RNB LEASING AND FINANCIAL SERVICES,NEW DELHI V. DCIT CENTRAL CIRCLE-32, NEW DELHI

ITA 1089/DEL/2023

AI Insights

RNB Leasing and Financial Services appealed against the assessment order for the year 2016-17, which was passed following a search operation. The appellant challenged the validity of the search and the assessment order on several grounds, including the issuance of the search authorization to a non-existing entity and by an unauthorized person, and the improper reissuance of notices under section 153A. The Commissioner of Income-Tax (Appeals) upheld the assessment, leading to this appeal. The Tribunal will review the procedural and substantive legality of the actions taken by the Assessing Officer under the Income Tax Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 27107 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: VED JAIN; AMAN
• Keywords: Reassessment proceedings; Income from undisclosed sources
• Section: 143(3); 142(1); 143(2); 201; 153A; 68; 234B

Judgement Text

" ITA No.1089/Del/2023 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’, NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER ITA No.1089/Del/2023 Assessment Year: 2016-17 RNB Leasing and Financial Services, 1-Shivaji Enclave, Main Road near Raja Garden Opp Mother Dairy, Delhi PIN: 1100 09 PAN No. AAJFR5528H Vs. DCIT/ACIT, Central Noida, Noida (Gautam Budh Nagar), {PIN: 201 301 (APPELLANT) (RESPONDENT) Appellant by Shri Ved Jain, Adv. & Shri Aman Garg & Ms. Bulbul Singhal, CA Respondent by Ms. Suman Malik, CIT DR Date of hearing: 15/01/2025 Date of Pronouncement: /01/2025 ORDER PER MITHA LAL MEENA, ACCOUNTANT MEMBER: This appeal is directed by the assessee against the order dated 24.02.2023 passed by the Commissioner of Income-Tax ITA No.1089/Del/2023 2 (Appeal)-30, New Delhi [hereinafter referred to as “CIT(A)” and arises out of the assessment order dated 27.12.2019 passed under Sections 153A r.w.s. 143(3) of the Income Tax Act 1961 [hereinafter referred as ‘the Act’]. [hereinafter referred to as “A.O” pertaining to assessment year 2016-17. 2. The grounds of appeal taken by the assessee are as follows: 1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT (A)] is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the order passed by the learned AO under section 153A r.w.s 143(3) is illegal and bad in law as the same has been passed without having valid jurisdiction. 3. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the order passed by the AO under section 153A r.w.s. 143(3) is bad and liable to be quashed as the same has been framed consequent to the search which was initiated under the wrong pretext. 4. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the order passed by the learned AO under section 153A r.w.s 143(3) is bad and liable to be quashed as the same has been framed ITA No.1089/Del/2023 3 consequent to a search which itself was unlawful and invalid in the eyes of law. 5. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee the AO has erred in passing the order despite the fact that authorization for the search was issued on non-existing entity as well as by the person not authorized to issue such authorization. 6. (i) On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the learned AO has erred. in reissuing the notice under section 153A dated 05.09.2019 despite the fact that reassessment proceedings initiated by initial notice issued under section 153A dated. 03.07.2018 was already pending and not concluded by the AO. (ii) That the learned AO has erred in ignoring the settled position of law that the AO cannot issue the fresh notice unless and until the assessment proceedings earlier initiated by the AO was completed. 7. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the assessment order passed by the AO is illegal and liable to be quashed as the same has been passed violating the provisions of section 124 of the Income Tax Act. 8. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the proceedings initiated under section 153A against the appellant and the assessment framed under section 153A r.w.s. 143(3) are in ITA No.1089/Del/2023 4 violation of the statutory conditions of the Act and the procedure prescribed under the law and as such the same is bad in the eye of law and liable to be quashed. 9. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the learned AO has erred, in passing the order despite the fact that the notice issued under section 143(2) is barred by limitation as the same has been issued beyond the statutory time limit prescribed under the Act. 10. (i) On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that notice issued 142(1) of the Act is bad in law as the same was issued prior to the issue of notice under section 143(2) of the Act (ii) That the learned CIT(A) has erred, both on facts and in law, in confirming the action of the learned AO in drawing adverse inference against the appellant on the basis of above notice issued under section 142(1) of the Act which itself is invalid. 11. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the learned AO has erred in making the addition in order passed u/s 153A r.w.s 143(3) of the Act, without any incriminating material having been found during the course of search 12. (i) On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the proceedings initiated under section 153A against the appellant and the consequent reassessment framed under ITA No.1089/Del/2023 5 section 153A r.w.s 143(3) are in violation of mandatory provisions of Section 153D of the Act and as such the same is bad in eyes of law. (ii) That the CIT(A) has erred in ignoring the contention of the assessee that the purported approval u/s 153D of the Act is illegal, bad in law and also without any application of mind. 13. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in rejecting the contention of the assessee that the assessment order passed by the AO is invalid and bad in law as the same was passed in violation of the circular No. 19/2019 issued by CBDT which mandates that no order shall be passed without there being valid Document Identification Number (DIN) 14. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs. 60,00,000/- made by the AO holding the same as income from undisclosed sources invoking the provision of section 68 of the Income-tax Act. 15. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs. 30,000/- made by the AO on account commission. (ii) That the addition has been confirmed ignoring the fact that same has been made by applying an arbitrary rate of 0.50% on the above said addition. 16. On the facts and circumstances of the case, the learned CIT (A) has erred in making enhancement of Rs. 2,70,00,000/- on account of amount received from M/s ITA No.1089/Del/2023 6 PDS International holding the same as unexplained invoking the provision of section 68 of the Act 17. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in making the enhancement of Rs. 2,70,000/- made by the AO on account commission on the above amount of Rs. 2,70,00,000/- received from M/s PDS International. (ii) That the addition has been made by applying an arbitrary rate of 1% on the above addition without there being any justification for the same. 18. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in enhancing the income of the assessee without following due procedures as prescribed under the law. 19. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the addition has been made by misinterpreting the statements recorded during the course of search. 20. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the action of the learned AO by indulging in conjecture and surmises only on the basis of presumption and assumption. 21. On the facts and circumstances of the case, the learned CIT (A) has erred in facts and in law in confirming interest charged u/s 234B of the Act. 22. That the appellant craves leave to add, amend or alter any of the grounds of appeal. ITA No.1089/Del/2023 7 DICTATION PORTION - Order pronounced in the open court on .01.2025. (VIKAS AWASTHY) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER *Mohan Lal* Dated: .01.2025 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(Appeals) ` 5.DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA No.1089/Del/2023 8 Sl. No. Particulars Date 1. Date of dictation of Tribunal Order: 17.01.2025 2. Date on which the typed draft Tribunal order is placed before the Dictation Member: .01.2025 3. Date on which the typed draft Tribunal Order is placed before the other Member: . 01.2025 4. Date on which the approved draft Tribunal Order comes to the Sr. PS/PS: .01.2025 5. Date of which the fair order is placed before the Dictating Member for pronouncement: .01.2025 6. Date on which the signed order comes back to the Sr. PS/PS: .01.2025 7. Date on which the final Tribunal Order is uploaded by the Sr.PS/PS on official website: .01.2025 8. Date on which the file goes to the Bench Clerk along with Tribunal Order. .01.2025 9. Date of killing off the disposed of files on the judiSIS Portal of ITAT by the Bench Clerk: .12.2024 10. Date on which file goes to the Supervisor (Judicial): .01.2025 11. The date on which the file goes to the Asst. Registrar for endorsement of the order: .01.2025 12. Date of dispatch of the order .01.2025 "