SBS Realtors Private Limited Vs ITO (ITAT Delhi)
Learned Counsel for the Assessee submitted that since the re-assessment order is illegal and bad in Law and is covered by the Order of the Tribunal Dated 01.04.2019 in the case of assessee on the same issue, therefore, the Learned Pr. CIT cannot exercise jurisdiction under section 263 of the I.T. Act, 1961 in collateral proceedings. Therefore, the Order passed by the Learned Pr. CIT under section 263 of the I. T. Act, 1961 is invalid and bad in Law.
On the other hand, the Ld. D.R. relied upon the impugned Order of the Learned Pr. CIT and submitted that since assessee did not challenge the reopening of the assessment, therefore, it cannot be challenged in proceedings under section 263 of the I.T. Act, 1961.
After considering the rival submissions, we are of the view that the Learned Pr. CIT has wrongly assumed the jurisdiction under section 263 of the I. T. Act, 1961. It is an admitted fact that in A.Y. 2009-2010 the A.O. has recorded similar reasons for reopening of the assessment. However, the same have been quashed by the Tribunal vide Order Dated 01.04.2019 (supra). The A.O. in the impugned re-assessment order has mentioned the information received from DIT (Inv.)-II, New Delhi that assessee has received accommodation entries of Rs.40 lakhs. However, A.O. was satisfied with the explanation of assessee and did not make any addition after examining the issue in detail vide Order Dated 30.06.2014. It would, therefore, show that A.O. has taken one of the possible view under the Law. Therefore, on the same set of facts the Learned Pr. CIT should not have taken different view by exercising powers under section 263 of the I.T. Act, 1961. Since the re-assessment proceedings are already declared illegal and bad in Law in A.Y. 2009-2010 in the case of assessee on the same reasons, therefore, in assessment year under appeal also initiation of re-assessment proceedings is illegal and bad in Law. Therefore, the same cannot be subject to proceedings under section 263 of the I.T. Act, 1961. This issue is, therefore, covered by Order of the ITAT, Delhi G-Bench, New Delhi in the case of M/s. Shahi Exports Pvt. Ltd., New Delhi vs., The Pr. CIT, Circle-1, New Delhi (supra). In view of the above, we set aside the Order of the Learned Pr. CIT-8, New Delhi and quash the Order passed under section 263 of the I.T. Act, 1961 and restore the Order of the A.O. Accordingly, appeal of the Assessee is allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
PER BHAVNESH SAINI, J.M.
This appeal by Assessee has been directed against the Order of the Ld. Pr. CIT-8, New Delhi, Dated 24.03.2017, for the A.Y. 2008-2009.
2. We have heard the Learned Representative of both the parties and perused the material available on record.
3. Briefly the facts of the case are that return of income in this case was originally filed on 30.09.2008 declaring loss of Rs.7,817/-. In this case information received from the O/o. DIT (Inv.)-II, New Delhi that assessee has received bogus accommodation entries of Rs.40 lakhs during the F.Y. 2007-2008 relevant to A.Y. 2008-2009 under appeal. Notice under section 148 of the I.T. Act, 1961 has accordingly been issued, which was served upon the assessee. The A.O. provided copy of the reasons for reopening of the assessment to the assessee also. The A.O. issued statutory notice and called for the details which have been filed by the assessee and examined by the A.O. The A.O. noted that assessee-company is a building developer/ colonizer and dealt in all kind of immovable properties during the year under consideration. The assessee was required to furnish confirmation along with copy of ITR and bank statement of the parties. The assessee has furnished confirmation along with copy of financial statement, copy of bank statement of the parties from whom share application/ share capital money received, notice under section 133(6) of the I.T. Act was also issued and statements of the Directors were also recorded by the A.O. The A.O. was satisfied with the explanation of assessee and thus, the A.O. assessed income of assessee at NIL vide Order Dated 30.06.2014 under section 143(3)/147 of the I.T. Act, 1961.
3.1. The Learned Pr. CIT taken-up the proceedings under section 263 of the I.T. Act, 1961 and issued notice under section 263 of the I.T. Act, 1961 Dated 17.01.2017 which is reproduced in the impugned order in which the Learned Pr. CIT has mentioned that assessee has received accommodation entries of Rs.40 lakhs from M/s. Finage Leasing & Finance India Ltd., M/s. Singhal Securities Pvt. Ltd., M/s. VIP Leasing & Finance Pvt. Ltd., and M/s. Virgin Capital Services Pvt. Ltd., which are concerns of Shri S.K. Jain Group of cases. The Learned Pr. CIT has noted in the show cause notice that the documents seized shows that cash of Rs.20 lakhs was given by some Shri Rajesh Aggarwal to Shri S.K. Jain Group and also referred to the cash book etc., with regard to cash available. The Learned Pr. CIT, therefore, found that assessee has received accommodation entries and the material found during the course of search in the case of Shri S.K. Jain Group have not been considered by the A.O. The explanation of assessee was called for as to why the re-assessment order Dated 30.06.2014 cannot be set aside. The assessee submitted reply and also submitted that assessee filed documentary evidences which have been examined by the A.O. which prove that the Investors are existing parties and have creditworthiness. Shares have been allotted to them, therefore, the transaction is genuine. The assessee filed copy of share application form, resolution of Investor Companies, confirmation of Investor companies, their PAN Card, Certificate of Incorporation and Memorandum and Article of the Company, bank statements, present address of the Investor Companies, copy of Form No.2 held by the assessee-company with Registrar of Company, list of share allotment etc. The A.O. made detailed enquiry with reference to the search conducted in the case of Shri S.K. Jain Group of cases and information received from DIT (Inv.)-II, New Delhi. The Learned Pr. CIT, however, did not accept the explanation of assessee and noted that though the A.O. has referred to Appraisal Report, but, did not examine the seized material found during the course of search before making the assessment. Thus, the A.O. passed the Order without making enquiries or verification and accordingly gave relief without making enquiry. Therefore, the re-assessment order was found to be erroneous in so far as prejudicial to the interests of the Revenue. Therefore, the Learned Pr. CIT set aside the impugned assessment order with a direction to A.O. to examine the seized material and confront the same to the assessee and pass the Order accordingly.
4. Learned Counsel for the Assessee submitted that in A.Y. 2009-2010, the A.O. also reopened the assessment on identical reasons in the case of the assessee in which the matter travelled to ITAT G-Bench, New Delhi in ITA.No. 7791/Del./2018 and the Tribunal vide Order Dated 01.04.2019 quashed the re-assessment proceedings. The Order of the Tribunal Dated 01.04.2019 is reproduced as under :
“IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH ’G’: NEW DELHI
BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND
MS. SUCHITRA KAMBLE, JUDICIAL MEMBER
ITA No.7791/Del/2018
Assessment Year : 2009-10
M/s SBS Realtors (P) Ltd.,
B-14/C, First Floor,
Freedom Fighters Enclave,
Neb Sarai,
New Delhi – 110 068.
PAN : AALCS5106R.
