THEREAFTER, RECORDED REASONS FOR REOPENING OF THE ASSESSMENT THAT ASSESSEE HAS TAKEN ACCOMMODATION EN TRY THROUGH M/S. JMD INTERNATIONAL AND, THEREFORE, AMOU NT OF RS.15 LACS HAS ESCAPED ASSESSMENT. THE A.O, HOWEVER , WHILE PASSING THE ASSESSMENT ORDER HAS NOTED THAT A SSESSEE HAS MADE PAYMENT OF RS.15 LACS TO M/S. JMD INTERNAT IONAL. THE A.O. IN HIS FINDINGS HAS RECORDED INCONSISTENT, WRONG AND INCORRECT FINDINGS THAT PAYMENT OF RS.15 LAKH W AS MADE TO M/S. JMD INTERNATIONAL AND IN THE SAME LINE IT I S STATED THAT IT IS NOTHING BUT AN ACCOMMODATION ENTRY TAKEN BY THE ASSESSEE. AGAIN HE HAS HELD IN THE ASSESSMENT ORDER THAT ASSESSEE HAS TAKEN ACCOMMODATION ENTRY OF RS.15 LAC S FROM M/S. JMD INTERNATIONAL WHICH HAS TO BE ADDED IN HIS HAND. HOWEVER, WHILE CONCLUDING THE ISSUE, HE HAS MADE AD DITION OF RS.15 LACS ON ACCOUNT OF UNEXPLAINED EXPENDITURE . ALL THESE FACTS CLEARLY SHOW THAT A.O. HAS NOT APPLIED HIS MIND TO THE INFORMATION RECEIVED FROM INVESTIGATION WING . IT IS 17 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. ONLY A BORROWED SATISFACTION. THE A.O. WITHOUT ANY JUSTIFICATION HAS RECORDED IN THE REASONS THAT ASSE SSEE HAS TAKEN ACCOMMODATION ENTRY FROM M/S. JMD INTERNATION AL. FURTHER IT IS NOT A DENYING FACT THAT ASSESSEE HAS MADE PAYMENT TO M/S. JMD INTERNATIONAL. THEREFORE, IT CA N NEVER BE UNEXPLAINED EXPENDITURE OF THE ASSESSEE. THE A.O , THEREFORE, RECORDED IN CORRECT AND WRONG FACTS IN T HE REASONS FOR REOPENING OF ASSESSMENT AS WELL AS IN THE ASSES SMENT ORDER. IN THE CASE OF DCIT, ROHTAK CIRCLE, ROHTAK V S., M/S. KLA FOODS (INDIA) LTD., NEW DELHI IN ITA.NO.2846/DE L./ 2015 & C.O.NO.333/DEL./2015 IN ITA.NO.2846/DEL./201 5, FOR THE A.Y. 2007-2008, THE ITAT, DELHI D-BENCH, DE LHI, WHILE DECIDING THE ISSUE OF REOPENING OF THE ASSESS MENT UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 VIDE ORDER DATED 8 TH APRIL, 2019 CONSIDERED THE ISSUE IN DETAIL BY FOLLOWING SEVERAL DECISIONS OF DIFFERENT HIGH COURT S AND CAME TO THE FINDING THAT IF THE A.O. HAS RECORDED N ON- EXISTING REASONS AND INCORRECT FACTS, THEN REOPENIN G OF THE ASSESSMENT WOULD NOT BE VALID. THE ORDER IS REPRODU CED AS UNDER : 18 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES D: DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA.NO.2846/DEL./2015 ASSESSMENT YEAR 2007-2008 THE DCIT, ROHTAK CIRCLE, ROHTAK. VS., M/S. KLA FOODS (INDIA) LTD., 21/3GF, GEETA MANDIR MARG, NEAR RAJINDER NAGAR, NEW DELHI. PAN AACCK8299G (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.333/DEL./2015 ARISING OUT OF ITA.NO.2846/DEL./2015 - ASSESSMENT YEAR 2007-2008 M/S. KLA FOODS (INDIA) LTD., 21/3GF, GEETA MANDIR MARG, NEAR RAJINDER NAGAR, NEW DELHI. PAN AACCK8299G VS., THE DCIT, ROHTAK CIRCLE, ROHTAK. (CROSS OBJECTOR) (RESPONDENT) ITA.NO.2845/DEL./2015 ASSESSMENT YEAR 2007-2008 THE DCIT, ROHTAK CIRCLE, ROHTAK. VS., M/S. PARAM EXIM LTD., 21/3GF, GEETA MANDIR MARG, NEAR RAJINDER NAGAR, NEW DELHI. PAN AACCP9669B (APPELLANT) (RESPONDENT) 19 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. CROSS OBJECTION NO.372/DEL./2015 ARISING OUT OF ITA.NO.2845/DEL./2015 - ASSESSMENT YEAR 2007-2008 M/S. PARAM EXIM LTD., 21/3GF, GEETA MANDIR MARG, NEAR RAJINDER NAGAR, NEW DELHI. PAN AACCP9669B VS., THE DCIT, ROHTAK CIRCLE, ROHTAK. (CROSS OBJECTOR) (RESPONDENT) FOR REVENUE : SMT. NAINA SOIN KAPIL, SR. D.R. FOR CROSS OBJECTORS : SHRI GAUTAM JAIN, ADVOCATE & SHRI LALIT MOHAN, C.A. DATE OF HEARING : 03.04.2019 DATE OF PRONOUNCEMENT : 08.04.2019 ORDER PER BHAVNESH SAINI, J.M. THE AFORESAID DEPARTMENTAL APPEALS AND CROS S OBJECTIONS BY TWO DIFFERENT ASSESSEES ARE DIRECTED AGAINST THE DIFFERENT ORDERS OF THE LD. CIT(A), ROHTAK, DAT ED 9 TH MARCH, 2015 FOR THE ASSESSMENT YEAR 2007 2008. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL MADE AVAI LABLE BY BOTH PARTIES ON RECORD. THE APPEALS ARE DECIDED AS UNDER. 20 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. ITA.NO.2846/DEL./2015 & CO.NO.333/DEL./2015 M/S. KLF FOOD (INDIA) LTD., - A.Y. 2007-2008 : 3. BRIEFLY THE FACTS OF THE CASE ARE THAT ON THE BASIS OF INFORMATION RECEIVED BY ASSESSING OFFICER FROM D IT (INV.)