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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA & SHRI PAWAN SINGH
Date of Hearing 24.04.2017 Date of Order – 26.04.2017
Narottam Morarji Bhanushali & 7602/Mum./2016
O R D E R PER: SHAMIM YAHYA These are cross-appeals by assessee and revenue arising out of the order of CIT-A dated 23.04.2015 and pertain to assessment year 2009-10.
The grounds of appeal raised in assessee’s appeal read as under:
1. On the facts and circumstances of the case and in law the Ld. CIT (A) erred in confirming the re-assessment proceeding u/s 147 initiated by the Ld. Assessing officer.
2. On the facts and circumstances of the case and in law the Ld. CIT (A) failed to consider that reassessment proceeding cannot be initiated:-
a) No reassessment can be made just to make an enquiry or verification. b) Reassessment proceeding cannot be initiate merely on the information received from investigation wing. c) Reassessment proceeding cannot be initiated when the LD. AO have reason to suspect and not reason to believe.
Narottam Morarji Bhanushali & 7602/Mum./2016 3. On the facts and circumstances of case and law, the Ld. CIT (A) erred in confirming the assessment order passed by Ld. AO u/s 143(3) r.w.s 147 of income tax act, which is passed against the principal of natural justice.
On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming and treating the genuine purchases of Rs.2,21,21,064 as bogus purchases and added Rs.55,30,266/- to total income being the @25% on the purchases of Rs.55,30,266/- without any basis.
5. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming the addition made on account of estimated adhoc basis @2.5% on alleged purchases merely on assumption basis.
The Ld. CIT(A) erred in confirming the interest charged u/s 234B & 234C of the IT Act.
7. The Ld. CIT(A) erred confirming the initiation of the Penalty Provisions u/s. 271(1)(c) of the Income Tax Act.
8. The assessee craves leave to add, alter or amend the existing grounds of appeal on or before the date of hearing.
Narottam Morarji Bhanushali & 7602/Mum./2016 The grounds of appeal raised in revenue’s appeal read as under:
1. On the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs.1,65,90,798/ - on account of bogus purchases, without appreciating the fact that the assessee has failed to produce bills, vouchers and other documentary evidence in support of his claim.
2. On the facts and circumstances of the case, the Ld. CIT(A) erred in estimating the profit from hawala purchases by disallowing only 25% of the bogus purchases, as even the basic onus of producing bill of purchases ledger account, transport bills delivery challans was not fulfilled by the assessee.
3. The appellant prays that the order of the CIT(A) on the above grounds be reversed and that of the Assessing officer be restored.
4. "The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary".
3. The assesses has filed following additional ground also “On the facts and circumstances of the assessee’s case and under law, the order dated 2303.2015 passed by Ld. AO u/s. 143(3) r.w.s. 147, of the Income Tax Act, 1961 was Narottam Morarji Bhanushali & 7602/Mum./2016 dispatched on 09.04.2015 which is barred by limitation u/s. 153(2) of the Act and hence assessment order is required to be quashed.”
4. At the outset in this case we take up the assessee challenge to the validity of reassessment order passed in this case. We note that assessee has taken specific additional ground with before us in which the assessee states that assessment order was dispatched on 09.04.2015 which is barred by limitation u/s. 153(2) of the Act. In this regard we note that issue in this regard was also raised before the Ld. CIT-A who has adjudicated this issue as under:-
The appellant has admitted in the submission that the assessment order was passed before the end of the financial year 2014-15. However, it has been claimed that the said assessment order was received by the appellant only on 10.04.2015. In view of this, the AR of the appellant has presumed that the AO might have passed the order beyond 31st March, 2015 since the proof of dispatch is not provided to him. In this regard, I find the presumption of passing the order beyond 31st March, 2016 baseless and without merit. It is on record that the assessment order was passed on 23rd March, 2015. The AR has not brought on record any evidence to establish that the order was passed beyond 31st March,
Narottam Morarji Bhanushali & 7602/Mum./2016 2015 and completely ignored the delivery time taken by the postal department. The claim of the appellant that AO has not provided the dispatch proof will acquire credibility only when it was refused by the AO while being requested by the appellant. Before me, it is not established that such request was made by the appellant. Considering the totality of the facts and circumstances of the issued, there is no merit in the claim of the appellant. Hence this ground of appeal is dismissed.”
From the above we find that the said additional ground was very much before the Ld. CIT-A. Hence we find that the same goes to the root of the matter and hence deserves adjudication. Accordingly on the anvil of Hon’ble Apex Court decision in the case of NTPC Limited we admit aforesaid ground of appeal for adjudication.
6. While canvassing the aforesaid ground the Ld. Counsel of the assessee has submitted before us evidence in the form of document showing file movement of the postal authority. Referring to this document Ld. Counsel of the assessee assailed that the assessing officer has not passed the order within the limitation period. He submitted that the aforesaid evidence of the letter from the postal authority clearly show that the said letter was dispatched on 9th
Narottam Morarji Bhanushali & 7602/Mum./2016 April, 2015. Hence there was no question of serving the same to the assessee before the 31st March, 2015.
Per contra Ld. DR submitted that the aforesaid document being submitted by the Ld. Counsel of the assessee was not produced before the Ld. CIT-A. Hence Ld. DR was agreeable to the proposition that the issue along with the addition document should be remitted to the file of the assessing officer to examine the same and decide as per law. Ld. Counsel of the assessee was also agreeable to this proposition.
Accordingly, we remit this issue to the file of the assessing officer. The A.O shall examine afresh in the light of the aforesaid document from the postal authority and decide as per law, after giving the assessee proper opportunity of being heard.
Since we are remitting the validity of the reassessment itself to the file of the assessing officer adjudication on other issue in the assessee’s as well as revenue appeal at present is not required. Accordingly, we refrain from adjudicating other issues. Consequent upon the adjudication of the issue remitted to the file of the assessing officer the assessee is at liberty to take necessary grounds of appeal as it so desires.
Narottam Morarji Bhanushali & 7602/Mum./2016 In the result of this appeal are allowed for statistical purposes.
Order pronounced in the Open Court on 26.04.2017