INDUS VALLEY PROMOTERS LTD,NEW DELHI V. DCIT CIRCLE-10(1), DELHI, DELHI

ITA 1020/DEL/2024

AI Insights

The case involves M/s. Indus Valley Promoters Ltd., the appellant, contesting the reassessment order issued by the Assessing Officer under section 147 of the Income Tax Act, 1961, for the Assessment Year 2018-19. The reassessment was based on the allegation that the company received accommodation entries from shell companies, which were treated as unexplained credits under sections 68 and 69 of the Act. The appellant challenged the reassessment on several grounds, including lack of jurisdiction, failure to comply with mandatory conditions, and the absence of a speaking order in the reassessment notice. The National Faceless Appeal Centre (NFAC) upheld the reassessment, leading to the current appeal before the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774741 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Appeal Filed On: 05-03-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PARKASH
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Difference of opinion; Change of opinion; Opportunity of being heard; Unexplained cash credit; Principle of natural justice; Accommodation entries; Competent authority; Opportunity of cross examination
• Section: 147; 148; 143(3); 69; 234B

Judgement Text

" 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C”, DELHI BEFORE SH. SUDHIR KUMAR, JUDICIAL MEMBER AND SH. MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.1020/DEL/2024 Assessment Year- 2018-19 M/s. Indus Vally Promoters Ltd., F-6, Ground Floor (Right), Lajpat Nagar –III New Delhi-110024 PAN No. AAACI2241L Vs. DCIT Circle – 10 (1) Delhi (APPELLANT) (RESPONDENT) Appellant by Dr. Rakesh Gupta, Advocate Sh. Deepesh Garg, Advocate Respondent by Sh. Om Parkash, Sr. DR. Date of hearing: 18/08/2025 Date of Pronouncement: 10/09/2025 ORDER PER SUDHIR KUMAR, JUDICIAL MEMBER: This appeal by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [hereinafter referred to as “NFAC”] vide order dated 01.02.2024 arising out of the order of the Assessing officer under section 147 of the Income Tax Act 1961 (In short “the Act”) vide dated 08-03-2023 for Assessment year 2018-19. Printed from counselvise.com 2 2. The assessee has raised the following grounds in appeal:- 1. That having regard to the facts and circumstances of the case, L.d. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in framing the impugned reassessment order and that too without assuming jurisdiction as per law and without complying with mandatory conditions u/s 147 to 151A as envisaged under the Income Tax Act, 1961. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) ought to have quashed the impugned reassessment passed by Ld. AO u/s 147/144B inter alia on the following grounds:- (a) There was no material having live nexus with the belief of escapement of income. (b) There is no allegation in the reason recorded about any failure on the part of assessee in disclosing material fact, even though original assessment was made u/s 143(3) and reopening is sought to be done after four years from the end of the assessment year. Printed from counselvise.com 3 (c) Reassessment is based on change of opinion. (d) That satisfaction/approval obtained from the competent authority u/s 151A is not in accordance with law. 3. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in framing the impugned reassessment order u/s 147/144B, is bad in law and against the facts and circumstances the case and the same is not sustainable on various legal and factual ground 4. That having regard to the facts and circumstances of the case, Ld. CIT(A) aggregate addition of Rs.2,20,00,000/- on account of unsecured loan by has erred in law and on facts in confirming the action of Ld. AO in making recording incorrect facts and findings and without considering the treating it as alleged unexplained credits u/s 68/115BBE and that too by submissions filed by the assessee and without following the principles of natural justice and without providing the entire adverse material on record and without providing the opportunity of cross examination. Printed from counselvise.com 4 5. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making aggregate addition of Rs.2,20,00,000/- on account of unsecured loan by treating it as alleged unexplained credits u/s 68/115BBE, is bad in law and against the facts and circumstances of the case. 6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in charging interest u/s 234A, 234B and 234C of the Income Tax Act, 1961. 7. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are For INDUS VALLEY PROVIONERS without prejudice to each other. 3. The brief facts of the case are that the assessee has filed its original return of income for Assessment Year 2018-19 declaring total income at Rs.4,92,88,570/- on 25-10-2018 which was processed under section 143(1) (a ) of the Act. As per information available the assessee company has received an amount of Rs.2,20,00,000/-as accommodation entries from the shell companies operated by Sh. Dharmendra Gupta. Therefore, Printed from counselvise.com 5 proceedings u/s 147 of the Act were initiated and order u/s 148(d) of the Act was passed on 31-03-2022. In the compliance of the notice dated 31-03-2022 under section 148 of the Act the assessee furnished the ITR declaring total income of Rs. 4,92,88,570/- on 25-04-2022. After considering the submission submitted by the assessee the ld. AO completed the assessment after making the addition of Rs.2,20,00,000/- under section 68 and Rs. 3,30,000/- under the section 69 of the Act. 4. Aggrieved the order of the ld. Assessing officer, the assesse preferred the appeal before the Ld. NFAC who vide his order dated 01-02-2024 dismissed the appeal. Being aggrieved the order of the Ld. NFAC the assessee is in appeal before the Tribunal. 5. Ld. Counsel for the assessee submitted that in the compliance of the notice dated 10-03-2022 under section 148A(b) of the Act the assessee submitted the submission before the AO. He further submitted that order under section 148A(d) dated 31-03-2022 of the Act was passed on a blank paper without any body of order and does not contain any reasons, so all the proceedings becomes invalid. 6. Ld. Sr. DR relied upon the orders of the lower authorities and submitted that the appeal was rightly rejected. Printed from counselvise.com 6 7. We have heard the revival contention and gone through the material available on record. Ld. Counsel for assessee order u/s 148 A (d) of the Act was passed which is a blank order without any body order and does not contained any reasons for disposing off the objection of the assessee. It is true that the order does not contain and reasons and only a blank paper. The order under clause (d) of section 148A of Income Tax Act 1961, re produced as under:- Printed from counselvise.com 7 The provision of the section 148 A read as under :- 148 A conducting inquiry, providing of this section, specified authority means the specified authority referred to in section 151. 148- The Assessing Officer shall, before issuing any notice under section 148- (a) conduct any enquiry, if required with prior approval of specified authority, with respect to the information which suggest that the income chargeable to tax (b) provide an opportunity of being heard to the assessee, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a). (c) consider the reply of assessee furnished, if any, in response to the show- cause notice referred to in clause (b) Assessing officer has received information under the scheme notified under section 135A. Explanation – For the purposes of this section and section 148, “specified authority” means the specified authority referred to in section 151.] [Prior approval for assessment, reassessment or recomputation in certain cases. 148B No order of assessment or reassessment or recomputation under this Act shall be passed by an Assessing Officer below the rank of Joint Commissioner, in respect of an Assessment or Additional Director or Joint Commissioner or Joint Director.] (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148 by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires:- Printed from counselvise.com 8 8. The bench was also directed the department to explain the factual position in this regard but no order u/s 148A (d) of the Act, which was uploaded on the portal was produced before the bench. This issue was raised before the assessment unit by the assessee but no reasons have been assigned in the order in this regard. The statutory provision has not been followed by the Assessing Officer. As per the provision the Assessing Officer is bound to furnish reasons within a reasonable time. On the receipt of the notice the assessee is entitled to file the objection to issuance of notice and Assessing Officer is bound to dispose of the same by passing speaking order. In the instant case the ld. Assessing Officer has not passed, such order and blank paper without containing any reasons was provided to the assessee. The Assessing Officer has not made the compliance of the mandatory provision, therefore the assessment proceedings become void ab initio, illegal and invalid. Therefore the notice dated 31-03-2022 u/s 148 of the Act and assessment order dated 08-03-2023 are here by quashed. The respondent- revenue would be, however liberty to move the application to restore the Appeal, if found that the speaking order was passed by the Assessing Officer and copy was provided to the Assessee. Printed from counselvise.com 9 9. In the result the appeal of the assessee is allowed. Order pronounced in the open court on 10.09.2025. Sd/- Sd/- (MANISH AGARWAL) (SUDHIR KUMAR) ACCOUNTANT MEMBER (JUDICIAL MEMBER) Neha, Sr. PS Date: 10/09/2025 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) ` 5. DR: ITAT ASSISTANT REGISTRAR ITAT DELHI Printed from counselvise.com "