Luxe Trading And Holding (India) Pvt. Ltd. Vs ITO (ITAT Delhi)
From a perusal of the reasons, it is seen that the notice u/s. 148 of the Act has been issued mechanically without application of mind and the satisfaction by the Assessing Officer is only the borrowed satisfaction of the Investigation Wing. The Assessing Officer, without applying his mind, has simply on the basis of information of the Investigation Wing jumped to the conclusion that there is escapement of income. From the perusal of the aforesaid reasons, I do not find any application of mind by the AO for reaching to the conclusion that there was escapement of income except the information from the Investigation Wing. Therefore, I find considerable cogency in the contention of the Ld. Counsel for the assessee that AO has completed the assessment in dispute u/s. 147/143(3) of the Act without appreciating the facts and circumstances of the case and wrongly assumed the jurisdiction u/s. 148 of the Act, 1961, which is in violation of mandatory jurisdictional conditions as stipulated under the Act. He further stated that Ld. First Appellate Authority has wrongly upheld the order of the AO and dismissed the appeal of the assessee without passing any reasonable and elaborate finding as well as legal without properly adjudicating the legal ground as per the written submissions filed by the assessee, which is against the law and facts on the file. Ld. Counsel for the assessee further stated that the AO has completed the assessment and Ld. CIT(A) has wrongly upheld the order of the Ld. CIT(A) without appreciating that the reasons in this case are based on borrowed satisfaction and without independent application of mind. Lastly, he submitted that exactly similar issue has already been adjudicated and decided in favour of the assessee by the ITAT, Delhi ‘G’ Bench, New Delhi in the case of M/s SBS Realtors (P) Ltd. Vs. ITO decided in ITA No. 7791/Del/2018 (AY 2009-10) vide order dated 01.04.2019. He has also filed the copy of this order in the shape of Paper Book and especially draw my attention towards the page no. 100-112. He requested that in this case the Bench has elaborately discussed the various case laws rendered by the Jurisdictional High Court and declared the invalid assessment. He further requested that in view of the order dated 01.04.2019 passed in the case of M/s SBS Realtors (P) Ltd. Vs. ITO (Supra) the legal ground involved in this appeal may be decided in favour of the assessee and notice u/s. 148 of the Act may be quashed and accordingly assessment in pursuance of the notice may also be quashed by accepting the appeal of the assessee.
Respectfully following the precedents, ITAT quashed the notice issued under section 148 of the Act and consequently, the assessment completed in pursuance thereto. Since the notice issued u/s. 148 of the Act is quashed, the assessment order passed in pursuance to such notice is also quashed. Once the assessment order itself has been quashed, the other grounds raised by the assessee in its appeal do not require any adjudication on merits.
FULL TEXT OF THE ITAT JUDGEMENT
These 03 appeals have been filed by the separate assessees against the respective orders passed by the different Ld. CIT(A)s’ pertaining to respective assessment years.
2. The facts narrated by the revenue authorities are not disputed by both the parties, hence, the same are not repeated here for the sake of convenience.
3. These are 03 appeals filed by the different assesses by raising various grounds of appeal in each appeal challenging addition in dispute on merit as well as on legal. However, Ld. Counsel for the assessee only argued the legal ground no. 1 to 1.1 in ITA No. 6677/Del/2018 (AY 2011- 12) which is common in all the aforesaid 03 appeals of different assesses. He draw my attention towards the legal grounds raised by the assessee in all the appeals i.e. ground no. 1 which are identical in all the 03 appeals. For the sake of convenience, the legal ground raised by the Assessee in ITA No. 6677/Del/2018 (AY 2011-12) is reproduced as under:-
“1. That on the facts and in the circumstances of the case and in law, Ld. CIT(A) erred in sustaining the order passed by the AO u/s. 147/143(3) without appreciating that assumption of jurisdiction u/s. 148 by AO was in violation of mandatory jurisdictional conditions stipulated under the Act;
1.1 That on the facts and in the circumstances of the case and in law, Ld. CIT(A) erred in sustaining the order passed by the AO u/s. 147/143(3) without appreciating that “Rubber Stamp” reasons in present case are based on borrowed satisfaction and are without independent application of mind.”
3.1. Ld. Counsel for the assessee stated that AO has completed the assessment in dispute u/s. 147/143(3) of the Income Tax Act, 1961 (in short “Act”) without appreciating the facts and circumstances of the case and wrongly assumed the jurisdiction u/s. 148 of the I.T. Act, 1961, which is in violation of mandatory jurisdictional conditions as stipulated under the Act. He further stated that Ld. First Appellate Authority has wrongly upheld the order of the AO and dismissed the appeal of the assessee without passing any reasonable and elaborate finding and without properly adjudicating the legal ground, as per the written submissions filed by the assessee, which is against the law and facts on the file. Ld. Counsel for the assessee further stated that the AO has completed the assessment and Ld. CIT(A) has wrongly upheld the order of the Ld. CIT(A) without appreciating that the reasons in this case are based on borrowed satisfaction and without independent application of mind. Lastly, he submitted that exactly similar issue has already been adjudicated and decided in favour of the assessee by the ITAT, Delhi ‘G’ Bench, New Delhi in the case of M/s SBS Realtors (P) Ltd. Vs. ITO decided in ITA No. 7791/Del/2018 (AY 2009-10) vide order dated 01.04.2019. He has also filed the copy of the aforesaid order in the shape of Paper Book and especially draw my attention towards the page no. 100-112. He requested that in this case the Bench has elaborately discussed the various case laws rendered by the Jurisdictional High Court and quashed the assessment on the legal similar issue. He further requested that in view of the order dated 01.04.2019 passed in the case of M/s SBS Realtors (P) Ltd. Vs. ITO (Supra) the legal ground involved in this appeal may be decided in favour of the assessee and notice u/s. 148 of the Act may be quashed and accordingly assessment in pursuance of the notice may also be quashed by accepting the appeal of the assessee.
4. On the contrary, Ld. DR relied upon the orders of the authorities below.
5. I have heard both the parties and perused the records, especially the orders of revenue authorities as well as the Paper Book filed by the Ld. Counsel for the assessee in which the assessee has filed the copies of the various decisions rendered by the Hon’ble Jurisdictional High Court as well as Tribunal. Since similar legal issue has been raised in all the appeals, hence, the appeals were heard together and disposed of by this common order for the sake of convenience, by dealing with ITA no. 6677/Del/2018 (AY 2011-12), the result thereof will apply mutatis mutandis to other appeals i.e. ITA no. 1268 & 2009/Del/2019.
5.1 The reasons recorded for issue of notice under section 148 read as under in ITA No. 6677/Del/2018 (AY 2011-12):-
5.2 From a perusal of the reasons, it is seen that the notice u/s. 148 of the Act has been issued mechanically without application of mind and the satisfaction by the Assessing Officer is only the borrowed satisfaction of the Investigation Wing. The Assessing Officer, without applying his mind, has simply on the basis of information of the Investigation Wing jumped to the conclusion that there is escapement of income. From the perusal of the aforesaid reasons, I do not find any application of mind by the AO for reaching to the conclusion that there was escapement of income except the information from the Investigation Wing. Therefore, I find considerable cogency in the contention of the Ld. Counsel for the assessee that AO has completed the assessment in dispute u/s. 147/143(3) of the Act without appreciating the facts and circumstances of the case and wrongly assumed the jurisdiction u/s. 148 of the Act, 1961, which is in violation of mandatory jurisdictional conditions as stipulated under the Act. He further stated that Ld. First Appellate Authority has wrongly upheld the order of the AO and dismissed the appeal of the assessee without passing any reasonable and elaborate finding as well as legal without properly adjudicating the legal ground as per the written submissions filed by the assessee, which is against the law and facts on the file. Ld. Counsel for the assessee further stated that the AO has completed the assessment and Ld. CIT(A) has wrongly upheld the order of the Ld. CIT(A) without appreciating that the reasons in this case are based on borrowed satisfaction and without independent application of mind. Lastly, he submitted that exactly similar issue has already been adjudicated and decided in favour of the assessee by the ITAT, Delhi ‘G’ Bench, New Delhi in the case of M/s SBS Realtors (P) Ltd. Vs. ITO decided in ITA No. 7791/Del/2018 (AY 2009-10) vide order dated 01.04.2019. He has also filed the copy of this order in the shape of Paper Book and especially draw my attention towards the page no. 100-112. He requested that in this case the Bench has elaborately discussed the various case laws rendered by the Jurisdictional High Court and declared the invalid assessment. He further requested that in view of the order dated 01.04.2019 passed in the case of M/s SBS Realtors (P) Ltd. Vs. ITO (Supra) the legal ground involved in this appeal may be decided in favour of the assessee and notice u/s. 148 of the Act may be quashed and accordingly assessment in pursuance of the notice may also be quashed by accepting the appeal of the assessee. For the sake of convenience, I am reproducing the findings of the Tribunal in the case of M/s SBS Realtors (P) Ltd. Vs. ITO (Supra) as under, in which various case laws of the Hon’ble Courts have been discussed elaborately:-
“5. We have carefully considered the arguments of both the sides and perused the material placed before us. The reasons recorded for issue of notice under Section 148 read as under : –
