Case Law Details
Trinity Touch Pvt Ltd Vs ACIT (ITAT Delhi)
ITAT Delhi remanded the matter back to CIT(A) since CIT(A) failed to examined the validity of jurisdiction under section 148 of the Income Tax Act. Accordingly, order set aside and matter remanded back.
Facts- This appeal by the assessee is preferred against the order of the NFAC, Delhi dated 16.03.2023 pertaining to A.Y 2012-13. The gist of the grievance of the assessee is that the assessment order passed u/s 147/143(3) of the Income-tax Act, 1961 dated 25.12.2019 and upheld by the ld. CIT(A) is illegal, unlawful and totally contrary to the provisions of the Act and is based on invalid reopening action u/s 148 of the Act. The assessee is also aggrieved by the confirmation of addition of Rs. 1,60,00,000/- by the ld. CIT(A) which was passed without application of mind.
Conclusion- Held that the CIT(A) has not examined the facts of the case with respect to the assumption of jurisdiction u/s 148. The CIT(A) has not adjudicated on the issue of validity of reasons recorded u/s 148(2) of the Act and sanction u/s 151 of the Act of PCIT. In view of the above, we arrive at the conclusion that the ld. CIT(A) is required to examine the issues raised before him. Therefore, we set aside the impugned order to file of the ld. CIT(A) to examine the issue afresh in light of our above observations. The assessee is directed to co-operate with the first appellate authority and furnish necessary evidence as called for by the ld. CIT(A). The ld. CIT(A) is directed to decide the issue afresh after allowing reasonable opportunity of being heard to the assessee.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is preferred against the order of the NFAC, Delhi dated 16.03.2023 pertaining to A.Y 2012-13.
2. The gist of the grievance of the assessee is that the assessment order passed u/s 147/143(3) of the Income-tax Act, 1961 [the Act, for short] dated 25.12.2019 and upheld by the ld. CIT(A) is illegal, unlawful and totally contrary to the provisions of the Act and is based on invalid reopening action u/s 148 of the Act.
3. The assessee is also aggrieved by the confirmation of addition of Rs. 1,60,00,000/- by the ld. CIT(A) which was passed without application of mind.
4. In addition to the above, the assessee has raised an additional ground of DIN which was not pressed during the course of arguments. Accordingly, the additional ground is dismissed as not pressed.
5. Representatives of both the sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules.
6. Briefly the facts of the case is that the assessee is a resident company and had filed its return for A.Y.2012-13 on 28.08.2012 declaring total income Nil after adjusting of current year’s business loss of 1,33,60,278/- against income from House Property. The AO had received information from DIT(Inv.), Unit-2(2), New Delhi regarding taking of accommodation entry of Rs. 1,60,00,000/- from M/s Sperryn Gas Product Ltd during the year. The Assessing Officer issued notice u/s 148 of the Act on 29.03.2019. In response to the notice issued u/s 148 of the act, the appellant filed return of income on 02.05.2019 declaring a NIL income. The Assessing Officer passed order u/s 143(3) r.w.s. 147 of the Act on 25.12.2019 and determined the appellant total assessed income at Rs.1,60,00,000/-. The Assessing Officer made addition of Rs. 1,60,00,000/- u/s 68 of the Act on account of unexplained credits.
7. Being aggrieved by the above addition, the assessee filed an appeal before the CIT(A) who confirmed the addition on the ground that the assessee did not file any written submissions in support of the grounds of appeal despite being given several opportunities.
8. Aggrieved, the assessee is in appeal before us.
9. It is the say of the ld AR that the assessee filed ITR filed u/s 139 of the Act with income u/s (MAT provisions) 115JB of Rs 206,73,947 /-. There upon on 06.03.2019 a notice u/s 133(6) seeking inputs from assessee was The assessee filed a reply dated 13.03.2019 in pursuance to notice u/s 133(6) of the Act providing detailed inputs on information sought. Thereafter on 27.03.2019 a notice was issued u/s 148. The AO supplied the reason for reopening which was duly replied to.The AO passed the impugned assessment order passed u/s 143(3)/147 of the Act on 25.12.2019 with total income assessed at Rs. 160,00,000 u/s 68 of the Act as unexplained credit.
10. The ld AR vehemently argued that the CIT(A) order is illegal and not valid as he did not decide the issue at hand that as per admitted and undisputed fact as narrated in impugned assessment order’ when assessee has only received Rs 1 crore in its bank a/c, how can the impugned asst order be passed with addition of Rs. 1.60 crore. It is argued that the order of the Assessing Officer is full of serious inconsistency in that at one place addition is made u/s 68 and at other place it is alleged that there is disallowances of bogus purchases and yet at another place it is disallowed as expense. It was vehemently argued that the’said assessment order was passed without any application of mind and hence be quashed.
11. Per contra, the ld. DR forcefully relied on the orders of the authorities below.
12. We have heard the rival submissions and have perused the relevant material on record. We find that the CIT(A) has not adjudicated the various grounds of appeal where the assessee had challenged the assumption of jurisdiction u/s 148 and the merits of the addition. We find that the CIT(A) has dismissed the appeal only on the grounds that the assessee did not file any written submissions despite being given several
13. After careful perusal of the facts and circumstances of the case we are of the considered view that the CIT(A) has not examined the facts of the case with respect to the assumption of jurisdiction u/s 148. The CIT(A) has not adjudicated on the issue of validity of reasons recorded u/s 148(2) of the Act and sanction u/s 151 of the Act of PCIT. In view of the above, we arrive at the conclusion that the ld. CIT(A) is required to examine the issues raised before him. Therefore, we set aside the impugned order to file of the ld. CIT(A) to examine the issue afresh in light of our above observations. The assessee is directed to co-operate with the first appellate authority and furnish necessary evidence as called for by the ld. CIT(A). The ld. CIT(A) is directed to decide the issue afresh after allowing reasonable opportunity of being heard to the assessee.
14. In the result, the appeal of the assessee in ITA No. 1309/DEL/2023 is allowed for statistical purposes.
The order is pronounced in the open court on 03.12.2024.
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