M/S. RITIKA SALES PVT. LTD.,NEW DELHI vs. ITO, NEW DELHI

At the time of hearing, an adjournment was moved on behalf of the assessee. However considering the material available on record qua Ground No. 5 and 6 raised after hearing the Ld. Sr. DR the said request was rejected. The said grounds read as under:- 5. “That the impugned assessment order passed by the learned Assessing Officer is against the principles of natural justice and has been passed without affording opportunity to cross examine the subscriber in the Share Capital of the assessee or the director of the Subscriber Companies namely Mr.Aseem Gupta and/or Sh. Manoj Gupta based upon whose statements AO heavily relied and have made additions of Rs.10,01,000/- 6. That on the facts and circumstances of the case, the order passed by the learned AO is bad both in the eye of law and on the facts of the case as the same has been made on the basis of material collected at the back of the assessee and without confronting the same to the assessee in clear violation of the principles of natural justice.”

The relevant facts of the case are that the assessee returned an income of Rs.5265/- which after being processed was subjected to re-opening in view of the information received from the IT (Investigation) informing that the assessee had received accommodation entries amounting to Rs.10 lacs from the following parties:- Amount Date Name of Entry Name of Bank Branch of Provider Bank 600000 30.12.2004 Moderate Credit ABN Amro Bank NRR Corp. Ltd. 400000 30.12.2004 Moderate Credit ABN Amro Bank NRR Corp Ltd.

As a result of this after hearing the assessee an addition of Rs.10 lacs was made. The said addition was challenged in appeal before the CIT(A) who considering the detailed submission assailing the assumption of jurisdiction dismissed the grounds of the assessee and thereafter proceeded to consider the issue on merit. However on a perusal of the grounds raised before the CIT(A) it is seen that the assessee had specifically raised the following Ground No.4 before the CIT(A) as is found reproduced at page 2 of the impugned order:- 4. “We find that the Ld.AO has just relied on the information received from the investigation wings without going further into verifying the facts and used the information to make the additions without affording an opportunity to the appellant to cross examine. Thus rules of natural justice have not been adhered to by the Ld.A.O. That the Ld. ITO, Ward-15(4), New Delhi is not justified in making the addition of Rs.10,00,000/- on a/c of the undisclosed source without mentioning the section of Income Tax Act, 1961 in which its pertains to be added in the income of the assessee and Rs.1000/- added under section 69(C) of the I.T.Act, 1961. Neither on the facts of the case nor legally, on our letter dated 01.11.2012.”

On a perusal of the finding arrived at it, it is seen that all the aspects brought out in the above quoted ground have not been considered leading to the raising of the above two specific grounds before the ITAT. In the peculiar facts and circumstances of the case, I am of the view that the impugned order on this ground needs to be restored for adjudication thereon. Accordingly since the assumption of jurisdiction on its various facets is under challenge the entire order is set aside including the finding on merit. The Ld.CIT(A) shall first decide the jurisdictional issues and thereafter if need be shall proceed on merit afterwards. Page 2 of 3