Case Law Details
DCIT Vs KCJ Buildtech Pvt. Ltd. (ITAT Delhi)
The brief facts leading to this case is this that the assessee before us filed its return of income under section 139(1) of the Act on 26.09.2012 declaring income at Rs.5,883/-. Subsequently, a search under section 132 of the Act was carried out in the case of Anand Kumar Jain and Naresh Kumar Jain (Jain Group) on 17.12.2015, wherein various documents/books of account were found and seized. Upon examination of those seized materials, it was found that the said Anand Kumar Jain and Naresh Kumar Jain were engaged in the business of providing accommodation entries to various beneficiaries through various dummy/paper companies including the assessee company controlled and managed by those Jain brothers in order to provide accommodation entries to such beneficiaries in lieu of cash received by them and after relating the cash money from one company to the other and so on. It was further found by the Revenue that the Bank accounts of those companies were also managed and controlled by those Jain brothers.
As the assessee was found to be one of those paper companies of Jain brothers, on the basis of the entries in the coded name of the assessee found in the seized documents being Annexure No.13, Tally Data (Hard Disk) ledger name AJ and AJ1, satisfaction note was recorded by the Learned AO of the searched person and also by the Learned AO of the person other than the searched person notice under section 153A/153C of the Act was issued on 28.03.2018 directing the assessee to file return of income within 15 days from the date of receipt of the said notice. However, since nothing was forthcoming, further notice dated 20.09.2018 was served upon the assessee by affixing on the premises of the assessee. However, since no compliance was made by the assessee, the reassessment proceeding was finalized upon making addition of Rs.2,22,96,490/-, the amount credited in the Bank account of the assessee received from shell/paper concerns and from various beneficiaries of accommodation entries upon treating the same as unexplained entries and added to the total income of the assessee under Section 68 of the Act as assessee’s income from undisclosed sources on protective basis. It was further mentioned in the said order that substantive addition to be made in the hands of the beneficiaries. The said order was passed by the Learned AO on 26.12.2018.
The relevant materials available on record including the orders passed by authorities below. We have further considered the fact of striking of by the ROC on 16.01.2016 which is appearing at page 1 filed by the assessee on 03.08.2023. It is an admitted position that though the initiation of the proceeding was made by issuance of notice under section 153A/153C of the Act dated 28.03.2018 on the assessee, namely; M/s. KCJ Buildtech Pvt. Ltd., during the pendency of such proceedings, the name of the assessee was struck off by the role of ROC on 16.01.2017 by its application dated 06.07.2016 at page 1 of the paper book and knowledge whereof with AO is evident from assessee at pages 17-18 in the assessment order dated 19.12.2018 in the case of different assessee M/s. Nine Corporate Inception Pvt. Ltd. (formerly known as M/s. SKM creation Pvt. Ltd.) noted by the same Assessing Officer being ACIT, Central Circle – 26, New Delhi.
In the light of the above facts, it is crystal clear that the knowledge of the sticking of the name of the assessee from ROC was with Assessing Officer as on 19.12.2018 being the date of assessment order in respect of the other assessee which under any circumstances cannot be denied by the Revenue authorities, in spite of that, the Assessing Officer in the instant case as proceeded with the assessment proceedings and finalized the same under section 153C r.w.s 144 of the Act dated 26.12.2018. Therefore, order in the case of KCJ Buildtech Pvt. Ltd. is not sustainable in the eyes of law since the said company was not in existence at that material point of time at all. The assessment proceeding, is, thus found to be not maintainable as the assessment order suffers from jurisdictional error. The order is, therefore, admittedly being issued in the name of a non-existing company which has no value in the eyes of law; in fact such irregularities vitiated the entire proceedings and therefore, the same is liable to be quashed. We, thus, with the above observation quash the entire assessment proceedings initiated against the assessee. In the result, Cross objections is allowed.
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