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Facts
The assessee filed an ITR for AY 2013-14, which was processed under Section 143(1). Reassessment proceedings were initiated under Section 148 due to an alleged accommodation entry of Rs. 59,24,700 through penny stock, which was added to income under Section 69 read with 115BBE. The CIT(A) dismissed the assessee's appeal ex-parte due to non-prosecution after providing multiple opportunities.
Held
The Tribunal observed that the CIT(A) had dismissed the appeal ex-parte and adjudicated on merits. However, in the interest of justice, the Tribunal decided to set aside the CIT(A)'s order and remit the matter back to the CIT(A) for a fresh decision, explicitly refraining from commenting on the merits of the case.
Key Issues
The validity of reassessment proceedings, including non-compliance with Section 148A and limitation; the genuineness of the addition under Section 69 for accommodation entry; and the non-allowance of TDS credit.
Sections Cited
69, 115BBE, 143(1), 148, 148A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘C’: NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI AVDHESH KUMAR MISHRA
Appellant by None Respondent by Shri Om Prakash, Sr.DR Date of Hearing 28/07/2025 Date of Pronouncement 28/07/2025 ORDER PER AVDHESH KUMAR MISHRA, AM
The appeal for the Assessment Year (hereinafter, the ‘AY’) 2013-14 filed by the assessee is directed against the order dated 30.08.2024 passed by the Ld. Commissioner of Income Tax (Appeals), NFAC, New Delhi [hereinafter, the ‘CIT(A)’].
The assessee has raised following grounds of appeal: -
1. Ld. AO making an addition of Rs.59,24,700 under Section 69 of the Act is bad in law and on the facts and circumstances of the case and is liable to be quashed.
Jeet Kaur 2. The impugned reassessment order has been passed without complying with the mandate of section 148A of the Act in as much as the complete investigation records, information relied on, and the complete witness statements were never provided to the assessee, thereby denying the fair opportunity to assessee to cross examine, rebut and corroborate the said underlying information.
The impugned reassessment order is liable to be quashed as the same has been passed completely mechanically and without any application of mind and without even appreciating the facts and circumstances at hand.
The impugned reassessment proceedings proceed on a hypothesis or a theory about certain modus operandi of transactions without establishing any live link between the alleged information in the possession of the department and the case of the assessee; thus, the entire proceedings are void ab initio and liable to be quashed.
5. The subject reassessment proceedings are liable to be quashed as the notice under Section 148 was issued beyond the prescribed period of limitation.
6. The Ld. AO has grossly erred in raising the impugned demand upon the assessee as the TDS credit has not been allowed to the assessee of an amount of Rs.5,01,036/.
The impugned reassessment order has been passed in a vague, mechanical and cryptic manner without any application of mind and without dealing with any contention raised by the assessee and is hence bad in law and liable to be set aside.
The abovementioned grounds are independent and without prejudice to one another.
The assessee craves leave to add, amend, alter or withdraw all or any of the grounds of appeal either before or at the time of the hearing of the appeal.”
2.1 Vide above-mentioned grounds, the assessee has challenged not only the validity of reopening of the assessment order but also the genuineness of addition of Rs.59,24,700/- under section 69 of the Income Tax Act, 1961 (‘Act’) and non-allowance of TDS credit Rs.5,01,036/-.
Jeet Kaur 3. The relevant facts giving rise to this appeal are that the assessee filed her Income Tax Return (‘ITR’) on 27.03.2014 declaring income of Rs.20,79,370/-. The ITR was processed under section 143(1) of the Act. Thereafter, reassessment proceedings were initiated vide notice under section 148 of the Act on the reasoning that the assessee had taken accommodation entry of Rs.59,24,700/- through penny stock of Presha Metallurgical Ltd. The Assessing Officer (‘AO’) had given many opportunities to the assessee for explaining the genuineness of share transaction but in vain. Therefore, the reassessment was completed whereby the sum of Rs.59,24,700/- was taxed under section 69 r.w.s. 115BBE of the Act. Aggrieved, the assessee filed appeal before the CIT(A), who dismissed the appeal due to non-prosecution after providing 5 opportunities of being heard to the appellant assessee. (para 4 of the impugned order).
4. Before us, none appeared on behalf of the assessee. Therefore, we heard the Ld. Sr. Departmental Representative (‘Sr. DR’). With the help of facts mentioned in orders of the Authorities below, the Ld. Sr. DR submitted that sufficient opportunities of being heard were provided to the appellant assessee by the AO and the Ld. CIT(A) but in vain. He submitted that the appellant assessee tactfully ensured noncompliance to avoid proper investigations. Hence, he prayed for dismissal of the appeal.
We have heard Ld. Sr. DR and have perused the material available on the record. We take note of the fact that the Ld. CIT(A) has dismissed the Jeet Kaur appeal ex-parte due to non-prosecution and has also adjudicated the case on merits. The Ld. CIT(A) has decided each ground of appeal after discussing the issues in detail and his reasons for agreeing with the assessment order. We have taken note of the fact that the impugned order has been passed due to consistent non-compliance on the part of the assessee. However, considering facts of the case in entirety and in the interest of justice, we deem it fit to set aside the impugned order and remit the matter back to the file of the Ld. CIT(A) for deciding the case afresh. We are refraining from making any comment on merit of the case. The appellant assessee, no doubt, shall cooperate in remitted appellate proceedings.
In the result, the assessee’s appeal is allowed for statistical purposes.
Order pronounced in open Court on 28th July, 2025