DCIT Vs. M/s. Erawat Infotech Pvt.Ltd. (ITAT Delhi)
In the instant case, the information is specific having detail of value of the amount of accommodation entry taken, the instrument and date through which entry was taken, name and account number of the entry provider were available before the Assessing Officer and thus we cannot hold the information was vague. Further, the Hon’ble Delhi High Court in the case of PCIT Vs Paramount Communication Private Limited (supra), after considering various decisions held that the information received from Revenue Intelligence Authority constitute a tangible material and, thus, assessment was reopened validly.
In the instant case before us, the information has been received from the Director of Income Tax (Investigation) after carrying out detailed enquiries from the accommodation entry providers. As held by the Hon’ble Supreme Court in the case of Raymond Woollen Mills Ltd.(supra), the sufficiency or correctness of the information is not to be seen at the stage of the reopening of the assessment. In our opinion, the reassessment proceeding is a kind of enquiry, where the assessee is granted opportunity to explain his stand on the correctness of reasons to believe escapement of income. Further, the Assessing Officer is not empowered in law to carry out any enquiry, if no assessment proceeding are pending. The reassessment proceedings thus, empower the Assessing Officer to verify correctness of the information.
In the case of Ankit Financial Services Ltd. (supra) material indicating that assessee has received bogus share application through accommodation entry is one of the beneficiary, was recovered in the search of another person. In such circumstances, the initiation of reopening was justified.
FULL TEXT OF THE ITAT JUDGMENT
This appeal by the Revenue is directed against order dated 06/09/2011 passed by the Ld. Commissioner of Income-tax (Appeals)-XIII, New Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2002-03, raising following grounds:
1. On the facts and in the circumstances of the case. The CIT(A) has erred in law and on facts in holding that proceeding u/s 148 of the Income Tax Act, 1961 were invalidly initiated by the Assessing Officer.
2. On the facts and in the circumstanced of the case. The CIT(A) has erred in law and on facts in quashing the assessment on purely technical grounds especially when the CIT(A) himself has held that the AO was justified in making addition of Rs.91.25 lakhs as the assessee had failed to discharge its onus u/s 68 of the Income Tax Act, 1961.
3. The order of CIT(A) in erroneous and is not tenable on facts and in law.
4. The appellant craves leave to add. Alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.
2. At the outset, we may like to mention that despite notifying, neither anyone was present in hearing on behalf of the assessee nor any application for adjournment was filed on behalf of the We may also like to mention that this case has been listed for hearing since 2012, but on last several occasions i.e.15.12.2015; 27.07.2016; 19.10.2016; 16.01.2017; 03.04.2017; 06.06.2017; 22.08.2017; 18.01.2018; 02.04.2018, no one was present in hearings on behalf of the assessee despite notifying, thus, the case is heard ex parte qua the assessee.
3. Briefly stated facts of the case are that original return of income declaring nil income was filed on 15/09/2003. The return of income was processed under section 143(1) of the Income-tax Act, 1961 (in short ‘the Act’). Subsequently, on receipt of information from the Investigation Wing of the Income Tax Department that the assessee received accommodation entries in the form of share application money, the Assessing Officer initiated proceedings under section 147 of the Act for reopening of the assessment, by way of issue notice under section 148 of the Act on 25/05/2007. In response, the assessee filed return of The assessee was provided reasons recorded. In the reasons recorded, it was mentioned that certain investigations were carried out by the Investigation Wing of the Department, wherein it was found that amount of Rs.91,51,200/- entered in the books of the accounts of the assessee by way of share application money received from following parties, was actually in the nature of accommodation entries taken from entry operators:
