Sh. Naresh Kumar Jaggi, New Delhi V. ACIT, New Delhi

ITA 2433/DEL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7487 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 21-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 21-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UMESH CHANDER DUBEY
• Keywords: Principle of natural justice; Reasonable cause; Right to appeal
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI ANADI N. MISHRA, ACCOUNTANT MEMBER ITA NO. 2433/DEL/2014 AY: 2009-10 NARESH KUMAR JAGGI, VS. ASSTT. COMMISISONER OF IN COME TAX F-10/16, MODEL TOWN, CENTRAL CIRCLE-11, NEW DELHI 110 009 NEW DELHI (PAN: ADEPJ2932M) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SACHIN JAIN, CA RESPONDENT BY : SH. UMESH CHANDER DUBEY, SR. DR ORDER PER H.S. SIDHU, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 17.2.2014 OF LD. CIT(A)-XXXI, NEW DELHI PERTAINING TO ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS:- 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT (A) WAS TOTALLY UNJUSTIFIED AND ILLEGAL IN DISMISSI NG THE APPEAL BY TREATING THE SAME AS FILED BEYOND/PERMITTED TIME WI THOUT ANY REASONABLE CAUSE. ITA NO. 2433/DEL/2014 2 2. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT (A) WAS TOTALLY WRONG AND UNJUSTIFIED BY NOT FOLLOWING THE JUDICIAL DISCIPLINE 3. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE, AN ASSESSMENT ORDER PASSED BY THE LD. AD U/S 143(3) OF THE INCOME TAX ACT, 1961 IS ILLEGAL END , ON MAINTAINABLE SINCE TH E SAME HAS TO BE PASSED U/S 153C AND NOT U/S 143(3) OF THE ACT. 4. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE ASSESSMENT ORDER PASSED BY THE LD. AO DESERVES TO BE QUASHED IN TOTO SINCE IT IS: A) NOT SIGNED BY THE LD. AD B) PASSED WITH BIAS MIND C) PASSED WITHOUT RECORDING SATISFACTION D) PASSED WITHOUT PROVIDING OPPORTUNITY FOR CROSS E XAMINATION E) PASSED ON THE BASIS OF INSTRUMENTS WHICH ARE DEF ECTIVE AND NOT GOOD IN THE EYES OF LAW. F) PASSED ON THE BASIS OF STATEMENTS OF THIRD PARTI ES WHICH WERE COLLECTED AT THE BACK OF ASSESSEE AND DESPITE REQUE ST NOT BEING PROVIDED TO HIM. G) PASSED WITHOUT MAKING PROPER ENQUIRY ETC.' 5. THAT THE ASSESSMENT MADE BY THE LD. AD AT A TOTA L TAXABLE INCOME OF RS. 141035905/- IS TOTALLY UNJUSTIFIED AN D ILLEGAL, ARBITRARY AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. ITA NO. 2433/DEL/2014 3 6. THAT UNDER THE FACTS OF THE CASE, THE ADDITION OF RS. 58775000/- MADE BY THE LD. AO IN THE SALES CONSIDERATION IS UN JUSTIFIED AND DESERVES TO BE DELETED. 7. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. AO WAS TOTALLY UNJUSTIFIED AND ILLEGAL IN DISALLOWING THE SHORT TERM CAPITAL LOSS AMOUNTING TO RS. 19756507/- 8. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR WITHDRAW ANY GROUND OF APPEAL AT THE TIME OF HEARING WITH TH E PERMISSION OF THE HON'BLE ITAT, DELHI BENCH. 2. THE FACTS NARRATED BY THE REVENUE AUTHORITIES AR E NOT DISPUTED BY BOTH THE PARTIES, THEREFORE, NO NEED TO REPEAT THE SAME FOR THE CONVENIENCE. 3. AT THE TIME OF HEARING LD. COUNSEL OF THE ASSESS E STATED THAT LD. FIRST APPELLATE AUTHORITY HAS DISMISSED THE APPEAL OF THE ASSESSEE BEING TIME BARRED WITHOUT APPRECIATING THE GROUNDS RAISED BY THE ASSESSE FOR CONDONATION OF DELAY. HE FURTHER STATE D THAT ASSESSE HAS NOT PAID THE ADMITTED TAX AT THE TIME OF ORIGINALLY FILING THE APPEAL, BUT LATER ON AFTER MAKING ARRANGEMENT OF LOAN, ASSESSEE HAS PAID THE ADMITTED TAX. HE STATED THAT ITAT VIDE ORDER DATED 28.6.2013 DIRECTED THE LD. CIT(A) TO DECIDE THE ISSUE OF ADMISSION OF ENTERTAINMENT OF APPEAL AND DELAY IF ANY, BE CONDONED. LD. CIT(A) HAS NOT CONDONED THE DELAY. ACTUALLY THERE IS NO DELAY IN FILING H E APPEAL, BUT DUE TO NON-PAYMENT OF ADMITTED TAX, THE APPEAL IS TIME BAR RED WHICH IS BEYOND THE CONTROL OF THE ASSESSEE, BECAUSE ASSESSE E WAS HAVING FINANCIAL CRISIS AT THAT TIME. LD. COUNSEL OF THE ASSESSEE REQUESTED ITA NO. 2433/DEL/2014 4 THAT ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE CO-SELLER PASSED BY THE ITAT A ND UPHELD BY THE HONBLE DELHI HIGH COURT. THEREFORE, DELAY IF ANY, MAY BE CONDONED AND THE ADDITION IN DISPUTE MAY BE DELETED BEING CO VERED. HE HAS ALSO FILED THE COPY OF THE JUDGMENT OF THE HONBLE DELHI HIGH COURT PASSED IN THE CASES OF JASJIT SINGH AND BHUPINDER PAL SIN GH SARNA IN THE SHAPE OF ONE SMALL PAPER BOOK CONTAINING PAGES 1 TO 30. 4. ON THE CONTRARY, LD. DR STRONGLY OPPOSED THE REQ UEST OF THE ASSESSEES COUNSEL AND STATED THAT ASSESSEE HAS NOT PAID THE ADMITTED TAX AT THE TIME OF FILING APPEAL BEFORE THE LD. CIT (A) AND USED THE MONEY RECEIVED FROM SALE CONSIDERATION OF PROPERTY FOR HIS PERSONAL PURPOSE, BUT DID NOT DEPOSIT THE ADMITTED TAX WITH THE RETURN. HE STATED THAT NO DOUBT THAT THE ASSESSEE HAS PAID TH E ADMITTED TAX LATER ON, BUT DID NOT EXPLAIN THE DELAY PROPERLY. THEREF ORE, THE APPEAL FILED BY THE ASSESSEE MAY BE DISMISSED. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS ESPECIALLY THE ORDER PASSED BY THE REVENUE AUTHORI TIES. WE ARE OF THE CONSIDERED VIEW THAT ASSESSEE HAS FILED THE PRESENT APPEAL CHALLENGING THE IMPUGNED ORDER WHEREIN THE LD. CIT(A) HAS DISMI SSED THE APPEAL BEING TIME BARRED. AFTER PERUSING THE IMPUGNED OR DER, WE ARE OF THE VIEW THAT LD. CIT(A) HAS NOT DISCUSSED THE MERITS O F THE CASE AND ONLY DISMISSED THE APPEAL OF THE ASSESSEE ON LIMITATION ISSUE. WE HAVE ALSO PERUSED THE FORM NO. 35 FILED BEFORE THE LD. FIRST APPELLATE AUTHORITY AND FIND THAT THE DATE OF SERVICE OF RELE VANT NOTICE OF DEMAND IS 30.12.2010 AND ASSESSEE HAS FILED THE ITA NO. 2433/DEL/2014 5 APPEAL BEFORE THE LD. CIT(A) ON 27.1.2011 WHEREAS THE ASSESSMENT ORDER PASSED BY THE AO IS DATED 28.12.2010 PASSED U /S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE A CT) MEANING THEREBY THE ASSESSEE HAS FILED THE APPEAL BEFORE TH E LD. FIRST APPELLATE AUTHORITY WITHIN TIME, BUT DID NOT DEPOSIT THE ADMI TTED TAX FOR THE REASONS MENTIONED BY THE LD. CIT(A) IN PARA NO. 3. 