M/s Cheema Spintex Ltd., Chandigarh V. Addl. CIT, R-IV , Chandigarh

ITA 1109/CHANDI/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5473 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 08-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND SUDARSHAN JCIT DR
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice; Reasonable cause; Unabsorbed depreciation; Set aside; Audi alteram partem
• Section: 143(3); 40(a)(ia); 143(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH A, CHANDIGARH .., !' . . , # $ % BEFORE: SHRI. N.K.SAINI, VP & SHRI. R.L. NEGI, JM ITA NO.1109/CHD/2019 ASSESSMENT YEAR : 2008-09 M/S CHEEMA S P INTEX LIMITED S.C.O. 206-207, 3 RD FLOOR, SECTOR 34A CHANDIGARH, (S.C.O. 64-65, 3 RD FLOOR, SECTOR 17A CHANDIGARH THE ADDITIONAL CIT RANGE IV, CHANDIGARH PAN NO: AAACC6786C APPELLANT RESPONDENT !' ASSESSEE BY : SHRI TEJ MOHAN SINGH, ADVOCATE #!' REVENUE BY : SHRI ARVIND SUDARSHAN, JCIT, DR $ %! & DATE OF HEARING : 28/09/2020 '()*! & DATE OF PRONOUNCEMENT : 28/09/2020 $&/ ORDER PER N.K. SAINI, VICE PRESIDENT THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT. 17/05/2019 OF THE LD. CIT(A)-1, CHANDIGARH. 2. THE REGISTRY HAS POINTED OUT THAT THE APPEAL FILED BY THE ASSESSEE IS LATE BY TWO DAYS. THE ASSESSEE MOVED AN APPLICATION FOR CONDONATIO N OF DELAY STATING THEREIN AS UNDER: RESPECTFULLY SUBMITTED AS UNDER: - 1. THAT THE ABOVE MENTIONED ASSESSEE-COMPANY RECEIVED THE APPELLATE ORDER IN APPEAL NO. 543/10-11 DATED 17.05.2019 OF THE HON'BLE COMMI SSIONER OF INCOME TAX (APPEALS)-1, CHANDIGARH ON 07 LH JUNE 2019 FOR THE ASSESSMENT YEAR 2008-09. 2. THAT THE APPEAL WAS FILED ON 08 TH AUGUST 2019 WHICH IS SAID TO BE LATE BY 2 DAYS IN THE SHOW CAUSE NOTICE ISSUED BY THE ASSISTANT REGISTRAR , HON'BLE ITAT. 3. THAT IT IS SUBMITTED THAT THE ASSESSEE COMPANY HAD RECEIVED THE APPELLATE ORDER ON 07 TH JUNE 2019 AND THE SAME WAS FORWARDED TO OUR OFFICE ON 10 TH JUNE 2019. THE ASSESSEE COMPANY'S ACCOUNT OFFICER ON BEING ASKED THE DATE O F RECEIPT BY OUR OFFICE CLERK STATED 2 10 TH JUNE 2019. IN FACT 10 TH JUNE 2019 WAS THE DATE ON WHICH THE ORDER WAS RECE IVED IN THE UNDERSIGNED'S OFFICE AND INADVERTENTLY THE SAME WAS MENTIONED IN FORM NO. 36. 4. THAT THERE BEING NO MALA FIDE INTENTION OF NOT FILI NG THE APPEAL IN TIME, IT IS PRAYED THAT THE DELAY MAY PLEASE BE CONDONED. 5. THAT THE AFFIDAVIT OF THE ACCOUNTS OFFICER OF THE A SSESSEE COMPANY MR. BIRENDRA SINGH IS ENCLOSED HEREWITH. IT IS, THEREFORE, RESPECTFULLY PRAYED THAT THE DELA Y BE CONDONED THERE BEING A REASONABLE CAUSE LAND IN THE INTEREST OF SUBSTANTIAL JUSTICE, THE APPEAL BE HEARD ON MERITS. IN SUPPORT OF THE ABOVE APPLICATION AN AFFIDAVIT HAS AL SO BEEN FILED WHICH READ AS UNDER: I, BIRENDRA SINGH, SON OF MR. PRATAP SINGH, ACCOUNT S OFFICER OF CHEEMA SPINTEX LIMITED HAVING ITS REGISTERED OFFICE AT HOUSE NO. 176/2, SE CTOR 41-A, CHANDIGARH DO HEREBY SOLEMNLY AFFIRM AND DECLARE AS UNDER:- 1. THAT THE APPEAL FOR ASSESSMENT YEAR 2008-09 WAS FIL ED BEFORE THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH ON 08/08/2019. 2. THAT THE APPELLATE ORDER IN APPEAL NO. 543/10-11 DA TED 17.05.2019 WAS RECEIVED ON 07 LH JUNE, 2019 ON MAIL. 3. THE SAID APPELLATE ORDER WAS FORWARDED TO OUR COUNS EL'S (M/S KHURANA VINEET & ASSOCIATES, CHARTERED ACCOUNTANTS) OFFICE ON 10 TH JUNE, 2019. 4. AT THE TIME OF FILING OF THE APPEAL ON 08 TH AUGUST, 2019, INADVERTENTLY IN FORM NO. 36 THE DATE OF RECEIVING THE APPELLATE ORD ER WAS MENTIONED AS 10 TH JUNE, 2019 INSTEAD OF 07 TH JUNE, 2019, ON THE MISTAKEN PREMISE THAT THE ORDER HAD BEEN RECEIVED ON 10 TH JUNE, 2019. 3. DURING THE COURSE OF HEARING THE LD. COUNSEL FOR TH E ASSESSEE REITERATED THE CONTENTS OF THE AFORESAID APPLICATION AND REQUESTED TO CONDONE THE DELAY OF TWO DAYS. 4. LD. DR ALTHOUGH OPPOSED THE AFORESAID APPLICATION B UT COULD NOT CONTROVERT THE CONTENTS OF THE SAID APPLICATION. 5. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTI ES WE ARE OF THE VIEW THAT SMALL DELAY OF TWO DAYS MAY BE CONDONED. ACCORDINGLY THE APPEAL IS ADMITTED. 6. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL : 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER OF THE ASSESSING OFFICER UNDER SECTION 143(3) ASSESSING THE LOSS AT RS. 1,14,38,25 0/- WITHOUT CORRECTLY APPRECIATING THE FACTS OF THE CASE IS BAD IN LAW AND VOID-AB-INITIO. THE A SSESSEE COMPANY WAS NOT OPERATING AT THIS ADDRESS AND AS SUCH THE NOTICES/SUMMONS WERE B EEN SENT TO THE WRONG ADDRESS. 3 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS FURTHER ERRED IN UPHOLDING THE DISALLOWANCE OF RS. 29,94,224/- OUT OF COMMISSION U NDER THE PROVISIONS OF SECTION 40(A)(IA) MADE BY THE ASSESSING OFFICER WHICH IS ARBITRARY AN D UNJUSTIFIED. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS FURTHER ERRED IN UPHOLDING THE DISALLOWANCE OF RS. 5,86,895/- OUT OF INTEREST TOWA RDS CAPITAL WORK IN PROGRESS MADE BY THE ASSESSING OFFICER WHICH IS ARBITRARY AND UNJUSTIFIE D. 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS FURTHER ERRED IN UPHOLDING THE DISALLOWANCE OF CARRY FORWARD OF UNABSORBED DEPRECI ATION AND CURRENT YEAR LOSSES. 5. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS ERRONEOUS, ARBITRARY, OPPOSED TO LAW AND FACTS OF THE CASE AND IS, THUS, UNTENABLE. 7. THE MAIN GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS T HAT THE NOTICES WERE SENT TO THE WRONG ADDRESS WHICH WERE NOT RECEIVED BY THE ASSESSEE . 8. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FIL ED ITS RETURN OF INCOME ON 30/09/2008 DECLARING NIL INCOME WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT ) ON 20/03/2010. LATER ON THE CASE WAS SELECTED FOR SCRUTINY. THE A.O. FRAMED THE ASSESSM ENT AT A LOSS OF RS. 1,14,38,250/- AND UNABSORBED DEPRECIATION OF RS. 42,38,64,687/- INSTE AD OF LOSS DECLARED BY THE ASSESSEE AT RS. 2,25,81,494/- AND UNABSORBED DEPRECI ATION OF RS. 42,38,64,687/-, BY MAKING VARIOUS ADDITIONS. 9. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO PASSED THE IMPUGNED ORDER EXPARTE AND CONFIRMED THE ACTION OF T HE A.O. BY OBSERVING THAT NOBODY ATTENDED IN THE APPEAL PROCEEDINGS HENCE FINDING OF THE A.O. STANDS NON REBUTTED. 10. NOW THE ASSESSEE IS IN APPEAL. 11. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO NOTI CE FOR HEARING WAS RECEIVED BY THE ASSESSEE, THEREFORE THE LD. CIT(A) WAS NOT JUSTI FIED IN CONFIRMING THE ORDER PASSED BY THE A.O. WITHOUT PROVIDING DUE AND REASONABLE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. 12. IN HIS RIVAL SUBMISSIONS THE LD. DR STRONGLY SUPPOR TED THE ORDERS OF THE AUTHORITIES BELOW. 13. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTI ES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE THE LD. CIT(A) IN PARA 4 OF THE 4 IMPUGNED ORDER MENTIONED THE DATES OF VARIOUS NOTICES IS SUED THROUGH SPEED POST, HE ALSO MENTIONED THAT THE NOTICES SENT BY SPEED POST WERE RECEIVED BACK WITH REMARKS SHIFTED / NO SUCH COMPANY FOUND ON THE GIVEN ADDRESS. ON THE CONTRARY THE CONTENTION OF THE ASSESSEE IN GROUND NO. 1 IS THAT THE NOTIC ES / SUMMONS WERE SENT ON THE WRONG ADDRESS. IT IS WELL SETTLED THAT NOBODY SHOULD BE CONDEMNED, UNHEARD AS PER THE MAXIM, AUDI ALTERAM PARTEM . 14. IN THE PRESENT CASE, IT IS NOT BROUGHT ON RECORD TO SUBSTANTIATE THAT NOTICE FOR HEARING WAS SERVED UPON THE ASSESSEE. WE THEREFORE BY KE EPING IN VIEW THE PRINCIPLES OF NATURAL JUSTICE, DEEM IT APPROPRIATE TO SET ASIDE THIS CASE BACK TO THE FILE OF LD. CIT(A) TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED F OR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 28/09/2020) SD/- SD/- . . .., (R.L. NEGI ) ( N.K. SAINI) # $%/ JUDICIAL MEMBER / VICE PRESIDENT AG DATE: 28/09/2020 (+! ,-.- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. $ / CIT 4. $ / 01 THE CIT(A) 5. -2 45&456789 DR, ITAT, CHANDIGARH 6. 8:% GUARD FILE (+ $ BY ORDER, ; # ASSISTANT REGISTRAR