Kansi Technovation Pvt Ltd, Gurgaon V. ITO WARD - 2(3), Gurgaon

ITA 1492/DEL/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3616 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 17-08-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MANOJ PAHWA
• Keywords: Opportunity of being heard
• Section: 142(1); 250; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, SMC: NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1492/DEL/2020 [ASSESSMENT YEAR: 2016-17] M/S KANSI TECHNOVATION PVT. LTD. Q-5/22, HOUSING BOARD COLONY, SECTOR-7 EXTENSION, DLF PHASE-2, GURGAON, HARAYANA-122001 ITO, WARD-2(3), GURUGRAM, HARYANA-122016 PAN-AAFCK7107C ASSESSEE REVENUE ASSESSEE BY SH. MANOJ PAHWA, CA REVENUE BY SH. R. K. GUPTA, SR. DR DATE OF HEARING 11.10.2021 DATE OF PRONOUNCEMENT 11.10.2021 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE EX-PARTE ORDER DATED 05.03.2020 OF THE LEARNED CIT( A)-2, GURGAON, RELATING TO ASSESSMENT YEAR 2016-17. 2. ALTHOUGH, A NUMBER OF GROUNDS HAVE BEEN RAISED, THESE ALL RELATES TO THE EX-PARTE ORDER OF THE LD. CIT(A) IN SUSTAINING THE VARIOUS ADDITIONS MADE BY THE AO AND THEREBY DETERMINING THE TOTAL INCOME OF RS.46,92,100/- AS A GAINST THE RETURNED LOSS OF RS.(-)28,42,518/-. 2 ITA NO.1492/DEL/2020 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE IS A COMPANY AND FILED ITS RETURN OF INCOME DECLARING LO SS OF RS.(-) 28,42,518/-. THE CASE WAS SELECTED FOR COMPLETE SCR UTINY UNDER CASS. NOTICE U/S 143(2) WAS ISSUED ON 08.08. 2017 FIXING THE CASE FOR HEARING ON 25.08.2017, WHICH WA S DULY SERVED ON THE ASSESSEE COMPANY. THEREAFTER, NOTICE U/S 142(1) ALONG WITH QUESTIONNAIRE WAS ISSUED. DURING THE CO URSE OF ASSESSMENT PROCEEDINGS, THE AO ASKED THE ASSESSEE T O EXPLAIN AS TO WHY THE FOLLOWING EXPENSES SHOULD NOT BE DISA LLOWED SINCE, THE ASSESSEE IS DOING BUSINESS OF TRADING OF GOODS AND NOT MANUFACTURING OF PRODUCT:- 1. BRAND ADVERTISEMENT FEE RS.9,27,450/- 2. BRANDING & PUBLISH CHARGES RS.13,36,910/- 3. TRAVELLING EXPENSES RS.2,93,944/- 4. UNSECURED LOAN OF RS.5,05,000/- IN ABSENCE OF ANY CONFIRMATION/LEDGER ACCOUNT. 5. PRE-OPERATIVE EXPENSE RS.33,708/- 6. SECURITY PAYABLE AT RS.24,00,000/- IN ABSENCE OF CONFIRMATION/DETAIL. 7. PROPORTIONATE DISALLOWANCE OF OTHER EXPENSES IN ABS ENCE OF CORRESPONDING PAYMENT THROUGH BANK. 8. ALL STATUTORY DUES WHICH WAS SHOWN PAYABLE IN ABSEN CE OF ANY EVIDENCE OF PAYMENT OF SAME WITHIN TIME LIMI T. 9. ANY OTHER ADDITION, WHICH IS NOT ADMISSIBLE. 3 ITA NO.1492/DEL/2020 10. SUNDRY CREDITORS IN ABSENCE OF CONFIRMED COPY OF LEDGER ACCOUNT/CONFIRMATION. 2.1. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY T HE ASSESSEE, THE AO MADE ADDITION OF RS.25,58,304/- ON ACCOUNT OF THE FIRST THREE ITEMS I.E. BRAND ADVERTISEMENT F EE, BRANDING & PUBLISHING CHARGES AND TRAVELLING EXPENSES. 3. SIMILARLY, THE AO ASKED THE ASSESSEE TO FILE TH E COMPLETE COPY OF LEDGER ACCOUNT OF SUNDRY CREDITORS . IN ABSENCE OF ANY CONFIRMED LEDGER ACCOUNT OF SUNDRY C REDITORS, THE AO MADE ADDITION OF RS.49,76,330/- TO THE TOTAL INCOME OF THE ASSESSEE. THUS, THE AO DETERMINED THE TOTAL INC OME OF RS.46,92,100/- AS AGAINST THE RETURNED INCOME OF LO SS OF RS.(-) 28,42,518/-. 4. SINCE, THE ASSESSEE DID NOT APPEAR BEFORE THE L D. CIT(A) DESPITE NUMBER OF OPPORTUNITIES GRANTED. TH E LD. CIT(A) IN THE EX-PARTE ORDER DISMISSED THE APPEAL FILED BY THE ASSESSEE. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO OPPORTUNITY WHATSOEVER WAS GRANTED BY THE LD. CIT(A ) AND NO NOTICE OF HEARING WAS RECEIVED BY THE ASSESSEE IN T HE GIVEN ADDRESS NOR ANY MAIL WAS ALSO RECEIVED. HE SUBMITT ED THAT IN 4 ITA NO.1492/DEL/2020 THE INTEREST OF JUSTICE, THE ASSESSEE SHOULD BE GIV EN OPPORTUNITY TO SUBSTANTIATE ITS CASE BEFORE THE LD. CIT(A). 6. THE LD. DR, ON THE OTHER HAND, HEAVILY RELIED U PON THE ORDER OF THE LD. CIT(A). 7. I HAVE HEARD THE RIVAL SUBMISSION AND PERUSED T HE RECORDS. I FIND THE LD. CIT(A) WHILE PROCEEDING TO DECIDE THE APPEAL EX-PARTE HAS OBSERVED AS UNDER:- 4.1. NOTICE U/S 250 WAS ISSUED IN THE PENALTY PROCEEDINGS FOR THE YEAR UNDER CONSIDERATION, FIXIN G THE CASE FOR HEARING ON 11.12.2019, 20.1.2020, 05.02.20 20, AND 20.02.2020 RESPECTIVELY. HOWEVER THERE WAS NO RESPONSE IN RESPONSE TO THESE NOTICE ISSUED. NO SUBMISSIONS WERE FILED BY THE APPELLANT DURING THE ENTIRE APPELLATE PROCEEDINGS. 4.2. THE AFORESAID CIRCUMSTANCES SHOW THAT THE APPELLANT IS NOT INTERESTED TO PURSUE ITS APPEAL. I N THE ABSENCE OF ANY REPLY FROM THE APPELLANT, THE MATTER IS BEING DECIDED EX-PARTE. THE MAXIM 'VIGILANTIBUS NON - DERMINENTIBUSJURASUBVENUNT I.E. THE LAW ASSIST THO SE WHO ARE VIGILANT AND NOT THOSE WHO SLEEP OVER THEIR RIGHTS' IS APPLICABLE IN THIS CASE. 4.3. HON'BLE ITAT IN ITA NO. 1025- 1027/CHANDIGARH/2005 FOR THE AY 2002-03 IN THE CASE OF M/S CHHABRA LAND AND HOUSING LTD., AFTER FOLLOWI NG THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF B.N. BHATTACHARGEE & OTHER 118 ITR 461 [SC] HELD THAT THE APPEAL DOES NOT MEAN MERELY FILLING O F THE APPEAL BUT EFFECTIVELY PURSUING THE SAME. 4.4. KEEPING IN VIEW THE AFORESAID FACTUAL POSITIO N, THE APPEAL FILED BY THE APPELLANT IS THEREFORE DECI DED ON MERITS, AS DISCUSSED HEREUNDER: 5 ITA NO.1492/DEL/2020 8. A PERUSAL OF THE ABOVE SHOWS THAT NO NOTICE WHATSOEVER WAS SENT BY THE OFFICE OF THE LD. CIT(A) BEFORE DECIDING THE APPEAL AND HE HAS PROCEEDED TO DECIDE THE APPEAL EX-PARTE ON THE GROUND THAT NOTICE U/S 250 WAS ISSU ED IN PENALTY PROCEEDINGS FOR THE YEAR UNDER CONSIDERATIO N FOR DIFFERENT DATES AND THERE WAS NO RESPONSE. IT IS SE TTLED PROPOSITION OF LAW THAT QUANTUM APPEAL PROCEEDINGS AND PENALTY APPEAL PROCEEDINGS ARE DISTINCT AND SEPARAT E FROM EACH OTHER. THEREFORE, IN ABSENCE OF ANY SERVICE OF NOTI CE BY THE LD. CIT(A), HE SHOULD NOT HAVE PROCEEDED TO DECIDE THE APPEAL EX- PARTE. THEREFORE, CONSIDERING THE TOTALITY OF THE F ACTS OF THE CASE AND IN THE INTEREST OF JUSTICE, I DEEM IT PROPER TO RESTORE THE ISSUE TO THE FILE OF THE LD. CIT(A) WITH A DIRECTIO N TO GRANT AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND DECI DE THE ISSUE AS PER FACT AND LAW. THE ASSESSEE IS ALSO HEREBY DI RECTED TO APPEAR BEFORE THE LD. CIT(A) AND SUBSTANTIATE ITS C ASE WITHOUT SEEKING ANY ADJOURNMENT UNDER ANY PRETEXT, FAILING WHICH THE LD. CIT(A) IS AT LIBERTY TO PASS APPROPRIATE ORDER AS PER LAW. I HOLD AND DIRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATISTICAL PU RPOSE. 6 ITA NO.1492/DEL/2020 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSE. THE ORDER IS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF I.E. TODAY ON 11.10.2021. SD/- SD/- [KUL BHARAT] [R.K.PANDA] JUDICIAL MEMBER ACCOUNTANT MEMBER DELHI; DATED: 11/10/2021. F{X~{T? F{X~{T? F{X~{T? F{X~{T? FA FA FA FA P.S P.SP.S P.S COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI