Income Tax Appellate Tribunal - Delhi
Excel Infotech Limites,Delhi vs Acit, Cenral Circle-30, New Delhi on 28 April, 2025
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'B', NEW DELHI
Before Sh. Satbeer Singh Godara, Judicial Member
&
Sh. M. Balaganesh, Accountant Member
ITA No. 1065/Del/2020 : Asstt. Year : 2009-10
Excel Infotech Ltd., Vs ACIT,
Sachin Saxena & Co., Central Circle-30,
Office no. 101 & 102, 1st Floor, A-1, New Delhi-110055
Madhuban Tower, Veer Savarkar
Block, Shakarpur, Delhi-110092
(APPELLANT) (RESPONDENT)
PAN No. AAACE2098K
Assessee by : Sh. S. Krishnan, Adv. &
Sh. Harshit Chauhan, Adv.
Revenue by : Sh. Rajesh Kumar Dhanesta, Sr. DR
Date of Hearing: 07.04.2025 Date of Pronouncement: 28.04.2025
ORDER
Per Satbeer Singh Godara, Judicial Member:
This assessee's appeal for Assessment Year 2009-10, arises against the CIT(A)-30, New Delhi' s in case No. 161/16- 17/2595 dated 04.09.2019 , in pr oceedings u/s 147/143(3) of the Inco me T ax Act, 1961 (in short "the Act").
2. Heard both the p arties at length. Case file perused.
3. This assessee's appeal raises the following substantive grounds:
"1 . The Ld. C IT (A) er red i n uphol ding the orde r of re- as sessment , whi ch i s bad in law a nd ab -inti o voi d.2 ITA No. 1065/Del/2020
Excel Infotech Ltd.
2. The Ld. C IT(A) er red in upholdi ng the reas ons rec orde d by the Ld. A.O. and the approval gr a nted by t he Ld. Princi pal Commissioner of I ncome-ta x, whic h a re bad in law as they do not c onform to the provisi on of s ection
147.
3. The Ld. A.O. and Id. Pri ncipal Commiss ione r di d not apply thei r mi nds inde pendently to facts of t he c as e a nd followed the r eports of I nv esti gati on Wing i n a mec ha nic al manner.
4. The notice u/s 148 is bad i n la w as it is vague.
5. The Ld. C IT(A ) err ed in upholdi ng the or der e ven tho ugh the A.O. did not a ss ume j uri sdic tio n to mak e re- as sessment as objecti ons filled by the a ppellant to t he rec orde d reasons were not c ons id ered i n the s o-c all ed rej ec tion order dated 28.11.2016.
6. T he order of as sess ment is bad in law as the ori gi nal ret urn o f i ncom e filed by t he a ppellant has not been considered by the A.O. at all.
7. The order of t he L d. C IT(A ) is bad i n la w as t he mat erial reli ed upo n has not bee n even sho wn t o the appella nt and t hus, there is a compl et ed fail ure in meeti ng the pri nciples of natural j ustice.
8. On the fa cts and in the circ umstanc es of cas e, the Ld. CIT(A) erred i n upholdi ng additi on of Rs. 7.70 C ror e.
9. On the fa cts and in the circ umstanc es of cas e, the Ld. CIT(A) er red i n upholdi ng addition Rs. 1,61,468/- e ven without menti oni ng the detai ls of alleged tra nsac tion.
10. The Ld. C IT(A ) erred in enha ncing t he i nc ome by a sum of Rs . 1,25,0 0,000/-.
11. The Ld. CIT(A ) erred i n i nitiati ng penalty u/s 271(1 ) (c ).
12. The ld. CIT(A) erred i n not dispos ing off ground no. 11 before hi m regardi ng gr ant of credit for tax c omputed in orde r of assessment pass ed u/s 143(3) r ead with sec tion 153A on 2 3.03.2013."
4. We advert to the basic re levant facts . A perusal of the case file ind icates it's original return on 30.09.2009 declaring income of Rs.60,37,990/- which was summar ily processed u/s 3 ITA No. 1065/Del/2020 Excel Infotech Ltd.
143(1) of the Act on 17.02.2011. Learned Asse ssing Officer's re-assessment framed herein on 27.12.2016 indic ates tha t he thereafter finalized section 153 A r.w.s. 143(3) assessment in assessee's case on 23.03.2013, in furtherance to a search action dated 22.03.2011 . And that the learned Assessing Officer thereafter formed reasons to believe that the asses see's taxable income representing payment of Rs.7,70,00,000/- made to M/s Shine Infr acone Pvt. Ltd. and that arising from the alleged client code modificatio n to the tune of Rs.1 ,61,468/-, liable to be asse ssed, had escape d assessment. He accordingly set into motion the impugned re-opening by issuing sectio n 148 notice dated 29.03.2016. All this admittedly resulted in the Assessing Officer's re-asse ssment dated 27.12.2016 making both the above additio ns in the assessee's hands; which in tur n, inter alia stands converted to that as unexplained advances received from M/s ARGL Ltd. e tc., as bogus unexplained cash credits, confirmation of the latter addition of Rs.1 ,61,468/- and further enhancement to the tune of Rs.1 ,25,00,000/- also representing an amount of Rs.1 ,25,00,000/- given to M/s Heaven Infraco ne Pvt. Ltd. as well, in the lower appellate discussio n.
This is what leaves the assessee aggrieved on all the foregoing three co unts who is in appeal befo re the tribunal. 4 ITA No. 1065/Del/2020
Excel Infotech Ltd.
5. We have given our thoughtful co nsideration to the assessee's and Revenue 's vehement submiss ions reiterating the ir respective stands against and in support of the impugned additio ns. We first of all note at the outset that so far as the first and foremost addition of Rs.7 ,70,00,000/- is converned, the assessee had filed it's additional evidence in the lower appellate procee dings w hich w as duly stood admitted. The CIT(A) thereafter sought a remand report from the field authorities. And that the Assessing Officer submitted his remand report on 19.02.2019 (pages 16 to 17 in the CIT(A)'s order) duly concurring with the assessee's stand thereby treating the same as explained since coming from M/s Amtek Auto Ltd., M/s ARGL Ltd. and M/s Castex Technologies Ltd. involving varying sums, respectively. T his being the clinching fact emerging from the case file, we are of the considered view that the learned departmental authoritie s thereafter could not have proceeded to confirm the very addition of Rs.7 ,70,00,000/- in the assessee's case a s such a remand report indeed binds the Revenue going by Smt. B. Jayalakshmi Vs. ACIT (2018) 96 taxmann.com 486 (Mad.) and CIT vs. D. M. Purnes h (2020) 426 ITR 169 (Karn)(HC). We thus see no merit in the impugned addition forming subject matter of the re- opening reasons (supra) which stands de leted in very terms. 5 ITA No. 1065/Del/2020
Excel Infotech Ltd.
6. Next comes the second substantive issue between the parties qua correctness of addition of Rs.1 ,61,468/- made in both the lower proceedings alleging the assessee as a beneficiary of a client code mod ification racquet. We note that neither there is any specific material quo ted in the assess me nt order along w ith corresponding transactions nor in the CIT(A) discuss ion estab lishing a clear cut live nexus between the assessee and the said alleged racque t and therefore, the impugned addition stands dele ted in very terms.
7. Lastly comes the enhancement addition of Rs.1 ,25,00,000/- made by the CIT(A) by exercising his statutory jurisdiction u/s 251(1)(a) of the Act. W e first of all quote CIT (Exemptions) vs. B. P. Poddar Foundation for Education (2022) 448 ITR 695 (Cal.) to hold that once the former twin additions here in for ming part o f the Asse ss ing Officer's re-opening reasons stand deleted, the re-opening itself does not survive. This is indeed coupled with the fact that it has admittedly come on record that making this third additio n during the course of enhancement by the CIT(A) amounts to changing the head of the addition itself, already held as not sustainable in law going by CIT vs. Shapoorji Pallonji Mistry (1962) 44 IT R 891 (SC), CIT vs. Sardari Lal & Co. (2001) 251 ITR 864(Del.) and CIT vs. Unio n Tyres (1999) 240 ITR 556(Del). We thus quash the impugned re-opening as 6 ITA No. 1065/Del/2020 Excel Infotech Ltd.
well as delete this third addition in very terms i.e. on lega lity as well as on merits.
8. No o ther ground or argument has been pressed before us at this stage.
9. This assessee's appeal is allowed.
Order Pronounced in the Open Co urt on 28/04/2025.
Sd/- Sd/-
(M. Balaganesh) (Satbeer Singh Godara)
Accountant Member Judicial Member
Dated: 28/04/2025
*Subodh Kumar, Sr. PS*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR