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Facts
The assessee company filed its return of income for A.Y. 2011-12 and was later subjected to reassessment proceedings under Section 147, leading to additions of ₹13,19,00,000/- as unexplained investment and ₹7,93,50,000/- as unexplained cash credit. The assessee's appeal before the CIT(A) was dismissed, and a subsequent appeal to the ITAT was initially dismissed ex-parte and later recalled.
Held
The Tribunal noted that the assessee claimed to have made submissions before the CIT(A) on 30th August, 2017, but this was not considered, leading to an ex-parte order against the principles of natural justice. The Tribunal found it apparent that the assessee's submissions were not considered.
Key Issues
Whether the appeal proceedings before the CIT(A) were conducted in accordance with natural justice, and if the assessee's submissions were duly considered.
Sections Cited
143(3), 147, 69, 68, 234B, 234C, 271(1)(c), 148, 133(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Minutex Processors Pvt. Ltd (assessee /appellant), against the appellate order passed by the National Faceless Appeal Centre, Delhi [the learned CIT (A)], for A.Y. 2011-12, dated 28th February, 2023, wherein the appeal filed by the assessee against the assessment order passed under Section 143(3) read with section 147 of the Income-tax Act, 1961 (the Act) by the Income Tax Officer, Ward 15(2)(3), Mumbai, was dismissed.
“1) On the facts and circumstances of the case and in law the authorities have erred in passing an ex-pate order u/s 250 without affording any opportunity of being heard in the matter which is against the principles of natural justice and hence the order passed be quashed.
2) On the facts and circumstances of the case and in law the authorities below have erred in making/sustaining an addition of Rs. 13,19,00,000/- being the investment made by appellant treating as un- explained investment u/s 69 and the reasons assigned for doing so, were wholly wrong, inconsistent with the facts of the case and not in accordance with the provision of the Income Tax Act, 1961 and rules made there under.
3) On the facts and circumstances of the case and in law the authorities below have erred in making/sustaining an addition of Rs. 7,93,50,000/- being the un-explained cash credit u/s 68 and the reasons assigned for doing so, were wholly wrong, inconsistent with the facts of the case and not in accordance with the provision of the Income Tax Act, 1961 and rules made there under.
5) On the facts and circumstances of the case and in law, the authorities below have erred in initiating the penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961 which were wholly wrong, irrelevant, and not in accordance with the facts and circumstances of the case as no income is concealed nor any inaccurate particulars were furnished.
6) The appellant craves leave to add, alter, modify and delete all or any of the aforesaid grounds of appeals on or before the date of hearing.”
Brief facts of the case shows that assessee is a company who filed its return of income on 11th August, 2012, at a total income of ₹1349/-. This was processed under Section 143(1) of the Act.
Subsequently, notice under Section 148 of the Income-tax Act, 1961 (the Act) was issued on 30th March, 2016. The reasons recorded shows that Assessee Company has invested in the shares of M/s Parvesh Construction Pt. Ltd. on 27th March, 2011, of 13,190 shares at ₹13,19,00,000/-. M/s Parvesh Construction Pvt. Ltd. is a loss making company and the investment in the share premium by the assessee is from unaccounted income keeping in mind the financial position of the company. The assessee did not
During the course of assessment proceedings, the assessee was issued a show cause notice with respect to the investment made of ₹ 13.19 crores. The show cause notice was replied in general manner. As the assessee is not carrying on any business and is a shell company which is used to launder money, It has a weak financials and do not have a capacity to invest and therefore, the addition was made of ₹13.19 crores. However, the learned Assessing Officer noted that identically sum has been added in A.Y. 2013-14, but it was found that this investment is pertaining to A.Y. 2011-12, and therefore, the addition was made to protect the interest of the Revenue.
The learned Assessing Officer further found that assessee has accepted share application money of ₹7,93,50,000/-. The assessee was asked to explain the details and nature, sources and genuineness of transactions of such receipt from four different companies. The assessee submitted the bank statement, audit report and the ITR of this company. Notice under Section 133(6) of the Act was issued to all these companies, but information was not received. Accordingly, another show cause notice was issued in
The assessment order under Section 143(3) read with section 147 of the Act was passed on 29th December, 2016, wherein the return of income of Rs.1,349/- was assessed at ₹21,12,51,350/-.
Aggrieved with the same assessee preferred an appeal before the learned CIT (A). During the appellate proceedings, assessee was given five opportunities and assessee did not avail any of them therefore, the learned CIT (A) confirmed the addition on the merit. Assessee also challenged as per grounds of appeal reopening of the assessment, vide paragraph no.6.5, the learned CIT (A) upheld the same.
9. Against this appellate order the assessee preferred the appeal before ITAT which was earlier dismissed for failure to make submission, ex-parte and subsequently recalled.
10. Now before us, in such recall appeal assessee has submitted a paper book containing 190 pages. It was claim of the assessee that assessee has appeared before the learned CIT (A) and submitted a paper book which is submitted before us. However, the learned CIT (A) did not consider any of the submissions and dismissed the appeal of the assessee. It was stated that earlier in this appeal, Mr. Mahesh Saboo , CA appeared and submitted the information which was not considered. Therefore, the ex-
13. As appeal is restored back to the file of the learned Assessing Officer, all other grounds on the merit are not adjudicated.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 26.07. 2024.