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Facts
The assessee filed an appeal against the order dated 26.09.2023, which confirmed the Assessing Officer's action of making additions and passing an assessment order under Section 144 read with Section 147, allegedly in violation of natural justice. The assessee also challenged the reassessment proceedings on grounds of lack of jurisdiction and failure to fulfill pre-conditions.
Held
The Tribunal noted that the assessee had opted for settlement under the 'Vivad Se Vishwas Scheme, 2024'. Based on the assessee's request for withdrawal due to this settlement, the appeal was dismissed as infructuous. The ultimate result was the dismissal of the assessee's appeal.
Key Issues
Whether the reassessment proceedings were valid and conducted in accordance with law and principles of natural justice, and whether the addition made under Section 68 was justified.
Sections Cited
144, 147, 148, 68
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Income Tax Appellate Tribunal, MUMBAI BENCH “K (SMC
Before: SHRI OM PRAKASH KANT & SHRI RAHUL CHAUDHARY
This appeal by the assessee is directed against order dated 26.09.2023 passed by the Ld. Commissioner of Income-tax (Appeals), NFAC [in short ‘the Ld. CIT(A)’] for assessment year 2012- 13, raising following grounds:
ON NATURAL JUSTICE:
1.1. In the facts and circumstances of the case and in law the 1.1. In the facts and circumstances of the case and in law the 1.1. In the facts and circumstances of the case and in law the Learned Commissioner of Income Tax (Appeals) ["the Ld. Learned Commissioner of Income Tax (Appeals) ["the Ld. Learned Commissioner of Income Tax (Appeals) ["the Ld. CIT(A)"] erred in confirming the action of the Learned CIT(A)"] erred in confirming the action of the Learned CIT(A)"] erred in confirming the action of the Learned Assessing Officer ["the Ld. AO"] who in turn made huge Assessing Officer ["the Ld. AO"] who in turn made huge Assessing Officer ["the Ld. AO"] who in turn made huge additions to the returned income and passed the Assessment additions to the returned income and passed the Assessment additions to the returned income and passed the Assessment order u/s 144 r.w.s. 147 of the Income Tax Act, 1961 ["the order u/s 144 r.w.s. 147 of the Income Tax Act, 1961 ["the order u/s 144 r.w.s. 147 of the Income Tax Act, 1961 ["the Act"] in gross violation of principles of natural justice. Act"] in gross violation of principles of natural justice. 1.2. In the facts and ci 1.2. In the facts and circumstances of the case and in law the rcumstances of the case and in law the order passed in Ld. CIT(A) deserves to be quashed since the order passed in Ld. CIT(A) deserves to be quashed since the order passed in Ld. CIT(A) deserves to be quashed since the same is, (1) Sans any independent reasoning whatsoever; same is, (1) Sans any independent reasoning whatsoever; same is, (1) Sans any independent reasoning whatsoever; and; (ii) is passed in gross violation of principles of natural and; (ii) is passed in gross violation of principles of natural and; (ii) is passed in gross violation of principles of natural justice based on extraneous considera justice based on extraneous considerations while ignoring the tions while ignoring the relevant, material, considerations and submissions made by relevant, material, considerations and submissions made by relevant, material, considerations and submissions made by the Appellant. the Appellant.
2. ON REASSESSMENT: 2. ON REASSESSMENT: 2.1 In the facts and circumstances of the case and in law, the 2.1 In the facts and circumstances of the case and in law, the 2.1 In the facts and circumstances of the case and in law, the impugned re-assessment proceedings are bad in law and void assessment proceedings are bad in law and void assessment proceedings are bad in law and void for want of Jur for want of Jurisdiction since the necessary pre- conditions for conditions for initiation and completion of re initiation and completion of re-assessment u/s 147/148 of the assessment u/s 147/148 of the Act are not fulfilled in the present case. Act are not fulfilled in the present case. 2.2 While affirming the impugned re 2.2 While affirming the impugned re-assessment order, the Ld. assessment order, the Ld. CIT(A) failed to appreciate that: CIT(A) failed to appreciate that: i. The initiation of re e initiation of re-assessment is without any application of assessment is without any application of mind and in fact the reasons are based on incorrect facts mind and in fact the reasons are based on incorrect facts mind and in fact the reasons are based on incorrect facts which is also acknowledged by the Ld. AO himself; which is also acknowledged by the Ld. AO himself; ii. The entire re The entire re-assessment proceedings are bad in law since assessment proceedings are bad in law since the same are conducted in the same are conducted in violation of the extant judicial violation of the extant judicial precedents and the re precedents and the re-assessment order is directly passed assessment order is directly passed without first disposing off the objections raised by the without first disposing off the objections raised by the without first disposing off the objections raised by the Appellant; and; Appellant; and; iii. In any case, there is no income escaping assessment in the iii. In any case, there is no income escaping assessment in the iii. In any case, there is no income escaping assessment in the present case and even in the present case and even in the assessment order the additions assessment order the additions are simply made on assumptions and presumptions; and; are simply made on assumptions and presumptions; and; are simply made on assumptions and presumptions; and; iv. The re-opening is simply based on borrowed satisfaction opening is simply based on borrowed satisfaction opening is simply based on borrowed satisfaction and without any independent application of mind. and without any independent application of mind.
2.3 In the facts and circumstances of the case and in law, t 2.3 In the facts and circumstances of the case and in law, t 2.3 In the facts and circumstances of the case and in law, the impugned re-assessment deserves to be quashed. assessment deserves to be quashed.
3. ON MERITS: 3. ON MERITS: 3.1. In the facts and circumstances of the case, and in law the 3.1. In the facts and circumstances of the case, and in law the 3.1. In the facts and circumstances of the case, and in law the Ld. CIT(A) erred in erred confirming the action of the Ld. AO in Ld. CIT(A) erred in erred confirming the action of the Ld. AO in Ld. CIT(A) erred in erred confirming the action of the Ld. AO in making an addition of Rs.6,84,810/ making an addition of Rs.6,84,810/- u/s 68 of the Act on the u/s 68 of the Act on the allegation of fictitious long term capital gain. legation of fictitious long term capital gain. 3.2. While doing so the Ld. CIT(A) failed to appreciate that: 3.2. While doing so the Ld. CIT(A) failed to appreciate that: 3.2. While doing so the Ld. CIT(A) failed to appreciate that: i No such capital gain is earned / claimed by the Appellant i No such capital gain is earned / claimed by the Appellant i No such capital gain is earned / claimed by the Appellant and in fact the Appellant has incurred a loss in the and in fact the Appellant has incurred a loss in the and in fact the Appellant has incurred a loss in the transaction; ii. The addition made The addition made by the Ld. AO as confirmed by the Ld. by the Ld. AO as confirmed by the Ld. CIT(A) is based on assumptions, presumptions, surmises, CIT(A) is based on assumptions, presumptions, surmises, CIT(A) is based on assumptions, presumptions, surmises, conjectures, conjectures, conjectures, based based based on on on irrelevant irrelevant irrelevant and and and extraneous extraneous extraneous considerations while ignoring the relevant material, evidences considerations while ignoring the relevant material, evidences considerations while ignoring the relevant material, evidences and considerations; and considerations; iii. Section 68 is not at all Section 68 is not at all applicable to the additions so made applicable to the additions so made by the Ld. AO; and; by the Ld. AO; and; iv. In any case, the addition is unsustainable being contrary to iv. In any case, the addition is unsustainable being contrary to iv. In any case, the addition is unsustainable being contrary to extant law and without providing the necessary material to the extant law and without providing the necessary material to the extant law and without providing the necessary material to the Assessee as relied on by the AO and without granting an Assessee as relied on by the AO and without granting an Assessee as relied on by the AO and without granting an opportunity to c opportunity to cross examine the parties whose statements are ross examine the parties whose statements are relied on; 3.3. In the facts and circumstances of the case and in law the 3.3. In the facts and circumstances of the case and in law the 3.3. In the facts and circumstances of the case and in law the addition made by the Ld. AO as affirmed by the Ld. CIT(A) addition made by the Ld. AO as affirmed by the Ld. CIT(A) addition made by the Ld. AO as affirmed by the Ld. CIT(A) deserves to be deleted in toto. deserves to be deleted in toto.
At the very outset, learned counsel for the At the very outset, learned counsel for the assessee submitted assessee submitted that the assessee has opted for the settlement of the tax dispute that the assessee has opted for the settlement of the tax dispute that the assessee has opted for the settlement of the tax dispute under the ‘Vivad Se Vishwas Scheme, 2024.’ A copy of Form No. 2, under the ‘Vivad Se Vishwas Scheme, 2024.’ A copy of Form No. 2, under the ‘Vivad Se Vishwas Scheme, 2024.’ A copy of Form No. 2, determining the tax liability under the said scheme, has also been determining the tax liability under the said scheme, has also been determining the tax liability under the said scheme, has also been placed on record. In light of the asse placed on record. In light of the assessee’s request for withdrawal, ssee’s request for withdrawal, the present appeal stands dismissed as having become infructuous. the present appeal stands dismissed as having become infructuous. the present appeal stands dismissed as having become infructuous.
In the result, the appeal of the assessee is dismissed. In the result, the appeal of the assessee is dismissed. In the result, the appeal of the assessee is dismissed.
Order pronounced in the open Court on nounced in the open Court on 11/02/2025. /02/2025.