Case Law Details
Roop Raj Hospitality (P) Ltd Vs ITO (ITAT Delhi)
Admittedly, in the present appeal, the assessee has not raised any ground on merits challenging the addition sustained by learned Commissioner (Appeals). On a query from the Bench, learned counsel appearing for the assessee submitted that assessee has accepted the addition sustained by learned Commissioner (Appeals). Thus, only issue which arises in the present appeal is relating to validity of reopening of assessment under section 147 of the Act. The main plank of assessee’s argument is, while recording reasons for reopening of assessment, the Assessing Officer has relied upon wrong facts. The second line of argument is, approval under section 151 of the Act has been granted mechanically.
As could be seen from the facts on record, the assessee in spite of having income from operations to the tune of Rs.29,85,471/-, as shown in the profit and loss account furnished before learned Commissioner (Appeals), did not file any return of income under section 139(1) of the Act. In fact, neither in response to notice issued under section 148 nor under section 142(1) of the Act, the assessee filed any return of income for the year under consideration. Further, the assessee neither complied with any of the statutory notices issued by the Assessing Officer, nor appeared in course of assessment proceeding. Therefore, the Assessing Officer had to complete the assessment ex-parte, to the best of his judgment under section 144 of the Act. It is evident, the Assessing Officer had tangible material available with him to indicate that, though, in the year under consideration, the assessee had earned income, but it was not offered to tax. Based on such material, the Assessing Officer has reopened the assessment under section 147 of the Act. Merely because certain purchases made by the assessee was shown as contractual receipts in the reasons recorded, that by itself, will not invalidate the proceeding under section 147 of the Act. This is so because, the assessee from the very beginning has not only defaulted in filing the return of income but has remained non-cooperative. The assessee never appeared before the Assessing Officer to explain the correct factual position. Therefore, in absence of any material brought on record by the assessee, the Assessing Officer had no other option but to proceed based on materials available on record.
Considering the fact that the assessee had not filed any return of income for the year under consideration, the reopening of assessment, based on tangible material available with the Assessing Officer, in my view, is valid. As regards satisfaction recorded by the approving authority for issuance of notice under section 148 of the Act, I do not find any fault therein. When the assessee has suppressed material facts by not filing return of income and other details in the course of assessment proceeding, he cannot challenge the validity of the reassessment proceeding. More so, when he has accepted the additions sustained by learned first appellate authority. As regards the decision of the Tribunal in case of Space Chem Engineers Pvt. Ltd. (supra), on careful examination, I have found it to be factually distinguishable, hence, not applicable to the assessee’s case. Firstly, in case of Space Chem Engineers Pvt. Ltd. (supra), unlike the present assessee, the assessee there had filed the return of income voluntarily. Moreover, in the reasons recorded, the Assessing Officer had mentioned names of the companies from whom the assessee allegedly accepted share application money, which are completely different from the companies mentioned in the assessment order. Whereas, facts in assessee’s case are completely different.
In view of the aforesaid, I do not find merit in the grounds raised.
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