JAIBRO INDUSTRIES,DELHI V. ACIT, DELHI

ITA 100/DEL/2025

AI Insights

The case involves Jaibro Industries appealing against the order of the Commissioner of Income-tax (Appeals), which upheld the assessment order made by the Assessing Officer (AO) under sections 143(3) and 147 of the Income Tax Act, 1961. The AO had added Rs. 9,41,000 to the assessee's income, considering it a bogus payment made to a paper/shell entity. The Tribunal found that the assessee failed to comply with the statutory notice under section 148 and did not file the return of income in a timely manner, which justified the AO's actions. The Tribunal also dismissed the appellant's arguments regarding the non-issuance of notice under section 143(2) and the validity of the proceedings under section 147 read with section 148.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 822674 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 05-01-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR ARORA
• Keywords: Difference of opinion; Change of opinion; TDS; Accommodation entries; Competent authority; Validity of assessment; Bogus
• Section: 147; 148; 144; 143(3); 142(1); 132; 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : A : NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No.100/Del/2025 Assessment Year : 2012-13 Jaibro Industries, T-306, Vikas Chamber, D-Block, Central Market, Prashant Vihar, New Delhi – 110 034. PAN: AAGFJ4977R Vs. ACIT, Circle 36(1), New Delhi. (Appellant) (Respondent) Assessee by : None Revenue by : Shri Ajay Kumar Arora, Sr. DR Date of Hearing : 09.12.2025 Date of Pronouncement : 23.12.2025 ORDER PER VIMAL KUMAR, JM: The appeal filed by the assessee is against the order dated 07.11.2024 of the ld. Commissioner of Income-tax (Appeals), Delhi-31 [hereinafter referred to as the Ld. CIT(A)] u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of the assessment order dated 30.12.2019 of the ld. Printed from counselvise.com ITA No.100/Del/2025 2 AO/ACIT of Income-tax Circle-36(1), New Delhi (hereinafter referred to as ‘the ld. AO’) u/s 143(3)/147 of the Act for Assessment Year 2012-13. 2. The brief facts of the case are that the information was received from DDIT (Inv.), Unit-III, Gurugram that a search action u/s 132 of the Act was carried on M/s Skylark Group of cases on 25.04.2017. It was found that non- genuine/bogus banking transactions and entries in the name of share capital and share premium, etc. by South Asia Impex Pvt. Ltd., Krac Securities, GT Comex Pvt. Ltd., Pooja Equity Advisor Pvt. Ltd., earlier known as Pooja Warehousing Pvt. Ltd., Secure Automation India Pvt. Ltd. and others to various entities. Statement of Shri Anirudh Joshi was recorded u/s 131(1A) of the Act wherein he admitted to the fact of having provided accommodation entries to the Skylark group companies through concerns controlled and operated by him. On physical verification as well as from ITD database, it was gathered that no scrutiny assessment u/s 143(3) of the Act was completed in the case. Notice u/s 148 of the Act was served on 27.03.2019 after recording reasons in accordance with section 147 of the Act and obtaining approval from the competent authority. In response to notice u/s 148 of the Act, the assessee e-filed return of income on 17.12.2019 declaring income of Rs.40,74,260/-. Notice u/s 142(1) of the Act along with a questionnaire was issued on 13.12.2019. Copy of reasons was supplied to the assessee vide letter dated 17.12.2019. The assessee filed reply dated 18.12.2019. The assessee e-filed the reply. On completion of the Printed from counselvise.com ITA No.100/Del/2025 3 proceedings, the ld. AO, vide order dated 30.12.2019, made addition of Rs.9,41,000/-. 3. Against the order dated 30.12.2019 of the ld. AO, the appellant-assessee preferred an appeal before the ld. CIT(A) which was dismissed vide order dated 07.11.2024. 4. Being aggrieved, the appellant-assessee filed the present appeal with the following grounds:- “1. On facts and circumstances of the case, the learned CIT (Appeals) has erred in law in upholding the validity of assessment order, ignoring the fact that, the learned AO has erred in law in completing the assessment u/s 143(3) read with section 147 without issuing statutory notice u/s 143(2) of the Act. Hence, assessment made without issuance of notice u/s 143(2) is void ab- initio and is invalid. 