Delhi High Court
Makams Industries Pvt Ltd vs Assist. Commissioner Of Income ... on 13 August, 2021
$~13
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision:13.08.2021
+ W.P.(C) 6155/2021 & CM 19527/2021
MAKAMS INDUSTRIES PVT LTD ..... Petitioner
Through Mr.Salil Kapoor, Ms.Ananya
Kapoor, Ms.Soumya Singh,
Mr.Sumit Lalchandani,
Mr.Sanat Kapoor, Advs.
versus
ASSIST. COMMISSIONER OF INCOME TAX CENTRAL
CIRCLE 29 & ANR. ..... Respondents
Through Mr.Abhishek Maratha, Sr.
Standing counsel.
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
HON'BLE MR. JUSTICE NAVIN CHAWLA
MANMOHAN, J. (Oral)
1. The petition has been heard by way of video conferencing.
2. Present writ petition has been filed challenging the Assessment
order dated 15th June, 2021 passed under Section 143(3) of the Income
Tax Act, 1961 (hereinafter referred to as the 'Act') in case of the
petitioner for the assessment years 2018-19 on the ground that the
regular assessment proceeding in the case of the petitioner had already
stood concluded vide assessment order dated 26th November, 2019 and
the respondent Assessing Officer had become functus officio.
Signature Not Verified
Digitally Signed By:JASWANT
SINGH RAWAT
Signing Date:15.08.2021
11:34:53
3. The learned Predecessor Division Bench while issuing notice on
07th July, 2021 had stayed the operation of the impugned Assessment
Order dated 15th June, 2021. The order dated 07th July 2021 is
reproduced hereinbelow:
"W.P.(C) 6155/2021 & CM No.19527/2021
[Application filed on behalf of the petitioner seeking stay on
the operation of the impugned assessment order dated
15.06.2021 and consequential actions]
2. Via this writ petition, inter alia, challenge is laid to
the assessment order dated 15.06.2021 passed under
Section 143(3) of the Income Tax Act, 1961 (in short „the
Act‟), concerning the assessment year (AY) 2018-2019.
2.1. Mr. Salil Kapoor, who appears on behalf of the
petitioner, says that the aforementioned assessment order
dated 15.06.2021 was passed by the concerned Assessing
Officer (in short „AO‟) when he had already been rendered
functus officio. In this context, our attention has been drawn
to the earlier assessment order dated 26.11.2019
concerning the very same AY i.e. 2018-2019. This order was
also passed under Section 143(3) of the Act by the very
same officer.
2.2. According to Mr. Kapoor, after the earlier
assessment order was passed, i.e. the order dated
26.11.2019, impugned notices under Section 142(1) of the
Act, dated 08.02.2021, 12.02.2021 and 06.03.2021 were
served on the petitioner by respondent no.1, which,
according to him, was an action without jurisdiction. Mr.
Kapoor says that, objections qua the same were raised by
the petitioner via communications dated 09.02.2021,
15.02.2021 and 18.03.2021.
2.3. It is also emphasized by Mr. Kapoor that, a bare
perusal of the assessment order dated 26.11.2019 would
show that it was not passed either under Section 153A or
153C of the Act.
3. Accordingly, issue notice to the respondents. Mr.
Abhishek Maratha accepts service on behalf of the
Signature Not Verified
Digitally Signed By:JASWANT
SINGH RAWAT
Signing Date:15.08.2021
11:34:53
respondents/revenue.
3.1. Mr. Maratha says that he will revert with
instructions. In case, instructions are received to resist the
writ petition, a counter-affidavit will be
filed before the next date of hearing.
4. List the matter on 13.08.2021.
5. In the meanwhile, there shall be a stay on the
operation of the impugned assessment order dated
15.06.2021."
4. Mr.Maratha, learned counsel, on instructions, states that he does
not wish to file any counter affidavit. However, he has drawn this
Court's attention to the first assessment order dated 26th November,
2019, wherein it has been held as under:
"12. Assessment year 2018-19 is therefore the
search year and the case is required to be assessed
alongwith assessment years 2012-13 to 2017-18 for which
proceedings u/s 153C were separately initiated.
13. In view of facts stated above, it is clear that
the assessee did not submit any details in response to
notices issued. Therefore, I have no option but to complete
the assessment on the basis of material available on record.
14. As discussed above, it is evident that Sh.
Verma was actually doing all these entry providing
activities and also enjoying the commission earned out of it.
Creation of various entities was solely with a view to
facilitate him in carrying out his activities. All these entities
being merely on papers, their directors/partners/proprietors
were only name lenders and there was no actual business
activity in any such entity. Therefore, the entire income
arising out of these activities shall be assessed in the hands
of Sh.Verma and not in the hands of these paper entitles.
14.1 Assessee company is one of the 200 shell
companies/entities which is being controlled by Himanshu
Verma for providing accommodation entries in lieu of
commission. This was confirmed by Mr. Himanshu Verma in
Signature Not Verified
Digitally Signed By:JASWANT
SINGH RAWAT
Signing Date:15.08.2021
11:34:53
his statement recorded during the course of search and also
during assessment proceedings."
5. Mr. Maratha has also drawn this Court's attention to the
impugned assessment order dated 15th June, 2021, which is
reproduced hereinbelow:
"12. For the Assessment year 2018-19 the assessment
proceedings were completed u/s 153C/143(3) of the Act on
26.11.2019 in name M/s Soubhagaya Mithila Television Pvt.
Ltd. (AANCS0160K). Further, The ITR for A.Y. 2018-19 of
the above assessee company in name M/s Makams
Industries Pvt. Ltd (AANCS0160K) (Previously known as
M/s Sobhagaya Mithila Television Pvt. Ltd.) had also been
selected for limited scrutiny for the following CASS
reasons:-
1. Exports/Imports
2. Investment in Immovable property
From the assessment records, following observations
are being made:
1. It has been observed that the case for A.Y. 2018-19
was selected in CASS Scrutiny on date 28.09.2019.
Similarly the company was covered in search of Sh.
Himanshu Verma (Entry Operator). So the case of M.s
Makams Industries Pvt. Ltd. were taken for scrutiny by the
Assessing Officer on 28.09.2019.
2. For the same year A.Y. 2018-19 two notices were
issued to assessee company M/s Makam Industries Pvt. Ltd.
(Previously known as M/s Sobhagaya Mithila Television
Pvt. Ltd.)
1. First Notice by NeAC
2. Second notice by Assessing Officer in consequence
of Search Operation
1. As first case was covered in search operation and
it was stated as a bogus/shell company of entry operator Sh.
Himanshu Verma. Sh. Verma has been managing and
Signature Not Verified
Digitally Signed By:JASWANT
SINGH RAWAT
Signing Date:15.08.2021
11:34:53
controlling a number of companies / firms sole
proprietorship concerns and a number of bank accounts in
the name of these entries in different banks. It is pertinent to
mention that the case which was opened in consequence of
search operation has been completed in the hands of bogus
entry operator Sh. Himanshu Verma. At that time assessee
company has not made any objection before the Department
about pendency of assessment proceedings under CASS
before NeAC.
2. Now, the case pending before NeAC has been
transferred to Central Circle - 29, Delhi. Now, the assesseee
has made objection by stating that his case for A.Y. 2018-19
has already been completed. It is informed that case opened
in consequence of search operation has been completed but
the case opened by NeAC is still pending and to be
completed as per time barring date 30.04.2021.
13. Further, the opportunity of being heard had been
provided to the assessee company. In response to this
opportunity, the assessee company had deposited a letter
dated 18.03.2021 in which he had stated as under:-"lmage".
14. On perusal of the records it is known that the
assessee company was previously a shell company
controlled and managed by entry operator Sh. Himanshu
Verma. But then, the entry operator had sold this company
to Sh.Mukesh Aggarwal & Sh. Aakash Agarwal on
17/02/2017 after taking commission in cash of total capital
and changed the name of the company from Sobhagaya
Mithila Television Ltd. to M/s Makams Industries Ltd. It is
pertinent to mention here that the assessment proceedings
u/s 153C/143(3) of the Act were concluded in light of the
Jurisdictional High court judgment in case of CIT Vs Kabul
Chawla dated 28/08/2015, and the assessment was
concluded on the basis of the incriminating materials
unearthed during the course of search and the Ld. AO was
not vigilant about CASS reasons of limited scrutiny
assessment pending before NeAC for the A.Y. 2018-19......"
Signature Not Verified
Digitally Signed By:JASWANT
SINGH RAWAT
Signing Date:15.08.2021
11:34:53
6. He emphasis that in the present case, two notices had been
inadvertently issued simultaneously by NeAC and the Assessing
Officer and two conflicting assessment orders had been passed.
7. Mr. Maratha states on instructions that he has no objection to
the impugned assessment order dated 15th June, 2021 being quashed
and the respondent-Revenue being given liberty to initiate appropriate
proceedings in accordance with law.
8. Consequently, with the consent of the parties, the impugned
assessment order dated 15th June, 2021 is quashed. However, the
respondent/Revenue is given liberty to initiate appropriate proceeding
in accordance with law with regard to the first assessment order.
9. This Court clarifies that it has not commented on merits with
regard to first assessment order dated 26th November, 2019. In fact,
the rights and contentions of all the parties are left open with regard to
the said assessment order dated 26th November, 2019.
10. The order be uploaded on the website forthwith. Copy of the
order be also forwarded to the learned counsel through e- mail.
MANMOHAN, J
NAVIN CHAWLA, J
AUGUST 13, 2021
RN
Signature Not Verified
Digitally Signed By:JASWANT
SINGH RAWAT
Signing Date:15.08.2021
11:34:53
