White House Infra Developers P.Ltd, Faridabad V. ITO, Ward-2(5), Faridabad

ITA 1070/DEL/2020

AI Insights

The case involves M/s. White House Infra Developers Pvt. Ltd., the appellant, contesting an ex-parte order by the Commissioner of Income Tax (Appeals), Faridabad, which confirmed a disallowance of Rs. 50,00,000 as business advance in the assessment year 2011-12. The appellant argued that the order was unlawful, erroneous, and passed without proper opportunity to be heard, violating the principles of natural justice. The Income Tax Officer had initially disallowed the amount, which was paid to Shubh Propbuild Pvt. Ltd. as a business advance but was returned within the same financial year. The Tribunal noted issues with the service of notices to the appellant and restored the matter to the CIT (Appeals) for a fresh hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 113127 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 04-01-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 12-03-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice

Judgement Text

I.T.A. No. 1070/Del/2020 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “H” NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER AND Dr. B.R.R. KUMAR, ACCOUNTANT MEMBER आ.अ.सं/.I.T.A No. 1070/Del/2020 िनधाᭅरणवषᭅ/Assessment Year : 2011-12 M/s. White House Infra Developers Pvt. Ltd., SCF No. 36-37, Second Floor, Sector : 19, Part – II, Faridabad, Haryana–121002. बनाम Vs. Income Tax Officer, Ward : 2 (5), Faridabad. PAN No. AAACW9894K अपीलाथᱮ/ Appellant ᮧ᭜यथᱮ/ Respondent िनधाᭅᳯरतीकᳱओरसे / Assessee by : Shri Ruchesh Sinha, Adv.; & Ms. Nivedita, Advocate; राजˢकीओरसे / Department by Shri Sumit Kumar Verma, Sr. D. R.; सुनवाईकᳱतारीख/ Date of hearing : 05.01.2023 उ᳃ोषणाकᳱतारीख/Pronouncement on : 24.02.2023 आदेश / O R D E R PER C. N. PRASAD, J.M. 1. This appeal is filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals) [hereinafter referred I.T.A. No. 1070/Del/2020 2 to CIT (Appeals)] Faridabad, dated 22.01.2020 for the Assessment Year 2011-12. 2. The assessee has raised the following substantive grounds of appeal:- “1. That the ex-parte order passed by CIT(A), Faridabad confirming the disallowance made in assessment order passed by A.O is unlawful and erroneous. 2. That the Learned CIT(A), Faridabad has grossly erred both on facts and on the circumstances of the case by upholding the Order of Ld A.O for asking disallowance of Rs 50,00,000/- as he has not given the proper opportunity to be heard to the Appellant Company by passing an ex-parte order. The Ld. CIT(A) acted arbitrarily in a hurriedly manner and has not acted as per the Principles of Natural Justice to provide the justice to the Appellant Company. 3. That the Ld. CIT(A), Faridabad had grossly erred both on facts and circumstances of the case and in law in confirming the assessment order passed by Ld AO for disallowing Rs.50,00,000(Fifty Lac only) paid during the financial year 2010-11 by the Appellant Company to Shubh Propbuild Pvt. Ltd. as business advance but the same was received back by Appellant Company from Shubh Propbuild Pvt. Ltd. during the same financial year that is F. Y.20 10-11. 4. That the disallowance confirmed by Ld CIT (A) is totally wrong, and unjustified as the assessment order was based on assumptions surmises, conjectures and suspicion which cannot be the basis of passing an Assessment. It can be clearly seen from the Assessment Order that allegation and observations made by Ld. AO are based only on suspicion and assumption. It is a trite law that suspicion however strong cannot take the place of evidence. The Appellent Company had given a business advance of Rs.50,00,000 to Shubh Propbuild Pvt. Ltd. on dated I-I1-2010 towards aggregation of land and it has received back the same on dated 28-03- 2011 as the job was not done. Therefore, the advance got squared -up during the year. There is no loss to the I.T.A. No. 1070/Del/2020 3 government revenue on this account as the Assessee Company had given the advance to Shubh Propbuild Pvt. Ltd. out of its genuine sources and it has received back the same from Shubh Propbuild Pvt. Ltd. within a short period of around 4 months only. Hence this amount was never booked as expenditure in the Profit and Loss Account. We have submitted Copy of Ledger account of Shubh Propbuild Pvt. Ltd. as per books of Appellant Company along with relevant extract of the bank statement. Hence the addition made by Ld. AO only on the basis of suspicion is arbitrary and needs to be deleted.” 3. The ld. Counsel for the assessee at the outset submits that the ld. CIT (Appeals) passed ex-parte order dismissing the appeal of the assessee. The ld. Counsel submits that the notices have not been received by the assessee and, therefore, could not attend the proceedings. The ld. Counsel for the assessee, therefore, submits that an priority may be given to the assessee to present its case before the ld. CIT (Appeals). 4. On hearing both the parties and perusing the order of the ld. CIT (Appeals) we observe that the ld. CIT (Appeals) posted the appeal for hearing on 17.10.2019, 18.11.2019 and 6.01.2020. The ld. CIT (Appeals) stated that the notices were issued through e-mail and Speed Post and the assessee has not attended. It is not clear from the order of the ld. CIT (Appeals) whether the notices sent were served on the assessee. The ld. Counsel for the assessee undertakes to appear before the ld. CIT (Appeals) after the appeal is fixed for hearing. Taking the totality of facts and circumstances into consideration we restore this appeal to the file of the ld. CIT (Appeals) who shall adjudicate the issue on merits after providing I.T.A. No. 1070/Del/2020 4 adequate opportunity of being heard to the assessee. Grounds raised by the assessee are allowed for statistical purposes. 5. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on : 24/02/2023 Sd/- Sd/- ( B.R.R. KUMAR ) ( C. N. PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 24/02/2023 *MEHTA* Copy forwarded to : 1. Appellant; 2. Respondent; 3. CIT 4. CIT (Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, New Delhi. Date of dictation 20.02.2023 Date on which the typed draft is placed before the dictating member 21.02.2023 Date on which the typed draft is placed before the other member 24.02.2023 Date on which the approved draft comes to the Sr. PS/ PS 24.02.2023 I.T.A. No. 1070/Del/2020 5 Date on which the fair order is placed before the dictating member for pronouncement 24.02.2023 Date on which the fair order comes back to the Sr. PS/ PS 24.02.2023 Date on which the final order is uploaded on the website of ITAT 24.02.2023 Date on which the file goes to the Bench Clerk 24.02.2023 Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the order