2. On facts and circumstances of the case, the learned CIT (Appeals) has erred in law in upholding the validity of proceedings u/s 147 read with section 148 of the Act, ignoring the fact that the reasons recorded for issue of notice under section 148 of the Act are without making any allegation that the appellant has failed to disclose fully and truly all material facts necessary for the assessment as per proviso to section 147 of the Act. 3. On the facts and circumstances of the case, the learned CIT (Appeals) has erred in law in upholding the validity of the order passed by the Ld. AO u/s 147 of the Act is bad and liable to be quashed as the same is based on the reasons which are vague, without bringing any fresh material or evidence, and done on the basis of change of opinion, which amounts to review of order, not permissible under the law. 4. On facts and circumstances of the case, the learned CIT (Appeals) has erred in law in upholding the addition of Rs. 9,41,000/- made u/s 68 of the Act on account of commission paid. 5. On facts and circumstances of the case, the learned CIT (Appeals) has erred in law in upholding the addition of Rs. 9,41,000/- ignoring the fact that no such expenditure has been claimed in the AY 2012-23. Printed from counselvise.com ITA No.100/Del/2025 4 6. On facts and circumstances of the case, the learned CIT (Appeals) and the id. AO, both have failed to appreciate the scope of section 68 which is not applicable to the case of the assessee. 7. On facts and circumstances of the case, the learned assessing officer has grossly erred in law in excessively charging Tax @ 60% in place of correct tax @ 30% in computation form of The Income Tax Act, 1961 8. That the appellant craves leave to add, alter or delete the above grounds of appeal at the time of hearing.” 5. At the time of hearing none appeared for the assessee on 17.07.2025 and today. 6. The ld. DR for the Revenue relied on the order of the ld.CIT(A). 7. From perusal of the record, in the light of the above submissions, it is crystal clear that the ld.CIT(A) in para No.8 has held as under:- “Findings, Analysis and Decision 8.1 I have carefully considered the facts and circumstances of the case, assessment order passed by the AO, submissions made by the Appellant, remand report submitted by the AO and rejoinder thereto filed by the Appellant. 8.2 It is the contention of the Appellant that the amount of Rs 9,41,000/- was payable (including service tax and after deducting TDS) in FY 2010-11 to a commission agent of the Appellant namely M/s Sharma Engineers & Consultants on account of commission payable for the sale of Lighter. This amount was paid by the Appellant on 04/08/2011 through HDFC Account No. 2728020000270. It has also been argued that the Appellant’s case for AY 2011- 12 was selected for scrutiny and completed u/s 143(3) of the Act wherein the said sum of Rs 9,41,000/- has been duly assessed to tax. 8.3 The AO in his assessment order, from para 6 to 8, has clearly brought out that the said payments were made a paper/shell entity namely M/s Sharma Engineers & Consultants. The AO has noted as under: - Printed from counselvise.com ITA No.100/Del/2025 5 “7. The reply/submission of the assessee is considered carefully in the light of the fact that M/s Sharma Engineers & Consultants is a paper/shell entity which is directly or indirectly controlled and managed by entry operator group who have already accepted that in these entities/firms/companies, no actual business is carried out but only accommodation and shape of entries are given to the beneficiaries. In the instant case although the expenditure belongs AY 2011-12 but the payment thereof (which is only entry) as being carried out by the recipient of payment (i.e. being only entry operator) then it is established beyond any doubt that the payment is only bogus payment which has actually not been entered by recipient. It is correct to say that expenditure thereof has been entered into FY 2010-11, but Department is in possession of additional facts and evidence regarding paper/shell entity nature of recipient. 8. In the light of the above facts and circumstantial evidence, it is the own any doubt that when alleged receiver of payment is denying actual receipt of payment against any service rendered in past then the contention of the assessee that it has entered into actual business transaction does not stand on its legs. Hence the contention of assessee firm is not acceptable and it is established beyond any doubt that the assessee firm has utilised tool of booking bogus expenditure so as to create unaccounted wealth by making payment using banking channel and converting same into unaccounted money, thereby evading legitimate taxes thereupon without being entered into any actual business transaction. In the light of the above facts a sum of Rs 9,41,000/-is hereby added to the returned income of the assessee u/s 68 of the Act.\" 8.4 In view of the foregoing facts and circumstances of the case, I am of the considered view that the AO is justified in bringing to tax amount of Rs 9,41,000/- in the assessment year under appeal which has been paid out to a paper/shell entity. Since the recipient of money has denied to have received any such money, there s no justification on the part of the Appellant to claim such bogus payments as expenditure for his business. Therefore. I find that the action of the AO in bringing to tax the said amount u/s 68 of the Act in the assessment year under appeal is justified and the same is upheld. Hence, the addition of an amount of Rs 9,41,000/- made by the AO is hereby confirmed. Thus, the grounds relating to the said addition are hereby dismissed. 8.5 Coming to the question of non-issuance of notice under section 143(3) of the Act, it is seen that the notice u/s 148 of the Act was issued and served on the Appellant on 27/03/2019 requiring the Appellant to file its return of income within 30 days. The Appellant failed to file the return within the time given in the said notice. It is further seen that the Appellant had filed its return of its income on 17/12/2019 much beyond the time given in the said notice. It is also seen that the assessment order was passed on Printed from counselvise.com ITA No.100/Del/2025 6 30/12/2019. Therefore, it is clear that the AO was at the fag end of completion of assessment when the Appellant chose to file its return of income. The Appellant, have been clearly failed to discharge its obligation under the law of filing a return of income in compliance to the said statutory notice, cannot take the shelter under the technicalities of issue of notice under section 143 (3) of the Act and find fault on the actions of the AO while on purpose the Appellant has not allowed him time to issue notice under section 143 (3) of the Act. 8.6 It is further seen from the record that the notice under section142 (1) of the Act was issued to the Appellant on 13/12/2019 prior to the date on which the Appellant filed its return of income. Section 142 of the Act provides for inquiry before assessment. This fact makes it clear that the AO was going ahead with the assessment in case of the Appellant without waiting for the Appellant to file its return of income. Had the Appellant not filed its return of income, the AO still would have made an assessment albeit under section 144 of the Act. It is trite that a person having done wrong cannot take advantage of his own wrong and plead bar of any law to frustrate the lawful trial by a competent Court. In such a case the legal maxim Nullus Commodum Capere Potest De Injuria Sua Propria applies which means that the persons violating the law cannot be permitted to urge that their offence cannot be subjected to inquiry, trial or investigation. Nor can a person claim any right arising out of his own wrong doing as the dictum Juri Ex Injuria Non Oritur implies. Therefore, in my view the Appellant having failed to discharge its onus of filing return of income in compliance to notice u/s 148 of the Act and having been filed its return at the time of its choice leaving very little time for the AO to complete the assessment, cannot be allowed to take advantage of its own scheme to defeat the law. Hence, the Appellant is not at sound legal footing to agitate the issue of notice u/s 143(3) of the Act. 8.7 In view of the foregoing, I am of the considered view that the Appellant, having not complied with the terms of notice u/s 148 of the Act and having filed its return of income a: his own sweet will at the fag end of completion of assessment, is not entitled to agitate the issue of notice u/s 143(3) of the Act. Therefore, the additional ground raised by the Appellant in this regard are liable to be dismissed. I hold accordingly. Hence, the validity of assessment under section 147 of the Act is upheld and the grounds relating thereto are hereby dismissed.” Printed from counselvise.com ITA No.100/Del/2025 7 8. From the above discussion and findings, it is apparent on record that there was no justification for the assessee to claim bogus payments of expenditure for its business. The assessee failed to discharge the obligation under law by not filing the return of income in compliance of the statutory notice u/s 148 of the Act. Since the assessee did not file the return of income, the ld. AO was justified in passing the assessment order. Therefore, the grounds of appeal being devoid of merits are rejected. 9. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 23.12.2025. Sd/- Sd/- (M. BALAGANESH) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 23rd December, 2025. dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi Printed from counselvise.com "