M/s Can & Able Events Pvt. Ltd., Chandigarh V. Addl. CIT, Range Central, Chandigarh

ITA 168/CHANDI/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6790 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 11-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND SUDERSHAN
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside; Audi alteram partem
• Section: 271D

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A, CHANDIGARH (VIRTUAL COURT) . . , ! , ' #$ BEFORE: SHRI. N.K.SAINI, VP & SHRI , SANJAY GARG, J M ./ ITA NO. 168/CHD/2019 / ASSESSMENT YEAR : 2014-15 M/S CAN & ABLE EVENTS PRIVATE LIMITED, 2175, 2 ND FLOOR, CHANDIGARH THE ADDL CIT, RANGE CENTRAL, CHANDIGARH ./PAN NO:AABCC8309C /APPELLANT /RESPONDENT /ASSESSEE BY : SHRI TEJ MOHAN SINGH, ADVOCATE / REVENUE BY : SHRI ARVIND SUDERSHAN, JCIT DR ! ' # /DATE OF HEARING : 08/09/2020 $%&' # /DATE OF PRONOUNCEMENT : 08 /09/2020 #% /ORDER PER N.K. SAINI, VICE PRESIDENT THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 5.11.2018 OF THE LD. CIT(A)-3, GURGAON. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEA L:- 1. THAT THE ORDER OF CIT(A) -3 IS NOT A SPEAKING ORDER , IS ERRONEOUS, ARBITRARY, OPPOSED TO LAW AND FACTS OF T HE CASE. 2. THAT THE LD. ASSESSING OFFICER HAS GROSSLY ERRED IN LEVYING PENALTY UNDER SECTION 271D AMOUNTING TO RS. 16,50,000/- DESPITE THE FACT THAT THE AMOUNTS WERE RECEIVED BY WAY OF JOURNAL ENTRIES IN THE BOOKS OF THE ACCOUNTS OF THE ASSESSEE COMPANY AND THE ASSESSEE 2 COMPANY HAD NOT ACCEPTED ANY CASH LOANS OR DEPOSITS FROM ITS DIRECTOR. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO; ALTE R, TO AMEND OR VARY FROM THE AFORESAID GROUNDS OF APPEAL ON OR BEFORE THE TIME OF HEARING OF THE SAID APPEAL. 3. VIDE GROUND NO.1, THE GRIEVANCE OF THE ASSESSEE RELATES TO THE NON-SPEAKING ORDER PASSED BY THE LD. CIT(A). 4. THE FACTS OF THE CASE IN BRIEF ARE THAT A SEARCH U/S 132(1) OF THE INCOME TAX ACT, 1961 (HEREIN REFERRED TO THE ACT') WAS CONDU CTED AT THE RESIDENTIAL PREMISES OF SMT. PRIYA ARORA AND HER HUSBAND SHRI MANISH ARORA ON 17.11.2013. SMT. ARORA IS ONE OF THE DIRECTORS HOLDING 50% SHARES OF THE ASS ESSEE COMPANY. DURING THE COURSE OF SEARCH, ONE DOCUMENT WAS SEIZED FROM THE RESIDEN CE OF SHRI MANISH ARORA IN THE FORM OF A SALE AGREEMENT FOR 3.5 KANALS OF LAND IN KANGRA DISTRICT BETWEEN SMT. PRIYA ARORA AND SHRI NEK RAM RESIDENT OF RAKKAR, MAUJA SI DHBARI, TEHSIL DHARMSHALA, DISTRICT KANGRA, HIMACHAL PRADESH. AS PER THIS AGR EEMENT, TOTAL SALE CONSIDERATION FOR THE LAND WAS FIXED AT RS. 31,50,000/-. AS PER THE SEIZED DOCUMENT, FOLLOWING PAYMENTS HAD BEEN MADE BY SMT. PRIYA ARORA TO SHRI NEK RAM, FOR THE PURCHASE OF LAND IN CASH DURING THE YEAR RELEVANT TO THE ASSESS MENT YEAR UNDER CONSIDERATION. DATE AMOUNT 28.6.2013 RS. 8,00,000/- 16.10.2013 RS. 8,50,000 TOTAL RS. 16,50,000/- DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS STATED THAT THE AFORESAID AGREEMENT WAS ENTERED INTO BY SMT. PRIYA ARORA ON B EHALF OF THE ASSESSEE COMPANY BECAUSE AS PER SECTION 118 OF THE HIMACHAL PRADESH TENANCY AND LAND REFORMS ACT 1972, ONLY A BONAFIDE HIMACHALI COULD PURCHASE THE LAND OUTSIDE THE MUNICIPAL LIMITS 3 AND THAT FOR THE OUTSIDERS, SANCTION FROM THE CABIN ET OF HIMACHAL PRADESH WAS REQUIRED. IT WAS STATED THAT AGREEMENT WAS ENTERED INTO ON BEHALF OF THE ASSESSEE COMPANY, SO AS TO MAKE IT LEGALLY SECURE TO PURCHAS E AND TRANSFER THE LAND IN THE NAME OF THE ASSESSEE COMPANY SUBSEQUENTLY AND THAT THE I NTERIM ARRANGEMENT WAS DONE IN THE EVENT THE SELLER BACKED OUT OR CREATED ANY ILLE GAL HURDLE. 4.1 THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE COMPANY HAD ACCEPTED THE LOAN OF RS. 16,50,000/- IN CASH DURING THE PRE VIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION FROM SMT. PRIYA ARORA IN V IOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT, THEREFORE, THE PENALTY NOTICE U/S 271D OF THE ACT READ WITH SECTION 269SS OF THE ACT WAS ISSUED TO THE ASSESSEE. THE AS SESSING OFFICER DID NOT FIND MERIT IN THE WRITTEN SUBMISSION OF THE ASSESSEE WHICH HAS BEEN INCORPORATED IN PARA 3 OF THE PENALTY ORDER DATED 24.4.2017, FOR THE COST OF REPE TITION, THE SAME IS NOT REPRODUCED HEREIN. THE ASSESSING OFFICER LEVIED THE PENALTY OF RS. 16,50,000/- U/S 271D OF THE ACT. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO PASSED THE IMPUGNED ORDER EX-PARTE AND SUSTAINED THE PENA LTY LEVIED BY THE ASSESSING OFFICER. NOW THE ASSESSEE IS IN APPEAL. 6. THE LD. COUNSEL FOR THE ASSESSEE, SUBMITTED THAT NO NOTICE FOR HEARING WAS SERVED UPON THE ASSESSEE AND THAT THE LD. CIT(A) H AD NOT PASSED A SPEAKING ORDER AND SIMPLY REPRODUCED THE CONTENTS OF THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER & THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 6. IN HIS RIVAL SUBMISSIONS, THE LD. DR SUPPORTED T HE IMPUGNED ORDER PASSED BY THE LD. CIT(A). 4 7. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE IT IS AN ADMITTED FACT THAT THE LD. CIT(A) PASSED THE IMPUGNED ORDER EX-PARTE. HE HAS S IMPLY MENTIONED THAT THE NOTICES FOR HEARING WERE ISSUED TO THE ASSESSEE ON 29.8.201 8, 26.9.2018 AND 18.10.2018, HOWEVER, NOBODY APPEARED IN RESPONSE TO THOSE NOTIC ES. IN THE INSTANT CASE, THE LD. CIT(A) NOWHERE MENTIONED THAT THE NOTICES OF HEARIN G WERE SERVED UPON THE ASSESSEE. IT IS ALSO NOTICED THAT LD. CIT(A) REPRODUCED THE E NTIRE PENALTY ORDER IN PARA 3 AND THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE COMPANY IN PARA 5.4.1 OF THE IMPUGNED ORDER AND THEREAFTER HE SIMPLY MENTIONED THAT HE AGREED W ITH THE CONTENTION OF THE ADDL. CIT, CENTRAL RANGE, CHANDIGARH AND HELD THAT ON THE FACTS OF THE CASE PENALTY U/S 271D WAS LEVIABLE. 7.1 IT IS WELL SETTLED THAT NOBODY SHOULD BE CONDE MNED UNHEARD AS PER THE MAXIM AUDI ALTERAM PARTEM . WE THEREFORE, KEEPING IN VIEW THE PRINCIPLES OF NATURAL JUSTICE AND THE FACTS OF THE PRESENT CASE AS DISCUSSED HERE INABOVE, SET ASIDE IMPUGNED ORDER PASSED BY THE CIT(A) EX-PARTE WITHOUT BRINING ON RE CORD THAT THE NOTICES FOR HEARING WERE SERVED UPON THE ASSESSEE, TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 08/09/2020 ) SD/- SD/- ! . . , (SANJAY GARG ) ( N.K. SAINI ) ' #$ / JUDICIAL MEMBER / VICE PRESIDENT DATE: 08 .09.2020 RKK 5 %( )* +* / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ! , / CIT 4. ! , ( )/ THE CIT(A) 5. *-. / , # / , 012.3 / DR, ITAT, CHANDIGARH 6. .2 4' / GUARD FILE