MR. KAMAL JAJOO,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE -4(3) C B CENTRAL RANGE-4, MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL
“SMC” BENCH MUMBAI
BEFORE HON‟BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER
Mr. Kamal Jajoo
Flat No. 2/b Jai Hind Estate
CB Central Range -4
Air India Bldg, Nariman
Point, Mumbai -
400021
PAN/GIR No. ABVPJ3150A
(Applicant)
(Respondent)
Assessee by Shri K. Gopal
Revenue by Shri Avinash Karpe, Sr. DR
Date of Hearing
29.04.2025
Date of Pronouncement
02.06.2025
आदेश / ORDER
PER SANDEEP GOSAIN, JM:
The present appeal has been filed by the assessee challenging the impugned order 14.08.2024 passed u/s 250 of the Income Tax Act, 1961 („the Act‟), by the National
Faceless Appeal Centre, Delhi (NFAC) for the assessment year 2011-12. 2. At the outset, Ld. AR drawn our attention to the petition filed by the assessee, seeking admission of 2
Mr. Kamal Jajoo., Mumbai additional grounds, the contents of the said petition is reproduced herein below:
“Sub.: Petition seeking Admission of Additional Grounds
Respected Sir,
The Appellant is moving the present application before this Hon'ble Bench to admit the additional grounds of appeal raised. The Appellant submits that through the additional grounds of appeal, the Appellant has challenged the juri iction of the Ld.A.O. to initiate the reassessment proceedings under section 147 of the Act. In the present case, the Ld.A.O.
failed to follow the procedure laid down by the Hon'ble Supreme Court in the case of GKN Driveshaft (India) Ltd. vs. ITO [2003] 259 ITR 191 (SC) by not passing the order disposing off the objections raised by the Appellant against the reasons recorded to issue a notice under section 148 of the Act. Thus, the notice issued under section 148 of the Act and the subsequent assessment order passed under section 143(3) r.w.s 147 of the Act are without juri iction and bad in law. The Appellant submits that the additional grounds raised by the Appellant go to the root of the proceedings. Hence, the same may be admitted.
For the abovementioned well-established proposition of the law, the Appellant strongly relies upon the following judicial pronouncements and requests your honour to admit and adjudicate the said additional ground.
Sr
No Name of judicial pronouncements
Hon'ble Judicial
Forum
Relevant
Citation
Jute Corpn. of India Ltd. v/s
Commissioner of Income-tax
Supreme Court
187 ITR
688
National Thermal Power Co.
Ltd. v/s Commissioner of Income Tax
Supreme Court
229 ITR
383
3
Ahmedabad Electricity Co Ltd v/s Commissioner of Income- tax
Bombay High
Court
199 ITR
351
Kindly take the above-mentioned application on record and oblige.”
On the other hand, Ld. DR on behalf of the revenue contested the said application and requested for dismissal of the same.
3
Mr. Kamal Jajoo., Mumbai
I have heard the counsels for both the parties, perused the material placed on record, judgements cited before us and also the orders passed by the revenue authorities. 5. From the records, I found that through the present petition, the assessee has challenged the juri iction of the AO to initiate the reassessment proceedings u/s 147 of the Act. It was submitted that the AO has failed to follow the procedure laid down by Hon‟ble Supreme Court in the case of GKN Driveshaft India Limited Vs. ITO [2003] 259 ITR 19 (SC) by not passing the order disposing of the objections raised by the assessee against the reasons recorded to issue a notice u/s 148 of the Act. 6. After having gone through the records, I found that assessee has raised objections before the AO however the same were not disposed off, therefore in our view, assessee has got every right to raise this legal ground at any stage before any authority. In this regard, I am convinced that the additional grounds raised by the assessee are purely legal in question and goes to the roots of the case and therefore, while placing reliance upon the decision of NTPC 1. The Ld.A.O. failed to follow the procedure laid down by the Hon'ble [2003J 259 ITR 19 (SC) before initiating reassessment proceedings under section 147 of the Act. Thus, the notice dated 28.03.2018 issued under section 148 of the Act and the subsequent assessment order passed under section 143(3) r.w.s 147 of the Act are without juri iction and bad in law. 2. The Ld.A.O. failed to pass any order disposing off the objections raised by the Appellant against the reasons recorded to issue a notice under section 148 of the Act. Hence, the Ld. A.O. has failed to comply the procedure prescribed by the Hon'ble Supreme Court in the case of GKN Driveshaft (Supra). In view of the same, the notice under section 148 of the Act and the subsequent reassessment order passed under section 143(3) r.w.s 147 of the Act are bad in law and the same needs to be quashed. 7. Both the additional grounds are interrelated and interconnected and relates to challenging the reassessment proceedings initiated u/s 147 of the Act as bad in law and without juri iction. Since, these legal grounds goes to the roots of the case, therefore I have decided to adjudicate these grounds through the present consolidated order firstly. 8. I have heard the counsels for both the parties on additional grounds, perused the material placed on record, judgements cited before us and also the orders passed by the revenue authorities. From the records I noticed that reassessment proceedings were initiated u/s 147 of the Act because as per information received by the AO from ADIT
5
Mr. Kamal Jajoo., Mumbai
Investigation, Kolkata to the effect that several entities were found to be depositing cash in bank accounts and thereafter amounts were being rotated through banking channel among various entities.
And as per the information, the assessee had received funds of Rs.
2,03,73,721/- through the entity „Sajendra Mookim‟ which found to be a shell entity in investigation.
9. Thus while initiating reopening of assessment proceedings notice u/s 148 of the Act was issued upon assessee on 28.03.2018 in response assessee had filed written submissions on 07.05.2018. The assessee requested for copy of reasons recorded for reopening and hence wide office letter dated 04.07.2018 reasons for reopening were provided.
10. Now to question for decision before us is as to whether the objections filed by the assessee were disposed off or not before finalisation of assessment. In this regard, our attention was drawn to the paper book wherein at page No.
98 to 111 the objections filed by assessee to the reopening of assessment has been placed on record. However, on the perusal of the said objections, I found that these are dated
11.10.2018, but having sale of receipt by the revenue on 23.10.2018. Apart from this assessee had filed a reply to the notice u/s 142(1) on 15.10.2018 at paper book page
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Mr. Kamal Jajoo., Mumbai
No. 112 and another reply was also filed along with documents which is a Paper book page No. 113 & 114. 11. On going through the order of assessment, although there is a mention of supply of reasons recorded for reopening to the assessee but there is no mention in the entire order regarding filing of objections by the assessee.
And it is important to mention here that although assessee had filed reply to the notice u/s 142(1) on 15.10.2018 but even in that reply there is no mention of filing objections against reassessment proceedings. Therefore, in our view in order to decide this ground consultation of assessment record is necessary so that clear factual picture can emerge.
12. There is no dispute to the legal proposition as set down by Hon‟ble Supreme Court in the case of GKN
Driveshaft (supra).
13. Be that as it may, in my view, the interest of justice would be met only if the matter is the restored back to the file of Ld. CIT for deciding this legal ground after consulting and verifying the assessment records, needless to mention after providing opportunity of hearing to the assessee. Thus, keeping in view the above factual position, the present appeal of the assessee is restored to the file of Ld. CIT(A) for adjudicating, the additional grounds on merits by providing opportunity of hearing to the parties.
7
Mr. Kamal Jajoo., Mumbai
The Ld. CIT(A) shall be at liberty to call for any other document from the parties or to call for remand report or to pass any order as deemed fit according to law.
14. Before parting, I make it clear that our decision to restore the matter back to the file of Ld. CIT(A) shall in no way be construed, as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the Ld. CIT(A) independently in accordance with law.
15. Since I have restored the additional grounds raised by the assessee to the file of Ld. CIT(A) for decision therefore other grounds raised by the assessee are also restored back. As the outcome of the decision of the additional grounds would have bearing on the other grounds as well.
16. In the result, the appeal filed by the assessee stands partly allowed.
Order pronounced in the open court on 02.06.2025. (SANDEEP GOSAIN)
JUDICIAL MEMBER
Mumbai, Dated 02/06/2025
KRK, Sr. PS
आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to :
1. अपीलाथी / The Appellant
2. प्रत्यथी / The Respondent.
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Mr. Kamal Jajoo., Mumbai
संबंधधत आयकर आयुक्त / The CIT(A) 4. आयकर आयुक्त(अपील) / Concerned CIT 5. धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, मुम्बई / DR, ITAT, Mumbai 6. गार्ड फाईल / Guard file.
आदेशानुसार/ BY ORDER,
सत्याधपत प्रधत ////
उि/सहायक िंजीकार ( Asst.