2 IN HIS IMPUGNED ORDER WHICH IS REPRODUCED AS UNDER:- 3.2 VIDE HIS LETTER DATED 09.10.2013, THE AR INFO RMED THAT HONBLE ITAT HAS SET ASIDE THE MATTER AS ABOVE AND REQUESTED TO HEAR THE APPEAL ON MERITS AND ALSO TO CONDONE THE DELAY. THE AR HAS MADE THE FOLLOWING SUBMISSION REQUESTING FOR CO NDONATION OF DELAY. WITH REFERENCE TO ABOVE MATTER THIS FOR YOUR KIND INFORMATION THAT THE ASSESEES APPEAL WAS DISMISSED BY THE CIT-31 ON THE GROUND OF NON DEPOSITED OF THE AD MITTED TAX U/S./ 29(4) OF THE ACT, 1961 AND DUE TO AGGRIEV ED BY THE SAID ORDER THE ASSESSEE FILED THE APPEAL BEFORE THE ITAT-DELHI AND ITAT DELHI HAS ACCEPTED AND ALLOWED THE APPEAL OF THE ASSESSEE AND RESTORE THE MATTER BACK TO THE CIT TO HEARD THE CASE ON THE BASIS OF MERIT OF THE CASE. FURTHER IN SUPPORT OF OUR CLAIMED THE ASSESSEE HAS ALREADY FILED THE COPY OF THE ORDER OF THE ITAT, DELHI ON 18.10.2013 IN HIS EARLIER LETTER DATED 9.10.2013. ITA NO. 2433/DEL/2014 6 YOU ARE THEREFORE REQUESTED TO PLEASE HEARD THE CASE OF APPELLANT ON MERITS AND PLEASE BE CONDONE THE DELAY, IF ANY AS DIRECTED BY THE ITAT, DELHI THAT T HE APPEAL BE ADMITTED ON THE DAY WHEN THE ADMITTED TAX WAS P AID BY THE APPELLANT I.E. 24.4.2011, AS THE APPELLANT W AS NOT IN THE POSITION TO PAY THE ADMIT TAX AT THE TIME OF FI LING THE APPEAL THIS CAN BE ESTABLISH THROUGH THE FACT THAT THE APPELLANT HAD TAKEN THE LOAN FROM INDIA BULLS AGAIN ST THE PROPERTY AND THE SAID FUNDS HAS BEEN USED BY THE APPELLANT TO PAY THE ADMITTED TAX, FURTHER THE SUPP ORT OF THIS APPELLANT HAS FILE THE LOAN DOCUMENTS AND THE BANK STATEMENT OF THE APPELLANT. THAT THE APPELLANT HAD USED THE FUNDS WHICH WAS RECEIVED AGAINST THE SALE OF SALES OF SHARE I.E. RS . 8,27,78,250/- (RS. 9,15,00,000 87,21,750) TO MAKE THE ADVANCE PAYMENT TO BUY THE SHARES / PROPERTY, ADVA NCE GIVEN WERE AS RS. 60,50,000/- TO COLOUR BUILDWELL P VT. LTD. AND RS. 1,16,62,820/- TO KAMDHENU AGRO PVT. LTD. AN D RS. 90,00,000/- TO SEAGULL BUILDWELL PVT. LTD. AND RS. 2,15,07,082/- TO PHUGU RESORT PVT. LTD. RS. 94,09,4 93/- TO COLOUR INFRASTRUCTURE PVT. LTD. AND RS. 49,85,000/- TO SEAGULL BUILDWELL PVT. LTD. AND RS. 1,97,56,507/- O N ACCOUNT OF LOSS IN SHARES. AND THE PAYMENT OF ADV ANCE TAX OF RS. 14,00,000/- AND FURTHER THE APPELLANT HA S MADE HIS BEST AFFORDS TO RECOVERED THE ADVANCE GIVE BUT WHEN ITA NO. 2433/DEL/2014 7 HE FAILS TO RECOVER WHICH CREATE THE HARDSHIP TO HI M FOR THE DEPOSIT THE TAX WHEN HE TAKE THE LOAN FROM THE INDI A BULLS FOR THE PAYMENT OF TAXES. YOU ARE REQUESTED TO PLEASE CONDONE THE DELAY IF AN Y AS IT IS CLEAR FROM THE FACTS OF THE CASE THAT HE F UNDS WERE NOT AVAILABLE WITH THE APPELLANT TO PAY THE ADMITTE D TAX AT THE TIME OF FILING THE APPEAL AND IT IS BEYOND H IS CONTROL. 5.1 LD. CIT(A) DID NOT CONDONE THE DELAY BY STATING THAT ASSESSEE HAS RECEIVED RS. 9.15 CRORES BY CHEQUE AS SALE CONS IDERATION AND HAVE NOT DISCHARGED HIS DUTY TOWARDS THE EXCHEQUER. LD. CIT(A) HAS MENTIONED OTHER VARIOUS REASONS IN THE IMPUGNED ORD ER FOR NOT CONDONING THE DELAY IN DISPUTE, BUT WE FIND THAT AR E NOT RELEVANT ON THE ISSUE IN DISPUTE. WE ALSO FIND THAT LD. CIT(A ) HAS ALSO MENTIONED IN PARA 3.12 OF THE IMPUGNED ORDER THAT RIGHT TO AP PEAL MIGHT BE A STATUTORY RIGHT, BUT HOWEVER, THE SAME COMES ALONG WITH CERTAIN DUTIES. THE LAW HELPS TO PROTECT THE RIGHTS OF TH OSE WHO ARE DILIGENT AND NOT OF THOSE WHO SLEEP OVER THEIR RIGHTS AND DE LAY OF EACH DAY NEED TO BE EXPLAINED. THERE MUST BE GENUINE REASON ABLE CAUSE FOR DELAY. IN THE INSTANT CASE THE ASSESSEE HAS USED H IS MONEY FOR PERSONAL PURPOSES AND HE DID NOT CONSIDER THAT THE ASSESSEE HAS BEEN ABLE TO SHOW REASONABLE CAUSE FOR DAY IN FILING THE APPEAL WHICH IS ON ACCOUNT OF HIS DIVERSION OF TAX AMOUNT FROM HIS PE RSONAL USE AND HE DISMISSED THE APPEAL OF THE ASSESSEE BEING TIME BA RRED. ITA NO. 2433/DEL/2014 8 5.2 AFTER GOING THROUGH THE CONTENTIONS RAISED BY THE ASSESSEE ON THE DELAY POINT, WE FIND THAT ASSESSEE HAS CHALLENG ED THE ASSESSMENT ORDER DATED 28.12.2010 PASSED BY THE AO BEFORE THE LD.CIT(A) BY WAY OF FILING THE APPEAL ON 27.1.2011 WITHIN 30 DAYS ME ANING THEREBY THERE IS NO DELAY IN FILING THE APPEAL FILED BY THE ASESSEE, BUT THE ONLY FAULT OF THE ASSESSEE IS AT THAT TIME, THE ASSESSEE HAS NOT PAID THE ADMITTED TAX WHICH HE HAS LATER PAID. IT IS NOT DI SPUTED THAT ASSESSEE HAS PAID THE TAX DURING THE COURSE OF APPELLATE PR OCEEDINGS. AS ADMITTED BY THE LD. CIT(A) THAT RIGHT TO APPEAL MIG HT BE A STATUTORY RIGHT OF THE ASSESSEE, WE ARE OF THE CONSIDERED VIE W THAT ASSESSEE CANNOT BE DEPRIVED FROM THE RIGHT OF FILING THE APP EAL ON SMALL TECHNICAL GROUND. THE ASSESSEE HAS PAID THE ADMITT ED TAX DURING THE COURSE OF APPELLATE PROCEEDINGS AND APPEAL FILED BY THE ASSESSEE CANNOT BE DISMISSED ON THIS PLEA. ACTUALLY THERE I S NO DELAY IN FILING THE APPEAL, BUT THE DELAY IF ANY, IS ON ACCOUNT OF NON-PAYMENT OF ADMITTED TAX AND THE REASONS MENTIONED BY THE ASSES SEE IN PARA 3.2 OF THE IMPUGNED ORDER ARE REPRODUCED ABOVE IS VERY REASONABLE AND PLAUSIBLE WHICH CANNOT BE IGNORED IN A ROUTINE MANN ER. SO IN THE INTEREST OF JUSTICE, WE ARE CONDONING THE DELAY IN PAYING THE ADMITTED TAX BY THE ASSESSEE, AND DIRECTED THE LD. CIT(A) TO DECIDE THE ISSUE IN DISPUTE ON MERITS, AFTER GIVING FULL OPPORTUNITY TO THE ASSESSEE FOR SUBSTANTIATING HIS CLAIM. ITA NO. 2433/DEL/2014 9 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSSEE STAND ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 03/08/2016. SD/- SD/- (ANADI N. MISHRA) (H.S. SIDHU) ACCOUNTANT MEMBER J UDICIAL MEMBER DATED: 03/08/2016 *SR BHATNAGAR* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR