Manmohan Singh Sehgal, Delhi V. Pr, CIT Delhi -10, New Delhi

ITA 791/DEL/2021

AI Insights

The case revolves around the reassessment and subsequent revisionary proceedings concerning the income tax assessments of Manmohan Singh Sehgal for the assessment year 2011-12. Initially, the Income Tax Officer (ITO) completed the assessment under Section 143(3) in 2014, which was later challenged and resulted in a reassessment order in 2018. The Principal Commissioner of Income Tax (PCIT) invoked Section 263 in 2021, leading to further additions and disallowances. The assessee contested these proceedings, arguing lack of jurisdiction and that the reassessment was not erroneous nor prejudicial to the interests of the revenue. The Tribunal's decision highlighted the repeated scrutiny of the same issues and concluded that the PCIT's revisionary proceedings were not legally tenable.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 116360 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 19-07-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 23-06-2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBHRA J. CHAKRABORTY
• Keywords: Bogus purchase; Business income; Revision of order; Deemed dividend
• Section: 147; 68; 69; 263; 69C; 143(3); 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’, NEW DELHI Before Sh. C. M. Garg, Judicial Member Dr. B. R. R. Kumar, Accountant Member ITA No. 791/Del/2021 : Asstt. Year : 2011-12 Manmohan Singh Sehgal, C/o Ajay Arun Mehta & Associates, Chartered Accountants, Shop No. 25, DDA Market, B Block, Preet Vihar, Delhi-110092 Vs PCIT, Delhi-10, (APPELLANT) (RESPONDENT) PAN No. ABAPS6153M Assessee by : Sh. C. S. Anand, Adv. Revenue by : Sh. Subhra J. Chakraborty, CIT-DR Date of Hearing: 20.07.2023 Date of Pronouncement: 14.09.2023 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by the assessee against the order of ld. PCIT, Delhi-10 dated 15.03.2021. 2. Following grounds have been raised by the assessee: “1. That since the re-assessment order dt.11.07.2018 passed u/s 147/143(3) by the learned ITO Ward 48(4) Delhi (which is sought to be revised by the learned PCIT Delhi 10) was patently without jurisdiction, the impugned revisionary proceedings were also without jurisdiction and illegal. 2. That the impugned revisionary proceedings ini tiated and conducted by the learned PCIT Delhi 10 w.r.t. the assessment order dt.11.07.2018 passed by the learned ITO Ward 48(4) Delhi working under the learned PCIT Delhi-16' Charge, are without jurisdiction and illegal. ITA No. 791/Del/2021 Manmohan Singh Sehgal 2 3. That the impugned order passed u/s 263 on 15.03.2021 is liable to be annulled /quashed because the learned P CIT Delhi-10 had not taken into consideration the submissions whi ch were made by the assessee in the form of a letter (containing 24 points) which were e-mailed on 15.03.2021 4. That the i mpugned order passed u/s 263 is liable to be annulled because the re-assessment order dt. 11.07.2018 u/s 147/143(3) was not erroneous in so far as it is prejudicial to the interest of Revenue. 5. That the i mpugned order passed u/s 263 is liable to be annulled/quashed because the learned PCIT Delhi- 10 had himself not cond ucted any enq uiry /investigation, in order to verify as to whether the import purchases were bogus. 6. That the i mpugned order passed u/s 263 is liable to be annulled because the learned PCIT Delhi-10 had failed to disprove that the assessee had not made import purchases. 7. That the learned PCIT Delhi-10 had failed to appreciate that since all the import purchases of Rs.1,27,13,757/- were fully accounted for and recorded in the books of account, the provision of section 69C were not at all attracted in the case of the assessee. 8. That the learned PCIT Delhi-10 had failed to appreciate that since the material representing import purchases of Rs.1,27,13,757/- were already sold (duly credited to the Trading and P & L A/c for FY 2010-11 & FY 2011-12), no addition on account of so called bogus purchases could had been made. 9. That the learned PCIT Delhi-10 had failed to appreciate that during the first round of assessment proceedings (which travelled upto ITAT), the sources of the funds were thoroughly examined.” ITA No. 791/Del/2021 Manmohan Singh Sehgal 3 3. The pertinent facts of the appeal are as under:  Assessment u/s 143(3) has been completed on 28.03.2014 making certain additions/disallowances.  Aggrieved, the assessee filed appeal before the ld. CIT(A) who after getting the remand report from the Assessing Officer deleted the additions.  The revenue filed appeal before the ITAT against the order of the ld. CIT(A) which has been adjudicated vide order dated 28.11.2019.  Meanwhile, the case has been reopened u/s 147 and Assessment Order u/s 143(3) r.w.s. 147 has been passed on 11.07.2018, after duly considering the order of the ld. CIT(A) in the case of the assessee and accepted the returned income.  The said Assessment Order passed u/s 143(3) r.w.s. 147 dated 11.07.2018 was the subject matter of provisions of Section 263 invoked by the ld. PCIT who set aside the Assessment Order dated 28.03.2014.  Consequent to the order u/s 263 of the ld. PCIT, the Assessing Officer passed order u/s 143(3) r.w.s. 263 r.w.s. 144B on 30.03.2022 making the same additions/disallowances made in the Assessment Order dated 28.03.2014. ITA No. 791/Del/2021 Manmohan Singh Sehgal 4 4. For the sake of ready reference, the addition made in both the Assessment Orders is tabulated as under: Addition/disallowanc e made by AO vide Reassessment Order dt. 30.03.2022 passed u/s 143(3) r.w.s. 263 r.w.s. 144B Addition/disallowance made by AO vide Assessment Order dt. 28.03.2014 passed u/s 143(3) Addition made u/s 69 by doubting the sale of old gold ornaments 79,10,335 79,10,385 Addition made towards Business Income 5,90,376 5,90,376 Disallowance of Business Expenses 10,00,000 10,00,000 Addition made u/s 40(a)(ia) 2,81,514 2,81,514 Addition made u/s 68 on account of Sundry Creditors 42,80,624 42,80,624 Addition made u/s 68 on account of accretion in Capital 1,15,43,077 1,15,43,077 Addition made u/s 2(22)(e)- Deemed Dividend 10,00,000 10,00,000 5. Thus, we find that the assessee was a subject matter of,  Assessment u/s 143(3) dated 28.03.2014.  Assessment u/s 143(3) r.w.s. 147 dated 11.07.2018.  Revision u/s 263 dated 15.03.2021.  Assessment u/s 143(3) r.w.s. 263 dated 30.03.2022. 6. Hence, it can be said that the assessee has been scrupulously scrutinized by various provisions of the Income Tax Act by examining the same issue multiple times. 7. It is also an undisputed fact on record that all the additions made by the AO vide Assessment Order dated 28.03.2014 were subject matter of appeal before the Tribunal which are the same additions made by the AO vide order dated 30.03.2022 r.w.s. 263 of the Income Tax Act, 1961 and the ITA No. 791/Del/2021 Manmohan Singh Sehgal 5 issues in the Assessment Order dated 28.03.2014 stands adjudicated in ITA No. 3956/Del/2015 vide order dated 28.11.2019. Hence, the order passed by the ld. PCIT u/s 263 of the Income Tax Act, 1961 becomes damp squib and hence the appeal of the assessee is liable to be allowed. 8. In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 14/09/2023. Sd/- Sd/- (C. M. Garg) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 14/09/2023 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR