M/s. Bhoomika Infrabuild Private Limited, Bangalore V. Income Tax Officer, Ward- 1(1)(3), Bangalore

ITA 2211/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6541 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 23-01-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 14-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K HARITHA CIT BENGALURU
• Assessee Lawyers: S V RAVISHANKAR
• Keywords: Unexplained cash credit; Accommodation entries; Set aside
• Section: 143(3); 142(1); 143(1); 292BB; 143(2); 147; 68; 148; 6; 144; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B R BASKARAN , ACCOUNTANT MEMBER IT A NO. 2211/BANG/2019 ASSESSMENT YEAR: 2011 - 12 M/S. BHOOMIKA INFRABUILD P. LTD., NO.823, 2 ND CROSS, 11 TH MAIN, HAL 2 ND STAGE, INDIRANAGAR, BANGALORE 560 008. PAN: AAECB 0240N VS. THE INCOME TAX OFFICER, WARD 1(1)(3), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI S.V. RAVISHANKAR, ADVOCATE` RESPONDENT BY : SMT. K. HARITHA, ADDL .CIT (DR)(ITAT), BENGALURU. DATE OF HEARING : 23 .01.2020 DATE OF PRONOUNCEMENT : 06 .0 2 .2020 O R D E R PER N.V. VASUDEVAN, VICE PRESIDENT THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER D ATED 1.8.2019 OF THE CIT(APPEALS)-I, BENGALURU RELATING TO ASSESSMEN T YEAR 2011-12. 2. THE ASSESSEE IS A COMPANY STATED TO BE ENGAGED I N THE BUSINESS OF DEALING IN REAL ESTATE FOR AY 2011-12. THE ASSESSE E FILED RETURN OF INCOME ON 30.9.2011 DECLARING TOTAL INCOME OF RS.8,87,180. THE SAID RETURN OF INCOME WAS PROCESSED U/S. 143(1) OF THE INCOME-TAX ACT, 1961 [THE ACT] ON 17.1.2012 ACCEPTING THE RETURN FILED. LATER ON, AN ORDER DATED 30.5.2012 WAS PASSED U/S. 154 GIVING CREDIT TO SELF-ASSESSMEN T TAX PAID. SUBSEQUENTLY, THE AO RECEIVED INFORMATION FROM DDIT (INV.) UNIT 3(1), KOLKATA VIDE LETTER DATED 22.01.2016 WHEREIN THERE WAS A REFERENCE TO ITA NO.2211/B/2019 PAGE 2 OF 8 INVESTIGATION OF ENQUIRIES CONDUCTED BY THE SAID DD IT(INV.) IN THE CASE OF MARUDHARA INDIA PVT. LTD., KOLKATA IN WHICH THE DIR ECTOR OF THE AFORESAID COMPANY MR. RAMESH KUMAR KHAITAN ADMITTED THAT HE W AS PROVIDING ACCOMMODATION ENTRIES BY ACCEPTING CASH FROM THE PA RTIES AND DEPOSITING THE SAME IN UNDISCLOSED BANK ACCOUNTS AND CHARGED N OMINAL COMMISSION FROM JAMAKHARCHI TRANSACTION. MR. KHAITAN HAS GIVE N A LIST OF BENEFICIARIES OF ACCOMMODATION ENTRIES AND THE ASSESSEES NAME AL SO APPEARS AS A BENEFICIARY IN THE SAID LIST. THEREFORE, PROCEEDIN GS U/S. 147 WERE OF THE ACT WERE INITIATED AGAINST THE ASSESSEE. A NOTICE U/S. 148 WAS ISSUED ON 14.2.2018 BY WHICH ASSESSEE WAS ASKED TO FILE RETUR N OF INCOME ON OR BEFORE 21.3.2018. 3. THE ASSESSEE DID NOT FILE RETURN OF INCOME IN RE SPONSE TO NOTICE U/S. 148 OF THE ACT WITHIN TIME GIVEN FOR COMPLIANCE I.E ., 21.3.2018. ON 3.5.2018, THE AO ISSUED A NOTICE U/S. 143(2) OF THE ACT IN WHICH THE ASSESSEE WAS ASKED TO ATTEND THE OFFICE OF AO ON 21 .5.18. ON THE VERY SAME DAY I.E., 3.5.2018 THE AO ALSO INFORMED THE AS SESSEE THAT WITH REFERENCE TO NOTICE U/S. 148 ISSUED BY THE AO, THE ASSESSEE HAD NOT FILED ANY RETURN OF INCOME AND THEREFORE HE WOULD TREAT T HE RETURN OF INCOME FILED BY THE ASSESSEE FOR AY 2011-12 ON 30.9.2011 AS A RE TURN FILED IN RESPONSE TO U/S. 148 OF THE ACT AND ALSO INFORMED THE ASSESS EE THAT HE CAN INTIMATE IF HE HAS ANY OBJECTION TO THE AFORESAID PROPOSAL LATE ST BY 10.5.2018 SO AS TO ENABLE THE ASSESSEE TO CONTINUE THE PROCEEDINGS. 4. THE AO ALSO INFORMED BY THE AFORESAID LETTER THA T BASED ON THE ORIGINAL RETURN FILED, NOTICE U/S. 143(2) AND 142(1 ) WILL BE ISSUED IN RESPONSE TO THE AFORESAID LETTER OF AO. THE ASSESSEE BY LET TER DATED 10.5.2018 INFORMED THE AO THAT ORIGINAL RETURN FILED BY ASSES SEE ON 39.9.2011 MAY BE TREATED AS A RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S. 148 OF THE ACT. THEREAFTER, THE PROCEEDINGS WERE COMPLETED BY THE A O IN WHICH THE AO BROUGHT TO TAX A SUM OF RS.65 LAKHS AS UNEXPLAINED CASH CREDIT U/S. 68 OF ITA NO.2211/B/2019 PAGE 3 OF 8 THE ACT. IT IS NOT IN DISPUTE THAT THE AFORESAID A DDITION OF RS.65 LAKHS WAS MADE BY TREATING THE RECEIPT OF SHARE CAPITAL BY TH E ASSESSEE FROM THE FOLLOWING PERSONS AS UNEXPLAINED CASH CREDIT U/S. 6 8 OF THE ACT:- SL.NO. NAME OF THE COMPANY/INVESTOR PAN DATE OF RECEIPT IN THE BANK A/C / AMOUNT RECEIVED DATE OF WITHDRAWALS APPEARING IN BANK STATEMENT / AMOUNT OF DEPOSIT 1. M/S HONESTY MERCANTILE PVT LTD AACCH 1907Q 20.04.2010 RS.15,00,000 24.06.2010 RS.50,00,000 (CLEARING VENKATASWAMY) 2. M/S AASHISH RETAIL GARMENTS PVT LTD AAGCA 3644K 20.04.2010 RS 20,00,000 20.04.2010 RS.5,00,000 3. M/S SHAGUN SHREE CONSTRUCTION PVT LTD AAKCS 9218H 22.04.2010 RS.10,00,000 4. EKALAVYA TRADECOM P LTD. - 23.04.2010 RS.10,00,000 23.06.2010 8,00,000/- (CLEARING NATARAJ) 5. SIVA SWATHI CONSTRUCTIONS PVT LTD. 30.11.2010 5,00,000 01.12.2010 SELF 5,00,000 TOTAL 65,00,000 5. ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) CONF IRMED THE ORDER OF AO. AGGRIEVED, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 6. BEFORE THE TRIBUNAL, THE ASSESSEE HAS FILED SERV AL ADDITIONAL GROUNDS OF APPEAL. WE DEEM IT APPROPRIATE TO DEAL WITH FIR ST 5 ADDITIONAL GROUNDS AND CONSIDER ITS ADMISSIBILITY:- LEGAL GROUNDS 1. THE ORDER OF ASSESSMENT IS BAD IN LAW AS THE LEA RNED ASSESSING OFFICER HAS NOT ASSUMED PROPER JURISDICTI ON, BY ISSUE OF VALID NOTICE UNDER SECTION 143(2) OF THE ACT, CO NSEQUENTLY THE ORDER PASSED IS REQUIRED TO BE SET ASIDE AS BAD IN LAW, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.2211/B/2019 PAGE 4 OF 8 2. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE NOTICE ISSUED UNDER SECTION 143(2) OF THE ACT, DT: 03/05/2 018 IN RESPECT OF RETURN FILED IN 2011, WAS BARRED BY LIMITATION A ND THUS THE ASSUMPTION OF JURISDICTION WAS BAD IN LAW, ON THE F ACTS AND CIRCUMSTANCES OF THE CASE. 3. WITHOUT PREJUDICE, THE NOTICES ISSUED UNDER SECT ION 148 AND 143(2) ISSUED BY THE ACIT, WAS WITHOUT JURISDIC TION IN VIEW OF THE MONETARY LIMITS PRESCRIBED FOR PASSING THE A SSESSMENT ORDER AS PROVIDED IN THE INSTRUCTIONS, CONSEQUENTLY THE ORDER IS LIABLE TO BE ANNULLED. 4. WITHOUT FURTHER PREJUDICE, THE AUTHORITIES BELOW FAILED TO APPRECIATE THAT 'CONSENT DOES NOT CONFER JURISDICTI ON' ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LEARNED ASSESSING OFFICER HAS NOT ISSUED A N OTICE U/S 143(2), CONSEQUENT TO THE FILING OF THE RETURN OF I NCOME IN RESPONSE TO NOTICE U/S 148 OF THE ACT, AND CONSEQUE NTLY, THE ORDER PASSED IS WITHOUT JURISDICTION AND THE ASSESSMENT O RDER IS REQUIRED TO BE SET ASIDE AS BAD IN LAW, ON THE FACTS AND CIR CUMSTANCES OF THE CASE. 7. THE AFORESAID ADDITIONAL GROUNDS RELATE TO VALID ITY OF ORDER OF ASSESSMENT ON THE GROUND THAT AFTER THE FILING OF R ETURN OF INCOME BY THE ASSESSEE, NO NOTICE U/S. 143(2) OF THE ACT WAS ISSU ED BY THE AO AND THE ASSESSMENT FRAMED WITHOUT ISSUE OF NOTICE U/S. 143( 2) OF THE ACT IS NULL AND VOID AND THE ORDER OF ASSESSMENT IS LIABLE TO BE AN NULLED. 8. THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NTPC LTD. V. CIT, 229 ITR 383 (SC) IN SUPPORT OF ADMISSION OF THE ADDITIONAL GROUND. THE HONBLE SUPREME COURT IN THE AFORESAID DECISION HAS HELD THAT ADDITIONAL GROUNDS NOT RAISED BEFORE THE LOWER AUTHORITIES HAVE TO BE ADMITTED AND ADJUD ICATED WHERE THOSE GROUNDS INVOLVE LEGAL ISSUES WHICH CAN BE DECIDED O N FACTS ALREADY ON RECORD. WE ARE OF THE VIEW THAT IN THE LIGHT OF THE AFORESAID DECISION OF THE HONBLE SUPREME COURT, THE ADDITIONAL GROUNDS NO.1 TO 5 RAISED BY THE ITA NO.2211/B/2019 PAGE 5 OF 8 ASSESSEE HAS TO BE ADMITTED OR ADJUDICATION AS IT I NVOLVES THE VALIDITY OF THE ORDER OF ASSESSMENT PASSED WHICH CAN BE ADJUDICATED ON THE BASIS OF MATERIAL ALREADY AVAILABLE ON RECORD. THE ADDITION AL GROUNDS ARE ACCORDINGLY ADMITTED FOR ADJUDICATION. 9. WE HAVE HEARD THE PARTIES ON THE ADDITIONAL GROU NDS REFERRED TO ABOVE. RECORDS OF ASSESSMENT WERE CALLED FOR AND P RODUCED BY THE REVENUE. THE ADMITTED FACTUAL POSITION WITH REGARD TO ISSUE OF NOTICE U/S. 143(2) OF THE ACT IS THAT ORIGINALLY THE ASSESSEE H AD FILED A RETURN OF INCOME ON 30.9.2011 AND THAT RETURN OF INCOME WAS ACCEPTED U/S. 143(1) OF THE ACT ON 17.1.2012. A NOTICE U/S. 148 WAS ISSUED ON 14.2 .2018. ASSESSEE WAS ASKED TO FILE RETURN OF INCOME IN RESPONSE TO NOTIC E U/S. 148 OF THE ACT ON OR BEFORE 21.3.2018. THE ASSESSEE DID NOT FILE RETURN OF INCOME WITHIN THE TIME GIVEN BY THE AO. THE AO ISSUED A NOTICE U/S. 1 43(2) OF THE ACT ON 3.5.2018. ON THE VERY SAME DAY THE AO ALSO ISSUE D ANOTHER NOTICE/LETTER TO THE ASSESSEE WHEREIN HE HAD INFORMED THE ASSESSE E THAT HE WOULD TREAT THE RETURN ORIGINALLY FILED BY THE ASSESSEE ON 30.9 .2011 AS A RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT AND INVITED T HE ASSESSEES OBJECTIONS FOR SUCH A COURSE OF ACTION ON OR BEFORE 10.5.2018. ON 10.5.2018, THE ASSESSEE INFORMED THAT THE RETURN ORIGINALLY FILED ON 30.9.2011 MAY BE TREATED AS A RETURN FILED IN RESPONSE TO NOTICE U/S . 148 OF THE ACT. THE LAW IS WELL SETTLED THAT IT IS ONLY ON 10.5.2018 THAT T HE RETURN FILED BY THE ASSESSEE IN RESPONSE TO NOTICE U/S. 148 OF THE ACT CAN BE TAKEN COGNIZANCE BY THE AO. THE ADMITTED POSITION IS THAT THERE WAS NO NOTICE U/S. 143(2) OF THE ACT AFTER 10.5.2018. IT IS ON THESE FACTUAL DE TAILS THAT WE NEED TO ADJUDICATE THE ADDITIONAL GROUNDS NO.1 TO 5. 10. THE LD. COUNSEL FOR THE ASSESSEE PLACED RELIANC E ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT V. LAXMANDAS KHANDELWAL [2019] 108 TAXMANN.COM 183 (SC) IN WHICH THE HONBLE SUPREME COURT REITERATED THE LEGAL POSITION AS LAID DOWN BY IT IN THE CASE OF ACIT V. HOTEL ITA NO.2211/B/2019 PAGE 6 OF 8 BLUMOON, 321 ITR 362 (SC) THAT AN ASSESSMENT FRAMED WITHOUT ISSUE OF NOTICE U/S. 143(2) OF THE ACT RENDERS THE ORDER OF ASSESSMENT NULL AND VOID. IT WAS FURTHER HELD THAT THE DEFECT OF NON-ISSUE OF NOTICE U/S. 143(2) OF THE ACT AND ITS NON-SERVICE IS NOT A DEFECT OR INFIRMIT Y WHICH CAN BE CURED BY THE PROVISIONS OF SECTION 292BB OF THE ACT I.E., THE ME RE PARTICIPATION OF ASSESSEE IN THE ASSESSMENT PROCEEDINGS. 11. THE LD. DR, HOWEVER, PLACED RELIANCE ON THE DEC ISION OF THE HONBLE JAMMU & KASHMIR HIGH COURT IN THE CASE OF PR. CIT V. M/S. BROADWAY SHOE CO. IN ITA NO.10/2017, ORDER DATED 11.10.2018 WHEREIN IT WAS HELD THAT IF IN RESPONSE TO NOTICE U/S. 148 OF THE ACT, THE ASSESSEE DID NOT FILE ANY RETURN OF INCOME, THEN THERE IS NO REQUIREMENT TO ISSUE A NOTICE U/S. 143(2) OF THE ACT. IN OUR VIEW, THIS DECISION WILL NOT BE APPLICABLE TO THE FACTS OF THE PRESENT CASE FOR THE REASON THAT RETUR N OF INCOME HAD BEEN FILED BY THE ASSESSEE IN RESPONSE TO NOTICE U/S. 148 OF T HE ACT REQUESTING THE AO TO TREAT THE RETURN FILED ORIGINALLY ON 30.9.2011 A S A RETURN FILED IN RESPONSE TO NOTICE U/S. 148 OF THE ACT. THEREFORE AS OF 10. 