M/s. Deluxe Alloys Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 212/DEL/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6371 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 12-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Period of limitation; Cost of acquisition; Assessment record; Time period of passing order; Set aside
• Section: 142(1); 143(2); 144

Judgement Text

ITA NO. 212/DEL/2017 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCE) ITA NO. 212/DEL/2017 A.Y. : 2013-14 M/S DELUXE ALLOYS PVT. LTD. 303B, APRA PLAZA, PLOT NO. 28, ROAD NO. 44, PITAMPURA, NEW DELHI 110 044 (PAN: AAACD4351Q) VS. DCIT, CIRCLE 21(1), NEW DELHI (APPELLANT) (RESPONDENT) ORDER PER H.S. SIDHU, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 21.12.2016 PASSED BY THE LD. CIT(A)-28, NEW DELHI IN RELATION TO ASSESSMENT YE AR 2013-14 ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LD. COMMISSIONER ASSESSEE BY SH. RAJIV SAXENA, ADV.; SH. RAVI PRATAP MALL, ADV.; MS. SUMANGLA SAXENA, ADV. & SH. SHYAM SUNDER, ADV. DEPARTMENT BY SH. M. BARNWAL, SR. DR. ITA NO. 212/DEL/2017 2 OF INCOME TAX (APPEALS) AND LD. AO IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED IN GROSS VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE BEING SUFFICIENT OPPORTUNITY OF BEING HEARD IS NOT PROVIDED TO THE APPELLANT AND THUS IS ILLEGAL AND UNTENABLE IN THE EYES OF LAW. 3. ON THE FACT AND CIRCUMSTANCES OF THE CASE, LD. CIT-A HAS ERRED IN CONFIRMING THE ADDITIONS OF RS.6,43,30,175/- MADE BY THE LD. AO IN THE ASSESSMENT ORDER UNDER BEST JUDGMENT ASSESSMENT U/S 144 OF THE ACT. 4. (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN EYES OF LAW AND FACTS OF CASE IN CONFIRMING THE ADDITIONS OF RS.5,18,70,453/- MADE BY THE LD. AO BY APPLYING GROSS PROFIT RATE OF 11%, BEING G. P. RATE DECLARED IN PRECEDING ASSESSMENT YEAR, ON THE TOTAL TURNOVER OF THE ASSESSEE. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN EYES OF LAW AND FACTS OF CASE BY CONFIRMING THE ADDITION OF RS.24,09,722/- MADE BY LD. AO BY NOT ALLOWING ADJUSTMENT OF LOSS OF RS.17,81,127/- AGAINST ITA NO. 212/DEL/2017 3 INCOME FROM CAPITAL GAIN AND INCOME FROM OTHER SOURCES. (III) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN EYES OF LAW AND FACTS OF CASE IN CONFIRMING THE ADDITION OF RS.1,00,50,000/- MADE BY THE LD. AO BY NOT ALLOWING INDEXED COST OF ACQUISITION OF RS.88,97,468/-. 5. IN ALTERNATIVE AND WITHOUT PREJUDICE TO THE ABOVE GROUNDS, ALTHOUGH THE ASSESSMENT WAS FRAMED EX-PARTE U/S 144 OF THE ACT, HOWEVER ADDITIONS WERE MADE WITHOUT FOLLOWING THE PRINCIPLE OF BEST JUDGMENT ASSESSMENT AS ENVISAGED IN THE LAW AND SETTLED BY THE JUDICIARY. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. 2. ASSESSEE HAS ALSO FILED THE ADDITIONAL GROUNDS OF APPEAL VIDE LETTER DATED 20.02.2020 WHICH READ AS UNDER: - PERMISSION TO SEEK, RAISE, URGE AN ADDITIONAL GROUND OF APPEAL ITA NO. 212/DEL/2017 4 THE AFORESAID APPEAL IS FIXED FOR HEARING ON 10-02-2020. DURING THE COURSE OF HEARING, IT WAS ARGUED THAT ASSESSMENT U/S 144 IS BAD IN LAW AS NOTICE U/S 143(2) WAS NOT SERVED WITHIN THE STIPULATED PERIOD AS PROVIDED UNDER THE STATUTORY PROVISION. HENCE, ASSESSMENT MADE IS REQUIRED TO BE QUASHED. THE HON'BLE BENCH HAS ASKED THE LD. DR TO PRODUCE THE ASSESSMENT RECORD AS DIRECTED BY THE HON'BLE BENCH ON THE EARLIER DATE OF HEARING FOR WHICH LD. DR SOUGHT TIME AND THE SAME WAS GRANTED BY THE HON'BLE BENCH. IT IS FOUND NECESSARY THAT APART FROM THE LEGAL GROUNDS ALREADY TAKEN, FOLLOWING SPECIFIC ADDITIONAL GROUND OF APPEAL MAY ALSO BE RAISED WHICH ARE PURELY LEGAL AND CAN BE RAISED AT ANY TIME AS THEY DO NOT REQUIRE ANY ADDITIONAL FACTS OR MATERIAL OTHER THAN THE ASSESSMENT RECORD OR ALREADY ON RECORD. 2 IT IS SUBMITTED THAT ON 04-12-2019 AN APPLICATION FOR INSPECTION WAS ALSO MOVED BEFORE THE DY. CIT, CENTRAL CIRCLE-20, NEW DELHI, REQUESTING INSPECTION OF THE ASSESSMENT RECORDS. INSPECTION WAS MADE AND FROM THE INSPECTION OF THE ASSESSMENT RECORDS BECAUSE NOTICES HAVE NOT BEEN SERVED ON THE ASSESSEE I.E. ON THE PRINCIPAL OFFICER AS PROVIDED UNDER THE PROVISION. DUE TO WHICH EX-PARTE ITA NO. 212/DEL/2017 5 ASSESSMENT HAS BEEN MADE U/S 144 OF THE IT ACT. AFTER PERUSING THE ASSESSMENT ORDER IT WAS NOTICED THAT ASSESSING OFFICER HIMSELF HAS ADMITTED THAT NOTICE U/S 143(2) WAS ISSUED ON 19-08-2016 (INCORRECTLY STATED INSTEAD ON 19- 08-2015), FURTHER NOTICES U/S 142(1) WAS ALSO ISSUED ON 19-08-2015 (INCORRECTLY STATED INSTEAD OF 19-08-2015) AND 12-01-2016. THESE NOTICES ARE BEYOND THE TIME LIMIT AS PROVIDED UNDER THE STATUTORY PROVISION I.E. WITHIN SIX MONTHS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, NOTICE ULS 143(2) HAS TO BE SERVED FOR INITIATING ASSESSMENT PROCEEDINGS. IN THE AFORESAID CIRCUMSTANCES, THE APPELLANT SEEKS THE PERMISSION TO RAISE, URGE, AMEND AND ARGUE THE GROUND NO. I AS UNDER:- THE GROUND NO. 1 WHICH MAY BE READ AS UNDER: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER PASSED BY THE LD. CIT AND AO IS BAD BOTH IN THE EYES OF LAW AND ON FACTS BECAUSE: A. THEY HAVE FAILED TO NOTICE THAT BEFORE INITIATING ASSESSMENT PROCEEDINGS IT IS MANDATORY TO SERVE NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961, ITA NO. 212/DEL/2017 6 BEFORE THE EXPIRY OF SIX MONTHS OF THE END OF FINAN CIAL YEAR IN WHICH THE RETURN IS FURNISHED. B. THE ASSESSING OFFICER HAS ISSUED NOTICE U/S 143( 2) ON 19-08-2015(INCORRECTLY STATED 19-08-2016) WHICH IS BEYOND THE LIMITATION PERIOD AND ANY ASSESSMENT THEREAFTER IS BAD IN LAW. C. MERELY ISSUANCE OF A NOTICE U/S 143(2) IS NOT SUFFICIENT UNLESS IT IS SERVED ON THE ASSESSEE AS PROVIDED IN THE RELEVANT PROVISION FOR COMPLETING T HE ASSESSMENT. D. THE ASSESSING OFFICER HAS NOT PROVIDED REASONABL E AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE BEFORE COMPLETING THE ASSESSMENT. E. THE LD. CIT (APPEALS) HAS ALSO IGNORED THESE FAC TS AND DESPITE MAKING REQUEST FOR SEEKING TIME HAS NOT ALLOWED REASONABLE AND SUFFICIENT OPPORTUNITY TO TH E ASSESSEE. F. THE LD. CLT (APPEALS) HAS ALSO FAILED TO APPRECIA TE THAT ASSESSEE COMPANY HAS DECLARED HUGE TURNOVER AN D FINANCIAL LOSS DUE TO RECESSION IN THE INDUSTRY AS WELL AS VARIOUS INTERNAL REASONS FOR WHICH IT WAS NECESSARY TO GRANT SUFFICIENT TIME FOR SUBMISSIONS OF DETAILS FO R WHICH SUFFICIENT OPPORTUNITY WAS NOT GRANTED. 3. IT IS SUBMITTED THAT, THE AFORESAID ADDITIONAL G ROUND IS PURELY LEGAL AND RELATED TO THE ORIGINAL GROUND ITA NO. 212/DEL/2017 7 ALREADY RAISED AND SO DESERVES TO BE ADMITTED IN VI EW OF THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO, LTD VS. CIT REPORTED IN 229 ITR 383 AND M/S JUTE CORPORATION OF INDIA LTD, VS. CIT REPORTED IN 187 ITR 688 (SC), MOREOVER, IT IS IMPERATIVE THAT THE INSTANT GROUND BE RAISED AS IT IS NECESSARY TO CONSIDER THAT QUESTIO N IN ORDER TO CORRECTLY ASSESS THE TAX LIABILITY OF THE ASSESSEE. 4 IN VIEW OF THE AFORESAID, IT IS PRAYED THAT, THE ASSESSEE MAY BE PERMITTED TO RAISE, URGE, AND AMEND THE GROUND NO.1 AS AN ADDITIONAL GROUND OF APPEAL A S SUBMITTED ABOVE, IN SUPPORT OF ITS CONTENTION THAT, THE INSTANT ASSESSMENT FRAMED IS NON-EST IN LAW. 3. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NO T DISPUTED BY BOTH THE PARTIES, THEREFORE, NO NEED TO REPEAT THE SAME FOR THE SAKE OF CONVENIENCE. 4. AT THE TIME OF HEARING, SHRI M. BARNWAL, SENIOR DEPARTMENTAL REPRESENTATIVE STATED THAT ASSESSEE H AS RAISED ORIGINAL GROUNDS OF APPEAL AND ALSO FILED ADDITION AL GROUNDS OF APPEAL VIDE LETTER DATED 20.02.2020. HE SUBMITTED THAT THE IMPUGNED EXPARTE ORDERS WERE PASSED BY BOTH THE REV ENUE AUTHORITIES, BECAUSE ASSESEE REMAINED NON-COOPERATI VE BEFORE THE REVENUE AUTHORITIES. HE STATED THAT IF THE AU THORISED REPRESENTATIVE OF THE ASSESSEE WITHDRAW THE ADDITIO NAL GROUNDS OF APPEAL RAISED VIDE LETTER DATED 20.02.2 020, THEN ITA NO. 212/DEL/2017 8 THE ORIGINAL ISSUES IN DISPUTE MAY BE SET ASIDE TO THE ASSESSING OFFICER TO ADJUDICATE THE SAME, AFRESH, AS PER LAW, AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASESSEE . 4.1 SHRI RAJIV SAXENA, LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ISSUES RAISED BY THE ASSESEE IN THE ADDITI ONAL GROUNDS MAY ALSO BE SENT BACK TO THE ASSESSING OFFICER TO ADJUDICATE THE SAME, AS PER LAW, ALONGWITH THE ORIGINAL GROUNDS OF APPEAL FOR FRESH ADJUDICATION. HE UNDERTAKES TO COOPERATE BEFORE THE AO, IF THIS BENCH SET ASIDE THE ISSUES IN DISPUTE TO THE ASSESSING OFFICER. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS PASSED BY THE AUTHORITIES BELOW AS WELL AS THE CONT ENTIONS RAISED BY THE ASSESSEE IN THE ORIGINAL GROUNDS OF A PPEAL AND IN THE ADDITIONAL GROUNDS OF APPEAL FILED WITH LETTER DATED 20.02.2020 AS REPRODUCED ABOVE. WE ARE OF THE VIEW T HAT NO DOUBT THAT ASSESSEE REMAINED NON-COOPERATIVE BEFOR E THE AO AS WELL AS BEFORE THE LD. CIT(A), BUT IN COMPLIANCE OF THE STATEMENT OF LD. SR. DR, THE LD. COUNSEL FOR THE A SSESEE FILED THE EMAIL LETTER DATED 16.09.2020 IN WHICH HE HAS WITHDRAWN THE ADDITIONAL GROUNDS OF APPEAL RAISED BY THE ASSE SSEE VIDE ITS LETTER DATED 20.02.2020. KEEPING IN VIEW OF THE FAC TS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE ORDERS PA SSED BY THE REVENUE AUTHORITIES ALOGNWITH THE CONTENTIONS R AISED BY THE ASSESSEE IN THE ORIGINAL GROUNDS OF APPEAL AS WELL AS ADDITIONAL GROUNDS OF APPEAL WHICH THE ASSESSEE HAS WITHDRAWN VIDE EMAIL LETTER DATED 16.09.2020. WE ARE OF THE VIEW THAT THERE IS ITA NO. 212/DEL/2017 9 NO DOUBT THAT THE AO HAS PASSED THE ASSESSMENT ORDE R U/S. 144 OF THE I.T. ACT, 1961 AND THE LD. CIT(A) HAS ALSO PASSED THE IMPUGNED ORDER EXPAR TE. AS PER RECORD, THE PRESENT APPEAL CAME UP FOR HEARING B EFORE THE BENCH ON 07.12.2018 AND ADJOURNED MANY-TIMES. ON 27.11.2019 THE BENCH HAS DIRECTED THE DEPARTMENTAL REPRESENTATIVE TO PRODUCE THE RECORDS OF ASSESSMENT , BUT THE DEPARTMENT DID NOT PRODUCE THE SAME. ON 15.06.2020, LD . DR ALSO SOUGHT TIME TO FILE THE PROOF OF SERVICE OF NO TICE ISSUED U/S. 143(2) OF THE ACT AND CASE WAS ADJOURNED FOR 30.07. 2020. BUT AGAIN ON 30.07.2020, THE LD. DR DID NOT PRODUCE THE ASSESSMENT RECORDS TO PROVE THE SERVICE OF NOTICE I SSUED U/S. 143(2) OF THE ACT AND THE CASE WAS ADJOURNED FOR TO DAY I.E. 16.09.2020. TODAY ALSO THE RECORD IS NOT AVAILABLE. B UT LD. SR. DR MADE A STATEMENT THAT, IF THE COUNSEL FOR THE ASSESSEE WITHDRAW THE ADDITIONAL GROUNDS OF APPEAL FILED VID E LETTER DATED 20.02.2020, THEN THE ISSUES INVOLVED IN THE PRES ENT APPEAL MAY BE SET ASIDE TO THE AO TO DECIDE THE SA ME AFRESH, AS PER LAW, AFTER GIVING OPPORTUNITY TO THE ASSESS EE. SH. RAJIV SAXENA, LD. COUNSEL FOR THE ASSESSEE AGREED TO THE S AME AND FILED A LETTER DATED 16.09.2020 REQUESTING FOR WITH DRAWAL OF THE ADDITIONAL GROUNDS OF APPEAL RAISED VIDE ITS LET TER DATED 20.02.2020. KEEPING IN VIEW THE STATEMENT MADE BY THE LD. SR. DR FOR SETTING ASIDE THE ISSUES IN DISPUTE TO TH E AO AND IN VIEW OF THE LETTER DATED 16.09.2020 FILED BY THE LD . COUNSEL FOR THE ASSESEE FOR WITHDRAWAL OF ADDITIONAL GROUNDS OF APPEAL AND IN VIEW OF THE NON-PRODUCTION OF ASSESSMENT RECORDS ESPECIALLY ITA NO. 212/DEL/2017 10 PROOF OF SERVICE OF NOTICE ISSUED U/S 143(2) OF THE ACT BY THE DEPARTMENT, IN OUR CONSIDERED OPINION, THIS MATTER REQUIRES THOROUGH INVESTIGATION AT THE LEVEL OF THE ASSESSIN G OFFICER. THEREFORE, IN THE INTEREST OF JUSTICE, WE SET ASIDE T HIS MATTER TO THE AO WITH THE DIRECTIONS TO MAKE THE ASSESSMENT , AS PER LAW, BY GIVING FULL OPPORTUNITY TO THE ASSESSEE FOR SUBSTANTIATING ITS CLAIM BEFORE THE AO. WE ALSO DIR ECT THE ASSESSEE THROUGH HIS COUNSEL TO FULLY COOPERATE IN THE ASSESSMENT PROCEEDINGS IN COMPLETING THE SAME AND NOT TO TAKE ANY UNNECESSARY ADJOURNMENT. 7. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FO R STATISTICAL PURPOSES. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 16.09.2020. SD/- SD/- (O.P. KANT) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER SRB COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI