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29-11-2019, Flovel Energy, Section 292BB, 27, 148, Tribunal Delhi

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1 week 5 days ago #11625 by amit
Section - 292BB, 27, 148, 147, 133A, 144
Order Date - 29-11-2019
Favouring - Assessee
Court - Tribunal Delhi
Appellant - Flovel Energy Pvt. Ltd.
Respondent - ACIT
Citation - 1219Taxpundit15
Appeal No. - ITA No.6485/Del/2019
Asstt. Year - 2011-12



This appeal filed by the assessee is directed against the order dated 27th June, 2019 of the CIT(A)-34, New Delhi, relating to assessment year 2011-12.

2. Facts of the case, in brief, are that the assessee company is a Joint Venture between Flovel India and MECAMIDI SA, France. It provides all inclusive solutions for small, Hydro power projects and provides solutions for Renovation, modernization and upgradation of existing hydropower plants. It filed its return of income on 29th September, 2011 declaring total income of Rs.2,64,02,058/-. The Assessing Officer completed the assessment u/s 143(3) on 30th June, 2013, determining the total income at Rs.2,04,57,580/-. Subsequently, the case of the assessee was reopened u/s 147 of the IT Act, 1961 and notice u/s 148 was issued on 29th January, 2015. The basis for such reopening was that a survey was conducted in the case of the assessee u/s 133A on 22nd January, 2014 during which a diary was found from the cabin of Shri R.N. Aggarwal, DGM (Finance) which was impounded as Annexure A-11. The said diary contains details of receipt of cash against the payment made to various parties in the garb of commission/business procurement and under other heads. The diary also contained unaccounted sale of scrap and excess payment of interest over and above what has been recorded in the books of account. According to the Assessing Officer, the assessee did not file any reply in response to such notice issued u/s 148. He, thereafter, issued notice u/s 142(1) dated 29th February, 2016 fixing the case for hearing on 8th March, 2016. The AR of the assessee attended before the Assessing Officer on 8th March, 2016 and filed its reply wherein it was submitted that reply to the notice issued dated 09.01.2015 was submitted in the office of the then DCIT, Circle (9), New Delhi with a reply dated 23rd March, 2015 and a copy of the same was also enclosed. According to the Assessing Officer, no such reply was found as per the office record. Further, the assessee, vide letter dated 9th March, 2016, submitted that the reply dated 23rd March, 2015 was submitted by the assessee through speed post. The assessee requested for copy of reasons recorded which was provided to the assessee. The assessee filed its objections against such reassessment proceedings which was disposed of by the Assessing Officer by passing a speaking order. The Assessing Officer, thereafter, completed the assessment u/s 144/143(3) determining the total income of the assessee at Rs.4,70,49,353/-, wherein he made the following three additions:-

a) Business procurement expenses - Rs.1,85,28,300/-
b) Unaccounted scrap - Rs.13,85,556/-
c) Excess payment over and above debited in the P&L A/c - Rs.6,77,918/-

3. Before the CIT(A), the assessee, apart from challenging the addition on merit, challenged the validity of the reassessment proceedings and also challenged the validity of the assessment on the gr und of non-issuance of notice u/s 143(2). However, the ld.CIT(A) dismissed the appeal filed by the assessee and upheld the validity of the reassessm nt proceedings as well as the validity of assessment on account of non-issuance of notice u/s 143(2). So far as the order of the CIT(A) dismissing the ground raised by the assessee on account of non-issuance of notice u/s 143(2) is concerned, he rejected the same by observing as under:-

“6.3 I have considered the facts of the case, finding of the AO, remand report and submission of the appellant. The appellant has objected the initiation of reassessment proceedings on the basis that notice u/s 143(2) was not issued within the time allowed under the proviso to section 143(2). The appellant has also raised objection on the basis that AO has mentioned in the reason recorded that income of Rs.3,13,46,453/- chargeable to tax has escaped assessment but has not spelled out in the reason as to which material facts was not disclosed during the original assessment proceedings. Remand report is called for from the AO on the issue of objection raised by the appellant for the issuance of notice u/s 143(2). The AO has submitted that appellant has not raised any objection during the course of reassessment proceedings with regard to service of notice u/s 143(2) and complied to all the notices issued. In the case of the appellant notice was issued on 09.01.2015 while the objections were filed by the appellant only on 14.03.2016. The AO has duly disposed off the objection as per the decision of the Hon'ble Supreme Court in the case of GKN Driveshafts India Ltd. Vs ITO 259 ITR 19 vide letter dated 15.03.2016. After disposal of the objection, AO has issued the notice u/s 143(2) to the appellant. Even in the objections appellant has not raised the issue of non issuance of notice u/s 143(2) within time. The AO has followed the procedure laid down by the Hon'ble Supreme Court in GKN Driveshafts, thus objection raised by the appellant for not issuance notice within time is not acceptable. The appellant is also not entitled to raise objection as per the provisions of section 292BB, as notice u/s 143(2) of the Act was duly served upon it and appellant has appeared and cooperated during the assessment proceedings.

6.4 Considering the above facts, AO has correctly initiated the reassessment proceedings in the case of the appellant and objection raised by the appellant on the initiation of reassessment proceedings are not maintainable.”

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