5.2018, THE RETURN ORIGINALLY FILED ON 30.9.2011 BECOMES A RETURN FILE D IN RESPONSE TO NOTICE U/S. 148 OF THE ACT. SINCE THERE WAS A RETURN FILE D IN RESPONSE TO NOTICE U/S. 148, WE ARE OF THE VIEW THAT THE DECISION REFERRED TO BY THE LD. DR WILL NOT BE OF ANY ASSISTANCE. 12. THE LD. DR ALSO SUBMITTED THAT THE ORDER OF ASS ESSMENT DOES NOT MENTION THAT IT IS AN ORDER PASSED U/S. 143(3) OF T HE ACT AND THEREFORE THE ASSESSMENT CAN BE SAID TO BE ONE CONCLUDED U/S. 144 OF THE ACT. THIS ARGUMENT OF THE LD. DR ALSO CANNOT BE ACCEPTED BECA USE BEFORE PROCEEDING TO FRAME AN ASSESSMENT U/S. 144 OF THE A CT (BEST JUDGMENT ASSESSMENT), THE PROVISIONS OF SECTION 144(1) CONTE MPLATES FAILURE OF AN ASSESSEE TO COMPLY WITH THE TERMS OF A NOTICE ISSUE U/S. 142(1) OR 143(2) OF THE ACT. ADMITTEDLY, THERE WAS NO FAILURE ON THE P ART OF ASSESSEE TO COMPLY WITH THE NOTICE U/S. 142(1) OF THE ACT. AS FAR AS NOTICE U/S. 143(2) IS ITA NO.2211/B/2019 PAGE 7 OF 8 CONCERNED, NO SUCH NOTICE WAS ISSUED AFTER FILING O F RETURN BY THE ASSESSEE IN THE PRESENT PROCEEDINGS WHICH ARE UNDER CHALLENG E. THEREFORE, THERE WAS NO BASIS ON WHICH THE ASSESSMENT CAN BE SAID TO BE ONE FRAMED U/S. 144 OF THE ACT. IT WAS NOT EVEN THE CASE OF AO THA T THE ASSESSMENT WAS FRAMED U/S. 144 OF THE ACT. WE ARE THEREFORE OF TH E VIEW THAT THE REQUIREMENT OF SERVICE OF NOTICE U/S. 143(2) OF THE ACT IN THE PRESENT CASE WAS NECESSARY AND THE ADMITTED FACTUAL POSITION IS THAT NO SUCH NOTICE WAS ISSUED AFTER THE FILING OF RETURN OF INCOME BY THE ASSESSEE IN RESPONSE TO NOTICE U/S. 148 OF THE ACT. IN THE GIVEN CIRCUMSTA NCES, WE ARE OF THE VIEW THAT THAT THE RATIO LAID DOWN BY THE HONBLE SUPREM E COURT IN THE CASE OF HOTEL BLUEMOON (SUPRA) AND LAXMANDAS KHANDELWAL (SUPRA) WILL APPLY TO THE PRESENT CASE. THE CONSEQUENE OF NON-ISSUE OF N OTICE U/S. 143(2) OF THE ACT IS FATAL TO THE VALIDITY OF THE ORDER PASSED U/ S. 148 OF THE ACT. SINCE THE AFORESAID LEGAL INFIRMITY RENDERS THE ORDER OF ASSE SSMENT NULL AND VOID, WE ARE OF THE VIEW THAT THE ORDER OF ASSESSMENT HAS TO BE ANNULLED. WE HOLD AND DIRECT ACCORDINGLY. 13. IN VIEW OF THE AFORESAID CONCLUSIONS ON THE ADD ITIONAL GROUNDS OF APPEAL, WE ARE OF THE VIEW THAT THE OTHER ISSUES RA ISED IN THE ADDITIONAL GROUNDS OF APPEAL AS WELL AS THE ISSUE ON MERITS RA ISED BY THE ASSESSEE IN ITS GROUNDS OF APPEAL DO NOT REQUIRE ANY CONSIDERAT ION. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. PRONOUNCED IN THE OPEN COURT ON THIS 6 TH DAY OF FEBRUARY, 2020. SD/- SD/- ( B R BASKARAN ) ( N V VASUDE VAN ) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE, DATED, THE 6 TH FEB., 2020. / DESAI S MURTHY / ITA NO.2211/B/2019 PAGE 8 OF 8 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FIL E BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.