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Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. M. Balaganesh
Asstt. Year : 2009-10 Excel Infotech Ltd., Vs ACIT, Sachin Saxena & Co., Central Circle-30, Office no. 101 & 102, 1st Floor, A-1, New Delhi-110055 Madhuban Tower, Veer Savarkar Block, Shakarpur, Delhi-110092 (APPELLANT) (RESPONDENT) PAN No. AAACE2098K Assessee by : Sh. S. Krishnan, Adv. & Sh. Harshit Chauhan, Adv. Revenue by : Sh. Rajesh Kumar Dhanesta, Sr. DR Date of Hearing: 07.04.2025 Date of Pronouncement: 28.04.2025 ORDER
Per Satbeer Singh Godara, Judicial Member:
This assessee’s appeal for Assessment Year 2009-10, arises against the CIT(A)-30, New Delhi’s in case No. 161/16- 17/2595 dated 04.09.2019, in proceedings u/s 147/143(3) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
3. This assessee’s appeal raises the following substantive grounds:
“1. The Ld. CIT (A) erred in upholding the order of re- assessment, which is bad in law and ab-intio void.
2. The Ld. CIT(A) erred in upholding the reasons recorded by the Ld. A.O. and the approval granted by the Ld. Principal Commissioner of Income-tax, which are bad in law as they do not conform to the provision of section 147.
The Ld. A.O. and Id. Principal Commissioner did not apply their minds independently to facts of the case and followed the reports of Investigation Wing in a mechanical manner.
The notice u/s 148 is bad in law as it is vague.
The Ld. CIT(A) erred in upholding the order even though the A.O. did not assume jurisdiction to make re- assessment as objections filled by the appellant to the recorded reasons were not considered in the so-called rejection order dated 28.11.2016.
The order of assessment is bad in law as the original return of income filed by the appellant has not been considered by the A.O. at all.
The order of the Ld. CIT(A) is bad in law as the material relied upon has not been even shown to the appellant and thus, there is a completed failure in meeting the principles of natural justice.
8. On the facts and in the circumstances of case, the Ld. CIT(A) erred in upholding addition of Rs. 7.70 Crore.
On the facts and in the circumstances of case, the Ld. CIT(A) erred in upholding addition Rs. 1,61,468/- even without mentioning the details of alleged transaction.
The Ld. CIT(A) erred in enhancing the income by a sum of Rs. 1,25,00,000/-.
The Ld. CIT(A) erred in initiating penalty u/s 271(1) (c).
The ld. CIT(A) erred in not disposing off ground no. 11 before him regarding grant of credit for tax computed in order of assessment passed u/s 143(3) read with section 153A on 23.03.2013.”
4. We advert to the basic relevant facts. A perusal of the case file indicates it’s original return on 30.09.2009 declaring income of Rs.60,37,990/- which was summarily processed u/s Excel Infotech Ltd. 143(1) of the Act on 17.02.2011. Learned Assessing Officer’s re-assessment framed herein on 27.12.2016 indicates that he thereafter finalized section 153A r.w.s. 143(3) assessment in assessee’s case on 23.03.2013, in furtherance to a search action dated 22.03.2011. And that the learned Assessing Officer thereafter formed reasons to believe that the assessee’s taxable income representing payment of Rs.7,70,00,000/- made to M/s Shine Infracone Pvt. Ltd. and that arising from the alleged client code modification to the tune of Rs.1,61,468/-, liable to be assessed, had escaped assessment. He accordingly set into motion the impugned re-opening by issuing section 148 notice dated 29.03.2016. All this admittedly resulted in the Assessing Officer’s re-assessment dated 27.12.2016 making both the above additions in the assessee’s hands; which in turn, inter alia stands converted to that as unexplained advances received from M/s ARGL Ltd. etc., as bogus unexplained cash credits, confirmation of the latter addition of Rs.1,61,468/- and further enhancement to the tune of Rs.1,25,00,000/- also representing an amount of Rs.1,25,00,000/- given to M/s Heaven Infracone Pvt. Ltd. as well, in the lower appellate discussion.
This is what leaves the assessee aggrieved on all the foregoing three counts who is in appeal before the tribunal.
5. We have given our thoughtful consideration to the assessee’s and Revenue’s vehement submissions reiterating their respective stands against and in support of the impugned additions. We first of all note at the outset that so far as the first and foremost addition of Rs.7,70,00,000/- is converned, the assessee had filed it’s additional evidence in the lower appellate proceedings which was duly stood admitted. The CIT(A) thereafter sought a remand report from the field authorities. And that the Assessing Officer submitted his remand report on 19.02.2019 (pages 16 to 17 in the CIT(A)’s order) duly concurring with the assessee’s stand thereby treating the same as explained since coming from M/s Amtek Auto Ltd., M/s ARGL Ltd. and M/s Castex Technologies Ltd. involving varying sums, respectively. This being the clinching fact emerging from the case file, we are of the considered view that the learned departmental authorities thereafter could not have proceeded to confirm the very addition of Rs.7,70,00,000/- in the assessee’s case as such a remand report indeed binds the Revenue going by Smt. B. Jayalakshmi Vs. ACIT (2018) 96 taxmann.com 486 (Mad.) and CIT vs. D. M. Purnesh (2020) 426 ITR 169 (Karn)(HC). We thus see no merit in the impugned addition forming subject matter of the re- opening reasons (supra) which stands deleted in very terms.
6. Next comes the second substantive issue between the parties qua correctness of addition of Rs.1,61,468/- made in both the lower proceedings alleging the assessee as a beneficiary of a client code modification racquet. We note that neither there is any specific material quoted in the assessment order along with corresponding transactions nor in the CIT(A) discussion establishing a clear cut live nexus between the assessee and the said alleged racquet and therefore, the impugned addition stands deleted in very terms.
7. Lastly comes the enhancement addition of Rs.1,25,00,000/- made by the CIT(A) by exercising his statutory jurisdiction u/s 251(1)(a) of the Act. We first of all quote CIT (Exemptions) vs. B. P. Poddar Foundation for Education (2022) 448 ITR 695 (Cal.) to hold that once the former twin additions herein forming part of the Assessing Officer’s re-opening reasons stand deleted, the re-opening itself does not survive. This is indeed coupled with the fact that it has admittedly come on record that making this third addition during the course of enhancement by the CIT(A) amounts to changing the head of the addition itself, already held as not sustainable in law going by CIT vs. Shapoorji Pallonji Mistry (1962) 44 ITR 891 (SC), CIT vs. Sardari Lal & Co. (2001) 251 ITR 864(Del.) and CIT vs. Union Tyres (1999) 240 ITR 556(Del). We thus quash the impugned re-opening as
No other ground or argument has been pressed before us at this stage.