Pigeon exports International Pvt. Ltd, Delhi V. PCIT, Delhi-7, New Delhi

ITA 2520/DEL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1169 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2014-2015
• Appeal Filed On: 22-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SULEKHA VERMA
• Assessee Lawyers: LALIT KUMAR
• Keywords: Principle of natural justice; Reasonable cause; Corroborative evidences; Set aside
• Section: 69; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO. 2520/DEL/2019 ASSESSMENT YEAR: 2014-15 PIGEON EXPORTS INTERNATIONAL VS. PR. CIT, PRIVATE LIMITED, DELHI -7, 306, KRISHNA HOUSE, ROOM NO. 394A, BHARAT RAM ROAD, C.R. BLDG., DARYAGANJ, I.P. ESTATE, DELHI 92 NEW DELHI 2 (PAN: AAACE9888P) (ASSESSEE) (RESPONDENT) ASSESSEE BY : SH. GAUTAM JAIN, ADV. & SH LALIT KUMAR, ADV. REVENUE BY : SMT. SULEKHA VERMA, CIT(DR) ORDER PER H.S. SIDHU, JM THIS APPEAL IS FILED BY ASSESSEE AGAINST THE ORDER DATED 23.1.2019 PASSED BY THE LD. PR. COMMISSIONER OF INCOME TAX, D ELHI-7, NEW DELHI RELATING TO ASSESSMENT YEAR 2014-15 ON THE FOLLOWIN G GROUNDS:- 1. THAT ORDER DATED 23.01.2019 PASSED ULS 263 OF THE A CT BY LEARNED PR. COMMISSIONER OF INCOME TAX, DELHI - 7, NEW DELH I HAS BEEN MADE WITHOUT SATISFYING THE STATUTORY PRECONDITIONS CONTAINED IN THE ACT AND IS THEREFORE WITHOUT JURISDICTION AND THUS, DESERVES TO BE QUASHED AS SUCH. 2. THAT THE LEARNED PR. COMMISSIONER OF INCOME TAX HAS FRAMED THE IMPUGNED ORDER WITHOUT GRANTING ADEQUATE OPPORTUNIT Y TO THE APPELLANT AND AS SUCH THE IMPUGNED ORDER IS CONTRAR Y TO PRINCIPLES OF NATURAL JUSTICE AND HENCE VITIATED. 2.1 THAT THE LEARNED PR. COMMISSIONER OF INCOME TAX HAS FAILED TO APPRECIATE THAT THE APPELLANT HAD ENGAGED AN AUTHOR IZED 2 REPRESENTATIVE WHO ON ACCOUNT REASONABLE CAUSE OF CIRCUMSTANCES COULD NOT CAUSE APPEARANCE ON THE LAS T DATE FIXED FOR HEARING; AND THEREFORE, IMPUGNED ORDER WITHOUT ISSUING ANY FRESH NOTICE TO THE APPELLANT IS A VITIATED ORDER. 3. THAT THE LEARNED PR. COMMISSIONER OF INCOME TAX HAS ALSO ERRED BOTH IN LAW AND ON FACT IN CONCLUDING THE ASSESSEE HAD UNDERTAKEN TRANSACTION PENNY STOCK COMPANY AND THE TRANSACTION WAS ILLEGAL TRANSACTION WITHIN THE PROVISION OF SECTION 69 OF THE ACT. I 3.1 THAT THE LEARNED PR. COMMISSIONER OF INCOME TAX HAS FAILED TO APPRECIATE THAT ONCE THE LEARNED ASSESSING OFFICER ON EXAMINATION OF THE FACTS ON RECORD AND ALTER MAKING ALL POSSIBL E ENQUIRIES HAD ACCEPTED CLAIM OF THE APPELLANT THEN SUCH AN ORDER OF ASSESSMENT COULD NOT BE REGARDED AS ERRONEOUS IN AS MUCH AS PR EJUDICIAL TO THE INTEREST OF REVENUE MERELY BECAUSE THE LEARNED PR. COMMISSIONER OF INCOME TAX HAD A DIFFERENT OPINION AND THAT TOO, WI THOUT HAVING ESTABLISHED 111 ANY MANNER THAT, VIEW ADOPTED BY TH E LEARNED ASSESSING OFFICER WAS AN UNSUSTAINABLE VIEW. 3.2 THAT THE LEARNED PR. COMMISSIONER OF INCOME T AX HAS ALSO FAILED TO APPRECIATE THAT, U/S 263 OF THE ACT, AN ORDER OF AS SESSMENT CANNOT BE SET-ASIDE TO SIMPLY TO MAKE FURTHER ENQUIRIES AN D THEREAFTER PASS FRESH ORDER OF ASSESSMENT AND AS SUCH, IMPUGNED ORD ER IS LEGALLY INVALID. 3.3 THAT THE FINDING THAT, 'THE ASSESSEE COMPANY HA S UNDERTAKEN TRANSACTIONS OF PENNY STOCK AMOUNTING TO RS. 45,78, 441/- WITH SRK INDUS WHICH IS A PENNY STOCK COMPANY AND SHARE PRIC E OF WHICH IS ARTIFICIALLY LIFTED ON THE STOCK EXCHANGES IN ORDER TO BOOK EITHER LONG TERM CAPITAL GAIN OR SHORT TERM CAPITAL LOSS AND TO PASS ON BENEFIT OF THE RECIPIENT. THE ENTIRE TRANSACTION STANDS ILL EGAL WITHIN THE PROVISION OF SECTION 69 OF THE ACT I.E. UNDISCLOSED INVESTMENT AS PER GUIDELINES CONTAINED IN CBDT LETTER F.NO. 287/30/20 14-IT (INVESTIGATION -II)- VOL 3 DATED 16.3.216' IS FACTU ALLY INCORRECT, 3 CONTRARY TO LAW AND IS OTHERWISE TOO BEYOND THE SCO PE AND AMBIT OF SECTION 263 OF THE ACT, APART FROM BEING UNSUBSTANT IATED, CONJECTURE, VAGUE AND, ARBITRARY . 3.4 THAT THE CONCLUSION THAT, 'NO ENQUIRY/DETAILS HAVE BEEN REQUISITIONED BY THE ASSESSING OFFICER AT THE TIME OF SCRUTINY ASSESSMENT AND THE ABOVE COMPANY IS ALSO DEFINED AS BOGUS COMPANY AS PER LIST CIRCULATED BY CBDT AS A PENNY S TOCK COMPANY. IN VIEW OF THE ABOVE, IT IS EVIDENT THAT THE PENNY STOCK TRANSACTION OF RS. 45,78,441/- HAS NOT BEEN TAKEN INTO CONSIDER ATION WHILE DECIDING THE SCRUTINY ASSESSMENT' IS ALSO CONTRARY TO FACTS AND EVIDENCE ON RECORD AND NOT IN ACCORDANCE WITH LAW A ND THEREFORE UNSUSTAINABLE. 3.5 THAT FURTHER MORE THE LEARNED PRINCIPAL COMMI SSIONER OF INCOME TAX HAS PROCEEDED TO SET ASIDE THE ORDER ON MERE SPECUL ATION, GENERALIZED OBSERVATIONS, THEORETICAL ALLEGATIONS A ND ASSERTIONS, WITHOUT THERE BEING ANY SUPPORTING EVIDENCE AND IS THEREFORE NOT IN ACCORDANCE WITH LAW. 3.6 THAT IMPUGNED ORDER IS BASED ON PREMEDITATED A ND PRECONCEIVED SUPPOSITION ASSUMPTION AND PERCEPTION AND NOT ON OB JECTIVE APPRECIATION OF FACTS AND EVIDENCE GATHERED DURING THE COURSE OF ASSESSMENT AND HENCE THE ILLEGAL ACTION BE HELD TO BE VITIATED AND COLOURED BY AN ARBITRARY APPROACH WHICH FINDS NO SA NCTION IN LAW. 3.7 THAT EVEN THE DIRECTION AND CONCLUSION THAT AS SESSMENT ORDER IS ERRONEOUS IS ILLEGAL, INVALID IN EXCESS OF JURISDIC TION APART FROM BEING LEGALLY, FACTUALLY MISCONCEIVED AND UNSUSTAINABLE. PRAYER IT IS THEREFORE PRAYED THAT, IMPUGNED ORDER MADE UN DER SECTION 263 OF THE ACT DATED 23.01.2019 BE HELD TO BE WITHOUT J URISDICTION AND, THEREFORE BE QUASHED AND APPEAL OF THE APPELLANT CO MPANY BE ALLOWED. 4 2. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NO T DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE NOT REPEATED HERE FOR THE SAKE OF BREVITY. 3. DURING THE HEARING, LD. COUNSEL FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TOWARDS THE GROUND NO. 2 IN WHICH THE ASS ESSEE HAS STATED THAT PR. CIT HAS DISMISSED THE APPEAL OF THE ASSESSEE W ITHOUT GRANTING ADEQUATE OPPORTUNITY TO THE ASSESSEE AND SUCH THE IMPUGNED ORDER IS CONTRARY TO PRINCIPLES OF NATURAL JUSTICE. HENCE, HE REQUESTED THAT THE ISSUES IN DISPUTE MAY BE REMITTED BACK TO THE FILE OF THE PR. CIT TO DECIDE THE SAME AFRESH, AS PER LAW AFTER GIVING ADEQUATE O PPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4. ON THE CONTRARY, LD. CIT(DR) RAISED THE OBJECTI ON ON THE REQUEST OF THE LD. COUNSEL FOR THE ASSESSEE AND STATED THAT ASSESSEE REMAINED NON-COOPERATIVE BEFORE THE LD. PR. CIT. HOWEVER, L D. PR. CIT HAS PASSED A WELL REASONED ORDER AGAINST THE ASSESSEE. HENCE, SHE STATED THAT THE ISSUES IN DISPUTE MAY NOT BE SENT BACK TO THE FILE OF PR. CIT FOR FRESH ADJUDICATION. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS, WE FIND THAT ASSESSEE REMAINED NON-COOPERATIVE BEFORE THE L D. PR. CIT. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE PRESE NT CASE AND IN THE INTEREST OF JUSTICE, THE ISSUES IN DISPUTE REQUIRES TO BE ADJUDICATED BY THE LD. PR. CIT, AFRESH. THEREFORE, WE REMIT BACK THE I SSUES IN DISPUTE TO THE FILES OF THE LD. PR. COMMISSIONER OF INCOME TAX, DE LHI -7 FOR HEARING ON 21.10.2019 AT 10.00 AM WITH THE DIRECTIONS TO DECIDE THE ISSUES IN DISPUTE AFRESH, AFTER GIVING ADEQUATE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE. IT IS MADE CLEAR THAT NO NOTICE FOR HEAR ING WILL BE ISSUED BY THE LD. PR. CIT. ASSESSEE IS ALSO DIRECTED THROUGH HIS COUNSEL TO APPEAR BEFORE THE LD. PR. CIT ON 21.10.2019 AT 10.00 AM FOR HEARING TO SUBSTANTIATE HIS CASE AND DID NOT TAKE ANY UNNECESS ARY ADJOURNMENT IN THE CASE. 5 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 13/09/2019. SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 13/09/2019 SRB COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES