HARI GANGA FINCAP PVT. LTD., NEW DELHI V. ITO, WARD- 11(1), NEW DELHI

ITA 1895/DEL/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8687 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 18-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Accommodation entries; Reassessment proceedings
• Section: 147; 68; 69; 148; 143(1); 143(2)

Judgement Text

Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH “C”: NEW DELHI ] BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER (Through Video Conferencing) ITA. No.1895/Del/2018 (Assessment Year: 2010-11) Hari Ganga Fincap Pvt. Ltd., Raj Kumar & Associates, C.A.; L–7A [LGF]; South Extension, Part–2, New Delhi–110 049. PAN: AAACH6775J Vs. Income Tax Officer, Ward : 11 (1) New Delhi. (Appellant) (Respondent) Assessee by : Shri Raj Kumar Gupta, C. A.; Department by : Shri Vivek Vardhan, Sr. D. R.; Date of Hearing : 07/10/2021 Date of pronouncement : 11/11/2021 O R D E R PER PRASHANT MAHARISHI, A. M. 1. This appeal is filed by the assessee against the order of the ld. CIT (Appeals)–35, New Delhi, dated 15.12.2017 for assessment year 2010-11, raising the following grounds of appeal:- “1. That under the facts and circumstances, initiation of proceedings U/s. 147 / 148 is without jurisdiction, mechanical, without application of mind, illegal and un - sustainable in law as well as on merits. 2. That in the absence of issuance of notice U/s. 143 (2) within statutory time period, the asstt. proceedings are without jurisdiction, illegal and un - sustainable in law. 3. That without prejudice, in the absence of disposing of all the objection against reassessment proceedings and as per law, the impugned asstt. is un - sustainable. 4. That under the facts and circumstances, the Ld. AO grossly erred in law as well as on merits in making the following additions U/s. 68 as alleged accommodation entries from following parties Page | 2 4.1 That without prejudice, in the absence of providing the adverse material for rebuttal as well as in the absence of providing for cross - examining the persons whose statements have been taken on the back of the assessee which have been adversely used and which were specifically asked for, no adverse view of such material and statements etc. can be taken and all such material needs to be ignored for taking a view for framing the Asstt. 5. That under the facts and circumstances and in the absence of any material whatsoever on records, the Ld. AO committed grave error of law and facts in imagining 1.6% as commission element on alleged accommodation entry of Rs.15 lacs, consequently he erred in making an addition of Rs.24,000/- U/s. 69 C as un - explained expenditure. “ 2. The brief facts of the case shows that assessee filed return of income declaring total income of Rs. 20,021/- on 25.09.2010. This return was processed under Section 143(1) of the Income Tax Act, 1961 (the Act) on 14.04.2011. The case of the assessee was re-opened by issue of notice under Section 148 of the Act on 14.11.2014. In response to that notice assessee submitted a letter dated 17.04.2015 stating that return of income originally filed on 25.09.2010 should be treated as a return in response to the notice under Section 148 of the Act. Consequent to that the assessment proceedings commenced. The assessment order was passed under Section 143(3) read with Section 147 of the Act on 13 th March, 2016 determining the total taxable income of the assessee at Rs. 19,61,263/-. The ld. Assessing Officer made an addition of Rs. 15,00,000/- under Section 68 of the Act, Rs. 24,000/- under Section 69 of the Act and also disallowed a sum of Rs. 4,17,342/- u/s 37 (1) of the Act.. 3. Against this order, the assessee preferred appeal before the ld. CIT (Appeals). It was challenged before the ld. CIT (Appeals) that statutory notice under Section 143(2) of the Act was not issued to the assessee within a statutory time period and, therefore, the assessment order is bad in law. The ld. CIT (Appeals) along with the objection to 148 of the Act dismissed the appeal of the assessee. 4. The assessee is in appeal before us and has mainly challenged the issue that there is no notice issued under Section 143(2) of the Act in time. S. NO. PARTY NAME AMOUNT (RS.) 1. Attractive Finlease Ltd. 10,00,000/- 2. Sunny Cast & Forge Ltd. 5,00,000/- TOTAL 15,00,000/- Page | 3 5. The ld. AR firstly submitted that the ground No. 2 of the appeal challenged the assessment order on the ground that in absence of issuance of notice under Section 143(2) of the Act within statutory time period the assessment is bad in law. He submitted that an identical issue has been decided in the case of the assessee for assessment year 2011-12 in I.T. Appeal No. 2314/Del/2018. He specifically referred to para No. 3.2.8 of the order. 6. The ld. DR vehemently objected to the fact stating that assessee has appeared before the Assessing Officer and now it cannot be objected that no notice under Section 143(2) of the Act has been issued. 7. We have carefully considered the rival contentions and perused the orders of lower authorities. Even before us, no proof of issue of notice u/s 143(2) of the act was produced. In absence of any proof of issuance of notice u/s 143 (2) of the act , the assessment order u/s 143 (2) of the act is not sustainable. On identical facts and circumstances of the case, for AY 2011- 12 in ITA No 2314 Del 2018 dated 13/9/2021 we have quashed reassessment order for non issuance of notice u/s 143 (2) of the act. Therefore respectfully following that order, we allow ground no 2 of the appeal and quash the assessment order. 8. Accordingly appeal of the assessee is allowed on that issue. Oder pronounced in the open court on : 11/11/2021. Sd/- Sd/- (SUCHITRA KAMBLE) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 11/11/2021 *MEHTA* Copy forwarded to 1. Appellant; 2. Respondent 3. CIT Page | 4 4. CIT (Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, New Delhi Date of dictation 11.11.2021 Date on which the typed draft is placed before the dictating member 11.11.2021 Date on which the typed draft is placed before the other member 11.11.2021 Date on which the approved draft comes to the Sr. PS/ PS 11.11.2021 Date on which the fair order is placed before the dictating member for pronouncement 11.11.2021 Date on which the fair order comes back to the Sr. PS/ PS 11.11.2021 Date on which the final order is uploaded on the website of ITAT 11.11.2021 date on which the file goes to the Bench Clerk 11.11.2021 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