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Income Tax Appellate Tribunal, DELHI BENCH “SMC” DELHI
Before: SHRI KUL BHARAT & SHRI PRADIP KUMAR KEDIA
Appellant by: Shri S.C. Singhal, CA Respondent by: Shri Mohd. Gayasuddin Ansari, CIT-DR Date of hearing: 18 04 2023 Date of pronouncement: 18 04 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.:
The captioned appeal has been filed by the Assessee against the order of the Commissioner of Income Tax (Appeals)-XXIV, New Delhi (‘CIT(A)’ in short) dated 30.09.2022 arising from the assessment order dated 30.12.2021 passed by the Assessing Officer (AO) under Section 143(3) r.w. Section 153C of the Income Tax Act, 1961 (the Act) concerning AY 2015-16.
The grounds of appeal raised by the assessee read as under:
“The ld. CIT(A) erred in rejecting the appeal without going into merits / ground on a wrong plea that the grounds of appeal were not attached to From 35. Alternatively it is a curable defect and no effective step was taken by CIT(A).
2. The reply / written submissions admitted by CIT(A) to have been filed on 05/07/2022 were point wise on each grounds of appeal narrating facts and law and were grounds of appeal. CIT(A) rejecting appeal without reading anything out of it.
3. The learned AO erred in not following the time schedule given in sec 132(9A), making the asst. order invalid. The search AO handed over papers to appallants AO much beyond 60 days of last authorisation.
As no money, bullion, jewellery or other valuable acticle or thing was seized nor any books of accounts or documents pertaining to assessee as per sec 153C, jurisdiction to this AO does not arise. The application of section 153C is not there, the proceedings all through were without valid power given in law.
Satisfaction note for issuing 153C notice is to be recorded by AO having jurisdiction over the case of assessee. ITO, Ward 43(3). Delhi was the AO but satisfaction note dt 05/01/2021 is signed by someother officer. Satisfaction should be of the A0 and of no one else. In absence of valid satisfaction note, notice and subsequent proceedings are all invalid. Transfer of jurisdiction has been assumed by CIT(A) with no evidence on file.
6. The satisfaction note dt 05/01/2021 say dongle of JBL. contained data for 2 years 2015-16 and 2016-17. Even then notice us 153C was issued for all 6 years from asst. Yr 2011-12 onwards. As per 394 IT 758 (Delhi) without any material placed on record, invocation of 153C (1) for several years is not justified.
The AO has erred grossly is not considering and passing any order to objection raised in letter filed on I.T portal much before final order. The AO may dissent / agree with the points raised but keeping silent thereon is not as per law and makes the final order bad in law. Separately or in final order, no consideration is there for any points raised in objection letter. It has challenged basic assumption of jurisdiction and procedural lapses. 443 IT 411(Bom) Tata Capital.
The AO has made reliance solely on the statement of Mr Kusharg Jindal, Ms Parul Ahluwalia etc. JBL. In letters dt 14/11/2021 and 20/12/2021 a written request was made before the A to provide copy of their statements and sought the opportunity to cross examine them. The AO never allowed the copy or cross examination opportunity to assessee and is against the principle of natural justice and leads to nullity- Kishinchand Chellaram v/s CIT (1980) 125 IT 713 (SC) and Andaman Timber inds vs CCE 281 CTR 241(SC), 397 IT 82(Delhi). This is only and sole evidence with the AO which is now not a good piece of evidence.
The Id. AO has failed to establish the link between alleged account in Hazir Johri dongle of JBL and the assessee. Inspite of firm denial in letters filed before him, the AO did not obtain the bank statement from bank to have confirmed detail that the said ledger account was that of the assessee and placed reliance on the statement of director/ employee of JBL. There can be number of reasons for their miss- statement but without complete evidence, this could not be proved that the two accounts in two sets of JBL were that of the assessee. In these cases, no addition can be made without conclusive evidence. Third party may do anything in its accounts and unless appellant role is proved, no addition can be justifiably made. The alleged cheque transactions do not appear in appellants bank account on the give date or 3 months thereafter.
The show cause notice dt 18/12/2021 was a 5 pages notice and wanted response on 20/12/2021 by 12:54 p.m. Just in less then 2 days, it is virtually amounting to giving no time to reply to a long show cause notice. It is against the rule of fair play.”
The assessee has raised multiple grounds challenging the jurisdiction for assessment under Section 153C of the Act as well as the additions carried out by the Assessing Officer on merits.
4. When the matter was called for hearing, the ld. counsel adverted to paragraphs 4.1 and 4.2 of the first appellate order and submitted that the CIT(A) has rejected the appeal of the assessee summarily on the premise that ‘grounds of appeal’ is not found as ‘attached document’ to the e-appeal memo. The ld. counsel submitted that the first appellate order has been dismissed in limine due to technical glitches over on which the assessee has no control. A paper book was referred to and a copy of print out from IT portal that ‘Grounds of Appeal’ were duly filed along with form 35 was inter alia placed for our perusal.
5. In the light of the submissions made on behalf of the assessee and having regard to the material available before the Bench, we consider it just and proper and in the interest of substantial justice to set aside the impugned first appellate order and restore the matter back to the CIT(A). The assessee shall take all corrective steps and provide the ‘Grounds of Appeal’ and all other documents as may be necessary to enable the AO to take informed decision on the dispute. The CIT(A) shall dispose of the appeal in accordance with law after providing reasonable opportunity to the assessee in this regard. The matter is thus set aside and restore to the file of the CIT(A) designated in this regard for fresh adjudication in accordance with la.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 18/04/2023.