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Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI
Before: Sh. Amit ShuklaDr. B. R. R. Kumar
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the assessee against the order of the ld. CIT(A)-XVIII, New Delhi, dated 09.10.2012.
Following grounds have been raised by the assessee:
1. That the Ld. AO had erred on facts and under the law without bringing any conclusive evidence on record in making an addition of Rs. 17,76,209/- on account of alleged unexplained investment u/s 69 of I.T. Act on the ground that such amount was allegedly paid in cash outside its books of accounts to M/s V.K. Tours & Transport.
2. That the Ld. CIT(A) had no jurisdiction to make enhancement of addition from Rs.17,76,209/- to Rs.49,02,000/- resulting in enhanced addition of Rs.31,25,791/- on account of alleged purchase of 2 Dominion Investment Pvt. Ltd. vehicle without giving a notice/reasonable opportunity of being heard to the Appellant for making such enhancement as provided u/s 251(2) of I.T. Act and consequently, the enhanced addition of Rs.31,25,791/- as made being wholly illegal, deserves to be deleted.
3. That without prejudice to above, addition of Rs. 17,76,209/- as made by the AO being wholly unjust, arbitrary and untenable, ought to have been deleted by the Ld. CIT(A) and there was also no justification on the part of Ld. CIT(A) both on facts and under the law in enhancing the above addition of Rs.17,76,209/- to Rs.49,02,000/- resulting in enhanced addition of Rs.31,25,791/- on account of alleged purchase of vehicle without bringing any conclusive evidence on record to support the addition as made. At any rate, without prejudice, the addition as made is very excessive.
4. That the Ld. AO had erred on facts and under the law without bringing any conclusive evidence on record to prove cessation of liabilities u/s 41 of I.T. Act and in making additions of Rs.86,41,464/- in respect M/s Kotak Securities and Rs.2,85,05,964/- in respect of M/s Omex Investment & Finance Ltd.
5. That the Ld. CIT(A) had no jurisdiction to make enhancement of addition from Rs.86,41,464/- to Rs.93,98,872/- resulting in enhanced addition of Rs.7,57,408/- in respect of M/s Kotak Securities and from Rs.2,85,05,964/- to Rs.4,87,83,959/- resulting in enhanced addition of Rs.2,02,77,995/- in respect of Omex Investment & Finance Ltd. on account of cessation of liabilities u/s 41 of I.T. Act without giving a notice/reasonable opportunity of being heard to the Appellant for making such enhancement as provided u/s 251(2) of I.T. Act and consequently the enhanced addition of Rs.2,10,35,403/- (Rs.7,57,408 + Rs.2,02,77,995) as made being wholly illegal both on facts and law, deserves to be deleted.
6. That without prejudice to above, addition of Rs.3,71,47,428/- as made by the AO being wholly
3 Dominion Investment Pvt. Ltd. unjust, arbitrary and untenable, ought to have been deleted by the Ld. CIT(A) and there was also no justification on the part of Ld. CIT(A) both on facts and under the law in enhancing the above addition from Rs.3,71,47,428/- to Rs.5,81,82,831/- resulting in enhanced addition of Rs. 2,10,35,403/-on account of cessation of liabilities u/s 41 of I.T. Act without bringing any conclusive evidence on record to support the addition as made. At any rate, without prejudice, the addition as made is very excessive.
Various observations made by the CIT(A) in the appellate order are either incorrect or are untenable. The submissions made supported by documentary evidence had either been ignored or had not been appreciated properly.
7. That without prejudice to above grounds, the total income as assessed at Rs.6,26,02,713/- after giving effect to CIT(A) order and the income-tax demand created thereon at Rs.5,19,61,820/- vide order u/s 250/143(3)/148 dated 26/11/2012 is arbitrary, unjust and at any rate, without prejudice, very excessive.
8. That the levy of interest u/s 234 vide Income-tax Computation Form dated 26/11/2012 at Rs. 2,96,12,650/- is wholly unjust and illegal. At any rate, without prejudice, the levy of such interest is very excessive.
The assessee has filed additional grounds before the Tribunal on 26.11.2018 and requested for admission of the same. The additional grounds read as under:
1. The reopening of assessment is illegal, bad in law and the assessment order passed pursuant to such illegal assumption of jurisdiction is void ab-initio which deserves to be quashed.
During the hearing for the admission of the additional ground, the ld. DR opposed for admission of additional ground 4 Dominion Investment Pvt. Ltd. arguing that this is not the time to raise such grounds as the AO and ld. CIT (A) have not been confronted with any such objection and raising of the technical ground at this juncture cannot be admitted.
The ld. AR argued that the ground raised
being a legal ground and goes to the root of the matter, the same may be admitted. He placed reliance on the order in the case of National Thermal Power Co. Ltd. Vs Commissioner of Income Tax on 4. December, 1996, (229 ITR 383), the additional ground filed by the assessee is accepted. The relevant portion of the judgment is as under: “Under Section 254 of the Income-tax Act, the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is thus expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the tribunal for the first time, so long as the relevant facts are on record in respect of that item. We do not see any reason to restrict the power of the Tribunal under Section 254 only to decide the grounds which arise from the order of the Commissioner of Income-tax (Appeals). Both the assessee as well as the Department have a right to file an appeal/cross-objections before the Tribunal. We fail to see why the Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier.
In the case of Jute Corporation of India Ltd. v. C.I.T. this Court, while dealing with the powers of the Appellate Assistant Commissioner observed that an appellate authority has all the powers which the original authority may have in deciding the question before it subject to the 5 Dominion Investment Pvt. Ltd. restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income-tax Officer. This Court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also.
7. The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner of Income-tax (Appeals) takes too narrow a view of the powers of the Appellate Tribunal [vide, e.g., C.I.T, v. Anand Prasad (Delhi), C.I.T. v. KaramchandPremchand P. Ltd. and C.I.T. v. Cellulose Products of India Ltd. Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee.
The reframed question, therefore, is answered in the affirmative, i.e., the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the assessee. We remand the proceedings to the Tribunal for consideration of the new grounds raised by the assessee on the merits.”
6. Respectfully following the above judgment of the Hon’ble Apex Court, the additional grounds taken up by the assessee are hereby admitted. The matter is taken up for adjudication.
6 Dominion Investment Pvt. Ltd.
At the outset, the ld. AR argued that the assessee has not been provided with the copy of the reasons recorded while issuing the notice u/s 148 of the Income Tax Act, 1961. The ld. AR produced the letter dated 28.08.2018 requesting the ITO, Ward 7(4), for the copy of reasons recorded for reopening of the assessment in the case of the assessee. The scanned copy of the letter of the assessee is as under: “The Income Tax Officer, Ward-7(4), C.R. Building, New Delhi-110002 Ref: Case ITAT appeal 627/239/18 Dated 28.08.2018 Sub: Request for furnishing copy of reasons recorded in writing for reopening the assessment of M/s Dominion Investment (P) Ltd. for the assessment year 2002-03, .
Dear Sir, We on behalf and instructions of our client above named in the captioned matter request your honour to furnish us a copy of the reasons recorded in writing for reopening the assessment for the above assessment year.
The ITAT hearing in the above case is fixed for 06.09.2018 in view of which the same may be furnished at earliest. A power of attorney in our favour is enclosed.
We may be intimated the requisite copying fee to enable us to deposit the fee.
Thanking you, Yours faithfully Sd/- (Satish Aggarwal)
7 Dominion Investment Pvt. Ltd. 8. The ITO Ward 7(4) vide letter dated 10.06.2019 furnished his reply saying that the assessment record is presently not traceable. The scanned copy of the reply of the ITO is as under: OFFICE OF THE CENTRAL PUBLIC INFORMATION OFFICER, INCOME TAX OFFICER WARD 7(4), NEW DELHI, ROM NO. 413-F, 4TH FLOOR, C.R. BUILDING, I.P. ESTATE, NEW DELHI-110002 F.No. ITO/Ward-7(4)/CPIO/TRI/2019-20 Date: 10.06.2019 Name of the Applicant Sh. Satinder Pal Singh Date of receipt of application 16.05.2019 Date of Order 10.06.2019 ORDER UNDER SECTION 7(1) OF THE RIGHT TO INFORMATION ACT, 2005 Kindly refer to your application under the RTI Act, 2005 dated 14.05.2019. Yu have requested vide above RTI application for providing copy of reasons recorded in writing for reopening of assessment of M/s Dominion Investment (P) Ltd. A.Y. 2002-03 which is required by you to present case of M/s Dominion Investment (P) Ltd. for A.Y. 2002-03 before the Income Tax Appellate Tribunal, Delhi.
In this regard, it is stated that the assessment record of M/s Dominion Investment (P) Ltd. PAN: AAACD3199A for A.Y. 2002-03 is presently not traceable. As the documents requested by you are part of the assessment record which is not traceable, this office is unable to provide you the copy o reasons recorded for reopening of assessment in the case.
If aggrieved, the applicant, within 30 days from the receipt of this order, may prefer appeal against this order before the Addl. Commissioner of Income Tax. Range-7, Room No. 407, 4th Floor, Central Revenue Building, I.P. Estate, New Delhi.