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| The Tax Publishers2019 TaxPub(DT) 7615 (Del-Trib) INCOME TAX ACT, 1961
Section 147
Where AO had reasons to believe that an income of Rs. 10,00,000 represents assessee's own unaccounted income which had escaped assessment whereas the amounts received as per the bank statements was only of Rs. 5,00,000, therefore AO had committed a number of mistake in the reasons recorded for issue of notice under section 148 which makes the assessment null and void ab initio, therefore reopening notice was quashed.
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Reassessment - Change of opinion - Lack of application of mind on the part of AO -
Assessee was issued notice of reassessment under section 147 on the reason recorded that DIT(Inv.) carried out a detailed enquiry about the persons/companies engaged in the business of providing accommodation entries to various companies. These persons used to issue cheques in lieu of cash received after deducting their commission and these cheques were generally issued as share application money/unsecured loans. Assessee-company was one of the beneficiaries and took entry from the entry operator. Escapement of income was on account of failure on the part of assessee to truly and fully disclose all the material facts necessary for assessment. Held: AO had committed a number of mistake in the reasons recorded for issue of notice under section 148. He also mentioned that he had reasons to believe that an income of Rs. 10,00,000 represents assessee's own unaccounted income which had escaped assessment whereas the amounts received as per the bank statements was only of Rs. 5,00,000. This shows as absolute lack of application of mind on the part of AO which makes the assessment null and void ab initio. Amount of Rs. 10,00,000 was not supported by any correct cheque number whereas the allegation was that the assessee had received accommodation entry to the tune of Rs. 10,00,000. Therefore basis of reopening itself was based on wrong facts therefore, the same could not be upheld.
REFERRED : Hindustan Lever Ltd. v. R.B. Wadkar, Asstt. CIT & Ors. (2004) 268 ITR 332 (Bom.) : 2004 TaxPub(DT) 1424 (Bom-HC).
FAVOUR : In assessee's favour.
A.Y. :
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