Case Number: ITA 465/DEL/2019
Appellant: Technicon Holdings Pvt. Ltd, New Delhi
Respondent: ACIT, Circle-25(1), New Delhi
Assessment Year: 2010-11
Case Filed On: 2019-01-23
Order Type: Final Tribunal Order
Date of Order: 2022-03-23
Pronounced On: 2022-03-23
The case of Technicon Holdings Pvt. Ltd vs ACIT, Circle-25(1), New Delhi, pertains to the assessment year 2010-11. The appellant, Technicon Holdings Pvt. Ltd, filed an appeal against the order passed by the CIT(A)-9, New Delhi, which upheld the assessment order dated 30-11-2017 passed under section 147 of the Income Tax Act, 1961.
The case originated when the Assessing Officer (AO) received information from the ADIT (Investigation), Faridabad, indicating that M/s. Neelkanth Steel, Faridabad, had made bogus sales of Rs. 25 lakhs to Technicon Holdings Pvt. Ltd. This led to the reopening of the assessment for the year 2010-11 under section 147 of the Income Tax Act. The AO added Rs. 25 lakhs to the total income of the appellant under section 69/69C of the Act, citing the receipt of accommodation entries and the failure of the appellant to provide documentary evidence substantiating the transactions.
The Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘G’ heard the case on 27.01.2022. The appellant was represented by Shri Sanjeev Sapra, Ld. CA, while the respondent was represented by Shri Umesh Takyar, Ld. Sr. DR. The tribunal examined whether the reopening of the assessment based on the information from the Investigation Wing was justified and whether the addition of Rs. 25 lakhs was warranted.
The ITAT reviewed the provisions of section 147 of the Income Tax Act, which authorizes the AO to assess or reassess income if there is reason to believe that income has escaped assessment. The tribunal emphasized that the reasons to believe must be bona fide and based on relevant material, not merely on borrowed satisfaction from other authorities.
The tribunal found that the AO had not conducted any independent inquiry to verify the information received from the ADIT (Investigation). The reasons recorded for reopening the case were based on unverified information and lacked substantive evidence.
The tribunal concluded that the reopening of the assessment was not justified as it was based on borrowed satisfaction without independent verification by the AO. The tribunal quashed the reassessment order and the addition of Rs. 25 lakhs, deeming the reasons for reopening to be invalid and not in accordance with the law.
In summary, the appeal filed by Technicon Holdings Pvt. Ltd for the assessment year 2010-11 was allowed. The ITAT quashed the reassessment order and the addition of Rs. 25 lakhs, highlighting the importance of independent verification and genuine satisfaction in reopening cases under section 147 of the Income Tax Act.
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