- (1.) This order shall dispose of I.T.A. Nos. 505 and 454 of 2009 as, according to the learned counsel for the parties, the issue involved in both the cases is similar. However, the facts have been extracted from I.T.A. No. 505 of 2009. I.T.A. No. 505 of 2009 has been preferred by the Revenue under section 260A of the Income-tax Act, 1961 (in short, "the Act"), against the order dated January 20, 2009, annexure A. 4 passed by the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar (in short, "the Tribunal"), for the assessment year 2000-01, claiming the following substantial questions of law: "(i) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in concluding that the Assessing Officer could not have assessed the income chargeable to tax which has come to his notice subsequently in the course of proceedings under section 147 though was not the basis for reopening of the proceedings under section 147 of the Income-tax Act? (ii) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law to conclude that once the Assessing Officer had not made any addition on the income which form the basis for reopening the assessment under section 147 of the Income-tax Act then the Assessing Officer was precluded in law from having made the additions qua other income chargeable to tax, which escaped assessment and came to the notice of the Assessing Officer during the course of the proceedings under section 147? (iii) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law to conclude that the proceedings under section 147 were vitiated though there was no challenge to the reopening proceedings at the instance of the assessee?"
(2.) A few facts relevant for the decision of the controversy involved, as narrated in I.T.A. No. 505 of 2009 may be noticed. The assessee is a private limited company. It filed regular return of income on November 30, 2000, for the assessment year 2000-01 declaring a net taxable income of "nil", which was processed under section 143(1) of the Act. The Assessing Officer received information from the Additional Director of Income-tax (Investigation) that various finance companies managed and controlled by Shri Kapil Aggarwal and Shri V.K. Umat, chartered accountants of Amritsar, were involved in providing accommodation entries to various assessees. One such finance company was M/s. Mehak Finvest P. Ltd. The bank accounts of this finance company were first used to receive cash and then to issue accommodation entries. All the accounts were held in the name of various employees of Shri Kapil Aggarwal and Shri V.K. Umat, chartered accountants. Accordingly, the Assessing Officer had reason to believe that income chargeable to tax had escaped assessment. The Assessing Officer initiated proceedings under section 147 of the Act. It was noticed that fresh share application money amounting to Rs. 47,00,000 could not be explained by the respondent and, therefore, treating the same as undisclosed income made the addition of the said amount as unexplained cash credits under section 68 of the Act, vide order dated March 31, 2005, annexure A. 2. Aggrieved by the order, the respondent filed an appeal before the Commissioner of Income-tax (Appeals) ("the CIT(A")). Vide order dated September 19, 2008, annexure A. 3, the Commissioner of Income-tax (Appeals) allowed the appeal. Dissatisfied with the order, the Revenue filed an appeal before the Tribunal. Vide order dated January 20, 2009, annexure A. 4, the Tribunal dismissed the appeal relying upon the decision of this court dated August 6, 2008, in I.T.A. No. 493 of 2007 in assessee's sister concern--Empire Finvest--for the assessment year 1996-97. Hence, the instant appeals by the Revenue.
(3.) Learned counsel for the Revenue submitted that the Tribunal had erred in quashing the proceedings under section 147/148 of the Act. It was argued that the issue raised herein stands decided in favour of the Revenue by the judgment of this court in Majinder Singh Kong v. CIT, 2012 344 ITR 358 (I.T.A. No. 421 of 2010, decided on September 13, 2010). It was submitted that special leave petition against the said judgment was also dismissed by the apex court bearing Special Leave Petition (Civil) No. 13028 of 2011 on August 19, 2011.;