Tirupati Constwell Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 4171/DEL/2014

AI Insights

The case involves M/s Tirupati Constwell Pvt. Ltd., which appealed against the order of the CIT (Appeals)-XXXII, New Delhi, confirming additions made by the Assessing Officer regarding unexplained cash expenditure and other financial discrepancies for the Assessment Year 2011-12. The primary legal contention was the validity of the assessment order passed under section 153A, which was challenged due to improper approval under section 153D by the then Addl. CIT. The Tribunal's decision was influenced by previous ITAT rulings that found similar approvals to be invalid.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121888 (ITAT-DELHI)
• Duration Of Justice: 8 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 27-02-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 27-07-2014
• Other Referred Cases: All Cargo Global Logistics Ltd. Vs. DCIT, ACIT V. PACL India Ltd, Sh. Subhash Dabas-a group case, ACIT vs M/s Tirupati Buildings & Offices Pvt. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule 8D
• Section: 132; 153A; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘H’: NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.4171/DEL/2014 [Assessment Year: 2011-12] M/s Tirupati Constwell Pvt. Ltd. Plot No.3, Dwarka City Centre Sector-10, Dwarka, New Delhi-110075 Vs Dy Commissioner of Income Tax, Central Circle-9, Jhandewalan Extn. 3 rd Floor, New Delhi PAN-AACCT2478E Assessee Revenue Assessee by Sh. Mahavir Singh, Adv. Revenue by Ms. Sapna Bhatia, CIT-DR Date of Hearing 28.02.2023 Date of Pronouncement 03.03.2023 ORDER PER SHAMIM YAHYA, AM, This appeal by the assessee is directed against the order of ld. CIT (Appeals)-XXXII, New Delhi, dated 24.03.2014 for the Assessment Year 2011-12. 2. The grounds of appeal reads as under:- “1. On the facts and in the circumstances of the case, the Ld. CIT(A)- XXXII, New Delhi has erred in confirming the addition on account of the alleged unexplained cash expenditure to the extent of Rs. 5929000/- as recorded on seized document page nos. 58 to 62 of Annexure A-1 without considering the source of the said expenditures as per documentary evidences and cash flow statement compiled for the utilization of the surrendered amount of Rs. 300 lacs on 01.06.2006 U/S 132(4) of the Income Tax Act, 1961. 2. On the facts and in the circumstances of the case, the Ld. CIT(A)- XXXII, New Delhi has erred in confirming the addition of Rs. 2 ITA No.4171/Del/2014 1824298/- (subject to verification by Ld. AO, as directed) under Section 14A read with Rule 8D of the Income Tax Rules, 1962. 3. On the facts and in the circumstances of the case whether the Id. CIT(A)-XXXII is correct in dismissing the arguments that the assessment has not been framed on the material seized pursuant to an action taken u/s 132 of the Act but the reassessment has been made not based on search material found in the action taken by the department which is illegal in law in view of the decision of Hon'ble ITAT in the matter of All Cargo Global Logistics Ltd. Vs. DCIT ITA no.5018 to 5022. And ACIT V. PACL India Ltd ITA No. 2637 of 2010.” 3. The assessee has taken additional ground, the same reads as under:- “The assessment order passed on 28.03.2013 by the Ld. Assessing Officer is illegal and void due to inappropriate approval u/s 153D granted by the then Addl. CIT as held in case of ITA No.2399/Del/2016 in case of Sh. Subhash Dabas-a group case. Hence, the appellate order based on above assessment order is also without any basis and hence illegal and void.” 4. This appeal was earlier disposed of by the Tribunal in ex-parte order in ITA No.4171/Del/2014 for Assessment Year 2011-12 vide order dated 09.04.2018 and subsequently the same was recalled. Pursuant to the recall in MA No.644/Del/2018, vide order dated 29.04.2022, we have heard the appeal. 5. At the outset, the ld. Counsel for the assessee pressed additional ground. 6. Upon careful consideration, the same being legal issue, we admit the same. The submission of the ld. Counsel for the assessee is that the assessment order passed on 28.03.2013 by the Assessing Officer is illegal and void due to inappropriate approval u/s 153D granted by then Addl. CIT(A) as held in ITA No.2399/Del/2016 in the case of Subhash Dabas and group cases. Furthermore, the ld. Counsel for the assessee draw our attention to the ITAT Delhi Bench order in ITA 3 ITA No.4171/Del/2014 No.2405/Del/2016 for AY 2010-11 in the case of ACIT vs M/s Tirupati Buildings & Offices Pvt. Ltd., vide order dated 09.02.2023. In the said order, at page-50, there was a noting for five assessees whose approval was granted by the same Addl. CIT u/s 153D of the Act which has included the name of the assessee. The same is reproduced as below: 33. We find the Addl. CIT vide his approval dated 28.03.2013 has given approval, the copy of which is placed in the paper book at page, 5 which is as under:- 4 ITA No.4171/Del/2014 7. Going through the above approval which included the name of the assessee as well, the ITAT has concluded as under:- “16. Per contra, as we have noted above, it clearly discernable that the approval u/s. 153D of the Act was sought by the DCIT/Assessing Officer on 28.03.2013 from ACIT which was granted on the same date i.e.28.03.2013 by the ACIT to the Assessing Officer and said approval has been held by the Tribunal in the case of Subhash Dabas order dated 08.09.2021 (supra) and subsequent order dated 09.09.2021 (supra) for A.Y. 2009-10 and 2010-11 & 2011-12 (supra), as has been given without application of mind and thus the same is invalid bad in law and liable to be quashed and Tribunal has quashed the same. Therefore, the application of assesses under Rule 27 of the ITAT Rules is allowed by following the order of ITAT Delhi Bench in the case of Subhash Dabas dated 08.09.2021 for A.Y. 2009-10(supra) and 09.09.2021 for A.Y. 2010-11 and 2011-12 (supra). We, therefore quash the assessment order passed u/s. 153A of the Act for A.Y. 2010-11 in 5 ITA No.4171/Del/2014 the case of present assessee i.e. M/s. Tirupati Buildings & Offices Pvt. Ltd. Resultantly, all additions are deleted. The ground raised by the assessee under Rule 27 of the ITAT Rules is accordingly allowed.” 8. Thus, this issue is squarely stand covered in favour of the assessee by the decision of the ITAT above. The ITAT after examining the approval which included inter alia the name of the assessee as well has concluded that the same has been given without application of mind, thus, the same is invalid bad in law and liable to be quashed. It is not the case that the above decision has been set-aside by the Hon’ble jurisdictional High Court. Hence, respectfully following the precedent as above, we allow the additional ground and therefore, we quash the assessment order passed u/s 153A of the Act for Assessment Year 2011-12 in the case of the assessee. 9. Since, we have quashed the assessment order on the additional ground raised by the assessee, adjudication of other grounds on merit is only of academic interest, hence we are not engaging in the same. 10. In the result, this appeal by the assessee is allowed. Order pronounced in the open court on 03 rd March, 2023. Sd/- Sd/- [ANUBHAV SHARMA] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Delhi; Dated: 03.03.2023. f{x~{tÜ f{x~{tÜf{x~{tÜ f{x~{tÜ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi