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Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI
Before: SH. N. K. BILLAIYA & MS. ASTHA CHANDRA
This appeal by the assessee is preferred against the order of the CIT(A)-28, New Delhi dated 23.07.2012 pertaining to A.Y.2003-04. 2. The concise grounds of appeal read as under :-
1. That on the facts and in the circumstances of the case, the Hon'ble Commissioner of Income Tax (Appeals) has erred in law by holding that the reopening proceeding u/sec. 148 of the Income Tax Act, 1961 cannot be said invalid in law.
2. That the Hon'ble Commissioner of Income Tax (Appeals) while upholding the reopening of the assessment u/sec. 148 of the Act has failed to appreciate that the informations received by the learned Assessing Officer from the Director of Income Tax (Investigation) that the assessee had introduced Rs.6.00 lacs being unaccounted money by way of accommodation entry from M/s Centenary Software Pvt. Ltd. is based on vague and non specific information. It is solely based on the annexure supplied by the learned Director of Income Tax (Inv.) which cannot be regarded as a material or evidence that prima facie shows and establishes escapement of income. He had erroneously accepted such information in a mechanical manner which is bad in law.
3. That the Hon'ble Commissioner of Income Tax (Appeals) has erred in law as much as on the facts of the case by not appreciating that the question of assumption of jurisdiction by any statutory authority and its validity can be challenged by the aggrieved party at any point or at any stage of proceedings and can even be taken during appellate proceeding. He had, thus, erroneously held that since it was not challenged before the learned Assessing Officer, it cannot be challenged at appellate stage.
4. That the Hon’ble Commissioner of Income Tax (Appeals) has erred in law as much as on the facts of the case in not appreciating that the learned Assessing Officer has wrongly invoked the proceedings under Explanation - 3 of section 147 of the Income Tax Act, 1961 thereby floated enquiry in respect of Share Capital contribution by the others five shareholders in aggregate to Rs.43.30 lacs without at first applying his own mind to the information received from the Hon'ble Director of Income Tax (Inv.) and arriving at a belief as to whether any income has escaped assessment or not. He has failed to do so, therefore, invokement of the provision of Explanation - 3 of section 147 is in a suspicious and arbitrary manner which is bad in law. Thus the addition of Rs.43.30 lacs made by the learned Assessing Officer u/sec. 68 of the Act is unwarranted and bad in law. 5) That the Hon'ble Commissioner of Income Tax (Appeals) has further erred in law and on the facts of the case in not appreciating that it is a trite law for any unproved / unsubstantiated amount to the satisfaction of the learned Assessing Officer towards the share capital / share application money cannot be added u/sec. 68 of the Income Tax Act, 1961.
It is, therefore, kindly prayed that the unwarranted addition of Rs. 49,30,000/- made by the learned Assessing Officer and erroneously upheld by the Hon'ble Commissioner of Income Tax (Appeals) may kindly be deleted after providing an opportunity of being heard to the appellant.
4. The assessee has also raised the following additional grounds :-
Filed On 5th Sept.. 2017 1) That the Hon’ble Commissioner of Income Tax (Appeals) has erred in law as much as on the facts of the case in not appreciating the fact that the learned Assessing Officer does not assume the jurisdiction to complete the reassessment proceedings as no notice u/esc. 143(2) of the Income Tax Act, 1961 have been issued by him after the appellant had filed the return of income in compliance to notice u/sec. 148 of the said Act and thus, the reassessment proceedings are liable to be quashed.
Filed On 15th Feb.. 2017 2) That the Hon’ble Commissioner of Income Tax (Appeals) has erred in law as much as on the facts of the case by confirming the additions made by the learned Assessing Officer without providing the appellant the statement of any of the accommodation providers and an opportunity to cross examine them which is against the principles of natural justice resulting into quashing the reassessment proceedings.
Filed On 22th Feb.. 2016 (These grounds are not being pressed). 3) That on the facts and circumstances of the case the learned Assessing Officer has erred in the law in making erroneous addition of Rs.40,30,000/- (Rs.46,30,000/- minus of Rs.6,00,000/-) u/sec. 68 of the Income Tax Act, 1961 which is beyond his power in view of Explanation 3 of section 147 of the said Act.
4) That the learned Income Tax Officer had recorded the reasons for reopening of the impugned assessment after the expiry of four years from the end of the relevant assessment year only for escaped assessment of Rs.6,00,000/- and the subsequent approval granted by the Additional Commissioner of Income Tax, Range-15, New Delhi under section 151 was also only for Rs.6,00,000/-, therefore, addition beyond Rs.6,00,000/- under section 147/143(3) of the Act is invalid in law and void ab initio.
Since the additional ground mentioned here in above go to the root of the matter we heard the representatives on the issues raised in the additional grounds (supra). We have carefully perused the case records and have also the benefit of perusing the assessment record.
The peculiar facts of the case are that on 25.03.2010 the AO issued notice u/s. 148 of the Act and vide letter dated 02.08.2010 assessee brought to the notice of the AO that the income tax return submitted u/s. 139 of the Act may be treated as submitted in response to the notice u/s. 148 of the Act. However, the AO issued notice u/s. 143(2) of the Act dated 26.07.2010 wherein he has not referred to any return filed by the assessee for which he wanted clarification. Since the assessee had written to the AO on 02.08.2010 that the return filed originally should be treated as filed in pursuant to the notice u/s. 148 of the Act, therefore, in our considered opinion the date of filing of the return of income tax pursuant to notice u/s. 148 of the Act is to be taken as 02.08.2010. 6. We have carefully perused the assessment records with the assistance of the DR and the DR himself has perused the assessment records but could not point out any notice issued and served u/s. 143 (2) of the Act subsequent to 02.08.2010 which is date of filing of the return of income. 7. Though there is a mention by the AO vide order sheet entry dated 15.04.2010 that there is a compliance by the assessee but again the entire assessment record were considered and we (alongwith DR) could not find any such compliance letter / details by the assessee on 15.04.2010 since there is no evidence whatsoever in relation to the issue and service of notice u/s. 143 (2) of the Act. 8. We have no hesitation to hold the entire assessment null and void for want of notice u/s. 143 (2) of the Act. The appeal is allowed on the additional ground. Since we have quashed the assessment order we do not find it necessary to dwell into the merits of the case. 9. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 03.02.2023.