M/S. Big Brokers House Stock Limited, Kanpur V. Assistant Commissioner of Income Tax,C.C-II, Kanpur

ITA 760/LKW/2017

• Counselvise Citation: [2022] 107 COUNSELVISE.COM (IT) 0683 (ITAT-LUCKNOW)
• Duration Of Justice: 4 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 03-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARISH GIDWANI
• Section: 148; 144; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “B”, LUCKNOW BEFORE SHRI A.D JAIN, VICE PRESIDENT AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER ITA No.760 & 761 /Lkw/2017 Assessment Year 2008-09 ACIT, Central Circle-II, Kanpur-208001 Vs. M/s Big Brokers House Stock Ltd., 7/125, C-2, Swaroop Nagar, Kanpur – 208002 PAN- AACCB 9811B (Respondent) (Appellant) Shri Rakesh Garg, Advocate Appellant by Shri Harish Gidwani, (DR) Respondent by 09/06/2022 Date of hearing 04/07/2022 Date of pronouncement O R D E R PER A.D. JAIN, V.P. : These appeals have been filed by the assessee against the separate orders of ld. CIT(A)-IV, Kanpur, dated 31.10.2017 and 30.06.2017, for Assessment Year 2008-09. 2. First, we take up the appeal in ITA No. 760/Lkw/2017. In this appeal, the assessee has taken the following Grounds: “01. Because the learned CIT(A) has failed to acknowledge that the assessment order passed under section 148/144 dated 31.03.2016 is without jurisdiction, bad in law and be quashed. 02. Because the CIT(A) stands incorrect in not commenting on the fact that there being no order under section 127 of the 2 Act for transferring the file from ITO-5(1), New Delhi to ACIT, CC-II. Kanpur, the order passed by the ACIT, CC- 11, Kanpur is without jurisdiction, bad in law and be quashed. 03. Because the CIT(A) chose to ignore the facts and circumstances of the case, that the notice issued under section 148 being without jurisdiction, bad in law the re- assessment framed thereafter is void-ab-initio and be quashed. 04. Because the CIT(A) did not consider the submission made by the assessee and wrongfully rejected the ground of appeal for jurisdiction u/s 127 as not pressed whereas on the contrary, the assessee had discussed the ground thoroughly. 05. Because there being no material top form reason to believe, that the income has escaped assessment, the notice issued under section 148 is devoid of substance, the re-assessment framed be quashed. 06. Because on a proper consideration of facts and circumstances of the case, there being no service of notice under section 148 upon the assessee, the re- assessment framed is contrary to the provisions of law and be quashed. 07. Because without prejudice to the above, the re- assessment framed has been framed in utter haste, without disposing of the objections filed to the notice under section 148 the re-assessment framed is bad in law and be quashed. 08. Because the CIT(A) failed to consider the fact that no adequate opportunity has been given by the AO, as would be apparent from the series of proceedings, the reassessment framed is contrary to the provisions of law and be quashed. 09. Because on a proper consideration of facts and circumstances of the case, the addition of Rs.51,60.000/- made by the AO and upheld by the CIT(A) is without any basis, substance, devoid of merit, unjustified and unwarranted be deleted. 10. Because the CIT(A) has failed to appreciate the facts and circumstances of the case and has arbitrarily upheld the addition of Rs.51,50,000/-, treating the same to be 3 unexplained deposit in bank, which deposit having been made in normal course of business, the addition made is bad in law and be deleted. 11. Because the CIT(A) was not appreciating the facts that the order passed u/s I43(3)/148 is bad in law as if the proceedings were taken as unattended then the order should have been passed u/s 144 of the Act, hence the order passed u/s 143(3)/148. 12. Because the CIT(A) has not appreciated the facts brought to his knowledge that the order was passed by the AO u/s 143(3)/148 without issuing the statutory notice u/s 143(2) of the Act, which is mandatory requirement as per the law. Hence, the order must quashed. 13. Because the CIT(A) has wrongly mentioned in his order that order was completed by the AO u/s 148/144 of the Act which is wrong fact as the order was made by the AO u/s 143(3)/148 of the Act, 1961. Hence, the order being bad in law must be quashed. 14. Because in any case and in all circumstances of the case, both the re-assessment as well as the addition made therein are void ab initio for want of jurisdiction, the reassessment be quashed. 15. Because the assessee should be permitted to take any other ground in the interest of justice.” 3. At the outset, the ld. Counsel for the assessee has contended that he does not wish to press Ground Nos. 1, 2 and 4. Ground Nos. 1, 2 and 4 are, therefore, rejected as not pressed. 4. The ld. Counsel for the assessee, arguing Ground No.7 first, has contended that since the reassessment has been framed without disposing of the objection filed by the assessee to the notice u/s. 148 of the Act, such reassessment order requires to be quashed. In this regard, our attention has been drawn to APB-2 pgs. 7 to 9, which is a copy of the objections raised by the assessee before the Assessing Officer against the proceedings u/s. 148 of the Act. 4 5. It has further been contended that though the issue of the aforesaid objection raised against the reopening was specifically raised by the assessee before the ld. CIT(A) by way of Ground No.6, the ld. CIT(A) has erred in not deciding the same. For ready reference, these objections are reproduced hereunder: 5 6 6. On the other hand, the ld. DR has contended that the aforesaid objections were raised before AO as part of the assessee’s reply dated 29.03.2016; that the assessment order finds mention of this letter dated 29.3.2016 as having been received in the Office of the AO; that as such, it cannot be contended that these objections are not considered by the Assessing Officer. 7 7. We have heard the parties on this issue. The related material filed has been perused. It is undisputed that the assessee has raised objections against the process of assessment, by way of its reply dated 29.3.2016. Since in this reply, other than the objections to the assessment, the assessee’s objection with regard to the jurisdiction of the AO concerned was first raised, it would be appropriate to reproduce hereunder, for clarity, the specific objection taken up by the assessee against reasons recorded for the opening of the assessment: “Again without prejudice to the above, on going through the reasons recorded, a copy of which has been provided along with the certified copy of the order sheet, it is submitted, that the reasons have been recorded on the dictum of the ADIT (Inv.), Kanpur and as such, are not valid reasons. The reason for belief of escapement of income is misconceived. The sole consideration for issue of notice under section 148 is (as per the reasons) that the assessee has made deposits of Rs.51,50,000/- in its bank account and the source of cash deposit has been treated to be unexplained for the reason that the return of income for A.Y. 2008-09 has not been filed by the assessee. It is submitted, that there is no column in the return of income wherein deposits made in the bank account have to be declared. Thus, mere deposits in bank account would not amount to escapement of income. Accordingly, the reasons recorded as such cannot be said to be giving rise to any escapement of income. It has been admitted by the Assessing Officer at Delhi, that complete details of the assessee company are available with the ROC on website. The Balance Sheet for the year ending 31.03.2008 has already been filed with ROC. The facts and figures, disclosed, and as such, it cannot be concluded that the assessee has not furnished necessary details to the authorities.” 8. In ‘GKN Driveshafts (India) Ltd. vs. ITO and Others’ 259 ITR 19 (SC), it has been specifically mandated by the Hon'ble Supreme Court that where in a case of reassessment/opening, the assessee has raised 8 objections against the process of reassessment/assessment, it is incumbent upon the AO to first dispose of such objections by a speaking order separately, before ensconsing upon the assessment per se. That is to say, in a case where specific objection has been raised by the assessee against the reopening/opening of the assessment, it is the bounden duty of the AO to first dispose of such objections by way of a separate speaking order. He is not to touch upon the merits of the assessment before doing so. In the present case, however, this has not been done. In fact, the specific objections raised by the assessee have not, as seen above, been discussed at all, much less disposed of by the Assessing Officer. Therefore, the issue raised by the assessee in this regard, by way of Ground No.8, is found to be justified and is accepted. Since the objections have not been disposed of by the assessee before dealing with the assessment, the assessment order has been rendered unsustainable on this lone score and it is liable to be quashed. Therefore, we order accordingly. 9. No other issue thus survives for adjudication, nor was anything else argued. ITA No. 761/Lkw/2017 (A.Y. 2008-09) 10. This appeal has been filed by the assessee against confirmation of levy of penalty of Rs.10,000/- u/s. 271(1)(b) of the Act. 11. At the very outset, ld. counsel for the assessee informed that the appeal in ITA No. 761/Lkw/2017 is barred by limitation by 89 days. In this respect, the ld. Counsel for the assessee has submitted an application dated 16.07.2021 for condonation of delay. In the condonation application, the assessee has stated that the delay in filing the appeal is on account of the fact that the order under appeal got 9 mixed up with other papers in the office of the company and inadvertently got placed in another folder. The ld. Counsel for the assessee requested that this lapse being purely unintentional and not deliberate, the delay in filing the appeal may be condoned. The ld. DR has no objection. 12. Having carefully perused the application for condonation of delay, we find that there was sufficient cause for the delay in filing of the appeal. Accordingly, we condone the delay and admit this appeal for hearing. 13. The issue of penalty, it is seen, is consequential upon the decision of the appeal on merits, which, as above, has been decided by us in favour of the assessee. 14. In view of the above, the penalty of Rs.10,000/-, levied on the assessee u/s. 271(1)(b) and confirmed by the ld. CIT(A), is cancelled. 15. In the result, both the appeals of the assessee are allowed. (Order pronounced in the open court on 04/07/2022) Sd/- Sd/- (T.S. Kapoor) (A.D. Jain) Accountant Member Vice President Aks – Dtd. 04/07/2022 Copy of order forwarded to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File Assistant Registrar