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Grounds of Appeal, remand Rule 46A, statement of Facts

1. General
   1. That the assessment order is void-ab-initio, invalid and illegal.
   2. That the appellant craves leave to amend, delete, add, substitute, modify or alter any one or more of the grounds of appeal at the time of hearing.
   3. That in the alternative and without prejudice to the Grounds stated above the additions made be held to be highly unreasonable and excessive and be reduced.
2. Negative inference solely on the basis of extracts of statement by third parties without confronting the same to the assessee
   1. The Assessing Officer has erred on facts and in law forming a negative inference solely on the basis of extracts of statement by third parties without confronting the same to the assessee company and in total disregard to the provisions of law.”

 

3. 11
   1. On the facts and in the circumstances of the case the CIT(A) has erred in stating that AO has not established that (i) the society is not genuine and misuses the benevolent legislation (ii) Not running the educational institution for which the society was formed (iii) the society is running for the purpose profit (iv) registration granted for genuine charitable/education, not withdrawn by the compete authority, which is not the requirement for invoking section 13(1)(c).

 

11. On the facts and in the circumstances of the case, the CIT(A) has erred in allowing exemption u/s 11.

 

1. On the facts and in the circumstances of the case, the CIT(A) has erred in allowing deduction u/s.11 for undisclosed income of Rs. 1,03,65,000/- and income from undisclosed Bank Account of Rs. 7,79,514/-

4. 13(1)(c)
   1. On the facts and in the circumstances of the case, the CIT(A) has erred in not appreciating the fact that the assessee has made payment of Rs. 10,00,000/- to the trustee which falls in the ambit of section 13(1)(c).

 

5. U/s 40(a)(ia)

The Ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming the disallowance of Rs.73,714/- u/s 40(a)(ia) without considering the fact that the recipient of this amount has included the same in its income and paid the tax on the same.

6. 48
   1. The learned Commissioner (Appeals)-IV, Ahmedabad erred in sustaining the addition to the extent of Rs. 26,83,137, being 33% out of addition of Rs. 81,30,720 made by the assessing officer on account of income from short-term capital gain.
   2. The learned Commissioner (Appeals)-IV, Ahmedabad erred in treating a duly registered transaction of purchase of impugned land as a ‘colorable device’.
   3. The learned Commissioner (Appeals)-IV, Ahmedabad erred in holding that the appellant reduced short-term capital gain in his hands by increasing the cost of acquisition of land.
   4. The learned Commissioner (Appeals)-IV, Ahmedabad failed to appreciate that the actual cost of acquisition of land in F.Y. 2009-10 which was duly disclosed in the books has come to be accepted by the Department as part of assessment for assessment year 2010-11 vide order under section 153A of the Act and hence the same could not have been altered by the assessing officer in the year of sale of the impugned land by the appellant.

 

5. The learned Commissioner (Appeals)-IV, Ahmedabad erred in not granting credit for cash of Rs. 15,00,000 seized on 24-06-2010 as and by way of advance tax payment for the assessment year 2011-12.

 

8. 50C
   17. That the addition of Rs.1 ,86,478/- maintained and confirmed by CIT(A) on account of short-term capital gain u/s 50C by adopting cost of acquisition at Rs.59,76,625/- in place of Rs.61,23,103/- as discussed by the learned DCIT in Para No.17.5 of the assessment Ashok Gupta & Neeraj Gupta IT(SS)Nos.64, 66,67 & 161 & 162 /Ind/17 order be held to be bad and unjustified on the facts and in the circumstances of the case and be quashed and deleted.

 

9. 68
   1. Without prejudice to other grounds and subject to the rectification application made before the Ld. CIT(A)-1 Gurgaon, Whether the Ld CIT(A)-1 Gurgaon was justified in confirming the addition of Rs. 15,52,221/- and further making the addition of Rs. 89,75,305/- u/s 68 of the Income Tax Act, 1961 in the absence of books of accounts?
   2. Without prejudice to other grounds, the addition of Rs. 89,75,305/- made u/s 68 of the Act by the Ld CIT(A)-1 Gurgaon is beyond the powers of CIT(A).
   3. Without prejudice to other grounds and subject to the rectification application made before the Ld. CIT(A)-1 Gurgaon, Whether the Ld CIT(A)-1 Gurgaon was justified in confirming the additions of Rs. 36,611/- and Rs. 15,15,600/- u/s 68 of the Act in spite of the fact that sufficient cash in hand was available with the assessee at relevant point of time?
10. 69
    1. The CIT(A) has erred in law and on facts in accepting the explanation of the Assessee that the opening capital appearing in the balance sheet was brought forward from the closing balance appearing in the balance sheet for the immediately preceding F.Y, particularly when the Assessee had not maintained regular books of accounts for the preceding year and had merely submitted copies of unaudited P&L A/c and balance sheet.
    2. That the Learned Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs.20,000 on account of Balance Sheet difference by wrongly treating it as an unexplained investment.
    3. That, on the facts and circumstances of the case, the assessment made under 158BCon 29-11-1996, determining the undisclosed income at Rs. 11,24,500 is illegal, unjust and unfair and is vitiated being contrary to the facts on record and the provisions of the Act.
    4. That, on the facts and in the circumstances of the case, the learned assessing officer erred in making an addition of Rs. 10,69,500 as income from undisclosed sources.
    5. That, on the facts and in the circumstances of the case, the learned assessing officer erred in holding that the property at pitampura was sold for a consideration of Rs. 39,500.
    6. That, on the facts and in the circumstances of the case, and without prejudice to the preceding grounds of appeal, the learned assessing officer earned in not giving the full benefit of set off of the alleged surplus receipt on sale of the Pitampura house against the alleged unexplained expenditure/investment made by the assessee, his associates and family members.
    7. That, on the facts and in the circumstances of the case, the learned assessing officer erred in making an addition of Rs. 55,000 on account of alleged unexplained investment on shares/UTI.
    8. That, on the facts and circumstances of the case, the learned assessing officer erred in holding that there was an unexplained investment of Rs. 3,61,166 in the construction of house at 48-B, Narayan Singh Park, Panipat.
    9. That, on the facts and in the circumstances of the case, the learned assessing officer erred in holding that the assessee paid a premium of Rs. 5,50,000 on purchase of a flat at Rohini.
    10. That, on the facts and in the circumstances of the case, the learned assessing officer erred in holding that there was an alleged unexplained investment of Rs. 91,000 on movable assets.
    11. That, on the facts and in the circumstances of the case, the learned assessing officer erred in holding that there was an unexplained investment of Rs. 12,800 in shares.”
    12. In the facts and circumstances of the case and in law, Ld. CIT(A) was not justified in confirming the addition of Rs.5,26,400/- made by the AO u/s.69 on account of deposits in the bank account holding it to be undisclosed income of appellant. The addition made by AO and confirmed by the Ld. CIT(A) is arbitrary and not justified.
    13. The Ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming an addition of Rs.3,83,757/- by considering the peak of cash deposit and withdrawal from the bank account as unexplained. He has further erred in confirming the addition ignoring that these are regular bank accounts of the assessee and all the deposits in the bank account is verifiable from the cash book maintained by the assessee
    14. That the addition of Rs.16,26,897/- maintained and confirmed by CIT(A) on account of Cash and foreign currency found u/s 69 as discussed by the learned DCIT in Para No.10.5 of the assessment order be held to be bad and unjustified on the facts and in the circumstances of the case and be quashed and deleted.

 

 

11. 69A
    1. Addition of Rs. 1,39,15,000/-representing cash deposited in various Bank Accounts of the ‘appellant’ which is duly recorded in the books of accounts is bad on facts and in law and has been made purely on unfounded presumptions and surmises without any evidence brought on records and confronted to the assessee.
    2. Addition of Rs. 1,39,15,000/-representing cash deposited in various Bank Accounts of the ‘appellant’ ignoring evidences is bad on facts and in law and has been made purely on unfounded presumptions and surmises without any evidence brought on records and confronted to the assessee.
12. 69B

 

18. That the addition of Rs. 4,46,086/- on account of unexplained investment u/s 69B as discussed by the learned DC IT in Para No.18.11 of the assessment order be held to be bad and unjustified on the facts and in the circumstances of the case and be quashed and deleted.
19. That the addition of Rs.4,50,OOO/- on account of undisclosed cash investment u/s 69B as discussed by the learned DCIT in Para No.14.4 of the assessment order be held to be bad and unjustified on the facts and in the circumstances of the case and be quashed and deleted.

 

13. 69C

 

12. That the addition of Rs.13,00,000/- on account of unexplained expenditure u/s 69C as discussed by the learned DCIT in Para No.12.6 of the assessment order be held to be bad and unjustified on / the facts and in the circumstances of the case and be quashed and deleted.

 

75. That the addition of Rs.75.000/- on account of unexplained foreign expenditure u/s 69C as discussed by the learned DCIT in Para No.11.4 of the assessment order be held to be bad and unjustified on the facts and in the circumstances of the case and be quashed and deleted.

 

14. 132

 

19. That the addition of Rs.1 ,40,914/- on account of voluntary disclosure u/s 132(4) as discussed by the learned DCIT in Para No.19.6 of the assessment order be held to be bad and unjustified on the facts and in the circumstances of the case and be quashed and deleted.
20. That the addition of Rs.1,75,00,000/- on account of voluntary disclosure u/s 132(4) against the cash received from Bansal Group for sale of Shares of Ayushman Medical Diagnostic Pvt Ltd. as discssed by the learned DCIT in Para No.20.9 of the assessment order be held to be bad and unjustified on the facts and in the circumstances of the case and be quashed and deleted.

 

1. That having regard to the facts and circumstances of the case, learned Commissioner (Appeals) has erred in law and on facts in confirming the action of assessing officer in framing the impugned reassessment order without appreciating that the proceedings under section 147 of the Act has been initiated on the basis of the alleged documents / information found during the course of search under section 132(1) of the Act which is impermissible as on the basis of such document / information, only proceedings under section 153C of the Act can be initiated and hence assumption of jurisdiction under section 147 of the Act is bad in law and liable to be annulled.

 

 

 

 

6. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in charging interest u/s 234B of Income Tax Act, 1961.

 

7. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.”

 

15. 142(1)
    1. That having regard to the facts and circumstances of the case, reassessment order framed u/s 147/144is bad in law as non service of notice u/s 142(1) of the act renders the order of assessment nullity.
    2. Statement of Facts

No notice u/s 142(1) of the Act was served on the assessee therefore your honour the reassessment order passed by the Assessing Officer is not sustainable.  The A.O. has also not stated anything about service of the notice u/s 142(1) in the assessment order. The absence of service of notice u/s 142(1) of the act renders the order of assessment nullity as held by the Hon’ble supreme court. The AR relied the decision of  Hon’ble Supreme Court in the case of ACIT vs Hotel Blue Moon 321 ITR 362 (SC).

 

16. 143(2)
    1. That having regard to the facts and circumstances of the case, reassessment order framed u/s 147/144is bad in law for want of jurisdiction in as much as notice u/s 143(2) has not been issued and served in accordance with law after the filing of return.
    2. That having regard to the facts and circumstances of the case, learned Commissioner (Appeals) has erred in law and on facts in confirming the action of assessing officer in framing the impugned reassessment order and that too without serving the mandatory notice under section 143(2) as per law.
    3. That having regard to the facts and circumstances of the case, assessment order framed u/s 143(3) is bad in law for want of jurisdiction in as much as notice u/s 143(2) has not been issued and served in accordance with law after the filing of return.
    4. Statement of Facts
       144. No notice u/s 143(2) of the Act was issued and served on the assessee therefore your honour the reassessment order passed by the Assessing Officer is not sustainable in law.  The A.O. has also not stated anything about service of the notice u/s 143(2) in the assessment order. Omission on the assessing authority to issue notice under section 143(2) cannot be a procedural irregularity and is not curable. Therefore the requirement of notice under section 143(2) cannot be dispensed with. The AR relied the decision of  Hon’ble Supreme Court in the case of ACIT vs Hotel Blue Moon 321 ITR 362 (SC). The service of notice u/s 143(2) is sine qua non for making assessment u/ss 143(3)/144. Since in the present circumstances there is no valid service of notice u/s 143(2) on the assessee and further the provisions of section 292BB are not attracted, the assessment order passed is void ab initio.
       145. No notice u/s 143(2) of the Act was served on the assessee therefore your honour the reassessment order passed by the Assessing Officer is not sustainable in law.  The A.O. has also not stated anything about issue and  service of the notice u/s 143(2) in the assessment order. Omission on the assessing authority to issue notice under section 143(2) cannot be a procedural irregularity and is not curable. Therefore the requirement of notice under section 143(2) cannot be dispensed with. The AR relied the decision of  Hon’ble Supreme Court in the case of ACIT vs Hotel Blue Moon 321 ITR 362 (SC). The service of notice u/s 143(2) is sine qua non for making assessment u/ss 143(3)/144. Since in the present circumstances there is no valid service of notice u/s 143(2) on the assessee and further the provisions of section 292BB are not attracted, the assessment order passed is void ab initio.
    5. 143(3)/148

violating the principles of natural justice

1. Without prejudice to the other grounds, whether the Ld. CIT(A)-1 was justified in not annulling the assessment order which was framed in just 26 days without affording the sufficient opportunity to represent the case and to file objections, thereby violating the principles of natural justice?

 

18. 144
    1. That having regard to the facts and circumstances of the case, reassessment order framed u/s 147/144is bad in law as non service of notice u/s 142(1) of the act renders the order of assessment nullity.

 

19. Addition of Rs. 70,00,000/- is bad on facts and in law and has been made purely on unfounded presumptions and surmises without any evidence brought on records and confronted to the assessee.

 

21. 145 G.P.
    1. The learned CIT(A) has grievously erred in law and on facts in partly confirming the addition on account of estimation of gross profit to the extent of Rs.1,54,937/- out of total addition of Rs.7,09,229/- made by the AO without proper consideration and appreciation of the facts of the case. In view of facts and submissions filed as well as legal position, the entire estimated addition on account of gross profit requires to be deleted.
    2. The learned CIT(A) has further erred in estimating the addition of G.P. at 20% of alleged unverified purchases of Rs.7,74,687/- as against estimation of G.P. @ 20% of total turnover as made by the AO. In view of facts of the case and more particularly the nature of business of the appellant, the entire addition ought to have been deleted.
22. lump sum disallowance
    1. The ld CIT(A) has erred on facts and in law in confirming the lump sum disallowance of Rs. 75,000/- out of various expenses.”
    2. The ld CIT(A) has erred on facts and in law in confirming the lump sum disallowance of Rs. 75,000/- on account of decline in GP and NP by invoking the provisions of sec 145(3) of the IT Act,1961.

 

23. 147
    1. That having regard to the facts and circumstances of the case, learned Commissioner (Appeals) has erred in law and on facts in confirming the action of assessing officer in framing the impugned reassessment order without appreciating that the proceedings under section 147 of the Act has been initiated on the basis of the alleged documents / information found during the course of search under section 132(1) of the Act which is impermissible as on the basis of such document / information, only proceedings under section 153C of the Act can be initiated and hence assumption of jurisdiction under section 147 of the Act is bad in law and liable to be annulled.

 

24. 148
    1. Ex-parte assessment completed without serving any Notice under section 148 of the ‘Act’ till the completion of assessment render the Assessment Order void-ab-initio as the same is bad in law and facts.

Statement of Facts

26. The assessee is uneducated farmer having source of income solely agriculture income purchased an  agriculture land from agriculture sources only. The addition on DLC rate has been made of Rs. 42,85,699,   which is bad in law and facts. No notice u/s 143(2), 142(1) and 148 of the Act was served. The A.O. has also not stated anything about service of ‎the notice u/s 142(1) in the assessment order. ‎The A.O. has also not ‎stated anything about issue and  service of the notice u/s 143(2) in ‎the assessment order. Omission on the assessing authority to issue ‎notice under section 143 (2) cannot be a procedural irregularity and ‎is not curable. The AR relied the decision of  ‎Hon’ble Supreme Court in the case of ACIT vs Hotel Blue Moon 321 ‎ITR 362 (SC). The service of notice u/s 143(2) is sine qua ‎non for making assessment u/ss 143(3)/144 and therefore the assessment order ‎passed is void ab initio.‎Further,  as per assessment order,  the notice u/s 148 was issued on 26.03.2019 ‎sent through speed post by the AO. But the address mentioned by the Ld. ‎AO is only of village and gram and no specific address was given.  Due to ‎above mistake the assessee was never served the notice u/s 148. Under ‎Section 148 of the Act, the issue of notice to the Assessee and service of ‎such notice upon the Assessee in accordance with Section 282 (1) of the ‎Act read with Order V Rule 12 CPC and Order III Rule 6 CPC are ‎jurisdictional requirements that must be mandatorily complied with. They ‎are not mere procedural requirements. Section 292 BB is prospective. It is ‎an accepted legal position that service of notice u/s. 148 is a jurisdictional ‎requirement that must be mandatorily complied with. This is not a ‎procedural requirement. In this regard, reliance was placed on the ‎decision of Hon’ble Delhi High Court in the case of CIT v. Chetan Gupta ‎‎(2015) 94 CCH 13. The ld AR further placed reliance on the decision of ‎Hon’ble Rajasthan High Court in the case of Mrs. Subhashri Panicker v. ‎CIT (D.B. Income Tax Appeal NO. 202/2015, dated 24.10.2017).  Hence, ‎the present proceeding is requested  to be quashed. ‎ ‎
27. The assessee was never served the notice u/s 148 and the service of notice u/s 148 is a jurisdictional requirement that must be mandatorily complied with and in the absence of the same, the present proceeding needs to be quashed. It was submitted that in the instant case, the notice u/s 148 was issued on 29.03.2016 sent through speed post by the AO on 30.03.2016 at the address Plot No. 196, sector-9, UIT Colony, Bhiwadi which is the address of one Sh. Bhardwaj through whom the assessee had applied for PAN, was received back by the AO with the postal remarks” ukt number par iss naam ka koi nahi rehta hai, atah vapas. Sd. Dated, 31.03.2016.” It was submitted that the envelope returned by the postal authorities containing un-served notice u/s. 148 is available on assessment records, a copy of which has been obtained by the assessee and is enclosed as part of paperbook. It was further submitted that as apparent from the assessment records, there has been no effort made by the AO to serve the said notice. It is apparent from the assessment records that the said notice was never served upon the assessee or any of his authorized agent or even through affixture. The A.O. has also not stated anything about service of the notice u/s 148 in the assessment order and the order-sheet maintained by him. It was further submitted that the correct permanent residential address of the assessee was available with the department from the very beginning at which address the assessment order has been passed by the AO and notice u/s. 142(1) was sent through speed-post on 07.10.2016. Therefore, no attempt was made by the AO to serve the notice u/s. 148 upon the assessee at the last known correct address. Under Section 148 of the Act, the issue of notice to the Assessee and service of such notice upon the Assessee in accordance with Section 282 (1) of the Act read with Order V Rule 12 CPC and Order III Rule 6 CPC are jurisdictional requirements that must be mandatorily complied with. They are not mere procedural requirements. Section 292 BB is prospective. In any event the Assessee in the present case, having raised an objection regarding the failure by the Revenue to effect service of notice upon him, the main part of Section 292BB is not attracted. It was submitted that it is an accepted legal position that service of notice u/s. 148 is a jurisdictional requirement that must be mandatorily complied with. This is not a procedural requirement. In this regard, reliance was placed on the decision of Hon’ble Delhi High Court in the case of CIT v. Chetan Gupta (2015) 94 CCH 13. The ld AR further placed reliance on the decision of Hon’ble Rajasthan High Court in the case of Mrs. Subhashri Panicker v. CIT (D.B. Income Tax Appeal NO. 202/2015, dated 24.10.2017) wherein the Hon’ble High Court relied on the decision in case of Chetan Gupta (supra) and others, and has allowed the appeal of the assessee admitting non-service of notice u/s. 148 of the Act. It was accordingly submitted that the notice u/s. 148 may kindly be held void-ab-initio for want of service and assessment may kindly be quashed.

 

As per assessment order,  the notice u/s 148 was issued on 29.03.2016 sent through speed post by the AO. But the address mentioned by the Ld. AO is only of village and gram and no specific address was given.  Due to above mistake the assessee was never served the notice u/s 148. Under Section 148 of the Act, the issue of notice to the Assessee and service of such notice upon the Assessee in accordance with Section 282 (1) of the Act read with Order V Rule 12 CPC and Order III Rule 6 CPC are jurisdictional requirements that must be mandatorily complied with. They are not mere procedural requirements. Section 292 BB is prospective. It is an accepted legal position that service of notice u/s. 148 is a jurisdictional requirement that must be mandatorily complied with. This is not a procedural requirement. In this regard, reliance was placed on the decision of Hon’ble Delhi High Court in the case of CIT v. Chetan Gupta (2015) 94 CCH 13. The ld AR further placed reliance on the decision of Hon’ble Rajasthan High Court in the case of Mrs. Subhashri Panicker v. CIT (D.B. Income Tax Appeal NO. 202/2015, dated 24.10.2017).  Hence, the present proceeding is requested  to be quashed.

 

 

25. 153A
    1. That the assessment made u/s 153A r.w.s.143(3) of the Income-Tax Act be held to be bad in law and on facts and be quashed.
    2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in assuming jurisdiction u/s 153A and further erred in passing the impugned assessment order.
    3. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in assuming jurisdiction and framing the impugned assessment order u/s 153A, is bad in law and against the facts and circumstances of the case and the same is not sustainable on various legal and factual grounds.
    4. That having regard to the facts and circumstances of the case, impugned assessment order passed u/s 143(3)/153A is bad in law more so when approval u/s 153D is not valid statutory approval.
26. 153C
    1. That having regard to the facts and circumstances of the case, learned Commissioner (Appeals) has erred in law and on facts in confirming the action of assessing officer in framing the impugned reassessment order without appreciating that the proceedings under section 147 of the Act has been initiated on the basis of the alleged documents / information found during the course of search under section 132(1) of the Act which is impermissible as on the basis of such document / information, only proceedings under section 153C of the Act can be initiated and hence assumption of jurisdiction under section 147 of the Act is bad in law and liable to be annulled.
27. 153D
    1. That in any case and in any view of the matter, action of Ld. AO in passing the impugned assessment order u/s 143(3)/153A without obtaining the valid approval u/s 153D is bad in law and against the facts and circumstances of the case.”

The ld. Counsel for the assessee submitted that the approval was given by the higher authorities in only one line. He submitted that these are search matters and in order to provide safeguard, the approval of the higher authorities have been provided u/s 153D. However, a perusal of such approval shows that there is neither proper satisfaction nor proper justification given in the approval. Referring to the following decisions, he submitted that the approval given by the superior authorities being not in accordance with the law, such order passed by the AO should be quashed:-

1. i) Smt. Shreelekha Damani vs. DCIT (2015) 125 DTR 263 (Mumbai) (Trib);
2. ii) PCIT vs. Smt. Shreelekha Damani approved by the Hon’ble Bombay High Court vide ITA No.668 of 2016;

iii) DCIT vs. Citimates Builders & Promoters (P) Ltd. (ITA No.3169/Del/2015).

28. 154
    1. Without prejudice to other grounds and subject to the rectification application made before the Ld. CIT(A)-1 ITA No.1682/Del/2017 Gurgaon u/s 154 of the Act, if the computation filed is not a valid return then the assessment should not therein, which was not followed by the AO and hence the assessment is invalid and illegal.
    2. Without prejudice to other grounds and subject to the rectification application made before the Ld. CIT(A)-1, Gurgaon u/s 154 of the Act, if the computation filed is a valid return of income then the notice u/s 143(2) should have been issued as it was a mandatory requirement before passing order u/s 143(3) as held in many cases. Therefore the assessment is invalid and illegal.
    3. Without prejudice to other grounds and subject to the rectification application made before the Ld. CIT(A)-1 Gurgaon, whether the CIT(A)-1 Gurgaon, was justified in treating the advance of Rs. 89,75,305/- which later returned to the buyers, be taxable in A.Y. 2010-11 without any enquiry in spite of availability of registered sale deeds, complete addresses of the buyers and without confronting the same to the assessee during appellate proceedings?
29. 245D(4)

Petitioners have prayed for the following relief(s): –

 

“That by this writ petition the petitioners seek issuance of an appropriate writ/writs, direction/directions and order/orders on the respondents in the facts and circumstance of the case after quashing the order dated 28.03.2008 passed by the Income Tax Settlement Commission (IT & WT), Kolkata, as contained herein in Annexure-3, in settlement applications as contained in Annexure-1 herein, under the section 245D(4) of the Income Tax Act, 1961, (after an order passed by this Hon’ble Court on the Settlement Commission, Respondent No.1 herein to dispose of the applications by 31.3.08, (as contained in annexure-3 herein) whereby and where under after giving the opportunity to the petitioner no.1, the Commissioner Income Tax (Central), Patna and applicants (therein before the Settlement Commission) without examining the record and investigating the case.”

 

30. 260A-Condonation of delay
    2013. A DISTINCTION IN DELAY AND INORDINATE DELAY The appeal of assessee was late by 20 days. The assessee submitted before the Ld. CIT(A) in the application for condonation of delay in filing the said appeal that the Orders were suddenly passed in the last week of February 2013 and assessee was under pressure of completing around 250 assessments for the block period and 50 + assessments of companies and individuals of the same group. The same were getting time barred on 31st March 2013. Further, various orders of the same Group of assessee were passed in a piecemeal manner from the last week of February 2013 to last week of March 2013. Since all the issues were interrelated, therefore, assessee was under tremendous mental pressure and stress and in a confused state of mind. The assessee due to the above facts was not able to defend its case properly and no opportunity were given before making the said additions. There was a gross contravention of provisions of Section 264 and 153A of the Income Tax Act. Further, the assessee filed writ petition before Hon’ble Delhi High Court for redressal of its grievance and to protect its rights and interest. The writ petition was schedule for hearing on 23rd April 2013 which was deferred to second week of May 2013, therefore, appeal could be filed with delay before Ld. CIT(A). The Ld. CIT(A) accepted the above contention of assessee and the reasoning given about that various assessment orders were passed for Group Companies and writ petition was pending in High Court which got differed, therefore, 20 days was not considered abnormal and delay was not attributable to the assessee and no negligence was found in the case of assessee. The Ld. CIT(A) relied upon Judgment of the Hon’ble Supreme Court in the case of Smt. Prabha vs., Ramprakash Kalra 1987 (Suppl.) 339 (SC) in which it was held that “Courts should not adopt an injustice oriented approach in rejecting the application for condonation of delay.” The Ld. CIT(A) also relied upon Judgment of the Hon’ble Supreme Court in the case of Vedabhai alias Vyjayantibhai Baburao Patil vs., Santaram Baburao Patil 253 ITR 798 (SC) in which the Hon’ble Apex Court made a distinction in delay and inordinate delay and it was held that “Court should adopt a pragmatic approach where delay is of few days only.” The Ld. CIT(A) has also relied upon several other decisions and considering nominal delay in filing the appeal before him and for cause of substantial justice, condoned the delay in filing the appeal.
    2014. the order passed by the learned Commissioner (Appeals) was not received by the assessee. It was received by Sh. Gopal Dutt, a Guard of the building where the office of the assessee is situated, but the Guard has handed over the order of the learned Commissioner (Appeals) in the month of February, 2019 and immediately thereafter, the assessee filed the appeal before the Tribunal. No doubt that assessee has mentioned various other reasons for condonation of delay of 49 days alognwith the affidavit and balance sheet as on 31-3-2019 showing its financial position. Keeping in view of the facts and circumstances of the present case and the delay of 49 days for which the assessee has given various reasons in the application for condonation of delay which has strongly been opposed by the learned DR, but in the interest of justice, I am of the view that no one can be debarred from filing the appeal which is a statutory right of the assessee only because the appeal filed by the assessee is delayed by 49 days. In the interest of justice, I am of the view that the delay of 49 days in filing the present appeals deserve to be condoned, therefore, I condone the delay of 49 days in both the appeals and admit both the appeals for adjudication on the basis of the original grounds raised by the assessee as well as the additional grounds raised by the assessee.
31. Grounds of Penalty u/s 271(1)(c)
    1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in levying penalty of Rs. 60,77,308/- u/s 271(1)(c) and that too without assuming jurisdiction as per law and without appreciating the facts and circumstances of the case.
    2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in levying the penalty u/s 271(1)(c) of Rs. 65040/- is bad in law and against the facts and circumstances of the case.
    3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in levying penalty u/s 271(1)(c) in as much as the impugned assessment order u/s 143(3) dated 26-09-2008 is also contrary to law and facts, void ab initio and not sustainable on various legal and factual grounds.
    4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in levying penalty u/s 271(1)(c) which is bad in law being beyond jurisdiction and barred by limitation and contrary to the principles of natural justice and has been passed by recording incorrect facts and findings and without giving adequate opportunity to the assessee and the same is not sustaining on various legal and factual grounds.
    5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in imposing a penalty of Rs. 60,77,308/- that too without recording mandatory “satisfaction” as per.
    6. That the assessee craves the leave to add, alter or amend the grounds of appeal at any stageand all the grounds are without prejudice to each other.”
    7. With reference to above the  notice of penalty u/s 271(1)(c ) is issued.

Your honour the order u/s 148 r.w.s. 143(3) of the IT Act, 1961 was passed on 23.12.2019 With reference to above, we request that we have filed an appeal. Please find enclosed  herewith the copy of appeal.

 

The assessee also have deposited 20% of demand to apply for stay of demand. This is for your kind information.

 

So your honor is requested to keep penalty proceeding pending till the disposal of first appeal.Please also find enclosed the POA issued in our favour.

 

 

2. (a)That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs. 1,70,72,313/- on account of alleged gross profit calculated on the basis of material allegedly found during the course of search of third person by treating it as allege unaccounted income of assessee and that too by recording incorrect facts and finding and without observing the principles of natural justice.

 

2(b) That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making addition of Rs. 1,70,72,313/- on account of alleged gross profit, is bad in law and against the facts and circumstances of the case.

 

2(c) That in any case and in any view of the matter, impugned addition has been made without confronting the entire adverse material available on record and without providing the opportunity of cross examination of Sh. Himanshu Kohli.

 

3. (a) That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs.1,31,95,532/- on account of alleged unaccounted investment on the basis of material allegedly found during the course of search of third person by treating it as alleged unaccounted income of assessee and that too by recording incorrect facts and findings and without observing the principles of natural justice.

 

3(b) That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making addition of Rs. 1,31,95,532/- on account of alleged unaccounted investment, is bad in law and against the facts and circumstances of the case.

 

3(c) That in any case and in any view of the matter, impugned addition has been mad without confronting the entire adverse material available on record and without providing the opportunity of cross examination of Sh. Himanshu Kohli.

 

4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs.27,44,392/- on account of alleged commission paid and that too by recording incorrect facts and findings and without observing the principles of natural justice.

 

5. That in any case and in any view of the matter, addition made in the impugned assessment order are beyond jurisdiction and illegal also for the reason that these could not have been made since no incriminating material has been found as a result of search.

 

32. Rule 46A
    1. The Ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in deciding the appeal without admitting the additional evidence filed under rule 46A.
    2. On the facts and in the circumstances of the case, the CIT(A) has erred in admitting additional evidence in the form of Confirmation Letters (which have not been mentioned by the Assessing Officer in the assessment order), copies of receipts without giving opportunity to the Assessing Officer in violation Rule 46A.
    3. The Remand Report was provided to the assessee. The assessee filed the re-joinder which is reproduced in the appellate order which reads as under:-

Page | 13 ITA No.3342/Del/2013 XO Infotech Ltd., Ahmedabad.

“2. At the outset, the appellant feels highly obliged for affording us an opportunity to submit our counter submission in rebuttal of the AO’s report under reference.

3. Vide opera 1, the AO has denied that the notice u/s. 143(2) of the Act was formal one. Conversely, he has reproduced the format of the notice and has supplied emphasis on the wordings “to be produced at the said time any documents, accounts and any other evidence on which you may rely in support of the return filed by you.” This itself goes to establish that it was neither a specific notice u/s. 142(1) nor a questionnaire therewith. The assessing officer’s proposition is against the letters and spirit of instruction No. 1367 dated 18.11.1980 which reads as under:-

“Hearing fixed by the Income Tax officers for completion of the assessments:

1. It has been time and again brought to the notice of the board that the Income Tax Officers are issuing notices u/s. 143(2) indiscriminately and Page | 14 ITA No.3342/Del/2013 XO Infotech Ltd., Ahmedabad.

mechanically without acquainting themselves in advance as to what is their requirement. This has been a source of harassment to the taxpayers and also delaying the completion of assessment proceedings, more particularly so in Salary Circles.

2. In the Action Plan for 1980-81 also the Chairman has desired that before fixing up the cases the files should be studied and requirements specified for the purposes of scrutiny. In cases which would normally fall under the Summary Assessment Scheme only a deficiency letter may be issued as required by Board’s Instruction No 1072 dated 1.1.1977 or under section 139(9)of the Income Tax Act, 1961.
3. Where the cases is to be fixed for hearing, it will be advisable to either issue notice under section 142(1)which requires production of certain documents or books or notice under section 143(2)specifying the point on which the clarification is Page | 15 ITA No.3342/Del/2013 XO Infotech Ltd., Ahmedabad.

needed, issue of notices under section 143(2) which requires the assessee to produce evidence in support of the return should not be done mechanically and the Income Tax Officer should be well aware of the points on which he desires the assessee to produce evidenced issue of such notice.

4. The Commissioners and the Inspecting Assistant Commissioners should make it a point to see during the course of surprise or regular inspections as to whether the notices have been issued mechanically or not. In case some officers are in the habit of issuing notices mechanically, they may be suitably pulled up.
5. The Board desire that the contents of the above instructions may be brought to the notice of all the officers working in your charge.

Instruction: No./367. dated 18-11-1980 (Source: 114th Report of P.A.C (1981-82) (Seventh Lok Sabha) (pp 14- 15) ”

Page | 16 ITA No.3342/Del/2013 XO Infotech Ltd., Ahmedabad.

Thus this in itself demolishes the absurb reasoning assigned by the AO rendering the notice as the one issued mechanically and indiscriminately which did not specified any of his requirement.

In the latter part in this para the AO has simply extracted selective portion from the impugned assessment order but has tacitly avoided offering any comments on the fact that the jurisdiction over the case was ested with the AO only in the middle of August, 2011. Needless to state that the AO has passed final order u/s. 143(3) and not u/s. 144 of the Act. Therefore, the AO’s comments in the latter limbs of this para are misleading and exhibits non- application of kind. As submitted in the appellant’s letter dated 3.7.2012, the first and foremost questionnaire was issued only on 14.11.2011 and the appellant on each and every hearing attended and submitted replies vide letters dated 23.11.2011, 28/11/2011, 5/12/2011, 17/12/2011 & Page | 17 ITA No.3342/Del/2013 XO Infotech Ltd., Ahmedabad.

28/12/2011. The present AO having failed to offer any comments on these compliances, his report is untrue and reveals unfair attitude with a prejudiced mind.

6. Vide para 2, the AO summarily dealt with the jurisdiction issue saying that the case was transferred to ITO, Wd. 18(4) having jurisdiction over company cases. What the appellant want to bring on record is that the then AO didn’t possess even a return of income and it is the appellant who has supplied hard copy of re3turn of income along with requisite audit reports and Annexures/Schedules etc. on 30/10/2011 as incorporated in para 3 of the assessment order. Therefore, in the fitness of things, the then AO didn’t have any jurisdiction to issue statutory notice u/s. 143(2) of the Act prior to that date.
7. Vide para 3 the AO has rejected the contention of the appellant that nothing was heard from the Page | 18 ITA No.3342/Del/2013 XO Infotech Ltd., Ahmedabad.

department between August, 2011 to 30/10/2011. As mentioned in para 3 of the appellant’s letter dated 3/7/2012, the appellant’s representative, su-motto met the then AO on 30/10/2011 to enquire about the fate of pending assessment, as stated in para 2 of the impugned order itself. After collecting the return of income and other documents Authorized Representative, the first and foremost questionnaire was issued only on 14/11/2011. As is also verifiable from the records, the appellant has attended on each and every hearing and submitted written replies vide letters dated 23/11/2011, 28/11/2011,5/12/2011, 17/12/2011 & 28/12/2011.

8. Vide para 4, the AO has commented in cryptic manner without addressing the issue raised by the appellant in proper prospective. As submitted by the appellant in para 4 of the letter dated 3/7/2012 the appellant is not allowed adequate time nor any show Page | 19 ITA No.3342/Del/2013 XO Infotech Ltd., Ahmedabad.

cause notice has been issued! served before making huge addition running in to Rs.15.95 Crores vis-a-vis returned income of Rs.69,860/-. It is incorrect to state that first questionnaire issued on 17/1/2011 remained uncomplied with. On the contrary, the first and foremost questionnaire was issued only on 14/11/2011 and the appellant has attended on each and every hearing and submitted replies vide letters dated 23-11-2011, 28-11-2011, 5-12-2011, 17-12- 2011 & 28-12-2011. The present AO has not offered any comments on such compliances and has simply rejected appellant’s contention in a quite casual manner.

9. Vide para 5 the AO has stated that the notices were being served on the appellant and they remained uncomplied with. In this context, it is submitted that the remark of the AO is quite vague and he has not offered any comments on the additional evidences produced by the appellant.

Page | 20 ITA No.3342/Del/2013 XO Infotech Ltd., Ahmedabad.

10. Vide para 6, the AO has objected to admission of additional evidence saying the same is not admissible under Rule 46A of the IT Rules, 1962, without pin-pointedly mentioning as to how the appellant is not entitled to produce the same. In this context it is submitted that as stated in appellant’s letter dated 3-7-2012, the then AO made an order appealed against, without giving sufficient opportunity to the appellant to adduce evidence relevant to the grounds raised in the appeal on hand.

It is further submitted that the AO has furnished his comments on the appellant’s letter dated 3-7-2012 but he has opted not to examine the documents produced by the appellant nor he has produced any evidence to the contrary. The AO has not made any attempt to cross verify the facts on record by making any reference to the evidence produced by the appellant though all the parties are Page | 21 ITA No.3342/Del/2013 XO Infotech Ltd., Ahmedabad.

assessed to tax. In fact copies of their Bank Statements evidencing the identity and source of payment are placed on record and it remains undisputed as issued by the respective banks. Even a cursory look at these Bank Statements goes to eveal that there was no introduction of cash deposit in any of such bank accounts.

11. The submission of the A 0 vide the last para of his report is of general nature for the sake of defence.
12. In view of the above, it may kindly be appreciated that the appellant was prevented by sufficient cause from producing the evidence before the AO which is relevant to the grounds raised in appeal and the appellant is entitled to its right to defend its case within the parameters of provisions of Rule 46A. This should be found in accordance with the Rule of Natural Justice. Your honour is, therefore, earnestly requested to kindly consider the evidence Page | 22 ITA No.3342/Del/2013 XO Infotech Ltd., Ahmedabad.

produced by the appellant on merits and decide the same sympathetically in the interest of justice.

13. The appellant therefore crave liberty to submit a consolidated chart in respect of all the nineteen parties reflecting the names of such parties and the details of evidences submitted all along including the additional evidences such as acknowledgment of income tax return filed, balance sheet, bank statements etc. with reference to the paper book page numbers filed so as to judge the issues at a glance. The same may therefore be read as a whole alongwith submission dated 1/6/2012 as submissions filed with regard to our appeal and may kindly be treated and considered as our attendance for the hearing and the appeal may also be decided in the light of it.

For the act of your honour’s kindness the appellant, as is duty bound, shall every pray.

Thanking you,”

 

 

33. Unverifiable Purchase
    1. The Ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming the trading addition of Rs. 11,99,984/- by disallowing 15% of the entire purchases of Rs.79,99,891/- alleging the same to be unverifiable but at the same time accepting the sales declared by the assessee and ignoring the fact that the g.p. rate declared during the year is better than the earlier years.

 

34. Chapter VIA
    1. The Ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming the disallowance of deduction of Rs.56,256/- made under Chapter VIA of the Act.”