Ashish Gupta Vs PCIT (ITAT Delhi)
ITAT Delhi held that order of the ld. PCIT passed in haste without verification of factual material, as amount alleged was in Crores as against actual transactions in Lakhs, is unsustainable.
Facts- In the present case, the ld. PCIT, Central-2 issued show cause as per the provisions of Section 263 of the Income Tax Act, 1961 to the assessee on 28.03.2018 (Wednesday) and passed the order on 31.03.2018 (Saturday). The ld. PCIT assumed that the Assessing Officer completed the assessment without proper examination and verification of transactions of the assessee with regard to M/s Aerens Projects & Infrastructure Pvt. Ltd. for applicability of provisions of Section 2(22)(e) of the Act.
Conclusion- Held that the ld. PCIT given just two days time to the assessee to reply to the show cause. The basic tenets of principle of natural justice have not be adhered to. Further, the amount alleged by the ld. PCIT was Rs.3.16 Cr. against the actual transactions of Rs.21.90 lacs which reflects that the ld. PCIT has not examined the issue properly. Hence, we hold that the order of the ld. PCIT was passed in haste without verification of the factual material and hence the same cannot be sustained.
FULL TEXT OF THE ORDER OF ITAT DELHI
The present appeals have been filed by the assessee against the order of ld. PCIT, Central-2, New Delhi dated 31.03.2018 and the order of ld. CIT(A)-31, New Delhi dated 09.09.2019.
2. In ITA No. 3951/Del/2018, the assessee has raised the following grounds of appeal:
“1. The ld. PCIT erred in law and on facts in passing the order u/s 263 of the Act and set aside the assessment order for the A.Y. 2013-14 passed by the learned Assessing Officer u/s 143(3), despite the fact that the assessment order was neither erroneous nor prejudicial to the interest of the revenue. The Assessing Officer passed assessment order after considering the reply of the assessee and applied his mind. Therefore, assessment order passed by Assessing Officer neither erroneous nor prejudicial to the interest of revenue. Thus, instructions given by the learned Pr. CIT for fresh consideration of assessment merely on surmises and conjecture should be reversed.”
3. In ITA No. 8686/Del/2019, the assessee has raised the following grounds of appeal:
“1. On the facts, law and circumstances of the case, the ld. Commissioner of Income Tax (Appeals)-31, New Delhi erred in upholding validity of notice u/s 147/148.
2. On the facts, law and circumstances of the case, the ld. Commissioner of Income Tax (Appeals)-31, New Delhi erred in law and fact in upholding the addition of Rs.1,25,000/- on account of deemed dividend u/s 2(22)(e) of the Income Tax Act, 1961.”
4. In ITA No. 8687/Del/2019, the assessee has raised the following grounds of appeal:
“1. That the impugned Appeal Order is bad in law, illegal, and in violation of rudimentary principal of contemporary jurisprudence.
2. The Ld. Honorable Commissioner of Income Tax (Appeal)-31, New Delhi erred on law and on facts and against the principal of natural justice upholding addition of made by Ld. A 0 as no show cause notice was issued be for making the addition to the income of the assessee. Thus, assessment order passed by the learned assessing officer on surmises and conjecture should be cancelled.
3. On the facts and circumstances of the case, the Honorable Commissioner of Income Tax (Appeal)-31, New Delhi erred in law and fact in upholding the addition of Rs. 21,90,000/- on account of deemed dividend u/s 2(22)(e) of the Income Tax Act, 1961.”
5. The ld. PCIT, Central-2 issued show cause as per the provisions of Section 263 of the Income Tax Act, 1961 to the assessee on 28.03.2018 (Wednesday) and passed the order on 31.03.2018 (Saturday). The ld. PCIT assumed that the Assessing Officer completed the assessment without proper examination and verification of transactions of the assessee with regard to M/s Aerens Projects & Infrastructure Pvt. Ltd. for applicability of provisions of Section 2(22)(e) of the Act.
6. The show-cause notice dated 28.03.2018 issued to the assessee to file submissions on 30.03.2018 is as under:
“ On perusal of the balance sheet of the assessee, it is noticed that you have accepted Rs.3,16,80,800/- as loan or advances from M/s Aerens Projects & Infrastructure Pvt. Ltd. in which you have 18% shareholding not having been brought to tax by the Assessing Officer u/s 2(22)(e). The same was not verified by the Assessing Officer during the assessment proceeding. Thus, this approach on the part of the AO for not verifying the loan or advances of the assessee is prima facie appears to be erroneous so as to cause prejudice to the interest of the Revenue.”
7. The assessee submitted that the issue has been examined in detail by the AO during the assessment proceedings. Further, it was submitted that no loan or advances was received by the assessee during the year. In fact, the balance of M/s Aerens Projects & Infrastructure Pvt. Ltd. in the books of the assessee has come down from Rs.3.25 Cr. to Rs.3.16 Cr.
8. Against these facts, the record clearly prove that the transactions of the assessee with M/s Aerens Projects & Infrastructure Pvt. Ltd. are as under:
