M/s Arcelor Neel Tailored Blank (Pvt.) Ltd., Delhi V. ITO, New Delhi

ITA 1575/DEL/2013

• Counselvise Citation: 157520114 RSA 2013
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-02-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 18-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Keywords: Depreciation; Opportunity of being heard
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI J.S. REDDY ITA NO. 1575/DEL/2013 ASSTT. YR: 2008-09 M/S ARCELOR NEEL TAILORED BLANK (PVT.) LTD. VS. IN COME-TAX OFFICER, NEEL HOUSE, OPP: QUTAB MINAR, WARD 2(1), NEW DEL HI. LADO SARAI, DELHI-110030. PAN: AAFCA 9635 D ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : MANISH KUMAR ADV. RESPONDENT BY : SHRI Y. KAKKAR DR O R D E R PER R.P. TOLANI, J.M: : THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF CI T(A)-V, NEW DELHI DATED 21-12-2012 RELATING TO A.Y. 2008-09. AS MANY AS 9 GROUNDS HAVE BEEN RAISED MAINLY TO CHALLENGE THE ORDER OF CIT(A ) IN DISPOSING OF THE APPEAL EX PARTE, QUA THE ASSESSEE, AND THE ENHANCI NG THE ASSESSMENT WITHOUT AFFORDING THE ASSESSEE ANY OPPORTUNITY OF HEARING. 2. FACTS IN BRIEF ARE: FOR A.Y. 2008-09 THE AO COM PLETED THE ASSESSMENT U/S 143(3) AT NIL INCOME AS AGAINST LOSS OF RS. 4,87,87,249/-. AGGRIEVED, ASSESSEE PREFERRED FIRST APPEAL BEFORE T HE CIT(A) AND SUBMITTED WRITTEN SUBMISSIONS BEFORE HIM. THE CIT(A) SENT THE WRITTEN SUBMISSIONS TO AO FOR HIS COMMENTS AND TO SUBMIT A REMAND REPORT, WHICH IS SUBMITTED ON 18-10-2012, INTER ALIA, AS UNDER: 2 (VII) WITH DUE REGARD IT IS SUBMITTED THAT THE INT EREST OF RS. 7,54,805/- RECEIVED FROM NMPL NEEDS TO ASSED AS IN COME FROM OTHER SOURCES YOUR GOODSELF IS REQUESTED TO KINDLY ENHANCE THE INCOME TO THIS EXTENT AS IS UPHELD IN THE CASE OF M /S TUTION ALKALI CHEMICALS AND FERTILIZERS LTD. (227 ITR 172) AND CIT VS. COROMANDAL CEMENT LTD., 234 ITR 412, CLEARLY AP PLIES TO THIS CASE. 2.1. THEREAFTER, THE CIT(A) CONCLUDED THE APPEAL A S UNDER: THE REMAND REPORT OF THE AO WAS CONFRONTED TO THE APPELLANT AS PER A NOTICE DATED 31-10-2012 FIXING THE APPEAL FOR HEARING ON 09-11-2012. ON 09-11-2012 AN APPLICATION FOR ADJ OURNMENT WS RECEIVED, ACCORDINGLY HEARING OF THE APPEAL WAS ADJOURNED TO 17-12-2012. ON 17-12-2012 NEITHER ANYBODY ATTEND ED THE PROCEEDINGS NOR ANY APPLICATION FOR ADJOURNMENT WAS SUBMITTED. FROM THE AFORESAID THE UNDERSIGNED HAS N O ALTERNATIVE OTHER THAN CONSTRUING THAT THE APPELLAN T HAS NOTHING TO SAY ON THE REMAND REPORT OF THE AO. THEREFORE TH E ACTION OF THE AO ON BOTH THE ISSUES I.E. DISALLOWANCES ON A/C OF DEPRECIATION AT RS. 1,71,68,185/- AND OF EXPENSES O F RS. 94,97,979/- BY HOLDING THE SAME TO BE OF CAPITAL NA TURE ON THE GROUND THAT BUSINESS HAS NOT COMMENCED IS CONFIRMED AND THE GROUNDS OF APPEAL ARE DISMISSED. THE AO HAS REPORTED THAT INTEREST OF RS. 7,54,805/- RECEIVED FROM NMPL NEEDS TO ASSESSED AS INCOME FROMOTHER SO URCES IN VIEW OF THE RATIO OF JUDGMENTS IN THE CASES OF M/S TUTION ALKALI CHEMICALS AND FERTILIZERS LTD. (227 ITR 172) AND CI T VS. COROMANDAL CEMENT LTD., 234 ITR 412 AND AHS RECOMME NDED ENHANCE THE INCOME TO THIS EXTENT. SINCE, AS NOTED ABOVE, THE APPELLANT HAS NOT BOTHERED TO REBUT THE REMAND REPO RT OF THE AO THE INCOME IS ENHANCED BY RS. 7,54,805/- AND IS DIRECTED TO BE ASSESSED AS INCOME FROM OTHER SOURCES. THIS CASE WAS ORIGINALLY FIXED FOR HEARING ON 10-11 -2008. THE COUNSEL OF THE APPELLANT MOVED AN ADJOURNMENT APPLI CATION FOR FIXING OF THE CASE ON SOME OTHER DATE AND ACCORDING LY THE CASE WAS ADJOURNED TO 17-11-2008. THERE WAS NO COMPLIANC E ON THIS DATE. SUBSEQUENTLY THE CASE WAS AGAIN FIXED FOR HEA RING ON 16- 3 12-2008. HOWEVER, AGAIN THERE WAS NO COMPLIANCE EIT HER ON THE PART OF THE APPELLANT OR HIS AUTHORIZED REPRESE NTATIVE. NO ADJOURNMENT APPLICATION HAS BEEN MOVED IN THIS REG ARD. SINCE, INSPITE OF DUE OPPORTUNITIES PROVIDED TO THE APPELL ANT, THERE WAS NO COMPLIANCE TO THE APPELLATE PROCEEDINGS, I HAVE NO OTHER ALTERNATIVE BUT TO DISPOSE OF THE APPEAL ON THE BAS IS OF MATERIALS AVAILABLE ON RECORD. 2.2. AGGRIEVED, THE ASSESSEE IS BEFORE US. 3. LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT APPEA L WAS FIXED FOR HEARING BEFORE LD. CIT(A) ON 12-12-2012 AND NOT 17- 12-2012 AS MENTIONED BY THE LD. CIT(A) IN HIS ORDER DATED 21-12-2012. ON 12-12-2012, THERE WAS STAFF STRIKE IN THE LAXMI NAGAR INCOME-TAX OFFICE. DESPITE APPEARANCE OF ASSESSEES COUNSEL, APPEAL COULD NOT BE HEARD DUE T O SAID STRIKE OF STAFF IN THE INCOME-TAX DEPARTMENT ON THAT DATE. FURTHER DATE WA S DIRECTED TO BE COMMUNICATED BY CIT(A). 3.1. LD. CIT(A) WITHOUT GIVING FURTHER NOTICE OF HE ARING, ERRED IN DISPOSING OFF THE ASSESSEES APPEAL, EX PARTE, WIT HOUT AFFORDING ANY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. BESIDES , THE AND ENHANCEMENT HAS BEEN DONE SOLELY ON THE REMAND REPORT OF AO, WI THOUT GIVING ANY NOTICE AND BY PASSING A SKETCHY ORDER WITHOUT ASSIGNING ANY REASON IN COMING TO HIS CONCLUSIONS INCLUDING ENHANCEMENT. ACCORDING TO HIM, THE ORDER PASSED BY THE CIT(A) BEING UNTENABLE, A NON-SPEAKING ORDE R AND WITHOUT ENHANCEMENT NOTICE, CANNOT STAND IN THE EYE OF LAW . HE PRAYED THAT THE ORDER OF CIT(A) MAY BE SET ASIDE WITH A DIRECTION TO DECIDE THE GROUNDS OF APPEAL ON MERIT BY PASSING A REASONED ORDER, AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4. ON THE OTHER HAND THE LEARNED DR SUPPORTED THE ORDER OF CIT(A). 4 5. AFTER GOING THROUGH THE ORDER OF LEARNED CIT(A) WE FIND FORCE IN THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. FROM THE ORDER OF CIT(A), WE FIND THAT HE HAS ENHANCED THE ASSESSMENT WITHOUT ISSUING STATUTORY NOTICE AND BY SIMPLY REFERRING TO REMAND REPORT FURNISHED BY THE ASSESSING OFFICER. THE ORDER OF THE LEARNED CIT(A) BEING UNTENABLE, A NON-SPEAKING ORDER AND ENHANCEMENT BEING WITHOUT PROPER NOTICE, THE SAME I S SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE FIRST APPELLA TE AUTHORITY WITH THE DIRECTION TO PASS A REASONED ORDER IN ACCORDANCE WITH LAW, AF TER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE ORDE R ACCORDINGLY. 6. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN OPEN COURT ON 3-2-2014. SD/- SD/- ( J.S. REDDY ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: _3-02-2014. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR