C C ENGINEERS PVT. LTD,PUNE vs. INCOME TAX OFFICER WARD 1(1), PUNE

Findings and analysis: We have heard both the parties and perused the records.The Ld. DR vehemently relied on the order of the Ld. CIT(A) and AO. Assessee is a private limited company. The Assessing Officer (AO) based on the system generated data noted that assessee had not filed return of income for AY 2012-13. Accordingly, AO issued notice u/s 148 of the Act dated 25.03.2019.

the Ld. AR invited our attention to the reasons recorded by the ITO, Ward-1(2), Pune for initiating proceedings u/s 148 of the Act. The reasons recorded have been filed bythe Ld. AR as Annexure-J in the paper book.

Ld. AR submitted that reasons recorded mentions details pertaining to Alfa Security Services. Ld. AR submitted that assessee had never received interest from Co-operative Credit Society. Ld. AR submitted that

Ld. DR submitted that assessee had not raised any objection during the assessment proceedings.

We have studied that reasons recorded for reopening and it is clearly observed that it is for some entity called Alfa Security Services. The contention of the Ld. DR that assessee had not raised objection during assessment proceedings is not sustainable as assessee was not provided copy of reasons recorded for reopening during assessment proceedings. This fact has not been rebutted by the Ld. DR. Ld. DR also not rebutted the contention of the assessee that assessee had never received interest from Co-operative Credit Society.

The assessee had raised these legal grounds before the Ld. CIT(A). However, Ld. CIT(A) has dismissed the ground cursorily. The said paragraphs are reproduced as under:

In these facts and circumstances of the case, since the reasons recorded pertains to some other entity and not to the assessee, the reasons recorded are factually incorrect. This shows that there was no application

It is observed that in the assessment order AO made following additions : i. Loan from Mr. Prashant Kale Rs.19,00,000/- ii. Disallowance u/s 36(1)(iii) on alleged advances given without interest Rs.38,70,745/- iii. Non-deduction of TDS Rs.67,58,209/- iv. Disallowance u/s 43B Rs.10,10,646/-

Thus, it can be observed that the AO has not made any addition on the issues mentioned in the reasons recorded for reopening. The Hon’ble Bombay High Court in the case of CIT Vs. Jet Airways (I) Ltd., 331 ITR 236 (Bombay) has held that if AO does not make any addition on the issues mentioned in the reasons recorded for re-opening then AO is precluded from making addition on any other issue. Therefore, the additions made by the AO are bad in law. In the result, the ground No. 5 raised by the assessee is allowed.

Since, we have allowed the legal grounds raised by the assessee, we do not intent to adjudicate on merits of the addition. Accordingly, all other grounds raised by the assessee are dismissed as unadjudicated.

In the result, the appeal of the assessee is partly allowed.