CBS Holding (P) Ltd., Delhi V. ITO, Ward-5(4), New Delhi

ITA 204/DEL/2019

AI Insights

The case involves CBS Holding Pvt. Ltd., the appellant, contesting the orders of the Income Tax Officer (ITO) and the Commissioner of Income Tax (Appeals)-2, New Delhi, for the Assessment Year 2012-13. The appellant raised multiple grounds including the lack of proper opportunity of hearing, improper initiation of proceedings under section 147 of the Income Tax Act, 1961, and various additions made to their income. The Tribunal found that the appellant was not provided a proper opportunity during the appellate proceedings as the information crucial for their appeal was provided post the decision by the CIT(A). Consequently, the Tribunal set aside the CIT(A)'s order and remanded the matter for a fresh decision.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 116085 (ITAT-DELHI)
• Duration Of Justice: 10 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-12-2022
• Assessment Year: misc
• Appeal Filed On: 10-05-2012
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Period of limitation; Time period of passing order; Set aside
• Section: 147; 148; 143(3); 234B; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’: NEW DELHI BEFORE, SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA No.204/Del/2019 (ASSESSMENT YEAR 2012-13) CBS Holding Pvt. Ltd. B-5/6, 2 nd Floor Sector-11 Rohini, Delhi-110 085 PAN-AADCC 3702D Vs. Income Tax Officer Ward-5(4) New Delhi (Appellant) (Respondent) Appellant by Mr. Sachin Kumar, CA and Mr. Achin Garg, Advocate Respondent by Mr. Akhilesh Gupta, Senior Departmental Representative (“Sr. DR” for short) ORDER PER ANADEE NATH MISSHRA, AM: (A) This appeal by Assessee is filed against the order of Learned Commissioner of Income Tax (Appeals)-2, New Delhi [Ld. CIT(A)”, for short], dated 11/05/2018 for Assessment Year 2012-13. Grounds taken in this appeal are as under: “1. The ld. Commissioner of Income Tax (Appeals)-2, New Delhi [hereafter ld. CIT(A)] as well as the ld. Income Tax Officer, Ward-5(4), Delhi (hereafter the AO) failed to provide proper opportunity of hearing. 2 ITA No.204/Del/2019 CBS Holding Pvt. Ltd. vs. ITO 2. The ld. AO erred in initiating the proceedings under section 147 of the Income Tax Act, 1961 (hereafter the Act), without satisfying and complying with the statutory, mandatory pre-requisite conditions, particularly as required by section 147 to 151 of the Act; which are sine qua non for assumption of valid jurisdiction to initiate the proceedings under section 147 of the Act and complete the assessment and therefore, the intimation of the proceedings under section 147 of the Act as well as assessment made is bad in law, null and void ab-initio and deserves to be annulled, intere alia, because: (1) The ld. AO failed to record the ‘reasons to believe’ for initiating the assessment proceedings under section 147 of the Act, as required by section 148(2) of the Act; (2) The ld. AO had no ‘reason to believe’ to initiate the assessment proceedings under section 147 of the Act, the proceedings were initiated on highly misconceived grounds, in the nature of pretence and without any justification and on wrong facts; (3) There is no satisfaction u/s 151 of the Act by the competent authority and without prejudice the same is bad in law, inter alia, because the satisfaction is (a) mechanical and without application of mind; (b) without providing any opportunity of hearing, and(c) without recording reasons; (4) The ld. AO failed to provide the reasons to believe to the Assessee within the limitation period; (5) The ld. AO failed to apply his mind independently to the information received to arrive at a belief that income of the Assessee had escaped assessment and there is no independent satisfaction of the AO and the satisfaction is borrowed one. (6) Any notice u/s 148 of the Act was not served. 3. The impugned assessment order passed by the ld. AO is null and void ab initio, inter alia, because: (1) any notice u/s 143(2) of the Act was neither issued nor served upon the Assessee after filing of the return of income, which is sine qua non for assumption of valid jurisdiction to complete the assessment u/s 143(3) /147 of the Act; 3 ITA No.204/Del/2019 CBS Holding Pvt. Ltd. vs. ITO (2) the objection of the Assessee against the action u/ 147 of the Act was not dispose off before passing the assessment order and even in the assessment order. 4. The ld. CIT(A) erred in confirming the addition of Rs.55,52,644 u/s 40a(ia) of the Act. 5. The ld. CIT(A) erred in confirming the addition of Rs.12,55,000 being loss on Chit Fund. 6. The ld. CIT(A) erred in confirming the business loss on trading of shares of Rs.2,63,37,267 as STCL. 7. The ld. CIT(A) erred in confirming the addition of Rs.4,79,06,926/- u/s 68 of the Act.” 8. The ld. AO erred in charging interest u/s 234A of the Act and without prejudice the same is excessive. 9. The ld. AO erred in charging interest u/s 234B of the Act and without prejudice the same is excessive. 10. The observations of the ld. CIT(A) as well as ld. DCIT are against the facts of the case. 11. The assessment order as well as the impugned order is against the facts of the case as well as law.” (A.1) At the time of hearing before us, Sh. Sachin Kumar, CA, the learned Authorized Representative [‘AR’, for short] for the assessee drew our attention to Ground No.1 of appeal and contended that the learned CIT(A) did not provide proper opportunity of hearing. In support of this, he submitted that the assessee had filed an application under Right to Information Act in the office of Assessing Officer, requesting for certain information, in order to effectively pursue the appeal filed in the office of the learned CIT(A). He further 4 ITA No.204/Del/2019 CBS Holding Pvt. Ltd. vs. ITO drew our attention to the fact that the information was provided by the Assessing Officer vide letter dated 26/05/2022. However, he submitted, the learned CIT(A) disposed off the assessee’s appeal vide impugned appellate order dated 11/05/2018, much before 26/05/2022. He made a prayer that all the issues in dispute in the present appeal filed by the assessee in Income Tax Appellate Tribunal should be set aside to the file of the ld. CIT(A) with the direction to pass fresh order in accordance with law after providing reasonable opportunity to the assessee. (A.2) The learned Sr. DR for the Revenue relied on the impugned appellate order dated 11/05/2019 of the learned CIT(A) and the order passed by the Assessing Officer. (A.2.1) We have heard both sides. We have perused the record. We find that the assessee had filed application on 10/05/2022 under RTI ACT, 2005 calling for certain information, in the office of the Assessing Officer. The information was provided by the Assessing Officer vide letter dated 26/05/2022. However, the learned CIT(A) passed the impugned appellate order on 11/05/2018, much before the Assessing Officer provided the 5 ITA No.204/Del/2019 CBS Holding Pvt. Ltd. vs. ITO assessee with the relevant information. In view of the foregoing, we are of the view that the assessee was not provided proper opportunity during the appellate proceedings before the learned CIT(A) to effectively pursue the appeal with the help of information provided by the Assessing Officer in response to the assessee’s application under Right to Information Act. Therefore, we set aside the impugned appellate order dated 11/05/2018 of the learned CIT(A), and we restore all the issues in dispute to the file of the learned CIT(A) with the direction to pass fresh appellate order in accordance with law after providing reasonable opportunity to the assessee. (B) For statistical purposes, the appeal is treated as partly allowed. Order pronounced on 08/12/2022 Sd/- Sd/- (KUL BHARAT) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 08/12/2022 Pk 6 ITA No.204/Del/2019 CBS Holding Pvt. Ltd. vs. ITO Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI