TNG Retails India Pvt. Ltd., Delhi V. JCIT, New Delhi

ITA 1351/DEL/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9568 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 06-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Keywords: Unexplained cash credit; Depreciation; Opportunity of being heard; Principle of natural justice
• Section: 271(1)(c); 139(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO. 1351/DEL/2017 ASSESSMENT YEAR: 2013-14 TNG RETAILS INDIA PVT. LTD., VS. JCIT, RANGE-25, 503, F.I.E. NEW DELHI PATPARGANJ, DELHI 110 092 (PAN: AAHCA2563L) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : MS. ASHIMA NEB, SR. DR. ORDER PER H.S. SIDHU, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 31.1.2017 OF THE LD. CIT(A)-9, NEW DELHI RELATING TO ASSESSMENT YEAR 2013- 14 ON THE FOLLOWING GROUNDS:- 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE C ASE LD. CIT(A) HAS ERRED IN DISMISSING THE APPEAL ON THE G ROUND THAT THE SAME WAS TO BE MANDATORILY FILED ON-LINE BEFORE 15TH JUNE, 2016 PARTICULARLY WHEN IT WAS BROUGHT TO HIS NOTICE THAT THE ELECTRONIC APPEAL THOUGH FILED BELATEDLY HAS BEEN F ILED ON 31.01.2017. LD. CIT (A) OUGHT TO HAVE TAGGED THE EL ECTRONIC APPEAL WITH MANUAL APPEAL WHICH WAS FILED WITHIN T HE PRESCRIBED TIME. 2 2. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE INSTEAD OF DISMISSING THE ELECTRONIC APPEAL LD. CIT (A) SHOULD HAVE DECIDED THE SAME ON MERITS IGNORING THE TECHNI CAL ASPECT OF NOT HAVING FILED THE APPEAL ELECTRONICALLY WITHI N THE TIME PRESCRIBED AS HE DOES NOT HAVE THE POWER UNDER SECT ION 250(6) OF THE INCOME TAX ACT, 1961 ('THE ACT') TO DISMISS THE APPEAL IN- LIMNE. 3. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE LD. CIT(A) OUGHT TO HAVE DELETED THE ADDITION REGARDING EMPLOYEES CONTRIBUTION OF PF AND ESI TO THE EXTENT OF RS. 2,6 0,628/- AND RS. 56,541/- RESPECTIVELY AS THE PAYMENT WAS MADE W ITHIN THE PRESCRIBED TIME OF FILLING THE RETURN UNDER SECTION 139(1) OF THE ACT. THE IMPUGNED ADDITION IS LIABLE TO BE DELETED. 4. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE LD. CIT(A) OUGHT TO HAVE DELETED ADDITION OF RS. 5,74,0 00/- ADDED ON ACCOUNT OF SALE OF CARS BY TREATING THE SALE CON SIDERATION AS UNEXPLAINED CASH DEPOSIT U/S 68 OF THE ACT. THE IMP UGNED ADDITION IS LIABLE TO BE DELETED. 5. THE AMOUNT RS. 5,74,000/- REPRESENTED SALE PROCE EDS OF OLD CARS AND COULD NOT BE TREATED AS UNEXPLAINED CR EDITS UNDER SECTION 68 OF THE ACT PARTICULARLY IN THE LIGHT OF THE FACT THAT SELLING PRICE OF THE VEHICLES HAVE NOT BEEN DOUBTED AND THE IMPACT WAS ONLY ON QUANTUM OF ADMISSIBILITY OF QUAN TUM OF DEPRECIATION. SALE PRICE OF FIXED ASSETS (OLD CARS) CAN NEITHER BE TREATED AS UNEXPLAINED CREDIT NOR CAN BE ASSESSED A S INCOME 3 FROM OTHER SOURCES LIABLE TO BE TAXED UNDER SECTION 115BBE OF THE ACT. THE TAX TREATMENT OF THE IMPUGNED ADDITION UNDER SECTION 115BE OF THE ACT IS LIABLE TO BE DELETED IN LAW. 6. THE AO HAS ERRED IN INITIATING PENALTY PROCEEDIN GS UNDER SECTION 271(1)(C) OF THE ACT WITHOUT RECORDING ADEQ UATE SATISFACTION AND WITHOUT CONCLUDING THAT THE ASSESS EE HAS NOT ACTED IN GOOD-FAITH AND HAS NOT EXERCISED DUE-DILIG ENCE. 7. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE AO HAS ERRED, IN CHARGING INTEREST UNDER SECTIO NS 234B, 234C AND 2340 OF THE ACT 8. THE APPELLANT PRAYS FOR LEAVE TO ADD, ALTER, VA RY, OMIT, SUBSTITUTE OR AMEND THE ABOVE GROUNDS OF APPEAL, AT ANY TIME BEFORE OR AT, THE TIME OF HEARING OF THE APPEAL. 9. EACH OF THE ABOVE GROUNDS IS INDEPENDENT AND WIT HOUT PREJUDICE TO THE OTHER GROUNDS OF APPEAL PREFERRED BY THE APPELLANT. 2. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NO T DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE NOT REPEATED HERE FOR THE SAKE OF CONVENIENCE. 3. IN THIS CASE, NOTICE OF HEARING TO THE ASSESSEE WAS SENT BY THE REGISTERED AD POST, IN SPITE OF THE SAME, ASSESSEE, NOR ITS AUTHORIZED REPRESENTATIVE APPEARED TO PROSECUTE THE MATTER IN DISPUTE, NOR FILED ANY APPLICATION FOR ADJOURNMENT. KEEPING IN VIEW THE F ACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE ISSUE INVOLVED IN THE P RESENT APPEAL, WE ARE OF THE VIEW THAT NO USEFUL PURPOSE WOULD BE SERVED TO ISSUE NOTICE AGAIN AND 4 AGAIN TO THE ASSESSEE, THEREFORE, WE ARE DECIDING THE PRESENT APPEAL EXPARTE QUA ASSESSEE, AFTER HEARING THE LD. DR AND PERUSING THE RECORDS. 4. DURING THE HEARING, IT WAS NOTED FROM THE GROUND S OF APPEAL THAT DURING THE FIRST APPELLATE PROCEEDINGS ASSESSEES APPEAL WAS TREATED AS NON-EST AND THE SAME WAS DISMISSED IN LIMINE BY THE LD. CIT (A) BY PASSING A EXPARTE ORDER. IT HAS BEEN MENTIONED IN THE GROUNDS OF APP EAL THAT LD. CIT(A) HAS ERRED IN DISMISSING THE APPEAL ON THE GROUND THAT T HE SAME WAS TO BE MANDATORILY ON-LINE BEFORE 15 TH JUNE, 2016 PARTICULARLY WHEN IT WAS BROUGHT TO HIS NOTICE THAT THE ELECTRONIC APPEAL THOUGH FI LED BELATEDLY HAS BEEN FILED ON 31.1.2017 AND LD. CIT(A) OUGHT TO HAVE TAGGED TH E ELECTRONIC APPEAL WITH MANUAL APPEAL WHICH WAS FILED WITHIN THE PRESCRIBED TIME. IT WAS FURTHER MENTIONED IN THE GROUNDS OF APPEAL THAT LD. CIT(A) INSTEAD OF DISMISSING THE ELECTRONIC APPEAL, SHOULD HAVE DECIDED THE SAME ON MERITS IGNORING THE TECHNICAL ASPECTS OF NOT HAVING FILED THE APPEAL EL ECTRONICALLY WITHIN THE TIME PRESCRIBED AS HE DOES NOT HAVE THE POWER UNDER SECT ION 250(6) OF THE INCOME TAX ACT, 1961 TO DISMISS THE APPEAL IN LIMINE. 5. LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND STATED THAT LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSE E IN ACCORDANCE WITH CBDT GUIDELINES, WHICH DOES NOT NEED ANY INTERFEREN CE. 6. WE HAVE HEARD THE LD. DR AND PERUSED THE RECORDS ESPECIALLY THE IMPUGNED ORDER AS WELL AS THE GROUNDS OF APPEAL. W E FIND THAT LD. CIT(A) HAS OBSERVED THAT ASSESSEE WAS REQUIRED TO FILE TH E APPEAL ONLY IN ELECTRONIC FORM LATEST BY 15.6.2016. HOWEVER, THE PRESENT APP EAL / COPY OF THE APPEAL FILED MANUALLY IN THE OFFICE OF THE LD. CIT(A) WAS A PAPER APPEAL AND THUS DOES NOT MEET THE REQUIREMENT OF THE EXTANT RULES, HENCE, HE TREATED THE APPEAL AS NON-EST AND THE APPEAL WAS DISMISSED IN L IMINE. HOWEVER, WE 5 HAVE NOTED FROM THE GROUNDS OF APPEAL THAT ASSESSE ES APPEAL WAS TREATED AS NON-EST AND THE SAME WAS DISMISSED IN LIMINE BY THE LD. CIT(A) BY PASSING A EXPARTE ORDER. WE FIND CONSIDERABLE COGE NCY IN THE CONTENTION OF THE ASSESSEE THAT LD. CIT(A) HAS ERRED IN DISMISSIN G THE APPEAL ON THE GROUND THAT THE SAME WAS TO BE MANDATORILY ON-LINE BEFORE 15 TH JUNE, 2016 PARTICULARLY WHEN IT WAS BROUGHT TO HIS NOTICE THAT THE ELECTRONIC APPEAL THOUGH FILED BELATEDLY HAS BEEN FILED ON 31.1.2017 AND LD. CIT(A) OUGHT TO HAVE TAGGED THE ELECTRONIC APPEAL WITH MANUAL APPEA L WHICH WAS FILED WITHIN THE PRESCRIBED TIME. WE FURTHER FIND THAT LD. CIT( A) INSTEAD OF DISMISSING THE ELECTRONIC APPEAL, SHOULD HAVE DECIDED THE SAME ON MERITS IGNORING THE TECHNICAL ASPECTS OF NOT HAVING FILED THE APPEAL EL ECTRONICALLY WITHIN THE TIME PRESCRIBED AS HE DOES NOT HAVE THE POWER UNDER SECT ION 250(6) OF THE INCOME TAX ACT, 1961 TO DISMISS THE APPEAL IN LIMINE. IN VIEW OF ABOVE, IT IS NOTED THAT LD. CIT(A) HAS NOT DISCUSSED IN DETAIL THE FACTS AND CIRCUMSTANCE OF THE CASE AND ALSO DID NOT DEAL THE ISSUE ON MERIT AND PASSED A NON-SPEAKING EXPARTE ORDER, WHICH IN OUR OPINION, IS NOT IN ACCORDANCE WITH THE PRINCIPLES OF NATURAL JUSTICE A ND IT IS AN ERRONEOUS APPROACH. AFTER READING SECTION 250(6) OF THE ACT , WE ARE ALSO OF THE CONSIDERED VIEW THAT ASSESSEES CASE SHOULD BE DECI DED ON MERITS, WHICH THE LD. CIT(A) HAS NOT DONE. HOWEVER, IT IS A SETTLED L AW THAT EVEN AN ADMINISTRATIVE ORDER HAS TO BE SPEAKING ONE. IN TH IS REGARD, WE DRAW SUPPORT FROM HONBLE APEX COURT IN THE CASE M/S SA HARA INDIA (FARMS) VS. CIT & ANR. IN [2008] 300 ITR 403 WHEREIN IT HAS BEEN HELD THAT EVEN AN ADMINISTRATIVE ORDER HAS TO BE CONSISTENT WITH THE RULES OF NATURAL JUSTICE. 6.1 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND IN THE INTEREST OF JUSTICE, WE REMIT BACK THE ISSUES IN DISPUTE TO T HE FILE OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FOR HEARING WI TH THE DIRECTIONS TO CONSIDER EACH AND EVERY ASPECTS OF THE ISSUES INV OLVED IN THE APPEAL AND DECIDE THE SAME AFRESH, AFTER CONSIDERING ALL THE E VIDENCES/DOCUMENTS AND PASS A SPEAKING ORDER ON THE MERITS OF THE CASE AND GIVE ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASS ESSEE IS ALSO DIRECTED TO FILE ALL THE NECESSARY EVIDENCES / DOCUMENTS BEFORE THE LD. CIT(A) TO 6 SUBSTANTIATE ITS CASE AND DID NOT TAKE ANY UNNECES SARY ADJOURNMENT IN THE PROCEEDINGS BEFORE THE LD. CIT(A). 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON 03/07/2019. SD/- SD/- (B.R.R. KUMAR) [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED:03/07/2019 *SR BHATNAGAR* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR