1 ITA NO. 6826/Del/2018

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: ‘A’ NEW DELHI

BEFORE MS SUCHITRA KAMBLE, JUDICIAL MEMBER
AND

DR. B. R. R. KUMAR, ACCOUNTANT MEMBER

ITA No. 6826/DEL/2018 ( A.Y 2009-10)
(THROUGH VIDEO CONFERENCING)

ITO Vs Altamash Township P. Ltd.
C/o. Shri Jagminder Gupta,
Ward-2(2) Direcgtor, J-181, Saket
New Delhi
Room No. 375, C. R. Building, AABCA0598H
(RESPONDENT)
New Delhi

(APPELLANT)

Appellant by Sh. Virender Singh, SR. DR
Respondent by Sh. Ved Jain, Adv

Date of Hearing 27.09.2021

Date of Pronouncement 05.10.2021

ORDER

PER SUCHITRA KAMBLE, JM
This appeals is filed by Revenue against the order dated09/08/2018

passed by CIT(A)-1, New Delhi for Assessment Year 2009-10.

2. The grounds of appeal are as under:-
1. Whether on the facts and in the circumstances of the case, Ld.CIT(A) has
erred in quashing proceedings, u/s 147 of the IT Act on the ground of non-
issuance of notice u/s 143(2) of the Income Tax Act.
2. Whether on the facts and in the circumstances of the case, Ld.CIT(A) has
erred in not considering the order of the Hon'ble High Court of Delhi in the
case of CIT-II Vs. Madhya Bharat Energy Corporation Ltd. in ITA No.
950/2008.”
2 ITA NO. 6826/Del/2018

3. The assessee is a Private limited company engaged in the business of

real Estate. The return for the year under consideration i.e. 2009-10 was filed

on 31.03.2010 declaring NIL income. On 25.03.2014, notice under Section 148

was issued by the Assessing Officer. In response to the above notice, the AR of

the assessee company vide its letter dated 04.02.2015 informed the Assessing

Officer that the name of the assessee company has been struck off from the

records of ROC w.e.f. F.Y. 2009-10. Accordingly, neither the assessee nor its

director have received any notice u/s 148 for the AY 2009-10 and requested

him to provide a copy of notice u/s 148. Later on, the Assessing Officer issued

notice u/s 142(1) on the address of AR of the company. In response to which,

the AR vide letter dated 10.02.2015 informed that he is the auditor of the

company, the company has been closed and its name has been struck off from

the records of ROC and he is not in possession of any of the documents or

information with respect to the assessee company. Thereafter, assessee filed a

reply dated 11.02.2015 in which it was stated that the original ROI filed u/s

139(1) on 31.03.2010 may be treated as ROI in response to notice u/s 148.

Vide letter dated 11.02.2015, the AR submitted the financials and ITR of the

assessee company and requested the Assessing Officer to provide the copy of

reasons recorded for reopening the case u/s 147. As per the reasons recorded,

the Assessing Officer observed that the assessee has received accommodation

entries of Rs 1.40 crores from various companies belonging to Shri. Aseem

Gupta. Thereafter vide letter dated 13.02.2015, the assessee filed its objection

to the reasons recorded by the Assessing Officer. The said objections were

disposed off by the Assessing Officer vide letter dated 13.02.2015. Vide letter

dated 16.02.2015, the AR of the assessee company informed the Assessing

Officer that since the name of the company has been struck off from ROC and

all its operations are closed there is no record retained by the company.

Further, the AR at the time of assessment proceedings informed the Assessing

Officer that the company is also not in possession of its bank account,

accordingly they are unable to confirm the share application money exactly

received in the year under consideration. The Assessing Officer was informed
3 ITA NO. 6826/Del/2018

that the share application money received to the extent of Rs. 1.01 crore from
M/s. Moderate Credit Corporation Pvt. Ltd. has already been forfeited and
disclosed as income in the profit and loss account. The Assessing Officer was
not satisfied with the explanation filed by the assessee added Rs. 39,00,000/-
in the hands of the assessee u/s 68 of the Act treating the same as
accommodation entry taken by the assessee and also added Rs. 39,000/- as
commission expense u/s 69C of the Act on notional basis. The Assessing
Officer also disallowed Rs. 1,24,22,000/- being the securities and deposits
written off by the assessee in the profit and loss account stating that the
assessee has not offered any explanation in this regard.

4. Being aggrieved by the assessment order, the assessee filed appeal
before the CIT(A). The CIT(A) allowed the appeal of the assessee.

5. The Ld. DR submitted that the Assessing Officer has rightly made the
additions as the assessee company has deliberately dealt the transaction till
Assessment Year 2009-10 and thereafter filed proceedings thereby, the
assessee Company was struck off from the records of ROC w.e.f. Financial Year
2009-10 while letter dated 4/5/2015 and the same was informed to the
Assessing Officer. The Ld. DR further submitted that the decision of the
Hon’ble Delhi High Court in case of CIT vs. Madhya Bharat Energy Corpn. Ltd.
in ITA No. 950/2008 order dated 11 July, 2011 was not at all considered by
the CIT(A). The grounds of appeal before the CIT(A) relating to non issuance of
notice under Section 143(2) was also not raised at the initial stages. Thus, the
Ld. DR submitted that the additions made by the Assessing Officer should have
been confirmed by the CIT(A).

6. The Ld. AR relied upon the order of the CIT(A) and further submitted
that the decision of the Madhya Bharat Energy Corpn. Ltd. (supra) is reviewed
and is no more a good law. The Ld. AR relied upon the decision of the Hon’ble
Delhi High Court in case of Pr. CIT vs. Shri Jai Shiv Shankar Traders Pvt. Ltd.
4 ITA NO. 6826/Del/2018

2015 (10) TMI 1765 dated 14.10.2015 as well as Pr. CIT vs. Silver Line 2015
(11) dated 04.11.2015 and CIT vs. Laxman Das Khandelwal 2019 (8) TMI 660
dated 13.08.2019 decided by the Hon'ble Supreme Court.

7. We have heard both the parties and perused the material available on
record. It is pertinent to note that in the remand report the Assessing
Officer has not commented upon the query related to issuance of notice u/s
143(2). There was nothing on the record to show that 143(2) notice was issued
to the assessee. Thus, at threshold itself the assessment proceedings becomes
bad in law as held in the case of Pr. CIT Vs. Silver Line (supra) upholding the
decision of the Tribunal that the reassessment order cannot be passed without
complying with the mandatory requirement of notice being issued by the
Assessing Officer to the assessee u/s 143(2) of the Act and, therefore, the re-
assessment order was legally unsustainable. Thus, the CIT(A) has rightly
quashed re-assessment order passed u/s. 147 and allowed the appeal of the
assessee. There is no need to interfere with the findings of the CIT(A). Hence,
appeal of the Revenue is dismissed.

8. In result, the appeal of the Revenue is dismissed.

Order pronounced in the Open Court on this 05th Day of October, 2021

Sd/- Sd/-
(B. R. R. KUMAR) (SUCHITRA KAMBLE)
ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 05/10/2021
R. Naheed

Copy forwarded to:

1. Appellant

2. Respondent

3. CIT

4. CIT(Appeals)

5. DR: ITAT
5 ITA NO. 6826/Del/2018

ASSISTANT REGISTRAR
ITAT NEW DELHI