RAJAN DIWAN,GHAZIABAD vs. DCIT/DCIT, CENTRAL CIRCLE, NOIDA
Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI
Before: SHRI VIKAS AWASTHY & DR. MITHA LAL MEENAAssessment Year: 2016-17
Per Dr. Mitha Lal Meena, A.M.:
This appeal is filed by the assessee against the order dated
08.05.2013 passed by the Commissioner of Income-Tax (Appeal)-3, Noida
[hereinafter referred to as “CIT(A)”] which is arises out of the assessment order dated 31.12.2018 passed under Section 143(3) of the Income Tax Act
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1961 [in short the referred as ‘the Act’] by the DCIT/ACIT, Central Circle,
Noida [in short the “A.O”] in respect of the assessment year 2016-17. 2. The assessee has raised the following grounds of appeal:
l. Because, the order of learned lower authority is bad in law and against the facts and circumstances, hence is unsustainable.
Because, the learned CIT(A) grossly erred in sustaining the addition of Rs.17,72,50,000/- u/s 69 of the Act, being the presumed cash loan given, whereby no such charge and connected allegation is ever made by Ld. AO during the whole assessment proceedings in order, thus order making unilateral addition/charges itself is null and void.
Because, the learned CIT(A) erred in not appreciating that there is absolutely no material or evidence in support of allegation, whereby statement and WhatsApp chat mentioned in order never brought on record during assessment/appellate proceedings by AO.
Because, learned CIT(A) further mi irected in law in invoking provisions of section 292C although assessee was not having even a remote connection with the alleged search on one hand and AO had not brought on record alleged seized material/statement etc. with some any authoritative document like seizure memo etc.
Because, learned CIT(A) manifestly wrong in not appreciating the fact that onus to prove investment in terms of section 69 of the Income Tax, 1961 Act is on Assessing Officer but he proved nothing except and further defeated the basic principle of juris
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prudence that, onus to on one who alleges more so when assessee flatly denied any such transaction long before, before ADI and filed affidavit in appellate proceedings.
Because, learned CIT(A) inherently wrong in sustaining the addition even beyond the theory of preponderance of probabilities whereby assessee is a petty property dealer who could have hefty funds in terms of any prudent assumption.
Because, learned CIT(A) even failed to acknowledge that assessee had fully complied all the notices but AO had failed to issue even any valid show cause before assuming juri iction to make the addition.
Because, learned CIT(A) also failed collected remand report behind the back of assessee without providing any copy of same to assessee with an opportunity to file rejoinder. Therefore, in terms of above grounds addition of Rs.17,72,50,000/- u/s 69 of the Act may kindly be quashed in TOTO.
The brief facts of the case are that the assessee filed its return of income on 27.07.2016 declaring an income of Rs.5,45,690 from the consultancy business. The case was selected under compulsory scrutiny assessment and notice under Section 143(2) of the Act was issued on 25.09.2017 to make compliance on 09.10.2017. Assessing Officer assessed
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his income under Section 143(3) of the Act on a total income of Rs.17,77,95,690. 4. At the outset, learned counsel appearing for the assessee submitted that the multiple notices were issued under Section 143(2) and 142(1) of the Act without raising any queries and that show-cause-notice was also issued without raising any queries. Learned AR of the assessee has stated that he issued notice dated 31.10.2018 under Section 142(1) of the Act mentioning wrong assessment year i.e. 2017-18 whereas the relevant assessment year is 2016-1017 (Page No.47 of the paper books).
It was further submitted by the Ld. AR that in compliance to notices that detailed reply dated 18.12.2018 was filed in compliance to the notices issued under Section 142(1) of the Act (assessee’s paper books page nos.53 and 55). It was brought to our notice that the Assessing Officer has issued a show cause notice under Section 144 of the Act dated 12.12.2018 and without granting opportunity for taking rebuttal of the assessee on the adverse view taken by the Assessing Officer passed the order in violation of principles of natural justice. The Ld. AR also mentioned that the learned CIT
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(Appeals) has confirmed the findings of the Assessing Officer in a mechanical manner and without taking rebuttal of the assessee to the remand remand report, in violation of the principles of natural justice. The Ld. AR contended that one of the notice was corrected in hand writing by the Assessing Officer. Thus, the Learned AR by way of pointing out deficiency and lack of proper opportunity to rebut the contention of the department pleaded that the matter may be restored to the file of the Assessing Officer to pass de novo assessment after granting adequate opportunity of being heard and issue proper show cause notice before passing the Assessment order as per law. He undertakes to cooperate with the AO in the de novo assessment proceedings to enable the AO to pass a reasoned and speaking order based on the merits of the case.
Per contra, the Ld. DR stands by the order of the revenue authorities.
We have heard both the sides, perused the material on record, impugned order, submissions filed and case laws cited before us. From the impugned order, it is noted that the Ld. CIT (A) has confirmed the finding of the AO without taking rebuttal of the assessee on the remand report and 6 addressing the assessee objecting to the issues regarding notices and show cause notice issued without any questionnaire to the assessee to enable the assessee to file requisite reply. In our view, the assessee has been denied opportunity to explain the quarries of the department in the assessment proceedings in absence of valid notice u/s 142(1) and show cause notice and again by the Ld. CIT (A) by not taking rebuttal of the to the remand report furnished by the AO to the assessee’s submission furnished before the CIT (A) by way of rejoinder.
From the record, it evident that the learned CIT(A) has failed to acknowledge that assessee had fully complied all the notices during the assessment proceedings, but the AO had failed to issue even any valid show cause before taking adverse view to make the addition of unsubstantiated alleged amount disputed by it. Again, the learned CIT(A) violated the principles of natural justice as he failed to rebut the remand report used for confirming the finding of the AO behind the back of assessee without providing any copy of same to assessee with an opportunity to file rejoinder.
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9. Perusal of notices issued u/s 143(2)/142(1) it is evident that at no stage, during assessment proceedings, any show cause notice was issued to assesse in respect of impugned addition made and confirmed by the CIT(A). It is seen that at no stage during assessment proceedings neither any query nor information nor explanation was sought with respect to any alleged investment made by the assessee with M/S Airwill group of Companies. The assess has filed an Notarized affidavit dated 4th Jannaury
2025, certifying the fact regarding no show cause notice, no opportunity to file rejoinder to remand report and that during the assessment proceeding, no query, information or explanation was sought in respect to subject addition and no opportunity has been provided to assesse at any stage of assessment proceeding to offer any explanation in relation to such addition neither in notices u/s 143(2), 142(1) nor by the show cause notice (APB,
Pgs. 100-101).
Since the assessment proceedings no questionnaires issued either with the notices issued u/s 142(1) nor with the show cause notice before passing assessment order. In our view, the AO could have come to a definite conclusion on facts after fully understanding the facts by taking reply
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of the assessee on record and before taking any adverse view, the AO ought to have issued a proper show cause notice by way of bringing to the notice of the assessee the proposed addition with the reasons. In our view, assessment proceeding under the changed scenario would require proper determination of facts by proper exchange and flow of correspondence between the revenue authorities and the appellant assessee.
In view of above discussion and the factual matrix of the case, the impugned order is set aside and the case is remitted back to the AO to pass de novo assessment order as per law. Needless to mention that the assessee shall cooperate in the assessment proceedings by timely compliance to the notices, in the assessment proceedings before the AO by way clearly explaining its claims in writing so that the AO can come to an objective conclusion on facts based on the records.
Without prejudice to the above, we make it clear that we did not express any view on merits of the case, and the AO shall have to take independent decision on facts as per law, uninfluenced by any of the observation contained herein above.
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12. In the result, the appeal is allowed for statistical purposes.
Order pronounced on 13/01/2025 in accordance with the Rule
34(4) of Income Tax (Appellate Tribunal) Rules, 1963. (VIKAS AWASTHY)
ACCOUNTANT MEMBER
*Mohan Lal*
Dated: 13.01.2025