JSR Financial Services Private Limited, Faridabad V. ACIT, Circle-1, Faridabad

ITA 490/DEL/2022

AI Insights

The case involves JSR Financial Services Private Limited appealing against the order of the Commissioner of Income Tax (Appeals), Faridabad, which upheld the AO's decision treating a sum of Rs.1,05,00,000 as unexplained cash credit under section 68 of the Income-tax Act, 1961. The AO had reopened the assessment for AY 2012-13 based on information from the Investigation Wing, Delhi, linking the assessee to a network of companies involved in providing accommodation entries. The assessee contended that it was not given a proper opportunity to be heard at both the AO and CIT(A) levels, and challenged the validity of the reopening under section 147 of the Act. The Tribunal, considering the circumstances presented, including threats to the directors and their inability to respond to notices, decided to remand the case back to the AO for a fresh assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 115761 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 14-05-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 20-03-2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Accommodation entries; Reassessment proceedings
• Section: 147; 68; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : C : DELHI BEFORE SHRI C.M. GARG, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No.490/Del/2022 Assessment Year: 2012-13 JSR Financial Services Private Limited, House No.2221, Housing Board Colony, Near Tagore Public School, Ballabgarh, Sector-3, Faridabad, Haryana – 121 001. PAN: AACCJ6188M Vs ACIT, Circle-1, Faridabad. (Appellant) (Respondent) Assessee by : Ms Mansi Jain, Advocate Revenue by : Shri Anuj Garg, Sr. DR Date of Hearing : 15.05.2023 Date of Pronouncement : 19.05.2023 ORDER PER M. BALAGANESH, AM: This appeal in ITA No.490/Del/2022 for AY 2012-13 arises out of the order of the Commissioner of Income Tax (Appeals), Faridabad, [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No.10614/2018-19 dated 20.03.2020 ITA No.490/Del/2022 2 against the order of assessment passed u/s 147/144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 20.12.2018 by the Assessing Officer, Circle-I, Faridabad, (hereinafter referred to as ‘ld. AO’). 2. The main crux of the grounds raised by the assessee could be summarized as under:- i) Proper opportunity of being heard not given to the assessee both by the AO as well as by the CIT(A); ii) Challenging the validity of reopening u/s 147 of the Act; and iii) Challenging the addition made in the sum of Rs.1,05,00,000/- u/s 68 of the Act in respect of share capital received. 3. We have heard the rival submissions and perused the material available on record. The return of income for the assessment year 2012-13 was filed by the assessee company on 29.09.2012 declaring total income at Rs.1,63,910/-. An information was received by the ld. AO vide e-mail dated 08.11.2017 from the Investigation Wing, Delhi, containing the names of certain beneficiary companies receiving cheques as share capital investment through conduit companies controlled and managed by Shri Himanshu Verma during the FY 2011-12. This information came to light during the search conducted in the hands of Shri Himanshu Verma u/s 132 of the Act. During the course of that search, the statements of Shri Himanshu Verma together with various other persons were recorded u/s 132(4) of the Act wherein it got revealed that Shri Himanshu Verma through his entities had been providing accommodation entries in the form of share capital to various companies. The e-mail received on 08.11.2017 contained the name of the assessee company also as one of the beneficiary companies. Accordingly, the assessment for the AY 2012-13 was sought to be reopened by the ld. AO u/s 147 of the Act. Notice u/s 148 of the Act was issued on ITA No.490/Del/2022 3 29.03.2018. In response thereto, no return had been filed by the assessee. The ld. AO, during the course of reassessment proceedings, sought to examine the veracity of the share capital received by it from the following persons:- Name Amount (Rs.) i. Delbella Township Pvt. Ltd. 25,00,000/- ii. Mithilanchal Investment & Finance Pvt. Ltd. 25,00,000/- iii. Shulini Realty Pvt. Ltd. 30,00,000/- iv. Vertable Township Pvt. Ltd. 25,00,000/- Total 1,05,00,000/- 4. As no details were furnished by the assessee before the ld. AO to prove the three ingredients of section 68 of the Act in respect of share capital received in the sum of Rs.1,05,00,000/-, the ld. AO proceeded to treat the same as unexplained cash credit u/s 68 of the Act. Even before the ld.CIT(A), none appeared before the ld.CIT(A) and the ld.CIT(A) upheld the action of the ld. AO. 5. Before us, the ld. AR made a statement from the bar that the address of the registered office of the company and the address of the directors were one and the same and that the directors had life threat and had to accordingly leave the said residence. Because of this, none of the notices issued by the lower authorities could be responded to by the assessee. The assessee had stopped broking activity from November, 2015. Moreover, the directors were also jailed in the year 2019. Because of these reasons beyond the control of the assessee, the notices could not be responded to. Accordingly he prayed for setting aside the entire issue to the ld. AO requesting for one more opportunity. ITA No.490/Del/2022 4 6. Considering the totality of the facts and circumstances of the case, we deem it fit and appropriate, in the interest of justice and fair play, to restore this appeal to the file of the ld. AO for denovo adjudication in accordance with the law. The assessee is at liberty to furnish various evidences in support of its contentions. Accordingly, the grounds raised by the assessee are allowed for statistical purposes. 7. In the result, the appeal of the assessee is allowed for statistical purposes only. Order pronounced in the open court on 19.05.2023 Sd/- Sd/- (C.M. GARG) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 19 th May, 2023. dk .... Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi