Smt. Amandeep Kaur, Chandigarh V. ITO, Chandigarh

ITA 796/CHANDI/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3122 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 10-11-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 11-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Loose papers; Share purchase agreement; Tangible material; Accommodation entries; Reason to believe; Documents seized; Reassessment proceedings; Set aside; Capital Gains
• Section: 143(3); 48; 13; 22; 153C; 148; 6; 132

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCHES A, CHANDIGARH .. , !' #$ %'& '(, ) (* BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI SATBE ER SINGH GODARA, JUDICIAL MEMBER ./ ITA NO. 795/CHD/2017 / ASSESSMENT YEAR : 2010-11 SHRI AMARJEET SINGH RANDHAWA, #82, SECTOR 27-A, CHANDIGARH. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-5(1), CHANDIGARH. ./ PAN NO: AAPPR 6056 G / APPELLANT / RESPONDENT ./ ITA NO. 796/CHD/2017 / ASSESSMENT YEAR : 2010-11 SMT. AMANDEEP KAUR, #82, SECTOR 27-A, CHANDIGARH. INCOME TAX OFFICER, WARD-5(1), CHANDIGARH. ./ PAN NO: ABCPK 2432 R / APPELLANT / RESPONDENT / ASSESSEE BY: SHRI TEJ MOHAN SINGH (ADV) ! / REVENUE BY: SMT. MEENAKSHI VOHRA (ADDL.CIT) ' # $ / DATE OF HEARING : 10/11/2020 %&'( $ / DATE OF PRONOUNCEMENT: 11/11/2020 (+ / ORDER PER: SATBEER SINGH GODARA, J.M. : THESE TWO ASSESSEES APPEALS FOR A.Y. 2010-11 ARISE AGAINST THE CIT(A)-2, CHANDIGARH SEPARATE ORDERS; DATED 01/ 03/2017 AND 07/03/2017 PASSED IN APPEAL NO. 193/2/15-16 & 192/2 /15-16 RESPECTIVELY INTER ALIA UPHOLDING THE ASSESSING OFF ICERS ACTION INITIATING REOPENING PROCEEDINGS CULMINATING IN IDE NTICAL LONG TERM ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 2 CAPITAL GAIN ADDITION(S) OF RS. 81,53,086/- EACH IN VOLVING PROCEEDINGS U/S 143(3) R.W.S. 147 OF THE ACT. HEARD BOTH THE PARTIES. CASE FILE RECORDS PERUSED. 2. BOTH THE LEARNED REPRESENTATIVES ARE AD IDEM AT THE OUTSET THAT THESE TWO ASSESSEES APPEALS RAISED IDENTICAL SUBSTANTIVE GROUNDS ON LAW AS WELL AS ON FACTS. WITH THIS, WE T AKE ITA 795/CHD/2017 AS THE LEAD CASE. THIS LEAD APPEAL RAI SES THE FOLLOWING SUBSTANTIVE GROUNDS OF APPEAL: 1. THAT THE LD. ASSESSING OFFICER HAS ERRED IN LAW IN FRAMING THE ASSESSMENT UNDER SECTION 148 OF THE ACT WHICH IN FA CT WAS TO BE FRAMED UNDER SECTION 153C OF THE ACT AS THE DOCUMEN TS FOUND AT THE PREMISES OF THE PERSON WHO WAS SEARCHED HAS BEE N THE BASE OF RE-OPENING OF THE CASE OF THE ASSESSEE AND THE ASSE SSMENT CAN BE FRAMED ONLY UNDER SECTION 153C BEING A CODE IN ITSE LF AND AS SUCH THE ASSESSMENT FRAMED UNDER A WRONG STATUTORY PROVI SION IS VOID AB INITIO AND THUS ILLEGAL. 2. WITHOUT PREJUDICE TO THE ABOVE, THE LD. COMMIS SIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN UPHOLDING THE ACT ION OF THE ASSESSING OFFICER RESORTING TO THE PROVISIONS OF SE CTION 148 IN AS MUCH AS THERE HAS BEEN NO ESCAPEMENT OF INCOME WARR ANTING ISSUANCE OF NOTICE UNDER SECTION 148 THEREBY RE-OPE NING THE ALREADY COMPLETED ASSESSMENT AND AS SUCH THE ASSESS MENT FRAMED IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 3. THAT THE RE-OPENING IS BASED ON SOME BORROWED INFORMATION WITHOUT THERE BEING A REASON TO BELIEVE WHICH IS MA NDATORY AND AS SUCH THE ASSESSMENT FRAMED IS ILLEGAL, ARBITRARY AN D UNJUSTIFIED. 4. WITHOUT PREJUDICE TO THE ABOVE LEGAL GROUNDS, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ER RED IN UPHOLDING TO MAKING AN ADDITION OF RS. 81,53,086/- ON ACCOUNT OF ALLEGED UNDERSTATEMENT OF CAPITAL GAINS WHICH IS AR BITRARY AND UNJUSTIFIED. 5. THAT THE ENTIRE ADDITION IS BASED ON SOME DUMB PHOTOCOPIED ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 3 DOCUMENTS AND SUSPICION AND SURMISES ONLY WHICH IS NOT PERMISSIBLE UNDER THE ACT AND AS SUCH THE ADDITION MADE IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 6. THAT THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) HAS FURTHER ERRED IN UPHOLDING THE CHARGING OF INTEREST UNDER S ECTION 234 OF THE ACT WHICH IS NOT CHARGEABLE IN THE FACTS OF THE CASE. 7. THAT THE ORDER OF THE LD. COMMISSIONER OF INC OME TAX (APPEALS) IS ERRONEOUS, ARBITRARY, OPPOSED TO LAW AND FACTS OF T HE CASE AND IS, THUS, UNTENABLE. 3. WE MAKE IT CLEAR THAT ALTHOUGH THE ASSESSEES HAV E RAISED ADDITIONAL GROUND AS WELL AS IN BOTH THESE APPEALS CHALLENGING CORRECTNESS OF INITIATION OF 148 PROCEEDINGS FOR TH E REASON THAT SINCE THEY HAPPEN TO BE THE PERSONS OTHER THAN THE SEARCHED ASSESSEES, ONLY SECTION 153C PROCEEDINGS COULD HAV E BEEN TAKEN RECOURSE TO IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE(S). 4. BOTH THE LEARNED REPRESENTATIVES NEXT INVITED OU R ATTENTION TO THE CIT(A)S DETAILED DISCUSSION UPHOLDING THE A SSESSING OFFICERS ACTION ON THE ABOVE STATED TWIN ISSUES AS UNDER: 5. GROUNDS OF APPEAL NO. 1 & 2 ARE AGAINST RE-OPE NING OF ASSESSMENT BY ISSUE OF NOTICE U/S 148 AS THERE HAS BEEN NO ESCAPEMENT O F INCOME AND RE- OPENING ON THE BASIS OF BORROWED INFORMATION AND WI THOUT BEING A REASON TO BELIEVE. 5.1 BRIEF FACTS ON THE ISSUE ARE THAT ASSESSING OF FICER RECEIVED INFORMATION FROM CENTRAL CIRCLE, MEERUT THAT AS A RESULT OF SEARCH U /S 132 OF THE ACT AT THE BUSINESS PREMISES OF M/S GODWIN GROUP OF COMPANIES ON 09.09.2010, CERTAIN DOCUMENTS WERE SEIZED WHICH SHOW THAT THE A PPELLANT ALONGWITH FIVE OTHER CO-OWNERS HAVE RECEIVED AN AMOUNT OF RS. 7,74,00,000/- FROM THE REPRESENTATIVE OF THE PURCHASER I.E. M/S GREAT VALU E INFRA PROMOTERS PVT. LTD, AS ADVANCE PAYMENT ON ACCOUNT OF SALE OF RESID ENTIAL HOUSE NO. 11, PLOT ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 4 NO. 83, SECTOR-9A, CHANDIGARH. HOWEVER, THE SELLERS ALONGWITH THE ASSESSEE HAS SHOWN THE SALE CONSIDERATION FOR THE SAID PROPE RTY AT RS. 5,50,00,000/- IN THE REGISTERED SALE DEED DATED 05.06.2009. ASSES SING OFFICER AFTER MAKING INDEPENDENT ENQUIRIES RECORDED REASONS THAT UNACCOU NTED RECEIPTS WERE INVOLVED IN THE TRANSACTION AND THE ASSESSEE AS HIS SHARE OF SALE CONSIDERATION HAS RECEIVED 1,87,50,000/- OUT OF TOT AL SALE CONSIDERATION FOR THE SAID PROPERTY OF RS. 11,25,00,000/-. HIS SHARE BEING 1/6 TH IN THE SAID PROPERTY AND THEREFORE, CAPITAL GAINS AMOUNTING TO RS. 95,83,334/- HAVE ESCAPED ASSESSMENT. ASSESSING OFFICER INITIATED RE- ASSESSMENT PROCEEDING BY ISSUE OF NOTICE U/S 148 DATED 15.01.2015. 5.2 APPELLANT REITERATED HIS SUBMISSIONS MADE BEFO RE ASSESSING OFFICER. IT WAS 4LBMITTED THAT ASSESSING OFFICER REJECTED THE OBJE CTIONS OF THE ASSESSEE WHICH IS NOT WARRANTED FOR THE REASONS AS UNDER:- I) WITH REGARD TO THE ASSESSING OFFICERS OPINIO N THAT THERE WAS FAILURE ON THE PART OF ASSESSEE TO DISCLOSE FULLY AND TRULY AL L THE MATERIAL FACTS NECESSARY FOR FRAMING THE ASSESSMENT, IT WAS SUBMIT TED THAT ASSESSEE HAD FILED HIS RETURN OF INCOME ON 26.05.2011 DECLAR ING CAPITAL GAINS ON THE SALE OF IMPUGNED PROPERTY AND HENCE DISCLOSED F ULLY AND TRULY ALL THE MATERIAL FACTS. II) IT WAS SUBMITTED THAT THE SO-CALLED INCRIMINATI NG DOCUMENTS FOUND WERE FROM THE PREMISES OF THE THIRD PARTY AND ARE P HOTOCOPIES AND NOT ORIGINAL DOCUMENTS. THE DOCUMENTS WERE FOUND FROM T HE SEARCH CONDUCTED ON THE GODWIN GROUP OF CASES IN MEERUT IN WHICH ASSESSEE HAS NO CONNECTION. III) THE ALLEGED RECEIPT-CUM-AGREEMENT TO SELL DATE D 28.03.2009 PERTAINS TO THE DATE WHEN THE PURCHASER COMPANY WAS NOT EVEN IN EXISTENCE AS THE PURCHASER COMPANY M/S GREAT VALUE INFRA PROMOTE RS PVT. LTD. WAS INCORPORATED ONLY ON 08,04.2009. THE AGREEMENT TO S ELL IS JUST A PHOTOCOPY AND THE SIGNATURE ON IT ARE DENIED. IV) THE RELIANCE OF THE ASSESSING OFFICER ON THE DE CISION OF HON'BLE KERALA HIGH COURT, IN THE CASE OF NATIONAL TAYER AND RUBBE R COMPANY LTD. IS ON DIFFERENT ISSUE. APPELLANT PLACED RELIANCE ON TH E DECISION OF HON'BLE ITAT, CHANDIGARH BENCH IN THE CASE OF M/S JMD ASTRO LOGICAL CONSULTANCY SERVICES PVT. LTD. THAT RE-OPENING IS N OT VALID ON THE BASIS OF BORROWED INFORMATION. ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 5 5.3 SUBMISSIONS OF THE APPELLANT HAVE BEEN CONSIDER ED. THE MATERIAL FACT AS RECORDED BY THAT ASSESSING OFFICER IN THE ASSESSMEN T ORDER IS THAT THE SEARCH WAS CONDUCTED AT THE BUSINESS PREMISES OF GODWIN GR OUP AND THE DIRECTORS IN GODWIN GROUP OF COMPANIES, SH. JITENDER SINGH BA JWA AND SH. BHUPENDER SINGH BAJWA ARE ALSO DIRECTORS IN THE PURCHASER COM PANY I.E. M/S GREAT VALUE INFRA PROMOTERS PVT. LTD, AND THEREFORE, IT CANNOT BE SAID THAT THE SOURCE OF INFORMATION, WHICH LED TO REASON TO BELIE VE FOR ESCAPEMENT OF INCOME BY THE ASSESSING OFFICER IS THIRD PARTY. THE INFORMATION THAT THE ASSESSEE ALONGWITH OTHER CO-OWNERS HAD SOLD THE IMP UGNED PROPERTY FOR A HIGHER SALE CONSIDERATION THAN WHAT IS SHOWN IN THE REGISTERED SALE DEED CAME FROM THE RELEVANT SOURCE. AFTER INDEPENDENTLY VERIFYING INFORMATION, ASSESSING OFFICER RECORDED HIS REASON TO BELIEVE TH AT INCOME ON ACCOUNT OF CAPITAL GAINS HAS ESCAPED ASSESSMENT AND ISSUED NOT ICE U/S 148 OF THE ACT. THE RELIANCE PLACED BY THE APPELLANT IN THE CASE OF M/S JMD ASTROLOGICAL CONSULTANCY DECIDED BY HON'BLE ITAT, CHANDIGARH BEN CH IS NOT RELEVANT TO THE ISSUE AS IN THIS CASE ASSESSING OFFICER NOTED T HAT ASSESSEE HAS NOT FILED HIS RETURN OF INCOME AND THAT WAS ONE OF THE REASON S FOR RESORTING TO ISSUE OF NOTICE U/S 148 WHICH WAS FOUND NOT CORRECT. ALSO IN HIS STATEMENT SH. TARUN GOYAL, NEVER MENTIONED THAT THE ASSESSEE COMP ANY IN THAT CASE IS ONE OF THE BENEFICIARIES OF THE ACCOMMODATION ENTRI ES. IN THE INSTANT CASE SPECIFIC AND RELEVANT DOCUMENTS PERTAINING TO THE S AID PROPERTY SOLD BY THE ASSESSEE WITH 5 OTHERS WERE FOUND AND ON THAT BASIS AND AFTER INDEPENDENT ENQUIRIES, A.O FORMULATED HIS REASON TO BELIEVE THA T INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. 5.3.1 BASED ON THE INFORMATION IN HIS POSSESSION, ASSESSING OFFICER FORMED HIS REASON TO BELIEVE THAT SOME INCOME HAD ESCAPED ASSE SSMENT AND SO ISSUED NOTICE U/S 148 OF THE ACT. IT HAS BEEN HELD BY HON' BLE SUPREME COURT IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS PVT. LTD. (291 ITR 500) THAT AT THE STAGE OF ISSUE OF NOTICE U/S 148 THE ONLY QUEST ION TO BE SEEN IS WHETHER THERE WAS RELEVANT MATERIAL, ON THE BASIS OF WHICH A REASONABLE PERSON COULD HAVE FORMED THE REQUISITE BELIEF. WHETHER MAT ERIAL WOULD CONCLUSIVELY PROVE ESCAPEMENT OF INCOME IS NOT THE CONCERN AT TH E STAGE OF ISSUE OF ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 6 NOTICE U/S 148. IT IS SO BECAUSE THE FORMATION OF B ELIEF IS WITHIN THE REALM OF THE SUBJECTIVE SATISFACTION OF THE ASSESSING OFFICE R. IN VIEW OF THE JUDGEMENT OF HON'BLE SUPREME COURT (SUPRA) AND BY RESPECTFULL Y FOLLOWING THE SAME, THE ACTION OF THE ASSESSING OFFICER OF REOPENING TH E ASSESSMENT BY ISSUE OF NOTICE U/S 148 IS UPHELD. GROUNDS OF APPEAL NO 1 & 2 ARE DISMISSED. 6. GROUNDS OF APPEAL NO. 3 & 4 ARE AGAINST ADDITION OF RS. 81 ,53,0867- ON ACCOUNT OF ALLEGED UNDERSTATEMENT OF CAPITAL GAINS ON THE BASIS OF SOME DUMB DOCUMENTS. 6.1 BRIEF FACTS OF THE CASE ARE THAT ASSESSEE, SH. AMARJEET SINGH RANDHAWA ALONG WITH OTHER FIVE CO-OWNERS HAD SOLD A RESIDENT IAL HOUSE NO 11, SECTOR 9A, CHANDIGARH TO M/S GREAT VALUE INFRA PROMOTERS P VT. LTD., MEERUT THROUGH A REGISTERED SALE DEED DATED 05.06.2009 . A S PER THE SALE DEED THE TOTAL SALE CONSIDERATION FOR THE SAID PROPERTY WAS RS. 5,50,00,000/-. THE ASSESSEE WAS OWNER OF 1/6 TH SHARE IN THIS PROPERTY. ASSESSING OFFICER RECEIVED INFORMATION FROM CENTRAL CIRCLE, MEERUT AN D THE INFORMATION WAS BASED ON THE DOCUMENTS SEIZED FROM THE PREMISES OF GODWIN GROUP OF COMPANIES. THE INFORMATION WAS IN THE SHAPE OF AGRE EMENT TO SELL DATED 28.03.2009 ENTERED INTO BY THE ASSESSEE ALONG WITH FIVE CO-OWNERS THAT THE ABOVE PROPERTY WAS TO BE SOLD FOR A CONSIDERATION O F RS. 11,25,00,000/-. ASSESSING OFFICER NOTED THAT THE RECEIPTS CUM AGREE MENT TO SELL IS SIGNED BY THE ASSESSEE WHICH SHOWS THAT THE PAYMENT IN CASH H AS BEEN RECEIVED OVER AND ABOVE THE AMOUNT MENTIONED IN THE SALE DEED. TH E OTHER CORROBORATING DOCUMENTS IN THE FORM OF MINUTES OF THE MEETING OF BOARD OF DIRECTORS OF THE PURCHASER COMPANY WERE SEIZED WHICH AUTHORIZED MR. PANKAJ GARG, CHIEF EXECUTIVE OF THE COMPANY TO ENTERED INTO AGRE EMENT TO SELL. COPIES OF 35 DEMAND DRAFTS OF RS. 9,00,0007- EACH WERE ALSO S EIZED DURING THE SEARCH WHICH PROVES THAT THESE DEMAND DRAFTS PERTAINS TO T HE SAID TRANSACTION AND WERE CREDITED INTO THE BANK ACCOUNT OF THE SELLERS. SMT. AMANDEEP RANDHAWA, WIFE OF THE ASSESSEE MADE GENERAL POWER O F ATTORNEY IN THE NAME OF SH. VIJAY SAHU TO CARRY OUT THE DEAL WITH R EGARD TO THIS PROPERTY AND THE AFFIDAVIT OF SH. VIJAY SAHU CONFIRMING GENE RAL POWER OF ATTORNEY ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 7 WAS ALSO SEIZED. SH. VIJAY SAHU ADMITTED DURING ASS ESSMENT PROCEEDING THAT THE DOCUMENTS SEIZED FROM THE PREMISES OF M/S GODWI N GROUP RELATING TO HIM ARE TRUE COPIES. THEREFORE ON THE BASIS OF THES E DOCUMENTS ASSESSING OFFICER HELD THAT THE IMPUGNED PROPERTY WAS SOLD FO R RS. 11,25,00,000/- AS AGAINST RS. 5,50,00,000/- AS CLAIMED BY THE ASSESSE E IN HIS RETURN OF INCOME FOR CALCULATING LONG TERM CAPITAL GAINS. ASSESSING OFFICER COMPUTED LONG TERM CAPITAL GAINS OF THE SHARE OF THE ASSESSEE ON THE SALE CONSIDERATION ON RS 11,25,00,000/-AND MADE ADDITION OF RS 81,53,086/ - ON ACCOUNT OF LONG TERM CAPITAL GAINS. 6,2 APPELLANT MADE SUBMISSIONS AS UNDER:- I. IT WAS SUBMITTED THAT ASSESSING OFFICER HAS BASE D THE ADDITION ON THE PHOTOSTAT COPIES OF SUM DOCUMENTS FOUND FROM THE PR EMISES OF THE THIRD PERSON WHICH WERE ONLY SHOWN DURING THE COURS E OF ASSESSMENT PROCEEDING AND COPIES OF THE SAME WERE NOT GIVEN TO THE ASSESSEE. THE CONTENTS IN THE ALLEGED RECEIPTS AND AGREEMENT TO S ELL ARE DENIED AS IT DOES NOT APPEAR TO HAVE BEEN SIGNED BY THE APPELLAN T. THE MINUTES OF THE MEETINGS DOES NOT MENTIONED THAT THE PROPERTY I S BEING PURCHASED AT THE HIGHER AMOUNT THEN THAT MENTIONED IN THE SAL E DEED. THE GPA IN THE NAME OF SH. VIJAY SAHU IS NOT BEING DENIED WHIC H IN ANY WAY DOES NOT SUPPORT THE CONTENTION OF THE AO. ADDITIONS CAN NOT BE MADE ON THE BASIS OF PHOTOCOPIES. APPELLANT PLACED RELIANCE ON THE DECISION OF APEX COURT IN THE CASE OF MOOSA S MADHA AND AZAM S MADHA (SUPRA) WHICH HAS BEEN FOLLOWED BY HON'BLE ITAT, CHANDIGARH BENCH IN THE CASE OF DCIT VS. NAND LAL BABU RAM ITA 780/CHD/2008. II. ASSESSING OFFICER HAS RELIED ON THE DECISION O F HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SHASHI KIRAN (SUPRA ) WHI CH IS NOT APPLICABLE TO THE FACTS OF THE CASE AS THE SELLER HAD DECLARED TH E SALE CONSIDERATION TO BE HIGHER IN HIS RETURN. APPELLANT PLACED RELIANCE ON THE DECISION IN THE CASE OF KP VARGHESE VS. ITO OF THE APEX COURT REPOR TED IN 131 ITR 597 AND THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CA SE OF PARAMJIT SINGH REPORTED IN 323 ITR 588 THAT THE AMOUNT SHOWN IN TH E REGISTERED SALE IS TAKEN TO BE CORRECT. 6.3 SUBMISSION OF THE APPELLANT AND THE ARGUMENTS OF ASSESSING OFFICER HAVE BEEN CAREFULLY CONSIDERED. THE MATERIAL FACT IN THI S CASE IS THAT A RECEIPT CUM AGREEMENT TO SELL SIGNED BY THE ASSESSEE WHICH SHOWS THE PAYMENT IN ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 8 CASH HAS BEEN MADE BY THE PURCHASERS FOR THE PROPER TY SOLD BY THE ASSESSEE WITH OTHER CO-OWNERS WAS SEIZED FROM THE PREMISES O F A COMPANY I.E. GODWIN GROUP IN WHICH THE DIRECTORS SH. JITENDER SI NGH BAJWA AND BHUPENDER SINGH BAJWA ARE COMMON DIRECTORS IN THE P URCHASER COMPANY I.E. M/S GREAT VALUE INFRAPROMOTERS PVT. LTD. BESID ES THIS DOCUMENT, A NUMBER OF OTHER DOCUMENTS WERE ALSO SEIZED WHICH SU GGEST THE CHAIN OF EVENTS IN THE TRANSACTION OF THE IMPUGNED PROPERTY AND THE PERSONS INSTRUMENTAL IN THE SAID TRANSACTION. ONE SUCH PAPE R IS THE MINUTES OF MEETING OF THE BOARDS OF DIRECTORS OF THE PURCHASER COMPANY MENTIONING THE SAID IMMOVABLE PROPERTY AND AUTHORIZING SH. PAN KAJ GARG, CHIEF EXECUTIVE AND LEGAL OFFICER IN THE COMPANY TO ENTER INTO SALE AGREEMENT FOR THIS PROPERTY. COPIES OF DEMAND DRAFTS EACH OF RS. 9,00,000/- AND ONE DRAFT OF RS. 8,00,000/-ISSUED BY ALLAHABAD BANK MEERUT WE RE ALSO SEIZED AND THESE DEMAND DRAFTS WERE CREDITED INTO THE LOAN ACC OUNT OF THE ASSESSEE. ONE OF THE SELLERS SMT. AMANDEEP RANDHAWA, WIFE OF THE ASSESSEE WAS AWAY ABROAD AND THEREFORE SHE GAVE GENERAL POWER OF ATTORNEY TO SH. VIJAY SAHU OF CHANDIGARH FOR EARRING OUT THIS DEAL. THE D OCUMENTS SEIZED SHOWING THE DETAILS OF PAYMENT RELATING TO THE SALE OF THIS PROPERTY EXACTLY MATCHES WITH THE AMOUNT PAID THROUGH DEMAND DRAFT. ANOTHER IMPORTANT FACT IN THIS CASE IS THAT DURING ASSESSMENT PROCEEDINGS, ASSESSI NG OFFICER SUMMONED SH. VIJAY SAHU, GENERAL POWER ATTORNEY HOLDER OF ASSESS EE'S WIFE SMT. AMANDEEP RANDHAWA AND HIS PRESENCE WAS RECORDED IN THE ORDER SHEET BY THE AO ON 21,10.2015 WHEREIN HE HAS CATEGORICALLY A GREED THAT THE DOCUMENTS RELATED TO GENERAL POWER OF ATTORNEY ARE TRUE COPIES AND HE WAS INVOLVED IN GETTING CLEARANCE AND DOING OTHER FORMA LITIES RELATED TO SALE OF IMPUGNED PROPERTY ON BEHALF OF THE ASSESSEE. THEREF ORE, IT IS CLEAR THAT THE ABOVE DOCUMENTS SEIZED WHICH ARE PHOTOCOPIES BUT AR E GENUINE DOCUMENTS RELATED TO THE TRANSACTION OF THE SAID PROPERTY. TH E PHOTOCOPIES OF THESE DOCUMENTS HAVE BEEN CORROBORATED BY THE SURROUNDING CIRCUMSTANCES, OTHER RELATED DOCUMENTS LIKE DEMAND DRAFT ETC AND T HE ADMISSION OF SH VIJAY SAHU WHO WAS INSTRUMENTAL IN THE SALE OF THIS PROPERTY AND HENCE THESE DOCUMENTS ARE SELF EXPLANATORY AND NOT DUMB D OCUMENTS AS ARGUED BY THE APPELLANT. THEREFORE THE RELIANCE OF THE APP ELLANT ON THE DECISION OF ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 9 ITAT CHANDIGARH BENCH, IN THE CASE OF NAND LAL BABU RAM IS NOT RELEVANT AS IN THIS CASE THE ADDITION WERE MADE ON THE BASIS OF DOCUMENTS WHICH WERE NOT IN THE POSSESSION OF THE ASSESSING OFFICER. THE REFORE THE CASE OF HON'BLE SUPREME COURT IN THE CASE OF MOOSA S MADHA AND AAZA M S MADHA (SUPRA) IS DISTINGUISHABLE ON FACTS IN THE CASE OF THE ASSE SSEE. IN THE INSTANT CASE THE DOCUMENTS HAVE BEEN SEIZED FROM A RELEVANT SOURCE W HICH HAS BEEN CORROBORATED WITH THE SURROUNDING CIRCUMSTANCE AND BY SH. VIJAY SAHU WHO WAS POWER OF ATTORNEY HOLDER OF ONE OF THE SELLERS. THEREFORE AS PER THE RECEIPT CUM AGREEMENT TO SALE IT IS CLEAR THAT THE SELLERS HAVE RECEIVED SALE CONSIDERATION FOR THE PROPERTY AT RS. 11,25,00,000/ - AND ARE LIABLE FOR CAPITAL GAIN TAX ON THIS SALE CONSIDERATION. THER EFORE AO IS JUSTIFIED IN COMPUTING CAPITAL GAINS ON THE SALE CONSIDERA TION OF RS. 11,25,00,000/- AND ADDITION MADE OF RS. 81,53,086/- IN CASE OF APP ELLANT IS CONFIRMED. GROUND OF APPEAL NO 3 AND 4 ARE DISMISSED. 7. GROUND OF APPEAL NO. 5 IS AGAINST CHARGING OF IN TEREST U/S 234 OF THE ACT. CHARGING OF INTEREST IS MANDATORY IN NATURE AS HELD BY HON'BLE SUPREME COURT IN THE CASE OF ANJUM M. H. GHASWALA AND OTHER S (252 ITR 1). HON'BLE PUNJAB & HARYANA HIGH COURT HAS ALSO HELD IN THE CA SE OF UPPER INDIA STEEL MFG. AND ENGG. CO. LTD. (279 ITR 123) THAT CHARGING OF INTEREST IS MANDATORY IN NATURE. HENCE, THIS GROUND OF APPEAL IS DISMIS SED. 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL PLEADINGS AGAINST AND IN SUPPORT SECTION 148/147 PR OCEEDINGS. LEARNED AUTHORIZED REPRESENTATIVE FIRST OF ALL TOOK US TO ASSESSEES 2 ND AND 3 RD SUBSTANTIVE GROUNDS THAT BOTH THE LOWER AUTHORITIE S HAVE ERRED IN LAW AND ON FACTS IN TAKING RECOURSE T O SECTION 148 PROCEEDINGS ON THE BASIS OF BORROWED INFORMATION ON LY WITHOUT THERE BEING ANY REASON TO BELIEVE BASED ON TANGIBLE MATERIAL THAT THE TAX PAYERS INCOME LIABLE TO BE ASSESSED HAD ES CAPED ASSESSMENT. WE PROCEED IN THIS FACTUAL BACKDROP AND FIND THAT THE ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 10 ASSESSING OFFICERS REOPENING REASONS RECORDED IN T HE LEAD CASE READ AS UNDER: INFORMATION HAS BEEN RECEIVED IN THE CASE OF THE A SSESSEE I.E. SH. AMARJIT SINGH RANDHAWA, PAN- APPR6056G, FROM THE O/O ACIT, CENTRA L CIRCLE, MEERUT VIDE LETTER NO. F.NO.ACIT/CC/MRT/2012-13/08 DATED 31.03.2013 RE CEIVED IN THIS OFFICE ON 25.04.2013 FOR FURTHER NECESSARY ACTION. AS PER INF ORMATION DURING SEARCH & SEIZURE U/S 132 IN THE CASE OF M/S GODWIN GROUP CER TAIN DOCUMENTS RELATING TO SH. AMARJIT SINGH RANDHAWA HAVE BEEN FOUND. AS PER THE INFORMATION AND DOCUMENTS RECEIVED BY TH IS OFFICE FOLLOWING FACTS HAVE COME TO LIGHT:- I) THE ASSESSEE SH. AMARJIT SINGH RANDHAWA ALONGWITH O THER FIVE OTHER CO- OWNERS HAD SOLD PROPERTY I.E. RESIDENTIAL HOUSE NO. 11, BUILT ON PLOT NO. 83, SEC - 9A, CHANDIGARH MEASURING 1800 SQ. YARDS TO M/ S GREAT VALUE INFRAPROMOTORS PVT. LTD. MEERUT (U.P) THROUGH REGIS TERED SALE DEED DATED 5.6.2009. AS PER THE SAID REGISTERED CONVEYANCE DEE D, THE TOTAL SALE CONSIDERATION RECEIVED FOR THE SAID PROPERTY WAS RS . 5,50,00,000/- (RUPEES FIVE CRORE FIFTY LACS ONLY). THE SAID PROPERTY WAS PURCHASED BY THE ASSESSEE ALO NGWITH 5 OTHER CO- OWNERS ON 27.01.2006 FROM M/S ELECTROFAB ENGINEERIN G PVT. LTD., MUMBAI VIDE R.P. NO. 332 DATED 27.01.2006. II) IT IS CLEAR THAT THE PROPERTY UNDER CONSIDERATI ON I.E. RESIDENTIAL HOUSE NO. 11, BUILT ON PLOT NO. 83, SEC - 9A, CHANDIGARH IS A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2 (14) OF THE I T ACT 1961- RESI DENTIAL IN NATURE AND COVERED WITHIN MUNICIPAL LIMITS OF CITY CHANDIGARH. III) AMONGST THE DOCUMENTS FORWARDED BY THE O/O ACI T, CENTRAL CIRCLE, MEERUT A RECEIPT WHICH HAS BEEN DULY SIGNED BY THE ASSESSE E SH. AMARJIT SING RANDHAWA ON BEHALF OF ALL THE SELLERS HAS ALSO BEEN RECEIVED. AS PER THE SAID RECEIPT, THE ASSESSEE HAS ADMITTED TO HAVE RECEIVED AN AMOUNT OF RS. 7,74,00,000/-(RUPEES -SEVEN CRORE & SEVENTY FOUR LA CS ONLY) FROM SH. ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 11 BHUPINDER SINGH BAJWA, REPRESENTATIVE OF M/S GREAT VALUE INFRAPROMOTERS PRIVATE LIMITED AS ADVANCE PAYMENT AGAINST THE SALE OF H. NO, 11, SEC-9, CHANDIGARH. A BREAK UP OF THE AMOUNT RECEIVED REVEALS THAT RS. 3,14,00,00/- HAVE BEEN RECEIVED VIDE 35 DEMAND DRAFT NOS. 436958 TO 436991 EACH OF RS. 9,00,000 AND DRAFT NO. 436992 OF RS. 8,00,000, ISSUED BY ALLAHAB AD BANK, MEERUT CANTT, MEERUT. THESE CHALLANS HAVE ALSO BEEN MENTIONED IN THE REGISTERED SALE DEED DATED 05.06.2009. THE SIGNED RECEIPT ALSO MENTIONS THAT THE ASSESSEE HAS FURTHER RECEIVED A PAYMENT TO THE TUNE OF RS. 4,60,00,000/- (RUPEES FOUR CRORE & SIXTY LACS ONLY). THIS AMOUNT IS NOT MENTIONED IN THE SALE DEED BUT HAS BEEN CLEA RLY RECEIVED BY THE ASSESSEE WITH RESPECT TO ALL SIX CO-OWNERS OF THE PROPERTY- HOUSE NO. 11, BUILT ON PLOT NO. 83, SEC-9A, CHANDIGARH. THE SIGNED RECEIPT ALSO MEN TIONS THAT THE LAST DATE FOR FULL AND FINAL PAYMENT (FOR THE REMAINING AMOUNT) HAS BE EN EXTENDED TO 03.06.2009. FURTHER, A HAND WRITTEN PAPER HAS. ALSO BEEN RECEIV ED BY THIS OFFICE AMONGST THE DOCUMENTS RECEIVED WHICH REVEALS THAT THE TOTAL SAL E CONSIDERATION RECEIVED IN RESPECT OF THE ABOVE TRANSACTION WAS ACTUALLY RS. 1 1,25,00,000/- AND OUT OF THAT THE ASSESSEE HAD ALREADY RECEIVED A PAYMENT OF RS.7 ,74,00,000/. THUS, IT IS SEEN THAT THE CONTENTS OF THE HAND WRITTEN PAPER ARE COR ROBORATED/SUBSTANTIATED BY THE CONTENTS OF THE RECEIPTS WHEREBY THE ASSESSEE HAS A DMITTED TO HAVE RECEIVED A CASH AMOUNT RS. 7,74,00,000/- (RUPEES SEVEN CRORE & SEVENTY LACS ONLY;. FURTHER AS ALREADY MENTIONED ABOVE THE 35 DEMAND DRAFTS WHI CH CONSIST OF THE RECEIPTS OF RS. 7,74,00,000 ARE MENTIONED IN THE REGISTERED SAL E DEED. IN VIEW OF THE ABOVE, IT IS AMPLY CLEAR THAT THE HA ND WRITTEN PAPER PERTAINS TO THE DEAL/TRANSACTION OF SALE OF PROPERTY (I.E. FREE-HOL D RESIDENTIAL HOUSE NO. 11, BUILT ON PLOT NO. 83, SEC- 9A, CHANDIGARH MEASURING 1800 SQ. YARDS). THUS, AFTER INDEPENDENT VERIFICATION OF THE INFORMA TION/DOCUMENTS, I HAVE REASONS TO BELIEVE THAT THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE ALONGWITH OTHER CO- OWNERS OF THE SAID PROPERTY I.E. HOUSE NO. 11, BUIL T ON PLOT NO, 83, SEC - 9A, CHANDIGARH IS ACTUALLY RS. LL,25,00,000/-(RUPEES EL EVEN CRORE & TWENTY FIVE LACS ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 12 ONLY) AS AGAINST RS. 5,50,00,000/- (RUPEES FIVE CRO RE & FIFTY LACS ONLY) MENTIONED IN THE REGISTERED SALE DEED. ACCORDINGLY, IT IS CRY STAL CLEAR THAT AN ELEMENT/COMPONENT OF UNACCOUNTED RECEIPTS WAS INVOL VED IN THIS TRANSACTION. IT IS ALSO CLEAR THAT THE ASSESSEE I.E. SH. AMARJIT SINGH RANDHAWA HAS RECEIVED TOTAL SALE CONSIDERATION OF RS. 1,87,50,000 (I.E. 11,25,0 0,000/-) WITH RESPECT TO HIS SHARE IN THE PROPERTY HOUSE NO. 11, BUILT ON PLOT NO. 83, SEC - 9A, CHANDIGARH AS AGAINST RS.91,66,666 (RS. 5,50,00,000/-) HIS SHARE AS PER R EGISTERED SALE DEED DATED 05.06.2009 OF THE SAID PROPERTY. FURTHER, A PERUSAL OF THE ITR OF THE ASSESSEE FOR T HE PERIOD UNDER CONSIDERATION (I.E. A.Y. 2010-11) REVEALS THAT THE ASSESSEE HAS DECLARE D CAPITAL LOSS OF RS. -(1430247) DURING THE YEAR. IN VIEW OF THE ABOVE, THE CASE OF THE ASSESSEE IS R EQUIRED TO BE EXAMINED IN DEPTH AS I HAVE REASONS TO BELIEVE THAT THE AMOUNT OF RS. 95,83,334/- (I.E. RS. 1,87,50,000 - RS.91,66,666) HAS ESCAPED THE AMBIT O F CAPITAL GAIN TAX. THUS, AFTER VERIFICATION OF RECORDS WITH RESPECT TO THE ABOVE MENTIONED ASSESSEE, I HAVE REASON TO BELIEVE THAT AN INCOME OF RS, 95,83, 334/- AND ANY OTHER INCOME WHICH MAY SUBSEQUENTLY COME TO THE NOTICE OF THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HAS ESCAPED ASSESSMENT WITH IN THE MEANING OF SECTION 147 OF THE INCOME TAX ACT, 1961. THE ESCAPEMENT OF INCOME IS DUE TO FAILURE OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL MATERIAL F ACTS RELATING TO HIS INCOME. ISSUE NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 TO THE ASSESSEE FOR A.Y 2010-11. 6. LEARNED COUNSELS FIRST AND FOREMOST CONTENTION DURING THE COURSE OF HEARING IN LIGHT OF ABOVE STATED REOPENIN G REASONS IS THAT THE ASSESSING OFFICER HAD ERRED IN LAW AND ON FACTS IN INITIATING SECTION 148/147 PROCEEDINGS ON MERE BORR OWED INFORMATION THEREBY ALLEGING THE ASSESSEE TO HAVE R ECEIVED HIS SHARE OF ON MONEY REGARDING TRANSFER OF THE CAPITAL ASSET IN ISSUE. ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 13 THE REVENUES CASE ON THE OTHER HAND HIGHLIGHTS THE FACT THAT THE ASSESSING OFFICER HAD RATHER CARRIED OUT AN INDEPEN DENT VERIFICATION OF THE INFORMATION/DOCUMENTS AS IT HAS BEEN MADE CLEAR IN THE FOREGOING REOPENING REASONS RECORDED I N THE ASSESSEES CASE. LEARNED DEPARTMENTAL REPRESENTATIV E ALSO TOOK PAINS TO REFER TO THE ACIT, CENTRAL CIRCLE, MEERUT S LETTER ADDRESSED TO THE DEPARTMENTAL AUTHORITIES IN CHANDI GARH DATED 31/3/2013. IT IS, THEREFORE, SUBMITTED THAT NOT ONL Y THE ASSESSING OFFICER HAD RECEIVED INFORMATION AND APPLIED HIS MI ND BUT ALSO HE HAD INDEPENDENTLY VERIFIED ALL THE INFORMATION/DOCU MENTS. THE REVENUE THEREFORE PLEADS THAT THE IMPUGNED REOPENIN G MAY BE UPHELD. 7. AFTER GIVING OUR THOUGHTFUL CONSIDERATION TO RIV AL PLEADINGS AGAINST AND IN SUPPORT OF THE REOPENING, WE FIND NO MERIT IN THE REVENUES STAND THAT THE ASSESSING OFFICER HAD RIGH TLY SET SECTION 148/148 MACHINERY IN MOTION AGAINST THIS TAX PAYER. WE AFFORDED AMPLE OPPORTUNITIES TO THE DEPARTMENTAL REPRESENTAT IVE TO PLACE ON RECORD ALL NECESSARY DETAILS INDICATING THE ASSE SSEES ASSESSING OFFICER TO HAVE INDEPENDENTLY VERIFIED ALL THE DOCU MENTS COMING FROM MERRUT. NO SUCH RECORDS FORMS PART OF THE CASE FILE TO THIS EFFECT. WE NOTICE IN THIS FACTUAL BACKDROP THAT THE IMPUGNED REOPENING IS NOT BASED ON ANY INDEPENDENT APPLICATI ON OF MIND AT THE ASSESSEES ASSESSING OFFICERS END. THIS TRIBUN ALS COORDINATE BENCHS DECISION IN M/S J.M.D. ASTROLOGICAL CONSULT ANCY SERVICES ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 14 PVT. LTD. VS CIT ITA NO NO. 849/CHD/2011 DATED 05/0 1/2017 HOLDS THAT SUCH A REOPENING NOT BASED ON ANY TANGIBLE MAT ERIAL HAVING DIRECT NEXUS BETWEEN THE MATERIAL FORMING BASIS THE REON VIS A VIS THE ADDITION MADE; IS NOT SUSTAINABLE AS FOLLOWS: 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IT IS WELL SETTLED LAW THAT VALIDITY OF RE-ASSESSMENT PROCEEDINGS TO B E DETERMINED WITH REFERENCE TO REASONS RECORDED U/S 1 48 OF THE I.T. ACT. COPY OF THE REASONS AS SUPPLIED BY TH E LD. DR DATED 25.3.2010 ARE REPRODUCED AS UNDER:- NAME OF THE ASSESSEE : M/S J.M. D. ASTROLOGICAL CONSULTANCY SERVICES (P)LTD PAN NO. : AABCJ 4419N ADDRESS : HOUSE NO. 1456, SECTOR 4, PANCHKULA ASSESSMENT YEAR : 2008-09 THE INFORMATION WAS RECEIVED FROM ADDL. DIT, UNIT-I V, NEW DELHI VIDE HIS OFFICE LETTER NO. ADDL, DIT(INV) /UNIT IV/BENEFICIARIES/2008-09/7, DATED 06-04-2009 IN WHI CH IT WAS MENTIONED THAT: A SEARCH U/S 132 OF THE IT, ACT, 1961 WAS CONDUCTED AT THE OFFICE PREMISES OF SHRI TARUN GOYAL, CA AT 13/3 4, WEA, ARYA SAMAJ ROAD, KAROL BAGH, NEW DELHI BY THE INVESTIGATION WING ON 15-09-2008. DURING THE COURSE OF SEARCH AND LATER INQUIRIES IT WAS ESTABLISHED THAT SH. TARUN GOYAL HAD FLOATED NEARLY 90 PRIVATE LIMIT ED COMPANIES AND FIRMS FOR PROVIDING ACCOMMODATION ENTRIES. THE DIRECTORS OF THESE COMPANIES WERE HIS EMPLOYEES WHO WORKED IN HIS OFFICE AS PEONS, RECEPTIONISTS ETC.. ALL THE DOCUMENTS WERE GOT SIGN ED FROM THESE EMPLOYEES. A NUMBER OF BANK ACCOUNTS IN VARIOUS BANKS WERE OPENED IN THE NAMES OF THESE COMPANIES AND HIS EMPLOYEES IN WHICH HUGE CASH DEPOSITS WERE MADE. LATER CHEQUES WERE ISSUED TO VARIOUS BENEFICIARIES, DISGUISING THE WHOLE TRANSAC TION ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 15 AS GENUINE. THUS THE NETWORK OF COMPANIES RUN BY SH . TARUN GOYAL ARE NOT CARRYING OUT ANY GENUINE ACTIVI TY AND ARE INFACT SHAM COMPANIES. THIS IS MORE APPAREN T FROM ACTIVITY FACT THAT: A. ALL THE COMPANIES ARE OPERATING FROM THE OFFICE OF SH. TARUN GOYAL ADDRESSED AT 13/34, WEA, ARYA SAMAJ ROAD, KAROL BAGH, NEW DELHI AND AT HIS FORMER OFFICE VIZ 203, DHAKA CHAMBERS, 2069/39, NAIWALA, KAROL BAGH, NEW DELHI. B. THE DIRECTORS OF THE COMPANY ARE NONE BUT FORMER AND PRESENT EMPLOYEES OF SH. TARUN GOYAL. SH. TARUN GOYAL HAS BEEN USING THEM FOR MERELY SIGNING ALL THE DOCUMENTS, BANK CHEQUES AND ALSO FOR TRANSPORTING AND EXCHANGING CASH AND CHEQUES IN ORDER TO PROVIDE ACCOMMODATION ENTRIES. C. AT THE TIME OF SEARCH ON15/9/2008 TARUN GOYAL WA S RECORDED ON OATH. AS PER HIS STATEMENT, HE HAS ACCEPTED THAT HE PROVIDES ACCOMMODATION ENTRIES AND HIS VARIOUS COMPANIES ARE USED FOR THIS PURPOSE . SH. TARUN GOYAL HAS ALSO DESCRIBED THE MODUS OPERANDI FOR PROVIDING ACCOMMODATION ENTRIES. D. AT THE TIME OF SEARCH ON 15/9/2008, THE STATEMEN T ON OATH OF THE EMPLOYEES PRESENT AT THE PREMISES OF SH . TARUN GOYAL WERE RECORDED. THESE INCLUDE SH. PRAMOD KUNAR, HIS PEON; SH. HARPREET SINGH, ACCOUNTANT. IN THEIR STATEMENTS THEY STATED THAT THEY WERE MERE EMPLOYEES OF SH. TARUN GOYAL AND THEY WERE SIGNING VARIOUS DOCUMENTS RELATED TO MANY COMPANIES AT HIS BEHEST, AS AND WHEN ASKED BY SH. TARWI GOYAL. E. LATER, MORE EMPLOYEES WERE TRACED NAMELY, MS. US HA AND MS.RITU SAXENA, FORMER RECEPTIONISTS. IN THEIR STATEMENTS RECORDED ON OATH, THEY HAVE STARTED THAT VARIOUS BANK ACCOUNTS WERE OPENED IN THEIR NAMES BY SH, TARUN GOYAL, WHO HIMSELF OPERATED THESE ACCOUNTS AND DEPOSITED CASH IN THEM. AS SUCH, THEY COULD NOT REFUSE THE SAME AS THEY WERE MERE EMPLOYEES. ALL THE PASSBOOKS, CHEQUE-BOOKS, VARIOUS IMPORTANT DOCUMENTS WERE IN HIS TOTAL CONTROL. ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 16 F. THE STATEMENTS OF THE AUDITORS OF VARIOUS COMPAN IES OF SH. TARUN GOYAL WERE RECORDED ON OATH AFTER SUMMONS WERE ISSUED TO THEM. THE AUDITORS OF VARIOUS COMPANIES RUN BY SH.TARUN GOYAL HAVE CONFIRMED THAT THEY HAD NO KNOWLEDGE ABOUT THE DIRECTORS OF THE COMPANIES AND ALL THE AUDITS WERE DONE AT THE INSTRUCTIONS OF SH. TARUN GOYAL. ONE O F THE AUDITORS HAS STATED THAT PROPER RECORDS FOR TRANSACTIONS AND CONTRACTS OF SHARES, HELD AS INVESTMENT OR PURCHASED OR SOLD COULD NEVER BE VERIFIED. IN MOST CASES, SHARE CERTIFICATES, SHARES ALLOTMENT ADVISES AND/OR OTHER RELATED DOCUMENTS WERE NOT AVAILABLE FOR THE AUDITOR'S VERIFICATION A ND IT COULD NOT BE VERIFIED/ ASCERTAINED WHETHER THE SHARES WERE ACTUALLY ALLOTTED TO THE COMPANY AND WHETHER THEY WERE HELD IN THE NAME OF THE COMPANY. G. DURING THE COURSE OF SEARCH, IT WAS REVEALED THA T ALL THE PASSBOOKS, CHEQUE BOOKS, PAN CARDS ETC. WERE ALWAYS IN POSSESSION OF SHRI. TARUN GOYAL. H. ALL THE BANK ACCOUNT OPENING FORMS ARE THE HANDWRITING OF SH. TARUN GOYAL, AND THUS SH. TARUN GOYAL CONTROLLED AND MANAGED THESE COMPANIES AS ALSO OPERATED ALL THE BANK ACCOUNTS. I ALL THE BOOKS OF ACCOUNTS OF ALL THE COMPANIES H AVE BEEN RETRIEVED FROM THE COMPUTERS/LAPTOP OF SH. TARUN GOYAL J. SH. TARUN SOYAL HAS GIVEN LETTERS FOR THE RELEA SE 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 APPEALS OF HIS COMPANIES HIMSELF BEFORE VARIOUS INCOME TAX AUTHORITIES. FROM VERIFICATION CARRIED OUT IN RESPECTIVE WARDS/CIRCLE S WHERE THE ABOVE MENTIONED COMPANIES ARE ASSESSED, IT IS EVIDENT 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 ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 17 A DETAILED LIST OF THE BENEFICIARIES OF ACCOMMODATI ON ENTRIES HAS BEEN PREPARED BY THE CONCERNED ADIT (INV.) FOR THE ASSESSMENT YEARS 2004-05, 2005-06, 2007-08, 2008-09 AND 2009-10. THIS LIST WAS FORWARDED BY 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 COMPANY IN T HE NAME AND STYLE OF JMD ASTROLOGICAL CONSULTANCY SERVICE (P) LTD. HAS RECEIVED AN ACCOMMODATION ENTRY OF RS. 21,00,000/- FROM THREE BOGUS COMPANIES RUN BY SH. TARUN GOYAL. THE PAN OF THE COMPANY IS AABCJ4419N AND THE DETAILS OF THE REGISTERED OFFICE OF THE COMPANY WAS OBTAINED FROM THE WEBSITE OF REGISTRAR OF COMPANY AND FOLLOWING DETAILS WERE OBTAINED : 1. DATE OF INCORPORATION IS 07-07-2004 2. THE REGISTERED OFFICE ADDRESS IS H. NO. 1456 SECTOR-4, PANCHKULA, ON PERUSAL OF RECORDS OF THIS OFFICE, IT IS SEEN TH AT THE ASSESSEE HAS NOT FILED THEIR RETURNS OF INCOME FOR ANY OF THE ASSESSMENT YEARS SINCE THE DATE OF INCORPORATION. THEREFORE, IT IS EVIDENT THAT THE ASSESSEE IS NON-FILER AND AS SUCH THE INCOME HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF EXPLANATION (II) (A) OF SECTION 147 OF THE INCOME T AX ACT. MOREOVER, IN THE LIGHT OF ABOVE MENTIONED FACTS, IT IS CLEAR THAT THE ASSESSEE HAS TAKEN ACCOMMODATION ENTRIES OF RS.21.00 LACS IN THE ASSESSMENT YEAR 200 8- 09. IN THE LIGHT OF THE ABOVE RECORDED REASONS. I H AVE REASON TO BELIEVE THAT INCOME OF MORE THAN RS.21.00 LACS HAS ESCAPED ASSESSMENT FOR THE A.Y. 2008-09 IN THE CASE OF THE ASSESSEE. 11. THE LD. DR RELIED UPON COPY OF THE LETTER OF T HE ADDL. DIT (INV.) NEW DELHI DATED 6/8 APRIL, 2009 ADDRESSED TO CIT-I PANCHKULA HARYANA INTIMATING THAT SEARCH U/S 132 WA S CONDUCTED IN THE CASE OF SHRI TARUN GOEL, CHARTERED ACCOUNTANT ON 15.9.2008. HE WAS EXAMINED BY THE ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 18 INVESTIGATION PARTY ON THE SAME DAY AND HIS STATEME NT WAS RECORDED, COPY OF WHICH IS ALSO PLACED ON RECORD BY THE LD. DR IN WHICH HE HAS ACCEPTED THAT HE HAS PROVIDED ACCOMMODATION ENTRIES TO VARIOUS COMPANIES BY CREAT ING NUMBER OF PRIVATE LIMITED COMPANIES AND FIRMS. ALL HIS EMPLOYEES WERE INVOLVED IN THE SAME TO PROVIDE BOGU S ACCOMMODATION ENTRIES. THE LIST OF BENEFICIARIES CO MPANIES WERE ATTACHED WITH THIS LETTER AND REQUEST WAS MADE TO CIT-I PANCHKULA TO TRANSMIT THE SAME INFORMATION TO THE RESPECTIVE ASSESSING OFFICER OF HIS CHARGE SO THAT FURTHER INVIGILATION MAY BE CARRIED OUT BY THEM AND NECESSA RY ACTION MAY BE INITIATED AGAINST THESE BENEFICIARIES . IN THE LIST / ANNEXURE OF THIS LETTER FOR ASSESSMENT YEAR 2008-09, NAME OF THE ASSESSEE HAS BEEN MENTIONED. COPY OF TH E STATEMENT OF SHRI TARUN GOEL IS PLACED ON RECORD. HOWEVER, IN HIS STATEMENT THERE IS NO MENTION OF NAME OF THE ASSESSEE COMPANY TO WHOM HE HAS ALLEGEDLY PROVIDED ANY BOGUS ACCOMMODATION ENTRY. HOW THE ADDITIONAL DIT ( INV), NEW DELHI PREPARED THE LIST OF BENEFICIARIES NAMING THE ASSESSEE THEREIN IS NOT ESTABLISHED. NO BASIS IS DI SCUSSED AS TO HOW THE LIST / ANNEXURE TO THE LETTER OF ADIT (I NV.) WAS PREPARED. IT IS VIRTUALLY 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 AGA INST THE BENEFICIARIES. THE ASSESSING OFFICER MERELY COPIED LETTER DATED 6/8 APRIL, 2009 IN THE REASONS RECORDED U/S 1 48 OF THE I.T. ACT AND ON MERE PERUSAL OF LIST OF BENEFIC IARIES, RECORDED THE REASONS FOR REOPENING OF THE ASSESSMEN T U/S 148 OF THE ACT AGAINST THE ASSESSEE WITHOUT CONDUCT ING ANY INQUIRY OR RECORDING OF SATISFACTION. 12. THE INFORMATION IN LIST OF BENEFICIARY DID NOT INDICATE ESCAPEMENT OF ANY INCOME. THE ASSESSING OFFICER DID NOT ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 19 EXAMINE AND CONDUCT ANY ENQUIRY ON THIS INFORMATION PROVIDED BY ADIT (INV.) AND DID NOT VERIFY THE CORR ECTNESS OF THE SAME BUT ACCEPTED THE INFORMATION IN MECHANICAL MANNER. THE ASSESSING OFFICER REPRODUCED THE SAME INFORMATION IN THE REASONS EVEN WITHOUT SATISFYING HIMSELF ABOUT THE CORRECTNESS OR OTHERWISE OF THE REPORT AN D ISSUED NOTICE U/S 148 WAS FOR ESCAPEMENT OF INCOME. THERE IS NO REFERENCE TO ANY DOCUMENT EXCEPT LIST OF BENE FICIARIES WHICH COULD NOT BE REGARDED AS A MATERIAL OR EVIDEN CE THAT PRIMA FACIE SHOWED OR ESTABLISHED NEXUS OR LINK WHI CH DISCLOSED ESCAPEMENT OF INCOME. THE LETTERS DATED 6/8TH APRIL, 2009 MAY NOT POINTER TO ESCAPEMENT OF ANY IN COME PARTICULARLY WHEN IN THE STATEMENT OF SHRI TARUN GO EL RECORDED BY INVESTIGATING WING AND LETTER OF ADIT ( INV.), NEW DELHI DID NOT NAME THE ASSESSEE FOR RECEIVING A NY BOGUS ACCOMMODATION ENTRY. 13. THE ASSESSING OFFICER FORMED HIS BELIEF THAT IN COME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT BECAUSE ASSESSEE DID NOT FILE RETURN OF INCOME. IT IS, THER EFORE, APPARENT THAT FACT OF NON-FILLING OF RETURN OF INCO ME FOR ASSESSMENT YEAR UNDER APPEAL HAD PROMPTED THE ASSES SING OFFICER FOR ARRIVING AT THE CONCLUSION ABOUT ESCAPE MENT OF INCOME. HOWEVER, THE MATERIAL ON RECORD SHOWED THAT THE ASSESSEE FILED ORIGINAL RETURN OF INCOME FOR ASSESS MENT YEAR UNDER APPEAL IN OCTOBER 2008, COPY OF ACKNOWLEDGEME NT IS FILED AT PAGE 1 OF THE PAPER BOOK AND IS ALSO NOT D ISPUTED BY THE LD. DR. THE ASSESSING OFFICER, THEREFORE, R ECORDED INCORRECT, IRRELEVANT AND NON- EXISTING REASONS U/S 148 OF THE I.T. ACT. THE REASONS, THEREFORE, ARE VITIATED AND LIABLE TO BE QUASHED AS WOULD NOT SHOWED EVEN PRIMA FACIE CASE THAT THE ASSESSING OFFICER HAS ANY REASON TO BELIEV E THAT INCOME ESCAPED ASSESSMENT. IT IS NOT DISCERNIBLE AS TO ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 20 WHETHER ASSESSING OFFICER HAS APPLIED HIS MIND TO T HE REPORT OF THE DIT (INV.) NEW DELHI WHICH IS SOLE BA SIS OF RECORDING OF REASONS FOR REOPENING OF THE ASSESSMEN T AND INDEPENDENTLY ARRIVED AT A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT, THEREFORE, ASSESSING OFFICER DID NOT GE T JURISDICTION TO MAKE RE-ASSESSMENT. THERE IS, THUS, NO MATERIAL OR EVIDENCE THAT PRIMA FACIE SHOWED OR ESTABLISHED NEXUS OR LINK WHICH DISCLOSED ESCAPEMEN T OF INCOME. THE RE-ASSESSMENT PROCEEDING WERE INVALID A ND ARE LIABLE TO BE QUASHED. 13.1 THE HON'BLE DELHI HIGH COURT IN THE CASE OF CI T VS. ATUL JAN & SMT. VANITI JAIN [2008] 299 ITR 383(DELHI) HELD A S UNDER:- HELD, DISMISSING THE APPEALS THAT THE ONLY INFORMA TION WAS THAT THE ASSESSEE HAD TAKEN A BOGUS ENTRY OF CAPITAL GAINS BY PAYING CASH ALONG WITH SOME PREMIU M FOR TAKING A CHEQUE FOR THAT AMOUNT. THE INFORMATIO N DID NOT INDICATE THE SOURCE OF THE CAPITAL GAINS WH ICH IN THIS CASE WERE SHARES. THERE WAS NO INFORMATION WHICH SHARES HAD BEEN TRANSFERRED AND WITH WHOM THE TRANSACTION HAD TAKEN PLACE. THE ASSESSING OFFICER DID NOT VERIFY THE CORRECTNESS OF THE INFORMATION RECEI VED BY HIM BUT MERELY ACCEPTED THE TRUTH OF THE VAGUE INFORMATION IN A MECHANICAL MANNER. THE ASSESSING OFFICER HAD NOT EVEN RECORDED HIS SATISFACTION ABOU T THE CORRECTNESS OR OTHERWISE OF THE INFORMATION FOR ISSUING A NOTICE UNDER SECTION 148. WHAT HAD RECORD ED BY THE ASSESSING OFFICER AS HIS REASONS TO BELIEVE WAS NOTHING MORE THAN A REPORT GIVEN BY HIM TO THE COMMISSIONER. THE SUBMISSION OF THE REPORT WAS NOT THE SAME AS RECORDING OF REASONS TO BELIEVE FOR ISS UING A NOTICE. THE ASSESSING OFFICER HAD CLEARLY SUBSTIT UTED FORM FOR SUBSTANCE AND THEREFORE THE ACTION OF THE ASSESSING OFFICER WAS NOT SUSTAINABLE. 13.2 THE HONBLE PUNJAB & HARYANA HIGH COURT IN TH E CASE OF CIT VS. SMT. PARAMJIT KAUR [2009] 311 ITR 38(P&H) HELD AS UNDER:- ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 21 HELD, THAT THE ASSESSING OFFICER HAD NOT EXAMINED THE INFORMATION RECEIVED FROM THE SURVEY CIRCLE BEFORE RECORDING HIS OWN SATISFACTION OF ESCAPED INCOME AN D INITIATING REASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER HAD THUS ACTED ONLY ON THE BASIS OF SUSPICI ON AND IT COULD NOT BE SAID THAT IT WAS BASED ON BELIE F THAT THE INCOME CHARGEABLE TO TAX HAD ESCAPED INCOM E. THE ASSESSING OFFICER HAD TO ACT ON THE BASIS OF REASONS TO BELIEVE AND NOT ON REASONS TO SUSPECT . THE TRIBUNAL RIGHTLY CONCLUDED THAT THE ASSESSING OFFICER HAD FAILED TO INCORPORATE THE MATERIAL AND HIS SATISFACTION FOR REOPENING THE ASSESSMENT AND THEREFORE THE ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT FOR REASSESSMENT PROCEEDINGS WAS NOT VALID. 13.3 THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SFIL STOCK BROKING LIMITED [2010] 325 ITR 285 (DELHI) HE LD AS UNDER:- HELD, DISMISSING THE APPEAL, THAT THE FIRST SENTEN CE OF THE REASONS RECORDED BY THE ASSESSING OFFICER WAS MERE INFORMATION RECEIVED FROM THE DEPUTY DIRECTOR OF INCOME-TAX (INVESTIGATION). THE SECOND SENTENCE WAS A DIRECTION GIVEN BY THE SAME DEPUTY DIRECTOR OF INCO ME- TAX (INVESTIGATION) TO ISSUE A NOTICE UNDER SECTION 148 AND THE THIRD PERTAINING TO THE RELEVANT WARD. THE ASSESSING OFFICER REFERRED TO THE INFORMATION AND T HE 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 SECTI ON 147/148 OF THE ACT. AS THE FIRST PART WAS ONLY AN INFORMATION AND THE SECOND AND THE THIRD PARTS OF T HE REASONS WERE MERE DIRECTIONS, IT WAS NOT AT ALL DISCERNIBLE AS TO WHETHER THE ASSESSING OFFICER HAD APPLIED HIS MIND TO THE INFORMATION AND INDEPENDENT LY ARRIVED AT A BELIEF THAT, ON THE BASIS OF THE MATER IAL WHICH HE HAD BEFORE HIM, INCOME HAD ESCAPED ASSESSMENT. THERE WAS NO SUBSTANTIAL QUESTION OF LA W FOR CONSIDERATION. ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 22 13.4 THE HON'BLE DELHI HIGH COURT IN THE CASE OF S ARTHAK SECURITIES CO. P. LTD. [2010] 329 ITR 110 (DELHI) H ELD AS UNDER:- HELD, ALLOWING THE PETITION, THAT THE FORMATION O F BELIEF WAS A CONDITION PRECEDENT AS REGARDS THE ESCAPEMENT OF THE TAX PERTAINING TO THE ASSESSMENT YEAR BY THE ASSESSING OFFICER. THE ASSESSING OFFICE R WAS REQUIRED TO FORM AN OPINION BEFORE HE PROCEEDED TO ISSUE A NOTICE. THE VALIDITY OF REASONS, WHICH W ERE SUPPOSED TO SUSTAIN THE FORMATION OF AN OPINION, WA S CHALLENGEABLE. THE REASONS TO BELIEVE WERE REQUIRED TO BE RECORDED BY THE ASSESSING OFFICER. ONCE THE INGREDIENTS OF SECTION 147 WERE FULFILLED, THE ASSE SSING OFFICER WAS COMPETENT IN LAW TO INITIATE THE PROCEEDINGS UNDER SECTION 147. THE ASSESSING OFFICE R WAS AWARE OF THE EXISTENCE OF THE FOUR COMPANIES WI TH WHOM THE ASSESSEE HAD ENTERED INTO TRANSACTION. BOT H THE ORDERS SHOWED THAT THE ASSESSING OFFICER WAS MADE AWARE OF THE SITUATION BY THE INVESTIGATION WI NG AND THERE WAS NO MENTION THAT THESE COMPANIES WERE FICTITIOUS COMPANIES. NEITHER THE REASONS IN THE IN ITIAL 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 O R 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 EXISTEN CE WAS NOT DISPUTED. THE ASSESSEE IN ITS OBJECTIONS HA D STATED THAT THE COMPANIES HAD BANK ACCOUNTS AND PAYMENTS WERE MADE TO THE ASSESSEE THROUGH BANKING CHANNEL. THE IDENTITY OF THE COMPANIES WAS NOT DISPUTED. UNDER THESE CIRCUMSTANCES, THE INITIATION OF PROCEEDINGS UNDER SECTION 147 AND ISSUANCE OF NOTIC E UNDER SECTION 148 OF THE ACT WERE TO BE QUASHED. ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 23 13.5 THE HON'BLE DELHI HIGH COURT IN THE CASE OF S IGNATURE 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 INFORMAT ION RECEIVED FROM THE DIRECTOR OF INCOME TAX (INVESTIGATION) THAT THE PETITIONER HAD INTRODUCED MONEY AMOUNTING TO RS. 5 LAKHS DURING FINANCIAL YEA R 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 PRIM A 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 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, 198 9, AND WAS ALSO ALLOTTED A PERMANENT ACCOUNT NUMBER IN SEPTEMBER, 2001. THUS, IT COULD NOT BE HELD TO BE A FICTITIOUS PERSON. THE REASSESSMENT PROCEEDINGS WER E NOT VALID AND WERE LIABLE TO BE QUASHED. 13.6 THE HON'BLE GUJARAT HIGH COURT IN THE CASE O F SAGAR ENTERPRISES V ASSISTANT COMMISSIONER IN [2002] 257 ITR 335 (GUJARAT) HELD AS UNDER:- HELD, THAT IT WAS APPARENT THAT THE FACT OF NON FI LING OF THE RETURN FOR THE ASSESSMENT YEAR 1991-92 HAD WEIGHED WITH THE RESPONDENT FOR ARRIVING 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 CO ULD ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 24 NOT BE SAID WITH CERTAINTY AS TO WHICH FACT WOULD H AVE WEIGHED WITH THE OFFICER CONCERNED AND ONCE IT WAS SHOWN THAT AN IRRELEVANT FACT HAD BEEN TAKEN INTO CONSIDERATION, TO WHAT EXTENT THE DECISION WAS VITI ATED WOULD BE DIFFICULT TO SAY. MOREOVER THE INCOME-TAX OFFICER HAD STATED THAT THE PAYMENT WHICH WAS STATE D TO BE UNDISCLOSED INCOME RELEVANT FOR THE ASSESSMEN T YEAR 1991-92 COULD HAVE BEEN MADE DURING THE FINANCIAL YEAR 1990-91 RELEVANT TO THE ASSESSMENT Y EAR 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 ASSESSMENT 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 & HARYANA HIGH COURT IN T HE CASE OF CIT VS. ATLAS CYCLES LTD [1989] 180 ITR 319 (P&H) HAS H ELD 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 EX IST, 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 VIEW THAT THE REOPENING OF THE ASSESSMENT IS NOT VALID IN THIS CASE. WE ACCORDINGL Y SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND QUASH THE PROCEEDINGS U/S 148 OF THE I.T. ACT. 8. WE ADOPT THE ABOVE DETAILED REASONING MUTATIS MU TANDIS TO CONCLUDE THAT THE IMPUGNED REOPENING FORMING SUBJEC T MATTER OF OUR CONSIDERATION IN THE INSTANT CASE IS NOT SUSTAI NABLE IN LAW IN ABSENCE OF THE ASSESSING OFFICERS HAVING MADE HIS INDEPENDENT ITA 795 & 796/CHD/2017 SH. AMARJEET SINGH RANDHAWA VS ACIT & ANR 25 ENQUIRY OR DUE APPLICATION OF MIND. THE SAME STANDS QUASHED THEREFORE. ALL OTHER PLEADINGS ON MERITS ARE RENDER ED INFRUCTUOUS. THE FORMER ASSESSEES LEAD APPEAL NO. 795/CHD/2017 IS ACCEPTED. 9. SAME REASONING FOLLOWS IN LATTER ASSESSEES APPE AL ITA NO 796/CHD/2017 RAISING IDENTICAL GROUNDS OF LAW AS WE LL AS ON FACTS. 10. THESE TWO ASSESSEES APPEALS ARE ALLOWED IN ABO VE TERMS. A COPY OF THIS COMMON ORDER PLACED IN THE RESPECTIVE CASE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 11 NOVEMBER, 2020. SD/- SD/- .. , #$ %'& '( (N.K. SAINI) (SATBEER SINGH GODARA) ) (* / JUDICIAL MEMBER )& / DATED: 11/11/2020 *RANJAN &* +, -, / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' . / CIT 4. ' . ( )/ THE CIT(A) 5. ,/0 1 , $ 1 , 23405 / DR, ITAT, CHANDIGARH 6. 04 6# / GUARD FILE &* ' / BY ORDER, 7 ! / ASSISTANT REGISTRAR