Case Number: ITA 1046/DEL/2021
Appellant: Deepak Garg, Haryana
Respondent: Deputy Commissioner of Income Tax, Central Circle, Karnal
Assessment Year: 2010-11
Result: 2010-11
Case Filed on: 2021-09-02
Order Type: Final Tribunal Order
Date of Order: 2023-05-04
Pronounced on: 2023-05-04
The case of Deepak Garg, Haryana versus Deputy Commissioner of Income Tax, Central Circle, Karnal revolves around the reassessment and addition of undisclosed investment for the assessment year 2010-11. The appellant, Deepak Garg, challenged the reassessment proceedings initiated by the Assessing Officer (AO) and upheld by the CIT(A), regarding the addition of Rs. 19,35,001/- representing undisclosed investment in jewellery.
Deepak Garg filed his return of income for the assessment year 2010-11 on 26.07.2010 with the Income Tax Officer, Ward-2, Panipat, declaring an income of Rs. 4,16,715/-. The assessment was completed under section 143(3) of the Income Tax Act on 27.02.2012, determining the income of the assessee at Rs. 4,76,720/-. Subsequently, a search and seizure operation was carried out on 22.06.2016 in the case of M/s. Garg Group of cases, including the assessee.
The grounds raised by the appellant were as follows:
1. The appellant denies its liability to be reassessed at total income of Rs. 24,11,720/- and accordingly denies its liability to pay tax, cess, and interest demanded thereon.
2. The CIT(A) erred in law and on facts in upholding the reassessment order passed by the AO under section 143(3)/147 without assuming jurisdiction as per law and without complying with the mandatory conditions of sections 147 to 151 of the Income Tax Act, 1961.
3. The CIT(A) erred in not considering the facts that the AO has not provided the certified copy of reasons recorded, thus making the reassessment order bad in law.
4. The CIT(A) erred in not considering the facts that the reasons claimed to be reproduced by the AO in his letter dated 16.11.2017 are factually incorrect and self-contradictory, and not sustainable on various legal and factual grounds.
5. The CIT(A) erred in sustaining the impugned assessment order passed by the AO without assuming jurisdiction as per law and without serving the mandatory notice under section 143(2) of the Income Tax Act, 1961.
6. The CIT(A) erred in confirming the addition of Rs. 19,35,001/- on account of investment in jewellery by treating it as an investment from undisclosed sources under section 69, without providing adverse material, opportunity of cross-examination, and in violation of principles of natural justice.
7. The CIT(A) erred in not considering the fact that the copy of the alleged invoice of jewellery was not provided to the appellant during the proceedings.
8. The CIT(A) erred in not providing the appellant the opportunity to cross-examine CA H. K. Goel, whose statement was used against the appellant.
The Tribunal reviewed the submissions and materials on record. It noted that the search and seizure operation was conducted in the case of Garg Group of cases, and the reassessment was based on certain retail invoices found in the custody of CA H. K. Goel. The Tribunal found that the jurisdiction over the appellant rested with the Income Tax Officer, Ward-2, Panipat, and not with the Income Tax Officer, Ward-1, Panipat, who issued the notice under section 148 of the Act.
The Tribunal referenced several key decisions, including:
– CIT vs. Y. Narayana Chetty (1959) 35 ITR 388 (SC)
– CIT vs. Kurban Hussain Ibrahimji Mithiborwala (1971) 82 ITR 821 (SC)
– Hari Dass Singla vs. ITO in ITA No. 958/Del/2021
– CIT vs. M.I. Builders Pvt. Ltd. (2012) 349 ITR 271 (All)
The Tribunal allowed the appeal filed by Deepak Garg for the assessment year 2010-11. The notice issued under section 148 by the Income Tax Officer, Ward-1, Panipat, was found to be without jurisdiction, making the reassessment void ab initio. The Tribunal quashed the reassessment order passed under section 143(3) read with section 147 of the Act.
In conclusion, the ITAT, Delhi Bench, provided a fair judgment by allowing the appeal of Deepak Garg. The reassessment and addition of undisclosed investment under section 69 were deleted, ensuring adherence to jurisdictional requirements and legal precedents for the assessment year 2010-11.
Pronounced in the open court on 4th May 2023.
Signed:
(G. S. Pannu)
President
Signed:
(C. N. Prasad)
Judicial Member
Dated: 4th May 2023
Copy forwarded to:
Asstt. Registrar, ITAT, New Delhi
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