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Facts
The assessee filed a NIL return for AY 2012-13. The AO initiated reassessment proceedings u/s 148 based on information about an alleged accommodation entry of Rs. 1.6 crore and made an addition u/s 68. The CIT(A) confirmed the addition by dismissing the appeal due to the assessee's non-filing of written submissions, without adjudicating the merits or the validity of the reassessment.
Held
The Tribunal found that the CIT(A) failed to adjudicate crucial grounds raised by the assessee, including the challenge to the assumption of jurisdiction u/s 148, validity of reasons recorded u/s 148(2), and sanction u/s 151. Therefore, the Tribunal set aside the CIT(A)'s order and remanded the matter back to the CIT(A) for a fresh decision after allowing the assessee a reasonable opportunity of being heard on all issues.
Key Issues
1. Whether the reassessment proceedings initiated u/s 148 of the Act were valid, including the validity of reasons recorded and sanction u/s 151. 2. Whether the addition of Rs. 1.6 crore u/s 68 as unexplained credits was justified. 3. Whether the CIT(A) erred in dismissing the appeal without adjudicating the legal and factual grounds raised by the assessee.
Sections Cited
Section 147, Section 143(3), Section 148, Section 139, Section 115JB, Section 133(6), Section 68, Section 148(2), Section 151, Rule 18(6) of ITAT Rules
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘H’ BENCH,
Before: SHRI CHALLA NAGENDRA PRASAD, & SHRI NAVEEN CHANDRA
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:-
This appeal by the assessee is preferred against the order of the NFAC, Delhi dated 16.03.2023 pertaining to A.Y 2012-13.
The gist of the grievance of the assessee is that the assessment order passed u/s 147/143(3) of the Income-tax Act, 1961 [the Act, for short] dated 25.12.2019 and upheld by the ld. CIT(A) is illegal, unlawful and totally contrary to the provisions of the Act and is based on invalid reopening action u/s 148 of the Act.
The assessee is also aggrieved by the confirmation of addition of Rs. 1,60,00,000/- by the ld. CIT(A) which was passed without application of mind.
In addition to the above, the assessee has raised an additional ground of DIN which was not pressed during the course of arguments.
Accordingly, the additional ground is dismissed as not pressed.
Representatives of both the sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules.
Briefly the facts of the case is that the assessee is a resident company and had filed its return for A.Y.2012-13 on 28.08.2012 declaring total income Nil after adjusting of current year's business loss of Rs.1,33,60,278/- against income from House Property. The AO had received information from DIT(Inv.), Unit-2(2), New Delhi regarding taking of accommodation entry of Rs. 1,60,00,000/- from M/s Sperryn Gas Product Ltd during the year. The Assessing Officer issued notice u/s 148 of the Act on 29.03.2019. In response to the notice issued u/s 148 of the act, the appellant filed return of income on 02.05.2019 declaring a NIL income. The Assessing Officer passed order u/s 143(3) r.w.s. 147 of the Act on 25.12.2019 and determined the appellant total assessed income at Rs.1,60,00,000/-. The Assessing Officer made addition of Rs. 1,60,00,000/- u/s 68 of the Act on account of unexplained credits.
Being aggrieved by the above addition, the assessee filed an appeal before the CIT(A) who confirmed the addition on the ground that the assessee did not file any written submissions in support of the grounds of appeal despite being given several opportunities.
Aggrieved, the assessee is in appeal before us.
It is the say of the ld AR that the assessee filed ITR filed u/s 139 of the Act with income u/s (MAT provisions) 115JB of Rs 206,73,947 /-. There upon on 06.03.2019 a notice u/s 133(6) seeking inputs from assessee was issued. The assessee filed a reply dated 13.03.2019 in pursuance to notice u/s 133(6) of the Act providing detailed inputs on information sought.
Thereafter on 27.03.2019 a notice was issued u/s 148. The AO supplied the reason for reopening which was duly replied to.The AO passed the impugned assessment order passed u/s 143(3)/147 of the Act on 25.12.2019 with total income assessed at Rs. 160,00,000 u/s 68 of the Act as unexplained credit.
The ld AR vehemently argued that the CIT(A) order is illegal and not valid as he did not decide the issue at hand that as per admitted and undisputed fact as narrated in impugned assessment order' when assessee has only received Rs 1 crore in its bank a/c, how can the impugned asst order be passed with addition of Rs. 1.60 crore. It is argued that the order of the Assessing Officer is full of serious inconsistency in that at one place addition is made u/s 68 and at other place it is alleged that there is disallowances of bogus purchases and yet at another place it is disallowed as expense. It was vehemently argued that the'said assessment order was passed without any application of mind and hence be quashed.
Per contra, the ld. DR forcefully relied on the orders of the authorities below.
We have heard the rival submissions and have perused the relevant material on record. We find that the CIT(A) has not adjudicated the various grounds of appeal where the assessee had challenged the assumption of jurisdiction u/s 148 and the merits of the addition. We find that the CIT(A) has dismissed the appeal only on the grounds that the assessee did not file any written submissions despite being given several opportunities.
13. After careful perusal of the facts and circumstances of the case we are of the considered view that the CIT(A) has not examined the facts of the case with respect to the assumption of jurisdiction u/s 148. The CIT(A) has not adjudicated on the issue of validity of reasons recorded u/s 148(2) of the Act and sanction u/s 151 of the Act of PCIT. In view of the above, we arrive at the conclusion that the ld. CIT(A) is required to examine the issues raised before him. Therefore, we set aside the impugned order to file of the ld. CIT(A) to examine the issue afresh in light of our above observations. The assessee is directed to co-operate with the first appellate authority and furnish necessary evidence as called for by the ld. CIT(A). The ld. CIT(A) is directed to decide the issue afresh after allowing reasonable opportunity of being heard to the assessee. is allowed for statistical purposes.
The order is pronounced in the open court on 03.12.2024.