M/s Earthcon Systems India Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 2171/DEL/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6229 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 21-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rejection of books of accounts; Assessment record; Set aside
• Section: 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI K. NARSIMHA CHARY, JUDICIAL MEMBER I.T.A.NO. 2171/DEL/2016 [ASSESSMENT YEAR: 2010-11] ORDER PER K. NARSIMHA CHARY, J.M. AGGRIEVED BY THE ORDER DATED 01.02.2016 IN APPEAL N O. 159/2012-13 PASSED BY THE LD. COMMISSIONER OF INCOM E TAX (APPEALS)-3, DELHI (LD. CIT(A)), M/S EARTHCON SYSTEMS INDIA PV T. LTD., (THE ASSESSEE) FILED THIS APPEAL. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF CONTRACTORS, ARCHITECTUR AL WORKS, CIVIL ENGINEERING WORKS, STRUCTURAL DESIGN AND OTHER RELA TED ACTIVITIES IN M/S EARTHCON SYSTEMS INDIA PVT. LTD., B-28, SHIVALIK, MALAVIYA NAGAR, NEW DELHI PAN-AACCE1076B VS DCIT, CIRCLE-1(1), NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SH. AJAY JAIN, CA RESPONDENT BY SMT. APARNA KARAN, CIT DR DATE OF HEARING 29.08.2019 DATE OF PRONOUNCEMENT 07.10.2019 ITA NO. 2171/DEL/2016 2 RELATION TO INFRASTRUCTURE DEVELOPMENT. FOR THE ASS ESSMENT YEAR 2010- 11 THEY HAVE FILED THEIR RETURN OF INCOME 13.10.201 0 DECLARING AN INCOME OF RS. 55,81,220/-. DURING THE COURSE OF ASS ESSMENT PROCEEDINGS, THE AO REQUIRED THE ASSESSEE TO PRODUCE THE WAGE RE GISTER FOR THE OWN LABOUR EXPENSES, STOCK REGISTER ALONG WITH RELEVAN T BILLS AND VOUCHERS IN ORIGINAL ETC,.THE ASSESSEE HOWEVER DID NOT PRODUCE THE STOCK REGISTER ALONG WITH THE BILLS AND VOUCHERS BUT PRODUCED THE WAGE REGISTER. ON VERIFICATION OF THE WAGE REGISTER, THE LEARNED AO F OUND THAT THE REGISTER IS CONTAINING THE REVENUE STAMPS WITH THUMB IMPRESS IONS WHEREAS THE PHOTOSTATCOPIESOF THESAME DID NOT CONTAIN ANY REVEN UE STAMPS BUT THERE WERE ONLY THUMB IMPRESSIONS. LEARNED AO FURTH ER FOUND THAT THE WAGE REGISTER WAS APPEARING TO BE PREPARED WITH NEW PAPERS. 3. LEARNED AO FURTHER FOUND THAT THE ASSESSEE HAD N OT BEEN MAINTAINING ANY OPENING IN STOCK REGISTER AND NOT P RODUCED THE MOVEMENT REGISTER OR THE SUPPLY REGISTER OF THE STO CK IN THE ABSENCE OF THE PRODUCTION OF SUCH REGISTERS AND VERIFICATIONS THEREOF THE GENUINENESS OF THE ACCOUNTS CANNOT BE DETERMINED AN D THEREFORE LEARNED AO REJECTED THE BOOKS OF ACCOUNTS OF THE AS SESSEE UNDER SECTION 145(3) OF THE INCOME TAX ACT, 1961 (THE ACT) AND ADDED A SUM OF RS. 1.5 CRORES OUT OF THE OUT OF THE TOTAL LABOUR CHARG ES. 4. AGGRIEVED BY THE SAME ASSESSEE PREFERRED AN APPE AL BEFORE THE LEARNED CIT(A). IT COULD BE SEEN FROM THE IMPUGNED ORDER THAT LEARNED CIT(A) ISSUED NOTICE UNDER SECTION 250 OF THE ACT O N 18.9.2013 FIXING THE DATE OF HEARING ON 10.10.2013. IT IS THE OBSERVATIO N OF THE LEARNED CIT(A) THAT SUBSEQUENTLY THE MATTER UNDER WENT SEVEN ADJOU RNMENTS BUT ON NONE OF THE DATES OF HEARING THE ASSESSEE COOPERATE D FOR THE DISPOSAL OF ITA NO. 2171/DEL/2016 3 THE APPEAL ON MERITS AND ON MANY DATES THERE WAS NO REPRESENTATION FOR THE ASSESSEE. 5. IN THIS CIRCUMSTANCES, HAVING FOUND NO OPTION LE ARNED CIT(A) DISPOSED OF THE APPEAL EX PARTE BUT INSTEAD OF ADVERTING TO THE MERITS WHILE PASSING THE IMPUGNED ORDER, THE LEARNED CIT(A ) DISMISSED THE SAME IN LIMINE BY DRAWING AN INFERENCE THAT THE ASS ESSEE HAD LOST INTEREST IN PURSUING THE MATTER AND NOT PROVIDED AN Y WRITTEN SUBMISSIONS SUPPORTED BY EVIDENCE. 6. ASSESSING IS CHALLENGING THE SAID ORDER BEFORE U S IN THIS APPEAL ON SEVERAL GROUNDS, BUT THE MAIN PLANK OF THE ARGUMENT OF LEARNED AR IS THAT EVEN IN THE ABSENCE OF THE ASSESSEE NOTHING PR EVENTED THE LEARNED CIT(A) THE LEARNED CIT(A) TO LOOK INTO THE RECORD T O FIND OUT THEJUSTIFICATION OF ADDITION OR OTHERWISE MADE BY T HE LEARNED AR. IF ACCORDING TO THE LEARNED AR, THE GROUNDS ARE NOT SU FFICIENT TO REJECT THE BOOKS OF ACCOUNTS OF THE ASSESSEE NOT TO MAKE THE H UGE ADDITION OF RS. 1.5 CRORES. 7. PER CONTRA IT IS THE SUBMISSION OF THE LEARNED D R THAT SINCE THE ASSESSEE FAILED TO APPEAR AND COOPERATE WITH THE FI RST APPELLATE AUTHORITY FOR DISPOSAL OF THE MATTER ON MERITS AND THEREFORE THE LEARNED CIT(A) DID NOT FIND ANY OPTION BUT TO DISMISS THE A PPEAL IN LIMINE. 8. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS MADE ON EITHER SIDE. 9. RECORDS SPEAKS THAT THOUGH THE LEARNED CIT(A) GR ANTED SEVERAL ADJOURNMENTS, THE ASSESSEE FAILED TO AVAIL THE SAME LEAVE NO OPTION TO THE LEARNED CIT(A) BUT TO PROCEED EX PARTE . HOWEVER THE EX PARTE DOES NOT MEAN THE DISMISSAL OF THE APPEAL IN LIMINE. THE ASSESSMENT ORDER AVAILABLE BEFORE THE LEARNED CIT(A) AND THE LEARNED CIT(A) COULD HAVE ITA NO. 2171/DEL/2016 4 CALLED FOR THE ASSESSMENT RECORD AND TO HAVE LOOK A T THE MATERIAL FURNISHED BY THE ASSESSEE BEFORE THE LD. AO TO CONS IDER THE VERACITY OF THE OBSERVATIONS MADE BY THE AO BEFORE US THAT THE FACT FINDINGS RETURNED BY THE COULD BE OF SOME HELP TO THE TRIBUN AL AT SECOND APPEAL STAGE. SINCE THE LEARNED CIT(A) DISMISSED THE APPEA L IN LIMINI WITHOUT ADVERTING TO THE MERITS OF THE CASE OR THE CORRECTN ESS OF THE OBSERVATIONS MADE BY THE LEARNED AO WITH REFERENCE TO THE EVIDENCE THAT WAS AVAILABLE BEFORE THE AUTHORITIES, WE FEEL HANDICAPPED TO PROCEED FURTHER IN THIS APPEAL. 10. BOTH THE COUNSEL SUBMITTED THAT FOR THIS REASON THE MATTER COULD BE REMANDED TO THE FILE OF THE LEARNED CIT(A) WITH A DIRECTION TO DISPOSE OF THE APPEAL ON MERITS SO THAT THE REASONS GIVEN B Y THE FIRST APPELLATE AUTHORITY COULD BE AMENDED BY THIS TRIBUNAL. WE FIN D THIS SUGGESTION A REASONABLE ONE. WE, THEREFORE, SET ASIDE THE IMPUGN ED ORDER AND REMANDED THE MATTER BACK TO THE FILE OF THE LEARNED CIT(A) FOR DISPOSAL OF THE SAME ON MERITS BY GIVING AN OPPORTUNITY TO T HE ASSESSEE AND IF FOR ANY REASON THE ASSESSEE DOES NOT COOPERATE WITH THE FIRST APPELLATE PROCESS LEARNED CIT(A) IS FREE TO DISPOSE OF THE AP PEAL EX PARTE BUT ON MERITS. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07 TH OCTOBER, 2019. SD/- SD/- (PRASHANT MAHARISHI) (K.NARASIMHACHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 07/10/2019 SH ITA NO. 2171/DEL/2016 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT BY ORDER ASS ISTANT REGISTRAR DRAFT DICTATED 01.10.2019 DRAFT PLACED BEFORE AUTHOR APPROVED DRAFT COMES TO THE SR.PS/PS ORDER SIGNED AND PRONOUNCED ON FILE SENT TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER. DATE OF UPLOADING ON THE WEBSITE 15.10.2019