VASP ENTERPRISES PVT. LTD.,NEW DELHI V. DCIT, NEW DELHI

ITA 3018/DEL/2017

AI Insights

The case involves VASP Enterprises Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) concerning the reopening of their assessment for the year 2006-07 under sections 144/147 of the Income Tax Act, 1961. The primary contention was the applicability of section 148 for reopening the assessment, which the assessee argued was incorrect and should have been under section 153C, given that the reopening was based on materials found during a search operation. Additionally, the assessee contested the additions made to their income regarding share capital and alleged commission on share capital. The Tribunal dismissed the appeal, referencing a precedent set by the Delhi High Court in PCIT Vs. Naveen Kumar Gupta, which supported the use of section 148 in such circumstances.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473539 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Other Referred Cases: PCIT Vs. Naveen Kumar Gupta (2024) 161 taxamnn.com 574 (Del)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANJAY KUMAR
• Keywords: Borrowed satisfaction
• Section: 148; 153C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘SMC’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER ITA No.3018/Del/2017 Assessment Year: 2006-07 VASP Enterprises Pvt. Ltd., C/o- Ravi Gupta, Adv., E-6A, Kailash Colony, New Delhi Vs. DCIT, Circle-17(1), New Delhi PAN :AACCV0567A (Appellant) (Respondent) ORDER This assessee’s appeal for assessment year 2006-07, arises against the Commissioner of Income Tax (Appeals) [in short, the “CIT(A)”], New Delhi’s order dated 15.02.2017 passed in case no. 182/14-15, involving proceedings under section 144/147 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). This assessee’s appeal raises the following substantive grounds: 1. That on facts and circumstances of the case, the order passed by the Ld. CIT (Appeal) is bad both in the eyes of law and on facts. 2. That the Ld. CIT (Appeal) has erred on facts and in law in confirming the invoking of the provisions of section 148 of the Income Tax Act, 1961 when the same are not at all applicable in the circumstances in as much as the case has been reopened solely on the basis of material Assessee by None Department by Sh. Sanjay Kumar, Sr. DR Date of hearing 03.04.2025 Date of pronouncement 03.04.2025 ITA No.3018/Del/2017 2 | P a g e found during search operation and in such cases the provisions of section 153C of the Income Tax Act, 1961 ought to have been invoked instead of 147. Without prejudice to the above ground 3.1 That the Ld. CIT (Appeal) has erred on facts and in law in confirming the invoking of provisions of section 148 of the Income Tax Act, 1961 when the same are not at all applicable in the circumstances of the case. 3.2 That the Ld. CIT (Appeal) has erred on facts and in law in confirming the invoking of provisions of section 148 of the Income Tax Act, 1961 on reasons which are based upon vague and non specific material. 3.3 That the Ld. CIT (Appeal) has erred on facts and in law in confirming the invoking of provisions of section 148 of the Income Tax Act, 1961 despite the fact that the reasons recorded do not contain any satisfaction on part of the Assessing Officer regarding income which has escaped assessment. 3.4 That the Ld. CIT (Appeal) has erred on facts and in law in confirming the invoking of provisions of section 148 of the Income Tax Act, 1961 despite the fact that the reasons recorded are based upon borrowed satisfaction and not upon the satisfaction of the Assessing Officer as required by law. 4. That the Ld. CIT (Appeal) has erred in law and on facts in sustaining the addition of Rs. 10,00,000/- representing the share capital by invoking the provisions of Section 68. 5. That the Ld. CIT (Appeal) has erred in law and on facts in sustaining the addition of Rs. 35,000/- representing the alleged commission on share capital by invoking the provisions of Section 69C. 6. That the impugned appellate order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence. 7. That the Appellant craves leave to add/alter before or at the time of hearing of the Appeal. 2. Coming to the assessee’s legal ground that both the learned lower authorities have erred in law and on facts in initiating section 148/147 reopening than proceeding u/s 153C of the Act; the same hardly carries any merit in light of hon’ble jurisdiction high court’s recent decision in PCIT Vs. Naveen Kumar Gupta (2024) 161 taxamnn.com 574 (Del). Rejected accordingly. ITA No.3018/Del/2017 3 | P a g e 3. Next comes the latter twin additions on merits of share capital and alleged commission of Rs.10,00,000/- and Rs. 35,000/-, respectively, wherein, the CIT(A)’s impugned lower appellate discussion has placed reliance in the corresponding identical findings on the very issue of the preceding assessment years 2005- 06. Mr. Sanjay Kumar informs the bench that the assessee had already settled the issue under the Direct Tax Vivad Se Vishwas Scheme, 2020 as evident from the perusal of order dated 15.12.2022 in ITA No. 3017/Del/2017 for AY 2005-06. 4. That being the case, learned tribunal is of the considered view that the lower authorities’ findings on the identical issue have attained finality, and therefore the assessee’s instant substantive grounds on merits are hereby rejected in very terms. 5. This assessee’s appeal is dismissed. Order pronounced in the open court on 3rd April, 2025 Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Dated: 3rd April, 2025. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "