SCB Steel P.Ltd (earlier known as CBS Energy Systems P.Ltd), New Delhi V. DCIT, Circle-5(2), New Delhi

ITA 166/DEL/2019

AI Insights

The case involves SCB Steel P. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) - II, New Delhi, arising from the assessment order passed by the Assessing Officer under Section 143(3) of the Income Tax Act, 1961 for the assessment year 2013-14. The primary contention was the lack of proper opportunity of hearing provided by the CIT (A) and the validity of the notice issued under Section 143(2) of the Act. The CIT (A) had upheld the additions made by the DCIT, which included a significant addition of Rs. 8,22,60,418 based on unserved notices under Section 133(6) and unexplained cash deposits. The Tribunal found that the CIT (A) had erred in confirming the additions without proper consideration of all grounds of appeal and proceeded ex-parte, which violated the principles of natural justice.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121666 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2023
• Appeal Filed By: Assessee
• Order Result: AllowedAllowed
• Bench Allotted: G
• Next Hearing Date: 04-06-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 09-01-2019
• Other Referred Cases: CIT vs. B. N. Bhattacharya (1997) 118 ITR 461 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 201; 43; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A No.166/DEL/2019 Assessment Year 2013-14 SCB Steel P. Ltd. (earlier know as CBS Energy Systems P. Ltd.) New Delhi v. DCIT Circle-5(2) New Delhi TAN/PAN: AADCC2468C (Appellant) (Respondent) Appellant by: Shri Sachin Kumar, CA Respondent by: Shri H.K. Choudhary, CIT-DR Date of hearing: 05 06 2023 Date of pronouncement: 13 06 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: T he c a p ti o n e d a p pe a l h as b e e n fi le d b y t he a ss es se e ag ai n s t t h e or d e r o f t he Co mm i ss i o ne r o f In c o m e T a x (A p p e a l s ) -II , N ew D e l hi (‘ C IT (A ) ’ in s h o rt ) d a t e d 1 1. 0 5 . 20 1 8 ar is i n g f ro m th e a ss e s s me n t or d e r d a t e d 2 9 . 0 3. 2 0 1 6 pa sse d b y t he A sse s si ng O ff ic e r ( A O ) un de r S ec t i on 1 4 3( 3 ) o f t he I nc o m e T a x A c t, 1 96 1 ( t he A c t) c on c e r n i n g A Y 201 3- 1 4. 2. T he g r o un ds o f a pp e a l r ai s e d b y t h e as se s se e re ad a s u nd e r : “ 1 . Th e I d . C om m i s s i o n e r o f In c o m e Ta x (A p pe a l s ) - 2 , N e w D e l hi [ h e r e a f t e r l d . C I T ( A )] as w e ll as t he l d . D e pu t y C om m i s s i o n e r of I n c o m e T a x , C i r c l e 5 (2 ) , N e w D e l h i [ he r e a f t e r l d . DC I T] f a i le d t o p r o v i de p r o pe r o p po r t u ni t y of h e a r i n g . 2 . T h e Id . C I T ( A ) e r r e d i n r e je c t i n g t h e gr o u nd t h at th e a s s e s s m e nt I.T.A No.166/Del/2019 2 o r d e r p a s s e d b y t he Id . D C I T i s n u l l an d v oi d a b i ni t i o i n t e r a l i a b e c au s e t he n o t i c e u / s . 1 4 3 ( 2 ) of th e I n c om e T a x A ct , 19 6 1 ( h e r e af t e r t h e A c t ) i s i n v al i d b e c a u s e (1 ) t he s ai d no t i c e w a s i s s ue d by t h e I n c o m e T ax O f f i c e r (he r e i n af t e r t h e Id . I T O ), w ho h a s n o j ur i s di c t i o n o v e r t he c a s e ; an d w i t h ou t pr e ju d ic e t h e r e i s n o o r d e r b y t h e C o m p e t e nt A u t h o r i t y t r a n s f e r r in g t he ca s e f r o m t he I TO t o t he I d . D C I T ; (2 ) t h e c a s e w a s s e l e c t e d f o r s c r u t i ny t h r ou g h C A SS , w hi c h i s i n g r o s s v i o l at i o n o f pr o v i s i o ns of s e c t i on 1 43 (2 ) of t h e A c t ; an d w i t h o ut pr e j ud i c e , t h e b a s i s / r e as o n s f o r s e l e c t i on of t h e c as e fo r s c r u t i n y , ar e a g ai n s t t h e fa c t s o f t he c a s e . 3 . 1 T he Id . C I T ( A ) e r r e d i n up h ol d i ng a d di t i o n o f Rs . 8 , 2 2 , 6 0 , 4 18 , w h ic h w as m a de b y t h e l d. D C I T on t he s ol e g r o u n d th a t n ot i c e s i s s ue d u/ s . 1 3 3 ( 6 ) w e r e r e t u r n e d u ns e r v e d, b y e s t i mat i n g t h e G P at t h e r a t e o f 5 . 60 %. 3 . 2 T he I d. C I T (A ) f a i l e d t o c o n s i de r a n d d e c id e all o f t h e g r o u n d s o f ap p e al . 4 . 1 T he l d . C I T (A ) e r r e d i n c on f i r m i n g t he a d d i t i o n of R s . 1 , 7 8 , 3 1 , 80 0 /- b e i ng c as h d e p os i t i n B a nk a c c ou n ts , w hi c h w a s m ad e by t h e l d. D C I T u / s . 6 8 o f t he A c t . 4 . 2 Th e l d. C I T (A ) f ai l e d to c o ns i d e r a n d de c i d e all o f t he g r o u n d s of a p pe a l . 5 . Th e l d . C I T ( A ) e r r e d i n c on f i r m i n g t h e d i s a l l ow an c e of R s . 4 , 2 8 , 7 3 7/ - be i n g t he e x pe n d it u r e o n w hi c h t h e T ax a t S ou r c e w a s n o t d e d u c t e d . 6 . Th e o b s e r v a t i o n s of t h e l d. C I T ( A ) as w e l l a s l d. D C I T a r e a g ai n s t t he f a c t s of t h e c as e . 7 . Th e as s e s s m e n t or d e r a s w e l l a s t h e i m pu gn e d o r de r i s a g ai n s t t he f a c t s of t h e c as e as w e l l a s l a w . ” 3. B ri e f f a c t s o f t h e c as e a r e t h a t t h e a ss e s se e f ile d re t u r n o f i nc o m e de c l a r i ng l oss o f Rs. 6, 1 7, 34 , 77 4 /- . Th e r et ur n fi l e d by t h e a ss es se e w a s se l e c t e d fo r scr ut i n y a ss e s s me n t . C e r ta i n a d d i t io ns w er e ma de i n t h e c ou r s e o f t he a ss e ss m e n t t ow a rd s al l eg e d bo g u s pu r c h a s es , un e x p l a i ne d ca sh d e p os i t s a n d ad di t i o n on a c c o u nt o f fa i lu re t o de du c t T D S o n e x p e n s e s i nc ur r e d a s p er pr ov i s i o n s o f S ec t i on 40 (a )( i a ) o f t h e A ct . T h e i nc o m e w a s a s se sse d a t a pr o fi t o f Rs. 3, 8 7, 8 6 , 18 1 / - . I.T.A No.166/Del/2019 3 4. A g gri e v e d b y t he ad d i t io ns a nd di sa l l ow a nc e s ma de i n t he a ss es s m e n t or de r, t he as se ss e e fi l e d ap pe a l be f or e t h e CI T (A ) . 5. A b a r e p e r u sa l o f t h e o rd e r pa ss e d b y t h e CI T (A ) a g ai ns t , sh o w s t h at t h e a p p e al h a s be e n di s m is s e d p ri ma r i l y o w in g t o t he f a ct t ha t as se ss e e fa i l e d t o a p p e a r b e fo r e t he f ir s t a p pe l l a t e a ut h or i t y t o pr e se nt i t s c a se i n i t s pe r sp e c t i ve . T he C I T (A ) ga th e r e d s t r en gt h fr o m t h e j u dg me nt s r e nd e r e d b y t h e H on ’ bl e S up r e me C o u rt i n C IT v s. B. N. B ha t t a c h a ry a ( 1 99 7) 1 1 8 I T R 4 61 ( S C ) an d p r oc e e d e d e x - pa r te t o c o n fi r m t h e a c t i o n o f th e A sse ssi ng O f fi c e r. 6. A g gri e v e d b y t he o rd e r o f t h e CI T (A ), t he a ss es se e i s i n a p pe al be fo r e th e T r i b un a l . A t t he t i m e o f h ea r in g, t he l d. co u ns e l a t t he t hr e s ho l d po i n t e d o u t t h a t t h e o rd er o f t he CI T( A ) i s e x - pa rt e. T he l d. A R f or th e a ss e sse e a ls o po i n t e d o ut t ha t t he asse ss e e h a s d u l y re s po nd e d t o e a c h not i c es o f t he C IT ( A ) as t a bu l a t ed in t h e a p p e l l a te or d e r it se l f a nd su b mi t t ed t h a t on fo ur o cc a s i o ns the a dj o ur n me n t w as g ra nt e d a n d o nl y o n o ne o c ca si o n t h e C I T (A ) h a s al l e g e d no n c o mp l ia nc e a nd p r o c e e de d t o d is p o se o f t h e a p pe a l e x - pa rt e c a u s in g gr a v e pr ej u di ce to t h e a s ses s e e . T h e l d. c o un se l t hus ass a i l e d t h e a ct i o n o f t he C I T ( A ) i n p a ssi n g t h e e x - pa rt e o r d e r w i t ho u t g iv in g a de qu a t e op p o r t u ni t y o f b e i n g h ea r d i n cl e a r v io l ati o n o f pr in c i p l e s o f n a tu ra l j u s ti c e . 7. A s n ot ed a b o ve , i t i s ma n i f e st fr o m re c o rd t h at t he o rd er o f t h e CI T ( A ) w as pa sse d e x- pa r te in t h e a bse nc e o f as s e ss e e c o n c e r ne d a nd w i t h ou t a ny re pr e se nt a t i o n o n be ha l f o f t h e a s se s se e. W e a l s o no t i c e t h a t t he C I T (A ) w a s c o n st ra i n t t o d i s mi ss t he a p pe a l o f t h e a ss es se e i n t h e a bs e nc e o f an y e x p l a n at i on o r a n y ev i d en ce a d d uc e d on be ha l f o f t he a ss e s se e t o r e b u t t h e f in di ng s g i ve n b y t he A sse s si n g O ff i c e r. In t he t o t a l i t y o f c i r c u m s ta nc e s an d to p re ve nt mi sc a rr i a ge o f j u s t i c e , w e co ns i d e r i t e x p ed ie nt t ha t t he e nt i re I.T.A No.166/Del/2019 4 ma t t e r i s se t a si d e a nd re s t o re b a c k t o t h e fi l e o f th e A sse s si n g O ff ic e r for d e n o v o ad j u d i c at i o n o f t h e a p pe al a f te r a ffo rd in g p ro pe r op p or tu ni t y o f be in g h e a r d t o t h e a ss e sse e. T h e a sse s se e i s d i r e ct e d t o f u l l y co -o pe r a t e i n t h e pr oc ee d i n gs be for e CI T( A) a nd sha l l b e at l ib er t y t o p r e se n t i t s c a se on a ll as p e c t s a nd a d duc e s uc h e vi d e n ce s a nd m at e r i a l a s i t ma y c o n s id e r e x pe di e nt i n s up po rt o f i t s ap p e a l . 8. I n v i e w o f t h e a fo r es a i d d i s c u ss i o n , t h e or de r of t he C IT ( A ) i s se t a s i de a n d m a tt e r i s re st or ed b a c k t o t he fi l e of t he CI T( A ) fo r fr e sh a d j u di c a t i on i n ac c or d a nc e w i t h l aw . 9. I n t he re su lt , t h e a pp e a l o f t h e a sse ss e e i s a l lo w e d fo r st a t i st ic a l pu r p os e s . Order pronounced in the open Court on 13/06/2023. Sd/- Sd/- [CHANDRA MOHAN GARG] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 13/06/2023 Prabhat Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR Assistant Registrar