M/s. Panchshila Hospitality Ventures Ltd., New Delhi V. ACIT, New Delhi

ITA 2279/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86735 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2007-2008
• Appeal Filed On: 15-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOURAV DUDEJA
• Keywords: Recovery proceedings; Principle of natural justice; Condonation of delay
• Section: 144

Judgement Text

IN TH E INCOME TAX APPELLATE TRIBUNAL DELHI BENCH FRIDAY : NEW DELHI SHRI N.K. SAINI, ACCOUNTANT MEMBER AND BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER ITA NO S . 2278 & 2279 /DEL/201 4 ASSESSMENT YEAR 200 7 - 0 8 M/S PANCHSILA HOSPITALITY VS. ACIT, CIRCL E 14(1), S - 45, PANCHISHILA PARK, NEW DELHI. NEW DELHI - 110 017 STAY PETITION NO S .01 & 02 /DEL/201 5 ASSESSMENT YEAR 2007 - 08 M/S PANCHSHILA HOSPITALITY, VS. ACIT, CIRCLE 14(1), VENTURES LTD. NEW DELHI. NEW DELHI (PAN AAACP 0107 G) ( APPELLANT) (RESPONDENT) APPELLANT BY : SH. SALIL AGARWAL, ADVOCATE AND SH. SHAILESH GUPTA, CA RESPONDENT BY: SH. GOURAV DUDEJA, SR. DR. ORDER PER: BENCH: 1. THESE TWO APPEALS PREFERRED BY THE ASSESSEE ARE AGAINST THE SEPARATE ORDERS OF THE CIT (A) - XVII, DELHI, BOTH DATED 24.1.2014. THE CIT (A) S ORDERS ARISE OUT OF THE ORDERS OF THE ASSESSING OFFICER PASSED (I) U/S 144 OF THE ACT; AND (II) PENALTY ORDER U/S 271(1) (C) OF THE ACT. THE RELEVANT ASSESSMENT YEAR IS 2007 - 08. THE ASSESSEE HAS AL SO ITA NOS. 2278 & 2279/DEL/2014 S.A. 01 &02 /DEL/2015 2 PREFERRED STAY PETITIONS, SEEKING STAY AGAINST THE RECOVERY OF TAX AND PENALTY, AMOUNTING TO RS. 18,46,752 / - AND RS.26,60,130/ - RESPECTIVELY. 2. AS THE ISSUES RAISED BY THE ASSESSEE IN ITS APPEALS PERTAIN TO THE SAME ASSESSEE AND THE SAME ASSESSMENT YEAR, BOTH THE APPEALS WERE CONSIDERED TOGETHER AND DISPOSED OF IN THIS CONSOLIDATED ORDER. 3. WE SHALL NOW TAKE UP THE APPEALS FOR ADJUDICATION. THE BRIEF FACTS IN RELATION TO THE APPEALS FILED BY THE ASSESSEE ARE FOLLOWS: THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURING AND EXPORT OF GARMENTS. FOR THE RELEVANT ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE HAD FURNISHED ITS RETURN OF INCOME, DECLARING A LOSS OF RS.45,85,350/ - . THE ASSESSMENT PROCEEDINGS WERE INITIATED BY ISSUANCE O F NOTICE U/S 143(2) OF THE ACT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, NEITHER THE ASSESSEE NOR ITS AUTHORISED REPRESENTATIVES ATTENDED THE HEARINGS BEFORE THE AO. HENCE, A BEST JUDGMENT ASSESSMENT ORDER U/S 144 OF THE ACT WAS PASSED BY THE AO ON 21.12 .2009, ASSESSING THE TOTAL INCOME OF THE ASSESSEE AT RS.41,05,530/ - . SIMULTANEOUSLY, PENAL PROCEEDINGS WERE ALSO INITIATED AND, ACCORDINGLY, PENALTY OF RS.26,60,130/ - WAS IMPOSED U/S 271(1)(C) OF THE ACT ON 29.6.2010. 4. AGGRIEVED, THE ASSESSEE HAD PREFERRED APPEALS BEFORE THE CIT (A) ON BOTH THE COUNTS. THE CIT (A) DISPOSED OF THE QUANTUM AS WELL AS THE PENALTY APPEALS BY SEPARATE ORDERS BOTH DATED 24.1.2014. THE CIT (A) DID NOT CONDONE THE DELAY IN PREFERRING THE APPEALS AND PASSED EX - PARTE O RDERS FOR THE REASONS THAT THE ASSESSEE SOUGHT A NUMBER OF ADJOURNMENTS IN BOTH THE APPEALS. THE ASSESSEE, BEING AGGRIEVED, ARE IN APPEALS BEFORE US AGAINST THE QUANTUM ASSESSMENT AS WELL AS IMPOSING PENALTY U/S 271(1)(C) OF THE ACT. ITA NOS. 2278 & 2279/DEL/2014 S.A. 01 &02 /DEL/2015 3 5. DURING THE COURSE OF HEARING BEFORE US, THE LEARNED AR SUBMITTED THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, EVEN THOUGH AUDITORS WERE APPOINTED BY THE ASSESSEE TO REPRESENT ITS CASE, THEY DID NOT ATTEND THE HEARINGS PROPERLY WHICH, RESULTED IN, CONCLUSI ON OF ASSESSMENT U/S144 OF THE ACT. IT WAS, FURTHER, SUBMITTED THAT THE BEST ASSESSMENT MADE U/S 144 OF THE ACT DATED 21.12.2009 WAS NOT, IN FACT, RECEIVED BY THE ASSESSEE ON ACCOUNT OF SHIFTING OF ITS BUSINESS PREMISES FROM 340, UDYOGVIHAR, PHASE II, GUR GAON TO THE PREMISES AT S - 45, PANCHSHILA PARK, NEW DELHI 110 017, EVEN THOUGH THE CHANGE OF ADDRESS WAS DULY INTIMATED TO THE AO. IT WAS ALSO SUBMITTED THAT THE DELAY IN FILING THE APPEALS BEFORE THE CIT (A) WAS BONA FIDE AND THE ASSESSEE WAS PREVENTED BY A SUFFICIENT CAUSE. HOWEVER, THE CIT (A) DISPOSED OF THE APPEALS ON THE THRESHOLD, REJECTING THE CONDONATION OF DELAY PETITIONS OF THE ASSESSEE. IT WAS, FURTHER, SUBMITTED THAT NON - APPEARANCE OF HEARING BEFORE THE CIT (A) WAS ON ACCOUNT OF NON - RECEIPT O F CERTAIN HEARING NOTICES WHICH WERE ADMITTEDLY ISSUED (MENTIONED) TO THE PREMISES NO.S 54 INSTEAD OF PREMISES NO.S 45, PANCHSHILA PARK, NEW DELHI. IN CONCLUSION, IT WAS PLEADED THAT IN THE INTERESTS OF NATURAL JUSTICE AND EQUITY, THE ISSUES MAY BE RESTORE D ON THE FILES OF THE CIT (A) FOR FRESH CONSIDERATION OF ITS PETITIONS FOR CONDONATION OF DELAY. 6. THE LEARNED D . R REFERRING TO THE FINDINGS OF THE CIT (A) AT PARA 4.4 OF THE IMPUGNED ORDER SUBMITTED THAT THE CIT (A) WAS JUSTIFIED IN NOT EN TERTAINING THE ASSESSEE S APPEALS AND DISMISSING THE SAME WITHOUT CONDONING THE DELAY IN FILING OF THE APPEALS. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS ON RECORD. IT WAS THE CLAIM OF THE ASSESSEE THAT THE PRINCIPLES OF NAT URAL JUSTICE AND FAIRNESS HAVE BEEN DENIED IN THE INSTANT CASE , SINCE THE ASSESSEE S CONDONATION PETITIONS FOR FILING THE APPEALS BEFORE THE CIT (A) WERE REJECTED AND THE APPEALS WERE NOT CONSIDERED ON MERITS. IT WAS, FURTHER, SUBMITTED THAT THE ORDERS OF THE CIT (A) WERE EX - PARTE ORDERS. ON A PERUSAL OF PARA 4.4 OF ITA NOS. 2278 & 2279/DEL/2014 S.A. 01 &02 /DEL/2015 4 THE CIT (A) S ORDER, WE FIND THAT THE ASSESSEE HAD SOUGHT ADJOURNMENT OF HEARINGS BEFORE THE CIT (A) ON A NUMBER OF OCCASIONS. IN THE NORMAL COURSE, THE ASSESSEE DOESN T DESERVE ANY LENIENCY. HOWEVER, WE HAVE NOTICED THAT THERE WAS A CHANGE OF BUSINESS PREMISES OF THE ASSESSEE AND THE SAME WAS DULY INTIMATED TO THE AO ON 11.1.2010. ADMITTEDLY, IN THIS CASE, THE ASSESSMENT ORDER DATED 21.12.2009 WAS DESPATCHED TO THE ASSESSEE THROUGH SPEED POS T ONLY ON 29.12.2009 AND THERE IS NOTHING ON RECORD TO SUGGEST THAT THE ASSESSMENT ORDER WAS, IN FACT, SERVED ON THE ASSESSEE. IN ALL PROBABILITY, THE ASSESSMENT ORDER DESPATCHED TO THE OLD ADDRESS OF THE ASSESSEE WOULD NOT HAVE BEEN SERVED ON THE ASSESSE E, RESULTING IN, DELAY IN FILING THE APPEAL BEFORE THE CIT (A). FURTHER, IT WAS OBSERVED THAT SOME OF THE HEARING NOTICES DESPATCHED TO THE ASSESSEE FROM THE OFFICE OF THE CIT (A) REFERRED TO THE PREMISES NUMBER AS S 54 INSTEAD OF ACTUAL NUMBER OF S 45 . THIS WOULD HAVE, IN ALL PROBABILITY, LED TO NON - COMPLIANCE OF HEARING NOTICES OF THE CIT (A) BY THE ASSESSEE. 8. TAKING INTO ACCOUNT THE FACTS AND CIRCUMSTANCES OF THE ISSUE AS DISCUSSED (SUPRA) AND ALSO KEEPING THE PRINCIPLES OF NATURAL JUSTI CE AND FAIRNESS IN VIEW, THE APPEALS ARE RESTORED TO THE FILE OF THE CIT (A) .T HE CIT (A) SHALL LOOK INTO THE ISSUE IN ITS ENTIRETY AND AFTER AFFORDING REASONABLE HEARING TO ASSESSEE SHALL TAKE APPROPRIATE ACTION WITH REGARD TO THE ASSESSEE S PETITIONS FOR CONDONATION OF DELAY AND THEN PROCEED WITH MATTER AS HE/SHE DEEMS FIT . IT HAS ALSO BEEN OBSERVED THAT THE ASSESSEE WAS IN THE HABIT OF SEEKING ADJOURNMENTS WITHOUT SPECIFYING ANY VALID REASON. THE ASSESSEE IS, THEREFORE, DIRECTED TO FULLY CO - OPERATE WITH THE REVENUE IN FURNISHING ALL THE REQUIRED DETAILS AS SOUGHT AND NOT TO RESORT TO SEEK ADJOURNMENTS ON FLIMSY GROUNDS. THIS WOULD FACILITATE THE CIT (A) TO CARRY OUT THE DIRECTIONS OF THIS BENCH (SUPRA) EXPEDITIOUSLY. ITA NOS. 2278 & 2279/DEL/2014 S.A. 01 &02 /DEL/2015 5 9. S INCE WE HAVE RESTORED TH E QUANTUM APPEAL OF THE ASSESSEE TO THE FILE OF THE CIT (A) FOR FRESH CONSIDERATION (SUPRA), THE PENALTY ORDER U/S 271(1)(C) OF THE ACT BASED ON THE BEST JUDGMENT ASSESSMENT U/S 144 OF THE ACT IS ALSO RESTORED ON THE FILE OF THE CIT (A) FOR SIMILAR TREATME NT. IT IS ORDERED ACCORDINGLY. 10. THE QUANTUM AS WELL AS THE PENALTY APPEALS HAS SINCE BEEN REMITTED BACK ON THE FILES OF THE CIT (A) FOR FRESH CONSIDERATION (SUPRA), THE STAY PETITIONS FILED BY THE ASSESSEE IS DISMISSED AS INFRUCTUOUS. IT I S ORDERED ACCORDINGLY. 11. IN THE RESULT , THE QUANTUM AND PENALTY APPEALS OF THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. THE STAY PETITIONS OF THE ASSESSEE ARE DISMISSED AS INFRUCTUOUS. TH E DECISION WAS PRONOUNCED IN THE OP EN COURT ON 1 3 TH FEBRUARY , 201 5 . SD / - SD/ - ( N.K. SAINI ) (GEORGE GEORGE K.) A CCOUNTANT MEMBER J UDICIAL MEMBER DATED: 1 3 TH FEBRU ARY , 201 5 . AKS/ - DC OM COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST . REGISTRAR, ITAT, NEW DELHI