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Income Tax Appellate Tribunal, “B” BENCH : KOLKATA
Before: Hon’ble Shri A T Varkey, JM, & Shri M.Balaganesh, AM]
This appeal by the Revenue arises out of the order of the Learned Commissioner of Income Tax(Appeals)-3, Kolkata [in short the ld CIT(A)] in Appeal No. CIT(A), Kolkata-3/10988/2016-17 dated 09.10.2017 against the order passed by the ITO, Ward- 9(1), Kolkata [ in short the ld AO] under section 147 / 143(3) of the Income Tax Act, 1961 (in short “the Act”) dated 30.12.2016 for the Assessment Year 2009-10.
The assessee had raised the following grounds of appeal before us:
1. The ld. CIT(A) is not justified as well as has erred in law for deleting the addition to the tune of Rs. 2,08,71,151/- made as unexplained cash credit u/s 68 of the I.T. Act.
2. The ld. CIT(A) is not justified as well as has erred in law for deleting the disallowance of Rs. 5,55,588/- u/s 14A of the Act read with Rule 8D.
M/s Accurex Traders Pvt. Ltd. A.Yr. 2009-10
That the petitioner craves leave to adduce further grounds of appeal, if necessary at the time of hearing of appeal.
3. The brief facts of this issue is that the assessee is a domestic company and is a non- banking finance company. The return of income for assessment year 2009-10 was filed on 24.09.2009 declaring total income of Rs. Nil. Thereafter the assessment was sought to be reopened by issuance of notice u/s 148 of the Act on 31.03.2016 and duly served upon the assessee. In compliance to the notice u/s 148 of the Act, the assessee filed its return of income on 13.08.2016. Subsequently, notices u/s 143(2) and 142(1) of the Act were duly issued and served on the assessee. The ld. AO during the course of reassessment proceedings observed that there are total deposits of Rs. 2,08,71,151/- in bank a/c no. 53205026065 maintained by the assessee with Standard Chartered Bank, for which the details and explanations were sought by the ld. AO. The assessee did not furnish proper explanation regarding source of said deposits and accordingly, the Ld. CIT(A) added the same as unexplained cash credit. The ld. AO also made an addition u/s 14A of the Act in the sum of Rs. 5,55,588/- under third limb of Rule 8D(2) of the IT Rules. The assessee carried the matter in appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee pleaded that the reasons recorded for reassessment were sought for by the assessee and the same was duly submitted by the ld. AO to the assessee. The assessee filed objections against the reasons recorded for reopening before the Ld. AO. The assessee pleaded that these objections were not disposed off by the ld. AO by a separate speaking order. Accordingly, the assessee pleaded that the directions and guidelines issued by the Hon’ble Apex Court in the case of G.K.N Driveshafts India Pvt. Ltd. vs. ITO reported in 259 ITR 19 (SC) were not complied with by the ld AO. The Ld. CIT(A) duly appreciated these submissions of the assessee and held that the reopening of the assessment was not in accordance with guidelines of the Hon’ble Apex Court referred to supra and therefore the reassessment framed is void ab initio. He also held that the appeal of the assessee on this issue was therefore allowed.. The Ld. CIT(A) 2
M/s Accurex Traders Pvt. Ltd. A.Yr. 2009-10 thereafter also proceeded to adjudicate the issue on merits and gave relief to the assessee. Aggrieved the revenue is in appeal against the grounds reproduced supra.
We have heard the rival submissions. At the outset, we find that the Ld. CIT(A) had held that the reassessment framed by the ld. AO is void ab initio. We find that the revenue had not raised any ground before us against this quashing of reassessment by the Ld. CIT(A). We also find that the ld. AO had duly brought this fact to the notice of the Ld. CIT(A) while suggesting the grounds for filing of second appeal before this Tribunal. In other words, the ld. AO had recommended the suggestive grounds of appeal both on challenging the quashing of reassessment by the Ld. CIT(A) as well as the deletion of addition on merits. However, the administrative CIT in his wisdom chose to approve the grounds to be raised before this Tribunal only in respect of additions contested on merits, meaning thereby, no ground was suggested / approved by the ld. Administrative CIT to be filed before this Tribunal against the order quashing the reassessment by the ld. CIT(A). Hence, we find that the entire appeal preferred by the revenue is not maintainable as the adjudication of the issue on merits would only become academic in nature when the reassessment perse had been declared void ab initio by the Ld. CIT(A) which remain unchallenged by the revenue before us. Accordingly, grounds raised by the revenue are dismissed as not maintainable.
In the result, the appeal of the revenue is dismissed.
Order pronounced in the Court on 16.10.2018