-II, NEW DELHI, DATED 15 TH MARCH, 2013 THAT THE ASSESSEE HAS TAKEN ACCOMMODATION ENTRIES AMOUNTING TO RS 1.50 CR ORE IN THE SHAPE OF SHARE CAPITAL FROM VARIOUS COMPANIES, IN ORDER TO VERIFY THE GENUINENESS OF THE SAID INVESTORS, NOTIC E UNDER SECTION 148 WAS ISSUED ON 28 TH MARCH, 2013. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SHARE CAP ITAL RECEIVED FROM 07 INVESTORS. THE ASSESSING OFFICER A FTER CONSIDERING THE MATERIAL ON RECORD, IN THE LIGHT OF REPORT OF INVESTIGATION WING, MADE THE ADDITION OF RS.1.50 CR ORES ON ACCOUNT OF UNEXPLAINED CREDIT. 3.1. THE ASSESSEE CHALLENGED THE ADDITION BEFORE T HE THE LD. CIT(A). LD. CIT(A) NOTED THAT ALL THE INVES TOR COMPANIES ARE ASSESSED TO TAX UNDER SECTION 153C/15 3A OF THE INCOME TAX ACT, 1961 AND NOTHING ADVERSE WAS FO UND AGAINST THE ASSESSEE DURING THE COURSE OF ASSESSMEN T. THEREFORE, ADDITION WAS DELETED. 21 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. 3.2. THE REVENUE IS IN APPEAL CHALLENGING THE DE LETION OF ADDITION OF RS.1.50 CRORES AND ASSESSEE IN THE C ROSS- OBJECTION CHALLENGED INITIATION OF RE-ASSESSMENT PR OCEEDINGS UNDER SECTION 147/148 OF THE INCOME TAX ACT, 1961. 3.3. BEFORE CONSIDERING THE ISSUE ON MERIT, WE PRO CEED TO DECIDE THE LEGAL ISSUE I.E., REOPENING OF ASSESS MENT IN THE MATTER. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT VALIDITY OF THE REASSESSMENT PROCEEDINGS IS TO BE D ETERMINED WITH REFERENCE TO THE REASONS RECORDED UNDER SECTIO N 147/148 OF THE INCOME TAX ACT, 1961. HE HAS REFERRE D TO PB 23, WHICH IS REASONS FOR REOPENING OF ASSESSMENT. P B-44 IS ASSESSMENT ORDER PASSED UNDER SECTION 143(3), DATED 8 TH DECEMBER, 2009 FOR ASSESSMENT YEAR UNDER APPEAL I.E ., 2007- 2008, IN WHICH THE ASSESSING OFFICER HAS EXAMINED T HE IMPUGNED ISSUE OF SHARE CAPITAL AND SHARE PREMIUM. HE HAS SUBMITTED THAT THE REASONS RECORDED ARE VAGUE AND T HE ASSESSING OFFICER DID NOT VERIFY THE RETURN OF INCO ME, IN WHICH ALL THE PARTICULARS ON ACCOUNT OF SHARE CAPITAL/ PR EMIUM HAVE BEEN DISCLOSED BY THE ASSESSEE TO THE REVENUE AUTHO RITIES. THE ASSESSING OFFICER DID NOT APPLY HIS MIND AND TH AT THE 22 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. ASSESSING OFFICER RECORDED THE REASONS ON BORROWED SATISFACTION. THERE IS NO ALLEGATION IN THE REASONS RECORDED THAT THERE IS FAILURE ON THE PART OF THE ASSESSEE T O DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR AS SESSMENT UNDER SECTION 147 OF THE INCOME TAX ACT. THEREFORE, NOTICE ISSUED UNDER SECTION 148 OF THE I.T. ACT AFTER A PE RIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, IN CASE WHERE THE ORIGINAL ASSESSMENT HAS BEEN FRAMED UNDER SECTION 143(3) OF THE ACT IS ILLEGAL AND INVALID. H E HAS RELIED UPON JUDGMENT IN THE CASE OF VINIYAS FINANCE AND INVESTMENT (P) LTD., 357 ITR 646 AND ORDER OF ITAT, DELHI BENCH IN THE CASE OF M/S. SHIV SAI INFRASTRUCTURE ( P) LTD., VS. PR. CIT ITA.NO.2527/DEL./2017. HE HAS SUBMITTED THA T SINCE INITIATION OF REASSESSMENT PROCEEDINGS ARE BASED ON NON- APPLICATION OF MIND AND REASONS ARE RECORDED ON BOR ROWED SATISFACTION, THEREFORE, REASSESSMENT IS INVALID. I N SUPPORT OF THIS PROPOSITION, HE HAS RELIED UPON THE DECISIONS OF THE DELHI HIGH COURT IN THE CASE OF G & G PHARMA INDIA LIMITE D 384 ITR 147 (DEL.) AND PCIT VS., MEENAKSHI OVERSEAS (P) LTD., 395 ITR 677 (DEL.) AND PCIT VS., RMG POLY VINYL 396 ITR 5 (DEL.). 23 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. HE HAS SUBMITTED THAT THE REASONS RECORDED ARE VAGU E AND NO PARTICULARS OF CREDIT HAVE BEEN MENTIONED IN THE REASONS. THE REASONS ALSO DID NOT SAY IF ASSESSMENT HAVE ALR EADY BEEN FRAMED UNDER SECTION 143(3). EVEN THE NATURE O F THE CREDIT IS NOT MENTIONED IN THE REASONS. NO PARTICUL ARS OF ACCOMMODATION ENTRIES HAVE BEEN MENTIONED. HE HAS R ELIED UPON DECISION OF DELHI HIGH COURT IN THE CASE OF SI GNATURE HOTELS (P) LTD., 338 ITR 51 (DEL.) HE HAS SUBMITTED THAT REASSESSMENT IS INITIATED ON MERE SUSPICION ONLY. H E HAS REFERRED TO PAGE-1 OF THE PAPER BOOK FILED BY THE D EPARTMENTAL REPRESENTATIVE IN WHICH THE ACIT OF THE INVESTIGATI ON WING HAS DIRECTED TO ISSUE NOTICE UNDER SECTION 147/148 OF THE INCOME TAX ACT, 1961 AFTER RECORDING REASONS. HE HA S SUBMITTED THAT ALL THE INVESTORS ARE ASSESSED TO TA X AND NO MATERIAL FOUND DURING THE COURSE OF SEARCH HAVE BEE N SUPPLIED TO THE ASSESSEE. HE HAS SUBMITTED THAT PRO CEEDINGS ARE INITIATED ON MERE SUSPICION WHICH IS NOT REASON TO BELIEVE AND BASED ON NO TANGIBLE MATERIAL. HE HAS SUBMITTED THAT REOPENING OF ASSESSMENT MAY BE QUASHED. 24 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. 4. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON ORDER OF THE ASSESSING O FFICER AND REFERRED TO INFORMATION RECEIVED FROM INVESTIGATION WING, COPY OF WHICH, IS FILED AT PAGE-1 OF THE PAPER BOOK OF T HE DEPARTMENT, WHICH IS SUPPORTED BY LETTER OF THE DIT (INV.)-II, WING, NEW DELHI, DATED 15 TH MARCH, 2013, WHICH IS REFERRED TO IN THE REASONS FOR REOPENING OF THE ASSESSMENT. THE LEARNED DEPARTMENTAL REPRESENTATIVE REFERRED TO THE REPORT OF THE INVESTIGATION WING IN DETAIL AND SUBMITTED THAT THERE WAS SUFFICIENT MATERIAL AVAILABLE ON RECORD TO JUSTIFY THE REOPENING OF ASSESSMENT AND THAT INVESTIGATION WING AFTER DET AILED ENQUIRY CAME TO KNOW THAT JAIN GROUP HAS PROVIDED ACCOMMODATION ENTRIES. SO, THERE IS APPLICATION OF MIND ON THE PART OF THE ASSESSING OFFICER TO REOPEN THE ASS ESSMENT. PB-52 IS THE LIST OF THE INVESTORS. THE ASSESSEE DI D NOT DISCLOSE ALL MATERIAL FACTS NECESSARY FOR THE ASSES SMENT. THE REPORT OF THE INVESTIGATION WING IS TANGIBLE MATERI AL, THEREFORE, ON THAT BASIS REOPENING OF THE ASSESSMENT IS JUSTIF IED. THE LEARNED DEPARTMENTAL REPRESENTATIVE HOWEVER SUBMITT ED 25 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. THAT REPORT OF THE INVESTIGATION WING WAS NEVER SUP PLIED TO THE ASSESSEE BEING CONFIDENTIAL IN NATURE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS WEL L SETTLED LAW THAT VALIDITY OF REASSESSMENT PROCEEDINGS IS TO BE DETERMINED WITH REFERENCE TO THE REASONS RECORDED F OR BELIEF. WE, RELY UPON THE DECISION OF THE HONBLE BOMBAY HI GH COURT IN THE CASE OF INDIVEST PTE LTD., VS. ADDL. CIT (20 13) 350 ITR 120 (BOM.). THE ASSESSEE HAS FILED COPY OF THE REAS ONS RECORDED FOR REOPENING OF ASSESSMENT AT PAGE-23 OF THE PAPER BOOK, WHICH READS AS UNDER : OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME-TAX , CIRCLE, ROHTAK. 1. NAME AND ADDRESS OF THE ASSESSEE M/S. KFA FOODS (INDIA) LTD., 2. STATUS PVT. LTD., COMPANY 3. ASSESSMENT YEAR 2007 - 2008. REASONS IN BRIEF FOR REOPENING THE CASE UNDER SECTI ON 147 OF THE INCOME-TAX ACT, 1961 : IN THIS CASE, INFORMATION WAS RECEIVED FROM DIT (I NV.)-II, NEW DELHI, VIDE LETTER F.NO.DIT (INV.)-II UNDER SEC TION 26 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. 148/2012-13 DATED 15.03.2013. ON THE BASIS OF SEARC H IN THE CASES OF SHRI SURENDRA KUMAR JAIN GROUP OF CASE S (ENTRY OPERATOR) AND FURTHER ENQUIRIES THE DDIT (INV.) HAS SUGGESTED THE NOTICE UNDER SECTION 148 IN FOLLOWING CASES FOR THE A.Y. 2007-08 IS REQUIRED TO BE ISSUED TO BRING TO TAX TH E UNDISCLOSED INCOME REGARDING THE ACCOMMODATION ENTR IES OBTAINED BY THE COMPANIES. 2. AFTER GOING THROUGH ENTRIES IT IS REVEALED THAT M/S. KLA FOODS (INDIA) LTD., WHO IS ASSESSED WITH THIS CIRCL E, HAS AVAILED THE FOLLOWING ACCOMMODATION BOOK ENTRIES :- SR.NO. NAME OF THE COMPANY PAN F.Y. 2006-07 AMOUNT (RS.) 1. M/S. KLA FOODS (INDIA) LTD., AACCK8299G 1,50,00,000/ - THEREFORE, I HAVE REASON TO BELIEVE THAT INCOME TO THE TUNE OF RS.1,50,00,000/- HAS ESCAPED ASSESSMENT. ISSUE NOTICE UNDER SECTION 148 OF THE INCOME-TAX A CT, 1961 FOR THE ASSESSMENT YEAR 2007-2008. DATED : 25 TH MARCH, 2013 SD/- S. DAYAL ASSISTANT COMMI SSIONER OF INCOME-TAX, ROHTAK CIRCLE, ROHTAK. 27 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. 5.1. THE RELEVANT PROVISION OF SECTION 147 OF THE INCOME TAX ACT PROVIDES AS UNDER : 147. IF THE [ASSESSING] OFFICER [HAS REASON TO BELIEVE] THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153, ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, OR RE-COMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY BE, FOR THE ASSESSMENT YEAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTIONS 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR): PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB- SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF 28 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE T O MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 14 2 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT YEAR. 5.2. IN THE AFORESAID REASONS, THE ASSESSING OFFIC ER ON THE BASIS OF THE REPORT OF INVESTIGATION WING RECOR DED THAT THE ENQUIRIES CONDUCTED BY INVESTIGATION WING SUGGESTED NOTICE UNDER SECTION 148 IS REQUIRED TO BE ISSUED. SIMILAR LY, LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO PAGE-1 OF THE DEPARTMENT PAPER BOOK, IN WHICH, ACIT HAS REQUIRED THE ASSESSING OFFICER TO ISSUE NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT AFTER RECORDING REASONS. THESE FACTS CLEARLY SUGGESTED THAT THE ASSESSING OFFICER MERELY ACTED O N THE ADVICE OF THE INVESTIGATION WING. THOUGH THE REPORT OF THE INVESTIGATION WING IS TANGIBLE MATERIAL, BUT, ASSES SING OFFICER 29 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. DID NOT MENTION ANY DETAILS OR PARTICULARS OF CREDI TS IN THE REASONS AS TO HOW HE CAME TO THE CONCLUSION THAT TH ERE IS ESCAPEMENT OF INCOME IN THIS CASE. NO DETAILS AS TO WHAT INFORMATION WAS RECEIVED HAVE BEEN MENTIONED IN THE REASONS. IN WHAT MANNER SHARE CAPITAL/PREMIUM HAVE BEEN RECEIVED HAVE NOT BEEN MENTIONED IN THE REASONS. NO DETAILS OF ACCOMMODATION ENTRY AND ACCOMMODATION PROVIDER H AVE BEEN MENTIONED IN THE REASONS. IT IS NOT MENTIONED IN THE REASONS, IF THERE WAS ANY FAILURE ON THE PART OF TH E ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECE SSARY FOR ASSESSMENT UNDER SECTION 147/148 OF THE INCOME TAX ACT. IT IS AN ADMITTED FACT THAT ASSESSEE PRIOR TO THE REOP ENING OF ASSESSMENT HAS ALREADY BEEN ASSESSED FOR THE SAME Y EAR I.E., 2007-2008 UNDER SECTION 143(3) OF THE I.T. AC T, 1961 VIDE ORDER DATED 8 TH DECEMBER, 2009. COPY OF THE ASSESSMENT ORDER IS FILED PAGE-44 OF THE PAPER BOOK IN WHICH I T IS MENTIONED THAT ASSESSEE FILED ORIGINAL RETURN OF IN COME ON 8 TH NOVEMBER, 2007. THE ASSESSING OFFICER EXAMINED THE ISSUE OF SHARE CAPITAL AND CHARGING OF SHARE PREMIUM AND ULT IMATELY ASSESSED THE INCOME AT NET LOSS, WITHOUT MAKING ANY 30 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. ADDITION ON ACCOUNT OF SHARE CAPITAL/SHARE PREMIUM. THE ASSESSING OFFICER DID NOT MENTION IN THE REASONS IF ASSESSEE FILED ORIGINAL RETURN OF INCOME AND WHETHER ASSESSE E HAS BEEN ASSESSED UNDER SECTION 143(3) OF THE INCOME TA X ACT. THE INVESTIGATION WING HAS REQUIRED THE ASSESSING O FFICER TO REOPEN THE ASSESSMENT. IT, THEREFORE, APPEARS THAT RE- ASSESSMENT PROCEEDINGS ARE INITIATED ON MERE SUSPIC ION AND THAT REASON TO SUSPECT IS NOT THE SAME THING AS RE ASON TO BELIEVE. THE A.O. RECORDED VAGUE REASONS BASED ON NO EVIDENCE AT THE DICTATE OF INVESTIGATION WING ONLY. THUS, THERE IS TOTALLY NON- APPLICATION OF MIND ON THE PART OF THE ASSESSING OFFICER TO RECORD REASONS FOR REOPENING OF THE ASSE SSMENT. THE ASSESSING OFFICER DID NOT MENTION ANY MATERIAL FACT S IN THE REASONS, THEREFORE, REOPENING OF ASSESSMENT IS CLEA RLY ILLEGAL AND BAD IN LAW. IN THE CASE OF SIGNATURE HOTELS P. LTD., VS., INCOME TAX OFFICER AND ANOTHER (2011) 338 ITR 51 (D EL.) THE HONBLE DELHI HIGH COURT HELD AS UNDER : HELD ALLOWING THE PETITION, THAT THE REASSESSMENT PROCEEDINGS WERE INITIATED ON THE BASIS OF INFORMATION RECEIVED FROM THE DIRECTOR OF INCOME- 31 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. TAX (INVESTIGATION) THAT THE PETITIONER HAD INTRODUCED MONEY AMOUNTING TO RS. 5 LAKHS DURING FINANCIAL YEAR 2002-03 AS STATED IN THE ANNEXURE. ACCORDING TO THE INFORMATION, THE AMOUNT RECEIVED FROM A COMPANY, S, WAS NOTHING BUT AN ACCOMMODATION ENTRY AND THE ASSESSEE WAS THE BENEFICIARY. THE REASONS DID NOT SATISFY THE REQUIREMENTS OF SECTION 147 OF THE ACT. THERE WAS NO REFERENCE TO ANY DOCUMENT OR STATEMENT, EXCEPT THE ANNEXURE. THE ANNEXURE COULD NOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWED OR ESTABLISHED NEXUS OR LINK WHICH DISCLOSED ESCAPEMENT OF INCOME. THE ANNEXURE WAS NOT A POINTER AND DID NOT INDICATE ESCAPEMENT OF INCOME. FURTHER, THE ASSESSING OFFICER DID NOT APPLY HIS OWN MIND TO THE INFORMATION AND EXAMINE THE BASIS AND MATERIAL OF THE INFORMATION. THERE WAS NO DISPUTE THAT THE COMPANY, S, HAD A PAID-UP CAPITAL OF RS. 90 LAKHS AND WAS INCORPORATED ON JANUARY 4, 1989, AND WAS ALSO 32 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. ALLOTTED A PERMANENT ACCOUNT NUMBER IN SEPTEMBER, 2001. THUS, IT COULD NOT BE HELD TO BE A FICTITIOUS PERSON. THE REASSESSMENT PROCEEDINGS WERE NOT VALID AND WERE LIABLE TO BE QUASHED. 5.3. THE HONBLE MADRAS HIGH COURT IN THE CASE OF SRI SAKTHI TEXTILES LTD., VS. JCIT AND ANOTHER (2012) 3 40 ITR 144 (MAD.) HELD THAT REASONS FOR NOTICE MUST SPECIFY T HAT THERE WAS FAILURE TO DISCLOSE MATERIAL FACTS NECESSARY FO R ASSESSMENT. 5.4. THE HONBLE MADRAS HIGH COURT IN THE CASE OF KARTI P. CHIDAMBARAM & OTHERS VS. ACIT (2018) 402 ITR 488 (MAD.) OBSERVED THAT WHEN ORIGINAL ASSESSMENT PASS ED AFTER SCRUTINY, GRANTING EXEMPTION - NOTICE AFTER FOUR YE ARS ON THE GROUND THAT CLAIM FOR EXEMPTION WAS NOT EXAMINED PR OPERLY - NO FAILURE TO DISCLOSE MATERIAL FACTS NECESSARY FOR ASSESSMENT. 5.5. THE HONBLE DELHI HIGH COURT IN THE CASE OF A VTEC LTD., VS. DCIT (2017) 395 ITR 434 (DEL.) NOTED THAT IN CASE OF NOTICE AFTER FOUR YEARS, THE CONDITIONS PRECEDENT F OR 33 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. REASSESSMENT IS THAT IN WHAT MANNER ASSESSEE FAILED TO DISCLOSE MATERIAL FACTS FULLY AND FRESH OR TANGIBLE MATERIAL MUST BE DISCLOSED IN REASONS. 5.6. CONSIDERING THE FACTS OF THE CASE, IN THE LIG HT OF REASONS RECORDED ABOVE AND DISCUSSION, IT IS CLEAR THAT THE ASSESSING OFFICER DID NOT MENTION ANY MATERIAL FACT S IN THE REASONS. THE ASSESSING OFFICER DID NOT MENTION THAT ASSESSEE WAS ALREADY ASSESSED UNDER SECTION 143(3) IN THE OR IGINAL ASSESSMENT, IN WHICH, ASSESSING OFFICER HAS ALREADY EXAMINED THE ISSUE OF SHARE CAPITAL/PREMIUM AND WHA T WAS THE MATERIAL PRODUCED BEFORE HIM REGARDING ACCOMMOD ATION ENTRY. THE ASSESSING OFFICER DID NOT RECORD AS TO W HO HAS PROVIDED ACCOMMODATION ENTRY TO ASSESSEE IN THE REA SONS. THUS, THERE WAS NO FAILURE ON THE PART OF THE ASSES SEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR ASSESSMENT UNDER SECTION 147 OF THE INCOME TAX ACT, 1961. 5.7. IN VIEW OF THE ABOVE, IT IS CLEAR THAT IN THE INSTANT CASE THE ASSESSING OFFICER REOPENED THE ASSESSMENT AFTER 04 YEARS FROM THE END OF THE ASSESSMENT YEAR AND ASSES SING OFFICER HAS FAILED TO SPECIFY IF THERE IS ANY FAILU RE ON THE PART 34 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MAT ERIAL FACTS NECESSARY FOR ASSESSMENT UNDER SECTION 147 OF THE I NCOME TAX ACT, THEREFORE, CONDITIONS OF SECTION 147 OF TH E INCOME TAX ACT ARE NOT SATISFIED IN THIS CASE. FURTHER, TH E REASONS ARE VAGUE AND DO NOT DISCLOSE ANY INCRIMINATING MATERIA L AGAINST THE ASSESSEE. THE DECISIONS RELIED UPON BY LEARNED COUNSEL FOR THE ASSESSEE SQUARELY APPLY TO FACTS OF CASE. THEREFORE, REOPENING OF THE ASSESSMENT IS WHOLLY UNJUSTIFIED I N THE MATTER. WE ARE, THEREFORE, OF THE VIEW THAT ASSUMPT ION OF JURISDICTION UNDER SECTION 147/148 OF THE INCOME TA X ACT IS CLEARLY ILLEGAL AND BAD IN LAW. WE, ACCORDINGLY, SE T ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND QUASH THE REOPE NING OF THE ASSESSMENT UNDER SECTION 147/148 OF THE INCOME TAX ACT, 1961. RESULTANTLY, ALL ADDITIONS STAND DELETED . THE CROSS- OBJECTIONS OF THE ASSESSEE IS ALLOWED. IN VIEW OF T HESE FINDINGS, THERE IS NO NEED TO DECIDE THE DEPARTMENT AL APPEAL ON MERITS, IN WHICH, LD. CIT(A) HAS ALREADY DELETED THE ADDITION. 6. IN THE RESULT, CROSS OBJECTION OF THE ASSESSEE IS ALLOWED AND DEPARTMENTAL APPEAL IS DISMISSED. 35 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. ITA.NO.2845/DEL./2015 & C.O.NO.372/DEL./2015 PARAM EXIM LIMITED ASSESSMENT YEAR 2007-2008. 7. IN THIS CASE ALSO ASSESSING OFFICER RECEIVED INFORMATION FROM DIT (INV.)-II, NEW DELHI VIDE LETT ER DATED 15 TH MARCH, 2013 THAT ASSESSEE HAS TAKEN ACCOMMODATION E NTRY OF RS.3.20 CRORES IN THE SHAPE OF SHARE CAPITAL FRO M VARIOUS COMPANIES. THE ASSESSING OFFICER ISSUED NOTICE UNDE R SECTION 148 OF THE INCOME-TAX ACT ON 28 TH MARCH, 2013. THE ASSESSING OFFICER EXAMINED THE ISSUE WITH REFERENCE TO 08 INVESTORS MADE INVESTMENTS IN ASSESSEE COMPANY AND MADE THE ADDITION OF RS.3.20 CRORES AGAINST THE ASSESSEE . THE LD. CIT(A) ON THE SAME REASONING AS GIVEN IN THE CASE O F M/S. KLF FOOD (INDIA) LTD., DELETED THE ADDITION ON MERI T. 8. THE REVENUE IS IN APPEAL CHALLENGING THE DELETI ON OF ADDITION OF RS.3.20 CRORES AND ASSESSEE IS IN CR OSS OBJECTION CHALLENGING THE REOPENING OF THE ASSESSME NT IN THE MATTER. LEARNED REPRESENTATIVES OF BOTH THE PARTIES SUBMITTED THAT THE ISSUE IS SAME AS HAVE BEEN CONSI DERED IN THE CASE OF M/S. KLF FOOD (INDIA) LTD., EXCEPT THAT IN THIS 36 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. CASE THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961. 9. LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO REASONS RECORDED FOR REOPENING OF ASSESSMENT, COPY OF WHICH IS FILED AT PAGE-20 OF THE PAPER BOOK WHICH READS A S UNDER : OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME-TAX , CIRCLE, ROHTAK. 1. NAME AND ADDRESS OF THE ASSESSEE M/S. PARAM EXIM LTD., 2. STATUS PVT. LTD., COMPANY 3. ASSESSMENT YEAR 2007 - 2008. REASONS IN BRIEF FOR REOPENING THE CASE UNDER SECTI ON 147 OF THE INCOME-TAX ACT, 1961 : IN THIS CASE, INFORMATION WAS RECEIVED FROM DIT (I NV.)-II, NEW DELHI, VIDE LETTER F.NO.DIT (INV.)-II UNDER SEC TION 148/2012-13 DATED 15.03.2013. ON THE BASIS OF SEARC H IN THE CASES OF SHRI SURENDRA KUMAR JAIN GROUP OF CASE S (ENTRY OPERATOR) AND FURTHER ENQUIRIES THE DDIT (INV.) HAS SUGGESTED THE NOTICE UNDER SECTION 148 IN FOLLOWING CASES FOR THE A.Y. 2007-08 IS REQUIRED TO BE ISSUED TO BRING TO TAX TH E 37 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. UNDISCLOSED INCOME REGARDING THE ACCOMMODATION ENTR IES OBTAINED BY THE COMPANIES. 2. AFTER GOING THROUGH ENTRIES IT IS REVEALED THAT M/S. PARAM EXIM LTD., WHO IS ASSESSED WITH THIS CIRCLE, HAS AVAILED THE FOLLOWING ACCOMMODATION BOOK ENTRIES :- SR.NO. NAME OF THE COMPANY PAN F.Y. 2007 - 08 AMOUNT (RS.) 1. M/S. PARAM EXIM LTD., AACCP9669B 3,20,00,000/ - THEREFORE, I HAVE REASON TO BELIEVE THAT INCOME TO THE TUNE OF RS.3,20,00,000/- HAS ESCAPED ASSESSMENT. ISSUE NOTICE UNDER SECTION 148 OF THE INCOME-TAX A CT, 1961 FOR THE ASSESSMENT YEAR 2007-2008. DATED : 25 TH MARCH, 2013 SD/- S. DAYAL ASST. COMMISSIONER OF INCOME-TAX, ROHTAK CIRCLE, ROHTAK. 9.1. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT APART FROM THE FACT THAT THE ISSUE IS SAME AS HAVE BEEN CONSIDERED IN OTHER CASE, BUT, IN THE PRESENT CASE THE AMOUNT IN QUESTION AS MENTIONED IN THE REASONS AT RS.3.20 CRORES HAVE BEEN WRONGLY MENTIONED BECAUSE THE AMOUNT IN 38 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. QUESTION IS RS.2.20 CRORES [PB-10]. HE HAS ALSO SUB MITTED THAT THE ASSESSING OFFICER IN THE REASONS HAS MENTIONED THAT INCOME ESCAPED FOR ASSESSMENT FOR F.Y. 2007-2008 IN STEAD OF F.Y. 2006-2007. HE HAS, THEREFORE, SUBMITTED THAT S INCE WRONG FACTS HAVE BEEN MENTIONED IN THE REASONS FOR REOPENING OF ASSESSMENT, THEREFORE, ON THIS REASON ALONE THE REOPENING OF THE ASSESSMENT IS INVALID AND BAD IN L AW. 10. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON ORDERS OF THE AUTHORITIE S BELOW AND SUBMITTED THAT REASSESSMENT WAS DONE BY THE ASS ESSING OFFICER ON THE BASIS OF THE INFORMATION RECEIVED FR OM INVESTIGATION WING, WHICH IS TANGIBLE MATERIAL, WHI CH IS SUFFICIENT TO INITIATE REASSESSMENT PROCEEDINGS AGA INST THE ASSESSEE. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THE ISSUE IS SAME AS HAVE BEEN CONSIDERED IN T HE CASE OF M/S. KLF FOOD (INDIA) LTD., (SUPRA) EXCEPT THAT IN THIS CASE THERE IS NO ASSESSMENT UNDER SECTION 143(3) OF THE INCOME- TAX ACT, 1961. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SIEMENS INFORMATION SYSTEM LTD., VS. ACIT & OTHERS (2007) 39 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. 293 ITR 548 (BOM.) HELD THAT WHEN NOTICE FOR REASS ESSMENT BASING ON NON-EXISTING REASONS AND PROVISIONS INAPP LICABLE AT RELEVANT TIME NOT CONSTITUTING REASONS TO BELIEVE . NOTICE INVALID. THE HONBLE PUNJAB AND HARYANA HIGH COUR T IN THE CASE OF CIT VS., ATLAS CYCLE INDUSTRIES (1989) 180 ITR 319 (P&H) HELD AS UNDER : HELD, (I) THAT THE TRIBUNAL WAS RIGHT IN CANCELLIN G THE REASSESSMENT AS BOTH THE GROUNDS ON WHICH THE REASSESSMENT NOTICE WAS ISSUED WERE NOT FOUND TO EXIST, AND, THEREFORE, THE INCOME-TAX OFFICER DID NOT GET JURISDICTION TO MAKE A REASSESSMENT. 11.1. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF ANKITA A. CHOKSEY VS. INCOME TAX OFFICER AND OTHERS (2019) 411 ITR 207 (BON.) HELD THAT CONDITION PRECEDENT F OR ISSUE OF NOTICE FOR REASSESSMENT IS THAT THE REASON TO BELIE VE THAT INCOME HAS ESCAPED ASSESSMENT MUST BE BASED ON CORR ECT FACTS. NOTICE BASED ON WRONG FACTS IS WITHOUT JURIS DICTION AND IS TO BE QUASHED. 40 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. 11.2. IN THE INSTANT CASE, THE ASSESSING OFFICER H AS RECORDED VAGUE REASONS BASED ON WRONG FACTS. THE ESCAPEMENT OF INCOME BASED ON ACCOMMODATION ENTRY AS INFORMED BY INVESTIGATION WING HAVE BEEN MENTION ED AT RS.3.20 CRORES WHICH IN FACT WAS RS 2.20 CRORES. SUCH FACT IS MENTIONED IN THE BALANCE SHEET OF THE ASSESSEE, COPY OF WHICH IS, FILED AT PAGE-10 OF THE PAPER BOOK, WHICH IS ALSO SUPPORTED BY THE LIST OF INVEST ORS FILED AT PAGE-21 OF THE PAPER BOOK. THE ASSESSING OFFICER IN THE REASONS FOR REOPENING HAS ALSO MENTI ONED INCORRECT F.Y. 2007-2008 INSTEAD OF F.Y. 2006-2007. THEREFORE, THE REASONS ARE BASED ON WRONG FACTS, WH ICH CLEARLY SHOW THAT THERE WAS NO APPLICATION OF MIND ON THE PART OF THE ASSESSING OFFICER WHILE RECORDING REASONS FOR REOPENING OF THE ASSESSMENT. WE, THEREF ORE, CONSIDERING THE ABOVE DISCUSSION AND FOLLOWING THE REASONS FOR DECISION IN THE CASE OF M/S. KLF FOOD ( INDIA) LTD., (SUPRA), HOLD THAT ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER FOR REOPENING OF THE ASSESSMENT I S ILLEGAL AND BAD IN LAW. WE, ACCORDINGLY, SET ASIDE THE 41 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. ORDERS OF THE AUTHORITIES BELOW AND QUASH THE REOPE NING OF ASSESSMENT IN THE MATTER. RESULTANTLY, ALL ADDIT IONS STAND DELETED. IN VIEW OF THE ABOVE, THERE IS NO NE ED TO DECIDE THE DEPARTMENTAL APPEAL ON MERIT IN WHICH LD . CIT(A) HAS ALREADY DELETED THE ADDITION. 12. IN THE RESULT APPEAL OF THE DEPARTMENT IS DISMISSED AND THE CROSS-OBJECTION OF THE ASSESSEE I S ALLOWED. 13. TO SUM-UP, BOTH CROSS-OBJECTIONS OF DIFFERENT ASSESSEES ARE ALLOWED AND BOTH DEPARTMENTAL APPEALS ARE DISMISSED. 7.2. ACCORDING TO SECTION 148(1), BEFORE MAKING REASSESSMENT UNDER SECTION 147 OF THE INCOME TAX AC T, 1961, A.O. SHALL HAVE TO SERVE THE NOTICE UNDER SEC TION 148 UPON THE ASSESSEE REQUIRING HIM TO FURNISH THE RETU RN AS SPECIFIED IN THE NOTICE. HOWEVER, IN THE PRESENT CA SE IT IS AN ADMITTED FACT THAT THE NOTICE ISSUED UNDER SECTION 148 OF INCOME TAX ACT RETURNED BACK TO THE A.O. EVEN IN TH E RECORD THE ADDRESS OF THE ASSESSEE IS NOT COMPLETELY MENTI ONED. 42 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. THE REPORT SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE SHOWS THAT POSTAL AUTHORITIES HAVE MENTION ED AGAINST THE REGISTERED COVER ISSUED BY THE A.O. CON TAINING NOTICE UNDER SECTION 148 OF INCOME TAX ACT ITEM DELIVERY ATTEMPTED - ADDRESSEE MOVED . IT WOULD SHOW THAT NOTICE UNDER SECTION 148 HAVE NOT BE SERVED UPON THE ASSES SEE AND NO FURTHER EVIDENCE HAVE BEEN PRODUCED ON RECOR D, IF ANY ATTEMPT HAVE BEEN MADE TO SERVE THE NOTICE UPON THE ASSESSEE PERSONALLY. THE A.O. IN THE ASSESSMENT ORD ER HAS NOTED THAT NOTICE UNDER SECTION 148 HAVE BEEN SERVE D LATER ON THROUGH AFFIXTURE FOR WHICH NO RECORD HAVE BEEN PRODUCED TO SATISFY THE REQUIREMENTS OF LAW WHETHER NOTICE THROUGH AFFIXTURE HAVE BEEN SERVED IN ACCORDANCE WI TH LAW. THESE FACTS CONSIDERING THE FACT THAT INCORRECT ADD RESS HAVE BEEN RECORDED IN THE SPEED POST RECORD WOULD CLEARL Y REVEAL THAT NO NOTICE UNDER SECTION 148 HAVE BEEN SERVED U PON THE ASSESSEE. THEREFORE, ASSUMPTION OF JURISDICTION UND ER SECTION 147 OF THE INCOME TAX ACT IS CLEARLY ILLEGA L AND BAD IN LAW. 43 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. 7.3. IT MAY ALSO BE NOTED HERE THAT THE A.O. IN TH E REASONS RECORDED FOR REOPENING OF THE ASSESSMENT HA S MERELY RECORDED THAT RS.15 LACS ACCOMMODATION ENTRY TAKEN BY THE ASSESSEE HAS ESCAPED ASSESSMENT. HOWEVER, AT THE RE-ASSESSMENT STAGE, A.O. MADE FURTHER ADDITION OF RS.52.91 CRORES ON ACCOUNT OF DEPOSITS IN THE BANK ACCOUNT O F THE ASSESSEE. NO REASONS HAVE BEEN MENTIONED AS TO WHY SUCH ADDITION HAVE BEEN MADE AND WHAT WAS THE PURPOSE IN MAKING THE ADDITION. THE ENTIRE DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSEE COULD NEVER BE UNEXPLAINED. EVEN TH E INVESTIGATING AGENCY HAVE NOT MADE ANY ALLEGATION A GAINST THE ASSESSEE IF THAT AMOUNT WAS AN ACCOMMODATION EN TRY TAKEN BY THE ASSESSEE ? THE LD. D.R. ADMITTED THAT NO NOTICE HAVE BEEN ISSUED BY THE A.O. WHILE PROPOSING TO MAKE THIS ADDITION OF RS.52.91 CRORES. THE ISSUE IS , THEREFORE, COVERED IN FAVOUR OF THE ASSESSEE AGAINS T THE DEPARTMENT BY JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF RANBAXY LABORATORIES LIMITED VS., CIT [2011 ] 336 ITR 136 (DEL.) IN WHICH IN PARA 18 IT WAS HELD AS U NDER : 44 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. WE ARE IN COMPLETE AGREEMENT WITH THE REASONING OF THE DIVISION BENCH OF THE BOMBAY HIGH COURT IN THE CASE OF CIT VS., JET AIRWAYS (I) LIMITED [2011] 331 ITR 236 (BOM.). WE MAY ALSO NOTE THAT THE HEADING OF SECTION 147 IS 'INCOME ESCAPING ASSESSMENT' AND THAT OF SECTION 148 'ISSUE OF NOTICE WHERE INCOME ESCAPED ASSESSMENT'. SECTIONS 148 IS SUPPLEMENTARY AND COMPLIMENTARY TO SECTION 147. SUB-SECTION (2) OF SECTION 148 MANDATES REASONS FOR ISSUANCE OF NOTICE BY THE ASSESSING OFFICER AND SUB-SECTION (1) THEREOF MANDATES SERVICE OF NOTICE TO THE ASSESSEE BEFORE THE ASSESSING OFFICER PROCEEDS TO ASSESS, REASSESS OR RE-COMPUTE THE ESCAPED INCOME. SECTION 147 MANDATES RECORDING OF REASONS TO BELIEVE BY THE ASSESSING OFFICER THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. ALL THESE CONDITIONS ARE REQUIRED TO BE FULFILLED TO 45 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. ASSESS OR REASSESS THE ESCAPED INCOME CHARGEABLE TO TAX. AS PER EXPLANATION 3 IF DURING THE COURSE OF THESE PROCEEDINGS THE ASSESSING OFFICER COMES TO CONCLUSION THAT SOME ITEMS HAVE ESCAPED ASSESSMENT, THEN NOTWITHSTANDING THAT THOSE ITEMS WERE NOT INCLUDED IN THE REASONS TO BELIEVE AS RECORDED FOR INITIATION OF THE PROCEEDINGS AND THE NOTICE, HE WOULD BE COMPETENT TO MAKE ASSESSMENT OF THOSE ITEMS. HOWEVER, THE LEGISLATURE COULD NOT BE PRESUMED TO HAVE INTENDED TO GIVE BLANKET POWERS TO THE ASSESSING OFFICER THAT ON ASSUMING JURISDICTION UNDER SECTION 147 REGARDING ASSESSMENT OR REASSESSMENT OF THE ESCAPED INCOME, HE WOULD KEEP ON MAKING ROVING INQUIRY AND THEREBY INCLUDING DIFFERENT ITEMS OF INCOME NOT CONNECTED OR RELATED WITH THE REASONS TO BELIEVE, ON THE BASIS OF WHICH HE ASSUMED JURISDICTION. FOR EVERY NEW ISSUE 46 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. COMING BEFORE THE ASSESSING OFFICER DURING THE COURSE OF PROCEEDINGS OF ASSESSMENT OR REASSESSMENT OF ESCAPED INCOME, AND WHICH HE INTENDS TO TAKE INTO ACCOUNT, HE WOULD BE REQUIRED TO ISSUE A FRESH NOTICE UNDER SECTION 148. 7.4. SIMILAR VIEW IS TAKEN BY THE ITAT, MUMBAI G- BENCH IN THE CASE OF JULIET INDUSTRIES LTD., MUMBAI VS., ITO 6(3)(3), MUMBAI (SUPRA). CONSIDERING THE TOTALITY O F THE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT A.O. HAS RECORDED NON-EXISTING, INCORRECT AND WRONG FACTS IN THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT. T HE A.O. DID NOT APPLIED HIS MIND TO THE REPORT OF INVESTIGA TION WING. THE A.O. MERELY BELIEVED REPORT OF INVESTIGATION WI NG WITHOUT MAKING FURTHER SCRUTINY AT THE ASSESSMENT. THE A.O. MERELY REPRODUCED REPORT OF INVESTIGATION WING WITHOUT MAKING FURTHER SCRUTINY OF THE SAME. THE A.O. MEREL Y REPRODUCED REPORT OF INVESTIGATION WING AND CRUX OF STATEMENT OF SHRI KISHORI SHARAN GOEL FOR REOPENING OF THE 47 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. ASSESSMENT IN THE MATTER. THEREFORE, IT WAS MERELY A BORROWED SATISFACTION WITHOUT APPLICATION OF MIND. WE, THEREFORE, HELD THAT INITIATION OF RE-ASSESSMENT PR OCEEDINGS IN THE INSTANT CASE IS ILLEGAL, BAD IN LAW AND IS L IABLE TO BE QUASHED. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND QUASH THE REOPENING OF ASSESSMENT UNDER SECTION 147/ 148 OF THE INCOME TAX ACT, 1961. RESULTANTLY, ALL ADDITIONS STAND DELETED. IN VIEW OF THE ABOVE, THERE IS NO NEED TO ADJUDICATE THE ISSUES ON MERIT WHICH ARE LEFT WITH ACADEMIC DISCUSSION ONLY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (B.R.R. KUMAR) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 18 TH DECEMBER, 2019 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT B BENCH 6. GUARD FILE 48 ITA.NO.4271/DEL./2019 SHRI DEVKI NANDAN BINDAL, DELHI. // BY ORDER // ASST. REGISTRAR : ITAT DELHI BENCHES : DELHI.