M/s Emsons Organics Ltd., Chandigarh V. DCIT, CC-1, Chandigarh

ITA 1306/CHANDI/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1652 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 03-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S KAHLONCIT
• Assessee Lawyers: PREM CHAND GOYAL I P
• Keywords: Invalid notice; Opportunity of being heard; Set aside
• Section: 271(1)(c); 142(1); 153A; 143(2); 139(1); 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH A, CHANDIGARH ( VIRTUAL COURT) .., ! '# $ %', ! BEFORE: SHRI. N.K.SAINI, VP & SHRI , RAJPAL YADAV, VP ITA NOS. 1304 TO 1306/CHD/2019 ASSESSMENT YEARS : 2005-06, 2010-11 & 2011-12 M/S EMSONS ORGANICS LTD. H.NO. 1-F, ADJOINING MUNICIPAL HOUSE, MODEL TOWN, PATIALA-147001 PUNJAB THE DCIT CC-1, CHANDIGARH PAN NO: AABCE0631K APPELLANT RESPONDENT !' ASSESSEE BY : SHRI PREM CHAND GOYAL, I.P. #!' REVENUE BY : SMT. MEENAKSHI VOHRA, ADDL. CIT & SHRI J.S. KAHLON,CIT $ %! & DATE OF HEARING : 23/06/2021 '()*! & DATE OF PRONOUNCEMENT : 23/06/2021 %&/ ORDER PER N.K. SAINI, VICE PRESIDENT THESE THREE APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST THE SEPARATE ORDERS OF THE LD. CIT(A)-3, GURGAON EACH DT. 29/07/2019. 2. SINCE THE APPEALS WERE HEARD TOGETHER, SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BRE VITY. 3. FIRST WE WILL DEAL WITH THE APPEAL IN ITA NO. 1304/ CHD/2019 FOR THE A.Y. 2005-06 WHEREIN ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS ERRED IN PASSING AN EX- PARTE ORDER WHICH IS AGAINST THE PRINCIPALS OF NATU RAL JUSTICE AND AS SUCH THE ORDER PASSED IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 2. WITHOUT PREJUDICE TO THE ABOVE, THE LD. COMMISSI ONER OF INCOME TAX( APPEALS) ERRED IN LAW AND FACTS IN FAILING TO ADJUDICATE THE SPECIFIC GROUND OF APPEAL WHEREIN IT WAS CHALLENGED THAT THE ASSESSING OFFICER DID NOT RECOR D THE MANDATORY SATISFACTION IN THE ASSESSMENT ORDER BEFORE INITIATION OF PENALTY WHETH ER FOR CONCEALMENT OF INCOME OR FOR 2 FURNISHING INACCURATE PARTICULARS OF INCOME AND AS SUCH THE PENALTY ORDER IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 3. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS FURTHER ERRED IN LAW AND FACTS IN FAILING TO ADJUDICATE THE SPECIFIC GROUND OF APPEAL WHEREIN IT WAS CHALLENGED THAT THE LD. ASSESSING OFFICER HAS ERRED IN LAW IN FAILI NG TO MENTION WHETHER NOTICE UNDER SECTION 271(L)(C) ISSUED WAS FOR CONCEALMENT OF INCOME OR F OR FURNISHING INACCURATE PARTICULARS OF INCOME AND AS SUCH PENALTY IMPOSED IN PURSUANCE OF AN INVALID NOTICE IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 4. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HAS FURTHER ERRED IN LAW AND FACTS IN FAILING TO ADJUDICATE THE SPECIFIC GROUND OF APPEAL WHEREIN IT WAS CHALLENGED THAT THE LD. ASSESSING OFFICER HAS FURTHER ERRED IN IMPO SING PENALTY UNDER SECTION 271(L)(C) OF THE ACT WITHOUT MENTIONING THE CHARGE AS TO WHETHER THE PENALTY IS LEVIED FOR FURNISHING INACCURATE PARTICULARS OR FOR CONCEALMENT OF INCOME AND AS SUCH THE ORDER PASSED IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 5. WITHOUT PREJUDICE TO THE ABOVE, THE LD. COMMISSI ONER OF INCOME TAX(APPEALS) HAS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE I MPOSITION OF PENALTY OF RS.27,36,405/- UNDER SECTION 271(L)(C) OF THE ACT WHICH IS ILLEGAL , ARBITRARY AND UNJUSTIFIED. 6. THAT THE PENALTY IMPOSED UNDER SECTION 271(L)(C) OF THE ACT IS NOT IMPOSABLE IN AS MUCH AS THERE IS NEITHER ANY CONCEALMENT OF INCOME NOR FURNISHING OF ANY INACCURATE PARTICULARS OF INCOME AND AS SUCH THE ORDER PASSED UNDER SECTION 271(L)(C) OF THE ACT IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 7. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX(APPEALS) PASSED UNDER SECTION 271(L)(C) OF THE ACT IS ERRONEOUS, ARBITRAR Y, OPPOSED TO LAW AND FACTS OF THE CASE AND IS, THUS, UNTENABLE. 4. FROM THE AFORESAID GROUND IT IS CLEAR THAT THE MAIN G RIEVANCE OF THE ASSESSEE VIDE GROUND NO. 1RELATES TO THE PASSING OF THE IMPUGNED O RDER EX-PARTE WITHOUT GIVING PROPER AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE A SSESSEE. 