M/s. Sahai Tractor Automobiles Pvt. Ltd., Uttar Pradesh V. DCIT, Uttar Pradesh

ITA 1888/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74288 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 13-02-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 24-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RENUKA JAIN GUPTA
• Assessee Lawyers: JAIKISHAN
• Keywords: Opportunity of being heard; Principle of natural justice; Bad and doubtful debts

Judgement Text

ITA NO.1888/DEL/2012 ASSTT.YEAR: 2006-07 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI CHANDRAMOHAN GARG, JUDICIAL MEMBER ITA NO. 1888/DEL/2012 ASSESSMENT Y EAR: 2006-07 M/S SAHAI TRACTOR AUTOMOBILES PVT. LTD., VS DY.C OMMISSIONER OF INCOME 434, CIVIL LINES, TAX, CIRCLE BULANDSHAHR(U.P.) BULANDSHAHR (U.P.)-203001 (APPELLANT) (RESP ONDENT) APPELLANT BY: SHRI JAIKISHAN RESPONDENT BY: SMT. RENUKA JAIN GUPTA, SR. DR O R D E R PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF COMMISSIONER OF INCOME TAX(A), MEERUT DATED 4.1.201 2 IN APPEAL NO.75/- 9-10 FOR AY 2007-08. 2. THE MAIN GROUNDS OF THE ASSESSEE READ AS UNDER:- 1. THAT THE LD. C.I.T.(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS. 3,16,770/- ON ACCOUNT OF BAD DE BTS, SINCE THE APPELLANT COMPANY HAS TRULY WRITTEN OFF T HE BAD DEBTS AS IRRECOVERABLE IN THE ACCOUNTS AND A CO PY OF THE AUDIT-REPORT ALONG WITH BALANCE-SHEET AND PROFIT & LOSS A/C HAS BEEN DULY FILED DURING BOTH T HE ASSESSMENT AND APPELLATE PROCEEDINGS. 2. THAT THE LD. C.I.T.(A) HAS ERRED IN SUSTAINING T HE ADDITION OF RS. 3,16,770/- ON ACCOUNT OF BAD DEBTS, BY ITA NO.1888/DEL/2012 ASSTT.YEAR: 2006-07 2 SAYING WRONGLY THAT 'IT IS SEEN THAT THE ASSESSEE D ID NOT FILE ANY DETAILS OF BAD DEBTS AND COPIES OF ACCOUNTS OF THE PARTIES IN RESPECT OF WHOM THE DEBT S WERE WRITTEN OFF. THE SAME HAVE NOT BEEN FILED DURI NG THE APPELLATE PROCEEDINGS EITHER', WHILE A TRUE COP Y OF BAD DEBTS A/C SHOWING THE DETAILS OF THE BAD DEBTS DEBITED TO THE PROFIT & LOSS A/C, HAS BEEN DULY FIL ED VIDE PAPER BOOK PAGE NO. 49 FILED DURING THE APPELLATE PROCEEDINGS ON 14.11.2011. THE SAID COPY OF BAD DEBTS A/C TRULY SHOWS THE DATE AND AMOUNT- WISE DETAILS OF THE PARTIES IN RESPECT OF WHOM THE DEBTS WERE WRITTEN OFF. 3. THAT THE LD. C.I.T.(A) HAS ERRED IN SUSTAINING T HE ADDITION OF RS. 3,16,770/- ON ACCOUNT OF BAD DEBTS, SINCE THE LD. A.O. HAS NOT GIVEN PROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT COMPANY. ' 3. WE HAVE HEARD RIVAL ARGUMENTS OF BOTH THE PARTIE S AND CAREFULLY PERUSED THE RECORD PLACED BEFORE US. LD. COUNSEL O F THE ASSESSEE POINTED OUT THAT THE ASSESSING OFFICER HAS NOT GIVEN PROPER OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE COMPANY. THE COUNSEL HAS DRAWN OUR AT TENTION TOWARDS PAGE NO. 9, 10 AND 11 OF THE PAPER BOOK AND SUBMITTED TH AT THE ASSESSING OFFICER ISSUED A NOTICE U/S 143(3)/144 OF THE INCOME TAX AC T 1961 (FOR SHORT THE ACT) DATED 26.8.2009 FIXING THE HEARING DATE ON NEX T DAY I.E. 27.08.2009 AND THIS NOTICE WAS SERVED ON THE ASSESSEE IN THE EVENI NG OF 26.08.2009. THE COUNSEL FURTHER SUBMITTED THAT MR. LOKESH, ACCOUNTA NT OF THE ASSESSEE WAS NOT KEEPING WELL DURING THIS PERIOD AND HE WAS ADVI SED REST FOR ONE MONTH. THEREFORE, THE ASSESSEE FILED AN APPLICATION FOR AD JOURNMENT BEFORE THE ITA NO.1888/DEL/2012 ASSTT.YEAR: 2006-07 3 ASSESSING OFFICER WHICH WAS REJECTED BY THE ASSESSI NG OFFICER ASKING WHY THE BOOKS OF ACCOUNTS COULD NOT BE PRESENTED BY THE DIRECTOR HIMSELF, IF THE ACCOUNTANT MR. LOKESH WAS NOT WELL. THE COUNSEL SU BMITTED THAT IT IS A WELL KNOWN FACT THAT AN EXPERT KNOWLEDGE IS REQUIRED FOR MAINTENANCE OF THE BOOKS OF ACCOUNTS AND ALSO SUFFICIENT TIME SHOULD B E GIVEN TO THE ASSESSEE TO PLEAD ITS CASE WHICH WAS NOT GIVEN. LD. COUNSEL OF THE ASSESSEE RELIED ON THE DECISION OF HONBLE HIGH COURT OF MADRAS IN THE CASE OF SMT. RI TU DEVI VS C.I.T. (2004) 271 ITR 466 (MADRAS) WHEREIN IT HAS BEEN HELD THAT WHEN NOTICE IS SERVED ON THE ASSESSEE IN THE AFTERNOON, DIRECTING THE ASSESSEE TO FORWARD THEIR COMMENTS BY NEXT MORNING AND THE ASSE SSMENT WAS COMPLETED ON THE VERY NEXT DATE WITHOUT GIVING PROPER OPPORTU NITY OF HEARING TO THE ASSESSEE, THEN IT WOULD BE PRESUMED THAT THE ASSESS EE WAS NOT GIVEN PROPER OPPORTUNITY TO SUBMIT ITS REPLY AND THERE IS A GROS S VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 4. REPLYING TO THE ABOVE, LD. DR SUBMITTED THAT THE ASSESSEE WAS GIVEN DUE OPPORTUNITY OF HEARING BEFORE THE AUTHORITIES B ELOW AND THE DIRECTOR OF THE ASSESSEE AND HIS ACCOUNTANT WERE REGULARLY APPE ARING BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS , THEREFORE, IT CANNOT BE PRESUMED THAT THERE WAS A VIOLATION OF PRINCIPLES O F NATURAL JUSTICE BY THE ASSESSING OFFICER. IN ADDITION TO ABOVE SUBMISSION S, LD. DR ALSO SUBMITTED ITA NO.1888/DEL/2012 ASSTT.YEAR: 2006-07 4 THAT IF IT IS FOUND JUST AND PROPER TO RESTORE THE CASE TO THE FILE OF ASSESSING OFFICER, THEN HE HAS NO SERIOUS OBJECTION IN THIS R EGARD. 5. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS AN D CONTENTIONS, WE OBSERVE THAT THE ASSESSING OFFICER PASSED ASSESSMEN T ORDER ON 28.08.2009 REJECTING THE ADJOURNMENT APPLICATION OF THE ASSESS EE FILED ON 27.08.2009. WE ALSO OBSERVE THAT THE NOTICE WAS ISSUED AND SERV ED ON THE ASSESSEE ON 26.08.2009 I.E. ONLY ONE DAY BEFORE THE DATE OF HEA RING. IN THESE CIRCUMSTANCES WHEN MEDICAL CERTIFICATE OF MR. LOKES H (PB PAGE NO.11) HAS NOT BEEN DISPUTED BY THE DEPARTMENT, THEN WE OBSERV E THAT THE ADJOURNMENT APPLICATION FILED BY THE ASSESSEE WAS ON JUSTIFIED AND COGENT REASONS AND THE ASSESSING OFFICER OUGHT TO HAVE GRANTED ADJOURNMENT PROVIDING DUE OPPORTUNITY OF HEARING FOR THE ASSESSEE BUT THE ASS ESSMENT ORDER WAS PASSED ON 28.8.2009 ON THE VERY NEXT DATE OF HEARING DENYI NG THE VALUABLE RIGHT OF HEARING OF THE ASSESSEE. IN THESE CIRCUMSTANCES, W E ARE OF THE CONSIDERED VIEW THAT THE ORDERS OF THE AUTHORITIES BELOW ARE V IOLATIVE OF PRINCIPLES OF NATURAL JUSTICE AND WE SET ASIDE THE SAME BY RESTOR ING THE CASE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION THAT THE ASS ESSING OFFICER SHALL DECIDE THE CASE BY AFFORDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. NEEDLESS TO SAY, THE ASSESSEE SHALL COOPERATE WITH THE ASSESSME NT PROCEEDINGS. ITA NO.1888/DEL/2012 ASSTT.YEAR: 2006-07 5 ACCORDINGLY, GROUND NO.3 OF THE ASSESSEE IS ALLOWED IN THE MANNER AS INDICATED ABOVE. 6. SINCE WE HAVE ALLOWED GROUND NO. 3 OF THE ASSESS EE BY RESTORING THE CASE TO THE FILE OF ASSESSING OFFICER FOR A FRESH A DJUDICATION, THEREFORE, GROUND NO. 1 AND 2 OF THE ASSESSEE DO NOT SURVIVE F OR ADJUDICATION ON MERITS. BEFORE WE PART WITH THE ORDER, WE MAKE IT CLEAR THA T THE CASE IS BEING RESTORED TO THE FILE OF ASSESSING OFFICER FOR LIMIT ED PURPOSE I.E. FOR CONSIDERATION OF CLAIM OF THE ASSESSEE PERTAINING T O BAD DEBTS OF RS.3,16,770/- ONLY. OTHER ISSUES OR CONTROVERSY AR E NOT THE SUBJECT OF THIS APPEAL, THEREFORE, WE ARE NOT DISTURBING THE FINDIN GS OF THE AUTHORITIES BELOW IN THIS REGARD. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DEE MED TO BE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07/03/2014. SD/- SD/- (SHAMIM YAHYA ) (CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 7TH FEBRUARY, 2014 GS ITA NO.1888/DEL/2012 ASSTT.YEAR: 2006-07 6 COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR TRUE CO PY BY ORDER ASSTT. REGISTRAR