The Delhi Income Tax Appellate Tribunal (ITAT) dismissed the appeal challenging the approval of Assessment Order Under Section 153D of the Income Tax Act, 1961 as the Assessing Officer (AO) has approved the assessment order as per provisions of Income Tax Act, 1961.
The Assessee, Aravali Infrabuild Private Limited has filed three appeals against the separate orders of Commissioner of Income Tax (Appeals) [CIT(A)] for Assessment Years 2012-13, 2015-16 and 2016-17. Since the issues are common and the appeals are connected all these are heard together and disposed off by a common order.
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As per the facts of the case, the appeal was filed on 03.05.2023 and after the removal of defects six subsequent hearing notices were issued through Registered Post Acknowledgement Due (RPAD) but none appeared on behalf of assessee. Later it was came to the notice that no counsel was appointed till date so as per the above details it is shown that the assessee has no interest to proceed with the case so the court decided to hear the case with the assistance of Department Representative (DR) of the Revenue.
The Court proceeded with the assessee’s appeal in ITA No.1326/Del/2023 for AY 2012-13 as the lead case. According to the facts of the case, a search and seizure operation u/s 132 of the Income Tax Act,1961 (Act) was conducted on 23.07.2015 on subsequent dates in different business and residential premises of Deepak Agarwal, Mukesh Kumar and others, group of cases based at Delhi.
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The Investigation Wing found that a group of entry operators were providing accommodation entries to beneficiaries and various incriminating documents were also found. Those seized documents as per the statements recorded during the course of search and post-search proceedings, it was found that the group was involved in providing accommodation entries.
Assessing Officer (AO) based on various incriminating materials found which was relating to the assessee, issued and served notices u/s 153C, 143(2) and 142(1) of the Act to the assessee.
Later AO concluded that the assessee is only a shell company operated and managed by Deepak Aggarwal for providing accommodation entries such as share capital, share application money, share premium, sale/purchase of security loans etc. in lieu of a certain amount of commission.
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The AO passed the order u/s 153C r.w.s. 143 (3) of the Act by making addition of Rs.36,28,295/- on protective basis to the extent of 80% and addition on substantive basis of Rs.9,07,073/- to the extent of 20% on account of commission income and Rs.7,50,793/- on account of expenses disallowed u/s 37 of the Act.
Aggrieved by the order, assessee preferred an appeal before the CIT(A) which after consideration deleted the protective and substantive addition made by AO but rejected the additional ground relating to approval u/s 153D of the Act.
Aggrieved with the order, assessee filed an appeal before ITAT.
The DR for the revenue emphasized over the findings of the CIT(A) and the order passed by it. The court observed that since none appeared on behalf of the assessee and assessee chose not to pursue its case, the court found it fit and proper to dispose of the appeal after considering relevant material on record.
The Delhi ITAT Bench comprising S. Rifaur Rahman (Accountant Member) and Yogesh Kumar U.S (Judicial Member) observed that it is a normal practice in the department to put the draft order along with the assessment records and relying upon documents before the approving authority and the additional copy of the Appraisal report is already given to the Jt. /Addl. Commissioner.
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Further observed that it is nowhere evident which proves that these records were not provided to the approving authority. So, the CIT(A) has rightly held that the approving authority had approved the assessment order as per provisions u/s 153D of the Act.
Also in absence of any submission by the assessee, the court does not find any infirmity in the findings of the CIT(A) on the jurisdictional issue of approval u/s. 153D of the Act. Accordingly, the grounds raised by the assessee for the AY 2012-13 was rejected and dismissed.
Since, the facts in other AY’s i.e. 2015-16 & 2016-17 were exactly similar, the tribunal found the AY 2012-13 are applicable mutatis mutandis in AYs 2015-16 and 2016-17. Accordingly, the other appeals filed by the Assessee were also dismissed.
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