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Facts
M/s Krayon Marketing Pvt. Ltd. appealed against an order of the Ld. CIT(A) for AY 2011-12, challenging the reopening of assessment under sections 147/148 of the Income Tax Act due to alleged lack of 'Reason to Believe' and questioning the addition of Rs. 30,00,000/- under section 68 of the Act. The assessee also raised concerns about procedural lapses, including not being provided 'Reasons to Believe' timely and the Ld. AO's failure to substantiate inquiries.
Held
During the hearing, the assessee's representative submitted an application under the Vivad se Vishwas Scheme, 2024, and requested to withdraw the appeal, which the Revenue did not object to. The Tribunal, noting the assessee's availment of the VSV Scheme, disposed of the appeal as withdrawn, subject to approval by the competent authority, while granting liberty to recall the order if the declarations are not accepted.
Key Issues
Whether the reopening of assessment under sections 147/148 was legally valid due to lack of 'Reason to Believe' and proper procedure, and whether the addition of Rs. 30,00,000/- under section 68 of the Income Tax Act was justified.
Sections Cited
Section 147, Section 148, Section 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘C’: NEW DELHI
Before: SHRI PRADIP KUMAR KEDIA & SHRI SUDHIR PAREEK
the order of learned Commissioner of Income Tax (Appeals)-31, New Delhi-110055 (hereinafter referred to as the ‘Ld. CIT(A)’, in short), dated 05.01.2024 for Assessment Year 2011-12.
ITA No.- 890/Del/2024 Krayon Marketing Pvt. Ltd. 1.1 The assessee has raised the following grounds of appeal:
“1.) THAT learned Assessing Officer failed to appreciate that there existed no Reason to Believe and only Reasons to Suspect for reopening of assessment under section 147 of the Act and hence, the entire proceedings are ex-facie bad in law. 2.) BECAUSE the appellant was not provided with the Reasons to Believe at the time of issue of Notice under section 148, rather, at a much later stage in the course of proceedings. 3.) BECAUSE learned Assessing Officer failed to prove the nexus between information received from Investigation Wing and the appellant and also failed to substantiate the enquiries and investigations made by Ld. AO, relevant to the appellant, before forming of Reason to Believe for reopening of assessment. 4.) BECAUSE learned Assessing Officer failed to appreciate the fact that transaction under review was entered much after the alleged search operation was conducted by Investigation Win g on the Lender and thus, the outcomes of said search operation bore Nil significance to the case of appellant. 5.) BECAUSE the learned Assessing Officer was not justified either on facts or in law to compute the income of the appellant at Rs. 30,00,000/- by making an addition under section 68 of the Income Tax Act and in subjecting the appellant to a tax demand of Rs. 19,75,310/- on that basis. 6.) BECAUSE Ld. AO failed to highlight deficiencies in the submissions of the appellant mad e to justify the creditworthiness of the lender and hence, no addition could be made under Section 68 of the Act. 7.) BECAUSE Ld. AO failed to pass a speaking order in which the neither of the submissions, assertions and documents brought on records by the appellant were rebutted nor commented upon before passing an adverse order. 8.) BECAUSE the order appealed against is contrary to the facts, law and principles of natural justice. The appellant craves leave to add to alter, amend or delete above grounds of appeal.”
ITA No.- 890/Del/2024 Krayon Marketing Pvt. Ltd. We have heard the Ld. Representative of both the parties and 2. perused the material available on record.
When the matter was called for hearing, the Ld. AR for the assessee submitted an application under the Vivad se Vishwas Scheme, 2024. The Ld. AR further stated that the assessee does not wish to pursue the present appeal due to the exercise of the option for availing of the VSV Scheme and, consequently, requested that the written application for withdrawal of the appeal be granted.
The Ld. Sr. DR for the Revenue stated that he has no objection to withdraw the appeal as sought on behalf of the assessee.
In view of above fact, since the assessee has availed the benefit under Vivad Se Vishwas Scheme, 2024 to settle the matters, therefore, the appeal of the assessee stands disposed of in terms thereof, subject to approval of the same by the competent authority.
If at any stage the assessee finds that its declarations are not accepted by Department, the assessee is given liberty to recall this order. Appeal of the assessee is accordingly disposed of.
ITA No.- 890/Del/2024 Krayon Marketing Pvt. Ltd. 6. In the result, appeal of the assessee is dismissed as withdrawn.
Order pronounced in the Open Court on 21.11.2024