MADAN GOPAL,FARIDABAD V. INCOME TAX OFFICER-WARD 1(5), FARIDABAD

ITA 2510/DEL/2024

AI Insights

The case involves an appeal by the assessee, Madan Gopal, against the order of the Commissioner of Income-tax Appeals/National Faceless Appeal Centre (NFAC), Delhi, which sustained an increased assessment of income for the Assessment Year 2012-13. The primary contention was regarding the reassessment proceedings initiated based on unexplained cash deposits, which later led to additions on different grounds not originally specified in the notice under section 148 of the Income Tax Act. The ITAT, referencing decisions from the Hon'ble Bombay and Delhi High Courts, found that the reassessment was not conducted in accordance with the statutory provisions, leading to the acceptance of the additional grounds of appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312929 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Other Referred Cases: NTPC, Limited vs. CIT (1998) 229 ITR 383 (SC), CIT vs. Jet Airways (I) Ltd. (2010) 331 ITR 236 (Bom.), Ranbaxy Laboratories Ltd. vs. CIT (2011) 335 ITR 136 (Del.)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B.S. ANAND
• Assessee Lawyers: AMIT GOEL
• Keywords: Business income; Opportunity of being heard; Reassessment proceedings; Corroborative evidences; Unexplained cash credit
• Section: 147; 148

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘SMC’: NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA No.2510/DEL/2024 (Assessment Year: 2012-13) Madan Gopal, vs. ITO, Ward 1 (5), House No.308, Sector 9, Faridabad. Faridabad – 121 006 (Haryana). (PAN : AAUPG7569G) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Amit Goel, CA Shri Ankit Garg, Advocate REVENUE BY : Shri B.S. Anand, Sr. DR Date of Hearing : 06.03.2025 Date of Order : 30.04.2025 O R D E R 1. This appeal is filed by the assessee against the order of ld. Commissioner of Income-tax Appeals/National Faceless Appeal Centre (NFAC), Delhi (for short ‘ld. CIT (A)’) dated 11.01.2024 for Assessment Year 2012-13 raising following grounds of appeal :- “1. That under the facts and circumstances of the case, the impugned order dated 11.01.2024 passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as \"the Act\"), generated vide DIN: ITBAINF AC/S/250/2023- 24/1059629706(1), dismissing the grounds of appeal and sustaining the total income at Rs.28,81,766/- in place of returned income as returned by the assessee is bad in law on account of several grounds and assessee/appellant denies its liability to be assessed for any income other than the income already returned by the assessee and the consequential demand of Rs.13.91,270/-. 2. That under the facts and circumstances of the case the Ld. CIT(A) has erred in law as much as in fact while passing the impugned order as the Ld. 2 ITA No.2510/DEL/2024 CIT(A), has confirmed the addition made by the Ld. AO without appreciating the submissions made by the assessee during appeal proceedings. 3. That under the facts and circumstances of the case the Ld. CIT(A) has erred in law as much as in fact while passing the impugned order as the Ld. CIT(A) has failed to provide the assessee with an opportunity of being heard via video conferencing, even after specific request made by the assessee, before passing the impugned appeal order. 4. That under the facts and circumstances of the case the Ld. CIT(A) has erred in law as much as in fact while passing the impugned order, as the Ld. CIT(A) has upheld the addition made by the Ld. AO in the assessment order dt. 13.12.2019 passed without following the due provisions of law and without having proper jurisdiction. 5. That under the facts and circumstances of the case the Ld. CIT(A) has erred in law as much as in fact while passing the impugned order, as the Ld. CIT(A) has upheld the addition made by the Ld. AO without providing any corroborative evidences and copy of prior approval to the assessee, while passing the assessment order. 6. That under the facts and circumstances of the case the Ld. CIT(A) has erred in law as much as in fact while passing the impugned order, as the Ld. CIT(A) has upheld the addition made by the Ld. AO on the issues which were never raised at the time of assessment proceedings and the assessee was never given any chance to furnish any explanation in regards to the subject issues. 7. That under the facts and circumstances of the case the Ld. CIT(A) has erred in law as much as in fact while passing the impugned order, as the Ld. CIT(A) has upheld the addition made by the Ld. AO without providing any corroborative evidence and without even giving the assessee an opportunity of explanation and being heard on the basis of the addition made by the Ld. AO. 2. Subsequently assessee has filed additional grounds of appeal as under :- “1. On the facts of the case and in law, the notice u/s 148 issued in this case is bad-in-law, without jurisdiction and barred by limitation and, therefore, the said notice and assessment order passed is liable to be quashed. 2. On the facts of the case and in law, the reassessment proceedings initiated are contrary to provisions of section 147 to section 151 of the Act and therefore, the assessment order passed is liable to be quashed. 3. On the facts and circumstances of the case and in law, the addition of Rs.23,46.256/- made by the assessing officer is beyond the scope of provisions of section 147/148 of the Act and CIT(A) erred in not holding so.” 3 ITA No.2510/DEL/2024 3. Considered the rival submissions and material placed on record by both the parties. We observed that the issues raised by the assessee in additional grounds go to the root of the matter challenging the jurisdictional issue. In the light of Hon’ble Supreme Court in the case of NTPC, Limited vs. CIT (1998) 229 ITR 383 (SC), we are inclined to admit the additional grounds and take up the same for adjudication herein below. 4. At the time of hearing, ld. AR has submitted that the issues relating to additional grounds of appeal only are pressed. He brought to our notice page 21 of the paper book wherein show-cause notice issued by the Assessing Officer are placed on record and as per which the same was issued on the basis of cash deposits made by the assessee of Rs.15,56,000/- in the Canara Bank and why the same should not be treated as unexplained cash credits for the current assessment year. In response, assessee has submitted letter dated 04.12.2019 and explained the sources of cash deposits made by the assessee which is placed at pages 23 to 25 of the paper book. Further he brought to our notice the assessment order wherein Assessing Officer has observed the other issues that assessee has large credit and debit entries in his books of account which shows that assessee was doing business regularly and profit from the same was not disclosed. Accordingly, he estimated 8% of the total 4 ITA No.2510/DEL/2024 business receipts and proceeded to treat the same as additional income of the assessee. He submitted that the reassessment proceedings were initiated on the basis of cash deposits. However, Assessing Officer proceeded to rake-up other issues and not made addition relating to the issue on which the show-cause notice was issued. He submitted that the decision of Hon’ble Bombay High Court in the case of CIT vs. Jet Airways (I) Ltd. (2010) 331 ITR 236 (Bom.) squarely applicable in this case. 5. On the other hand, ld. DR of the Revenue relied on the orders of the lower authorities. 6. Considered the rival submissions and material placed on record. I observed that the Assessing Officer has initiated the proceedings of reassessment on the basis of cash deposits made by the assessee during the year. I observed that assessee has submitted the relevant information and explained the source of cash deposits made by the assessee during the year. I further observed that Assessing Officer has accepted the same and proceeded to observe that assessee has large credit and debit entries in his books of account and proceeded to estimate the income of the assessee considering only the credit entries recorded in the books of account. As per the facts available on record, it is clear that Assessing Officer has initiated the proceedings for the reason of cash deposits, however he 5 ITA No.2510/DEL/2024 proceeded to complete the assessment on some other issues for which no reasons were recorded and notice u/s 148 was not issued. Therefore, the facts of the case clearly apply the decision of Hon’ble Bombay High Court in the case of CIT vs. Jet Airways (I) Ltd. (2010) 331 ITR 236 (Bom.) and Hon’ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. vs. CIT (2011) 335 ITR 136 (Del.). Since the decision of Ranbaxy Laboratories Ltd. (supra) is squarely covered in the present case, I am inclined to allow the additional grounds raised by the assessee. 7. Since we have decided the issue on legal ground, the other grounds are not adjudicated. 8. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the open court on this 30TH day of April, 2025. SD/- (S. RIFAUR RAHMAN) ACCOUNTANT MEMBER Dated: 30.04.2025 TS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals). 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "