ITO, WARD- 6(3), NEW DELHI V. CONCLUSIVE TRADERS PVT. LTD., NEW DELHI

ITA 7317/DEL/2017

AI Insights

The case involves an appeal by the Income Tax Officer (ITO) against Conclusive Traders Pvt. Ltd., concerning an addition of Rs. 2,85,00,000 as unexplained cash credit under section 68 of the Income Tax Act for the assessment year 2009-10. The ITO challenged the CIT(A)'s decision, which had allowed the assessee's appeal on procedural grounds, specifically the non-issuance of a notice under section 143(2) of the Act. The tribunal upheld the CIT(A)'s decision, emphasizing the procedural necessity of the notice and dismissing the Revenue's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312656 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Other Referred Cases: M/s Nova Promoters and Finlease Pvt. Ltd. vs. None, Blue Moon vs. None
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: HOLDING
• Keywords: Unexplained cash credit
• Section: 148; 142(1); 68; 234B

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘B’, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER, AND SHRI SUDHIR PAREEK, JUDICIAL MEMBER ITA NO. 7317/DEL/2017 A.YR. : 2009-10 ITO, WARD 6(3), ROOM NO. 376A, C.R. BUILDING, I.P. ESTATE, NEW DELHI (PAN: AADCC3358B) Vs. CONCLUSIVE TRADERS PVT. LTD. 51/2, D.B. GUPTA ROAD, KAROL BAGH, NEW DELHI – 5 (Appellant) (Respondent) Date of hearing : 29.04.2025 Date of pronouncement : 29.04.2025 ORDER PER SHAMIM YAHYA: AM This appeal filed by the Revenue is directed against the order dated 27.09.2017 passed by the Ld. CIT(A)-XXVI, New Delhi in relation to assessment year 2009-10 on the following grounds:- i) The Ld. CIT(A) has erred in deleting the addition made u/s 68 of the Act amounting to Rs. 2,85,00,000/- received by the assesee company as unexplained cash credit. ii) The Ld. CIT(A) has failed to prove the identity, genuineness and creditworthiness of the transactions as per judgement of Hon’ble Delhi High Court in case of M/s Nova Promoters and Finlease Pvt. Ltd. where it was held that mere filing of PAN No. Assessee by None Department by Shri Rajesh Kumar Dhanesta, Sr. DR 2 acknowledgement of ITRs, Bank Account Statements of the applications was not sufficient to discharge the onus. iii) The Ld. CIT(A) has erred in accepting the creditworthiness and genuineness of transactions merely on the basis that transaction were through banking channel or by account payee instruments but did not reflect their actual genuine business activities. iv) The Ld. CIT(A) did not notice that the share subscribers did not have its own profit making apparatus. It merely rotated money, which was coming through the bank accounts. The bank accounts did not reflect their creditworthiness of transaction. 2. In this case assessment order was passed u/s. 148 r.w.s. 147 of the Act on 19.03.2014 by making the addition of Rs. 2,85,00,000/- on account of cash paid for purchase of property and the AO assessed the income of the assessee at Rs. 2,85,00,000/- as against the returned income Rs. NIL. Upon assessee’s appeal, Ld. CIT(A) allowed the appeal of the assessee. Aggrieved with the ld. CIT(A)’s order, Revenue is in appeal before us. 3. None appeared on behalf of the assessee, despite issue of notice of hearing. Hence, we are proceeding exparte qua the assessee, after hearing the ld. DR. 4. We have heard the Ld. DR and perused the records. It is noticed that Ld. CIT(A) allowed the appeal of the assessee by observing that notice u/s. 143(2) of the Act was not issued, which is sine qua non to make assessment. It is further noted that in this regard, Ld. CIT(A) obtained the remand report from 3 the AO, wherein, the AO accepted that no notice u/s. 143(2) was available on record. We find that Ld. CIT(A) allowed the appeal of the assessee by holding as under:- “It is seen that the assessee had filed return of Income by resubmitting his original return to the AO. Keeping in view the factual matrix of this case along with various judicial pronouncements it is clear that service of notice u/s 142(1) upon the Assessee Company and regular attendance in the assessment proceedings is no substitute for issue and service of notice u/s 143(2) of the Act. Notice under section 143 (2) was not issued by the AO. I have sought information from the AO also if the requisite notices uls143 (2) were issued and also perused the record. It is seen from the record that no such notices were issued by the AO. In view of the foregoing, following conclusions are drawn: I. That notice w/s 143(2) of the Act was not issued, which is sine qua non to make assessment. The Addl CIT has commented thus- On perusal of the record, the notices w/s. 148 was duly served upon the assessee on the basis of which, the assessee had filed details during the assessment proceedings before the AO. Note sheet noting dated 20.12.2012 also states that notice us. 148 was issued by speed post. Further vide order sheet dated 31.12.2012, the A had noted that the notice u/s. 148 had been personally handed to Shri Kamlesh Kumar Gupta. (Copy of Note Sheets enclosed). The assessee had not responded to the notice u/s. 148 by filing a fresh return. Nor did it submit before the AO 4 that in response to the notice w/s. 148 of the I.T. Act, 1961, the original return already filed may be treated as the return of income in response to the notice us 148 of the Act. The question of the AO issuing a notices us 143(2) of the Act does not appear to arise. The assessee apparently did not file a fresh return, but instead submitted his original return to the AO as has been conceded by the AO above. The Addi CIT, apparently, has missed this point. The return filed by the assessee has been placed at pages 1 to 24 of the paper book of the assessee. This return was finally assessed at Rs 2,85,00,000/- on 19/03/2014 charging interest u/s 234B only. It is clear that the assessee has discharged onus u/s 147 read with 139(4). II. Hence service of the notice is an impossibility in the given circumstances. Section 292BB of the Act is of no avail in the circumstances in view of the facts of the case. III. The service of notice u/s. 142(1) upon the appellant and regular attendance in the assessment proceedings does not substitute ‘issue’ and ‘service’ of notice u/s. 143(2) of the Act. The citations including that of Hon’ble SC in case of Blue Moon have the binding force in the circumstances. The action of the AO is, therefore, not tenable.” 5. In the background of the aforesaid discussions, we find that Ld. CIT(A) has taken a correct view on the legal issue, hence, we do not find any infirmity in the order of the Ld. CIT(A) and uphold the same. Accordingly, we decide the 5 issues in dispute against the Revenue. Resultantly, the Grounds raised by the Revenue are rejected. 6. In the result, the appeal filed by the Revenue stand dismissed. Order pronounced on 29/04/2025 upon conclusion of hearing. Sd/- (SUDHIR PAREEK) Sd/- (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER “SRBHATNAGAR” Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi "