Facts of the Case

The present appeal was filed by the assessee (Inder Singh) before the Delhi High Court challenging the order dated 23.08.2018 passed by the Income Tax Appellate Tribunal (ITAT), along with the subsequent order dated 12.01.2023 dismissing the miscellaneous application.

The dispute pertains to Assessment Year (AY) 2009-10. The Assessing Officer had made an addition of ₹1,29,15,000 under Section 68 of the Income Tax Act, 1961, treating certain amounts as unexplained cash credits.

The assessee contended that he earned income only from interest and agricultural sources and did not maintain regular books of accounts 

Issues Involved

  1. Whether addition under Section 68 of the Income Tax Act, 1961 can be made in the absence of maintained books of accounts.
  2. Whether the ITAT erred in not considering its own earlier order for AY 2010-11 on identical facts.
  3. Whether dismissal of the miscellaneous application by the Tribunal was justified despite apparent inconsistency.

Petitioner’s Arguments (Assessee)

  • The addition under Section 68 is not sustainable as the assessee did not maintain books of accounts.
  • Section 68 applies only where unexplained credits appear in books of accounts, which were absent in the present case.
  • The Tribunal had accepted a similar contention in assessee’s own case for AY 2010-11 vide order dated 05.12.2018.
  • The inconsistency between Tribunal orders was specifically highlighted through a miscellaneous application, which was wrongly dismissed.

Respondent’s Arguments (Revenue)

  • The Revenue supported the Tribunal’s findings and the dismissal of the miscellaneous application.
  • However, it was fairly accepted that there existed a foundational issue regarding inconsistency between Tribunal orders for different assessment years.

Court’s Findings / Order

  • The Delhi High Court observed that the Tribunal failed to consider its own order dated 05.12.2018 for AY 2010-11 on identical facts.
  • The Court noted that the miscellaneous application was filed precisely to address this inconsistency.
  • It held that the Tribunal should have examined whether its earlier order warranted recall or reconsideration of the impugned order.

Final Order:

  • The order dated 12.01.2023 passed by the Tribunal was set aside.
  • The miscellaneous application was restored to its original position.
  • The Tribunal was directed to rehear the matter and decide whether the earlier order dated 23.08.2018 requires recall.

Important Clarification

  • The Court did not directly decide the merits of Section 68 applicability but emphasized judicial consistency and proper adjudication.
  • It clarified that where conflicting orders exist for different assessment years on similar facts, the Tribunal must address such inconsistency.

Sections Involved

  • Section 68, Income Tax Act, 1961 – Unexplained Cash Credits
  • Provisions relating to appellate powers and rectification by ITAT (Miscellaneous Application)

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/RAS04052023ITA2532023_141504.pdf 

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