Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH, AHMEDABAD
Before: DR. BRR KUMAR & MS. SUCHITRA KAMBLE
O R D E R
PER DR. BRR KUMAR, VICE PRESIDENT:
This appeal is filed by the Assessee against order dated 14.02.2024 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2013-14.
The assessee has raised the following grounds of appeal :-
“01 That the Ld. CIT(A) has erred both in law and on facts while sustaining the addon made by Ld. A.O u/s. 694 r.w.s 115BBE of the I.T. Act, 1961 for Rs.5,97,074/- which requires to be deleted.
2. That the Ld. CIT(A) has not adjudicated the legal grounds No.1 to Grounds No.10 and therefore the order passed by Ld.CIT(A) is against the principal of natural Justice, which requires to be quashed.
3. That the assessee Ld. CIT(A) has erred in law while not issuing of Notice u/s.148 of the I.T. Act, 1961 and therefore assessment order passed by National Faceless Assessment Centre, Delhi making heavy addition u/s. 69A r.w.s. 115BBEof Rs.5,97,074/- is bad in law, illegal and void.
4. That the Ld. CIT(A) has breach the basic principle of natural justice by not considering the written submissions and documents available on Assessment Year: 2013-14 Arvind Shashank HUF vs. ITO Page 2 of 4 record and addition u/s.69A of the I.T. Act, 1961 for Rs.5,97,074/- sustained is requires to be deleted.
5. That the Notice u/s 148 of the I.T. Act, 1961 is not served to the assessee and therefore the proceedings initiated is not valid in law and requires to be quashed.
6. That the Assessing officer has not provided the original reasons recorded u/s. 147 of the I.T. Act, 1961 and also not provided the details of approval u/s.151 of the LT. Act, 1961 and such not followed the procedure laid down by Hon'ble Apex Court in the case of GKN Driveshafts (India) Limited v/s. ITO & Other and as such the order passed u/s.143(3) r.w.s 147 is against the provision of law.
7. That the Ld. Assessing Officer has not issued notice u/s.143(2) of the I.T. Act, 1961 however considered the manual return filled in compliance to notice u/s.148 due to technical error on income tax portal is against the provision of law and as such the reassessment order passed is not legal and requires to be quashed 08. That the reasons recorded u/s. 147 of the I.T. Act, 1961 are vague and only a fishing activity, therefore the proceedings initiated itself is bad in law, illegal 09. That the assessment order passed u/s. 147 r.w.s. 144B without giving draft assessment order which is prejudicial to the interest of the assessee and violated the provisions of section 144B of the I.T. Act, 1961 and therefore the reassessment order passed, requires to be quashed.
That the assessee has filled his detailed reply on 21/12/2021, 18/02/2022 and 25/03/2022, however without considering the documentary evidences on record, A.O. has passed an order u/s 148 r.w.s. 144 on presumption and assumption is against the provision of law and against the principle of natural justice and as such it requires to be deleted.
That the amount received by the assessee on sale of shares and security which is credited in Bank accounts of the assessee and also the A.O. is known the source of such amount, however without appreciating the facts addition made of Rs.5,97,074/- u/s.69A r.w.s. 115BBE of the Act is against the provision of Income Tax Act, which is requires to be deleted.
That the appellant has neither given incorrect information nor given inaccurate particulars of Income and as such the penalty proceedings initiated u/s.271(1)© and u/s. 271F of the I.T. Act, 1961 requires to be dropped.
Assessment Year: 2013-14 Arvind Shashank HUF vs. ITO Page 3 of 4 13. That the appellant has neither committed default of Sec. 210 nor made any default in payment of advance tax and therefore unwanted interest charged u/s. 234A, 234B and 234C requires to be deleted. 14. Your appellant craves leave to add, amend, delete or alter any of the grounds till the appeal is finally heard and decided.”
The only issue to be decided by us pertains as to “whether the Assessing Officer had derived primary satisfaction to arrive at escapement of taxable income or not?”.
The Assessing Officer at paragraph no.1 of the assessment order held that the assessee did not file return of income for the Assessment Year 2013-14 and as per the information received from the Income Tax Officer (Inv. Thane) there was trading in the scrip of Aricent Infra Limited by the assessee during the relevant Assessment Year amounting to Rs.5,98,860/-. The assessee’s case was reopened u/s 148 of the Act, after recording the reasons. It was pleaded that the reasons recorded suffered from infirmity which led to examination of the record before us.
The relevant documents examined for the adjudication of the case are page nos. 35, 36, 37 & 72 of the Paper Book which contains reasons recorded by the Assessing Officer and the return of income filed by the assessee. Paragraph no.3 of the reasons recorded reads as under :-
“3. Analysis of information collected/received: On verification of details received, it is noticed that the assessee has made huge transaction during the year under consideration, the assessee has carried out huge transactions of purchase and sale of shares (penny stock) Further, the assessee has not shown any capital gain/loss in this ITR nor shown any business earnings. The information articulates the fact that the assessee indeed made bogus transactions by trading in penny scrip Aricent Infra Ltd. in order to veil the amount from being taxed legitimately. Therefore, it is case where the assessee has invested in shares and carried out the transactions with his undisclosed income.”
From the above, it can be understood that the Assessing Officer has believed that the assessee has not shown any capital gain/loss in his income tax return nor shown any business earnings which is contrary to the material found on page no.35 which is the return of income was filed by the assessee on 30.12.2013 with the PAN Assessment Year: 2013-14 Arvind Shashank HUF vs. ITO Page 4 of 4 - AADHA6580L in ITR Form No.2 and page no.36 reflects the assessee’s computation of total income reflecting short term capital gains of Rs.82,802/- and income from other sources of Rs.3,93,725/- declaring gross total income of Rs.4,76,527/-. Page no.37 of the Paper Book filed alongwith return of income clearly shows statement of exempt short term capital gain from Pantaloon shares and long- term capital gain from Aricent Infra shares.
Considering these facts on record, it cannot be established that the Assessing Officer has really gone through the return of income filed by the assessee to come to the conclusion that there has been an escapement of income other than the information provided by the Department. The reasons recorded are found to be factually incorrect as they have been recorded without going through the return of income filed by the assessee. Hence, we hold that the reasons recorded suffers from infirmity on the factual grounds leading to quashing of the assessment order. Since we have decided on the threshold of reopening of the assessment thereby observing that reasons recorded were not found appropriate, the issues on merit does not need any adjudication at this juncture.
In the result, appeal filed by the assessee is allowed.
Order pronounced in the open Court on this 03rd January, 2025.