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Facts
The assessment order for A.Y. 2007-08 was passed under sections 143(3)/147, determining total income at Rs. 84,80,000/- against a returned NIL income. This included additions of Rs. 80,00,000/- under Section 68 for undisclosed sources and Rs. 4,80,000/- under Section 69C for unaccounted commission. The Ld. CIT(A) dismissed the assessee's appeal, leading to the present appeal before the ITAT, which was filed with a delay of 412 days that was condoned. Despite notices, neither the assessee nor their representative appeared before the Tribunal.
Held
Considering the facts and circumstances on record, and after hearing the Ld. DR, the Tribunal found no reason to interfere with the findings of the lower authorities. As neither the assessee nor their representative appeared or produced any material to dispute the lower authorities' findings, the appeal was dismissed.
Key Issues
Whether the reopening of assessment under Section 147/148 was valid, and if the additions made under Section 68 (undisclosed sources) and Section 69C (unaccounted commission) were justified.
Sections Cited
Section 68, Section 69C, Section 143(3), Section 147, Section 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI
PER YOGESH KUMAR U.S., JM:
This appeal filed by the Assessee against the order of Learned
Commissioner of Income Tax (Appeals)-33, New Delhi [“Ld. CIT(A)”, for
short], dated 13/02/2018 for Assessment Year 2007-08.
Grounds taken in this appeal are as under:
“1. That the Ld. CIT(A) erred in facts and law in confirming the addition by treating Rs. 80,00,000/- u/s 68 of the Act as income from undisclosed sources and also confirming addition of Rs. 4,80,000/- u/s 69C of the Act on account of alleged unaccounted commission paid to brokers and the same runs Page 1 of 7
ITA No. 76.Del.2021 Nova Estates P. ltd.
contrary to ratio of the judgment passed by the Hon’ble Supreme Court in the case of PCIT vs. M/s. Chain House International Pvt. Ltd. SLP(C) 5691/2019. 2. That the Ld. CIT(A) was not justified in holding that income chargeable to tax has escaped assessment due to the failure of the assessee to disclose fully and trully all material facts necessary for assessment.
That the Ld. AO did not have any 'reason to believe' as contemplated under Section 147 of the Act for re-opening of the assessment in the case of an assessee by issuance of notice u/s 148 of the Act. 4. That the Ld. CIT(A) has failed to appreciate that in the original assessment proceedings u/s 143(3) of the Act, all facts and materials were placed before the ld. AO and despite such scrutiny no addition was made in the original assessment proceedings.
That the Ld. CIT(A) was not justified in affirming the reopening the assessment due to change of opinion. Assessment proceedings were concluded after due consideration of all facts and material placed before him. In view of the judgments of ITO v. Techspan India (P) Ltd (2018) 404 ITR 10 (SC) and CIT vs Bhanji Lavji (1971) 79 ITR 582 (SC) reopening of assessment merely on change of opinion is bad in law. 6. That the notice u/s 148 of the Act was issued without the proper sanction and approval as contemplated under the Act.
That the impugned order is liable to be set aside as the issuance of notice u/s 148 is bad in law.
That the Ld. CIT(A) was not justified in affirming the findings of the Ld. AO that Rs. 80,00,000/- represent income from undisclosed sources.
That the Ld. CIT(A) was not justified in presuming that the assessee has paid commission of Rs. 4,80,000/- for taking alleged accommodation entry.
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ITA No. 76.Del.2021 Nova Estates P. ltd.
That the Ld. AO before issuing notice u/s 147 of the Act made no independent inquiry so as to form an opinion about the escapement of income by the appellant. The reassessment proceedings initiated solely on the basis of the directions of the investigation wing, in a mechanical manner and without application of independent mind is bad in law.
That the reasons recorded are a case of borrowed satisfaction since the Ld. AO has not conducted independent enquiries himself. It is a settled law that re-assessment proceedings cannot sustain if the Ld. AO does not have his own satisfaction that the income has escaped assessment.
That the addition cannot be made in the hands of the appellant on account of remissness by the Ld. AO in not summoning the directors of the lender companies. The wide powers to summon a witness are with the Ld. AO under the Act and he failed to exercise the same.
That the Ld. CIT (A) failed to appreciate that there is no allegation of any accommodation entry or statement of any such entry operator in the case of the appellant and the addition is solely made on the basis of material which the appellant is not aware of.
That the Ld. CIT(A) has completely failed to consider the material relied upon by the Ld. AO for re-opening the assessment proceedings in the case of the assessee holds no ground as the assessments have been duly quashed by the Hon'ble Delhi High Court in the case of Surendra Kumar Jain VS. PCIT in W.P. (C) 4304/2018.
That the Ld. AO has relied upon such evidence and purported statements which were collected/recorded behind the back of the appellant. No opportunity was given to the appellant to rebut or cross examine the same, which is against the principles of natural justice.
That the appellant craves leave to add or modify any one or all of the grounds of appeal mentioned above.”
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There is a delay of 412 days in filing the present appeal. The
assessee filed an application for condonation of the delay, the reason for
the delay mentioned by the assessee are as under:
“4. It is further submitted by the appellant that the appeal agaisnt the order dated 13.02.2018 passed by the Ld. CIT(A) could not be filed as the appellant companty is non- operational and no employee of the appellant company is working for the company and even the documents for the preparation of this appeal could not have been traced. Due to said reason, the Director of the appellant was not immediately aware o9f the order passed by the ld. CIT(A) dated 13.02.2018 and even after receiving the said order, it could not arrange the documents relevant for the purpose of preparing the appeal within time. Furthermore, due to the COVID 19 situation prevalent in the country and the lockdown the appellant could not file the appeal in the year 2020.”
Considering the reasons assigned in the application for condonation
of delay, the delay in filing the present appeal is condoned.
When the appeal is called neither the assessee nor the
representative of the assessee appeared. It is seen from the record, after
filing the present appeal, there is no representation from the assessee
side. Several Notices have been sent to the assessee through the registry
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ITA No. 76.Del.2021 Nova Estates P. ltd.
and the notice has also been served through the department on the
registered mail ID of the assessee and also to the registered address but
the notice sent through RPAD returned with the remark (Left) and the
notice has also been served to the Assessee’s representative through his
mail ID. Considering the above facts and circumstances, we deem it fit to
decide the present appeal after hearing the Ld. DR and verifying the
material available on record.
Brief facts of the case are that the assessment order came to be
passed u/s 143(3) / 147 of the Act by determining the total income of the
assessee at Rs. 84,80,000/- as against the returned NIL income. The
assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) vide
order dated 13.02.2018 dismissed the appeal filed by the assessee as
agaisnt the order of the Ld. CIT(A) the assessee preferred the present
appeal on the grounds mentioned above.
The grounds of appeal of the assessee are agaisnt the addition of
Rs. 80,00,000/- made u/s. 68 of the Act as income from undisclosed
sources and confirming the addition of Rs. 4,80,000 /- u/s 69C of the Act
on account of unaccounted commission paid to the broker. Ld. CIT(A)
while deciding the issue has gone into submissions made by the assessee
material available on record, judicial precedence on the issue and
rejected the grounds of the appeal of the assessee. Neither the assessee
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ITA No. 76.Del.2021 Nova Estates P. ltd. nor the Assessee’s representative have appeared and not produced any
material to contradict or to dispute the findings of the lower authorities.
Above facts and circumstances, we find no reason to interfere with
the findings of the lower authorities. Accordingly, the grounds of appeal
of the assessee are dismissed.
In the result appeal of the assessee is dismissed.
Order pronounced in open Court on 07th February, 2024.
Sd/- Sd/- Sd/- Sd/- (M.BALAGANESH) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 07/02/2024 B.R., Sr. Ps.