Loading judgment…
Facts
The assessee filed an appeal which was time-barred by 437 days due to notices being sent to an old email ID, despite the assessee having updated their contact information. The Assessing Officer reopened the assessment under Sections 147/148 based on information that the assessee received Rs. 90,00,000 as accommodation entry, which was treated as unexplained cash credit under Section 68 and added to the assessee's income. The CIT(A) confirmed this addition.
Held
The Tribunal condoned the delay in filing the appeal, finding it not attributable to the assessee. It was held that the lower authorities failed to examine the evidences submitted by the assessee and relied on a general modus operandi. As the assessee had discharged the burden of furnishing all required documents, the provisions of Section 68 could not be invoked. The addition was set aside, and the AO was directed to delete it.
Key Issues
Whether the delay in filing the appeal should be condoned due to communication issues, and whether the addition of Rs. 90,00,000 as unexplained cash credit under Section 68 was valid when the assessee had provided documents to discharge the onus.
Sections Cited
143(3), 147, 148, 148(2), 250, 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
Before: Shri Rajesh Kumar, AM & Shri Pradip Kumar Choubey, JM]
ORDER Per Shri Rajesh Kumar, AM
The appeal filed by the assessee is against the order of Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi dated 08.05.2023 for AY 2010-11 arising out of assessment order passed u/s. 143(3)/147 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) by ITO, Ward-1(3), Kolkata dated 11.12.2017.
At the outset, we note that the appeal of the assessee is time barred by 437 days for which condonation petition was duly filed before us. It was stated in the condonation petition that the email Id of the assessee was manishmadhukar86@gmail.com and it was duly updated in the e-filing portal besides being mentioned in the Form of appeal No. 35. It further stated that return of income filed for AY 2022-23 and AY 2023-24 also contained the said email. However, the notices and u/s 250 dated 17.04.2023 and dated 26.04.2023 were sent on the old email id i.e. stratus.commodity@rediffmail.com and only this email id was checked the assessee came to know about the order having been passed. Hence the delay in filing the appeal which was beyond the control of the assessee and cannot be attributed to the assessee at all. The assessee’s counsel therefore requested that the delay in filing the appeal may be condoned and it may be adjudicated. The ld. DR on the other hand opposed the condonation of delay that the notices and appellate order was sent on the email id of the assessee M/s. Stratus Commodities P. ltd., AY 2010-11 nonetheless it was old one. Therefore, the appeal may not be admitted. After hearing the rival contentions and perusing the condonation petition along with records , we find that the delay was attributable to sending the order on old email address while the assessee has given new email id. Therefore, in our opinion the delay is not attributable to the assessee and is hereby condoned.
The only issue raised by the assessee is against the confirmation of addition by the Ld. CIT(A) of Rs. 90,00,000/- as made by the Assessing Officer on account of unexplained cash credit u/s 68 of the Act.
The brief facts of the case are that the Assessing Officer received information from the Investigation Wing that assessee is a beneficiary of accommodation entry to the tune of Rs. 90,00,000/- from M/s. Canary Tradecom Pvt. Ltd. Accordingly, case of the assessee was reopened u/s. 147 of the Act by issuing notice u/s. 148 of the Act on 31.03.2017. The assessee complied with the said notice by filing the return of income on 16.08.2017 and also requested for giving the reasons recorded u/s. 148(2). Thereafter, the assessee furnished all the details and evidences as called for by the Assessing Officer in the questionnaire issued from time to time. Thereafter, the Assessing Officer in a very cryptic manner noted that the investments received by the assessee company is nothing but it is its own money through accommodation entry and added the same to the income of the assessee in the assessment framed u/s. 143(3)/147 dated 11.12.2017.
5. In the appellate proceeding, the ld. CIT(A) confirmed the order of the Assessing Officer by discussing the general modus operandi of the accommodation entry operators and without pointing out any specific defect or deficiency in the details and evidences filed by the assessee.
4. After hearing the rival contentions and perusing the material on record, we find that the assessee has raised share capital during the year from M/s. Canary Tradecom Pvt. Ltd. During the course of assessment proceeding, the assessee filed all the details as called for by the AO such as name, address, PAN, audited financial statements for FYs 2010-11 and 2022- 23 and also the assessment order u/s. 147/143(3) for AY 2010-11 in the case of investor company. All these evidences are available in the paper book from pages 18 to 50. We note M/s. Stratus Commodities P. ltd., AY 2010-11 that both the authorities below have not examined these evidences and without examining and by relying on the general modus operandi of accommodation entry operators, treated the share application money as assessee’s own money through accommodation entries, which in our opinion, is incorrect and cannot be sustained. We have examined all the evidences as placed before us and observe that the assessee has discharged the burden by furnishing all the documents before the authorities below and therefore provisions of section 68 can not be invoked. The case of the assessee is squarely covered by the decisions of of Hon’ble Apex Court namely DCIT Vs Orient News Prints Ltd. (2018) 100 taxmann.com69 (SC), PCIT Vs Adamine Construction (P) Ltd (2018)100 taxman .com100(SC) , PCIT Vs Adamine Construction (P) Ltd (2019)107 taxman .com85(SC) and PCIT Vs. Himachal Fibers Ltd(2018) 98 taxman .com 173(SC). In all the above decisions it has been upheld that where the assessee has discharged the onus by furnishing all the evidences and AO has not conducted any enquiry ,then no addition can be made u/s 68 of the Act. Accordingly, we set aside the order of the Ld. CIT(A) and direct the Assessing Officer to delete the addition.
In the result, appeal of the assessee is allowed.
Order is pronounced in the open court on 25th March, 2025.