SURAJ PULSES PVT.LTD.,DELHI vs. ITO, WARD-24(4), NEW DELHI

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ITA 5477/DEL/2019Status: DisposedITAT Delhi18 January 2023AY 2008-094 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the order of the CIT under Section 263 was quashed, the subsequent reassessment order passed based on that direction does not survive. Consequently, the order of the CIT(A) confirming the additions becomes non-est in law.

What were the facts?

The assessee's reassessment proceedings were initiated under Section 148, leading to an addition of Rs. 90,00,000 under Section 68. The CIT(A) confirmed these additions. However, a prior appeal by the assessee against the CIT's order under Section 263 had resulted in the quashing of that order by the Tribunal.

What were the issues?

The primary issue was the validity of the reassessment order and subsequent additions when the order directing the reassessment (under Section 263) was quashed by a higher tribunal.

Which sections of the Income-tax Act were involved?

Section 148,Section 143(3),Section 263,Section 68

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI BENCH “B”: NEW DELHI

Before: SHRI SHAMIM YAHYA & MS. ASTHA CHANDRA

For Appellant: Shri Gurjeet Singh, CA
For Respondent: Shri Gurpreet Shah Singh, Sr. DR
Hearing: 12.01.2023Pronounced: 18.01.2023

O R D E R PER ASTHA CHANDRA, JM

1.

The appeal by the assessee arises out of the order dated 11.3.2019 of the Ld. Commissioner of Income Tax Appeals-8, New Delhi (“CIT(A)”) pertaining to assessment year (“AY”) 2008-09.

2.

The assessee has taken the following grounds: “

1. Because the action is under challenge on facts & law since the findings recorded qua appeal dismissal is in violation to the principles of natural & substantial justice for a decision in accordance with law.

2. Because the action is under challenge on facts & law for passing ex-parte order whereas counsel appeared & filed application for additional ground and sought time to file the submissions which has been denied.

3. Because the action for initiation, continuation and conclusion of reassessment proceedings is being challenged on facts and law.

4.

Because the continuation and conclusion of reassessment proceedings is being challenged on facts and law while there being erroneous disposal of preliminary objection raised pursuant to judgment of GKN Driveshafts 259 ITR19 SC.

5. Because the action for initiation of re-assessment proceedings is unreasonable since while recording reasons, there is non- application of mind much less independent application of mind and merely relying upon investigation report by AO, further reasons recorded are vague, lacking tangible material/reasonable cause and justification. 6. Because the action is being challenged on facts and law for making addition of Rs. 90,00,000/- on account of share capital/premium received. 7. Because the action is being challenged since the addition of Rs 90,00,000/- has been made without having provided the cross examination of the person on whose statement or information the proceedings u/ s 147 were initiated & even without confronting the entire adverse material which was used against the assessee & that too by recording incorrect facts & findings. 8. Because the action is being challenged since the addition of Rs 90,00,000/- has been made without making proper investigation from other parties as directed by the Pr. Commissioner in order u/s 263 whereby assessee has discharged the onus by providing relevant documents. 9. Because the action for addition u/s 68 amounting Rs 90,00,000/- is being challenged on facts and law while all parameters for the provision of law required by assessee fulfilled as revealed in findings from acquiescence by silence. 10. Because the action is being challenged since the addition of Rs 90,00,000/- has been made totally against the settled positions of law enunciated by the Apex Court in the case of Commissioner of Income Tax vs Lovely Export P. Ltd. (216 CTR195 (SC). 11. Because the action is being challenged on facts and law for making addition on account of commission paid amounting Rs 1,62,000/-.”

3.

Briefly stated the assessee company filed its return for AY 2008-09 on 4.8.2008 declaring total income of Rs. 3,55,310/-. The case was taken up for scrutiny under section 148 of the Income Tax Act, 1961 (the “Act”) and notice under section 148 of the Act was issued to the assessee on 25.3.2014. In reply to the said notice, the assessee filed letter requesting the Ld. Assessing Officer (“AO”) to treat the return already filed as return filed in response to notice under section 148 of the Act.

4. The Ld. AO passed re-assessment order under section 148 r.w.s. 143(3) of the Act on 27.01.2015 accepting the return income of Rs. 3,55,310/-. The Ld. PR. CIT set aside this re-assessment order under section 263 of the Act and directed the Ld. AO to pass the order afresh as per law. The Ld. AO completed the fresh assessment under section 263 r.w.s. 147 /143(3) of the Act on 6.12.2017 determining the assessed income at Rs. 95,17,310/- including therein addition of Rs. 90,00,000/- under section 68 of the Act and Rs. 1,62,000/- on account of unexplained investment against which the assessee filed appeal before the Ld. CIT(A) who confirmed the above additions.

5.

The assessee, being aggrieved is before the Tribunal and all the grounds of appeal relate thereto.

6.

The Ld. AR submitted that against the order under section 263 of the Act passed by the Ld. Pr. CIT, the assessee has filed appeal before the Tribunal. The Tribunal vide its order dated 6.7.2021 in quashed the order of the Ld. Pr. CIT passed under section 263 of the Act. A copy thereof was placed on record. The Tribunal has discussed the matter in para 25 to 35, pages 44 to 53 of its order (supra).

7.

We have heard the Ld. Representative of the parties and perused the order (supra) of the Tribunal. For detailed reasons recorded by it, the Tribunal vide its order (supra) set aside the order of the Ld. Pr. CIT passed under section 263 of the Act. The assessment order dated 6.12.2017 passed by the Ld. AO as per the direction of the Ld. Pr. CIT under section 263 of the Act, which order of the Ld. Pr. CIT stands quashed, the impugned assessment order itself does not survive. In this view of the matter, the order of the Ld. CIT(A) confirming the additions against which the assessee is in appeal before us becomes non-est in the eye of law.

8.

In the result, for statistical purposes the appeal of the assessee is treated as allowed.

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