M/S Om Shiva Traders Pvt. Ltd v. Income Tax Officer Ward 13(4) New Delhi, & Anr

RAJIV SHAKDHER, J. (ORAL): CM No.39611/2023

¶1Exemption allowed subject to just exceptions. ITA 428/2023 & CM Nos.39610/2023

¶2Issue notice.

¶3Mr Shailendra Singh, learned senior standing counsel, accepts notice on behalf of the respondents/revenue.

¶4We have heard the counsels for the parties.

¶5We are of the view that the appeal should be admitted.

¶6It is ordered accordingly.

¶7The following question of law is framed for consideration of this

Court:

(i) Whether the Tribunal misdirected itself in law in passing the impugned order, in view of the fact that it contains no reasons?

¶8With the consent of the learned counsels for the parties, the writ petition is taken up for hearing and final disposal at this stage itself, based on the record presently made available to the Court.

¶9This appeal concerns Assessment Year 2008-09.

¶10Via this appeal, the appellant/assessee seeks to assail the order dated

01.03.2023 passed by the Income Tax Appellate Tribunal [in short, "The Act"].

¶11A perusal of the impugned order shows that the respondent/revenue had preferred an appeal with the Tribunal, against the order of Commissioner of Income Tax (Appeals) [in short, "CIT(A)"] dated

31.03.2011.

¶12The issue that the CIT(A), and thereafter the Tribunal, dealt with was, whether the addition made by the Assessing Officer (AO) under Section 68 of the Income Tax Act, 1961 [in short, "The Act"], was sustainable.

¶13The AO had added Rs. 3 crores, to the appellant/assessee's income.

¶14The record shows that this amount was apparently received by the appellant/assessee, in the form of share capital and share premium.

¶15According to the appellant/assessee, Rs. 2 crores was invested by an entity going by the name, Bhawani Portfolio Pvt. Limited, while Rs. 1 crore was invested by another entity going by the name, Thar Steels Pvt. Limited.

¶16It appears that Rs. 2.50 crores was invested towards share capital. The balance amount, i.e. Rs. 50 lakhs, was received in the form of share

premium.

¶17According to the CIT(A), the appellant/assessee had satisfied the triple test, i.e., i.e., established the identity, genuineness and creditworthiness of the investors.

¶18This conclusion was reversed by the Tribunal, with a direction to the AO to make a fresh enquiry.

¶19A perusal of the order shows that the Tribunal has not provided any reason whatsoever, as to why it disagrees with the conclusion arrived at by the CIT(A).

¶20The CIT(A) has rendered a reasoned decision.

¶21Furthermore, the Tribunal has simply quoted in extenso, the assertions made by the appellant/assessee and extracted a portion of the CIT(A)'s order.

¶22This aspect runs through the entire order.

¶23The Tribunal, thereafter, in one paragraph, i.e paragraph 11, has simply stated the following, which according to us, is not satisfactory. "Having heard arguments of both the parties and after going through the entire contents of the paper book and after perusing the facts on record, we do not find any strength in the ratio given by the ld. CIT(A), hence, owing to the absence of the pertinent facts, we deem it proper to remand the matter to file of the Assessing Officer to inquire into the issue afresh and pass a speaking order after affording due opportunity to the assessee".

¶24As would be evident on a perusal of the aforementioned paragraph, the reversal of the CIT(A)'s order has taken place, without the Tribunal discussing as to what part of the order was unsustainable.

¶25Furthermore, a direction of remand has been issued, without

indicating to the AO what exactly he is required to examine afresh.

¶26We are of the view that the Tribunal will have to deliberate on the matter afresh and articulate in the order its reasoning, if it chooses not to agree with the order of the CIT(A).

¶27Consequently, the impugned order is set-aside.

¶28Accordingly, the question of law is answered in favour of appellant/assessee, and against the respondent/revenue. The matter is remanded to the Tribunal for a de novo hearing.

¶29The above-captioned appeal is disposed of, in the aforesaid terms.

¶29Pending interlocutory application shall stand disposed of.

RAJIV SHAKDHER JUDGE

GIRISH KATHPALIA JUDGE AUGUST 4, 2023/RY

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* IN THE HIGH COURT OF DELHI AT NEW DELHI % Decision delivered on:04 .08.2023 + M/S OM SHIVA TRADERS PVT. LTD. ..... Appellant Through: Mr Rakesh Gupta with Mr Somil Agarwal and Mr Anshul Mittal, Advs. versus INCOME TAX OFFICER WARD 13(4) NEW DELHI, & ANR. ..... Respondents Through: Mr Shailendra Singh, Sr. Standing Counsel with Ms Dacchita Shahi, Mr Viplav Acharya and Mr Akash Saxena, Advs. CORAM: HON'BLE MR. JUSTICE RAJIV SHAKDHER HON'BLE MR. JUSTICE GIRISH KATHPALIA [Physical Hearing/Hybrid Hearing (as per request)]