Case Number: ITA 1607/DEL/2019
Appellant: Ratnashri Infrastructure Pvt. Ltd., Delhi
Respondent: ACIT, Central Circle-4, New Delhi
Assessment Year: 2010-11
Case Filed On: February 27, 2019
Order Type: Final Tribunal Order
Date of Order: October 31, 2023
Pronounced On: October 31, 2023
The case of Ratnashri Infrastructure Pvt. Ltd. vs ACIT, Central Circle-4, New Delhi revolves around the assessment year 2010-11. The core issue pertains to the unexplained cash credits and the validity of the reopening of assessment under sections 147/148 of the Income Tax Act, 1961. The final judgment was delivered by the Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘E’, comprising Accountant Member Shri M. Balaganesh and Judicial Member Shri Anubhav Sharma.
Ratnashri Infrastructure Pvt. Ltd., engaged in the business of builder and developer, filed its return on September 27, 2010, declaring nil income. During the assessment year under consideration, the Assessing Officer (AO) received information from the ADIT (Investigation Wing-2(1), Kolkata) about a fund of Rs. 12.5 lakhs credited to the assessee’s bank account, which was not reflected in the Profit & Loss account. Consequently, a notice under section 148 was issued on March 31, 2017, requiring the assessee to file its return of income.
The assessee complied with the notice and filed its return on August 10, 2017. Subsequently, notices under sections 143(2) and 142(1), along with a questionnaire, were issued. The AO observed that a search and seizure operation was conducted on MAPSKO Group on December 29, 2015, and an appraisal report dated September 8, 2016, along with seized material, was received on July 14, 2017. The AO found that eleven parties had subscribed to share capital of Rs. 62.5 lakhs in the assessee company. Upon examination, the AO made additions of Rs. 62.5 lakhs, concluding that the assessee failed to prove the identity, creditworthiness, and genuineness of the transactions.
The assessee appealed to the Commissioner of Income Tax (Appeals)-23, New Delhi, raising several grounds, including the legality of the reopening under sections 147/148 and the merits of the additions made by the AO. The CIT(A) dealt with the grounds and dismissed the appeal, sustaining the additions made by the AO.
Before the ITAT, the assessee raised jurisdictional grounds challenging the reopening under sections 147/148 and the additions made by the AO. The ITAT observed that the CIT(A) erred in not admitting additional grounds questioning the reopening’s legality. The Tribunal highlighted that questions of law regarding jurisdiction go to the root of the assessment order and should be entertained.
The ITAT set aside the order of the CIT(A) and directed it to admit the additional grounds raised by the assessee. The Tribunal emphasized that questions of law challenging the exercise of jurisdiction should be addressed by the first appellate authority. The appeal of the assessee was allowed for statistical purposes.
Order Pronounced in the Open Court on October 31, 2023:
Shri M. Balaganesh (Accountant Member) and Shri Anubhav Sharma (Judicial Member) delivered the final judgment, allowing the appeal for statistical purposes and setting aside the order of the CIT(A).
This case highlights the importance of addressing jurisdictional issues at the appellate level and ensuring that the exercise of reopening assessments under sections 147/148 is based on valid, tangible material and not merely on borrowed satisfaction or stale information.
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