M/s Dynamic Finvest Services P. Ltd., New Delhi V. DCIT, CC-I, Chandigarh

ITA 1561/CHANDI/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0842 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 05-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Bogus Share capital; Principle of natural justice; Condonation of delay; Set aside; Audi alteram partem
• Section: 68; 132; 69C; 143(3); 142(1); 153A

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “ए” , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH ी एन.के.सैनी, उपा य एवं ी स ु धांश ु ीवा%तव, या'यक सद%य BEFORE: SHRI. N.K.SAINI, VP & SHRI. SUDHANSHU SRIVASTAVA, JM ITA Nos. 1559 to 1563/Chd/2019 Assessment Years : 2005-06 to 2007-08 & 2009-10 to 2010-11 M/s Dynamic Finvest Services Pvt. Ltd. A-36, Shop No. 1, Ground Floor Gali No. 2, Madhu Vihar, Paradise Shopping Plaza, Delhi The Dy. CIT Central Circle-1 Chandigarh PAN NO: AAACD3347E Appellant Respondent ! " Assessee by : Shri Tej Mohan Singh, Advocate # ! " Revenue by : Shri Vivek Nangia, CIT DR $ % ! & Date of Hearing : 30/05/2022 '()* ! & Date of Pronouncement : 30/05/2022 आदेश/Order PER N.K. SAINI, VICE PRESIDENT These five appeals by the assessee for the different assessment years are directed against the separate common orders of the Ld. CIT(A)-3, Gurgaon each dt. 30/09/2019 for the A.Y’s 2005-06, 2006-07 & 2007-08 and 2009-10 & 2010-11. 2. The Registry has pointed out that the appeals filed by the assessee are barred by limitation for three days. The assessee furnished an application for condonation of delay stating therein as under: In the matter of ITA Nos. 1559 to 1563/Chandi/2019 relating to the assessment years 2005-06 to 2007-08, 2009-10 and 2010-11 filed on the 6 th of December 2019 Application for condonation of delay. Respectfully submitted as under:- 1. That the Income Tax Appeals against the orders dated 30.09.2019 of the Commissioner of Income Tax (Appeals)-3, Gurgaon relating to assessment years 2005-06 to 2007-08, 2009- 10 and 2010-11 were filed on 06.12.2019 which were late by 3 days. 2 2. That the counsel of the Company Sh. Tejmohan Singh Advocate was travelling between Chandigarh, Gurgaon and Mumbai for the treatment of his nephew who was suffering from Cancer and as such the appeals could not be finalized for signatures in time. 3. That it was only when Sh. Tejmohan Singh Advocate reached Chandigarh, it came to light that the appeals were yet to be filed. 4. That immediately corrective measures were initiated and the appeals were filed though belatedly on 06.12.2019. 5. That there being no mala fide intention of not filing the appeal in time, it is prayed that the delay be condoned. 6. That there being no mala fide intention of not filing the appeal in time, it is prayed that the delay be condoned. It is, therefore, respectfully prayed that the delay be condoned there being a reasonable cause and in the in interest of substantial justice, the appeal be heard on merits. Sd/- (Neeraj Kumar) Director M/s Dynamic Finvest Services Private Limited New Delhi 3. During the course of hearing the Ld. Counsel for the assessee reiterated the contents of the aforesaid application and submitted that the delay in filing the appeal was beyond the control of the assessee and there was no malafide intention, therefore the delay may be condone considering smallness in delay. 4. In his rival submissions the Ld. DR although opposed the application for condonation of delay but could not controvert the aforesaid contention of the Ld. Counsel of the assessee. 5. After considering the submissions of both the parties and the material available on the record, we are of the view that the small delay of three days which was beyond the control of the assessee may be condoned and the appeals are admitted. 6. Since the issues involved are common in these appeals which were heard together, so these are being disposed off by this consolidated order for the sake of convenience and brevity. 3 7. At the first instance we will deal with the appeal in ITA No. 1559/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 natural justice and as such the order passed is illegal, arbitrary and unjustified. 2. That the Ld. Commissioner of Income Tax (Appeals) has further erred in law in upholding the framing of assessment under section 153A rws 143(3) of the Act without there being any incriminating material having been found during the course of search relating to the said year and as such the assessment framed is illegal, arbitrary & unjustified which merits to be quashed. 3. Without prejudice to the above, the Ld. Commissioner of Income Tax (Appeals) has erred in upholding the addition of Rs. 2,04,00,000/- made on account of alleged bogus and unverifiable share capital treating the same to be unexplained credits applying the provisions of Section 68 which is arbitrary and unjustified. 