M/s. Parco Paints (P) Ltd., New Delhi V. ITO, New Delhi

ITA 1002/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3957 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 11-05-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 09-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONA MOHANTY
• Assessee Lawyers: AMIT AGGARWAL
• Keywords: Opportunity of being heard; Period of limitation; Time period of passing order
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `F: NEW DELHI BEFORE SHRI C.L.SETHI, JM & SHRI K.G. BANSAL, AM I.T. A. NO.1002/DEL OF 2010 ASSESSMENT YEAR: 2006-07 PARCO PAINTS (P) LTD., INCOME-TAX OFFICER, 70/B-6, RAMA ROAD, NEW DELHI. VS WARD 14(1), NE W DELHI. APPELLANT RESPONDENT APPELLANT BY: SHRI AMIT AGGARWAL, CA RESPONDENT BY: SMT. MONA MOHANTY, SR. DR ORDER PER C.L. SETHI, JM: THE ASSESSEE IS IN APPEAL AGAINST THE ORDER DATED 1 8.1.2010 PASSED BY THE LEARNED CIT(A) IN THE MATTER OF AN ASSESSMENT M ADE U/S 143(3) OF THE INCOME-TAX ACT, 1961 (THE ACT) PERTAINING TO ASSTT. YEAR 2006-07. 2. THE VARIOUS GROUNDS OF APPEAL RAISED BY THE ASSE SSEE REVOLVE AROUND THE ADDITION OF RS.22,73,522/- MADE BY THE AO ON AC COUNT OF PURCHASE FROM UNDISCLOSED SOURCES, WHICH HAS BEEN CONFIRMED BY TH E LD. CIT(A). 3. IN THIS CASE, THE ASSESSEE FILED ITS E- RETURN O N 30.11.2006 DECLARING TOTAL INCOME AT RS.2,19,270/-. THE CASE WAS SELECT ED FOR SCRUTINY AND THE NOTICE U/S 143(2) ERE ISSUED ON 5.10.2007, WHICH WA S DULY SERVED. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANU FACTURING AND TRADING 2 OF PAINTS. IN THE COURSE OF ASSESSMENT PROCEEDINGS , THE AO ISSUED NOTICES U/S 133(6) TO SIX PARTIES FROM WHO PURCHASES WERE M ADE BY THE ASSESSEE. FROM THE REPLIES GIVEN BY THE AFORESAID SIX PARTIES , CERTAIN DISCREPANCIES AMOUNTING TO RS.22,73,522/- WERE NOTICED BY THE AO BETWEEN THE VALUE OF PURCHASE SHOWN BY THE ASSESSEE AND THE PURCHASES SH OWN BY THESE PARTIES. THE AO THEM ISSUED A SHOW CAUSE LETTER DATED 26.12. 2008 ASKING THE ASSESSEE TO GIVE A REPLY ON 30.12.2008 TO EXPLAIN T HE DIFFERENCE. SINCE ON 30.12.2008, NOBODY FOR THE ASSESSEE APPEARED BEFORE THE AO NOR ANY REPLY WAS RECEIVED, THE AO TREATED THE DIFFERENCE OF RS.2 2,73,522/- AS PURCHASES MADE FROM UNACCOUNTED SOURCES AND ADDED THE SAME TO THE ASSESSEES TOTAL INCOME. 4. ON APPEAL, THE CIT(A) CONFIRMED THE ADDITION BY OBSERVING THAT ON THE DATE FIXED FOR HEARING, NONE FOR THE ASSESSEE H AD APPEARED, WHICH GOES TO SHOW THAT THE ASSESSEE WAS NOT REALLY INTERESTED TO PURSUE THE APPEAL. THE CIT(A), THEREFORE, DISMISSED THE ASSESSEES APPEAL AND CONFIRMED THE ADDITION. 5. HENCE, THE ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE PARTIES AND HAVE CAREFULL Y PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IN THIS CASE, THE AO ISS UED A SHOW CAUSE NOTICE ONLY ONCE ON 26.12.2008 I.E. AT THE FAG END OF THE LIMITATION PERIOD DURING 3 WHICH THE ASSESSMENT ORDER WAS TO BE MADE BY THE AO GIVING ONLY A FOUR DAYS TIME TO GIVE REPLY FIXING THE MATTER ON 30.12. 2008. IN THE ASSESSMENT ORDER, IT HAS NOWHERE BEEN MENTIONED BY THE AO AS T O WHEN THIS NOTICE ISSUED ON 26.12.2008 WAS RECEIVED BY THE ASSESSEE. IN THESE CIRCUMSTANCES, WE, THEREFORE, HOLD THAT THE ASSESSEE WAS NOT GIVEN SUFFICIENT AND ADEQUATE OPPORTUNITY TO GIVE ITS REPLY AS TO THE DIFFERENCE IN THE ACCOUNTS POINTED OUT BY THE AO. MOREOVER, THE ASSESSEE COULD NOT BE ABL E TO APPEAR BEFORE THE CIT(A) INASMUCH AS, IT IS CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE PRESENT TODAY THAT ASSESSEES AUTHORIZED REPRESENTA TIVE WAS SUFFERING FROM SERIOUS ILLNESS AT THAT RELEVANT POINT OF TIME. IN THESE CIRCUMSTANCES, WE, THEREFORE, HOLD THAT THE ASSESSEE SHOULD BE GIVEN F URTHER OPPORTUNITY TO EXPLAIN THE MATTER AND FOR THAT PURPOSE, WE SET ASI DE THE ASSESSMENT ORDER TO THE FILE OF THE AO FOR HIS FRESH ADJUDICATION. THE AO SHALL PROVIDE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. WE FURTHER DIRECT THE ASSESSEE TO FURNISHED DETAILED EXPLANATION BEFORE T HE AO AS TO THE DIFFERENCE BETWEEN THE PURCHASES POINTED OUT BY THE AO WITHIN TWO MONTHS FROM THE END OF THE MONTH IN WHICH THIS ORDER IS RECEIVED BY THE ASSESSEE WITHOUT AWAITING FOR ANY NOTICE FROM THE AO. THE ASSESSEE S HALL ALSO PRODUCE ALL OTHER EVIDENCES AND ACCOUNTS BEFORE THE AO AS MAY B E REQUIRED BY THE AO FOR MAKING A TRUE AND FAIR ASSESSMENT OF ASSESSEES TOTAL INCOME. THE 4 ASSESSEE SHALL COOPERATE WITH THE AO IN FINALIZING THE ASSESSMENT AS PER LAW WITHOUT INDULGING IN DELAY TACTICS TAKING UNNECESSA RY ADJOURNMENTS BEFORE THE AO. WE ORDER ACCORDINGLY. 7. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 8. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT O N 11 TH MAY, 2010 IMMEDIATELY AFTER THE HEARING WAS OVER. (K.G. BANSAL) (C.L . SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11 TH MAY , 2010 VIJAY COPY TO: 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT(A)-XVII, NEW DELHI 5. DR ASSISTANT REGISTRAR