5. FACTS OF THE CASE IN BRIEF ARE THAT A SEARCH OPER ATION WAS CONDUCTED ON 17/09/2010 UNDER SECTION 132(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED T O AS ACT) AT BUSINESS PREMISES OF CONCERNS BELONGING TO SURYA GR OUP AND THE RESIDENCE OF DIRECTORS AND EMPLOYEES OF SURYA GROUP INCLUDING THE BUSINESS PREMISES OF THE ASSESSEE. THE JURISDICTION OF THE ASSESSEE WAS TRANSFE RRED TO THE ACIT, CC-II, CHANDIGARH VIDE THE WORTHY CIT, PAIALAS ORDER NO. 45 DATED 04.0 4.2011. ACCORDINGLY, STATUTORY NOTICES U/S 153A OF THE INCOME TAX ACT, 1961 WERE ISS UED ON 05.05.2011 FOR THE ASSESSMENT YEARS 2005-06 TO 2010-11, FALLING WITHIN SI X ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH WAS CONDUCTED. THE ASSESSEE HAD FILED ITS RETURN UNDER SE CTION 139 OF THE ACT ON 31/08/2005 SHOWING NIL INCOME. IN RESPONSE TO THE NOTICE UNDER SECTION 153A THE ASSESSEE FILED A LETTER DATED 27.02.2013 STATING THEREIN THAT THE RETUR N FILED UNDER SECTION 139(1) MAY BE 3 TREATED AS SUFFICIENT COMPLIANCE TOWARDS RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 153A. STATUTORY NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED ON 01/03/2013 AND DULY SERVED ON THE ASSESSEE AND DETAILED QUESTIONNAIRE S DT. 28/02/2012 FOR A.Y. 2005-06 TO 2011-12 IN TERMS OF SECTION 142(1) OF THE ACT WERE ALSO ISSUED AND DULY SERVED UPON THE ASSESSEE BUT NO COMPLIANCE WAS MADE TO THE NOTICE D T. 28/02/2012. MEANWHILE THE ASSESSEE FILED AN APPLICATION IN TERMS OF SECTION 24 5C(1) BEFORE THE HON'BLE INCOME TAX SETTLEMENT COMMISSION, NEW DELHI FOR A.Y. 2005-06 TO A.Y. 2012-13 ON 21/03/2013 WHICH WAS REJECTED VIDE ORDER DT. 02/04/2013. THEREAF TER A LETTER DT. 13/05/2013 WAS ISSUED AND DULY SERVED UPON THE ASSESSEE AND THE HEARING WAS SCHEDULED ON 17/05/2013 BUT NO COMPLIANCE WAS MADE. A.O MADE THE A DDITION OF RS. 73,00,000/- TO THE TOTAL INCOME OF THE ASSESSEE BY STATING THAT THE ASSE SSEE HAD FAILED TO PROVE THE GENUINENESS OF THE SHARE CAPITAL RECEIVED AND CREDITWOR THINESS OF THE SHARE APPLICANTS. THE A.O. LEVIED THE PENALTY OF RS. 27,36,405/- UNDER SE CTION 271(1)(C) OF THE ACT VIDE THE EX-PARTE ORDER DT. 23/03/2018. 6. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY PASSING THE IMPUGNE D ORDER EX-PARTE. THE LD. CIT(A) OBSERVED THAT NOTICES FOR HEARING WERE ISSUED O N VARIOUS DATES TO THE ASSESSEE BUT NOBODY APPEARED IN RESPONSE TO THE SAID NOTICES. 7. NOW THE ASSESSEE IS IN APPEAL. 8. THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE S UBMITTED THAT HE HAD BEEN APPOINTED AS THE RESOLUTION PROFESSIONAL OF THE ASSESSEE VIDE ORDER DT. 18/11/2019 PASSED BY THE NCLT , CHANDIGARH BENCH. IT WAS FURTHER SUB MITTED THAT NO NOTICE FOR HEARING WAS SERVED UPON THE ASSESSEE THEREFORE THE EX-PA RTE ORDER PASSED BY THE LD. CIT(A) WITHOUT GIVING OPPORTUNITY OF BEING HEARD WAS NOT JUSTIFIED. 9. IN HER RIVAL SUBMISSIONS LD. SR. DR STRONGLY SUPPOR TED THE IMPUGNED ORDER PASSED BY THE LD.CIT(A). 10. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTI ES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE LD. CIT(A) DECIDED THE APPEAL EX-PARTE, HE SIMPLY STATED THAT NOTICES OF HEARING ON 20/02/2019, 23/04/2019, 26/06/2019 AND15/07/2019 WER E ISSUED BUT NONE ATTENDED. 4 HOWEVER, NOTHING IS BROUGHT ON RECORD TO SUBSTANTIATE THA T THE NOTICES OF HEARING WERE SERVED UPON THE ASSESSEE. IT IS WELL SETTLED THAT NOBOD Y SHOULD BE CONDEMNED, UNHEARD AS PER THE MAXIM, AUDI ALTERAM PERTAM . 11. WE THEREFORE KEEPING IN VIEW THE PRINCIPLE OF NATURA L 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 REASONABL E OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 12. IN OTHER APPEALS I.E; ITA NO. 1305 & 1306 /CHD/2 019 FOR THE A.Y 2010-11 & 2011-12 RESPECTIVELY THE FACTS ARE SIMILAR AS WERE INVOLVED IN ITA NO. 1304/CHD/2019 FOR THE A.Y. 2005-06, EVEN THE RIVAL CONTENTIONS WERE SIMILAR, THEREF ORE, OUR FINDINGS GIVEN IN THE FORMER PART OF THIS ORDER SHALL APPLY MUTATIS MUTANDIS FOR THESE APPEALS ALSO. 13. IN THE RESULT, ALL THE ABOVE APPEALS OF THE ASSES SEE ARE ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 23/06/2021 ) SD/- SD/- $ %' .., (RAJPAL YADAV ) ( N.K. SAINI) ! / VICE PRESIDENT ! / VICE PRESIDENT AG DATE: 23/06/2021 (+! ,-.- 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