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2015 (12) TMI 356 - ITAT DELHI

2015 (12) TMI 356 - ITAT DELHI - [2016] 48 ITR (Trib) 264 - Validity of assessment u/s 153A - whether the assessment is barred by limitation under Section 153(1B) - Held that:- In the present case, there was no evidence on record suggesting that the assesse sought suo motu extension of time for submission of audit report under Section 142(2A) of the Act. It is clear from the record that the Assessing Officer had suo motu extended time for furnishing the audit report under Section 142A of the Act .....

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essee : Sh. Ved Jain, CA For The Department : Sh. Ravi Jain, CIT(DR) ORDER PER INTURI RAMA RAO, A.M.: These cross appeals, filed by the assessee as well as by the Department, are directed against the order of CIT(A)-XXXII, Delhi, dated 26.03.2012 passed for the assessment year 2005-06. The assessee filed appeal in ITA No. 2237/Del/2012 and the Revenue filed appeal in ITA No. 2730/Del/2012. The assessee raised the following grounds of appeal in ITA No. 2237/Del/2012: i. The grounds of appeal ment .....

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radipkumar Vikaskumar 50,00,000 Total (Rs. ) 3,80,00,000 iii. The learned CIT(A) erred on facts as also in law in confirming addition of ₹ 75,00,000/- being unsecured loan received from Shri Raj Pal. The addition may kindly be deleted. iv. The learned CIT(A) erred on facts as also in law in retaining disallowance of ₹ 9,94,380/- being 20% of ₹ 49,71,904/- made u/s 40A(3) of the Act. The disallowance may kindly be deleted. v. The learned CIT(A) erred on facts as also in law in r .....

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on facts as also in law in confirming addition of ₹ 70,00,000/- being amount received from Shri Ram Kishan Dass. The addition may kindly be deleted. viii. Your Honour s appellant craves leave to add, amend, alter or withdraw any or more grounds of appeal on or before the hearing of appeal. 2. The Revenue raised the following grounds of appeal in ITA No. 2730/Del/2012: i. That the Commissioner of Income Tax(Appeals) erred in law and on facts of the case in deleting the addition of ₹ 4 .....

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de by the Assessing Officer on account of unexplained investment in construction of factory building. iv. (a) The order of the CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal. 3. First, we shall take up the appeal filed by the assessee company since the issues raised in the appeal relate to the validity of the assessment. During the course of he .....

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On the facts and circumstances of the case, the AO was not justified, both on facts and in law, in asking the appellant to get its accounts audited under Section 142(2A) of the Act. 11. On the facts and circumstanced of the case, the extension granted by the AO in carrying out the audit under Section 142(2A) is against the statutory provision of the Act, as applicable in the relevant assessment year whereby no such extension can be given unless the appellant makes a request for the same. 12. On .....

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purely legal grounds and does not require any verification of investigation into the facts. Having regard to the ratio laid down by the Hon ble Supreme court in the case of NTPC Ltd. Vs. CIT, 229 ITR 383 (SC), we admit the additional grounds of appeal for adjudication. Hence, we proceed to adjudicate upon the additional ground of appeal, since it goes to the very validity of the assessment. The factual matrix leading to the present appeal is as under: 6.1 A search and seizure operations under Se .....

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142(2A) of the Act. As per the said order, the time limit for filing the audit report was 90 days, which means audit report was to be completed on or before 12th March, 2007. However, the Assessing Officer at the request of the Chartered Accountant, namely, M/s P. Bholusaria & Co., extended the due date for furnishing of the audit report upto 5th June, 2007 by three different orders. The audit report was finally submitted on 4th June, 2007 and the assessment order was passed by the Assessin .....

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ion, he relied upon the decision of this Tribunal in the case of M/s Bishan Saroop Ram Kishan Agro Pvt. Ltd. Vs. DCIT, in ITA No. 3413/Del/2008 (A.Y. 1999-2000) along with other appeals, dated 18th September, 2009 and this decision was confirmed by the Hon ble Delhi High Court vide order dated 27th May, 2011, in ITA No. 1775/2010 (CIT Vs. Bishan Saroop Ram Kishan Agro Pvt. Ltd.) along with other appeals. Copies of the above orders have been filed before us. 8. On the other hand, the ld. CIT(DR) .....

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eport under the provisions of Section 142(2A) of the Act. Such power was granted by the statute to the Assessing Officer only from the assessment year 2008-09. This provision was made clear by the CBDT Circular No. 7, issued on 27th March, 2009. The similar issue had come up before a coordinate bench of this Tribunal, in the case of M/s Bishan Saroop Ram Kishan Agro Pvt. Ltd. Vs. DCIT, in ITA No. 3413/Del/2008 (A.Y. 1999-2000) along with other appeals and the Tribunal vide order dated 18th Septe .....

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been done vide letter dated 07.03.2007, 17.04.2007 and 17.05.2007 made on the request of the auditor could duly be taken as the suo motu action of the A.O. A perusal of the memorandum explaining the provisions of Finance bill 2008 as also the Circular No. 01 dated 27.03.2008 which explains the amendment to the proviso to Section 142(2C) shows that the term "suo motu, or" had been inserted w.e.f. 01.04.2008. In these circumstances, it would have to be held that the power to suo motu ex .....

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thout an application from the assessee. Further, even such extension would be controlled in view of the term "for any good & sufficient reason". Here as the period in the present case is before 01.04.2008 and as it is noticed that the assessee has not made any application for the extension of the period given vide order for special order dated 12.12.2006, the extensions made by the A.O. vide his order dated 7.03.2007, 17.04.2007 and 17.05.2007 are without jurisdiction and consequen .....

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claim of the assessee that the assessment is barred by limitation, would have to be upheld and we do so. 10. The above order was confirmed by the Hon ble Delhi High Court in ITA No. 1775 of 2010, vide order dated 27th May, 2011 as under: 19. It was to rationalize the said proviso that the word "suo motu" came to be added by way of amendment with effect from 1st April 2008. As per Clause 27.3 of the Circular dated 27th March, 2009 while the Assessing Officer shall continue to have the p .....

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from the date on which the directions under section 142(2A) of the Act for the audit was received by the Assessee. It is an admitted fact that in the present case, the assessee had not made any application for extension of period of audit report. Therefore, the extension which was granted by the Assessing Officer on the request of the Auditor could be taken to be a suo motu action of the Assessing Officer which power, as noted above, was not available with the Assessing Officer prior to the amen .....

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of furnishing of special audit report suo motu. 20. In the light of interpretation of the proviso as is existed before or after the amendment and the legislative intent behind the amendment as gathered from the memorandum and the circular noted above, we are not persuaded to agree with the interpretation as given by the Punjab and Haryana High Court in the case of Jagjit Sugar Mills Company Limited (supra). Further in view of our above discussion, it comes to be concluded that the Tribunal was c .....

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