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Facts
A search and seizure operation was conducted u/s 132 of the Income Tax Act, 1961, leading to assessment orders passed u/s 153A r.w.s. 143(3) for AY 2012-13 and 2013-14. The assessee appealed to the Ld. CIT(A) who allowed the appeals by relying on a group case order.
Held
The Tribunal held that the Ld. CIT(A) had not independently discussed the facts and merits of the case, nor had it considered crucial issues like the absence of incriminating material, lack of cross-examination opportunities, and the evidentiary value of retracted statements. The CIT(A)'s order was deemed cryptic and erroneous.
Key Issues
Whether the Ld. CIT(A) erred in allowing the appeals based on a group case order without independently considering the merits of the assessee's case, particularly regarding incriminating material, cross-examination, and retracted statements.
Sections Cited
132, 153A, 143(3)
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Income Tax Appellate Tribunal, DELHI
Before: SHRI YOGESH KUMAR U.S. & SHRI AVDHESH KUMAR MISHRA
order of Ld. Commissioner of Income Tax (Appeals)-23 (‘Ld. CIT(A) ’ for short), New Delhi dated 12/05/2017pertaining to Assessment Years2012-13 and 2013-14 respectively.
A search and seizure operation was carried out u/s 132 of Income Tax Act, 1961 ('Act' for short) on 10/03/2015 on Appu Ghar Group of cases and the Assessee herein was also covered u/s 132 of the Act. The assessment order came to passed u/s 153A r.w.s. 143(3) of the Income Tax Act, 1961 ('Act' for short) for Assessment Year 2012-13 and 2013-14 by making certain additions. The assessment orders were called in question by the Assessee before the Ld. CIT(A). The Ld. CIT(A) vide combined order dated 12/05/2017 along with other Assessees, allowed the Appeals of the Assessee herein on the ground that the Ld. CIT(A) has considered the issue involved in the Appeal in the order dated 04/05/2017 in the group case of ‘Surana Buildtech Pvt. Ltd’.
Aggrieved by the order of the Ld. CIT (A) dated 12/05/2017, the Department of Revenue preferred the present Appeal.
The Ld. Department's Representative vehemently submitted that the order of the Ld. CIT(A) is cryptic, not decided any of the issues involved in the Appeals independently on its merit and in a vague manner, by mentioning the case of ‘Surana Buildtech Pvt. Ltd’., allowed the Appeals of the Assessee, which cannot be sustained in the eyes of law. Thus, sought for allowing the Appeals of the Revenue.
Per contra, the Ld. Assessee's Representative by relying on the order of the Ld. CIT(A), submitted that the detailed reasoning has been assigned in the case of Surana Buildtech Pvt. Ltd. for 2011-12 in order dated 04/05/2017, which is similarly placed to the Assessee. However, fairly submitted that the Ld. CIT(A) should have discussed the facts and the merits of the case independently. Further submitted that the additions have been made dehors the incriminating material found during the course of search and the A.O. has not provided opportunity of cross examination of the persons who statements were relied upon by the A.O. while making the addition. Further submitted that the A.O. should not have made the additions based on the retracted statement.
The Ld. Counsel further submitted that the case of the Assessee is squarely covered with the Judgments of Hon'ble Supreme of Hon'ble Supreme Court in the case PCIT Vs. Abhisar Buildwell 454 ITR 212 (SC), CIT Vs. Sinhgad Technical Education society, [2017] 84 taxmann.com 290 (S.C) and Judgments of Jurisdictional High court in the case of Saksham Commodities Ltd. Vs. Income Tax Officer [2024] 161 taxmann.com 485 (Delhi)/[2024] 464 ITR 1 (Delhi), (SLP of Revenue dismissed 2025] 170 taxmann.com 87 (S.C) [16-12-2024]). Thus, sought for dismissal of the Appeal of the Revenue.
We have heard both the parties and perused the material available on record. The Ld. CIT(A) deleted the additions made by the A.O. at the hands of the Assessee on the ground that the Ld. CIT(A) has considered the matter in great detail in its order dated 04/05/2017 in the group cases of Surana Buildtech Pvt. Ltd. and following the same, deleted the additions made in the hands of the Assessee herein. The relevant portion of the Ld. CIT(A) is reproduced as under:-
“3.1.3 The facts of the matter, as mentioned above, have been considered in great detail in my order dt. 04.05.2017 in the group case of SuranaBuildtech Pvt. Ltd. in Appeal Nos. 337 & 338/16-17 for AYs 2011-12 at paras-4.1 to 4.1.9 wherein I have held that "the AO was not within the jurisdiction bestowed on him by law to make the impugned additions in the assessment u/s 153A of the Act, and therefore the impugned assessment orders for both the assessment years cannot be sustained. It is held accordingly and the reassessment orders for both assessment years are quashed." (para-4.1.7). and that, "no addition could be made without providing opportunity for cross-examination of the persons whose statements were relied upon by the AO make the addition and for this reason as well the addition is not sustainable." (para-4.1.5), and that, "no addition could be made on the basis of a retracted statement and for this reason as well the addition is not sustainable." (para-4.1.6), and having considered the facts related to the share application/share capital/unsecured loan in respect of M/s SuranaBuildtech Pvt. Ltd. and all these other cases of the group at paras-4.1.8 to 4.1.8.2 in my order in the case of SuranaBuildtechPvt Ltd. for AYS 2011-12 (supra) I have held that, "the addition made is not sustainable on merits as well. I hold accordingly.", and I have deleted the addition in the case of SuranaBuildtechPvt Ltd. for AYs 2011-12 (supra). Following the same the additions in all the above 16 assessments in the group cases listed at page-1 are deleted.”
As could be seen from the above, the Ld. CIT(A) has not discussed regarding the ‘incriminating material’ qua the Assessee and qua the Assessment Year under consideration to conclude that the additions made by the A.O. are without incriminating material gathered during the search. The Ld. CIT(A) has also not discussed the issue of not providing opportunity to the Assessee for cross examination of the persons who’s statement were relied upon by the A.O. to make the addition in the hands of the Assessee. The Ld. CIT(A) has also not stated anything in its order regarding the evidentiary value of the ‘retracted statement’ which has been made as basis for the addition. However, the Ld. CIT(A) has allowed the Appeals by impliedly borrowing the findings made in the case of Surana Buildtech Pvt. Ltd. vide order dated 04/05/2017. We find such approach of the Ld. CIT(A) is not only erroneous but also cryptic.
Considering the peculiar facts and circumstances of the case, we set aside the order of the Ld. CIT(A) and remand the matter to the file of the Ld. CIT(A) to decide all the above three issues in detail qua the facts and qua the documents of the Assessee and pass speaking order in accordance with law. Needless to say, the Assessee shall be provided the opportunity of being heard before passing the order.
In the result, Appeals of the Revenue are partly allowed for statistical purpose.
Order pronounced in the open court on 09th JULY , 2025