S.M.G. Electronics Pvt. Ltd., New Delhi V. CIT, New Delhi

ITA 2428/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81945 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 05-11-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 21-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMESH CHANDRA
• Assessee Lawyers: KUCHHAL
• Keywords: Opportunity of being heard; Bad and doubtful debts
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER & SHRI T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 2428/DEL/2012 ASSESSMENT YEAR: 2001-02 S.M.G. ELECTRONICS PVT. LTD., VS. CIT, 1402, CHIRANJIV TOWERS, DELHI-III, 43, NEHRU PLACE, NEW DELHI. NEW DELHI. AABCS2695H (APPELLANT) (RESPONDENT) APPELLANT BY : SH. KUCHHAL, CA RESPONDENT BY : SH. RAMESH CHANDRA, CIT(D R) ORDER PER H.S. SIDHU, J.M. THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 21.03.2012 PASSED BY THE COMMISSIONER O F INCOME TAX-III, NEW DELHI FOR A.Y. 2001-02. 2. THE FACTS NARRATED BY THE BOTH PARTIES ARE NOT D ISPUTED BY THE BOTH PARTIES, THEREFORE, NO NEED TO REPEAT THE SAME FOR THE SAKE OF CONVENIENCE. 3. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSE SSEE STATED THAT LD. COMMISSIONER OF INCOME TAX HAS NOT GIVEN ANY OPPOR TUNITY OF HEARING FOR SUBSTANTIATING THE CLAIM OF THE ASSESSEE. HE F URTHER STATED THAT THE ASSESSEE HAVING EACH AND EVERY EVIDENCE FOR SUBSTAN TIATING ITS CLAIM BEFORE THE LD. CIT WHICH THE ASSESSEE HAS ALREADY P RODUCED BEFORE THE AO WHO COMPLETED THE ASSESSMENT AFTER APPRECIATING THE EVIDENCE PRODUCED BY THE ASSESSEE BEFORE HIM. HE REQUESTED THAT THE ISSUE IN ITA NO. 2428/D/2012 SMG ELECTRONICS P. LTD. 2 DISPUTE MAY BE SET ASIDE TO THE LD. CIT TO PROVIDE SUFFICIENT OPPORTUNITY TO THE ASSESSEE AND DECIDE THE CASE OF ASSESSEE AS PER LAW. 4. ON THE CONTRARY LD. DR OBJECTED THE REQUEST OF T HE ASSESSEE AND STATED THAT THE AO HAS COMPLETED THE ORIGINAL ASSES SMENT WITHOUT MAKING PROPER ENQUIRY AS PER ESTABLISHED PROCEDURE AND THE LD. CIT HAS RIGHTLY ISSUE NOTICE U/S 263 TO THE ASSESSEE BUT THE ASSESS EE HAS NOT APPEARED BEFORE HIM AND HAS NOT AVAILED THE OPPORTUNITY OF H EARING. THEREFORE, THE APPEAL FILED BY THE ASSESSEE MAY BE DISMISSED. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORD AVAILABLE WITH US SPECIALLY IMPUGNED ORDER PASSED B Y THE LD. CIT. THE RELEVANT PARAGRAPH 4 PAGE 2 & 3 OF THE IMPUGNED ORD ER IS REPRODUCED AS UNDER: 4. IN VIEW OF THE ABOVE, IT WAS OBSERVED THAT THE ORDER PASSED BY THE AO WAS PRIMA FACIE ERRONEOUS AND, THE REFORE, PREJUDICIAL TO THE INTEREST OF REVENUE. THE ASSESS EE WAS ISSUED NOTICE U/S 263 VIDE THIS OFFICE LETTER DATED 07.03. 2012 FIXING THE DATE OF HEARING ON 13.03.2012. THE COUNSEL OF THE ASSESSEE APPEARED SUO MOTO ON 09.03.2012 AND SOUGHT ADJOURNM ENT UPTO 25.04.2012. THE CASE WAS ADJOURNED TO 15.03.2 012. THE ASSESSEE DID NOT APPEAR ON THE FIXED DATE NOR FILED ANY SUBMISSIONS. THUS, IN VIEW OF IT, IT IS HELD THAT THE ASSESSEE HAS NOTHING TO ARGUE. UNDER THE CIRCUMSTANCES, IT IS H ELD THAT THE ORDER DATED 25.02.2010 PASSED BY THE AO IS ERRONEOU S AND, THEREFORE, PREJUDICIAL TO THE INTEREST OF REVENUE. SICNE THE AO, FAILED TO MAKE EVEN BASIC ENQUIRIES AND FAILED UNRA VEL THE TRUE STATE OF AFFAIRS. THEREFORE, I DIRECT THE AO TO HO LD FRESH ENQUIRIES TO VERIFY OF THE GENUINENESS THE EXPENSES OF RS. 47,70,955/- AND RS. 88,757/- MADE ON ACCOUNT OF GEN ERAL INSTALLATION CHARGES AND BAD DEBTS PROVIDING THE AS SESSEE THE OPPORTUNITY OF BEING HEARD AND AFTER MAKING PROPER ENQUIRIES IN THIS REGARD. 6. AFTER GOING THROUGH THE AFORESAID RELEVANT PARAG RAPH OF THE IMPUGNED ORDER, WE ARE OF THE CONSIDERED VIEW THAT REQUEST MADE BY THE LD. COUNSEL FOR THE ASSESSEE FOR CANCELLING THE IMP UGNED ORDER IS VERY ITA NO. 2428/D/2012 SMG ELECTRONICS P. LTD. 3 PLAUSIBLE BECAUSE THE LD. CIT HAS ISSUED NOTICE U/S 263 FOR FIXING THE DATE OF HEARING ON 13/03/2012. THE LD. COUNSEL FOR THE ASSESSEE SUO MOTO APPEARED ON 09/03/2012 AND SOUGHT ADJOURNMENT UPTO 25/04/2012. THE LD. CIT ADJOURNED THE MATTER FOR 15/03/2012 FOR A V ERY SHORT PERIOD WITHOUT MENTIONING THE REASON FOR SHORT ADJOURNMENT ON THE REQUEST OF THE ASSESSEE FOR 25/04/2012 AND DECIDED THE CASE OF THE ASSESSEE ON 21/03/2012 WITHOUT AFFORDING REASONABLE OPPORTUNITY TO THE ASSESSEE WHICH IS CONTRARY TO THE PRINCIPLE OF NATURAL JUSTI CE. EVEN OTHERWISE THE IMPUGNED ORDER IS NON-SPEAKING ONE AND IS NOT SUSTA INABLE IN THE EYE OF LAW BUT IN THE INTEREST OF JUSTICE, WE SET ASIDE TH E IMPUGNED ORDER BY ACCEPTING THE REQUEST OF THE ASSESSEES COUNSEL AND DIRECTING THE LD. CIT TO PASS THE SPEAKING ORDER AS PER LAW AFTER PROVIDI NG SUFFICIENT OPPORTUNITY TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 05/11/2014 SD/- SD/- (T.S. KAPOOR) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 05/11/2014 *KAVITA, P.S. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR ITA NO. 2428/D/2012 SMG ELECTRONICS P. LTD. 4