Harvin Exports Pvt. Ltd., Delhi V. ACIT, CC-II, Chandigarh

ITA 1072/CHANDI/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0792 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-10-2020
• Assessment Year: 2010-2011
• Appeal Filed On: 30-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND SUDARSHAN
• Assessee Lawyers: KAMLESH KUMAR GUPTA
• Keywords: Principle of natural justice; Reassessment proceedings; Borrowed satisfaction
• Section: 143(2); 147; 148; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A , CHANDIGARH (VIRTUAL COURT) , ! ' # , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.1072/CHD/2019 / ASSESSMENT YEAR : 2010-11 HARVIN EXPORTS PVT. LTD. C/O KAMLESH KUMAR GUPTA, CA, 305, DR CHAMBERS 12/56, DB GUPTA ROAD, KAROLBAGH,DELHI-110005 THE ACIT/CC-II, LUDHIANA ./PAN NO: AAACC7391R /APPELLANT /RESPONDENT /ASSESSEE BY: SHRI KAMLESH KUMAR GUPTA, CA ! / REVENUE BY: SHRI ARVIND SUDARSHAN, JCIT ' # /DATE OF HEARING : 28/10/2020 $%&' /DATE OF PRONOUNCEMENT:. 15/12/2020 /ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER : THE ABOVE APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5, LUDHIANA [(IN S HORT REFERRED TO AS CIT(A)] DATED 17/09/2018, RELATING TO ASSESSMENT YEAR 2010-11 , PASSED U/S 250(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT ). 2. IN THE PRESENT APPEAL ASSESSEE HAS RAISED THE FOLLOWI NG GROUNDS: 1. THE NAME OF THE COMPANY (HARVIN EXPORTS (P) LTD ) W AS STRUCK OFF BY ROC, DELHI THROUGH PUBLIC NOTICE NO. ROC-DEL/248/STK-5/721 DAT ED 27.4.2017. HARVIN EXPORTS (P) LTD HAS LOST ITS LEGAL STATUS WEF27.04.2017. ANY ACTION AGAINST A STRUCK OFF (NON EXISTING ) COMPANY AFTER ITS STRIKING OFF IS AB INITIO NULL AN D VOID LEAVING ORDER U/S 147/144 PASSED ON 29.12.2017 BY AO AND FURTHER ORDER U/S 150(6) PASSE D ON 29.01.2018 BY CIT(A)-5, LUDHIANA TO BE NULL AND VOID. 2. THE CASE WAS REOPENED U/S 147/148 QUESTIONING THE R ECEIPT OF SHARE APPLICATION MONEY OF RS. 17684500.00 DOUBTING CREDITWORTHINESS AND GENUINENESS WITHOUT BRINGING ON RECORD THE DETAILS OF SHARE APPLICANTS AND ANY ADVE RSE FINDINGS TO SUBSTANTIATE THE CLAIM AND THE LEARNED ASSESSING OFFICER PROCEEDED AND ACT ED JUST ON THE INFORMATION RECEIVED 2 FROM DIRECTOR OF I TAX(INV), UNIT-3(3), NEW DELHI W ITHOUT VERIFYING THE FACTS AND APPLYING HIS MIND TO MAKE ADDITIONS. 3. THAT ORDER BY U/S 147/144 PASSED ON 29.12.2017 BY A O AND FURTHER ORDER U/S 150(6) PASSED ON 29.01.2018 BY CIT(A)-5, LUDHIANA ARE BAD IN LAW IN AS MUCH AS ADDITION OF RS. 17684500.00 IS MADE VIOLATING PRINCIPLES OF NATURAL JUSTICE WITHOUT CONFRONTING ANY INVESTIGATION WING REPORT, RELEVANT EXTRACT, STATEM ENTS RECORDED BY INVESTIGATION WING, ETC AND WITHOUT OFFERING CROSS EXAMINATION OF WITNESS W HOSE STATEMENTS IF RELIED IN IMPUGNED ORDER, WHICH IS SUFFICIENT TO QUASH THE ASSESSMENT ORDER AND ORDER PASSED BY LD CIT-A. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, ID CIT-A ERRED IN LAW IN DISMISSING THE APPEAL PREFERRED BY THE APPELLANT FOR THE ASSESSMENT YEAR 2010-2011 ON THE GROUND OF NONAPPEARANCE WITHOUT DISPOSING THE A PPEAL ON THE MERITS. 5. THE ALLEGED NOTICE ISSUED U/S 148 OF THE INCOME TAX ACT, 1961 IS NOT SERVED ON THE APPELLANT TILL DATE. 6. ANY NOTICE ISSUED U/S 143(2) OF THE INCOME TAX ACT, 1961 TO GAIN JURISDICTION (AND CLAIMED TO BE DULY SERVED) IS NEVER BROUGHT ON RECO RD AND IS NOT SERVED ON THE APPELLANT TILL DATE. 7. REASONS RECORDED IN SPECIFIED FORMAT U/S 148 ARE NE VER SUPPLIED TO APPELLANT THROUGHOUT THE ASSESSMENT PROCEEDINGS. 8. APPROVAL/PERMISSION TO BE TAKEN U/S 151 IN SPECIFIE D FORMAT IS NEVER BROUGHT ON RECORD AND NOT SUPPLIED TO THE APPELLANT TILL DATE. 9. ANY SHOW CAUSE NOTICE ISSUED U/S 144 OF THE INCOME TAX ACT, 1961 IS NEVER BROUGHT ON RECORD AND IS NOT SERVED ON THE APPELLANT TILL DATE DEFYING THE PRINCIPLE OF NATURAL JUSTICE. 10. THERE IS NEITHER ANY APPLICATION OF MIND NOR ANY IN VESTIGATION DONE BY AO FOR RECORDING REASONS BUT HE ACTED ON THE INFORMATION RECEIVED FR OM DIRECTOR OF I TAX(INV), UNIT-3(3), NEW DELHI. HE DID NOT MAKE ANY EFFORTS TO VERIFY THE CO RRECTNESS OF THE INFORMATION SINCE SHARE APPLICATION MONEY OF RS. 17684500.00 IS WELL RECORD ED AND REPORTED IN THE AUDITED BALANCE SHEET AND IDENTITY, CREDITWORTHINESS AND GE NUINENESS OF SHARE APPLICANTS COULD BE PROVED BEYOND DOUBTS THROUGH DOCUMENTS AND EVIDE NCES AVAILABLE WITH THE APPELLANT. 11. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, ID CIT-A ERRED IN SUSTAINING THE ACTION OF ID AO IN MAKING ADDITION O F RS. 17684500.00 WITHOUT APPRECIATING THAT BASIS OF FINDINGS OF THE LOWER AUTHORITIES IS 'SUSPICION' AND 'HUMAN PROBABILITIES' ONLY WHICH IS NEVER CONVERTED TO RELIABLE AND TRUSTWORTH Y MATERIAL AND ENTIRE ASSESSMENT ORDER IS PASSED ON SOLE BASIS OF 'BORROWED SATISFACTION' AND WITHOUT ANY INDEPENDENT APPLICATION OF MIND (LIKE A RUBBER STAMP ORDER). 12. THAT THE APPELLANT CRAVES LEAVE TO ADD ADD/ALTER AN Y/ALL GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 3. REFERRING TO THE SAME THE LD. COUNSEL FOR THE ASSESSE E HAS CONTENDED THAT THE ASSESSEE HAS PRIMARILY CHALLENGED THE VALIDITY OF THE ASSESSMENT ORDER PASSED IN THE PRESENT CASE UNDER SECTION 147 OF THE ACT ON THE FOLLOWING GROUNDS: 1. THAT NOTICE UNDER SECTION 148 OF THE ACT WAS NOT S ERVED ON THE ASSESSEE. 2. NOTICE UNDER SECTION 143(2) OF THE ACT WAS ALSO NOT SERVED UPON THE ASSESSEE. 3. THAT APPROVAL WAS TAKEN FOR INITIATING REASSESSMENT PROCEEDINGS UNDER SECTION 151 OF THE ACT EVEN BEFORE THE RECORDING OF SATISFACTION BY THE AO. 3 4. THAT THERE WAS NO APPLICATION OF MIND BY THE AO WH ILE RECORDING THE REASONS. 5. THAT THE ASSESSEE COMPANY WAS NO LONGER IN EXISTEN CE AS ITS NAME WAS STRUCK OFF BY ROC( REGISTRAR OF COMPANIES) AND IT HAD LOST ITS LEGAL STATUS W.E. F 27/04/2017 AND THEREFORE ASSESSMENT FRAMED ON IT ON 29-12-2017 WAS VOID HAVING BEEN PASSED ON A NON EXISTENT COMPANY. 4. WITH REGARD TO THE NON SERVICE OF NOTICE UNDER SECTIO N 143(2) ,LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE DEPARTMENT ITSELF HAD ADMITTE D NOT SERVING THE IMPUGNED NOTICE, IN RESPONSE TO THE RTI APPLICATION FILED BY THE ASSESSEE IN THIS REGARD. OUR ATTENTION WAS DRAWN TO THE RESPONSE OF THE REVENUE IN RTI APPLICATION OF THE ASSESSEE, PLACED BEFORE US ON PAPER BOOK PAGE NO. 24. LD. COUNSE L FOR THE ASSESSEE FURTHER POINTED OUT THAT TWO NOTICES UNDER SECTION 148 HAD BEEN I SSUED TO THE ASSESSEE DT. 29- 03-2017 & 31`-03-2017 AT DIFFERENT ADDRESSES, PLAC ED AT PAPER BOOK PAGE NO 30 & 31 AND ONE OF THEM DT 29-03-2017 WAS ISSUED EVEN PRIOR TO TAKING THE APPROVAL OF THE ACIT FOR ISSUANCE OF NOTICE UNDER SECTION 147 DATED 30/03/ 2017. 5. AT THIS JUNCTURE IT WAS POINTED OUT TO THE LD. COUNSE L FOR THE ASSESSEE AT BAR THAT THE ASSESSEE HAD NOT PARTICIPATED EITHER IN THE ASSESSMENT PROCEEDINGS OR IN THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A). IT WAS FURTHER POINTED OUT FROM THE ASSESSMENT ORDER THAT THERE WAS CONTRADICTION IN THE FACT S AS STATED IN THE ASSESSMENT ORDER AND THAT SUPPLIED BY THE DEPARTMENT IN RESPONSE TO THE RTI APPLICATION FILED BY THE ASSESSEE. IT WAS POINTED OUT THAT WHILE AS PER THE R TI APPLICATION NO RETURN WAS FILED BY THE ASSESSEE IN RESPONSE TO NOTICE U/S 148 OF THE ACT , IN THE ASSESSMENT ORDER THE A.O. HAD NOTED THE FACT OF NOTICE UNDER SECTION 148 BEING ISSUED TO THE ASSESSEE ON 29/03/2017 AND THE ASSESSEE RESPONDING TO THE SAME BY RE QUESTING THAT THE RETURN FILED ON 30/09/2010 BE TREATED AS HAVING BEEN FILED IN RESPONS E TO NOTICE UNDER SECTION 148. FURTHER ATTENTION WAS DRAWN TO THE FACT NOTED IN THE ASSES SMENT ORDER REGARDING SERVICE OF NOTICE UNDER SECTION 143(2) ON THE ASSESSEE AT PAGE 2 OF THE ORDER WHILE THE RTI APPLICATION STATED OTHERWISE. IT WAS THEREFORE STATED THAT CONSIDERING THE CONFLICTING FACTS BETWEEN WHAT WAS STATED BY THE A.O. IN HIS ASSES SMENT ORDER AND THE INFORMATION THAT HAD BEEN SUPPLIED BY THE REVENUE IN THE RTI APPLICA TION FILED BY THE ASSESSEE AND FURTHER CONSIDERING THE FACT THAT THE ASSESSEE HAD NOT PA RTICIPATED IN THE APPELLATE PROCEEDINGS, IT WOULD BE APPROPRIATE TO RESTORE THE APPEAL BACK TO THE CIT(A) FOR DECIDING IT AFRESH AFTER DULY VERIFYING THE FACTS. 6. LD. COUNSEL FOR THE ASSESSEE DID NOT OBJECT TO THE SAME AND SO ALSO THE LD. DR. 4 7. IN VIEW OF THE ABOVE, SINCE THE ASSESSEE HAS CHALLENG ED THE VALIDITY OF THE ASSESSMENT ORDER PASSED IN THE PRESENT CASE RAISING SEV ERAL LEGAL GROUNDS BASED ON FACTS ACCESSED BY IT THROUGH RTI APPLICATION FILED, WHICH IS APPARENTLY IN CONFLICT WITH THE FACTS STATED IN THE ASSESSMENT ORDER AND MORE PARTI CULARLY SINCE THESE GROUNDS REMAIN UNADJUDICATED BEFORE THE CIT(A) ON ACCOUNT OF NON P ARTICIPATION BY THE ASSESSEE IN PROCEEDINGS BEFORE HIM, WE CONSIDER IT F IT TO RESTORE THE APPEAL BACK TO THE CIT(A) TO DECIDE THE APPEAL AFRESH AFTER VERIFYING A LL FACTS RELEVANT TO THE GROUNDS RAISED .NEEDLESS TO ADD THAT THE ASSESSEE BE GRANTED D UE OPPORTUNITY OF HEARING . 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED ON 15/12/2020. . SD/- SD/- ! ' # (SANJAY GARG) (ANNAPURNA GUPTA) /JUDICIAL MEMBER $ % /ACCOUNTANT MEMBER /DATED: 15/12/2020 AG % ( ) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' * / CIT 4. ' * ( )/ THE CIT(A) 5. +, , , -./,0 / DR, ITAT, CHANDIGARH 6. ,/ 1# / GUARD FILE