Income Tax Appellate Tribunal - Delhi
Charan Kamal Singh, New Delhi vs Acit, Circle- 56(1), New Delhi on 21 March, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "SMC" NEW DELHI
BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER
I.T.A. No. 4662/DEL/2017
A.Y. : 2012-13
MR. CHARAN KAMAL SINGH, vs. ACIT, CIRCLE-56(1), ,
B-10, NAVEEN SHAHDARA, NEW DELHI
NEW DELHI - 110 032
(PAN: AATPS2742N)
(Appellant) (Respondent)
Assessee by : Sh. Rajesh Arora, CA
Department by : Sh. V.K. Jiwani, Sr. DR
ORDER
This appeal filed by the assessee against the order of the Ld. CIT(A)-19, New Delhi dated 23.5.2017 and pertains to assessment year 2012-13.
2. The grounds raised read as under:-
1.The AO has erred in law and facts of the case in reopening the case under section 148 of the Act without recording valid reasons with the appropriate approval and without providing the copy of the same to the appellant with notice which is completely unjustified, uncalled for and bad in law.
2. The Ld. CIT(A) and the AO has erred in law and facts of the case by making addition on account of unexplained expenditure u/s. 69C of the Act amounting to Rs. 30,01,500/- on the basis of alleged 1 material seized from the Institution and the statement of investigation wing having no corroboration with the allegation which is highly arbitrary, unjustified, uncalled for and bad in law.
3. The AO has erred in law by not discharging his onus to demonstrate the payment of alleged capitation fees and the Ld. CIT(A) has erred in approving the same which is highly unjustified, uncalled for and bad in law.
4. The Ld. CIT(A) has erred in rejecting the submission of assessee on the basis of presumptions and conjectures which is highly arbitrary, unjustified, uncalled for and bad in law.
5. The assessee crave to have the right to add, amend or modify the grounds of appeal.
3. The assesses has also filed the following additional grounds of appeal.
1. The Ld. CIT(A) has erred on facts and in law in assessing the appellant under section 153C of the Income Tax Act, 1961 without satisfying the substantive and procedural requirements under section 153C of the Income Tax Act.
2. Without prejudice to the other grounds of appeal, the Ld. CIT(A) has erred on facts and in law in passing the assessment order under section 143(3) of the Income Tax Act, 1961 with the approval of the Additional CIT, Range- III, New Delhi vide his letter F.No. Addl. CIT(CR)-III/2010- 11/816 dated 27.12.2010.
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3. Without prejudice to the other grounds of appeal, the Ld. CIT(A) has erred on facts and in law in confirming the additions which were not based on the incriminating material found and seized during the course of search.
4. The assessee's A.R. has also filed the following additional ground and stated that the below mentioned additional ground deserve to be admitted in view of the judgment of the Hon'ble Supreme Court of India in the NTPC vs. CIT reported in 229 ITR 383.
"Nothwithstanding to ground no.1 and ground no. 2 raised by the appellant, the AO has erred in law and facts of the case in making assessment under section 147 of the Income Tax Act, 1961 (The Act) without appreciating that assessment could have been made only under section 153C of the Act based upon documents / information found during the course of search."
5. The brief facts of the case are that the assessment in this case was made u/s. 147/143(2) of the Income Tax Act, 1961 at a total income of Rs. 31,73,415/-. The case was reopened on the basis of information received from Investigation Wing that the assessee had admitted his son to the Santosh Group of Institutions and besides the payment of fees, he had also paid Rs. 30,01,500/- as donation / 3 capitation fees to the college. During the course of assessment proceedings the assessee admitted the payment of fees for the admission of his son but denied paying any capitation fees. The AO based of statement of the Chairman of the Trust Dr. P. Mahalingam and also the evidence found during the course search made the addition of Rs. 30,01,500/- u/s. 69C of the Act and assessed the income of the assessee at Rs. 31,73,415/- vide assessment order. Aggrieved with the assessment order, assessee appealed before the Ld. CIT(A), who vide his impugned order dated 23.5.2017 has dismissed the appeal of the Assessee by confirming the action of the AO.
6. Aggrieved with the Ld. CIT(A)'s order, assessee appealed before the Tribunal.
7. At the time of hearing, Ld. Counsel of the assessee stated that the legal additional ground is squarely covered in favour of the assessee by the decision of dated 08.8.2017 of the ITAT, SMC, Delhi Bench passed in ITA Nos. 1500- 1501/Del/2017 (AY 2007-08) in the case of Sushil Gaur vs. ITO & Shelly Agarwal vs. ITO, hence, he requested to respectfully follow the same and appeal of the assessee may be allowed.
8. On the contrary, Ld. DR relied upon the orders of the authorities below and has tried to justify the action of the Assessing Officer in initiating reopening proceedings. However, he opposed to admit the additional legal ground. He relied upon the following cases laws on the addition as well as on reopening. 4
(ON THE ADDITION) Bhagirah Aggarwal vs. CIT - Delhi High Court (2013) 31 taxmann.com 274.
CIT vs. Kuwer Fibres Pvt. Ltd. Delhi High Court - (2016) 2017- TIOL-30-HC-DEL-IT (ON THE REOPENING) Yogendra Kumar Gupta. Vs. ITO - Hon'ble Supreme Court (2014) 51 taxmann.com 383 Ankit Financial Services Ltd. vs. DCIT - Hon'ble Gujarat High Court (2017) 78 taxmann.com 58 (Gujarat)
9. I have heard both the parties and perused the records. On the admission of additional ground is concerned, I find that the additional ground raised by the assessee is legal in nature and is squarely covered by the various decisions of the Coordinate Benches of the ITAT as well as decision of the Hon'ble Delhi High Court, hence, I am of the considered view that on the anvil of the decision of the Hon'ble Supreme Court of India in the case of NTPC Limited 229 ITR 383 (Supra), the additional ground raised by the assessee is purely legal ground and do not require fresh facts which is to be investigated and goes to the root of the matter. In the interest of justice, I admit the aforesaid additional ground raised by the assessee, in view of 5 the case law of NTPC Limited (Supra) and proceed to decide the legal additional ground.
10. I have heard both the parties and perused the records, especially the impugned order and the case laws cited by both the parties. I find that Ld the case laws cited by the Ld. DR are on different facts of the case i.e. relating to loan transaction and bogus share application through accommodation entries. But I find that the additional ground, as aforesaid is squarely covered by the decision dated 08.8.2017 of the ITAT, SMC, Delhi Bench passed in ITA Nos. 1500-1501/Del/2017 (AY 2007-08) in the case of Sushil Gaur vs. ITO & Shelly Agarwal vs. ITO, which was exactly on the similar and identical circumstances wherein the Tribunal has quashed the reassessment by holding as under:-
"8. I have heard both the parties and perused the records, especially the impugned order as well as the Paper Book. On having gone through the decisions cited above especially the decision of Amritsar Bench in the case of ITO vs. Arun Kumar Kapoor (supra), I find that in that case as in the present case before me, reassessment was initiated on the basis of incriminating material found in search of third party and the validity of the same was challenged by the assessee before the 6 Learned CIT(Appeals) and the Learned CIT(Appeals) vitiated the proceedings. The same was questioned by the Revenue before the ITAT and the ITAT after discussing the cases of the parties and the relevant provisions in details has come to the conclusion that in the above situation, provisions of sec. 153C were applicable which excludes the application of sections 147 and 148 of the Act. The ITAT held the notice issued under sec. 148 and proceedings under sec. 147 as illegal and void ab initio. It was held that Assessing Officer having not followed procedure under sec. 153C, reassessment order was rightly quashed by the Learned CIT(Appeals). I also draw my support from the ITAT, New Delhi decision in the case of Rajat Shubra Chatterji vs. ACIT, New Delhi ITA No. 2430/Del/2015 dated 20.5.2016, wherein the reassessment was quashed on the similar facts and circumstances by following the ITAT, Amritsar decision in the case of ITO vs. Arun Kumar Kapoor (supra). In the present case before me, it is an admitted fact, as also evident from the reasons recorded and the assessment order that the initiation of reopening proceedings was made by the Assessing Officer on 7 the basis of information available with the AO. I thus respectfully following the decision of Co-ordinate Bench of the ITAT, Amritsar in the case of ACIT vs. Arun Kapur - 140 TTJ 249 vs. (Amritsar) and the ITAT, Delhi decision in the case of Rajat Shubra Chatterji vs. ACIT, New Delhi ITA No. 2430/Del/2015 dated 20.5.2016 hold that provisions of sec. 153C of the Act were applicable in the present case for framing the assessment, if any, which excludes the application of sec. 147 of the ~ hence, notice issued under sec. 148 of the Act and assessment framed in furtherance thereto under sec. 147 read with section 143(3) of the Act are void ab initio. Hence, the reassessment in question is accordingly quashed. Since I have already quashed the reassessment, there is no need to adjudicate other grounds.
9. In the result, both the appeals filed by the different Assessees stand allowed in the aforesaid manner."
11. Keeping in view of the facts and circumstances of the case as explained above and respectfully following the aforesaid precedents, I quash the 8 reassessment in question. Since I have already quashed the reassessment, there is no need to adjudicate other grounds on merits.
12. In the result, the appeal of the assessee is allowed.
Order pronounced on 21/03/2018.
Sd/-
[H.S. SIDHU] SIDHU] JUDICIAL MEMBER Date:- 21/03/2018 SRBHATNAGAR Copy forwarded to: -
1. Appellant
2. Respondent
3. CIT
4. CIT (A)
5. DR, ITAT TRUE COPY By Order, Assistant Registrar, ITAT, Delhi Benches 9