DCIT, New Delhi V. M/s Bindal Sponge Ltd., Delhi

ITA 1666/DEL/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8976 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 20-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJOG KAPOOR
• Keywords: Reopening of assessment; Unexplained cash credit; Tax effect
• Section: 142(1); 254(2); 147; 68; 148; 144

Judgement Text

ITA NO.- 1666/DEL/2017. M/S BINDAL SPONGE INDUSTRIES LTD. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: A: NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO:- 1666/DEL/2017 ( ASSESSMENT YEAR: 2007-08) DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE- 28, NEW DELHI. VS. M/S BINDAL SPONGE INDUSTRIES LTD., 301, AGARWAL CITY MALL, OPP. M2K CINEMA, PITAMPURA, DELHI. PAN NO: AACCB1322M APPELLANT RESPONDENT REVENUE BY : SHRI SANJOG KAPOOR, SR. DR ASSESSEE BY : NONE PER ANADEE NATH MISSHRA, AM (A) THIS APPEAL BY REVENUE IS FILED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-29, NEW DELHI, [LD. CIT(A), FOR SHORT], DATED 21.12.2016 FOR ASSESSMENT YEAR 2007-08. GROUNDS TAKEN IN THIS APP EAL OF REVENUE ARE AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 1,00,00,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CREDITS U/S 68 OF THE IT ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT NO DATE F OR RECORDING REASONS HAS BEEN MENTIONED WHEN THE NOTE SHEET IN THE ASSESSMEN T FOLDER CLEARLY SHOWS THAT THE REASONS WERE RECORDED ON 25.03.2014 BY AO AND THE APPROVAL WAS GRANTED BY CIT ON 28.03.2014. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION BY HOLDING THAT NO FURTHER ITA NO.- 1666/DEL/2017. M/S BINDAL SPONGE INDUSTRIES LTD. PAGE 2 OF 4 ENQUIRIES WERE MADE BY AO AND HE MADE ADDITION BY R ELYING ON THE ENQUIRIES MADE BY INVESTIGATION WING. AS THE POWERS OF CIT(A) ARE COTERMINOUS WITH THOSE OF AO, IF THE CIT(A) WAS OF THE VIEW THAT AO HAD NOT MADE SUFFICIENT ENQUIRY /INVESTIGATION IN THE C ASE THEN HE COULD HAVE DIRECTED AO TO MAKE FURTHER ENQUIRIES OR COULD ALSO HAVE CONDUCTED INDEPENDENT ENQUIRIES. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,00,00,000/- MADE BY THE AO MERELY ON A HYPER TECHNICAL GROUND THAT T HE REASONS RECORDED FOR INITIATING PROCEEDINGS U/S 148 WERE NOT COMMUNI CATED TO THE ASSESSEE WITHOUT APPRECIATING THAT THE REASONS FOR INITIATIN G PROCEEDINGS U/S 148 WERE DULY RECORDED BY AO AND THE APPROVAL OF CIT WA S ALSO TAKEN ON THE REASONS RECORDED BY THE AO. ALSO THE REASONS FOR IN ITIATING PROCEEDING U/S 148 WERE COMMUNICATED TO THE ASSESSEE IN THE NOTICE S U/S 142(1) DATED 06.01.2015 AND 13.03.2015. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,00,00,000/- MADE BY THE AO WITHOUT APPRECIATING THE FACT THAT ASSESS EE DID NOT COOPERATE WITH THE DEPARTMENT AS NEITHER IT ATTENDED THE ASSE SSMENT PROCEEDINGS NOR IT FILED ANY REPLY/ DETAILS VIA DAK DESPITE THE SER VICE OF ALL THE NOTICES U/S 143(2), 142(1) AND 148 (CIT(A) HAS HIMSELF ESTABLIS HED IN PARA 8 OF HIS ORDER THAT THE NOTICES WERE RECEIVED BY ASSESSEE IN HAND), AND HENCE THE AO WAS LEFT WITH NO OPTION BUT TO PASS THE ORDER U/ S 144 OF THE IT ACT. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE NOTHI NG WAS MENTIONED IN THE REASONS FOR INITIATING PROCEEDINGS U/S 148 ABOUT TH E APPROVAL BY CIT WHEREAS THE APPROVAL OF CIT WAS ALSO TAKEN ON THE R EASONS RECORDED ON 28.03.2014 WHERE IN THE CIT HAD MENTIONED IN HIS OW N HANDWRITING THAT THE CASE WAS A FIT CASE FOR REOPENING OF ASSESSMENT U/S 147 OF THE ACT. 7. THAT THE ORDER OF THE CIT(A) IS PERVERSE, ERRONE OUS AND IS NOT TENABLE ON FACTS AND IN LAW. 8. THAT THE GROUND OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 9. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, A LTER OR FORGO ANY GROUND(S) OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. (B) AT THE OUTSET, WE NOTICED AT THE TIME OF HEARING TH AT TAX EFFECT IN THIS APPEAL IS BELOW RS. 50,00,000/-. VIDE RECENT CBDT CIRCULAR N O. 17/2019 DATED 08.08.2019 READ WITH EARLIER CBDT CIRCULAR NO. 3 OF 2018, DATED 11. 07.2018, MINIMUM THRESHOLD LIMIT OF ITA NO.- 1666/DEL/2017. M/S BINDAL SPONGE INDUSTRIES LTD. PAGE 3 OF 4 TAX EFFECT FOR FILING OF APPEALS BY REVENUE IN INCO ME TAX APPELLATE TRIBUNAL (ITAT, FOR SHORT) HAS BEEN ENHANCED TO RS. 50,00,000/-. IN A SUBSEQUENT CLARIFICATION ISSUED BY CBDT VIDE F.NO. 279/MISC/M-93/2018-ITJ, DATED 20/08 /2019, IT HAS BEEN CLARIFIED BY CBDT THAT THE AFORESAID REVISED MONETARY LIMIT IS A LSO APPLICABLE TO ALL PENDING APPEALS IN ITAT. IN VIEW OF THE FOREGOING, THIS APPEAL IS NOT MAINTAINABLE. HAVING REGARD TO THE AFORESAID, THE LD. SR. DR FOR REVENUE DID NOT PRESS THE APPEAL. THEREFORE, THIS APPEAL IS DISMISSED BEING NOT PRESSED AND ALSO BEING NOT M AINTAINABLE HAVING REGARD TO AFORESAID CBDT CIRCULAR NO. 17/2019 DATED 08.08.201 9 READ WITH AFORESAID CBDT CIRCULAR NO. 3 OF 2018 IN THE LIGHT OF AFORESAID CL ARIFICATION DATED 20/08/2019. (C) BEFORE LEAVING, WE CLARIFY THAT REVENUE WILL BE AT LIBERTY TO APPROACH INCOME TAX APPELLATE TRIBUNAL U/S 254(2) OF INCOME TAX ACT, 1961 SEEKING RECALL OF THIS ORDER AND, FOR RESTORATION OF THIS A PPEAL IF IT IS FOUND THAT APPEAL OF REVENUE IS NOT COVERED BY AFORESAID CBDT CIRCULA RS DATED 08.08.2019 AND 11.07.2018. (D) IN THE RESULT, THIS APPEAL BY REVENUE IS DISMISSED. OUR DECISION WAS ORALLY PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HE ARING ON THE DATE OF HEARING. NOW, THIS WRITTEN ORDER IS PRONOUNCED IN OPEN COURT ON 01-10-19. SD/- SD/- (H.S. SIDHU) (ANADEE NATH MI SSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: 01-10-19 POOJA/- ITA NO.- 1666/DEL/2017. M/S BINDAL SPONGE INDUSTRIES LTD. PAGE 4 OF 4 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER