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| The Tax Publishers2019 TaxPub(DT) 2091 (Del-Trib) INCOME TAX ACT, 1961
Section 148
Since there was a failure of application of mind by AO as it had proceeded on two wrong premises, one regarding non-filing of the return and second regarding the extent of accommodation entries and information received from Investigation Wing could not be said to be tangible material per se without a further inquiry, therefore, reassessment proceedings under section 148 were not sustainable.
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Reassessment - Receipt of accommodation entries - Proof of independent application of mind by AO -
Department received information from Investigation Wing that assessee had raised share capital and share premium but had not filed any return of income. Further, AO received another information from Investigation Wing that assessee had received accommodation entries from Mr. S who had been found to be providing accommodation entries. Accordingly, AO issued notice under section 148 after recording reasons that income of assessee had escaped assessment. CIT(A) held that very basis for issuance of notice under section 148 did not exist Held: As decided in CIT v. RMG Polyvinyl (I) Ltd. (2017) 83 taxmann.com 348 (Del) : 2017 TaxPub(DT) 2034 (Del-HC), there was a failure of application of mind by AO as it had proceeded on two wrong premises, one regarding non-filing of the return and second regarding the extent of accommodation entries. The information received from Investigation Wing could not be said to be tangible material per se without a further inquiry being undertaken by AO. Therefore, CIT(A) rightly held that initiation of reassessment proceeding was bad in law and not sustainable.
REFERRED : Pr. CIT v. RMG Polyvinyl (I) Ltd. (2017) 83 taxmann.com 348 (Del) : 2017 TaxPub(DT) 2034 (Del-HC)
FAVOUR : In assessee's favour
A.Y. :
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