Lakhmi Chand Tejoo Mal Vs ACIT (ITAT Delhi)
MULTIPLICITY OF ERRORS IN REASONS MAKE REASSESSMENT VOID
The ld. counsel for the assessee vehemently stated that 11 entries have been shown in the information and it can be seen that there are repetition of same entries/amounts and the Assessing Officer has, in fact, at para -6 of his order considered only 4 entries where total unsecured loan amount comes to Rs. 75 lakhs and information is in respect of amount of Rs. 2.05 crores.
The ld. counsel for the assessee also argued that the Assessing Officer has not applied his mind before issuing notice u/s 148 of the Act as it can be seen from the reasons for reopening assessment and additions made in the assessment order dated 18.12.2018.
We have carefully gone through the decisions relied upon by the first appellate authority. We find that in none of the decisions the issue was of multiplicity of the entries in the information received by the Assessing Officer which formed the basis for reopening the assessment. In all the decisions relied upon by the ld. DR, the issue was whether the information received amounts to tangible material evidence for reopening the assessment. Whereas the facts of the case in hand relates to the very information itself which contains 11 entries as mentioned elsewhere, where the total amount of escaped income is mentioned at Rs. 2.05 crores which is part of the reasons recorded for reopening the assessment.
Considering the totality of the facts in light of the decisions of the Hon’ble Jurisdictional High Court discussed elsewhere, we are of the considered view that the assumption of jurisdiction by issue of notice u/s 148 of the Act is bad in law which makes the assessment order dated 18.12.2018 framed u/s 147 r.w.s 143(3) of the Act void ab initio. Since we have quashed the assessment, we do find it necessary to dwell into the merits of the case.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] -16, Delhi dated 01.08.2019 pertaining to Assessment Year 2011-12.
2. The grievance of the assessee is two-fold – Firstly, the assessee is aggrieved by the reopening of the assessment u/s 147 of the Income tax Act, 1961 [hereinafter referred to as ‘The Act’ for short] and secondly, on merits, the assessee has challenged the addition of Rs. 75 lakhs on account of unsecured loans u/s 68 of the Act and disallowance of Rs. 4,25,194/- made by the Assessing Officer on account of interest paid for the unsecured loans.
3. Representatives of both the sides were heard at length. Case records carefully perused and judicial decisions relied upon by both the sides duly considered.
4. Briefly stated, the facts of the case are that the assessee filed its original return of income on 28.09.2011 declaring income at Rs. 43,06,620/-. Assessment was completed u/s 143(3) of the Act vide order dated 13.03.2014.
5. Pursuant to the information received from the Office of the ADIT, INV. Wing, Unit 2(1), New Delhi, the Assessing Officer reopened the completed assessment by issuing notice u/s 148 of the Act. Reasons for reopening assessment read as under:
1. Brief details of the Assessed: The assessee M/s Lakchmi Chand Tejoo Mai. 876. Kucha Kabil Attar. Chandm Chowk. Delhi. 110006 has PAN : AAAFL3353P. The last return of the assessee was filed on 30.10.2017 for A.Y. 2017-18 which has not been processed so far.
2. Brief details of information collected/ received by the A0: A letter dated 15.03.2018 was received in this office through the Office of Pr. CIT Delhi-16, New Delhi, from Asst. Director of Income Tax (Inv.) Unit- 2(1), New Delhi. As per the letter, it is noted that a search and seizure operation was executed on 18.1 1.2015 oil Sh. Pradeep Kumar Jindal. During the course of search, it was found Sh. Pradeep Kumar Jindal was engaged in providing accommodation entries to different beneficiaries. The bank statements of various front companies of Sh. Pradeep Kumar Jindal provided by Vaish Cooperative Commercial Bank Ltd. Nai Sarak Delhi, reveals that huge cash was being deposited in such bank accounts and RT&S/ Cheque issued immediately to other bank accounts in the same bank for purpose of layering and on 3rd and 4th stage finally RT&S/Cheque was issued to the beneficiaries for purpose of providing accommodation entries.
3. Analysis of information collected/ received: On perusal of report, various findings of investigation wing and document attached with the letter as Annexure A- l. it is seen that the assessee, M/s Lakchmi Chand Tejoo Mai had been provided accommodation entries as follow:
