NRI-BUILDTECH (INDIA) PRIVATE LIMITED,BHIWADI vs. PCIT JAIPUR-1, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR MkWa- ,l- lhrky{eh] U;kf;d lnL; ,oa MkWa- nhid ih-fjiksVs] ys[kk lnL; ds le{k BEFORE DR. S. SEETHALAKSHMI, JM & DR. DIPAK P. RIPOTE, AM vk;dj vihy la-@ITA No. 724/JPR/2024 fu/kZkj.k o"kZ@Assessment Year : 2018-19 NRI-Buildtech (India) Private Limited cuke The PCIT Vs. Main Road Chopanki, Near Power Jaipur-1, Jaipur. House, Vill- Bilahedi, Bhilwadi, Alwar. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAECN3080A vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assesseeby : None jktLo dh vksj ls@Revenue by : Shri Ajay Malik (CIT) lquokbZ dh rkjh[k@Date of Hearing : 22/07/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 24/09/2024

vkns'k@ORDER

PER: DR. S. SEETHALAKSHMI, J.M.

This is an appeal filed by the assessee against order of the Learned Principal Commissioner of Income Tax, Jaipur-1 [hereinafter referred to as “Ld. PCIT” ) dated 21.03.2024 for the assessment year 2018-19 raising therein following grounds of appeal.

“1. That on the facts and in the circumstances of the case, the Id. PCIT grossly erred in initiating & passing an order u/s 263 of the Act and in holding that the impugned assessment order passed u/s 143(3) r.w.s.144B of the Act by the by

2 ITA No. 724/JPR/2024 NRI-Buildtech (India) Pvt. Ltd. the Id. AO/JAO/FAO is found to be erroneous in so far as it is prejudicial to the interest of the revenue and therefore, the impugned order dated 21.03.2024 passed u/s 263 of the Act kindly be quashed. 2. The Id. PCIT erred in law as well on the facts of the case in holding the purchases as unexplained and made additions u/s 69C, without find out any defect in the complete audited books of accounts produced before him and whereas the all the purchases were duly recorded/accounted in regular books of accounts & the books of accounts were duly get audited under IT Act, 1961 and companies Act, 2013, then the source is duly explained, and therefore provisions of section 69C are not applicable, as there was no unaccounted expenditure. Hence, the impugned order dated 21.03.2024 passed u/s 263 of the Act was bad in law & liable to be quashed. 3. That Id. PCIT grossly erred in law as well on the facts of the case, regarding imposing the special tax rates u/s 115BBE(1)(b) of the IT Act, 1961, whereas special tax u/s 115BBE(1)(b) r.w.s. 2(7) of the IT Act, may be imposed by the AO only. Therefore the imposing special tax rates u/s 115BBE(1)(b) in absence of a valid jurisdictional is bad in law and liable to be quashed. 4. The Id. PCIT erred in law and on facts in taxing the disallowances/additions of purchases, at the rate prescribed u/s.115BBE of the Act as unexplained expenditure as per provisions section 69C of the IT Act, 1961. It is submitted that the provisions of section 115BBE are not at all applicable to the appellant as on business income and further Id. AO also duly accepted the complete revenue side including sales and complete expenditures side including purchases except purchase of Rs. 83,08,,238/- which was could not submitted due to technical glitches on the ITD portal which beyond the control of the assessee be deleted. 5. The Id. Pr. CIT seriously erred in law as well as on the facts of the case in assuming jurisdictions 263 of the Act by wrongly and incorrectly holding that the subjected assessment order u/s 143(3) r.w.s.144B of the Act dated 30.06.2021, was passed without initiating penalty proceedings u/s 271AAC of the Act instead of penalty proceedings u/s 270A. The assumption of jurisdiction u/s 263 of the Act with reference to initiation of penalty proceedings u/s 271AAC of the Act being contrary to the provisions of law and facts on record. Hence, the proceedings initiated u/s 263 of the Act and the impugned order dated 21.03.2024 deserves to be quashed.

3 ITA No. 724/JPR/2024 NRI-Buildtech (India) Pvt. Ltd. 6. That the Id. PCIT grossly erred in ignoring the detailed submissions along with supporting evidences made by the assessee in response to the notice u/s. 263 and in passing the impugned order simply on the basis of assumptions, presumptions, conjectures and surmises in mechanical & arbitrary manner which is bad in law. 7. That Proceedings initiated u/s 263 of the IT Act, 1961 by the Id. PCIT were bad in law and invalid for the reason that the proceedings were initiated merely on the basis of an audit objection and lacked an independent assessment of the facts. 8. The Id. PCIT as well as dl. AO both were erred in law as well on the facts of the case in holding that addition of Rs. 83,08,238/- which were made by AO as normal expenditure on account of unproved purchases(bogus purchases/unexplained purchases), should have been made u/s. 69C r.w.s. 11588E of the Act,, which is completely contrary to the provisions of the law and the facts available on the record. Hence, the impugned finding that the impugned assessment order passed u/s 143(3) r.w.s. 1448 dated 30.06.2021 was erroneous set-aside. 9. That the Id. CIT grossly erred in ignoring that the assessee's writ petition was pending before the Hon'ble Jurisdictional Rajasthan High on account of gross violation of the principle of natural justice & provisions of Faceless Assessment scheme u/s 1448 of the IT Act and suffering from the vice of illegality, is void ab initio and the impugned disallowances made is absolutely arbitrary in absence of reasonable opportunity of being heard by the Id. Assessing Officer, thus the initiation of proceedings is wholly barred beyond jurisdiction. 10. That the appellant craves his right to add, annul, amend, alter, withdraw and/or substitute any/ or all of the grounds of appeal before the finalization of the appeal. The additional/ revised ground of appeal can be raised which has not been taken with memorandum of appeal/ during the assessment/ appeal proceedings which is purely legal in nature as the assessee relies on the judgement of NTPC Ltd. vs CIT, 229 ITR 383 (SC)’’

4 ITA No. 724/JPR/2024 NRI-Buildtech (India) Pvt. Ltd. 2.1 Apropos grounds of appeal of the assessee, it is noted that the ld. PCIT set

aside the assessment order to the file of the AO by observing as under:-

“5. The reply of the assessee has been considered and perused carefully but the same was not found tenable for the reasons discussed below:- 5.1 The assessee had filed his ITR for the AY 2018-19 on 26.10.2018 declaring its total income at Rs. 97,91,160/-. 5.2 Subsequently, the case was selected for scrutiny through CASS. The assessment in this case was completed u/s 143(3) r.w.s. 1448 by NAFAC on 30.06.2021 at an income of Rs. 3,60,98,837/-making an addition of Rs. 1,77,90,188/- on account of short fall contract, Rs. 83,08,238/- on account of unproved purchases and Rs. 2,09,251/- on account of delayed contribution to ESIC and PF. The addition was made on account of unproved purchases as assessee had failed to submit the breakup of its entire purchases during the course of assessment proceedings. 5.3 During the course of assessment proceedings the assessee could substantiate/prove only purchase of Rs. 11,34,69,522/- as against the claim of purchase of Rs. 12,17,77,760/-. The unsubstantiated/unproved purchase cost of Rs.83.08.238/- was treated as excess claim and added to the income of the assessee. 5.4 As per Collins dictionary the word "unproved" means "not having been established as true, valid or possible". Thus, the unproved purchases mean false purchases or bogus purchase. 5.5 Since, the AO has made addition Rs. 83,08,238/- on account of unproved purchases (bogus purchases or unexplained purchases), this addition should have been made u/s 69C whereon tax needs to be charged at special rates as per provisions of section 115BBE. The AO in this case has made addition under regular head resulting in under charging of Tax as the regular addition made is charged at the rate of 30% plus surcharge and cess while the addition made u/s 69C r.w.s.115BBE attracts tax liability at the rate of 60% plus surcharge and cess. 5.6. Thus, penalty u/s 271AAC(1) needs to be initiated instead of penalty u/s 270A of the Income Tax Act, 1961 as initiated by the AO.

5 ITA No. 724/JPR/2024 NRI-Buildtech (India) Pvt. Ltd. 6. As discussed above, the AO failed to apply his mind on the material available on record and failed to invoke the applicable provisions of law. This in turn has resulted in passing of an erroneous order by the AO in the case due to non-application of mind to relevant material, an incorrect assumption of facts and an incorrect application of mind to the law which is prejudicial to the interest of the revenue and hence liable for revision under section 263 of the Act. The Hon'ble Supreme Court in the case of Malabar Industrial Limited V/s CIT 243 ITR it has held as under- “..... An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind." 7. Considering all the facts and circumstances of the case and for the reasons discussed above, the assessment order dated 30/06/2021 for AY 2018-19 passed by the AO is held to be erroneous in so far as it is prejudicial to the interest of the revenue for the purpose of section 263 of the Act. The said order has been passed by the AO in a routine and casual manner without applying the applicable sections of the Act. The AO has not verified the details which were required to be verified under the scope of scrutiny. The order of the AO is, therefore, liable to revision under the explanation (2) clause (b) and clause (a) of section 263 of the Act. The assessment order is set aside to be made afresh in the light of the observation made in this order. The AO is required to make necessary verification in respect of the observations made in this order after allowing reasonable opportunity to the assessee.”

2.2 During the course of hearing, it is noticed that in spite of the notice sent by the Tribunal, the case was not represented on behalf of the assessee when it was called for hearing. From this, it appears that the assessee is not interested to pursue its case. So in the circumstances, following the decision of Delhi Bench of ITAT in the case of CIT Vs. Multiplan India (P) Ltd., [1991] 38 ITD 320 and also on the judgement of the Hon'ble M.P. High Court in the case of Estate of Late Tukhoji

6 ITA No. 724/JPR/2024 NRI-Buildtech (India) Pvt. Ltd. Rao Holkar Vs. CWT [1997] 223 ITR 480, the appeal of the assessee is not admitted and dismissed in limine. 2.3 During the course of hearing, the ld. DR supported the order of the ld. PCIT. 2.4 The Bench further on merit heard the ld. DR and perused the materials available on record and it is found that no contrary material or written submissions concerning the above mentioned appeal had been advanced by the assessee. Hence, in such a situation, the Bench has no other alternative except to confirm the order of the PCIT. Thus the above mentioned appeal of the assessee is dismissed. 3.0 In the result, the appeal filed by the assessee is dismissed. Sd/- Sd/-

¼ZMkWa- nhid ih-fjiksVs½ ¼MkWa-,l-lhrky{eh½ (Dr. Dipak P. Ripote ) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 24/09/2024 *Santosh आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- NRI-Buildtech (India) Pvt. Ltd., Alwar. 2. izR;FkhZ@ The Respondent- PCIT, Jaipur-1, Jaipur. 3. vk;dj vk;qDr@ The ld CIT 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File ITA No. 724/JPR/2024) vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेजज. त्महपेजतंत