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Facts
The assessee filed an appeal against the CIT(A)'s order for AY 2014-15, with a delay of 165 days, which the Tribunal condoned. This appeal raises multiple grounds challenging the validity of reassessment proceedings and a significant addition made. Crucially, the Tribunal noted that a previous appeal by the Revenue and a cross-objection by the assessee for the same AY and against the same CIT(A) order had already been disposed of, with the matter remanded back to the AO for de-novo assessment.
Held
Given that a related appeal and cross-objection for the same assessment year had already been decided by the Tribunal, setting aside the CIT(A)'s order and restoring the matter to the Assessing Officer for de-novo assessment, the present appeal is also set aside to the file of the Ld. AO. The AO is directed to decide the issues raised on merits in accordance with fact and law, after providing the assessee an adequate opportunity of being heard.
Key Issues
The key legal issues raised by the assessee involve the applicability of reassessment provisions (pre/post April 1, 2021), the validity of Section 148 notices and Section 147 proceedings, the justification of a Rs. 6,77,00,000/- addition, compliance with natural justice, and the validity of Section 151 approval.
Sections Cited
147, 144, 144B, 148, 149, 151, 250, 139, 44AB
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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
The appeal filed by the assessee is directed against the order dated 07.03.2024 of the Ld. Commissioner of Income Tax (Appeals), Pune-12 [“CIT(A)”] pertaining to Assessment Year (“AY”) 2014-15.
The assessee has filed this appeal with a delay of 165 days. The assessee has filed a sworn affidavit for condonation of delay stating therein the reasons for delay in filing of the appeal. On perusal of the same, we are satisfied that the delay in filing of appeal is not intentional or deliberate but has occurred for the reasons mentioned in the affidavit. After hearing both the sides, we are of the view that the delay is attributable to the sufficient cause. We, therefore condone the said delay and proceed to decide the appeal.
The assessee has raised the following grounds of appeal :- “On the facts and circumstances of appellant's case and in law:
1. Your appellant prays for condoning the delay in filing the present appeal and admit the same in the interests of justice.
2. Whether ratio of judgement of Hon'ble Supreme Court in the case of Uol Vs. Rajeev Bansal reported in 167 taxmann.com 70 (SC) dt. 03.10.2024 is applicable to the facts of appellant's case! 3. Then, whether, not following the guidelines as per judgement of Hon'ble Supreme Court in the case of Uol Vs. Ashish Agarwal reported at 286 Taxman 183 (dt. 04.05.2022) by the Id. A.O. makes an order passed U/Sec.147 r.w. Sec.144 r.w.Sec.144B (carrying DIN: ITBA/AST/S/147/2021-22/1041903577(1) dt. 29.03.2022 by Al of NFAC) becomes bad in law? 4.A Whether, the Id. CIT(A) erred in not deciding whether reassessment provisions applicable up to 31.03.2021 or with effect from 01.04.2021 are applicable to the facts of the appellant's case! 4.B If reassessment provisions applicable up to 31.03.2021 are considered applicable to the facts of appellant's case then, whether, the Id. CIT(A) erred in not deciding whether the reassessment proceedings were initiated by the Id. A.O. on the basis of borrowed wisdom and then whether the Id. A.O. was justified in initiating reassessment proceedings based on borrowed wisdom while passing an order U/Sec.147 r.w. Sec.144 r.w. Sec.1448 of the Income Tax Act! 4.C If provisions applicable to reassessment w.e.f. 1º April 2021 are considered to be applicable to the facts of appellant's case then, whether not following the amended provisions applicable to reassessment proceedings justify passing of an order U/Sec.147 r.w. Sec.144 r.w. Sec. 144B of the Income Tax Act! 4.D If provisions applicable w.e.f. 1 April, 2021 are held applicable to the facts of the appellant's case then, whether notice issued U/Sec.148 dt.31.03.2021 served on appellant on 01.04.2021 violates provisions of Sec. 148 and Sec.149! 5. Whether, the Id. CIT(A) erred in not deciding whether a notice U/Sec.148 can be issued by the "Jurisdictional Assessing Officer violates provisions of Sec. 1448 of the Income Tax Act and if this legal position is accepted then, whether an order passed U/Sec.147 based on an illegal notice is valid in law? 6. Whether, the Id. CIT(A) erred in not deciding that an alleged addition imposed while passing an order U/Sec.147 amounting to Rs.6,77,00,000/- can be construed as escaped income when same was accounted and reported by the appellant in its profit and loss account and then whether reassessment proceedings were justified to these facts! 7. Whether the Id. CIT(A) erred in not deciding the fact that the alleged addition of Rs 6,77,00,000/- to the returned income resulted in double taxation of same receipt which is impermissible in law! 8. The Id. CIT(A) erred in not deciding the fact that the ld. A.O. erred in imposing an addition of Rs.6,77,00,000/- to the returned income of the appellant merely on the basis of surmises/ presumption which was totally unwarranted and unjustified! 9. The Id. CIT(A) erred in not deciding the fact that the Id. A.O. erred in not providing the evidences associated with an addition (imposed to the returned income) amounting to Rs.6,77,00,000/-which were asked by the appellant hence, said addition vitiated the principle of natural justice which makes an order passed U/Sec.147 bad in law! 10. The Id. CIT(A) erred in not deciding the fact that approval obtained by the Id. A.O. U/Sec.151 for proceeding with reassessment was granted by the superior authority without application of mind which makes an order passed U/Sec. 147 bad in law.
11. The Id. CIT(A) erred in not deciding an issue when A.O. possessed information about escapement of income then, whether provisions of Sec.144
could be invoked while passing an order U/Sec.147 r.w. Sec.144B of the Income Tax Act! In view of above questions of law emerging from an order passed U/Sec.250 by the Id. CIT(A), appellant prays for directing to lower authorities to delete an addition imposed to the returned income (of the appellant) amounting to Rs.6,77,00,000/- and restore the income returned by the appellant while filing the 'Return of Income' U/Sec.139 of the Income Tax Act.”
At the outset of the hearing, the Ld. AR submitted that the appeal filed by the Revenue and Cross appeal filed by the assessee for the same AY 2014-15 against the order of Ld. CIT(A) has already been disposed of by this Tribunal on 12.11.2024 in and CO No. 32/PUN/2024. The Ld. DR submitted that there are certain grounds of appeal which remained unadjudicated by the Ld. CIT(A) and hence this appeal has been filed before the Tribunal.
5. We have perused the order of Tribunal (supra) and find that the Tribunal has set aside the order of the Ld. CIT(A) and restored the matter back to the file of Ld. AO for de-novo assessment. The relevant findings and observations of the Tribunal is reproduced below : “7. We have heard ld. Counsel from both the sides and perused the material available on record including the paper books furnished by both the parties. We find that the assessment order was passed ex-parte and in the ex-parte assessment orders, the Assessing Officer has not mentioned even the name of the parties with whom the so called transactions were entered into by the assessee. We also find that the letter dated 25.03.2022 filed by the assessee requesting to provide relevant material on the basis of which the assessment was reopened was not at all considered / referred by the Assessing Officer. At the same time, we also find that the letter dated 25.03.2022 was not a letter of objection to the reassessment proceedings but it was simply a request letter for providing the material so that the assessee can submit his objections to the reassessment proceedings. We, therefore, find force in the argument of ld. DR that no objection letter was filed by the assessee before the Assessing Officer but at the same time we also find force in the argument of ld. Counsel of the assessee that the Assessing Officer ought to have discussed/referred the letter dated 25.03.2022 in his assessment order and the desired documents/ information should have been provided to the assessee, therefore, the Assessing Officer erred in observing that no response was submitted by the assessee till date. We also find that the books of accounts of the assessee are audited and audit report was furnished before the Assessing Officer, it was contended that all the transactions were recorded in the regular books of accounts subject to audit u/s 44AB of the IT Act. It was also contended before us that the AO failed to brought on record any of the impugned transaction in the ex-parte assessment order on the basis of which the assessment was reopened. It was therefore contended by LD AR that the order passed by ld. CIT(A) is justified. On the other hand, it was contended by Ld. DR that Ld. CIT(A) erred in considering letter dated 25.03.2022 as the objection letter. Considering the totality of the facts, we find that the reassessment order was passed ex-parte and no material was brought on record by the Assessing Officer in the reassessment order and the assessment order is silent on this issue of addition. At the same time, ld. CIT(A) has considered the request letter as objection letter and decided the appeal only on legal ground. Accordingly, we deem it appropriate to set-aside the order passed by ld. CIT(A) and restore the mater back to the file of the Assessing Officer with a direction to pass reassessment order afresh as per fact & law, after providing reasonable opportunity of hearing to the assessee so that the assessee can produce relevant documents in support of his contentions. The assesee is hereby also directed to respond to the notices issued by the Assessing Officer in this regard without asking for any adjournment under any pretext, otherwise the AO shall be at liberty to pass appropriate orders as per law. We hold & direct accordingly. Thus, the grounds of appeal filed by the Revenue are partly allowed for statistical purposes.
8. In the result, the appeal of the Revenue in is partly allowed for statistical purposes. C.O. No.32//PUN/2024 – By Assessee : 9. Since the appeal filed by the Revenue is allowed & matter is restored back to the file of the Assessing Officer for de novo reassessment afresh, therefore, present cross objection filed by the assessee becomes infructuous. Therefore, cross objection filed by the assessee stands dismissed.”
In the light of the above findings and observations of the Tribunal in Revenue’s appeal involving the same assessment year i.e. AY 2014-15 (supra) and on the facts and in the circumstances of the case, we deem it fit and proper to set aside the present appeal to the file of the Ld. AO to decide the issue(s) raised therein on merits in accordance with the fact and law after allowing adequate opportunity of being heard to the assessee. We order accordingly.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 28th January, 2025.
Sd/- Sd/- (R.K. Panda) (Astha Chandra) JUDICIAL MEMBER VICE PRESIDENT पुणे / Pune; दिन ांक / Dated : 28th January, 2025. रदि आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : अपील र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2. 3. The Pr. CIT concerned. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “बी” बेंच, 4. पुणे / DR, ITAT, “B” Bench, Pune. ग र्ड फ़ इल / Guard File. 5. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER,
िररष्ठ दनजी सदचि / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune