Loading judgment…
Facts
The assessee filed its return declaring Nil income for AY 2013-14. The AO reopened the case under Section 147 and made an addition of Rs. 2,00,00,000/- for an accommodation entry. The CIT(A) dismissed the assessee's appeal.
Held
The Tribunal condoned the delay in filing the appeal and noted that the addition made by the AO was prima facie incorrect. The matter was set aside to the AO for de novo consideration with an opportunity for the assessee to explain the transactions.
Key Issues
Whether the reassessment proceedings were validly initiated and whether the addition on account of accommodation entry was justified, especially when a similar issue in a prior year was set aside.
Sections Cited
147, 144, 148, 142(1), 69A, 69
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH, AHMEDABAD
Before: SHRI T.R. SENTHIL KUMAR & SHRI NARENDRA PRASAD SINHA
O R D E R PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:
This appeal has been preferred by the assessee against the order of National Faceless Appeal Centre (NFAC) [hereinafter referred as ‘CIT(A)’] dated 23.09.2024 for the Assessment Year (A.Y.) 2013-14 in the proceedings under Section 147 r.w.s. 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
There was a delay of 96 days in filing of this appeal. An affidavit has been filed by Shri Vishal M. Shah, Director of the assessee company, explaining the reasons for the delay. It is submitted that the order of the (Assessment Year: 2013-14) Aadi Real Estate Developers P.L. vs ITO Page 2 of 5 Ld. CIT(A) was received on email.id gurjarvrain@rediffmail.com which was operated by its Accountant, Shri Viren Gurjar. It has been submitted that the said Accountant did not inform the order of the Ld. CIT(A) in time and subsequently he also left his job. The fact about the order of the Ld. CIT(A) was subsequently learnt from online portal of the Department and, thereafter, the appeal was immediately filed in consultation with a lawyer and in the process, there was a delay of 96 days. Considering the explanation of the assessee, the delay in filing the present appeal is condoned.
The brief facts of the case are that the assessee had filed its return of income for the A.Y. 2013-14 on 13.09.2013 declaring Nil income. Subsequently, the Assessing Officer had received an information that the assessee had received certain accommodation entry from a shell entity operated by one Shri Jignesh Shah. Therefore, the case of the assessee was reopened u/s 147 of the Act and a notice u/s 148 of the Act was issued on 28.03.2021. Neither there was any compliance to this notice nor the assessee complied to the subsequent notices u/s 142(1) of the Act. The assessment was completed ex-parte u/s 147 r.w.s. 144 of the Act on 28.03.2022 wherein an addition of Rs.2,00,00,000/- was made on account of accommodation entry received in the bank account of the assessee.
Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed.
Now, the assessee is in second appeal before us. The following grounds have been taken by the assessee in this appeal: - (Assessment Year: 2013-14) Aadi Real Estate Developers P.L. vs ITO Page 3 of 5
1. That the Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO in reopening the case u/s.147 of the Act.
2. That the Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO in making addition of Rs.2,00,00,000/- under Section 69A of the Act.”
Shri Deepak Shah, the Ld. AR of the assessee, submitted that no compliance was made by the assessee either before the Assessing Officer or before the Ld. CIT(A) and the matter was not examined on merits at any stage. He submitted that an identical issue was involved in assessee’s own case in the A.Y. 2012-13 which was decided by this Tribunal in vide order dated 25.10.2024 and the matter was set aside to the Assessing Officer to adjudicate the matter afresh after allowing an opportunity of hearing to the assessee. The Ld. AR submitted that the Assessing Officer was not correct in making addition of Rs.2,00,00,000/- in respect of both the credit as well as debit entries appearing in the bank account of the assessee company. The Ld. AR, therefore, requested that the matter may be set aside to the file of the Assessing Officer, following the decision of the Tribunal in the earlier year.
Per contra, Shri Abhijit, Ld. Sr. DR, supported the orders of the lower authorities. He, however, had no objection in setting aside the matter to the file of the Assessing Officer.
We have considered the rival submissions. The assessee had not given any reasonable explanation for non-compliance before the Assessing Officer as well as before the Ld. CIT(A). We therefore, deem it proper to impose a cost of Rs.5,000/- (Rupees Five Thousand only) on the assessee, which should be deposited in “Prime Minister’s National Relief Fund” within a period of 15 days from the receipt of this order. Subject to the payment of cost imposed, we deem it proper to set aside (Assessment Year: 2013-14) Aadi Real Estate Developers P.L. vs ITO Page 4 of 5 the matter to the file of the Assessing Officer with direction to allow one more opportunity to the assessee to explain the transactions made by the assessee with Amar Textile in connection with the addition of Rs.2,00,00,000/- as made in the original assessment. From the details of transactions as reproduced in the assessment order, it is found that there was debit and credit entry of Rs.1,00,00,000/- each in the bank account of the assessee, both of which was considered as unexplained money u/s 69 of the Act. The addition of Rs.2,00,00,000/- as made by the Assessing Officer is prima facie not found to be correct. In the interest of justice, therefore, we restore the matter back to the Assessing Officer for denovo consideration of all the issues, after allowing due opportunity of hearing to the assessee. The assessee is also directed to make compliance before the Assessing Officer and produce the evidences and explanations as sought, failing which the Assessing Officer will be free to decide the matter on the basis of materials on record.
In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open Court on this 21st August, 2025.