M/s Rukhmani Traders vs. Asst. CIT -18(3)

Parties Involved

Facts Summary

The assessee, M/s Rukhmani Traders, filed its return of income for the year 2010-11 declaring total income at Rs.16,92,95,420/-. The return was processed under section 143(1) of the Income-tax Act, 1961. Subsequently, the Assessing Officer received information that the assessee had received fictitious profit and losses created by some brokers by misusing the client code modification facility. Based on this information, the Assessing Officer issued a notice under section 148 of the Act on 01.06.2015. The assessee filed a reply requesting to consider the original return of income filed on 15.10.2010 as filed in response to the notice. The Assessing Officer accepted the returned income filed by the assessee vide its order dated 22.12.2016 passed under section 147 r.w.s. 143(3) of the Act. However, the Assessing Officer later issued a notice under section 148 of the Act dated 06.04.2017 for reassessment proceedings. The assessee challenged the reassessment proceedings and addition on merit before the Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi. The Commissioner upheld the reassessment proceedings and addition, which the assessee appealed against before the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi erred in passing the order in the first appellate proceedings without affording adequate opportunity to the assessee firm to present its case and make appropriate submissions.
• 2. Whether the Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi erred in confirming the action of the Assessing Officer in reopening the case of the assessee firm under Section 147 of the Income Tax Act, 1961.
• 3. Whether the Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi erred in confirming the action of the Assessing Officer in reopening the case of the assessee firm without obtaining approval under Section 151 of the Income Tax Act, 1961.
• 4. Whether the Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi erred in confirming the action of the Assessing Officer in making addition of Rs.75,48,010/- to the income of the assessee firm under Section 68 of the Income Tax Act, 1961.

Judgment Outcome

Decided in favour of Assessee.

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