To assume a valid jurisdiction u/s 147 of the Income Tax Act, the AO must form a reason to believe on his own - Clarifies ITAT

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES "A", JAIPUR
BEFORE SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SINGH YADAV, AM

ITA No. 1388/JP/2019
Assessment Year :2008-09

M/s Bansiwala Iron & Steel Rolling Mills,
2nd Floor, Somani Building, S.C. Link
Road, Loha Mandi, Jaipur.
Appellant

Vs.
D.C.I.T.,
Circle-3,
Jaipur.
Respondent

PAN/GIR No: AADFB2375A

Assessee by: Shri Mahendra Gargieya & Shri Dewang Gargieya (Advs)
Revenue by: Shri Rajendra Singh (CIT-DR)

Date of Hearing : 06/09/2021
Date of Pronouncement : 15/09/2021

ORDER

PER: SANDEEP GOSAIN, J.M.

This is the appeal filed by the assessee against the order of the ld. CIT(A), Alwar dated 30/10/2019 for the A.Y. 2008-09. The grounds taken by the assessee are as under:

"1. The very action taken u/s 147 r/w 148 is bad in law, without jurisdiction and being void ab-initio, hence, the same kindly be quashed. Consequently, the impugned assessment framed u/s 143(3)/148 dated 30.03.2016 also kindly be quashed.

1.2 The Id. CIT(A) erred in law as well as on the facts of the case in confirming the reopening of the case u/s 148 despite the fact that the AO has not decided the objections filed by the appellant within a reasonable period of time and started proceeding to make the assessment through notices issued u/s 143(2) & 142 of the Act, even there before, which was in a direct contravention of the binding directions of the Hon'ble Supreme Court given in the case of  GKN Driveshafts (India) Ltd. vs. ITO & ORS 259 ITR 0019 (2002) and therefore, the impugned order so passed, deserves to be quested.

2. The impugned addition and disallowances made in the order dated 30.03.2016 u/s 143(3) of the Act are bad in law and on facts of the case, for want of jurisdiction and for various other reasons and hence the same may kindly be deleted.

3.1 Rs.1,12,256/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the addition of Rs.1,12,256/-made by the AO by applying estimated GP rate of 9.45% on the alleged suppressed sale of Rs.5,77,150/-, merely based on a search conducted by the Central Excise Department (even though the said Department itself has taken back their allegation) and merely on suspicion, surmises & conjectures, without arriving at an independent opinion/ satisfaction over the impugned addition. The allegation of suppressed sale being completely contrary to the provisions of law and facts and the consequent addition of the suspected gross profit thereon so made, also being completely contrary to the provisions of law and facts and contrary to the submissions and evidences placed on record hence, the impugned addition kindly be deleted in full.

3.2 The above impugned addition otherwise seriously lacks jurisdiction and hence, also the same kindly be deleted in full.

4. Rs.2,32,447/-: The ld. CIT(A) further erred in law as well as on the facts of the case in confirming the estimated addition of Rs.2,32,447/- made by the AO on account of alleged the unexplained investment in the initial unaccounted capital involved @50% of the suppressed sale (less the estimated addition of the gross profit), u/s 69/69C of the Act. The addition so made and confirmed by the ld. CIT(A), being completely contrary to the
provisions of law and facts and rather being the result of suspicion, surmises and conjectures, hence, the same kindly be deleted in full.

5. The ld. AO further erred in law as well as on the facts of the case in charging interest u/s 234A, 234B & 234C of the Act. The appellant totally denies its liability of charging of any such interest. The interest so charged, being contrary to the provisions of law and facts, kindly be deleted in full.

6. The appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing.”

To read / download the full judgment, find the enclosed file