Appeal details
Counselvise Citation
[2021] 107 COUNSELVISE.COM (IT) 5854 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 5 month(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
17-09-2021
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
SMC
Assessment Year
2010-2011
Appeal Filed On
28-03-2019
Judgement Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC B ENCH, NEW DELHI [THROUGH VIDEO CONFERENCE] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO. 2668/DEL/2019 [ASSESSMENT YEAR: 2010-11] CITY LIFE PROJECTS PVT LTD VS. THE I.T.O C 180, PRATAP ENCLAVE WARD 6(2) PITAMPURA, NEW DELHI NEW DELHI PAN: AADCC 4494 L [APPELLANT] [RESPONDENT] DATE OF HEARING : 15.09.2021 DATE OF PRONOUNCEMENT : 17.09.2021 ASSESSEE BY : SHRI SURESH K. GUPTA, CA REVENUE BY : SHRI R.K. GUPTA, SR. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] 31, NEW DELH I DATED 25.02.2019 PERTAINING TO ASSESSMENT YEAR 2010-11. 2 2. THE ASSESSEE HAS CHALLENGED THE ORDER OF THE LD. CIT(A), FIRSTLY ON THE POINT OF LAW THAT THE ASSESSMENT ORDER FRAMED U /S 147 R.W.S 143(3) OF THE INCOME TAX ACT, 1961 [HEREINAFTER REFERRED T O AS 'THE ACT' FOR SHORT] IS BAD IN LAW AND THE LD. CIT(A) ERRED IN C ONFIRMING THE SAME AND SECONDLY, THE ASSESSEE HAS CHALLENGED ON MERITS THE ADDITION OF RS.10 LAKHS MADE BY THE ASSESSING OFFICER U/S 68 OF THE ACT. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION WAS CONDUCTED AT THE PREMISES OF S.K. JAI N GROUP WHEREFROM CERTAIN INCRIMINATING MATERIAL IN THE FORM OF REGIS TER AND DIARIES WERE SEIZED. ON THE BASIS OF SEIZED DOCUMENTS, INFORMAT ION WAS TRANSMITTED TO THE ASSESSING OFFICER OF THE ASSESSEE STATING TH AT THE ASSESSEE HAS TAKEN HAWALA ENTRY FROM S.K. JAIN GROUP AMOUNTING T O RS.10 LAKHS. 4. ON THE BASIS OF SUCH INFORMATION, NOTICE U/S 148 OF THE ACT WAS ISSUED ON THE ASSESSEE. DURING THE SOURCE OF SCRUTI NY ASSESSMENT PROCEEDINGS, SHOW CAUSE NOTICE WAS ISSUED TO THE AS SESSEE ASKING IT TO EXPLAIN THE TRANSACTION OF RS.10 LAKHS WITH EURO AS IA MERCANTILE PRIVATE LIMITED. 3 5. THE ASSESSEE FILED A DETAILED REPLY, WHICH IS IN CORPORATED IN THE ASSESSMENT ORDER. AFTER CONSIDERING THE REPLY OF TH E ASSESSEE, THE ASSESSING OFFICER WAS OF THE OPINION THAT THE ASSES SEE HAS FAILED TO PROVE THE IDENTITY, CREDITWORTHINESS, AND GENUINENE SS OF THE TRANSACTION AND CONCLUDED THE ASSESSMENT PROCEEDING S BY MAKING ADDITION OF RS.10 LAKHS U/S 68 OF THE ACT. 6. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEF ORE THE LD. CIT(A) STRONGLY CONTENDING THAT THE ASSESSING OFFIC ER SHOULD HAVE INITIATED PROCEEDINGS U/S 153C OF THE ACT AND NOT S ECTION 148 OF THE ACT AND, THEREFORE, THE ASSESSMENT ORDER IS BAD IN LAW. 7. THE LD. CIT(A) WAS NOT CONVINCED WITH THIS CLAIM OF THE ASSESSEE AND DISMISSED THE CLAIM. ON MERITS, THE LD. CIT(A) CONFIRMED THE ADDITION OF RS.10 LAKHS. 