M/s. Sharmilee Furnishing Pvt. Ltd., Gurgaon V. ITO, New Delhi

ITA 4859/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3442 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2005-2006
• Appeal Filed On: 05-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: BL GUPTA
• Keywords: Question of law; Accommodation entries; Reason to believe; Reassessment proceedings
• Section: 147; 148; 132; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , DELHI A BENCH , NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER, AND SHRI SUDHANSHU SRIVASTAV A , JUDICIAL MEMBER ITA NO. 48 59 /D EL /20 1 4 [ ASSESSMENT YEAR : 20 05 - 06 ] M/S SHARMILEE FURNISHING P. LTD VS. THE I.T.O G - F, JMD REGENT PLAZA WARD - 8(1) M.G. ROAD, GURGAON NEW DELHI PAN : A AHCS 5999 J [APPELLANT] [RESPONDENT] DATE OF HEARING : 0 8 . 1 1 . 201 7 DATE OF PRONOUNCEMENT : 10 . 1 1 .201 7 ASSESSEE BY : SHRI B.L. GUPTA, A DV REVENUE BY : SHRI S .K. JAIN, SR. DR ORDER PER B.P. JAIN, ACCOUNTANT MEMBER, T H IS APPEAL FILED BY THE ASSESSEE ARISE S FROM THE ORDER OF THE CIT(A) - XI , NEW DELHI VIDE ORDER DATED 2 1 / 07 /201 4 FOR A.Y 2005 - 06 . 2 . T HE ASSESSEE HAS RAISED VARIOUS GROUND S OF APPEAL . HOWEVER, A T THE VERY OUTSET, THE LD. AR FOR THE ASSESSEE PRESSED ONLY THE LEGAL GROUND REGARDING REOPENING OF THE 2 ASSESSMENT AND SUBMITTED THAT THE PROCEEDINGS U/S 147/148 OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' ] HAVE BEEN INITIATED ON THIRD PARTY OPINION AND WITHOUT APPLICATION OF MIND OF THE AO. THE LD. AR RELIED ON VARIOUS DECISIONS INCLUDING THE DECISION OF THE ITAT DELHI D BENCH IN ITA NO. 4033/DEL/2010 IN THE CASE OF ACIT VS. M/S JONEJA BRIGHT STEELS PVT. LTD VIDE ORDER DATED 12.05.2017 FOR A.Y 2004 - 05 AND ITA NOS. 5750 & 5751/DEL/2016 IN THE CASE OF BASESAR PROPERTIES PVT LTD VS. ITO FOR A.YS 2007 - 08 & 2008 - 09 ORDER DATED 18.08.2017. 3 . PER CONTRA, THE LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 4 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE RELEVANT MATERIAL ON RECORD. THE RE IS NO DISPUTE TO THE FACT THAT THE DEPARTMENT CONDUCTED ENQUIRY IN THE CASE OF THIRD PARTY WHERE THE NAME OF THE ASSESSEE WAS ALSO WRITTEN TO HAVE RECEIVED ACCOMMODATION ENTRY AND ACCORDINGLY, THE AO REACHED TO A CONCLUSION WHILE RECORDING REASONS THAT THE INCOME OF THE ASSESSEE HAS ESCAPED 3 ASSESSMENT AND IT IS A FIT CASE FOR INITI ATI ON OF PROCEEDING S U/S 148 OF THE ACT AND THE CASE WAS SELECTED FOR S CRUTINY AND ASSESSMENT WAS MADE BY MAKING NECESSARY ADDITIONS. 5 . THE CIT(A) CONFIRMED THE ACTION OF THE AO. 6 . AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT THE PRESENT CASE IN HAND IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT DELHI D BENCH IN ITA NO. 4033/DEL/2010 IN THE CASE OF ACIT VS. M/S JONEJA BRIGHT STEELS PVT. LTD [SUPRA]. THE RELEVANT OPERATIVE PART OF THE SAID ORDER IS REPRODUCED HEREINBELOW FOR READY REFERENCE: 3. AT THE OUTSET, LEARNED COUNSEL FOR THE ASSESSEE, DR. RAKESH GUPTA, ADVOCATE ARGUED THAT THE REASONS RECORDED WHERE THE ASSESSING OFFICER HAS PRO CEEDED TO REOPEN THE ASSESSMENT U/S.147 ON THE BASIS OF INFORMATION RECEIVED IN THE FORM OF CD FROM THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE - II, FARIDABAD WHERE THE ASSESSEE HAS BEEN ALLOTTED AS BENEFICIARY OF OBTAINING ACCOMMODATION ENTRIES WHICH PERTAINED TO THE JURISDICTION OF THE PRESENT ASSESSING OFFICER IN THE INSTANT CASE AND THE ASSESSING OFFICER ASSUMED THAT IT IS AN UNACCOUNTED MONEY OF THE ASSESSEE - COMPANY WHICH WERE INTRODUCED AS CAPITAL WITHOUT PAYING ANY TAX. THE INFORMATION WITH REGAR D TO 4 SUCH TRANSACTIONS ARE THE PART OF THE REASONS RECORDED WHICH IN FACT HAS INVOLVED DUPLICACY AND WITH NO APPLICATION OF MIND WHERE SAME INSTRUMENT OF THE BANK HAS BEEN REPEATED TWICE AS IS EVIDENT FROM THE REASONS SO RECORDED. IN THE CIRCUMSTANCES AND FACTS OF THE CASE IN THE ABSENCE OF INDEPENDENT APPLICATION OF MIND, THE ASSESSING OFFICER DOES NOT ACQUIRE ANY JURISDICTION TO MAKE THE REASSESSMENT U/S.147 OF THE ACT. HE RELIED UPON THE DECISION OF VARIOUS COURTS OF LAW IN THIS REGARD. 4. LEARNED DR ON THE OTHER HAND RELIED UPON THE DECISION OF BOTH THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. IT IS PERTINENT TO REPRODUCE THE REASONS RECORDED BY THE ASSESSING OFFICER WHICH ARE AS UNDER: REASONS A CD CONTAINING INFORMATION IN RESPECT OF ACCOMMODATION ENTRIES RECEIVED FROM ADDL. COMMISSIONER OF INCOME - TAX, RANGE - II, FARIDABAD VIDE HIS LETTER NO.JCIT/R - II/FBD/07 - 08/774/394 DATED 12.06.2007 AND 1419 DATED 22.02.2008. THE CD ALSO CONTAINED BRIEF NOTE ON ACCOMMODATION ENTRIES PREPARED BY SANJAY SHARMA AND VISHESH PRAKASH, INCOME TAX OFFICERS OF UNIT - V, NEW DELHI. THE CD WAS OPENED AND NAME OF THE ASSESSEE AS BENEFICIARY OF OBTAINING ACCOMMODATION ENTRIES WAS FOUND WHICH PERTAINED TO THE JURISDICTION OF THE UNDERSIGNED AS ASSESSING OFFICER IN THE INSTANT CASE. THE REPORT IN THE CASE OF THE ASSESSEE IS IN THE FOLLOWING FORMAT: - BENEFICIARYS NAME BENEFICIARY BANK BENEFICIARY BANK BRANCH ADDRESS OF BENEFICIARY VALUE OF ENTRY TAKEN M/S. JONEJA ORIENTAL FARIDABAD B - 612/613, 500000 5 BRIGHT STEE LS PVT. LTD. - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - BANK OF COMMERCE - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - NEHRU GROUND, NIT FARIDABAD. - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - - DO - 500000 500000 500000 500000 500000 1000000 1000000 500000 500000 500000 1000000 1000000 1000000 1000000 INSTRUMENT NO. BY WHICH ENTRY TAKEN 683324 683324 683414 683414 684380 684380 685448 685448 TO CLG. 00795730 TO CLG. 00795730 TO CLG. 00788762 TO CLG. 00979656 TO CLG. 00979656 TO CLG. 00953471 TO CLG. 00953471 PO/DD NUMBER .. .. .. .. .. .. .. .. .. .. .. DATE OF WHICH ENTRY TAKEN 24.09.03 24.09.03 24.09.03 24.09.03 28.08.03 28.08.03 11.06.03 11.06.03 25.08.03 25.08.03 14.10.03 17.06.03 17.06.03 15.07.03 15.07.03 NAME OF ACCOUNT HOLDER OF ENTRY GIVING ACCOUNT NISHANT FINVEST P LTD NISHANT FINVEST P LTD RAHUL FINLEASE P. LTD. RAHUL FINLEASE P. LTD GANGA INFIN P. LTD. GANGA INFIN P. LTD. SWETU STONE P. LTD. SWETU STONE P. LTD. NISHAN FINVEST P. LTD. NISHAN FINVEST P. LTD. DINA NATH BANK FROM WHICH ENTRY GIVEN BOR BOR BOR BOR BOR BOR BOR BOR SBBJ SBBJ SBBJ SBP SBP SBP SBP BRANCH OF ENTRY GIVING BANK NRR NRR NRR NRR NRR NRR NRR NRR NRR NRR NRR DG DG DG DG ENTRY GIVING ACCOUNT BANK 39112 39112 39121 39121 39180 39180 39257 39257 24594 24594 24599 50111 50111 50098 50098 6 LUHARIWALA SEKHAWATI FINANCE P LTD SEKHAWATI FINANCE P LTD SRS VIJAY SALES P LTD. SRS VIJAY SALES P. LTD. THE ABOVE INFORMATION AS PER ABOVE REPORT RELATES TO ASSESSMENT YEAR 2004 - 05 IN THE STATUS OF COMPANY. THE INFORMATION REVEALS THAT THE ASSESSEE WAS THE BENEFICIARY OF THE ACCOMMODATION ENTRIES AMOUNTING TO RS.1,05,00,000/ - WHICH WAS ACTUALLY OWN UNACCOUNTED MONEY OF THE COMPANY INTRODUCED AS CAPITAL WITHOUT PAYING ANY TAX BY WAY OF APPROACHING THE ENTRY OPERATOR CONCERNS, WHO AFTER RECEIVING THE CASH EQUAL TO ENTRY AMOUNT FROM THE ASSESSEE, GOT PREPARED BANK INSTRUMENTS ON THE DATES MENTIONED ABOVE (RELEVANT FOR A.Y. 2004 - 05) IN FAVOUR OF ASSESSEE. THIS AMOUNT WAS DULY CREDITED TO THE ASSESSEES ACCOUNT WITH OBC FARIDABAD. THE REPORT PROVIDES INFORMATION OF A BIG RACKET OF MONEY LAUNDERING ACTIVITIES OF MANY ASSESSEE INCLUDING THE INSTANT ASSESSEE UNDER SUBJEC T. I HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX OF RS.1,05,00,000/ - MENTIONED ABOVE HAS ESCAPED ASSESSMENT FOR ASSESSMENT YEAR 2004 - 05 WITHIN THE MEANING OF SEC. 147 OF THE IT ACT, 1961. I ISSUE NOTICE U/S.148 ON A.Y.2004 - 05 TO ASSESS INCOME OF R S.1,05,00,000/ - AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO MY NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER SECTION 147 SUBJECT TO THE PROVISIONS OF SECTION 148 TO 153 OF THE IT ACT, 1961. 7 5.1 FROM THE REASONS SO RECORDED, IT IS EVIDENT THAT ASSESSING OFFICER HAS PROCEEDED TO REOPEN THE ASSESSMENT U/S.147 OF THE ACT ON THE BASIS OF INFORMATION RECEIVED FROM DIT(INVESTIGATION) AND NO INDEPENDENT APPLICATION OF MIND HAS BEEN FRAMED IN THIS REG ARD, THEREFORE, THE AO DOES NOT ACQUIRE ANY JURISDICTION TO MAKE THE ASSESSMENT / RE - ASSESSMENT U/S. 147/148 OF THE ACT. THE RELIANCE IS PLACED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF SIGNATURE HOTELS P. LTD. VS. INCOME TAX OFFICER AND ANOTHER, REPORTED IN (2011) 338 ITR 51 (DELHI). THE RELEVANT PORTION OF THE DECISION IS REPRODUCED HEREINUNDER: HELD, ALLOWING THE PETITION, THAT THE REASSESSMENT PROCEEDINGS WERE INITIATED ON THE BASIS OF INFORMATION RECEIVED FROM THE DIRECTOR OF INCOME 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 T HE 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 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 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. 8 5.2 RELIANCE IS ALSO PLACED UPON THE DECISION OF H ONBLE DELHI HIGH COURT IN THE CASE OF SARTHAK SECURITIES CO. P. LTD. VS. ITO, REPORTED IN (2010) 329 ITR 110 (DEL). 5.3 FURTHER RELIANCE IS PLACED UPON THE DECISION OF HONBLE HIGH COURT OF DELHI IN THE CASE OF PCIT VS. G &G PHARMA LTD. IN ITA NO.545/201 5 DATED 8.10.2015 AND ALSO UPON THE DECISION OF ITAT CHANDIGARH BENCH IN ITA NO.849/CHD/2011 DATED 05.01.2017. THE RELEVANT PORTION OF THE DECISION OF THE ITAT CHANDIGARH BENCH (SUPRA) IS REPRODUCED HEREINBELOW: 10. WE HAVE CONSIDERED THE RIVAL SUBMISSION S . IT IS WELL SETTLED LAW THAT VALIDITY OF RE - ASSESS M ENT PROCEE D INGS TO BE DETERMINED WITH REFERENCE TO REASONS RECORDED ULS 148 OF T HE LT . ACT . COPY OF THE REASONS AS SU P PLIED B Y THE LD . DR DATED 25 . 3 . 2010 ARE REPRODUCED AS UNDER : - 'NAME OF THE ASSESSEE : M I S J . M . D . ASTROLOGICAL CONSULTANC Y SERVICES (P)LTD PAN NO . : AABCJ 4419N ADDRESS : HOUSE NO . 1456 , SECTOR 4 , PANCHKULA ASSESSMENT YEAR : 2008 - 09 THE INFORMATION WA S RECEIVED FROM ADDL . DIT , UNIT - IV , NEW DELHI V IDE HIS OFFICE LETTE R NO . ADDL , DL ' I ' (INVL /UNIT - IV/BENEFICIARIES/2008 - 09 17 , DATED 06 - 04 - 2009 IN WHICH IT WAS MENTIONED THAT : A SEARCH U/ S 132 OF THE IT , A C T , 1961 WAS CO NDU C T E D A T THE O FFI C E PR E MI S E S O F SHRI T A R UN GO Y AL , CA AT 13/ 3 4 , W EA , AR Y A SAMAJ RO A D , K A ROL B AG H , NEW DELHI B Y THE IN V E S T I GATION WING ON 1 5 - 09 - 2008 . DURIN G THE COURSE OF SEARCH AND LATE R INQUIRI ES I T WAS ES T A B L I S H E D TH A T SH . TARUN GO Y AL H A D F LOATED NEARL Y 90 PRIVATE LIMITED COMPANIES AND F I RM S FO R PRO V IDING A C COMMOD A TION ENTRIES . THE DIRECTORS OF THE S E COMPANIE S WERE HIS EMPL O YE E S W HO W ORKED IN HI S OFF ICE A S PEONS , RECEPTIONISTS ETC . ALL THE DOCUMENTS WERE GOT SIGNED FROM THESE EMPLO Y EES . A NUMBER OF BANK ACCOUNTS IN V ARIOUS BANK S WERE OPENED IN THE NAMES OF THESE COMPANIE S AND HIS EMPLO Y EES IN WHI C H HUGE CASH 9 DEPOSITS WERE MADE . LATER CHEQUES WERE ISSUED TO VARIOUS BENEFICIAR I ES , DISGUI S ING THE W HOLE TRAN S ACTION AS GENUINE . THUS THE NETWORK OF C OMPANIES RUN B Y SH . TARUN GO YA L ARE NOT C A RR Y ING OUT AN Y GENUINE ACTIVIT Y AND ARE INFACT SHAM COMPANIES . THI S I S MORE APPARENT FROM ACTI V IT Y FACT THAT : A . ALL THE COMPANIES ARE OPERATING FROM THE OFFICE OF SH . TARUN GO YA L ADDRESSED A T 1 3 / 3 4 , WEA , AR Y A SAMAJ ROAD , KAROL BAGH , NEW DELHI AND AT HIS FORMER OFFICE V IZ 203 , DHAKA CHAMBERS , 2069/39 , NAIWALA , KAROL BAGH , NEW DELHI . B. THE DIRECTORS OF THE C OMPAN Y ARE NONE BUT FORMER AND P R ESENT EMPLOYEES OF SH. TARUN GO Y AL . SH . TARUN GO Y AL HAS BEEN USIN G THEM FOR MEREL Y SIGNIN G ALL THE DOCUMENTS , BANK CHEQUES AND ALSO FO R TR A NSPORTING AND E X CHANGING C A SH A ND CHEQUE S IN ORDER TO PROVIDE ACCOMMODATION ENTRIES . C . AT THE TIME OF SERCH ON15/9/2008 TARUN GO Y AL WA S RECORDED ON OATH. AS PER HIS STATEMENT , HE HAS ACCEPTED THAT H E PRO V IDES AC COMMODATION E NTRIES AND HIS V ARIOUS C OMPANIES ARE USED FOR THIS PURPOSE . SH . T ARUN GO Y AL HAS ALSO DESCRIBED THE MODU S OPERAND I FOR PRO V IDING ACCOMMODATION ENTRIES . D . AT TH E T I M E OF S EAR C H ON 15/9/2008 , TH E STATEMENT ON OATH OF THE E MPLO Y EES PRE S ENT A T TH E PREM I SE S OF SH . TARUN GO Y AL WERE RECORD E D . THESE INCLUDE SH . PRAMOD KUNAR , HIS PEON ; SH . H A RPRE E T SINGH , ACCOUNTANT . IN THEI R STATEM E NTS THE Y S TATED THAT THE Y W E RE MERE EMPLO Y E E S OF SH . TARUN GO Y AL AND THE Y WERE SIGNING V ARIOUS DOCUMENTS RELATED TO MAN Y COMPANIES AT HIS BEHEST , A S AND WHEN A SKED B Y SH . TAR W I GO Y AL . E . LATER , MORE EMPLO Y EE S WERE TRACED NAMEL Y , MS . USHA AND MS . RITU SA XE NA , F ORMER RECEPTIONISTS . IN THEIR S T A TEMENT S RECORDED ON OATH , THE Y HA V E STARTED TH A T V ARIOU S B A N K A C C OUNTS WERE OPENED IN THEIR N A M E S B Y SH , TA R UN GO Y AL , WHO H I MSELF OPER A TED THE SE ACCOUNT S A ND DEPOSITED CASH IN THEM . A S SU C H , THE Y C OULD NOT REFU S E THE S AME A S TH EY WERE MERE EMPLO Y EE S . ALL THE PASSBOOK S , CHEQU E - BOOK S , V A R IOUS IMPORTANT DOCUMENT S W ERE IN HIS TOTAL CONTR OL . F . T HE S TATEMENTS OF THE AUDITOR S OF V ARIOU S COMPANIE S OF SH . T ARUN GO Y AL W ERE R EC ORDED O N O A TH A FT ER S UMMON S WERE IS S UED TO THEM . TH E A UDITO RS O F VA RIOUS C OMPAN I E S RUN B Y SH . TARUN GO Y AL H AVE C ONFI R MED THAT THE Y HAD NO KNOWLED GE A BOU T TH E DIRE C TORS OF T HE 10 C OMPANIE S A ND A LL TH E A UD I T S WERE D ONE AT T HE INSTRUCTIONS OF SH . T A RU N GO Y AL . ON E O F TH E A UDITO RS H A S S T AT ED THAT PROPE R R E C O RD S F O R T RA N SAC T I ONS AND CONTRACTS OF S HA RES , H E LD AS I N V E S TMENT O R PUR C HASED OR SOLD C OULD NE VE R B E VERIFIE D . I N MOST CASE S, S H A RE C ERT IFIC AT ES, S HARE S ALLOTM E NT AD V I S E S A ND/ OR OTH E R REL A TED DO C UMENT S WERE NOT A V AILABLE FOR THE A UD I TO R ' S VE R I F I C A T I ON A ND IT C OULD NOT B E VER IFIED/ AS C ER TAINED W H E THE R TH E S H A RE S WERE ACTUALL Y A LLOTT E D TO THE C OMP A N Y A ND W HETHE R TH EY WE R E HELD I N THE N A M E O F TH E CO MP ANY . G . DURIN G TH E CO U RSE O F SEARC H , IT WAS REV E ALE D TH AT A LL TH E PA SS BO O K S , CHEQ U E BOOKS , P A N CA RD S E TC . WERE ALWAYS IN P OSSESS I ON OF S H , TAR UN G O YAL . H . ALL THE BANK ACCOUNT OPENING FORMS A RE TH E H A ND W RITING OF SH . TARUN GO Y AL , AND THUS SH . TARUN GOYAL CONTROLLED AND MANAGED THES E C OMPANIE S AS A LSO OPERATED ALL THE BANK ACCOUNTS . I ALL THE BOOKS OF ACCOUNTS OF ALL THE COMPANIE S H AV E BEEN RETRIE V ED FROM THE COMPUTERS/LAPTOP OF SH . TARUN GOYALJ . SH . TARUN SO Y AL HAS GIVEN LETTER S FOR THE RELEASE OF BANK ACCOUNTS OF COMPANIES PUT UNDER RESTRAINT AFTER SEARCH . NO SUCH APPLICATION WAS RECEIVED FROM THE SO CALLED DIRECTORS OF THE COMPANIES . K. SH . TARUN GOYAL APPEARS IN ALL THE SCRUTINY ASSESSMENTS AS WELL AS APPEAL S OF HIS COMPANIES HIMSELF BEFORE V ARIOUS INCOM E TAX AUTHORITIES . FROM V ERIFICATION CARRIED OUT IN RESPECTIV E WARDS/CIRCLES WHERE THE ABOVE MENTIONED COMPANIES ARE ASSESSED , IT IS E V IDENT THAT SH . TARUN GOYAL IS APPEARING IN ALL THE INCOME TAX PROCEEDINGS ON BEHALF OF ALL THE COMPANIES . HE IS ALSO NOT CHARGING ANY FEES FOR APPEARING IN THESE CASES A DETAILED LIS T OF THE BENEFICIARIES OF ACCOMMODATION ENTRIES HAS BEEN PREPARED BY THE CONCERNED ADIT (IN V . ) FOR THE ASSESSMENT YEARS 2004 - 05 , 2005 - 06 , 200 7 - 08 , 2008 - 09 AND 2009 - 10. THIS LIST WAS FORWARDED B Y THE ADDL . DIT (INV . ) , NEW DELHI UNIT IV ALONGWITH THE LETTER NO.7 DATED 06 - 04 - 2009 . ON PERUSAL OF THIS LIST IT IS SEEN THAT A COMPAN Y IN THE NAME AND STYLE OF JMD ASTROLOGICAL CONSULTANCY SER V ICE (P) LTD . HAS RECEIVED AN ACCOMMODATION ENTR Y OF RS . 21 , 00 , 000/ - FROM THREE BOGUS COMPANIES RUN BY SH . TARUN GO Y AL . THE PAN OF THE 11 COMPAN Y IS AABCJ4419N AND THE DETAILS OF THE REGISTERED OFFICE OF THE COMPAN Y WAS OBTAINED FROM THE WEBSITE OF REGISTRAR OF COMPAN Y AND FOLLOWING DET A ILS WERE OBTAINED : 1 . DATE OF INCORPORATION IS 0 7 - 0 7 - 2004 2 . THE REGISTER E D OFFICE A DDRE S S IS H . NO , 1456 SECTOR - A , PANCHKULA , ON PERUSAL OF RECORDS OF THIS OFFICE , IT IS SEEN THAT THE ASSESSEE HAS NOT FILED THEIR RETURN S OF INCOME FOR AN Y OF THE ASSESSMENT Y EARS SINCE THE DATE OF INCORPORATION . THEREFORE , IT IS E V IDENT THAT THE ASSESSEE IS NO N - FILER AND A S SUCH THE INCOME HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF EXPLANATION (II) (A) OF SECTION 14 7 OF THE INCOME TAX ACT . MOREO V ER , IN THE LIGHT OF ABO V E MENTIONED F A CTS , IT IS CLEAR THAT THE ASSESSEE HAS TAKEN ACCOMMODATION ENTRIE S OF RS .. 21 . 00 LAC S IN THE ASSESSMENT Y EAR 2008 - 09 . IN THE LIGHT OF THE ABOVE . RECORDED REASONS . I HAVE REA S ON TO BELIE V E THAT INCOME OF MORE THAN RS . 21 . 00 LACS HAS ESCAPED ASSESSMENT FO R TH E A . Y . 2008 - 09 IN THE CASE OF THE ASSESSEE . ' 11 . THE LD . DR RELIED UPON COP Y OF THE LETTER OF TH E ADDL . DIT (IN V . ) NEW DELHI DATED 6/8 APRIL , 2009 ADDRESSED TO CIT - I P A NCHKULA HAR Y ANA INTIMATING THAT S EARCH U/S 132 WAS CONDUCTED IN THE CASE OF SHRI TARUN GOEL , CHARTERED ACCOUNTANT ON 15 . 9 . 2008 . HE WAS E X AMINED B Y TH E INVESTIGATION PARTY ON THE SAME DA Y AND HI S STATEMENT W AS RE C ORDED , COP Y OF WHICH IS ALSO PLACED ON RECORD B Y THE LD . DR IN WHICH HE HA S AC C EPTED THAT HE HAS PROVIDED A CCOMMODATION ENTRIES TO VARIOUS COMPANIES B Y C REATING NUMBER OF PRI V ATE L I M I TED C O MP A NIE S A ND FIRM S . ALL HI S EMPLO YE E S W ERE I N V OLVED IN THE SAME TO PROVIDE BOGU S A CCOMMODATI O N ENTRIE S . THE L I ST OF BENEFICIARIES C O MPANIES W ERE A TTACHED WITH THI S LETTE R AND REQUE S T WAS MAD E TO CIT - I P A NCHKU LA TO TR A NSMIT THE S AME INFORMATION TO THE RESPECTI VE ASS E SS I NG OFFIC ER OF H IS CHARG E SO THAT F URTHE R I N V IGILAT I ON MA Y B E CA R R I E D OUT B Y THEM AND NECES S AR Y ACTION MA Y B E INITIATED AGAIN S T THE S E BEN E FI C I A R I E S . IN 12 TH E LIST / ANN EX U RE OF TH IS LETTER FO R ASSESSMENT Y EAR 2008 - 09 , N A M E OF THE ASSESSEE H AS BEEN MENTIONED . COP Y OF THE STATEMENT OF SHRI TA R UN GOEL IS PLACED ON R EC ORD . H OWEV E R , IN H IS ST A TEMENT THERE IS NO MENTION OF NAME OF THE ASSESSEE COMPAN Y TO WHOM HE HA S ALL E GEDL Y PRO V IDED A N Y BOGUS ACCOMMODATION ENTR Y . HOW THE ADDITIONAL DIT (INV) , NEW DELHI PREPARED THE LIST OF BENEFI C IARIES NAMING THE ASSESSEE THEREIN IS NOT ESTABLISHED . NO BASIS IS DISCUSSED AS TO HOW THE LIST / ANNEXURE TO THE LETTER OF ADIT (INV.) WAS PREPARED . IT IS VIRTUALL Y A DIRECTION ISSUED IN THE LETTER OF ADDL . DIT (INV . ) NEW DELHI TO THE ASSESSING OFFICER TO MAKE FURTHER INVESTIGATIONS SO AS TO INITIATE ACTION AGAINST THE BENEFICIARIES . THE ASSESSING OFFICER MEREL Y COPIED LETTER DATED 6/8 APRIL , 2009 IN THE REASONS RECORDED U/S 148 OF THE LT . ACT AND ON MERE PERUSAL OF LIST OF BENEFICIARIES , RECORDED THE REASONS FOR REOPENING OF THE ASSESSMENT U/S 148 OF THE ACT AGAINST THE ASSESSEE WITHOUT CONDUCTING ANY INQUIR Y OR RECORDING OF SATISFACTION . 12 . THE INFORMATION IN LIST OF BENEFICIAR Y DID NOT INDICATE ESCAPEMENT OF ANY INCOME . THE ASSESSING OFFICER DID NOT EXAMINE AND CONDUCT AN Y ENQUIRY ON THIS INFORMATION PROVIDED BY ADIT (INV.) AND DID NOT VERIFY THE CORRECTNESS OF THE SAME BUT ACCEPTED THE INFORMATION IN MECHANICAL MANNER. THE ASSESSING OFFICER REPRODUCED THE SAME INFORMATI ON IN THE REASONS EVEN WITHOUT SATISFYING HIMSELF ABOUT THE CORRECTNESS OR OTHERWISE OF THE REPORT AND ISSUED NOTICE XX] S 148 WAS FOR ESCAPEMENT OF INCOME . THERE IS NO REFERENCE TO AN Y DOCUMENT EXCEPT LIST OF BENEFICIARIES WHICH COULD NOT BE REGARDED AS A MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWED OR ESTABLISHED NEXUS OR LINK WHICH DISCLOSED ESCAPEMENT OF INCOME. THE LETTERS DATED 6/8TH APRIL , 2009 MAY NOT POINTER TO ESCAPEMENT OF AN Y INCOME PARTICULARL Y WHEN IN THE STATEMENT OF SHRI TARUN GOEL RECORDED B Y INVESTIGATING WING A ND LETTE R OF ADIT (INV . ) , NEW DELHI DID NOT NAME THE ASSESSEE FOR RECEIVING A NY BOGUS ACCOMMODATION ENTR Y . 13 . THE A S SESSING OFFICER FORMED HIS BELIEF THAT INCOME CHARGEABLE TO TA X HAD ESCAPED ASSESSMENT BECAUSE AS S ESSEE DID NOT FILE RETURN OF INCOME . IT IS , THEREFORE , APPARENT THAT FACT OF NON - FILLING OF RETURN OF INCOME FOR ASSESSMENT Y EAR UNDER APPEAL HAD PROMPTED THE ASSESSING OFFICER FOR 13 ARRIVIN G A T THE C ONCLUSION ABOUT ESCAPEMENT OF INCOME . HOWEVER , THE MATERIAL ON RECORD SH OWED THAT THE ASSESSEE FILED ORIGINAL RETURN OF INCOME FOR ASSESSMENT Y EAR UNDE R APPEAL IN OCTOBER 2008 , COPY OF ACKNOWLEDGEMENT IS FILED AT PAGE 1 OF THE PAPER BOOK AND IS ALSO NOT DISPUTED B Y THE LD . DR . THE ASSESSING OFFICER , THEREFORE , RECORDED INCORRECT , IRRELE V ANT AND NON - E X I S TING REASONS U/S 148 OF THE LT . A C T . THE REASONS , THEREFORE , ARE V ITIATED AND LIABLE TO BE QUASHED AS WOULD NOT SHOWED EVEN PRIMA F AC I E CASE THAT THE ASSESSING OFFICER HA S AN Y REA S ON TO BELIEVE THAT INCOME ESCAPED A S SESSM ENT . IT IS NOT DISCERNABLE AS TO WHETHER ASSESSING OFFICER HAS APPLIED HIS MIND TO THE REPORT OF THE DIT (IN V . ) NEW DELHI WHICH I S SOLE BASI S OF RECORDING OF REA S ON S FOR REOPENING OF THE ASS ES S MENT AND INDEPENDENTL Y A R RIVED AT A BELIEF THAT INCOME HA S ESCAPED ASSESSMENT , THEREFORE , A SS ES S IN G OFFICER DID NOT GET JURI S DICT I ON TO MAKE RE - ASSES S MENT . THERE IS , THUS , NO MATERIAL OR EV IDENCE THAT PRIMA FACIE SHOWED OR ESTABLISHED NE X US OR LINK WHICH DISCLOSED ESCAPEMENT OF I NCOME . T HE RE - ASSESSMENT PROCEED I N G WERE IN V ALID AND ARE LIABLE TO BE QUASHED . 13 . 1 T HE HON ' BLE DELHI HIGH COURT I N THE CASE OF CIT VS . ATUL JAN & SMT . VANIT I JAIN [2008] 299 ITR 3 83(D E LHI) HELD AS UNDER . - ' H E LD , DI S MISSING TH E APP EALS , THAT THE ONL Y INFORM A TION W AS TH A T TH E AS S E S SE E HAD TAKEN A BOGU S E NTR Y OF CA PIT AL GAI N S B Y P AY IN G CASH ALON G WITH S OM E PREMIUM FOR TAKING A CHEQUE FOR TH A T AMOUNT . THE INFOR M A TION DID NOT INDICATE THE SOURCE OF THE CAPITAL GAINS WHICH IN THIS CASE WERE SHA R ES. THERE WAS NO I NFORMATION WHICH SHARES HAD BEEN TRANSFERRED AND WITH W HOM THE TRANSACTION HAD TAKEN PLACE . THE ASSESSING OFFICER DID NOT VERIFY THE CORRECTNES S OF THE INFORMATION RECEIVED BY HIM BUT MERELY ACCEPTED THE TRUTH OF THE V AGUE INFORMATION IN A MECHANICAL MANNER . THE ASSESSING OFFI CER HAD NOT EVEN RECORDED HIS SATISFACTION ABOUT THE CORRECTNESS OR OTHERWISE OF THE INFORMATION FOR ISSUING A NOTICE UNDER SECTION 148. WHAT HAD BEEN RECORDED B Y THE ASSESSING OFFICER AS HIS ' REASONS TO BELIEVE' WAS NOTHING MORE THAN A 14 REPORT GIVEN BY HIM TO THE COMMISSIONER . THE UBMISSION OF THE REPORT WAS NOT THE SAME AS RECORDING OF REASONS TO BELIEVE FOR ISSUING A NOTICE . THE ASSESSING OFFICER HAD CLEARL Y SUBSTITUTED FORM FOR SUBSTANCE AND THEREFORE THE ACTION OF THE ASSESSING OFFICER WAS NOT SUSTAINABLE . ' 13 . 2 THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS . SMT . PARAMJIT KAUR [2009] 311 ITR 38(P&H) HELD AS UNDER: - 'HELD , THAT THE ASSESSING OFFICER HAD NOT EXAMINED THE INFORMATION RECEIVED FROM THE SURVE Y CIRCLE BEFORE RECORDIN G HIS OWN SATISFACTION OF ESCAPED INCOME AND INITIATING REASSESSMENT PROCEEDINGS . THE ASSESSING OFFICER HAD THUS ACTED ONLY ON THE BASIS OF SUSPICION AND IT COULD NOT BE SAID THAT IT WAS BASED ON BELIEF THAT THE INCOME CHARGEABLE TO TAX HAD ESCAPED INCOME . THE ASSESSING OFFICER HAD TO ACT ON THE BASIS OF ' REASONS TO BELIEVE ' AND NOT ON 'REASONS TO SUSPECT ' . THE TRIBUNAL RIGHTL Y CONCLUDED THAT THE ASSESSING OFFICER HAD FAILED TO INCORPORATE THE MATERIAL AND HIS SATISFACTION FOR REOPENING THE ASSESSMENT AND T HEREFORE THE ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT FOR REASSESSMENT PROCEEDINGS WAS NOT V ALID . ' 13.3 THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS . SFIL STOCK BROKING LIMITED [2010] 325 ITR 285 (DELHI) HELD AS UNDER : - 'HELD , DISMISSING THE APPEAL, THAT THE FIRST SENTENCE OF THE REASONS RECORDED BY THE ASSESSING OFFICER WAS MERE INFORMATION RECEIVED FROM THE DEPUTY DIRECTOR OF INCOME - TA X (IN V ESTIGATION) . THE SECOND SENTENCE WAS A DIRECTION GIVEN B Y THE SAME DEPUTY DIRECTOR OF INCOME - TA X (INVESTIGATION) TO ISSUE A NOTICE UNDER SECTION 148 AND THE THIRD SENTENCE AGAIN COMPRISED A DIRECTION GIVEN BY THE ADDITIONAL COMMISSIONER OF INCOME - TA X TO INITIATE PROCEEDINGS UNDER SECTION 148 IN RESPECT OF CASES PERTA I NING TO THE RELE V ANT WARD . THE ASSESSING OFFICER REFERRED TO THE INFORMATION AND THE TWO DIRECTIONS AS REASONS ON THE BASIS OF WHICH HE WAS PROCEEDING TO ISSUE NOTICE UNDER SECTION 148 . THESE COULD NOT BE THE REASONS FOR PROCEEDING UNDER SECTION 147/148 OF THE ACT . AS TH E 15 FIRST PART WAS ONL Y AN INFORMATION AND THE SECOND AND THE THIRD PARTS OF THE REASONS WERE MERE DIRECTIONS , IT WAS NOT AT ALL DISCERNIBLE AS TO WHETHER THE ASSESSING OFFICER HAD APPLIED HIS MIND TO THE INFORMATION AND INDEPENDENTL Y ARRIVED AT A BELIEF T HAT , ON THE BASIS OF THE MATERIAL WHICH HE HAD BEFORE HIM , I NCOME HAD ESCAPED ASSESSMENT . THERE WAS NO SUBSTANTIAL QUESTION OF LAW FOR CONSIDERATION . 13.4 THE HON'BLE DELHI HIGH CO UR T I N TH E CAS E OF SARTHAK SECURITIES CO . P . LTD . [2010] 329 ITR 110 ( DELHI) HELD AS UNDER : - ' HELD , ALLOWING THE PETITION , THAT THE FORMATION OF BELIEF WAS A CONDITION PRECEDENT AS REGARDS THE ESCAPEMENT OF THE TAX PERTAINING TO THE ASSESSMENT YEAR BY THE ASSESSING OFFICER . THE ASSESSING OFFICER WAS REQUIRED TO FORM AN OPINION BEFORE HE PROCEEDED TO ISSUE A NOTICE . THE VALIDITY OF REASONS, WHICH WERE SUPPOSED TO SUSTAIN THE FORMATION OF AN OPINION, WAS CHALLENGEABLE . THE REASONS TO BELIEVE WERE REQUIRED TO BE RECORDED BY THE ASSESSING OFFICER . ONCE THE INGREDIENTS OF SEC TION 147 WERE FULFILLED , THE ASSESSING OFFICER WAS COMPETENT IN LAW TO INITIATE THE PROCEEDINGS UNDER SECTION 147 . THE ASSESSING OFFICER WAS AWARE OF THE EXISTENCE OF THE FOUR COMPANIES WITH WHOM THE ASSESSEE HAD ENTERED INTO TRANSACTION . BOTH THE ORDERS SHOWED THAT THE ASSESSING OFFICER WAS MADE AWARE OF THE SITUATION BY THE INVESTIGATION WING AND THERE WAS NO MENTION THAT THESE COMPANIES WERE FICTITIOUS COMPANIES . NEITHER THE REASONS IN THE INITIAL NOTICE NOR THE COMMUNICATION PROVIDING REASONS REMOTELY INDICATED INDEPENDENT APPLICATION OF MIND . THOUGH CONCLUSIVE PROOF WAS NOT GERMANE AT THIS STAGE THE FORMATION OF BELIEF MUST BE ON THE BASE OR FOUNDATION OR PLATFORM OF PRUDENCE WHICH A REASONABLE PERSON WAS REQUIRED TO APPLY . FROM THE PERUSAL OF THE REASONS RECORDED AND THE ORDER OF REJECTION OF OBJECTIONS , THE NAMES OF THE COMPANIES WERE AVAILABLE WITH THE AUTHORITY AND THEIR EXISTENCE WAS NOT DISPUTED . THE ASSESSEE IN ITS OBJECTIONS HAD STATED THAT THE COMPANIES HAD BANK ACCOUNTS AND PAYMENTS WERE M ADE TO THE ASSESSEE THROUGH BANKING CHANNEL . THE IDENTITY OF THE COMPANIES WAS NOT DISPUTED . UNDER THESE CIRCUMSTANCES, 16 THE INITIATION OF PROCEEDINGS UNDER SECTION 147 AND ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT WERE TO BE QUASHED . ' 13 . 5 THE HON ' B LE DELHI HIGH COURT IN THE CASE OF SIGNATURE HOTELS P . LTD . VS . ITO AND ANOTHER [2011] 338 ITR 51(DELHI) HELD AS UNDER : - ' HELD , ALLOWING THE PETITION , THAT THE REASSESSMENT PROCEEDINGS WERE INITIATED ON THE BASIS OF INFORMATION RECEIVED FROM THE DIRECTOR OF INCOME - TAX (INVESTIGATION) THAT THE PETITIONER HAD INTRODUCED MONE Y AMOUNTING TO RS . 5 LAKHS DURING FINANCIAL Y EAR 2002 - 03 AS STATED IN THE ANNEXURE . ACCORDING TO THE INFORMATION , THE AMOUNT RE C EIVED FROM A COMPAN Y, S , WAS NOTHING BUT AN ACCOMMODATION ENTRY AND THEASSESSEE WAS THE BENEFICIAR Y . THE REASONS DID NOT SATISF Y THE REQU I REMENTS OF SECTION 14 7 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 P RIMA 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 APPL Y HI S OWN MIND TO THE INFORMATION AND EXAMINE THE BASI S AND MATERIAL OF THE INFORMATION . THERE WAS NO DISPUTE THAT THE COMPANY , S, HAD A PAID - UP CAPITAL OF RS . 90 L AKH S AND WAS INCORPORATED ON J ANUAR Y 4 , 1989 , AND WAS ALSO ALLOTTED A PERMANENT A C COUNT NUMBER IN SEPTEMBER , 2 001 . THUS , IT COULD NOT BE HELD TO BE A FICTITIOUS PERSON . THE REASSESSMENT PROCEEDING S WERE NOT VALID AND WERE LIABLE TO BE QUASHED .' 13.6 THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF SAGAR ENTERPRISES V ASSISTANT COMMISSIONER IN [2002] 257 ITR 335 (GUJARAT) HELD AS UNDER : - 'HELD, THAT IT WAS APPARENT THAT THE FACT OF NON - FILING OF THE RETURN FOR THE ASSESSMENT YEAR 1991 - 92 HAD WEIGHED WITH THE RESPONDENT FOR ARRI V ING AT THE SATISFACTION ABOUT THE FAILURE ON THE PART OF THE ASSESSEE AND ESCAPEMENT OF ASSESSMENT OF INCOME . HOWEVER , THE MATERIAL ON RECORD SHOWED THAT THE RETURN HAD BEEN FILED . IN SUCH CIRCUMSTANCES , IT COULD NOT BE SAID WITH CERTAINTY AS TO WHICH FACT WOULD HAVE 17 WEIGHED WITH THE OFFICER CONCERNED AND ONCE IT WAS SHOWN THAT AN IRRELEVANT FACT HAD BEEN TAKEN I NTO CONSIDERATION , TO WHAT EXTENT THE DECISION WAS VITIATED WOULD BE DIFFICULT TO SAY . MOREOVER THE INCOME - TAX OFFICER HAD STATED THAT THE PAYMENT WHICH WAS STATED TO BE UNDISCLOSED INCOME RELEVANT FOR THE ASSESSMENT YEAR 1991 - 92 COULD HAVE BEEN MADE DURING THE FINANCIAL YEAR 1990 - 91 RELEVANT TO THE ASSESSMENT YEAR 1991 - 92 AND HENCE , 'TO COVER UP THAT PROBABILITY , PROTECTIVE ADDITION WAS MADE IN THE ASSESSMENT YEAR 1992 - 93 ' . THE FIRST APPELLATE AUTHORITY DECIDED THE APPEAL FOR THE ASS ESSMENT YEAR 1992 - 93 ON JANUARY , 1996, AND THE REASONS HAD BEEN RECORDED THEREAFTER ON AUGUST 18 , 1997 . THE NOTICE OF REASSESSMENT WAS NOT VALID AND WAS LIABLE TO BE QUASHED . ' 13 . 7 THE HON'BLE PUNJAB & HAR Y ANA HIGH COURT IN THE CASE OF CIT VS . ATLAS CYCLES LTD. [1989] 180 ITR 319 (P&H) HAS HELD AS UNDER : - ' HELD , (I) THAT THE TRIBUNAL WA S RIGHT IN CANCELLING 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 . ' 14 . CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE LIGHT OF THE ABOVE DISCUSSION AND THE CASE LAWS REFERRED TO ABOVE , WE ARE OF THE V IEW THAT THE REOPENING OF THE AS SESSMENT IS NOT VALID IN THIS CASE . WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND QUASH THE PROCEEDINGS U/S. 148 OF THE LT . ACT . 15 . IN THE RESULT ALL THE ADDITIONS MADE IN THE RE - ASSESSMENT ORDER ARE DELETED . SINCE WE HAVE QUASHED THE REOPENING OF THE ASSESSEE U/S 148 OF THE LT . ACT , WE DO NOT PROPOSE TO DECIDE THE ISSUE ON THE MERIT BECAUSE IT IS LEFT FOR ACADEMIC DISCUSSION ONLY . 16 . IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . 18 7. THUS U NDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE DECISION OF ITAT IN M/S JONEJA BRIGHT STEEL P. LTD [SUPRA] , WE FIND THAT THE AO DOES NOT ACQUIRE JURISDICTION TO INITIATE PROCEEDINGS U/S 147/148 OF THE ACT AND ACCORDINGLY, THE ASSESSMENT SO MADE IS DIRECTED TO BE QUASHED. THUS THE LEGAL GROUND RAISED BY THE ASSESSEE IS ALLOWED. 8 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 0 .1 1 .2017. S D / - S D / - [ SUDHANSHU SRIVASTAV A] [B.P. JAIN] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 0 T H NOVEM BER , 201 7 VL/ COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, 19 ITAT, NEW DELHI