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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: SHRI H.S. SIDHU
This appeal has been filed by the Assessee against the order dated 19.7.2018 of the Ld. CIT(A)-31, New Delhi relating to assessment year 2008-09 on the following grounds:- i) That the assumption of jurisdiction u/s. 148 of Income Tax Act, 1961 by the AO is against the authority of law. The AO has no valid material to assume jurisdiction u/s. 147 of the Income Tax Act,
1961 and consequently the orders of the assessment are void and bad in law. ii) That the AO has no reasons to believe as contemplated u/s. 147 of the Act that the income chargeable to tax has escaped assessment. Hence the assessment as framed by AO is not valid in law and deserves to be quashed. iii) That the reasons on which jurisdiction u/s. 147 of the Act has been assumed is based on information received from Investigation Wing and there has not been any independent reasons recorded by the AO.
Hence, the orders of assessment are bad in law. iv) That no legal valid sanction as required u/s. 151 of the Income Tax Act, has been obtained before issuing notice u/s. 148 of the Act. v) That the addition of Rs. 15 lacs has been wrongly and illegally made in the income of the assessee by not accepting the documentary evidence in support of the fact, that the amount of Rs. 15 lacs was received as sale proceeds of shares of the company. Therefore, addition u/s. 68 of the Act had been wrongly and illegally made. vi) That the addition of Rs. 27,000/- made on the account of unexplained expenditure (commission) allegedly paid in cash is without any valid reasons, rather is based on suspicion, surmises and conjectures. vii) That the assessee has not been given an opportunity to cross examine the persons who statements have been considered and made the basis of making the addition. viii) That the Ld. CIT(A) has further erred in confirming that such orders of the AO. The Ld. CIT(A) has further erred in confirming the addition of Rs. 15 lacs alleged as accommodation entry. Further the addition of Rs. 27,000/- made on suspicion and surmises by the AO has been wrongly and illegally confirmed by the CIT(A).
On the facts and in the circumstances it is therefore requested that the orders passed by AO deserve to be cancelled and additions made deserve to be deleted.
Facts narrated by the revenue authorities are not disputed by both the parties, hence, the same are not repeated here for the sake of convenience.
Ld. Counsel of the assessee stated that the assumption of jurisdiction u/s. 148 of Income Tax Act, 1961 by the AO is against the authority of law and therefore, the AO has no valid material to assume jurisdiction u/s. 147 of the Income Tax Act, 1961 and consequently the orders of the assessment are void and bad in law.
It was further submitted that AO has no reasons to believe as contemplated u/s. 147 of the Act that the income chargeable to tax has escaped assessment. Hence the assessment as framed by AO is not valid in law and deserves to be quashed. He further stated that the reasons on which jurisdiction u/s. 147 of the Act has been assumed is based on information received from Investigation Wing and there has not been any independent reasons recorded by the AO. It was further submitted that no legal valid sanction as required u/s. 151 of the Income Tax Act, has been obtained before issuing notice u/s. 148 of the Act. He further submitted that the addition of Rs. 15 lacs has been wrongly and illegally made in the income of the assessee by not accepting the documentary evidence in support of the fact, that the amount of Rs. 15 lacs was received as sale proceeds of shares of the company. Therefore, addition u/s. 68 of the Act had been wrongly and illegally made and needs to be deleted. It was further submitted that the addition of Rs. 27,000/- made on the account of unexplained expenditure (commission) allegedly paid in cash is without any valid reasons, rather is based on suspicion, surmises and conjectures. It was further submitted that the assessee has not been given an opportunity to cross examine the persons who statements have been considered and made the basis of making the addition. It was further submitted that the Ld. CIT(A) has further erred in confirming such order of the AO. He further stated that Ld. CIT(A) has passed the impugned order 19.7.2018 by partly allowing the appeal of the assessee, but he has not considered the law settled by the Hon’ble High Court and the Tribunal. In this regard, he filed a small Paper Book containing copy of various judicial pronouncements, which requires considered by the Ld. CIT(A), which he has not done, as a result thereof, the assessee could not get adequate relief from the Ld. CIT(A). In view of above, he requested that the issues in dispute may be sent back to the file of the Ld. CIT(A) to decide the same afresh, under the law, after considering the various judgments i.e. pr. CIT vs. Meenakshi Overseas Pvt. Ltd. (2017) 395 ITR 677 (Delhi); Rajiv Agarwal & Vijay Laxmi Agarwal vs. ACIT (2017) 395 ITR 225 (Delhi); Pr. CIT vs. RMG Polyvinyl (I) Ltd. (2017) 396 ITR 5 (Delhi); Hon’ble High Court of Madhya Pradesh at Jabalpur of 2012 and others in the case of CIT, Jabalpur vs. S. Goyanka Lime and Chemical and Hon’ble Delhi High Court decision in the case of Pr. CIT vs. NC Cables Ltd.; ITAT ‘E’ Bench Decision decided in ITA 3342/Del/2015 AY 2010-11; ITAT ‘D’ Bench decision in ITA No. 2430/Del/2015 in the case of Rajat Shubra Chatterji vs. ACIT; relevant to the issues in dispute.
On the other hand, Ld. DR relied upon the orders of the authorities below. But did not raise any serious objection for setting aside the issues in dispute to the file of the Ld. CIT(A), for fresh consideration.
I have heard both the parties and perused the records and the case laws cited by both the parties and the Paper Book containing various copies of decisions as cited aforesaid in para no. 3 of this order. I find considerable cogency in the submissions of the Ld. Counsel for the Assessee that Ld. CIT(A) has passed the impugned order 19.7.2018 by partly allowing the appeal of the assessee, without considering the law settled by the Hon’ble High Court and the Tribunal, which in my opinion required to be considered by the Ld. CIT(A) for correct adjudication of the issues in dispute, which he has not done the same. Therefore, in the interest of justice, I set aside the issues in dispute to the file of the Ld. CIT(A) with the directions to decide the same afresh, after considering the various decisions as reproduced in para 3 of this order and give adequate opportunity of being heard to the assessee. The assessee is also directed to fully cooperate with the Ld. CIT(A) in the proceedings and did not take any unnecessary adjournment and file the necessary documents to substantiate his case before him, if necessary.
In the result, the Appeal filed by the Assessee stands allowed for statistical purpose.