MRS. DIVYESH AMBALAL SHAH,MUMBAI vs. ACIT-27(1), NAVIMUMBAI

impugned order dated 03.01.2023 passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] qua the assessment order for Assessment year 2011-12 on the grounds inter-alia that:-

“1. The learned Commissioner of Income-tax (Appeals) [hereinafter referred to as 'the Ld. CIT(A)] erred in upholding the action of the Assistant Commissioner of Income-tax- 27(1), Mumbai (hereinafter referred to as "the Assessing Officer") in determining the total income of the appellant at Rs.47,60,754/- while passing the assessment order under section 143(3) r.w. section 147 of the Income-tax Act, 1961 (the Act) as against returned income of Rs. 44,56,260/-. Reassessment proceedings are bad in law 2. The Ld. CIT(A) erred in upholding the action of the Assessing Officer in reopening the assessment under section 147 of the Act by issuing notice under section 148 of the Act inter alia in view of the following grounds and thus the said notice, consequent reassessment proceedings as well as the assessment order passed under section 143(3) read with section 147 of the Act are bad in law and liable to be quashed: (a) the Assessing Officer erred on facts and in law in not furnishing a copy of the reasons originally recorded for reopening to the appellant, in contravention of the law laid down by the Hon'ble Supreme Court in the case of GKN Driveshafts Ltd v ITO (2003) 259 TTR 19 (SC). (b) reassessment proceedings have been initiated by the Assessing Officer completely on the basis of information received from the investigation wing without forming his own belief based on application of his mind and thus the reopening was based on borrowed satisfaction. (c) notice under section 148 of the Act has been issued without complying with the jurisdictional condition of there being a valid belief that the appellant's income forthe assessment year in question has escaped assessment. Addition under section 68 of the Act - Rs.2,77,800/-

3. The Ld. CIT(A) erred in upholding the action of the Assessing Officer in making addition of Rs.2,77,800/- under section 68 of the Act based on the allegation that the appellant has received the said amount as proceeds from sales of share of a company listed on recognised stock exchange, being DMC Education Ltd, and that such transaction was nothing but bogus accommodation entry.

4. The Ld. CIT(A) failed to appreciate that the impugned addition was made by the Assessing Officer solely based on certain information received from investigation wing (one of the vertical of income-tax department itself) and surmises, without conducting any kind of enquiry on his own and ignoring every authentic document furnished by the appellant which proves the genuineness of the transaction undertaken by him.

5. The Ld. CIT(A) failed to appreciate that the Assessing Officer has neither provided the appellant with confessional statement of any person involved in transaction for generating bogus claims of long- term capital gains wherein appellant's name has been mentioned as a beneficiary of such transaction nor provide the appellant an opportunity to cross examine any such the person.

6. The appellant submits that the Ld. CIT(A) has erred in uploading the impugned addition based on certain incorrect factual understanding and placing reliance on certain judicial pronouncements which are not applicable to the facts involved in appellant's case. Addition of Rs.8.334/- as unexplained expenditure 7. The Ld. CIT(A) erred in upholding the action of the Assessing Officer in making addition of Rs.8.334/- (3% of Rs.2,77,800/-) as unexplained expenditure based on the allegation that the appellant has paid the said amount as brokerage for generating the alleged bogus accommodation entry of Rs.2,77,800/-.

8. The L.d. CIT(A) erred in upholding the levy of interest under section 234B and 234C of the Act and the same ought to be deleted.

are independent and without prejudice to each other.

11. The Appellant craves liberty to add, to alter and/or amend the grounds of appeal as and when given.

2. Briefly stated, facts necessary for consideration and adjudication of the issues at hand are: The assessment for the year under consideration was reopened by the AO by initiating proceeding under section 147/148 of the Income Tax Act, 1961 (in short, “the Act”). On the ground that the assessee has enterred into transactions of penny scrip i.e. M/s DMC Education Ltd. to the tune of Rs. 2,78,400/-. Declining the contentions raised by the asessee, the AO proceeded to make the addition of Rs. 2,77,800/- on account of unexplained cash credit under section 68 of the Act. The AO also made an addition of Rs. 8,334/- being expenses incurred on account of payment for brokerage @ 3% of transaction value of Rs. 2,77,800/- by treating the same as unexplained expenditure and thereby framed assessment at Rs. 47,60,754/- under section 143(3) r.w.s. 147 of the Act.

3. Assessee carried the matter before the ld. CIT(A) by way of filing appeal who has confirmed the disallowance by dismissing the appeal filed by the assessee. Feeling aggrieved with the impugned order passed by the ld. CIT(A), assessee has come up before the Tribunal by way of filing the present appeal.

7. No doubt 4 notices appeared to have been served upon the assessee and the appeal has been decided by the ld. CIT(A), but to impart the justice and to stop the multiplicity of the proceedings one more opportunity is required to be given to the assessee. The assessee assured that she will appear on each and every date fixed by the ld. CIT(A). Consequently, impugned order passed by the ld. CIT(A) is hereby set aside to be decided afresh by him after providing adequate of being heard to the assessee.