RAJESH BINDAL, J. - (1.) BY filing the present petition under Art. 226/227 of the Constitution of India, the petitioner has prayed for quashing income assessed by the AO in exercise of powers conferred under s. 251 of the IT Act, 1961 ( for short 'the Act').
(2.) WE have heard learned counsel for the petitioner and with his assistance perused the documents on record. taken up for scrutiny and notice under s. 143(2) of the Act was issued to the assessee, who is engaged in the business 1,15,00,000 was shown to have been received during the financial year 2002 -03 (asst. yr. 2003 -04) and the remaining amount of Rs. 1,67,00,000 was shown to have been received during the financial year 2003 -04 (relevant to current assessment year). During the course of assessment proceedings, assessee was required to prove the identity and creditworthiness of the shareholders and the genuineness of the transactions. After holding enquiries and considering the entire evidence on record, the AO came to the conclusion that transactions were not genuine. It was held that the amount was nothing else but concealed income of the assessee given cloak of share application money. Accordingly, the income was assessed at Rs. 1,38,30,856 as against Rs. 30,856 declared by the assessee.
(3.) Aggrieved against the order of assessment, the assessee preferred an appeal before the Commissioner of income -tax (Appeals) [for short 'the CIT(A)']. During the course of hearing, the CIT(A), while referring to the contention raised by the petitioner, about the violation of principles of natural justice by the AO, in not confronting the material collected at the back of the assessee, also issued notice for enhancement of income on the basis of information received from AO. It was for the reason that entire transactions of share application money, as noticed in the order of assessment, had not been verified by the AO.;