Vijay Garg, New Delhi V. ITO, Ward-42(5), New Delhi

ITA 5423/DEL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2003 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 20-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: TARUN BATRA
• Keywords: Unexplained cash credit
• Section: 201; 2(A); 147; 69; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I-2+SMC, NEW DELHI BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER ITA NO. 5423/DEL/2018 : ASSTT. YEAR : 201 0-11 VIJAY GARG, 34/1, VIKAS APARTMENTS, EAST PUNJABI BAGH, NEW DELHI-110026 VS INCOME TAX OFFICER, WARD-42(5), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A A JPG5770Q ASSESSEE BY : SH. TARUN BATRA, CA REVENUE BY : SH. PRADEEP SINGH GAUTAM, SR. DR DATE OF HEARING: 27.02.2020 DATE OF PRONOUNCEMENT: 06.05.2020 ORDER PER DR. B.R.R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF LD. CIT (A)-14, NEW DELHI DATED 07.06. 2018. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE: 1. THE ASSESSING OFFICER HAS ERRED IN TAKING ACTIO N UNDER SECTION 147/148 OF THE ACT ON THE BASIS OF INFORMATION RECEIVED FROM ADIT(INV.)-1, FARIDABAD, ONLY AND THE LEARNED CIT(APPEALS) HAS ERRED IN CONFIRMING THE ACTION TAKEN BY THE ASSESSING OFFICE R, WHEREAS SHE HAS NOT FORMED ANY OF HER OPINION FOR REOPENING OF THE CASE WHICH IS AGAINST THE LAW & FACTS OF THE CASE & DESERVES TO BE QUASHED. 2. THE ASSESSING OFFICER HAS ERRED IN MAKING AN ADDITION OF RS.13,00,320/- TO THE DECLARED INCOME A S UNEXPLAINED CREDIT U/S 69 OF THE INCOME TAX ACT, 1961 AND LEARNED CIT(APPEALS) HAS ERRED IN CONFIRMING THE ACTION TAKEN BY THE ASSESSING OFFICE R, ITA NO. 5423/DEL/2018 VIJAY GARG 2 WHEREAS THE ACTION TAKEN IS NOT JUSTIFIED IN CONFIRMING THE ADDITION AND DESERVES TO BE DELETED. 3. THE LEARNED CIT(APPEALS) HAS FAILED TO APPRECIAT E THAT REASONS RECORDED MECHANICALLY WITHOUT APPLICATION OF MIND DO NOT FORM A VALID REASONS TO BELIEVE FOR ASSUMPTION OF JURISDICTION U/S 147 OF T HE ACT. 4. THE ASSESSING OFFICER HAS ERRED IN TAKING ACTION UNDER SECTION 147/148 OF THE ACT. 3. THE GERMANE FACTS REQUIRED FOR THE ADJUDICATION ARE AS UNDER: 4. THE AO HAVING OBTAINED INFORMATION FROM ADIT, UN IT-1, FARDIDABAD, THAT THE M/S SHRINATH FILLING STATION H AS RECEIVED A SUM OF RS.3,00,000/- FROM THE GLOBAL TRADE CORPORAT ION, THE APPROVAL OF THE PRINCIPAL COMMISSIONER HAS BEEN OBT AINED BY THE AO TO ISSUE NOTICE U/S 148 OF THE INCOME TAX AC T, 1961. 5. WE HAVE GONE THROUGH THE APPROVAL GIVEN BY THE L D. PCIT AT PAGE NO. 14 OF THE PAPER BOOK. THE APPROVAL HAS BEEN ACCORDED TO M/S SHRINATH FILLING STATION AT 116/8, GHEVRA, KHANJHAWALA ROAD, NEW DELHI-110081. THE PAN NUMBER IS ACNFS6053Q. THE STATUS OF THE ASSESSEE IS FIRM. T HE DATE OF APPROVAL BY THE LD. PCIT WAS 31.03.2017. THE REASON S MENTIONED STATES THAT PERUSAL OF ITD DATA BASE REV EALS THAT THE ASSESSEE HAS NOT FILED HIS ITR FOR THE ASSESSME NT YEAR 2010-11 AND AS SUCH AN AMOUNT OF RS.3,00,000/- RECE IVED HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF EXPLANATIO N 2(A) OF SECTION 147. ITA NO. 5423/DEL/2018 VIJAY GARG 3 6. HAVING OBTAINED APPROVAL, THE AO HAS ISSUED NOTI CE U/S 148 OF THE INCOME TAX ACT, 1961 ON 31.03.2017 IN TH E NAME OF M/S SHRINATH FILLING STATION, PAN-ACNFS6053Q. 7. HAVING ISSUED THE NOTICE, THE ASSESSMENT HAS BEE N COMPLETED IN THE NAME OF SH. VIJAY GARG PROPRIETOR OF M/S SHRINATH FILLING STATION, PAN-AAJPG5770Q-----WHY? 8. FROM THE RECORDS, WE FIND THAT THE PARTNERSHIP F IRM HAS COME TO EXISTENCE FROM 14.01.2014 IN WHICH SH. VIJA Y GARG ONE OF THE PARTNERS. FOR THE ASSESSMENT YEAR 2010-1 1, THE FIRM TO WHICH THE NOTICE U/S 148 ISSUED WAS NOT EVEN AN EXISTENCE. HAVING REALIZED THE MISTAKE, THE AO PROCEEDED TO CO MPLETE THE ASSESSMENT IN THE NAME OF SH. VIJAY GARG. WE FIND T HAT A CONFUSION HAS BEEN CREPT INTO MINDS OF THE REVENUE AUTHORITIES OWING TO THE SIMILAR NAME OF THE PROPRIETARY CONCER N AND THE FIRM. 9. FROM THE FACTS GATHERED ABOVE, IT CAN BE UNEQUIV OCALLY SAID THAT THERE HAS BEEN LACK OF APPLICATION OF MIN D BY THE ASSESSING OFFICER AS WELL AS THE PR. CIT IN ACCORDI NG THE APPROVAL FOR ISSUE OF NOTICE U/S 148 TO A NON-EXIST ING FIRM. THE REASON ACCORDED BY THE AO THAT HE HAS GONE THROUGH THE ITD DATA BASE AND NO RETURN HAS BEEN FILED CANNOT BE HE LD TO BE VALID AS TRUTHFUL REASON AS THE FIRM WAS NOT EVEN E XISTENCE DURING THE ASSESSMENT YEAR 2010-11. 10. HENCE, THE ASSESSMENT COMPLETED IN THE NAME OF SH. VIJAY GARG, WHILE THE REASONS HAVE BEEN RECORDED AN D THE NOTICE HAS BEEN ISSUED IN THE NAME OF FIRM CANNOT B E HELD TO BE LEGALLY VALID AS THE AO HAS NOT APPLIED HIS MIND AND NOT ITA NO. 5423/DEL/2018 VIJAY GARG 4 COME TO A CORRECT CONCLUSION THAT HE HAS REASONS TO BELIEVE THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSM ENT WHICH WAS THE JURISDICTIONAL REQUIREMENT FOR REOPENING OF THE ASSESSMENT U/S 148 OF THE ACT. UNLESS, THE BASIC JU RISDICTIONAL REQUIREMENT IS SATISFIED ANY EXERCISE OF ANALYZING THE MATERIAL PRODUCED SUBSEQUENT TO THE REOPENING WILL NOT RESCU E AN INHERENTLY DEFECTIVE REOPENING ORDER FROM INVALIDIT Y. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/05/2020. SD/- SD/- (SUCHITRA KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED: 06/05/2020 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR