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Judgment
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER :
The captioned appeal preferred by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi passed under section 250 of the Income-tax Act, 1961 (in short “the Act”) dated 02.09.2024 arising from the assessment order dated 16.03.2023 under section 147 r.w.s 144B of the Act relating to assessment year 2018-19.
The grounds raised by the assessee are as under :
“1.On the facts and circumstances of the case, the order passed by the learned CIT (A) is bad both in the eye of law and on facts.
2.On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in upholding the unjustified assumption of jurisdiction by the AO u/s 147 as against u/s 153C of the Act.
3.On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in not giving due importance either to the submissions made by the assessee during the course of appellate proceedings or to the most relevant case laws relied upon including those pronounced by the jurisdictional Tribunal.
4.On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in passing a non-speaking order for denying contention of the assessee regarding applicability of Section 153C of the Act in the extant case.
5.That the appellant craves leave to add, amend or alter any of the grounds of appeal.”
None was present on behalf of the assessee. We decided to hear the appeal ex-parte with the assistance of the ld DR. We have carefully perused the materials on record.
Brief facts of the case are that the assessee is a private limited company and filed its original return of income for the A.Y. 2018-19 on 27.10.2018 declaring taxable income of Rs.6,740/-.
A search operation was conducted on 8 Hawala Operators. On the basis of information collected by the Investigation Wing, during post search enquiries from Manish Gupta, one of the 8 Hawala Operators, it was found that the assessee was involved in transaction of unexplained cash credit of Rs.26,50,000/- from entity M/s. KB Enterprises managed and controlled by Shri Manish Gupta. On the basis of such information, the assessee’s case was reopened u/s 148 of the Act dated 30.03.2022 after duly complying with the provisions of section 148A and 148A(d).
The reassessment proceedings was completed by treating the said amount of Rs.26,50,000/- received from M/s. KB Enterprises as unexplained cash credit, the assessee being one of the beneficiaries of the Manish Gupta who was a Hawala operator. Further the AO found that assessee has declared in its balance sheet a sum of Rs.2,73,19,000/- as loan and advances received. As the assessee failed to provide proper satisfactory explanation on account of such loans and advances, the AO added the balance sum of Rs.2,46,69,000/- as unexplained cash credit under section 68 of the Act. The CIT(A) upheld the addition and dismissed the challenge to the assumption of jurisdiction u/s 147. Aggrieved the assessee is before us.
Per contra, the ld DR relied on the orders of authorities below.
We have heard the rival submissions and perused the material available on record. The substantive argument of the assessee is that the AO has assumed unjustified jurisdiction under section 147 of the Act as against under section 153C of the Act and that the assessment should have been made under section 153C of the Act and not under 148/147 of the Act. It is the contention of the assessee is that where the provision of section 153C are applicable, the AO cannot assume jurisdiction under section 148 of the Act. We are unable to give our consent to such a proposition. We find that the Hon’ble Delhi High Court has dispelled such objection in the case of PCIT v. Naveen Kumar Gupta [2024] 168 taxmann.com 574 (Delhi) referencing the decision of the Supreme Court's decision in Pr. CIT v. Abhisar Buildwell (P.) Ltd. [2023] 454 ITR 212 (SC). The hon’ble Delhi Court held that where jurisdictional conditions to initiate further steps under section 153C were not satisfied, non obstante clause as used in section 153C could not be read to completely exclude provisions of section 147 and thus, Assessing Officer could initiate reassessment proceedings under section 147 even if proceedings under section 153C could have been initiated.
In the instant case, there was a search on the case of Hawala Operators including Manish Gupta from where it was discovered that the assessee had transactions of loans with Manish Gupta. This information was forwarded by the Investigation Wing to the Assessing Officer. On the basis of such information the AO initiated proceedings u/s 148. It remains an uncontroverted fact that the AO has followed the due procedure as specified for initiating such proceedings under Section 147 of the Act. In such factual matrix and in the light of the aforesaid decision of the hon’ble Delhi Court, we have no hesitancy to hold that the AO has validly assumed jurisdiction under section 147/148 of the Act. The grounds of appeal of the assessee is dismissed.
In the result, appeal of the assessee is dismissed.