M/s. Intarvo Technologies Ltd., Noida V. DCIT, New Delhi

ITA 1225/DEL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7147 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 02-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANUJ GARG CA SH ALOK GUPTA; AKSHIT GOYAL
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI S.K. YADAV, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.1225, 1226/DEL/2017 AYS - 2012-13 & 2013-14 INTARVO TECHNOLOGIES LTD. REGENCY TOWER, C-69, SECTOR-58, NOIDA PAN-AABCR7763B VS. DCIT CIRCLE-11(1) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANUJ GARG, CA, SH. ALOK GUPTA, CA & SH. AKSHIT GOYAL, CA RESPONDENT BY : SHRI. ARUN KUMAR YADAV, SR. DR / DATE OF HEARING : 03/07/2018 / DATE OF PRONOUNCEMENT: 05/07/2018 ORDER PER S.K. YADAV, J.M. THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAINST THE RESPECTIVE ORDERS OF THE CIT(A) INTER ALIA ON THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THE APPEALS. ITA NO. 1225/DEL/2017 I. THE LD. CIT(A) HAS ERRED IN PASSING AN EX-PARTE ORDER IGNORING THAT THE ASSESSEE COMPANY WAS PREVENTED BY SUFFICIENT CAUSE IN COMPLIANCE TO THE NOTICE OF HEARING AND DESERVED FURTHER OPPORTUNITY IN VIEW OF PRINCIPLE OF NATURAL JUSTICE. II. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE DISALLOWANCE OF RS. 6,71,71,498/- MADE BY THE LD. AO ALLEGING PRIOR PERIOD ITA NOS. 1225 & 1226-DEL-2017 2 EXPENSES WHICH IS HIGHLY UNJUSTIFIABLE, UNCALLED FOR AND BAD IN LAW. ITA NO. 1226/DEL/2017 I. THE LD/- CIT(A) HAS ERRED IN PASSING AN EX-PARTE ORDER DISPOSING THE APPEAL OF THE ASSESSEE ALLEGING THE NOTICE REMAINED UNSERVED WITH REMARKS 'LEFT WITHOUT ADDRESS' AND ALLEGED ON THE PRESUMPTION THAT ASSESSEE HAD NO ATTENTION TO PURSUE THE APPEAL WHICH IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND IS BAD IN LAW. II. THE LD/- CIT(A) HAS ERRED IN PASSING AN EX-PARTE ORDER IGNORING THAT THE ASSESSEE COMPANY WAS PREVENTED BY SUFFICIENT CAUSE IN COMPLIANCE TO THE LAST NOTICE DATED 20.10.2016 AND DESERVED FURTHER OPPORTUNITY IN VIEW OF PRINCIPLE OF NATURAL JUSTICE. III. THE LD/- CIT(A) HAS ERRED IN NOT PROVIDING SUFFICIENT OPPORTUNITY TO THE APPELLANT COMPANY BY PASSING AN EX-PARTE ORDER DISPOSING THE APPEAL OF THE ASSESSEE WHICH IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. IV. THE LD/- CIT(A) HAS ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE ADDITION OF RS.94,29,964 MADE BY LD/- AO ON ACCOUNT OF UNCLAIMED LIABILITIES WRITTEN BACK IN FIXED ASSETS SCHEDULE, WHICH IS HIGHLY UNJUSTIFIED, UNCALLED FOR AND BAD IN LAW. V. THE LD/- CIT(A) HAS ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE DISALLOWANCE MADE BY LD/- AO ON ACCOUNT OF ADVANCES TO SUPPLIERS WRITTEN-OFF AMOUNTING TO RS. 78,47,389 BEING BUSINESS ADVANCE UNDER SECTION 37(1) OF THE ACT, WHICH IS HIGHLY UNJUSTIFIED, UNCALLED FOR AND BAD IN LAW. VI. THE LD/- CIT(A) HAS ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF 'INVENTORY WRITTEN OFF AMOUNTING TO RS.7,95,993 DEBITED IN PROFIT & LOSS ACCOUNT, WHICH IS HIGHLY ARBITRARY, UNCALLED FOR AND BAD-IN- LAW. VII. THE LD/- CIT(A) HAS ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE DISALLOWANCE OF INTEREST COST AMOUNTING TO RS.2,54,310 ON BORROWED FUNDS, ALLEGING THAT THE BORROWED FUNDS ARE ATTRIBUTABLE TO LOANS & ADVANCES GIVEN TO ITS ASSOCIATE CONCERNS AND FURTHER ALLEGING THE ABSENCE OF NEXUS BETWEEN OWN FUNDS VIZ-A-VIZ LOANS AND ADVANCES MADE TO ITS SISTER CONCERNS, WHICH IS HIGHLY UNJUSTIFIED, UNCALLED FOR AND BAD-IN-LAW. VIII. THE LD/- AO HAS ERRED IN INITIATING THE PENALTY PROCEEDINGS UNDER SECTION 271(L)(C) OF INCOME-TAX ACT, 1961, WHICH IS HIGHLY UNJUSTIFIED AND BAD IN LAW. IX. THE ASSESSEE CRAVES THE RIGHT TO ADD, AMEND OR MODIFY ANY GROUND OF APPEAL. 2. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO THE ORDERS OF THE LEARNED CIT(A) WITH THE SUBMISSION THAT THE LEARNED CIT(A) HAD DECIDED THESE ITA NOS. 1225 & 1226-DEL-2017 3 APPEALS EX PARTE WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IN ITA NO. 1225/DEL/2017 LEARNED CIT(A) DID NOT DISCUSS ANY OF THE ISSUES IN THE ORDER AND DISMISSED THE APPEAL IN LEMINI. WHEREAS THE LEARNED CIT(A) IS REQUIRED TO ADJUDICATE ALL THE ISSUES RAISED BEFORE HIM ON MERIT, EVEN THOUGH THE ASSESSEE DID NOT APPEAR. 3. IN ITA NO. 1226/DEL/2017 THOUGH THE LEARNED CIT(A) HAS GIVEN CERTAIN FINDING ON MERIT BUT HE HAS NOT RECORDED ANY FINDING IN HIS ORDER WITH REGARD TO THE VALID SERVICE OF NOTICE UPON THE ASSESSEES. LEARNED COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT LEARNED CIT(A) HAS CONFIRMED THE DISALLOWANCE / ADDITIONS MADE BY THE AO WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THEREFORE, IN THE INTEREST OF JUSTICE, ORDER OF THE LEARNED CIT(A) MAY BE SET ASIDE AND MATTER MAY BE RESTORED TO THE FILE OF THE LEARNED CIT(A) FOR ADJUDICATION OF THE ISSUES RAISED BEFORE HIM ON MERIT. 4. THE LEARNED DR, HOWEVER, PLACED RELIANCE ON THE ORDER OF THE LEARNED CIT(A). 5. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LEARNED CIT(A), WE FIND THAT IN ITA NO. 1225/DEL/2017, THE LEARNED CIT(A) DID NOT ADJUDICATE ANY OF THE ISSUES RAISED BEFORE HIM, HE DISMISSED THE APPEAL SUMMARILY. WHEREAS IN ITA NO. 1226/DEL/2017, LEARNED CIT(A) HAS EXAMINED THE ISSUE ON MERIT ITA NOS. 1225 & 1226-DEL-2017 4 BUT FROM PERUSAL OF THE ORDER OF THE LEARNED CIT(A), WE FIND THAT LEARNED CIT(A) HAS NOT GIVEN PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THEREFORE, WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE, THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF CIT(A) FOR RE-ADJUDICATION OF THE ISSUES ON MERIT IN BOTH THE APPEALS. ACCORDINGLY, WE SET THE ORDERS OF THE LEARNED CIT(A) IN BOTH THE APPEALS AND RESTORE THE MATTER TO HIS FILE TO RE-ADJUDICATE THE ISSUES RAISED BEFORE HIM ON MERIT AFTER AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEES. IF NEED BE, HE MAY CALL A REMAND REPORT FROM AN ASSESSING OFFICER WHILE ADJUDICATING THE ISSUES RAISED BEFORE HIM. ACCORDINGLY, BOTH THE APPEALS ARE DISPOSED. 6. IN THE RESULT, APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY 5 TH JULY, 2018 -SD/- -SD/- (B.R.R. KUMAR) (S.K. YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 05/07/2018 SH. COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(APPEALS) 5.DR: ITAT ASSTT. REGISTRAR, ITAT, NEW DELHI