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2024 (9) TMI 1622
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.... (i) On the facts and circumstances of the case, the Order passed u/s 143(3) of the Income Tax Act, 1961 is void ab-initio as no proper notice issued u/s 143(2) of the Income Tax Act, 1961 by the jurisdiction Assessing Officer. (ii) On the facts and circumstances of the case, the Order passed u/s 143(3) of the Income Tax Act, 1961 is invalid as the same has not been passed by Jurisdictional Assessing Officer. 3) (i) On the facts and circumstances of the case, the Ld. CIT(A)- 5, Delhi erred in treating the purchases amounting to Rs. 6,51,70,866/- as unexplained u/s 69C of the Income Tax Act, 1961 on mere surmises, against facts & law. (ii) On the facts and Circumstances of the case, the Ld. CIT(A)-5, Delhi erred and acted arbitrarily in adding of Rs. 6,51,70,886/- inspite of corresponding sales on purchases, proper records maintained and Gross Profit earned there upon. 4) The Appellant craves to add, alter or delete any grounds of Appeal. 3. Brief fact of the case is that the assessee company was incorporated on 30-12-1994 which was engaged in the business of manufacturing, trading export, import etc of food products such as edible oil, o....
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.... 12. M/s. Annanda Devcon Pvt. Ltd. Vs. ACIT Circle -2 (1) Bilaspur (C.G.) 13. ITO (IT) TDS-2 Vs Tata Steel Ltd and Tata Steel Ltd. Vs. Addl. CIT Tax-2 (3) Mumbai [2024(6) TMI 427 14. M/s. Net Agri Company Pvt. Ltd. Vs ITO Ward no. 18 (1) New Delhi 15. Smt. Nirmala Jain w/o Late Sh. Pawan Kumar Jain Vs. ITO Ward - 2(1) CGO complex-2 Kamla Nehru Nagar, Ghaziabad UP 16. M/s. Green Valley Infracity Pvt. Ltd. Noida C/o Nitesh Singh Vs. ITO, Ward- 1 (4) Noida [2020(3) TMI 423] [ITA No.2110/Del/2019] 17. Prashant Piti Vs. ACIT, Central Circle - 4, Delhi [2024(2)TMI 486 ] ITAT Delhi 18. Infrastructure Development Finance Co. Ltd. Vs. JCIT Special Range VI Chennai [2012 (12) TMI 83] 19. Sri Y Brahmiah (died) Karimnagar Vs. ITO [2014 (9) TMI 574] Andhra Pradesh High Court 20. ACIT Circle -22(1), New Delhi Vs. Sanvik Engineers India Pvt. Ltd. 21. M/s. Shahnawaj Quereshi Vs. ACIT, Circle-2, Meerut [2019(2) TMI 112] 22. M/s. Mansarovar Infratech Pvt. Ltd. (Formerly knowns as Garhwal Mandal Salsees Pvt. Ltd. Vs. ACIT, Circle, Haridwar [2019 (4) TMI 1722 ] (ITA No.7022/Del/2014)- ITAT, Delhi 23. ....
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....w of the increase in the scale of trade and industry since 2001, when the present income limits were introduced. It has therefore been decided to increase the monetary limits as under: Income Declared (Mofussil areas) Income Declared (Metro cities) ITOS ACS/DCS ITOS DCS/ACS Corporate returns Upto Rs. 20 lacs Above Rs. 20 lacs Upto Rs. 30 lacs Above 30 lacs Non corporate Upto Rs. 15 lacs The above instructions are issued in supersession of the earlier instructions and shall be applicable with effect from 1-4-2011." 6. In the instant case, the notice under section 143(2) of the Act stood issued to the assessee on 12.04.2016 by ITO Ward 27(4), Delhi. In July, 2016, the ITO transferred the jurisdiction of the assessee from him to DCIT since the returned income for A.Y. 2015-16 is more than 30,00,000/- . Copy of the said transfer memo is enclosed in page 5 of the paper book. After the transfer of jurisdiction from ITO to DCIT, no fresh notice under section 143(2) of the Act was issued by ACIT, Circle 4(1), Gurgaon. The assessment was ultimately framed under section 143(3) of the Ac....
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....as per instruction No. 1/2011 dated 31st January, 2011 issued by the Central Board of Direct Taxes, where income declared/returned by any Non- Corporate assessee is up to Rs. 20 lakhs, then the jurisdiction will be of ITO and where the income declared returned by a Non Corporate assessee is above Rs. 20 lakhs, the jurisdiction will be of DC/AC. 3. Petitioner has filed return of income of about Rs. 64,34,663/- and therefore, the jurisdiction will be that of DC/AC and not ITO. Mr. Jain submitted that since notice under section 148 of the Act has been issued by ITO, and not by DC/AC that is by a person who did not have any jurisdiction over Petitioner, such notice was bad on the count of having been issued by an officer who had no authority in law to issue such notice. 4. We have considered the affidavit in reply of one Mr. Suresh G. Kamble, ITO who had issued the notice under section 148 of the Act. Said Mr. Kamble, ITO, Ward 12(3)(1), Mumbai admits that such a defective notice has been issued but according to him, PAN of Petitioner was lying with ITO Ward (12)(3)(1), Mumbai and it was not feasible to migrate the PAN having returned of income exceeding Rs. 30 lakhs ....
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.... no jurisdiction to issue such notice. According to Petitioner as per instruction No: 1/2011 dated 31st January, 2011 issued by the Central Board of Direct Taxes, where income declared/returned by any Non- Corporate assessee is up to Rs. 20 lakhs, then the jurisdiction will be of ITO and where the Income declared returned by a Non Corporate assessee is above Rs. 20 lakhs, the jurisdiction will be of DC/AC. 3. Petitioner has filed return of income of about Rs. 64,34,663/- and therefore, the jurisdiction will be that of DC/AC and not ITO. Mr. Jain submitted that since notice under section 148 of the Act has been issued by ITO, and not by DC/AC that is by a person who did not have any jurisdiction over Petitioner such notice was bad on the count of having been issued by an officer who had no authority in law to issue such notice. 4. We have considered the affidavit in reply of one Mr. Suresh G. Kamble, ITO who had issued the notice under section 148 of the Act. Sald Mr. Kamble, ITO, Ward 12(3)(1), Mumbai admits that such a defective notice has been issued but according to him, PAN of Petitioner was lying with ITO Ward (12) (3)(1), Mumbai and it was not feasible to mi....
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....er for determination under sub-section (2) before the assessment is made. Reference of matter under subsection (2) would not be required when Assessing Officer accepts the claim of the assessee and transfers the case to another Assessing Officer in view the objection by the assessee. (In terms of sub-section (3) to Section 124 of the Act, the petitioner had "Tost his right to question jurisdiction of the Income Tax Officer, Ward No. 1(1), Noida, 20. Sub-section (5) to Section 124, though limited in scope, would also be applicable in the facts and circumstances of the present case as the Income-Tax Officer, Ward-1 (1), Noida had the power to assess income accruing or arising within the area as it is not the case of the petitioner-assessee that the said officer did not have jurisdiction in view of location of the bank account and/or petitioner's place of work. Section 124(5) of the Act saves assessment made by an assessing officer provided that the assessment does not bring to tax anything other than income accruing, arising or received in that area over which the assessing officer exercises jurisdiction. However, notwithstanding Section 124(5), the Act does not postulat....
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....ty to urge the ground by virtue of the provision under Section 124(3)(a). This condition has been obviously overlooked by the ITAT which proceeded to set aside the assessment and completed the reassessment proceedings. The impugned order is consequently set aside; the question of law urged by the Revenue is answered in its favour. The matter is remitted for consideration on the merits of the appeal concerning the additions made in the reassessment proceedings." 11. The DR has also filed the latter F.No ITO/W-15(1)/ITAT /2022-23 /118 dated 26-09-2022 for the sake of convenience letter is as under:- Order u/s. 143(3) was passed on 18.03.2015, in the said order a detailed discussion was done and the main addition of Rs. 6,51,170,886/- was done u/s. 68 as the alleged creditors Rs. 65170886 could not be proved during assessment. The Ld. CIT(A) also upheld this order. This information is being provided after taking prior approval of Add. CIT, Range- 13, Delhi. 12 We find that assessee's return income for the A.Y.2012-13 was Rs. 2,10,529/- hence jurisdiction of the assessee should lie with ITO since the returned income was below Rs. 30,00,000/- in the view of the C....
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....T(A) has the power to confirm reduce, enhance or annul the assessment. In the instant case the addition was sustained by changing the provision of the Act, without giving the show cause notice to the assessee which is the mandatory requirement under sub-section of section 251 of the Act. The Ld. CIT(A) has made the addition. The Ld CIT(A) has observed as under ;- "5.2 The issue under consideration is the addition u/s 68 in respect of sundry creditors. The appellant, apart from manufacturing of ghee & skimmed milk powder, had also apparently traded in certain items de-oiled cake (DOC in short), oil etc during the Impugned year. It incurred expenditure on purchases of de-oiled cake made from certain parties. From the assessment order it is noted that the addition has been made on two accounts (a) that the parties concerned either did not respond to the 133(6) notice or that such notices could not be served, (b) that the bills of the parties had no TIN nor were supported by the transportation builties. I have perused the assessment order and the submissions of the appellant made from time to time before the AO. As per the requisition of the AO the appellant furnished the part....
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....012 and these were sold in March Itself at Rs. 2,66,09,106/-. It is also noted that the appellant was informed during the course of hearing on 09.03.2015 that the notices u/s 133(6) had been sent but had been returned back unserved and in one case reply had not been received from the sundry creditors. The appellant was asked to produce the five sundry creditors on 12.03.2015. Admittedly this was extremely short notice for the appellant to have produced the said creditors. The AO has objected to the additional evidences on the ground that sufficient opportunities were provided at the time of the original assessment. However, from the facts narrated above it is clear that the appellant was prevented by sufficient cause that is on account of insufficient time to produce the desired evidences. It may be kept in mind that the impugned transactions took place three years ago prior to the show cause and it is nobody's case that the appellant had the control and power under law to produce the said persons. Accordingly, the AO's objections are overruled and it is held that the appellant covered under clause (c) and clause (d) of Rule 46A (1). It is to be reiterated a held by the hig....
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.... There should be direct nexus between the conclusions of fact arrived at, or inferred, and the primary facts upon which the conclusion is based. Since it is the appellant which has claimed that the Impugned purchases are genuine and have been sold in the subsequent period, the onus fully rested on the appellant to prove with circumstantial evidences that this is so. The facts are within personal knowledge of the appellant and it was incumbent upon it to substantiate the facts as stated. 5.5 The Hon'ble Supreme Court, in the case of CIT v. Durga Prasad More [1971] 82 ITR 540 (SC) has categorically held that the revenue is entitled to look into the surrounding circumstances, to find out the reality of the recitals made in the documents. The relevant observations and findings of Hon'ble Supreme Court, In the matter of discharge of onus of proof and the relevance of surrounding circumstances of the case are "that though an appellant's statement must be considered real until it was shown that there were reasons to believe that the appellant was not the real, in a case where the party relied on self serving recitals in the documents, it was for the party to establish....
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....of the sellers, non- establishment by the sellers of having included these amounts in their turnover etc. are not genuine and can be assumed to have been made from outside the books. The addition is therefore sustained under the provisions of section 69C. As held by the Delhi High Court in the case of Yadu Hari Dalmia (126 ITR 48) that even though section 69C was introduced from 1.4.1976, the provision is merely clarificatory and embodies a rule of evidence. There can be no difference between a case where there is direct proof such as, say, discovery of a separate set of books in which are recorded the actual amount of the expenditure incurred. and a case where the circumstances clearly justify an inference that there must have been such excess expenditure but the amount thereof can only be estimated for want of direct evidence. Grounds of appeal no 2 & 3 are dismissed and the addition is sustained under the provisions of section 69C." 16. The Ld.AR has submitted that addition made by Ld.CIT(A) without giving the notice. In the case of M/s Net Agri Company Pvt Vs ITO ward No 18(1) New Delhi and vice versa ITA no 4945 /Del/2019 and ITA no.4495/Del/2019 the Hon'ble ITAT Tribunal h....
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....d the source of cash deposits in the Axis Bank account and considered the same as unexplained cash credits in the books of account for the year under consideration. Thus, addition made by Ld. CIT(A) on a new source, in the form of source of sum credited in book of account is not sustainable." 17. In the instant case the Ld CIT(A) has deleted the addition u/s. 68 of the Act and made the addition u/s 69 of the Act without giving the notice to the assessee. The books of account were never rejected by the AO. The AO had not made any effort to verify the sundry creditors which details were provided by the assessee. The disallowance of corresponding purchase u/s 68 of the Act cannot be made when the assessee has disclosed the sales and purchases as well as gross profit, and which were accepted by the AO. 18. The Ld CIT(A) has made the addition u/69 of the Act as the purchases were not made through banking channels. The books of account and audit report were accepted by the AO and entire alleged bogus transaction cannot be disallowed when the sales have been accepted. The assessee's gross profit rate was also increased 4.39% for the current year. Hence, the addition made by Ld CIT(A....
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....) to Ward 5(3) (copy enclosed as Annexure C). However, no specific reason is (d) (e) B D Why the proceedings were transferred to ITO ward 14(4), New Delhi. Apparently, they were in pursuance of CBDT No. SO 2752 (E) dated 22.10.2014 r. w order no. 01 dated 15.11.2014 issued by CBDT. Please confirm, an order of jurisdiction in pursuance of CBDT notification (supra) may please be given. mentioned in transfer memo for transferring the case. Restructuring In IT Department was done vide CBDT notification. No. S.O. 2752 (E) dated. 22.10.2014, r.w. order No. 01 dated 15.11.2014. After which jurisdiction over Company with name starting with alphabetic 'K') was transferred to Ward 14(4) Delhi(NEW) from Ward 5(3), Delhi(OLD). Copy of order is attached as Annexure D. A copy of notice u/s 143(2) dated 06.08.2013 may be Copy enclosed as Annexure A. given. As per the assessee a notice u/s 143(2) dated Copy enclosed as Annexure E. 28.11.2014 was issued by ITO Ward 14(4), New Delhi. Please furnish a copy of this notice also. Was the order u/s 143(3) passed by the jurisdictional assessing officer? If P....