1 ITA No. 5322/Del/2015 & C.O No. 10/Del/2016
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: `G' NEW DELHI
BEFORE SHRI G. D. AGRAWAL, VICE PRESIDENT
AND
MS SUCHITRA KAMBLE, JUDICIAL MEMBER
I.T.A. No. 5322/DEL/2015 (A.Y 2007-08)
DCIT Vs Bhaijee Portfolio Pvt. Ltd.
Circle-4(2) (Now known as Bhaijee
New Delhi Portfolio Ltd.)
AG-401, Shalimar Bagh
New Delhi
AACCB9390H
(APPELLANT) (RESPONDENT)
C.O No. 10/DEL/2016 (A.Y 2007-08)
Bhaijee Portfolio Pvt. Ltd. Vs DCIT
(Now known as Bhaijee Portfolio Ltd.) Circle-4(2)
AG-401, Shalimar Bagh New Delhi
New Delhi
AACCB9390H
(APPELLANT) (RESPONDENT)
Appellant by Sh. N. K. Bansal, Sr. DR
Respondent by Sh. R. S. Singhvi & Sh.
Satyajit Goel, CA
Date of Hearing 04.04.2019
Date of Pronouncement 04.06.2019
ORDER
PER SUCHITRA KAMBLE, JM
The appeal is filed by the Revenue and the Cross Objection is filed by the
assessee against the order dated 29/05/2015 passed by CIT(A)-II, New Delhi
for Assessment Year 2007-08.
2. The grounds of appeal are as under:- I.T.A. No. 5322/DEL/2015
2 ITA No. 5322/Del/2015 & C.O No. 10/Del/2016
"1. On the facts and in the circumstances of the case and in law, the Ld.
CIT(A) has erred in deleting the addition of Rs.70,000,000/- made u/s 68 of
the Income Tax Act, 1961 on account of share capital.
2. On the facts and in the circumstances of the case and in law, the Ld.
CIT(A) has deleted the additions u/s 68 without appreciating the fact that the
assessee failed to prove the genuineness and creditworthiness of the
shareholders who have invested in the Company.
3. On the facts and in the circumstances of the case and in law, the Ld.CIT(A)
has erred in not appreciating the fact that summons u/s 131 issued to Sh.
Satish Gupta, Director of assessee company and also to the shareholder,
remained uncomplied with.
4. On the facts and in the circumstances of the case and in law, the
Ld.CIT(A) failed to appreciate that in case of share subscriber viz. Venus Insec
Pvt. ltd. the accounts were signed by Ms. Ritu Saxena in capacity of Director
against whom the department had received specific information from
Investigation wing as being receptionist of Sh. Tarun Goyal, who had been
proved to be engaged in providing accommodation entries."
C.O No. 10/DEL/2016
"1. That as per facts and circumstances of the case and under the law, the
Ld.CIT(A) has erred in sustaining the reopening of the case u/s 147/148 of
the Income Tax Act, 1961.
2. That initiation of reassessment proceedings are without any tangible
material and even without approval of designated authority and as such
reassessment proceedings are illegal and without jurisdiction."
3 ITA No. 5322/Del/2015 & C.O No. 10/Del/2016
3. Firstly, we are taking up the Cross Objection, as Ld. AR is challenging
reopening u/s 147/148 of the Act. The assessee is a private limited company
which was incorporated on 30.08.2006 and this is the first year of the
company. The company was incorporated for carrying out brokerage activities
relating to purchase and sale of shares. However, this being the first year, no
such activity was carried out during the year. The return of income on the
basis of audited accounts was duly filed on 23.10.2007 and same was
processed u/s 143(1) on 26.08.2008. A search/survey operation u/s 132/133
A of the Income Tax Act, 1961 was conducted by Investigation Wing of Income
Tax Department on 15/09/2008 at the office premises of Shri Tarun Goel.
Various incriminating documents were seized and amended. In the present
case of the assessee company, proceedings u/s 147/148 were initiated vide
notice dated 26.03.2014 by recording reasons and satisfaction that income has
escaped assessment within the meaning of Section 147 of the Act based on the
evidence contained in the report of Investigation Wing and after taking
necessary approval from the competent authority. The Assessing Officer made
the addition u/s 68 in respect of share capital amounting to Rs. 70,00,000/-.
4. Being aggrieved by the Assessment Order, the assessee filed appeal
before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.
5. The Ld. AR submitted that the reasons are reproduced in the assessment
order, but there was no mention of date when the same was recorded. During
the hearing, the assessee produced certified copies of the reasons recorded for
initiation of Section 148 proceedings, the same bares approval of the concerned
CIT(A) dated 27/3/2014 which was proposed by the DCIT on 26/3/2014. The
Ld. AR also pointed out notice u/s 148 dated 26/3/2014. Thus, the Ld. AR is
taking technical ground that before the approval of the CIT how notice can be
issued by the Assessing Officer. Besides that in the reasons, the assessee's
name has been entered at Page 2 of the reasons and the rest of the contentions
set out by the Revenue are identical to the other group cases of Tarun Goel
4 ITA No. 5322/Del/2015 & C.O No. 10/Del/2016
Group. Thus, the Ld. AR submitted that the initiation of reopening u/s 148 is
itself bad in law.
6. The Ld. DR submitted that the reasons were properly recorded and the
initiation of reopening is valid.
7. We have heard both the sides and perused the material available on
record. From the records, it can be clearly seen that the notice has been issued
prior to the approval. Thus, reopening u/s 148 is without the approval of the
designated authority and as such reassessment itself is bad and without any
jurisdiction. The mandatory conditions of Section 148 has not at all followed by
Revenue. Therefore, the re-opening itself is void ab initio and does not survive.
Thus, the Cross objection filed by the assessee is allowed. Since the inception
of the challenge of the order of CIT(A) in Revenue's appeal itself is void ab initio,
the Revenue's appeal is dismissed.
8. In result, appeal of the Revenue is dismissed and cross objection of the
assessee is allowed.
Order pronounced in the Open Court on 04th June, 2019.
Sd/- Sd/-
(G. D. AGRAWAL) (SUCHITRA KAMBLE)
VICE PRESIDENT JUDICIAL MEMBER
Dated: 04/06/2019
R. Naheed *
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
5 ITA No. 5322/Del/2015 & C.O No. 10/Del/2016
Date of dictation 04.04.2019
Date on which the typed draft is placed before the 04.04.2019
dictating Member
Date on which the typed draft is placed before the
Other Member
Date on which the approved draft comes to the Sr.
PS/PS
Date on which the fair order is placed before the
Dictating Member for pronouncement
Date on which the fair order comes back to the Sr.
PS/PS
Date on which the final order is uploaded on the
website of ITAT
Date on which the file goes to the Bench Clerk
Date on which the file goes to the Head Clerk
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