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Income Tax Appellate Tribunal, “H” BENCH, MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL “H” BENCH, MUMBAI BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER (A.Y. 2013-14) Keyman Advisory Vs. Dy. Commissioner of Services Pvt. Ltd. Income Tax, Central Floor-3, Plot-90, Ganpati Circle-7(1), Niwas, Dhirubhai Parekh Aayakar Bhavan, Marg, Ladwadi, Kalbadevi Mumbai – 400 020 Mumbai – 400002 स्थायी लेखा सं./जीआइआर सं./ PAN/GIR No: AADCK2215K Appellant .. Respondent Appellant by : Vimal Punmiya Respondent by : Jagdish Jangid Date of Hearing 12.10.2022 Date of Pronouncement 31.10.2022 आदेश / O R D E R Per Amarjit Singh (AM):
The present appeal filed by the assessee is directed against the order passed by the ld. CIT(A)-49, Mumbai which in turn arises from the order passed by the A.O u/s 143(3) r.w.s 147 of the Act. The assessee has raised the following grounds before us:
1. The order of the Ld. CIT (A) is erroneous on the facts and in the law. On the facts and in the circumstances of the case he erred in reopening the case u/s 147 of the Income Tax Act, 1961 beyond a period of 4 years an assessment already completed u/s 143(3) r.w.s. 147 of the Act and without having reason to believe that the income has escaped assessment and therefore, the reopening is bad in law.
2 Keyman Advisory Services Pvt. Ltd. Vs. DCIT,CC-7(1)
On the facts and in the circumstances of the case and in law, the Ld. A.O. erred in completing the reassessment proceedings on the same grounds and facts and on the basis of same records and materials available during the assessment proceedings u/s 144 r.w.s 147 of the Act. In other words, the Ld. A.O. erred in completing the reassessment proceedings with a change of opinion.
3. On the facts and in the circumstances of the case and in law, the Ld. A.O. erred in reassessing the income of the appellant at Rs. 74,05,62,790/- as against NIL income. The appellant disputes wrongful additions and submits that NIL income be accepted as correct. 4. On the facts and in the circumstances of the case and in law, the Ld. A.O. erred in making a high pitched reassessment and made an addition of the amount of Rs. 74,01,62,790/- as unexplained cash credit u/s 68 of the Income Tax Act, 1961 on account of the amount credited to the bank account of the assessee/ appellant ignoring the fact that there are multiple transactions and without rejecting the books of accounts u/s 145(3) of the Act. 5. On the facts and in the circumstances of the case and in law, the Ld. A.O. erred in completing the reassessment proceedings on the basis of credits in the bank account which is in violation of sec 2(12A) of the Act which provides that bank statement can never be a basis for making an addition. 6. On the facts and in the circumstances of the case and in law, the Ld. A.O. erred in completing the reassessment proceedings without issuing any further notice asking for submissions of documents and records including recorded reasons, approval from higher authority which were not received by the assessee/appellant till the completion of reassessment proceedings. 7. On the facts and in the circumstances of the case and in law, the Ld. A.O. erred in reopening the case on the basis of statements recorded on oath u/s 131 of the Act without providing an opportunity for Cross examination to the Appellant and did not communicate to the Appellant that a statement on oath has been recorded. 8. Looking to the facts and in the circumstances of your Appellant's case the said addition made by the Ld. A.O. is incorrect and invalid and ought to be deleted. 9. In reaching to the conclusion and making the aforesaid additions/ disallowances, the Ld. CIT (A) omitted to consider relevant factors, considerations, principles and evidences while he was overwhelmed, influenced and prejudiced by irrelevant considerations and factors. 10. The reassessment is made in gross violation of principles of natural justice and hence bad in law and void and ought to be quashed. 11. The Ld. A. O. erred in charging interest u/s. 234A, 234B and 234C of the Income Tax Act, 1961. 12. The Ld. A.O. erred in initiating penalty proceedings u/s. 274 r.w.s. 271(1)(c) of the Income Tax Act, 1961.
3 Keyman Advisory Services Pvt. Ltd. Vs. DCIT,CC-7(1)
The appellant craves leave to add to, alter, amend, modify and/ or delete any or all of the above said ground(s) of appeal. The appellant reserves its right to file further submissions in the appeal.” 2. The assessee had not filed any return of income for the year under consideration. In this case information was received from the investigation wing that there were large value of funds credited by transfer and RTGS and debit by cash, transfers and RTGS in the bank account of the assessee during the year under consideration. After recording reasons for reopening of the assessment and after obtaining necessary approval, the A.O issued notice u/s 148 of the Act to the assessee on 28.03.2019. In response to the said notice the assessee did not file any return of income. Thereafter the A.O also provided the reasons recorded for reopening of the assessment to the assessee but the assessee did not object to the same. Thereafter the A.O issued notice u/s 142(1) of the Act requiring the assessee to furnish various details and explanation regarding the credit and debit entries appearing in its bank account. The same were not furnished by the assessee. The assessee has not made any compliance to explain the nature of transaction, source of funds application and utilization of funds. Thereafter, the A.O has obtained information from the bank manager of the ICICI bank Kalbadevi by issuing of notice u/s 133(6) of the Act. The bank had furnished copies of bank statement of the account held by the assessee. On perusal of the bank statement the AO noticed that there were large amount credited and debited to the bank account of the assessee i.e a sum of Rs.74,01,62,790/-. The assessment u/s 143(3) r.w.s 147 of the Act was completed on 21.12.2019, the total income of the assessee for the year under consideration was assessed at Rs.74,05,62,790/-.
4 Keyman Advisory Services Pvt. Ltd. Vs. DCIT,CC-7(1)
Aggrieved, the assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) had dismissed the appeal of the assessee holding that there was no evidence filed during the reassessment proceedings or even as additional evidences before him in appeal to explain nature and source of impugned cash credit in the bank account. The ld. CIT(A) observed that the transactions of the assessee company was not genuine and other group concern were used by one of Shri Manoj Punamiya for providing accommodation entries. The ld. CIT(A) has also stated that assessee has not filed any submission to negate the findings appearing in the report of investigation wing as well as in the assessment order, therefore, creditworthiness and the genuineness of transaction cannot be said to have been proved so as to shift the onus on the revenue.
During the course of appellate proceedings before us the ld. Counsel submitted that due to search action in the group concern of the assessee company many employees including the chartered accountant Mr. Manish Panwar who was attending to the assessment proceeding and handling income tax matter of the assessee company had left the organization, therefore, he had not communicated to the director of the assessee company about the pending detail to be furnished before the A.O. Regarding non compliance made before ld. CIT(A) during the course of appellate proceedings the ld. Counsel submitted that since the chartered accounted had left the organization, therefore, there was nobody to guide the assessee company to make compliance in the faceless appellate proceedings taken place before the department. Therefore, the ld. Counsel pleaded to provide more opportunities to the assessee for adjudicating its case on merit after hearing the assessee and considering the relevant detais.
5 Keyman Advisory Services Pvt. Ltd. Vs. DCIT,CC-7(1)