4. That the Ld. Commissioner of Income Tax (Appeals) has further erred in upholding the addition of Rs. 3,16,200/- for alleged commission paid on arranging the bogus share application money which is arbitrary and unjustified. 5. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 6. That the order of the Ld. Commissioner of Income Tax (Appeals) is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable. 8. The main grievance of the assessee vide ground no. 1 relates to the exparte order passed by the Ld. CIT(A). 9. Facts of the case in brief are that a search under section 132(1) of the Income Tax Act, 1961 (for short the ‘Act’) was conducted on M/s Surya, Nectar & Parabolic Group of cases on 17/09/2010 by the investigation wing (Income Tax), Chandigarh and the assessee was one of persons / concerns covered under section 132 of the Act. Accordingly notice under section 153A of the Act was issued to the assessee on 14/02/2013 for filing the return of income. In response no return had been filed by the assessee. Accordingly notice under section 271F and show cause on exparte and best judgment assessment was issued on 15/03/2013 under section 144(1) of the Act. The AO also issued notice under section 142(1) of the Act alongwith the Questionnaire. In response to the above said notice the assessee filed written reply on 05/03/2013 which the AO considered as incomplete. The AO framed the assessment exparte and assessed the income at Rs. 2,07,16,200/- by making the addition of Rs. 2,04,00,000/- on account of unexplained share capital & share premium under section 68 of the Act. 4 Another addition of Rs. 3,16,200/- was made on account of commission paid to arrange the bogus share application under section 69C of the Act. 10. Being aggrieved the assessee carried the matter to the Ld. CIT(A) who sustained the addition by passing the impugned order exparte. 11. Now the assessee is in appeal. 12. The Ld. Counsel for the assessee drew our attention towards para 5.1 and 5.2 of the impugned order and submitted that the Ld. CIT(A) nowhere stated that the notice issued for hearing were served upon the assessee. It was submitted that no notice for hearing was received by the assessee. Therefore the Ld. CIT(A) was not justified in passing the impugned order exparte which is against the principles of natural justice. 13. In his rival submissions the Ld. CIT DR strongly supported the orders of the authorities below and further submitted that the assessee not only before the Ld. CIT(A) but also before the AO did not appear, therefore by considering the attitude of the assessee, the Ld. CIT(A) was fully justified in deciding the appeal of the assessee exparte and passing the impugned order on merit. 14. We have considered the submissions of both the parties and perused the material available on the record. In the present case the Ld. CIT(A) in para 5.1 and 5.2 observed as under: 5.1 As the appeal were restored de-novo to the CIT(A) to be adjudicated fresh, notices were issued fixing up the case for 18.02.2019, 24.04.2019, 22.05.2019, 29.07.2019 and 20.09.2019. None appeared in response to the notice issued. No submissions were filed during the appellate proceedings. 5.2 The aforesaid circumstances show that the appellant is not interested to pursue its appeal. In 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 those who are vigilant and not those who sleep over their rights” is applicable in this case. From the aforesaid observation of the Ld. CIT(A) it would be clear that the impugned order has been passed exparte. The Ld. CIT(A) simply stated that the notices were issued for fixing up the case, but nowhere it is stated that the notices were served upon the assessee. It is well settled that nobody should be condemned, unheard as per the maxim, “audi alteram partem”. 5 14.1 We therefore by keeping in view the principle of natural justice deem it appropriate to set aside this case back to the file of the Ld. CIT(A) to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee. The assessee is also directed to co-operate and not to seek undue or unwarranted adjournment. 14.2 In all other appeals the main grievance of the assessee relates to the exparte order passed by the Ld. CIT(A), therefore our findings given in the former part of this order shall apply mutatis mutandis for all the appeals. Accordingly all the cases are set aside back to the file of the Ld. CIT(A). 15. In the result, appeals of the Assessee are allowed for statistical purposes. (Order pronounced in the open Court on 30/05/2022 ) Sd/- Sd/- स ु धांश ु ीवा%तव एन.के.सैनी, (SUDHANSHU SRIVASTAVA) ( N.K. SAINI) या'यक सद%य/ JUDICIAL MEMBER उपा य / VICE PRESIDENT AG Date: 30/05/2022 ( + ! , - . - Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. $ / CIT 4. $ / 0 1 The CIT(A) 5. - 2 ग 4 5 & 4 5 678 ग9 DR, ITAT, CHANDIGARH 6. ग 8 : % Guard File ( + $ By order, ; # Assistant Registrar