HARI GANGA FINCAP PVT. LTD.,NEW DELHI vs. ITO, WARD- 11(1), NEW DELHI

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ITA 1895/DEL/2018Status: DisposedITAT Delhi12 November 2021AY 2010-114 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessment order was not sustainable as there was no proof of issuance of notice under Section 143(2) within the statutory time period. Following a previous decision on identical facts, the Tribunal quashed the assessment order.

What were the facts?

The assessee filed a return of income, which was processed. The case was later re-opened under Section 147, and an assessment order was passed. The Assessing Officer made additions under Sections 68 and 69, and disallowed expenses under Section 37(1).

What were the issues?

The primary issue was whether the assessment proceedings were valid in the absence of a timely issued notice under Section 143(2) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 143(2),Section 68,Section 69,Section 37(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, [ DELHI BENCH “C”: NEW DELHI ]

Before: MS SUCHITRA KAMBLE & SHRI PRASHANT MAHARISHI

For Appellant: Shri Raj Kumar Gupta, C. A.;
For Respondent: Shri Vivek Vardhan, Sr. D. R.;
Hearing: 07/10/2021Pronounced: 11/11/2021
1.

This appeal is filed by the assessee against the order of the ld. CIT (Appeals)–35, New Delhi, dated 15.12.2017 for assessment year 2010-11, raising the following grounds of appeal:-

“1. That under the facts and circumstances, initiation of proceedings U/s. 147 / 148 is without jurisdiction, mechanical, without application of mind, illegal and un - sustainable in law as well as on merits.

2. That in the absence of issuance of notice U/s. 143 (2) within statutory time period, the asstt. proceedings are without jurisdiction, illegal and un - sustainable in law.

3. That without prejudice, in the absence of disposing of all the objection against reassessment proceedings and as per law, the impugned asstt. is un - sustainable.

4.

That under the facts and circumstances, the Ld. AO grossly erred in law as well as on merits in making the following additions U/s. 68 as alleged accommodation entries from following parties

S. NO. PARTY NAME AMOUNT (RS.) Attractive Finlease Ltd. 10,00,000/-

1. 1.

2. Sunny Cast & Forge Ltd. 5,00,000/- TOTAL 15,00,000/- 4.1 That without prejudice, in the absence of providing the adverse material for rebuttal as well as in the absence of providing for cross - examining the persons whose statements have been taken on the back of the assessee which have been adversely used and which were specifically asked for, no adverse view of such material and statements etc. can be taken and all such material needs to be ignored for taking a view for framing the Asstt.

5. That under the facts and circumstances and in the absence of any material whatsoever on records, the Ld. AO committed grave error of law and facts in imagining 1.6% as commission element on alleged accommodation entry of Rs.15 lacs, consequently he erred in making an addition of Rs.24,000/- U/s. 69 C as un - explained expenditure. “

2.

The brief facts of the case shows that assessee filed return of income declaring total income of Rs. 20,021/- on 25.09.2010. This return was processed under Section 143(1) of the Income Tax Act, 1961 (the Act) on 14.04.2011. The case of the assessee was re-opened by issue of notice under Section 148 of the Act on 14.11.2014. In response to that notice assessee submitted a letter dated 17.04.2015 stating that return of income originally filed on 25.09.2010 should be treated as a return in response to the notice under Section 148 of the Act. Consequent to that the assessment proceedings commenced. The assessment order was passed under Section 143(3) read with Section 147 of the Act on 13th March, 2016 determining the total taxable income of the assessee at Rs. 19,61,263/-. The ld. Assessing Officer made an addition of Rs. 15,00,000/- under Section 68 of the Act, Rs. 24,000/- under Section 69 of the Act and also disallowed a sum of Rs. 4,17,342/- u/s 37 (1) of the Act..

3.

Against this order, the assessee preferred appeal before the ld. CIT (Appeals). It was challenged before the ld. CIT (Appeals) that statutory notice under Section 143(2) of the Act was not issued to the assessee within a statutory time period and, therefore, the assessment order is bad in law. The ld. CIT (Appeals) along with the objection to 148 of the Act dismissed the appeal of the assessee. 4. The assessee is in appeal before us and has mainly challenged the issue that there is no notice issued under Section 143(2) of the Act in time.

5.

The ld. AR firstly submitted that the ground No. 2 of the appeal challenged the assessment order on the ground that in absence of issuance of notice under Section 143(2) of the Act within statutory time period the assessment is bad in law. He submitted that an identical issue has been decided in the case of the assessee for assessment year 2011-12 in I.T. Appeal No. 2314/Del/2018. He specifically referred to para No. 3.2.8 of the order.

6.

The ld. DR vehemently objected to the fact stating that assessee has appeared before the Assessing Officer and now it cannot be objected that no notice under Section 143(2) of the Act has been issued. 7. We have carefully considered the rival contentions and perused the orders of lower authorities. Even before us, no proof of issue of notice u/s 143(2) of the act was produced. In absence of any proof of issuance of notice u/s 143 (2) of the act , the assessment order u/s 143 (2) of the act is not sustainable. On identical facts and circumstances of the case, for AY 2011- 12 in Del 2018 dated 13/9/2021 we have quashed reassessment order for non issuance of notice u/s 143 (2) of the act. Therefore respectfully following that order, we allow ground no 2 of the appeal and quash the assessment order. 8. Accordingly appeal of the assessee is allowed on that issue.

Oder pronounced in the open court on : 11/11/2021.

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