8. BEFORE ME, LD. COUNSEL FOR THE ASSESSEE VEHEMENT LY STATED THAT THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF NAVAL OIL AND CONTAINERS PRIVATE LIMITED ITA NO. 852/DEL/2019 AND ALSO BY THE 4 DECISION IN THE CASE OF ADARSH AGARWAL 777/DEL/2019 AND ALSO BY THE DECISION IN THE CASE OF SAURASHTRA COLOUR TONER PRI VATE LIMITED ITA NO. 6276/DELL/2018. 9. PER CONTRA, THE LD. DR STRONGLY SUPPORTED THE FI NDINGS OF THE ASSESSING OFFICER AND VEHEMENTLY STATED THAT ON FAC TS OF THE CASE, PROVISIONS OF SECTION 148 OF THE ACT SQUARELY APPLY AND, THEREFORE, THERE IS NO ERROR OR INFIRMITY IN THE FINDINGS OF T HE ASSESSING OFFICER. IT IS THE SAY OF THE LD. DR THAT INFORMATION RECEIVED BY THE ASSESSING OFFICER FROM THE INVESTIGATION WING/THE ASSESSING O FFICER OF THE SEARCHED PERSON, WAS NOT IN THE FORM OF ANY SEIZED MATERIAL BUT IT WAS AN INFORMATION SIMPLICITER, AND THEREFORE, SECTION 153C OF THE ACT DOES NOT APPLY. 10. I HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE OR DERS OF THE AUTHORITIES BELOW AND HAVE CAREFULLY PERUSED THE DE CISIONS RELIED UPON LD. COUNSEL FOR THE ASSESSEE. I FIND THAT THE DECIS ION OF THE COORDINATE BENCH IN THE CASE OF NAVAL OIL AND CONTAINERS PVT. LTD [SUPRA] SQUARELY APPLIES ON THE FACTS OF THE CASE IN HAND, IN AS MUC H AS, IN THAT CASE ALSO, INFORMATION WAS RECEIVED OUT OF THE SEARCH OP ERATION CARRIED OUT 5 IN S.K. JAIN GROUP OF CASES WHICH IS EVIDENT FROM T HE FACTS EXTRACTED AT PARA 4 OF THE ORDER AND THE SAME ARE AS UNDER: 4. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE F ILED ITS RETURN OF INCOME ON 30.9.2009 DECLARING INCOME OF RS. 2,73 ,720/-. THE AO PROCESSED THE SAME U/S. 143(1) OF THE INCOME TAX AC T, 1961 (HEREINAFTER REFERRED AS THE ACT) ON 21.2.2011. ON THE INFORMATION RECEIVED FROM THE OFFICE OF THE DIRECTOR OF INCOME TAX (INVESTIGATION-II), JHANDEWALAN EXTENSION, NEW DELH I DATED 12.3.2013 MENTIONING THEREIN THAT A SEARCH OPERATIO N WAS CARRIED OUT IN THE CASE OF SURENDRA KUMAR JAIN GROUP OF CAS ES WHEREIN AFTER SCRUTINY OF THE INCRIMINATING DOCUMENTS SEIZE D DURING THE COURSE OF SEARCH AND SUBSEQUENTLY POST SEARCH ENQUI RY, IT HAS BEEN NOTICED THAT THE SAID GROUP WAS INVOLVED IN PROVIDI NG ACCOMMODATION ENTRIES TO THE PERSONS WHO WERE NAMED IN THE REPORT. THE ASSESSEE WAS ALSO FIGURES IN THE LIST A S ONE OF THE BENEFICIARIES OF THE ACCOMMODATION ENTRIES PROVIDED BY THE GROUP. AFTER EXAMINING THE DETAILS AND COPIES OF SEIZED DO CUMENTS, AO IS OF THE VIEW THAT ASSESSEE COMPANY HAS TAKEN THE ACC OMMODATION ENTRIES AMOUNTING TO RS. 25 LACS IN FY 2008-09 FROM S.K. JAIN GROUP OF COMPANIES AND SPECIFICALLY FROM M/S SHALIN I HOLDING LTD. IN THE GARB OF SHARE APPLICATION MONEY ON 30.08.200 8. ON THE BASIS OF THIS INFORMATION FOUND DURING THE SEARCH, AO ISS UED NOTICE U/S. 148 OF THE ACT DATED 8.3.2016 AFTER RECORDING THE R EASONS IN WRITING AND AFTER OBTAINING SANCTION U/S. 151(1) OF THE ACT FROM PCIT, DELHI-6, NEW DELHI WHICH WAS SERVED UPON THE ASSESSEE ON 10.3.2016 BY SPEED POST. IN RESPONSE TO THE SAME, A SSESSEE FILED A LETTER DATED 06.4.2016 WHEREIN IT WAS SUBMITTED THA T THE ORIGINAL 6 RETURN FILED EARLIER MAY BE TREATED AS RETURNED FIL ED IN RESPONSE TO THE NOTICE U/S. 148 OF THE ACT. THE ASSESSING OFFIC ER ISSUED NOTICE U/S. 143(2) OF THE ACT AND U/S. 142(1) OF THE ACT A LONGWITH QUESTIONNAIRE TO THE ASSESSEE. IN RESPONSE TO THE S AME, ASSESSEE APPEARED AND FILED REQUIRED DOCUMENTARY EVIDENCES A ND ANSWER THE QUERY RAISED BY THE AO, BUT THE AO DID NOT AGREE WI TH THE EXPLANATION GIVEN BY THE ASSESSEE AND FINALLY MADE THE ADDITION U/S. 68 OF THE ACT OF RS. 25 LACS AS DISCUSSED IN PARA 1 5 OF THE ASSESSMENT ORDER AND COMPLETED THE ASSESSMENT AT RS . 28,23,720/- U/S. 147/148 READ WITH SECTION 143(3) O F THE ACT VIDE ORDER DATED 15.12.2016. AGAINST THE ASSESSMENT ORDE R DATED 15.12.2016, ASSESSEE APPEALED BEFORE THE LD. CIT(A) , WHO VIDE HIS IMPUGNED ORDER DATED 30.11.2018 HAS DISMISSED THE A PPEAL OF THE ASSESSEE. AGGRIEVED WITH THE IMPUGNED ORDER DATED 3 0.11.2018 OF THE LD. CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TR IBUNAL. 11. ON THE AFORE-STATED FACTS, THE COORDINATE BENCH HELD AS UNDER 5. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSESSEE STATED THAT ASSESSEE HAS RAISED AS MANY AS 13 GROUNDS OF A PPEAL WHICH INCLUDES LEGAL AS WELL AS ON MERITS. BUT HE DRAW MY ATTENTION TOWARDS THE GROUND NO. 3 REGARDING JURISDICTION OF THE AO IGNORING THE PROVISIONS OF SECTION 153C OF THE ACT WHICH OUG HT TO HAVE BEEN APPLIED BY THE REVENUE INSTEAD OF SECTION 147 AS TH E FORMER PROVISIONS ARE NON-OBSTANTIVE PROVISIONS AND EXCLUD E THE OPERATIONS OF SECTION 147 OF THE ACT. HE DRAW MY ATTENTION TOW ARDS A SMALL PAPER BOOK CONTAINING PAGES 1-62 IN WHICH HE HAS AT TACHED VARIOUS DOCUMENTARY EVIDENCES INCLUDING VARIOUS JUDGEMENTS ON THE ISSUE IN 7 DISPUTE AND STATED THAT THE GROUND NO. 3 HAS ALREAD Y BEEN ADJUDICATED AND DECIDED IN FAVOUR OF THE ASSESSEE B Y THE VARIOUS BENCHES OF THE ITAT INCLUDING THE ITAT, SMC, DELHI BENCH DECISION DATED 08.08.2017 PASSED IN ITA NO. 1500 & 1501/DEL/2017 (AY 2007-08) IN THE CASES OF SUSHIL G AUR VS. ITO, WARD 2(3), GHAZIABAD AND SHELLY AGARWAL. VS. ITO, W ARD 2(3), GHAZIABAD. HE ESPECIALLY DRAW MY ATTENTION TOWARDS THE FACTS OF THE CASE AND THE DECISIONS MENTIONED IN PARA NO. 8 AT PAGE 7 TO 9 OF THE AFORESAID TRIBUNALS ORDER DATED 08.08.2017 AND REQUESTED BY FOLLOWING THE SAME RATIO, THE APPEAL OF THE ASSESSE E MAY BE ALLOWED. 6. ON THE CONTRARY, LD. DR RELIED UPON THE ORDER S PASSED BY THE LD. CIT(A) AND STATED THAT LD. CIT(A) HAS PASSED A WELL REASONED ORDER ON THE GROUND RAISED BY THE ASSESSEE. HE HAS ALSO FILED THE WRITTEN SUBMISSIONS ON LEGAL AS WELL AS MERITS WITH SUPPORTING VARIOUS DECISIONS RENDERED BY VARIOUS COURTS. 7. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS AND GONE THROUGH THE ISSUE RAISED BY THE ASSESSEE IN GR OUNDS OF APPEAL ALONGWITH ORDERS PASSED BY THE REVENUE AUTHORITIES ESPECIALLY THE IMPUGNED ORDER. NO DOUBT THAT LD. COUNSEL FOR THE A SSESSEE HAS ARGUED ON THE ISSUE IN GROUND NO. 3 AND STATED THAT LD. CIT(A) HAS ERRED IN AFFIRMING THE JURISDICTION OF THE AO THAT THE PROVISIONS OF SECTION 153C OUGHT TO HAVE BEEN APPLIED BY THE REVE NUE INSTEAD OF 147, AS THE FORMER PROVISIONS ARE NON-OBSTANTIVE PR OVISIONS AND EXCLUDE THE OPERATIONS OF SECTION 147 OF THE ACT. O N THIS ISSUE, HE RELIED UPON THE VARIOUS ORDERS PASSED BY THE ITAT, DELHI BENCHES 8 INCLUDING THE ITAT, SMC, DELHI BENCH DECISION DATED 08.08.2017 PASSED IN ITA NO. 1500 & 1501/DEL/2017 (AY 2007-08) IN THE CASES OF SUSHIL GAUR VS. ITO, WARD 2(3), GHAZIABAD AND SHELLY AGARWAL. VS. ITO, WARD 2(3), GHAZIABAD, WHICH WAS P ASSED BY THE UNDERSIGNED BY RESPECTFULLY FOLLOWING THE VARIOUS O RDERS MENTIONED IN PARA NO. 8 OF THE ORDER AT PAGE NO. 7 TO 9 OF TH E ORDER. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PARA NO. 8 IS REP RODUCED AS UNDER:- 8. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS, ESPECIALLY THE IMPUGNED ORDER AS WELL AS THE PAPER BOOK. ON HAVING GONE THROUGH THE DECISIONS CITED ABOVE ESPEC IALLY THE DECISION OF AMRITSAR BENCH IN THE CASE OF ITO VS. A RUN KUMAR KAPOOR (SUPRA), I FIND THAT IN THAT CASE AS I N THE PRESENT CASE BEFORE ME, REASSESSMENT WAS INITIATED ON THE BASIS OF INCRIMINATING MATERIAL FOUND IN SEARCH OF THIRD PARTY AND THE VALIDITY OF THE SAME WAS CHALLENGED BY THE ASSESSEE BEFORE THE LEARNED CIT(APPEALS) AND THE LEARNED CIT(APPEALS) VITIATED THE PROCEEDINGS. THE SAME WAS QUESTIONED BY THE REVENUE BEFORE THE ITAT AND THE I TAT AFTER DISCUSSING THE CASES OF THE PARTIES AND THE R ELEVANT PROVISIONS IN DETAILS HAS COME TO THE CONCLUSION TH AT IN THE ABOVE SITUATION, PROVISIONS OF SEC. 153C WERE APPLI CABLE WHICH EXCLUDES THE APPLICATION OF SECTIONS 147 AND 148 OF THE ACT. THE ITAT HELD THE NOTICE ISSUED UNDER SEC. 148 AND PROCEEDINGS UNDER SEC. 147 AS ILLEGAL AND VOID AB I NITIO. IT WAS HELD THAT ASSESSING OFFICER HAVING NOT FOLLOWED PRO CEDURE 9 UNDER SEC. 153C, REASSESSMENT ORDER WAS RIGHTLY QUA SHED BY THE LEARNED CIT(APPEALS). I ALSO DRAW MY SUPPORT FR OM THE ITAT, NEW DELHI DECISION IN THE CASE OF RAJAT SHUBR A CHATTERJI VS. ACIT, NEW DELHI ITA NO. 2430/DEL/2015 DATED 20.5.2016, WHEREIN THE REASSESSMENT WAS QUASH ED ON THE SIMILAR FACTS AND CIRCUMSTANCES BY FOLLOWING TH E ITAT, AMRITSAR DECISION IN THE CASE OF ITO VS. ARUN KUMAR KAPOOR (SUPRA). IN THE PRESENT CASE BEFORE ME, IT IS AN AD MITTED FACT, AS ALSO EVIDENT FROM THE REASONS RECORDED AND THE ASSESSMENT ORDER THAT THE INITIATION OF REOPENING PROCEEDINGS WAS MADE BY THE ASSESSING OFFICER ON TH E BASIS OF INFORMATION AVAILABLE WITH THE AO. I THUS RESPEC TFULLY FOLLOWING THE DECISION OF CO-ORDINATE BENCH OF THE ITAT, AMRITSAR IN THE CASE OF ACIT VS. ARUN KAPUR - 140 T TJ 249 VS. (AMRITSAR) AND THE ITAT, DELHI DECISION IN THE CASE OF RAJAT SHUBRA CHATTERJI VS. ACIT, NEW DELHI ITA NO. 2430/DEL/2015 DATED 20.5.2016 HOLD THAT PROVISIONS OF SEC. 153C OF THE ACT WERE APPLICABLE IN THE PRESENT CASE FOR FRAMING THE ASSESSMENT, IF ANY, WHICH EXCLUDES THE APPLICATION OF SEC. 147 OF THE ~ HENCE, NOTICE ISSU ED UNDER SEC. 148 OF THE ACT AND ASSESSMENT FRAMED IN FURTHE RANCE THERETO UNDER SEC. 147 READ WITH SECTION 143(3) OF THE ACT ARE VOID AB INITIO. HENCE, THE REASSESSMENT IN QUES TION IS ACCORDINGLY QUASHED. SINCE I HAVE ALREADY QUASHED T HE REASSESSMENT, THERE IS NO NEED TO ADJUDICATE OTHER GROUNDS. 10 7.1 AFTER GOING THROUGH THE AFORESAID FINDING OF TH E ITAT, SMC, DELHI BENCH DECISION DATED 08.08.2017 PASSED IN ITA NO. 1500 & 1501/DEL/2017 (AY 2007- 08) IN THE CASES OF SUSHIL GAUR VS. ITO, WARD 2(3), GHAZIABAD AND SHELLY AGARWAL VS. ITO, WA RD 2(3), GHAZIABAD, I AM OF THE CONSIDERED VIEW THAT GROUND NO. 3 OF THIS APPEAL HAS ALREADY BEEN ADJUDICATED AND DECIDED BY THE VARIOUS BENCHES OF THE ITAT, WHICH I HAVE MENTIONED IN THE AFORESAID PARAGRAPHS AND I AM OF THE VIEW THAT THIS ISSUE HAS ALREADY BEEN ADJUDICATED AND DECIDED IN FAVOUR OF THE ASSESSEE BY HOLDING THAT ON THE BASIS OF INCRIMINATING MATERIAL FOUND, ONCE REASSESSMENT PROCEEDINGS WAS INITIATED ON THE BASIS OF INCRIMINA TING MATERIAL FOUND IN THE SEARCH OF 3RD PARTY THEN THE PROVISION S OF SECTION 153C OF THE I.T. ACT WERE APPLICABLE WHICH EXCLUDE THE APPLICATION OF SECTION 147 AND 148 OF THE I.T. ACT AND NOTICE U /S. 148 OF THE ACT AND PROCEEDING U/S. 147 ARE ILLEGAL AND VOID AB INITIO. THEREFORE,, RESPECTFULLY FOLLOWING THE AFORESAID OR DER OF THE TRIBUNAL DATED 08.08.2017, THE REASSESSMENT IN QUES TION IS ACCORDINGLY QUASHED. SINCE I HAVE ALREADY QUASHED T HE REASSESSMENT, THERE IS NO NEED TO ADJUDICATE THE OT HER GROUNDS. LD. DR HAS NOT BROUGHT TO MY NOTICE ANY CONTRARY DE CISION ON EXACTLY SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE MENTIONED IN PARA NO. 8 OF THE TRIBUNAL ORDER DATED 08.08.2017, AS REPRODUCED ABOVE. THEREFORE, THERE IS NO HELP CAN BE GIVEN TO THE REVENUE ON THE ISSUES MENTIONED IN THE WRITTEN SUBMISSIONS BY THE LD. DR. 11 12. ON FINDING PARITY IN THE FACTS OF THE CASE IN H AND WITH THE FACTS OF NAVAL OIL AND CONTAINERS PVT. LTD [SUPRA] RESPECTFU LLY FOLLOWING THE DECISION OF THE COORDINATE BENCH, I DIRECT THE ASSE SSING OFFICER TO DELETE THE IMPUGNED ADDITION. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 2668/DEL/2019 IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 17.09. 2021. SD/- [N.K. BILLAIYA] ACCOUNTANT MEMBER DATED: 17 TH SEPTEMBER, 2021. VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) ASST. REGISTRAR, 5. DR ITAT, NEW DELHI 12 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
