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Facts
The assessee, a charitable trust, filed an appeal against an addition of Rs. 70,00,000 made under section 68 of the Income Tax Act for unexplained cash credits, which were treated as accommodation entries (bogus donations) received from two parties. The assessment was reopened under section 147. During the appeal proceedings before the ITAT, the assessee opted for the Direct Tax Vivad Se Vishwas Scheme (DTVSVS), 2024, and requested to keep the appeal in abeyance.
Held
The Income Tax Appellate Tribunal (ITAT) dismissed the appeal as withdrawn, noting that the assessee had chosen an alternative dispute resolution mechanism under the DTVSVS-2024 by filing Form 1. The Tribunal clarified that if the final settlement order (Form 4) under DTVSVS is not issued by the designated authority, the assessee would have the liberty to seek restoration of the appeal.
Key Issues
Whether the reassessment proceedings initiated under section 147 were valid; whether the principles of natural justice were violated by the AO; whether the addition of Rs. 70,00,000 for unexplained cash credits under section 68 was justified; and the legal implications of the assessee opting for the Vivad Se Vishwas Scheme on the pending appeal.
Sections Cited
Section 250, Section 147, Section 143(3), Section 68, Section 133A, Section 12AA
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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY, JM & SHRI ARUN KHODPIA, AM
आदेश / O R D E R Per Arun Khodpia, AM:
The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 13.01.2025, for the Assessment Year 2011-12, under section 250 of the Income Tax Act, 1961 (in short “the Act”), which in turn arises from the order passed by the Asstt. Commissioner of Income Tax (Exemption), Circle- Raipur, (in short “Ld. AO”), u/s 147 r.w.s. 143(3) of the Act, dated 28.12.2017.
Shri Jainarayan Hariram Goel Charitable Trust Vs. DCIT(Exemption), Bhopal 2. The assessee has assailed the impugned order on the following grounds of appeal:
1. The order passed by the Ld. Commissioner of Income Tax Appeals) ('CIT(A)') (NFAC) is bad in law and facts.
2. On the facts and circumstances of the case, the Learned CIT(A)(NFAC) has erred in upholding the order of the Learned Assessing Officer ('AO'), wherein the Assessing Officer has incorrectly initiated the re-assessment proceedings for the second time without a valid reason to believe. The reopening of the assessment without a legitimate reason to believe is contrary to the provisions of the law and, as such, the re-assessment proceedings are liable to be quashed.
3. On the facts and circumstances of the case, the Learned CIT(A)(NFAC) has erred in upholding the order of the Learned AO, wherein the AO erred by passing the order without providing the copies of document/enquiry report on which the AO has relied upon while forming the reason to believe and thus has violated the principal of natural justice. Any order passed against the principal of natural justice is bad in law. 4 On the facts and circumstances of the case, the Learned CIT(A)(NFAC) has erred in upholding the order of the Learned AO, wherein the AO erred in making addition of Rs.70,00,000 on account of unexplained cash credit us
68. The addition is unjustified, unwarranted and uncalled for.
5. The appellant reserves the right to add, amend or alter any grounds of appeal at any time of hearing.
3. In this case, the assessment of assessee was completed u/s 147 r.w.s. 143(3) of the Act, wherein several issues were raised by the Ld. AO and after deliberated on the issue in consideration to the submissions by the assessee, Ld. AO had made additions of Rs. 70,00,000/- u/s 68 of the Act on account of unexplained cash credits received by the assessee during the year under consideration. The matter, thereafter, had been carried by way of Shri Jainarayan Hariram Goel Charitable Trust Vs. DCIT(Exemption), Bhopal an appeal before the First Appellate Authority. In disposal of the appeal, Ld. CIT(A) had decided the issues raised against the assessee with the following observations: 6. Decision: I have considered the facts of the case, written submission and case laws relied upon by the appellant as against the observations and findings of the AO in the assessment order. The submissions and contentions of the appellant are discussed and decided as under: 6.1 Ground No.1: In this ground the appellant has challenged the addition worth Rs. 70,00,000 made by the AO u/s 68 of the Income Tax Act. The appellant is a trust and information was received from CIT Exemption, Kolkata that the appellant had received accommodation entries worth Rs. 65,00,000 from M/s Herbicure Healthcare Bio-Herbal research Foundation, Kolkata and Rs. 5,00,000 from M/s Sethi Trust, Kolkata . The appellant had received these entries as donations. Detailed enquiry was conducted by Investigation Wing Kolkata and CIT Exemption, Kolkata. On the basis of the information, the case was reopened u/s 147 of the Income Tax Act. Hence the AO had got valid reasons to reopen this case. The AO provided the appellant various opportunities to explain the transactions but the appellant failed to do so, hence the AO made the addition. 6.1.1 Now before me in the appellate proceedings, the appellant has filed written submission. I have gone through the written submission. The appellant has mentioned that the registration u/s 12AA of the Income Tax Act was cancelled by the CIT Exemption, Bhopal. On the directions of Hon. ITAT, the cancellation was reexamined by the CIT Exemption, Bhopal. The appellant has argued that it has received genuine donations from M/s Herbicure Healthcare Bio-Herbal research Foundation, Kolkata and M/s Sethi Trust, Kolkata. I have gone through the various submissions made by the appellant but no effort has been made to controvert the findings of the AO regarding the creditworthiness of the two parties, which have given donation. The AO has relied upon the various statements recorded during the course of survey u/s133A. The statement of Mr. SwapanRanjan Gupta was recorded and he clearly admitted that bogus donations were provided from M/s. Herbicure Healthcare Bio-Herbal research Foundation, Kolkata. The Investigation Wing Kolkata had also done investigation and given the finding about the accommodation entries given by these two parties. Hence the addition of- the AO is confirmed and appeal of the appellant is dismissed. 6.2 Ground No.2: This ground is consequential /general in nature.
4 . Aggrieved with the aforesaid decision by the First Appellate Authority, assessee preferred an appeal before us, which is under consideration.
At the outset, it is brought to our notice by the registry that there was no representation on behalf of the assessee during the hearing on 13.05.2025, however, an application has been submitted by the Counsel of the assessee, stating that the assessee has opted for Direct Tax Vivad Se Vishwas Scheme (“DTVSVS”), 2024 with the intent to resolve the dispute permanently and have therefore, filed Form No.1 as declaration under the said scheme. It is requested in the application to keep the proceedings undergoing before the Tribunal in abeyance until the necessary compliances under the DTVSVS, 2024 are completed. The copy of application submitted by the counsel of the assessee, is extracted as under:
Though in present case, it is submitted that the assessee had already initiated the proceedings under DTVSVS, 2024 by filing Form 1, in order to settle the dispute involved in the captioned appeal. The assessee had requested to keep the appellate proceedings in abeyance on account of its preference to go for DTVSVS-2024, but we are not inclined to accept such request. Rather, we find it appropriate to dismiss the appeal of the assessee, treating the same as withdrawn, as the assessee had already filed Form 1 by opting the alternate remedy available under DTVSVS-2024, thus, there is no need to keep the matter pending for adjudication on merits.
Per contra, Dr. Priyanka Patel, Sr. DR, on behalf of the revenue, did not raise any objection, if the present appeal is dismissed as withdrawn.
Considering the aforesaid factual position, we dismiss the appeal as withdrawn.
Before parting, we may herein observe that in case the order under DTVSVS-2024 for full and final settlement of tax arrears in “Form 4” is not passed by the designated authority, then the assessee will remain at a liberty to seek restoration of the subject appeal.
Shri Jainarayan Hariram Goel Charitable Trust Vs. DCIT(Exemption), Bhopal 10. Resultantly, the appeal filed by the assessee is dismissed as withdrawn in terms of the aforesaid observations.
Order pronounced in the open court on 20/05/2025.
Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (ARUN KHODPIA) �ाियक सद� / JUDICIAL MEMBER लेखा सद� / ACCOUNTANT MEMBER रायपुर/Raipur; िदनांक Dated 20/05/2025 Vaibhav Shrivastav आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant- Shri Jainarayan Hariram Goel Charitable Trust, Raipur 2. ��थ� / The Respondent- DCIT(Exemption), Bhopal 3. The Pr. CIT, Raipur (C.G.) 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 5. गाड� फाईल / Guard file. // स�ािपत �ित True copy //