ABHIPRA CAPITAL LTD.,NEW DELHI V. PR. CIT -1, NEW DELHI

ITA 1728/DEL/2024

AI Insights

The case involves Abhipra Capital Ltd., which appealed against the order of the Principal Commissioner of Income Tax (PCIT), Delhi, concerning a reassessment order issued by the Assessing Officer (AO). The reassessment was initially based on information about a search action related to accommodation entries provided by entry operator Shri Pradeep Kumar Jindal. The PCIT's order directed the AO to pass a new order under Sections 263/147/144B of the Income-Tax Act, adding Rs.1,74,19,000 as undisclosed income under Section 69. However, the Tribunal noted that the original reassessment order had been superseded by a subsequent order, leading to the conclusion that the PCIT's revisional jurisdiction was improperly exercised.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 26829 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Other Referred Cases: ITO vs. K.L. Srihari (HUF) (2001) 250 ITR 193 (SC), Tata AIG Life Insurance Co. Ltd. ITA Nos. 3556 and 3557/Mum/2012 dated 30.06.2023
• Laws Referred To: Income-Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAVED AKHTAR
• Assessee Lawyers: S K.SAMPATH; RAJ KUMAR
• Keywords: Set aside; Accommodation entries; Competent authority
• Section: 147; 148; 143(3); 142(1); 143(2); 250; 263

Judgement Text

" INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A”: NEW DELHI BEFORE SHRI VIMAL KUMAR, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No. 1728/Del/2024 Assessment Year: 2016-17 Abhipra Capital Ltd., GF 58-59, Barakhamba Lane, World Trade Centre, New Delhi PIN 1100 01 PAN No. AABCA1702F Vs. Principal CIT-1, New Delhi (Appellant) (Respondent) O R D E R PER VIMAL KUMAR, JUDICIAL MEMBER: The appeal filed by the Assessee is against order dated 31.03.2024 of the Learned Principal Commissioner of Income- Tax(Appeals),Delhi-1 (hereinafter referred as ‘Ld. PCIT’) arising out of assessment order dated 29.03.2022 of the ITO, NFAC, Delhi (hereinafter referred as ‘Ld. A.O.’) under Sections 147 read with section 144B of the Income-Tax Act, 1961 (hereinafter referred as “the Act”) for the assessment years 2016-17. Assessee by: S/Shri K. Sampath and Rajkumar, Advs. Department by: Shri Javed Akhtar, CIT DR Date of Hearing: 17.03.2025 Date of pronouncement: 21.03.2025 ITA No.1728/Del/2024 2 2. Brief facts of the case are that the appellant/assessee e-filed its return of income on 09.10.2016 declaring income of Rs.6,95,980/- for the assessment year 2016-17. Information was received on the Insight Portal of the Department. The ADIT, Inv. Unit 2(1), Delhi vide letter dated 14.01.2020 disseminated the information regarding the search action carried out on 18.11.2015 on entry operator Shri Pradeep Kumar Jindal who was providing accommodation entries in lieu of cash to large number of beneficiaries through non-descript companies managed and controlled by him with the help of dummy directors. A total of 69 front companies and total of 17 front non- descript firms of Shri Pradeep Kumar Jindal were identified. Shri Pradeep Kumar Jindal admitted to have charged commission in cash of 2% to 2.5% from various beneficiaries for providing accommodations entries. Notice under Section 148 dated 31.03.2021 was issued after obtaining prior approval from the competent authority. Notice under Section 143(2) dated 13.07.2021 was issued. Notices under Section 142(1) dated 13.12.2021 and 08.03.2022 were issued. Vide reply dated 03.03.3022, the assessee objected to the reasons for reopening the assessment on various contentions including jurisdictions ITA No.1728/Del/2024 3 under Section 147 of the Act being not in accordance with law. After considering objections filed by the assessee, proceedings under Section 148 of the Act, were initiated vide notice dated 31.03.2021. Ld. A.O vide order dated 29.03.2022 completed the assessment on the returned income. 3. Ld. PCIT vide order dated 31.03.2024 directed the A.O to pass an order under Section 263/147/144B of the Act in this case as held in this order and add an amount of Rs.1,74,19,000/- as undisclosed income under Section 69 of the Act. 4. Ld. AO vide order dated 30.01.2024, accepted the returned income. 5. Being aggrieved, appellant/assessee preferred present appeal with following grounds: “That on the facts and in the circumstances of the case and in law the Pr. Commissioner of Income Tax, Delhi erred in passing order under Section 263 of the Income-Tax Act, 1961 ( ‘the Act’ for short) holding the order dated 29.03.2022 passed by the Assessing Officer u/s 143(3) of the Act to be erroneous and prejudicial to the interest of revenue and directing the Assessing Officer to make a fresh assessment. That order being, arbitrary, misconceived, erroneous and unlawful must be quashed.” ITA No.1728/Del/2024 4 6. Learned Authorised Representative for the appellant/assessee submitted that before delving into the details of the case and pointing out the relevant facts which are necessary to establish that there is neither any error nor any prejudice to the Department vide the impugned reassessment order dated 29.03.2022 it is submitted that when on 31.03.2024 the Pr. CIT passed the revision order, the impugned order dated 29.03.2022 did not exist for it had been superseded by the second reassessment order dated 31.01.2024 referred to in para 5 above. With the wiping out of the impugned reassessment order dated 29.03.2022 by the second reassessment order dated 30.01.2024, there was no cause of action left for the Pr. CIT to reignite the case with reference to the 29.03.2022 order for a revision. The Pr. CIT could have assumed jurisdiction only in the event of a subsisting and live order which was existent and operative. At the time when the Ld. Pr.CIT(A) passed the revision order, the impugned order dated 29.03.2022 had got obliterated and cancelled qua the second reassessment order dated 31.01.2024. That order of 29.03.2022 of the A.O did not exist in law at the relevant time on 16.03.2024. ITA No.1728/Del/2024 5 6.1 By reference to case of ITO vs. K.L. Srihari (HUF) (2001) 250 ITR 193 (SC) and Mumbai Bench of the ITAT in ITA Nos. 3556 and 3557/Mum/2012 dated 30.06.2023 in Tata AIG Life Insurance Co. Ltd., has held as under: “ 17. One more contention of CIT is that the reopened assessment starts from where one ends in the order u/s. 143(3), In assessee's case, the assessment was reopened for the reason that the surplus as per the actuarial report has not been taken as the income of the assessee and the assessing officer proceeded to compute the total income of the assessee afresh completely ignoring the way income has been assessed in the original assessment u/s. 143(3). In this regard we notice that the Hon'ble Supreme Court in the case of KL Shri Hari (HUF) & Ors (supra) where it has been held that the Assessing Officer if in the reassessment order makes a fresh assessment of the entire income of the assessee, then the earlier assessment order is effaced by the subsequent order. In the facts of the present case the Assessing Officer has made a fresh assessment of the income of the assessee considering the provisions of the Act along with the various judicial proceeding and therefore in our view the ratio laid down by the Hon'ble Supreme Court is applicable in assessee's case also. Accordingly we are of the view that the excise of the revisionary powers u/s. 263 for this reason is not justified.” 7. Learned Authorised Representative for the Department of Revenue relied on the order of Ld. PCIT. 8. From examination of record in the light of aforesaid rival contentions, it is crystal clear that vide order dated 31.3.2024, Ld. PCIT exercised revisional jurisdiction regarding re- ITA No.1728/Del/2024 6 assessment order dated 29.03.2022. Ld. AO had passed second reassessment order dated 30.01.2024. So, there was no cause of action left for Ld. PCIT to adjudicate on order dated 29.03.2022. 9. In view of above material facts and well settled principles of law, noticed in order dated 30.06.2023 in Tata AIG Life Insurance Co. Ltd.’s case (supra), it is apparent on record that the earlier assessment order dated 29.03.2022 after passing of order dated 30.01.2024 was non-existent, therefore, Ld. PCIT had no cause of action to exercise the revisional powers. Accordingly, impugned order dated 31.03.2024 of Ld. PCIT is illegal and set aside. The ground of appeal is allowed. 10. In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on 21/03/2025. Sd/- Sd/- (BRAJESH KUMAR SINGH) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 21/03/2025 Mohan Lal Copy forwarded to - 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "