Brij Gopal Construction Co. P.Ltd, Delhi V. DCIT, Central Circle-3, New Delhi

ITA 2123/DEL/2022

AI Insights

The case involves M/S. Brij Gopal Construction Company Pvt. Ltd, the appellant, contesting the order of the Commissioner of Income Tax (Appeals)-24, which upheld the income determination of the company at Rs. 38,32,41,750 as opposed to the declared income of Rs. 38,23,53,730 for the assessment year 2018-19. The appellant raised multiple grounds including the non-condonation of delay in filing the appeal, non-adjudication of certain disallowances, and procedural irregularities in the issuance of intimation under section 143(1). The Tribunal's decision focused on the procedural validity of the intimation issued under section 143(1) following the notice under section 143(2).

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131738 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-04-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 31-08-2022
• Other Referred Cases: CIT Vs. Gujarat Electricity Board
• Laws Referred To: Income-tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 43B; 143(1); 143(2)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL DELHIBENCH ‘A’, NEW DELHI Before Sh. Saktijit Dey, Judicial Member Dr. B. R. R. Kumar, Accountant Member ITA No. 2123/Del/2022: Asstt. Year: 2018-19 M/S. Brij Gopal Construction Company Pvt. Ltd, A-7/2, Shivaji Apartment, Sector- 14, Rohini, North West Delhi- 110085 Vs. DCIT, Central Circle-3, Delhi (APPELLANT) (RESPONDENT) PAN No. AADCB7702J Assessee by : Ms. Monika Agarwal, Adv. Revenue by : Sh. Kanv Bali, Sr. DR Date of Hearing: 25.04.2023 Date of Pronouncement: 28.04.2023 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by the assessee against the order of the ld CIT(A)-24, New Delhi dated 28.06.2022 for AY 2018-19. 2. The assessee has raised the following grounds of appeal:- “1. That the learned Commissioner of Income Tax (Appeals)-24, Delhi has erred both in law and on facts in upholding the determination of income of the appellant company at Rs. 38,32,41,750/- as against declared income of Rs. 38,23,53,730/- in an intimation dated 22.10.2019 u/s 143(1) of the Act. 2. That the learned Commissioner of Income Tax (Appeals)-24, Delhi has further erred both in law and on facts in not condoning the delay in filing of the appeal by the appellant company. 2.1 That finding of the learned Commissioner of Income Tax (Appeals) that "reasons stated by the appellant for delay in filing of appeal cannot be considered as a sufficient cause for not presenting the appeal in time and therefore cannot be condoned" is illegal, invalid and untenable. 3 That the learned Commissioner of Income Tax (Appeals)-24, Delhi has further erred both in law and on facts by not adjudicating the ITA No. 2123/Del/2022 M/S. Brij Gopal Construction Company Pvt. Ltd 2 disallowance of Rs. 8,17,250/- made under section 2(24)(x) read with section 36(1)(va) of 21,0 the Act 4 That the learned Commissioner of Income Tax (Appeals) -24, Delhi has also erred both in law and on facts by not adjudicating the disallowance of Rs.35,246/- on account of loss on sale of fixed assets. 5. That the learned Commissioner of Income Tax (Appeals)-24 has erred both in law and on facts by not adjudicating the disallowance of sum of Rs. 35,520/- made under section 43B of the Act. 6. That even otherwise the adjustment so made in any intimation u/s 143(1) of the Act of a debatable and contentious issue is impermissible and thus untenable. 7. That the learned Commissioner of Income Tax (Appeals) -24, Delhi has failed to appreciate that intimation dated 22.10.2019 was made without granting opportunity much less fair meaningful and effective opportunity and therefore such an intimation is otherwise vitiated. 8. That the learned Commissioner of Income Tax (Appeals)-24 has failed to appreciate that intimation dated 22.10.2019 was made without jurisdiction; and therefore deserves to be quashed as such. 9. That various findings and, observations recorded by the learned Commissioner of Income Tax (Appeals) are based on surmises, conjectures and suspicion; and factually incorrect, legally misconceived and, infact in disregard of binding judgment of jurisdictional High Court and; thus untenable.” 3. Suffice to say that in this case notice u/s 143(2) was issued on 22.09.2019 and intimation u/s 143(1) of the Act has been issued to the assessee on 22.10.2019. 4. On this issue the Hon'ble Supreme Court in the case of CIT Vs. Gujarat Electricity Board 129 Taxmann 65 (SC) held as under:- “2. The short question which arises in these appeals is whether it is open to the Revenue to issue intimation under Section 143(1)(a) of the Income-tax Act, after notice for regular assessment has been issued under Section 143(2) of the Income-tax Act, 1961? 3. As far as the Gujarat High Court was concerned, the question was not res integra as it had before it the judgment in Gujarat Poly-Avx Electronics Ltd. v. Dy, CIT [1996] 222 ITR 140 and, therefore, the High Court was right in holding that a substantial question of law did not arise for determination. Mr. T.L.V. Iyer, learned senior counsel for the appellant, submits that the question needs to be decided by this court. 4. Learned counsel appearing for the respondents have pointed out that in a number of judgments several High Courts have consistently taken the view that once regular assessment proceedings have commenced ITA No. 2123/Del/2022 M/S. Brij Gopal Construction Company Pvt. Ltd 3 under Section 143(2) of the Income-tax Act, 1961, it is a limitation on the jurisdiction of the Assessing Officer to commence proceedings under Section 143(1)(a) of the Act. 5. Even otherwise, the view taken by the Gujarat High Court seems to be correct on principle. There is no dispute that Section 143(1)(a) of the Act enacts a summary procedure for quick collection of tax and quick refunds. Under the scheme if there is a serious objection to any of the orders made by the Assessing Officer determining the income, it is open to the assessee to ask for rectification under Section 154. Apart therefrom, the provisions of Section 143(1)(a)(i) indicate that the intimation sent under Section 143(1)(a) shall be without prejudice to the provisions of Sub-section (2). The Legislature, therefore, intended that, where the summary procedure under Sub-section (1) has been adopted, there should be scope available for the Revenue, either suo motu or at the instance of the assessee to make a regular assessment under Sub-section (2) of Section 143. The converse is not available; a regular assessment proceeding having been commenced under Section 143(2), there is no need for a summary proceeding under Section 143(1)(a), 6. In the result, we see no infirmity in the judgment of the High Court. The appeals are dismissed. There shall be no order as to costs.” 5. Hence, placing reliance on the order of the Apex Court we hereby hold that the action of the revenue cannot be supported and the intimation issued u/s 143(1) on 22.10.2019 after the issue of notice u/s 143(2) on 22.09.2019 is legally invalid. 6. In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 28/04/2023. Sd/- Sd/- (Saktijit Dey) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 28/04/2023 *Ajay Kumar Keot, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR