M/s Ormi Textile, Meerut V. ACIT, Ghaziabad

ITA 1716/DEL/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86943 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 09-03-2015
• Assessment Year: 1991-1992
• Appeal Filed On: 16-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 144

Judgement Text

ITA NO S . 91&92 /DEL/ 2013 & ITA NO.4329/DE L/2003 & 1716/DEL/2010 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E , NEW DELHI BEFORE SHRI H.S. SIDHU , JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NOS.91 & 92/DEL/2013 A.YRS. : 1992 - 93 & 1993 - 94 M/S ORMI TEXTILES C/O M/S MALIK & CO., 305, THAPAR NAGAR, MEERUT (GIR NO.: O - 302) VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 1, CGO COMPLEX - 1, HAPUR ROAD, GHAZIABAD (APPELLANT) (RESPONDENT) AND I.T.A. NO.4329/DEL/2003 A.Y. : 1991 - 92 M/S ORMI TEXTILES C/O M/S MALIK & CO., 305, THAPAR NAGAR, MEERUT (GIR NO.: O - 302) VS. DEPUTY COMMISSIONER OF INCOME TAX, SPL. RANGE - 2, GHAZIABAD - UP (APPELLANT) (RESPONDENT) AND I.T.A. NO.1716/DEL/2010 A.Y. : 1991 - 92 M/S ORMI TEXTILES C/O M/S MALIK & CO., 305, THAPAR NAGAR, MEERUT (GIR NO.: O - 302) VS. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE - 2, CGO COMPLEX - 1, HAPUR ROAD, GHAZIABAD (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SH. P. DAM. KANUNJNA, SR. DR DATE OF HEARING : 09 - 3 - 201 5 DATE OF ORDER : 1 1 - 3 - 201 5 ITA NO S . 91&92 /DEL/ 2013 & ITA NO.4329/DE L/2003 & 1716/DEL/2010 2 ORDER PER BENCH TH ESE ARE THE APPEALS FILED BY THE ASSESSEE EMANATE OUT OF SEPARATE O RDER S DATED 7.12.2009, 25.3.1997 & 06.1.2010 PASSED BY THE RESPECTIVE LD. COMMISSIONER OF INCOME TAX (APPEALS) PERTAINING TO THE ASSTT. YEARS 1992 - 93, 1993 - 94 & 1991 - 92. SINCE THE ISSUES INVOLVED IN THESE APPEALS ARE IDENTICAL AND SIMILAR, HENCE, THESE ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER . FOR THE SAKE OF CONVENIENCE, WE ARE DEALING WITH ITA NO.91/DEL/2013 (A.Y. 1992 - 93) WHEREIN THE FOLLOWING GROUNDS HAVE BEEN RAISED: - 1. THAT ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE A.O. WAS NOT CORRECT IN LAW TO TREAT THE ASSESSEE AS BEING IN DEFAULT S O AS TO WARRANT ASSESSMENT UNDER SEC. 144 OF I.T. ACT. THE IMPUGNED ASSESSMENT UNDER SEC. 144 DESERVES TO BE SET ASIDE BEING ILLEGAL AND IN VIOLATION OF PRINCIPLE OF NATURAL JUSTICE BECAUSE AS IS EVIDENT FROM THE RECORDS OF THE CASE THAT COMPLIANCE OF VARI OUS NOTICES ISSUED BY THE LD. ASSESSING OFFICER WAS MADE THROUGH VARIOUS PETITIONS. 2. I) THAT THE APPELLANT DID NOT RECEIVE ANY AMOUNT OUTSIDE ITS BOOKS OF ACCOUNTS NOR THERE WAS ANY EVIDENCE OF ACCRUAL OR RECEIPT OF MONEY OVER AND ABOVE THE RECORDED SUM . THUS ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THERE WAS NO LEGAL WARRANT TO MAKE ANY ADDITION AS INCOME, WHICH NEITHER ACCRUED NOR RECEIVED BY THE ASSESSEE. II). THE IMPUGNED ADDITION OF RS. 49,31,568/ - BEING ASSUMED UNDECLAR ED PROFIT ON SALES MADE OUTSIDE THE BOOKS OF ITA NO S . 91&92 /DEL/ 2013 & ITA NO.4329/DE L/2003 & 1716/DEL/2010 3 ACCOUNTS DESERVES TO BE DELETED BEING ILLEGAL, VOID, WITHOUT JURISDICTION AND UNTENABLE ON FACTS AND IN LAW. 3. I) THAT ALL THE ITEMS OF EXPENDITURE BEING VERIFIABLE BY PROPER EVIDENCE/DOCUMENT AND HAVING BEEN INCURRED IN THE COURSE OF BUSINESS, THERE WAS NO WARRANT FOR MAKING ANY DISALLOWANCE OUT OF THE RECORDED EXPENDITURE. II) THE IMPUGNED DISALLOWANCE OF RS. 98,195/ - DESERVES TO BE DELETED BEING ILLEGAL, VOID, WITHOUT JURISDICTION AND UNTENABLE ON FACTS AND IN LAW. 4. THAT THERE WAS NEITHER ANY ACCRUAL NOR RECEIPT ON ACCOUNT OF EXCISE DUTY REFUND OTHER THAN RECORDED IN THE BOOKS OF ACCOUNTS. THE ADDITION OF RS. 8,91,832/ - BY WAY OF INCOME ON THE ASSUMPTION THAT SUCH INCOME WAS NOT DISCLOSED IN THE BOOKS OF ACCOUNT WAS ILLEGAL, ERRONEOUS AND BASED ON WRONG PREMISES. THE IMPUGNED ADDITION OF RS. 8,91,832/ - DESERVES TO BE DELETED BEING ILLEGAL, VOID, WITHOUT JURISDICTION AND UNTENABLE ON FACTS AND IN LAW. 5. THAT THE RELEVANT GROUNDS OF APPEAL AGAINST THE ADDITIONS AND DISALLOWANCES OF RS.4931568/ - ; RS. 98195/ - AND RS. 891832/ - WERE NOT ADJUDICATED BY THE LD. CIT(A). THE ISSUES THUS DESERVE TO BE RESTORED TO THE LD. CIT(A) WITH THE DIRECTION FOR ADJUDICATION OF THE GROUNDS OF APPEAL AFTER AFFORDING OPPORTU NITY OF HEARING TO THE APPELLANT. ITA NO S . 91&92 /DEL/ 2013 & ITA NO.4329/DE L/2003 & 1716/DEL/2010 4 6. THAT IN RESPONSE TO THE NOTICE OF HEARING OF APPEAL FIXED ON 4.12.2009, THE ASSESSEE SENT A PETITION DATED 30.11.09 SENT THROUGH SPEED POST ON 1.12.09 FOLLOWED BY A TELEGRAM SENT ON 2.12.09. IT IS EVIDENT FROM THE APPE LLATE ORDER THAT THE ADJOURNMENT APPLICATION DATED 30.11.09 AND THE TELEGRAM DATED 2.12.09 HAVE N OT BEEN TAKEN INTO CONSIDERATION BY THE ID. CIT (A). CONSEQUENTLY, THE ID. CIT (A) WENT WRONG ON FACTS AND IN LAW TO HOLD THAT NO COMPLIANCE WAS MADE ON THE DA TE OF HEARING THEREBY DISMISSING THE APPEAL WITHOUT TAKING INTO CONSIDERATION THE PETITION AND ALSO THE TELEGRA M . 7. THAT AFTER RECEIPT OF APPELLATE ORDER DATED 7.12.2009, THE APPELLANT FILED A PETITION DATED 20.2.2010 ON 26.2.2010 PRAYING FOR RECALL OF T HE APPELLATE ORDER FOLLOWED BY REMINDERS VIDE PETITIONS DATED 28.7.2010; 8.2.2011; 13.9.2012 AND 21.9.2012. SINCE NECESSARY ACTION WAS NOT TAKEN AND THE MATTER REMAINED SUBJUDICE, THE COUNSEL PERSONALLY REPRESENTED THE MATTER ON 19.12.2012 BEFORE THE LD. C IT (A). 8. THAT AFTER A LAPSE OF TWO YEARS AND TEN MONTHS, THE LD. CIT (A) VIDE ORDER F. NO. 222,223/2006 - 071 CIT(A) - GZB - /2012 - 13/12 DATED 19.12.2012 HELD THAT THE REQUEST FOR RECALL OF THE APPELLATE ORDER THROUGH VARIOUS PETITIONS WAS REDUNDANT AS THERE WAS NO PROVISION FOR RECALLING THE APPELLATE ORDER BY THE CIT (A). THE FINDING RECORDED BY THE LD. CIT (A) DESERVES TO BE QUASHED AND ANNULLED BEING VOID, ILLEGAL AND WITHOUT JURISDICTION. ITA NO S . 91&92 /DEL/ 2013 & ITA NO.4329/DE L/2003 & 1716/DEL/2010 5 2. NOTICE FOR HEARING WAS ISSUED TO THE ASSESSEE BY RPAD FOR T ODAY I.E. 09.3.2015. IN RESPONSE TO THE SAME AUTHORISED REPRESENTATIVE FILED AN APPLICATION FOR ADJOURNMENT. AS PER RECORD THE PRESENT APPEAL CAME UP FOR HEARING BEFORE THE BENCH ON 07.3.2013 AND THE CASE WAS THEN ADJOURNED FOR 28.5.2013. ON 28.5.2013 , NONE APPEARED ON BEHALF OF THE ASSESSEE NOR FILED ANY APPLICATION FOR ADJOURNMENT AND THEREFORE, THIS BENCH HAS DISMISSED THE APPEALS OF THE ASSESSEE FOR NON - PROSECUTION ON THE SAME DATE. 2.1 THEREAFTER, ASSESSEE FILED MISC. APPLICATION FOR RECALLING THE AFORESAID TRIBUNAL S ORDER DATED 28.5.2013 WHICH WAS RECALLED BY THE TRIBUNAL VIDE ITS ORDER DATED 6.12.2013. AFTER RECALLING THE TRIBUNAL S ORDER THE CASE OF THE ASSESSEE WAS ADJOURNED ON VARIOUS DATES EITHER ON THE REQUEST OF THE ASSESSEE OR ON OTHE R PRETEXT AND LASTLY THE SAME WAS FIXED FOR HEARING ON 09.3.2015. IN SPITE OF THE SAME, ASSESSEE HAS NOT APPEARED TO PROSECUTE THE MATTER IN DISPUTE AND FILED THE APPLICATION FOR ADJOURNMENT. IT IS PERTINENT TO MENTION HERE THAT BEFORE THE AO ASSESSEE ALSO REMAINED NON - COOPERATIVE AND THE AO FINALLY PASSED THE ORDER U/S. 144 OF THE I.T. ACT. AS PER THE IMPUGNED ORDER ALSO ASSESSEE REMAINED NON - COOPERATIVE BEFORE THE LD. CIT(A), WHO HAS PASSED THE ORDER IN THE ABSENCE OF THE ASSESSEE. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, AS EXPLAINED ABOVE, WE ARE OF THE VIEW THAT WE ARE NOT INCLINED TO ADJOURN THE PRESENT APPEALS, THEREFORE, WE REJECT THE WRITTEN REQUEST OF THE ASSESSEE S COUNSEL. EVEN OTHERWISE, NO ONE APPEARED FOR THE COUNSEL OR FOR THE ASSESSEE TO SEEK THE ADJOURNMENT IN THE PRESENT APPEALS. THEREFORE, THE PRESENT REQUEST OF ADJOURNMENT IS HEREBY REJECTED AND KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE GROUNDS RAISED BY THE ASSESSEE AS WELL AS T HE IMPUGNED ORDER, WE ARE DECIDING THE ITA NO S . 91&92 /DEL/ 2013 & ITA NO.4329/DE L/2003 & 1716/DEL/2010 6 APPEALS EXPARTE QUA ASSESSEE AND AFTER HEARING THE LD. DR AND PERUSING THE RECORDS. 3. LD. DR HAS STATED THAT ASSESSEE REMAINED NON - COOPERATIVE BEFORE THE AO AS WELL AS BEFORE THE LD. CIT(A AND EVEN BEFORE THIS BENCH AND THEREFORE, THE ASSESSEE IS NOT ENTITLED FOR ANY LENIENT VIEW FROM THIS BENCH. HENCE, HE REQUESTED THAT THE APPEALS FILED BY THE ASSESSEE MAY BE DISMISSED. 4. AFTER HEARING THE LD. DR AND PERUSING THE IMPUGNED ORDER PASSED BY THE LD. CIT(A), WE ARE OF THE VIEW THAT NO DOUBT ASSESSEE REMAINED NON - COOPERATIVE BEFORE THE LD. CIT(A) AND THE LD. CIT(A) HAS MENTIONED THE SAME IN HIS ORDER DATED 7.12.2009 VIDE PARA NO. 3 AT PAGE NO. 3 , WHICH IS REPRODUCED HEREUNDER: - 3. THIS APPEAL WAS FIXED FOR HARING ON NUMBER OF TIMES, DETAILS OF WHICH ARE GIVEN BELOW, BUT NO COMPLIANCE WAS MADE TO ANY OF THE NOTICES ISSUED. ALL THESE NOTICES WERE SENT TO THE APPELLANT THROUGH SPEED POST ON THE ADDRESS GIVEN IN THE APPEAL PETIT ION I.E. FORM NO. 35. S.NO. DATE OF NOTICE DATE FIXED FOR HEARING REMARK 1 5.10.07 12.10.07 ON REQUEST CASE ADJOURNED FOR 26.10.07 2 26.10.07 24.12.07 ON REQUEST CASE ADJOURNED FOR 21.1.08 3 21.1.08 - ON REQUEST CASE ADJOURNED FOR 11.2.08 4 11.2.208 - ON REQUEST CASE ADJOURNED. 5 14.2.08 27.2.08 ON REQUEST ADJOURNED 14.5.08 6 14.5.08 - ON REQUEST CASE ADJOURNED. 7 28.7.08 18.8.08 ON REQUEST CASE ADJOURNED. 8 26.8.08 12.9.08 NONE ATTENDED NOR ANY ITA NO S . 91&92 /DEL/ 2013 & ITA NO.4329/DE L/2003 & 1716/DEL/2010 7 APPLICATION FOR ADJOURNMENT WAS FILED. 9 24.11.08 8.12.08 ON REQUEST CASE ADJOURNED. 10 29.1.09 16.2.09 ON REQUEST CASE ADJOURNED. 11 24.8.09 2.9.09 ON REQUEST CASE ADJOURNED. A LAST OPPORTUNITY WAS ALSO PROVIDED TO THE ASSESSEE VIDE NOTICE DATED 20.11.09 FIXING THE APPEAL FOR HARING ON 4.12.09 WHICH WAS ALSO SENT TO THE APPELLANT THROUGH SPEED POST ON THE ADDRESS GIVEN IN THE APPEAL MEMO. AGAIN THE ASSESSEE MADE NO COMPLAIN T ON THE DATE FIXED FOR HEARING I.E. ON 4.12.209. IN VIEW OF THE ABOVE, I AM LEFT WITH NO OPTION BUT TO DECIDE THE APPEAL ON MERITS ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 5. AFTER GOING THROUGH THE ABOVE, WE ARE OF THE VIEW THAT NO DOUBT THAT A SSESSEE REMAINED NON - COOPERATIVE BEFORE THE REVENUE AUTHORITIES, BUT WE ARE ALSO OF VIEW THAT LD. CIT(A) HAS CONFIRMED THE ASSESSMENT ORDER IN A ROUTINE, WITHOUT DISCUSSING IN DETAIL THE FACTS AND CIRCUMSTANCE OF THE CASE AND ALSO DID NOT DEAL THE ISS UE ON MERIT AND PASSED A NON - SPEAKING ORDER. FOR THE SAKE OF CONVENIENCE, THE FINDING OF THE LD. CIT(A) MADE IN HIS ORDER DATED 7.12.2009 VIDE PARA NO S . 4 & 5 AT PAGE NO. 4 IS REPRODUCED HEREUNDER: - 4. AS STATED EARLIER IN SPITE OF NUMBER OF OPPORTUNITIES PROVIDED, NEITHER THE APPELLANT ATTENDED BEFORE THE UNDERSIGNED NOR FURNISHED ANY MATERIAL EVIDENCE OR EXPLANATION IN SUPPORT OF THE GROUNDS TAKEN IN APPEAL. ON THE OTHER HAND, THE ITO HAS GIVEN SUFFICI ENT REASONING WHILE MAKING THE ADDITIONS /DISALLOWANCES. HENCE CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE, THE ACTION OF THE AO IS CONFIRMED. 5. IN THE RESULT THE APPEAL IS DISMISSED. 6. AFTER PERUSING THE AFORESAID FINDING OF THE LD . CIT(A), WE FIND THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT AT ALL DEALT THE ISSUES IN DETAIL AND NOT PASSED A SPEAKING ORDER AT ALL, BUT ONLY CONFIRMED THE ACTION OF THE ITA NO S . 91&92 /DEL/ 2013 & ITA NO.4329/DE L/2003 & 1716/DEL/2010 8 AO, WHICH IN OUR OPINION, IS NOT IN ACCORDANCE WITH THE PRINCIPLES OF NAT URAL JUSTICE AND IT IS A ERRONEOUS APPROACH. IT IS A SETTLED LAW THAT EVEN AN ADMINISTRATIVE ORDER HAS TO BE SPEAKING ONE. 6.1 IN THIS REGARD WE DRAW SUPPORT FROM HON BLE APEX COURT IN THE CASE M/S SAHARA INDIA (FARMS) VS. CIT & ANR. IN [2008] 300 ITR 403 HAS HELD THAT EVEN AN ADMINISTRATIVE ORDER HAS TO BE CONSISTENT WITH THE RULES OF NATURAL JUSTICE . 6.2 WE FURTHER DRAW SUPPORT FROM THE APEX COURT DECISION IN THE CASE OF KAPURCHAND SHRIMAL VS. CIT, 131 ITR 451 WHEREIN IT WAS HELD THAT THE APPE LLATE AUTHORITY HAS JURISDICTION AS WELL AS THE DUTY TO CORRECT THE ERRORS IN THE PROCEEDINGS UNDER APPEAL AND TO ISSUE OF NECESSARY, APPROPRIATE DIRECTIONS TO THE AUTHORITY AGAINST WHOSE DECISION APPEAL IS PREFERRED TO DISPOSE OF THE WHOLE OR ANY PART OF THE MATER AFRESH, UNLESS FORBIDDEN FROM DOING SO BY STATUTE. 7. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENTS, WE REMIT THE ISSUES TO THE FILES OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) TO CONSIDER EACH AND EVERY ASPECTS OF THE ISSUES INVOLVED IN THE APPEAL AND DECIDE THE SAME AFRESH, AFTER PASSING A SPEAKING ORDER. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN ADEQUATE OPPORTUNITY OF BEING HEARD. IN THE RESULT, THE ITA NOS. 91/DEL/2013 (AY 1992 - 93); 92/DEL/2013 (AY 1993 - 94) AND ITA NO. 4329/DEL/2003) (AY 1991 - 92) FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES IN THE AFORESAID MANNER. ITA NO S . 91&92 /DEL/ 2013 & ITA NO.4329/DE L/2003 & 1716/DEL/2010 9 I TA NO. 1716/DEL/2010 (AY 1991 - 92) 8. SINCE WE HAVE ALREADY REMITTED THE ISSUES IN THE QUANTUM APPEALS, AS AFORESAID , WITH THE DIRECTIONS TO THE LD. CIT(A) TO DECIDE THE ISSUES IN DISPUTE AFRESH, AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND PASS A SPEAKING ORDER. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE ARE OF THE VIEW THAT THE PENALTY HAS BEEN LEVIED ON THE ADDITIONS IN DISPUTE BY THE AO AND CONFIRMED BY THE LD. CIT(A). AS WE HAVE SET ASIDE THE QUANTUM APPEALS TO THE LD. CIT(A) TO PASS A FRESH AND SPEAKING ORDER THEREON, THEREFORE, THE PENALTY ORDER DATED 6.1.2010 PASSED BY THE LD. CIT(A) SUSTAINING THE PENALTY IN DISPUTE ALSO DESERVE TO BE SET ASIDE TO THE FILE OF THE LD. CIT(A) TO DECIDE THE ISSUE OF PENALTY IN DISPUTE, AFRESH, UNDER THE LAW AND PASS A SPEAKING ORDER, AFTER PROVIDING ADEQUATE OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE. IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, ALL THE FOUR APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN C OURT ON 1 1 - 3 - 201 5 . S D / - S D / - [ T.S. KAPOOR ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 1 1 / 3 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO S . 91&92 /DEL/ 2013 & ITA NO.4329/DE L/2003 & 1716/DEL/2010 10