PMS FLASHMATICS PVT. LTD., NOIDA V. DCIT, CIRCLE- 2 , NOIDA

ITA 1343/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3972 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 26-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AJAY KUMAR MITTAL
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI F BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER & SHRI O.P.KANT, ACCOUNTANT MEMBER ITA NO.1343/DEL/2018 ASSESSMENT YEAR : 2013-14 PMS FLASHMATICS PVT.LTD., E/21, SECTOR-7, NOIDA, UTTAR PRADESH-201301. PAN-AAECP0826A VS DCIT, CIRCLE-2, NOIDA. APPELLANT RESPONDENT APPELLANT BY SH. AJAY KUMAR MITTAL, CA RESPONDENT BY SH. ROHIT ANAND, SR.DR DATE OF HEARING 05.10.2021 DATE OF PRONOUNCEMENT 05.10.2021 ORDER PER KUL BHARAT, JM : THIS APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMEN T YEAR 2013-14 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-1, NOIDA D ATED 30.11.2017. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL :- THE APPELLANT RESPECTFULLY SUBMITS THAT: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, NOI DA ['CIT(A)'] HAS ERRED IN PASSING THE ORDER UNDER SECTION (U/S) 25 0 OF THE INCOME TAX ACT, 1961 ('ACT'), DISMISSING THE APPEAL FILED BY T HE APPELLANT AND ACCORDINGLY, CONFIRMING THE ORDER PASSED UNDER SECT ION 143(3) OF THE ACT BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCL E 2, NOIDA ('AO'). EACH OF THE GROUND IS REFERRED TO SEPARATELY, WHICH MAY KINDLY BE CONSIDERED INDEPENDENT OF EACH OTHER. ITA NO. 1343/DEL/2018 PAGE | 2 1. GROUND NO.1 - THE ORDER PASSED BY THE LEARNED C IT(A) IS BAD IN LAW 1.1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE ORDER PASSED BY LEARNED CIT(A) IS BAD IN LAW AND LIABLE T O BE QUASHED. 1.2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE ORDER PASSED BY THE LEARNED CIT(A) IS IN GROSS VIOLATION OF PRINCIPLE OF NATURAL JUSTICE SINCE OPPORTUNITY OF BEING HEARD WAS NOT PR OVIDED TO THE APPELLANT BEFORE PASSING THE ORDER. 1.3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LEARNED CIT(A) HAS ERRED IN DISMISSING THE APPEAL F ILED BY THE APPELLANT AND COMING TO THE CONCLUSION THAT THE APP ELLANT IS NOT SERIOUS TO PROSECUTE ITS CASE ONLY ON THE BASIS THA T THE APPELLANT FILE AN ADJOURNMENT LETTER ON THE FIRST HEARING OF THE C ASE. 2. GROUND NO.2 - DISALLOWANCE OF EXPENDITURE AMOUN TING TO RS 8,31,904/- 2.1. WITHOUT PREJUDICE TO GROUND NO.1, ON THE FACT S AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED A O HAS ERRED IN DISALLOWING THE EXPENSES AMOUNTING TO RS 8,31,904/- UNDER SECTION 35(2AB) OF THE ACT WITHOUT REALISING THE FACT THAT THERE WAS NO CLAIM MADE BY THE APPELLANT UNDER SECTION 35(2AB) OF THE ACT. 2.2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO HAS PASSED THE ORDER WITHOUT APPLICATION OF MIND AND APPRECIATING THE FACTS OF THE CASE. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY OF THE ABOVE GROUNDS AT OR BEFORE THE HEARING OF THE A PPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY AND ASSESSMENT U/S 143(3) OF THE INCOM E TAX ACT, 1961 (THE ACT), WAS FRAMED VIDE ORDER DATED 16.03.2016. THE ASSESSEE IS A PRIVATE ITA NO. 1343/DEL/2018 PAGE | 3 LIMITED COMPANY AND ENGAGED IN THE BUSINESS OF MANU FACTURING AND SELLING OF FLASH LIGHTS. IT WAS OBSERVED BY THE A SSESSING OFFICER THAT THE ASSESSEE HAD CLAIMED AN EXPENDITURE OF RS.8,31,904/ - IN THE FORM OF RESEARCH & DEVELOPMENT EXPENSES. IT WAS FURTHER OB SERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE SOUGHT DEDUCTIO N U/S 35(2AB) OF THE ACT. THE ASSESSING OFFICER OBSERVED THAT THE DEDU CTION WOULD NOT BE AVAILABLE AS THE ASSESSEE WAS REQUIRED TO GET THE R EQUISITE APPROVAL FROM THE DEPARTMENT OF SCIENTIFIC & INDUSTRIAL RESEARCH, GOVERNMENT OF INDIA. HENCE, THE ASSESSING OFFICER MADE DISALLOWANCE OF R S.8,31,904/- AND ADDED BACK TO THE INCOME OF THE ASSESSEE. THUS, TH E ASSESSING OFFICER ASSESSED THE INCOME OF RS.1,01,57,534/- AGAINST THE INCOME DECLARED BY THE ASSESSEE OF RS.93,25,630/-. 3. AGGRIEVED AGAINST THIS, THE ASSESSEE PREFERRED A PPEAL BEFORE LD.CIT(A) WHO DISMISSED THE APPEAL FOR NON-PROSECUTION VIDE T HE IMPUGNED ORDER. 4. NOW, THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBU NAL. 5. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE TOOK US THROUGH THE IMPUGNED ORDER AND SUBMITTED THAT THE APPEAL OF TH E ASSESSEE WAS DISMISSED EX-PARTE WITHOUT GIVING SUFFICIENT AND EFFECTIVE OPPORTUNIT Y OF REPRESENTING ITS CASE. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSING OFFICER ALSO COMMITTED GROSS ERROR IN MAKING THE ADDITION ON THE GROUND THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S 35(2AB) OF THE ACT. HE CONTENDED THAT INFACT NO SUCH DEDUCTION WA S CLAIMED BY THE ITA NO. 1343/DEL/2018 PAGE | 4 ASSESSEE. HE SUBMITTED THAT THIS FACT CAN BE VERIF IED FROM THE INCOME TAX RETURN FILED BY THE ASSESSEE COMPANY. 6. LD. SR. DR OPPOSED THE SUBMISSION OF THE LD. COU NSEL FOR THE ASSESSEE AND SUBMITTED THAT THE ASSESSEE WAS THROUG HOUT NEGLIGENT. HE DID NOT FURNISH THE REQUISITE DETAILS BEFORE LD.CIT (A), THEREFORE, LD.CIT(A) WAS JUSTIFIED IN DISMISSING THE APPEAL OF THE ASSES SEE. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. LD.CIT(A) HAS DISMISSED THE APPEAL VIDE IMPUGNED OR DER DATED 30.11.2017 BY OBSERVING AS UNDER:- IN THIS CASE APPEAL WAS FILED BY THE APPELLANT THR OUGH ONLINE. NOTICE WAS THEREFORE, SENT TO THE APPELLANT ASKING THE APP ELLANT TO FILE NECESSARY INFORMATION AND PAPER-BOOK, ETC., TO SUBS TANTIATE ITS CLAIM AND TO CANVASS ITS APPEAL AS DESIRED. HOWEVER, IN RESPONSE TO THE NOTICE SENT, VIDE LETTER DATED 31.07.2017 THE COUNS EL OF THE APPELLANT SUBMITTED THAT HIS PARTNER IS OUT OF STATION AND SO UGHT ADJOURNMENT. THIS NOT A VALID REASON FOR SEEKING ADJOURNMENT. I T APPEARS THAT THE APPELLANT IS NOT SERIOUS TO PROSECUTE ITS CASE, THE REFORE, NO MEANINGFUL PURPOSE IS TO BE SERVED BY KEEPING THE APPEAL PENDI NG. THE IMPUGNED ASSESSMENT ORDER IS THEREFORE CONFIRMED IN VIEW OF NON PROSECUTION OF THE APPEAL BY THE APPELLANT. THE APPEAL OF THE APP ELLANT FAILS AND IS DISMISSED. 8. FROM THE ABOVE, IT IS CLEAR THAT SUFFICIENT OPPO RTUNITY WAS NOT GRANTED TO THE ASSESSEE. FURTHER, IT IS THE SAY OF THE ASS ESSEE THAT IT HAD NOT CLAIMED ANY DEDUCTION U/S 35(2AB) OF THE ACT. THER EFORE, IT IS STATED THAT ITA NO. 1343/DEL/2018 PAGE | 5 THE FINDING OF THE ASSESSING OFFICER IS EX-FACIE CONTRARY TO THE RECORD AND ERRONEOUS. THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AND MATERIAL PLACED BEFORE US, WE SET ASIDE THE IMPUGNED ORDER A ND RESTORE THE ASSESSMENT TO THE FILE OF THE ASSESSING OFFICER TO FRAME ASSESSMENT AFRESH AFTER VERIFYING THE CLAIM OF THE ASSESSEE THAT NO D EDUCTION U/S 35(2AB) OF THE ACT WAS CLAIMED. IN CASE NO DEDUCTION WAS CLAI MED, THE ASSESSING OFFICER WOULD DELETE THE ADDITION. THE GROUNDS RAI SED IN THIS APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES ONLY. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ABOVE DECISION WAS PRONOUNCED ON CONCLUSION OF VIRTUAL HEARING IN THE PRESENCE OF BOTH THE PARTIES ON 05 TH OCTOBER, 2021. SD/- SD/- (O.P.KANT) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIA L MEMBER *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI