VIKAS PARUTHI,GHAZIABAD vs. ITO, WARD- 2(1), GHAZIABAD

This appeal is filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals), Ghaziabad [hereinafter referred to CIT (Appeals)] dated 28.02.2018 for assessment year 2011-12.

Because, without prejudice to above and only in alternative, in any case as ‘reason’ became non-existent and Ld. AO has made no addition of the investment of Rs. 45.40 which was the sole reason for issuance of notice u/s 148, hence subsequent proceedings/other additions are illegal in view of ration of Oriental bank of commerce - 49 taxmann.com 485 etc.

Because, ld. CIT(A) further erred in not accepting the additional evidences duly filed with a wrong finding that there is no reason at all for non-filing of evidences before AO even after accepting that evidences are vital for case while AO himself had held in penalty proceedings that assessee was prevented with sufficient cause for non-appearance on last day of hearing. 5. Because, without prejudice to above and only as an alternative on merits, Ld. C1T(A) grossly erred in sustaining following addition, being against the material on record, without any enquiry in case of doubt on any issue and against the settled law: a) Disallowance of intt. On housing loan 1,50,000/- b) Investment in stamp duty/Regn charges etc. 3,28,000/- c) Creditors outstanding balance 20,43,973/- d) Outstanding bal. of bank loan 3,63,478/- e) Credits of customers advances 9,30,316/- f) Claim u/s 54 19,12,289/- Therefore, in terms of above grounds, it is hereby respectfully prayed that the notice u/s 148 may kindly be declared void and 2 consequent order quashed. Without prejudice to above but only in alternative, it is hereby alternatively prayed that the additions of Rs. 57,28,060/- made may kindly be quashed in TOTO.”

The ld. Counsel for the assessee, at the outset, submits that assessee raised additional grounds of appeal before the ld. CIT (Appeals) questioning the jurisdiction and the validity of notice issued under Section 148 of the Income Tax Act, 1961 (the Act) and the ld. CIT (Appeals) did not adjudicate legal grounds raised by the assessee. The ld. Counsel for the assessee also submits that the additional evidences furnished by the assessee were not admitted by the ld. CIT (Appeals) and decided the grounds raised by the assessee on merits. The ld. Counsel for the assessee submits that there is no reason to believe income had escaped assessment and the reason for which the assessment was re-opened was not the addition made by the Assessing Officer in the assessment order making the re-assessment bad in law. Reliance was placed on the decision of the Hon’ble Delhi High Court in the case of Oriental Bank of Commerce and the decision of the Hon’ble Bombay High Court in the case of Jet Airlines.

We also observe that in the written submissions filed by the assessee before the ld. CIT (Appeals) which were also extracted in the order of the ld. CIT (Appeals) at page 7 that the assessee made his elaborate submissions on additional grounds filed before the ld. CIT (Appeals). However, on perusal of the order of the ld. CIT (Appeals) we find that these legal grouhnds have not been disposed of by the ld. CIT (Appeals). Since the additional grounds are legal grounds and goes to the root of the matter, the CIT (Appeals) ought to have decided the grounds raised by the assessee. Therefore, as the CIT (Appeals) inadvertently failed to dispose of the additional grounds raised by the assessee, we are of the view that this appeal should go back to the ld. CIT (Appeals) for adjudication of the additional grounds raised by the assessee. Thus, we restore this appeal to the file of the ld. CIT (Appeals) for adjudication of the additional grounds in accordance with law. As the decision on the additional grounds has bearing on the grounds raised by the assessee on merits, we feel it appropriate to restore the grounds raised by the assessee on merits also to the file of the ld. CIT (Appeals) for de novo adjudication. We are not expressing any opinion on merits of the grounds taken by the assessee. Thus, we set aside the order of the ld. CIT (Appeals) and restore this appeal to the file of the ld. CIT (Appeals) for adjudication of additional grounds as well as the grounds on merits in accordance with law, after providing adequate opportunity of being heard to the assessee.

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