Durgesh Autofin P.Ltd, Bijnor V. ACIT, Circle- 1, Muzaffarnagar

ITA 2605/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2611 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 13-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Keywords: Rejection of books of accounts; Capital expenditure
• Section: 143(3); 271D; 263

Judgement Text

ITA NOS.- 2605 & 2606/DEL/2018. M/S DURGESH AUTOFIN PVT. LTD. PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: B: NEW DELHI) BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NOS:- 2605 & 2606/DEL/2018 ( ASSESSMENT YEAR: 2013-14) M/S DURGESH AUTOFIN PVT. LTD., C/O SHRI PANKAJ KUMAR, DIRECTOR S/O LATE SHRI TEJPAL SINGH, MANDI KOTLA NEAR NEHRU MURTI, CHANDPUR, BIJNORE. VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE (1), MEERUT ROAD, MUZAFFARNAGAR-251002. PAN NO: AACCD0768P APPELLANT RESPONDENT ASSESSEE BY : SHRI VIVEK BANSAL, ADV. REVENUE BY : MS. NIDHI SRIVASTAVA, CIT(DR) ORDER PER BENCH ITA NO. 2605/DEL/2018 HAS BEEN FILED BY THE ASSESSE E AGAINST THE ORDER DATED 30.03.2018 OF LEARNED COMMISSIONER OF INCOME TAX (A PPEALS), MUZAFFARNAGAR, [LD. CIT(A), FOR SHORT] IN APPEAL NO. -1722-1249-1160-5 16 AND ITA NO. 2606/DEL/2018 HAS ALSO BEEN FILED BY THE ASSESSEE AGAINST SEPARATE OR DER DATED 30.03.2018 OF LD. CIT(A), MUZAFFARNAGAR IN APPEAL NO. 5920-6403-1140-117. FO R THE SAKE OF CONVENIENCE AND BREVITY THESE TWO APPEALS FILED BY ASSESSEE IN INCOME TAX A PPELLATE TRIBUNAL (ITAT, FOR SHORT) ITA NOS.- 2605 & 2606/DEL/2018. M/S DURGESH AUTOFIN PVT. LTD. PAGE 2 OF 8 ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER. THE GROUNDS OF APPEALS ARE AS UNDER: ITA NO.- 2605/DEL/2018 1 . THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AS MUCH AS IN FACT IN DISMISSING THE APPEAL FIL ED BY THE ASSESSEE, CONTESTING THE ADDITIONS MADE IN THE ASSESSMENT ORD ER PASSED U/S 143(3) OF THE ACT, ON THE GROUND THAT THE ASSESSMENT ORDER DA TED 29-03-2016 WAS SET ASIDE BY THE PR. CIT MUZAFFARNAGAR VIDE HIS ORDER D ATED 13-03-2018 PASSED U/S 263 OF THE ACT. WHILE DISMISSING THE APPEAL, LD. C IT(A) HAS FAILED TO APPRECIATE THAT THE APPEAL FILED BY ASSESSEE WAS AL READY FINALLY HEARD BY LD. CIT(A) ON 09-01-2018 I.E. MUCH BEFORE THE DATE ON W HICH THE REVISION PROCEEDINGS WERE STARTED BY PR. CIT MUZAFFARNAGAR V IDE SHOW-CAUSE NOTICE DATED 22-01-2018. 2. THE ORDER PASSED BY CIT(A) IS INVALID AS HE DID NOT FOLLOW CBDTS INSTRUCTION NO. F. NO. DGIT (VIG.)/HQ/SI/APPEALS/2017-18/9959 D ATED 08-03-2018, ACCORDING TO WHICH THE ORDER WAS REQUIRED TO BE PAS SED WITHIN 15 DAYS OF THE LAST DATE OF HEARING. 3. THAT LD. CIT(A) HAS FAILED TO APPRECIATE THAT TH E ORDER PASSED BY PR. CIT MUZAFFARNAGAR U/S 263 IN INVALID IN THE EYES OF LAW . IN ANY CASE, LD. CIT(A) WAS REQUIRED TO GIVE REASONABLE OPPORTUNITY OF HEAR ING TO THE ASSESSEE BEFORE DISMISSING THE APPEAL. IN ABSENCE OF SUCH OPPORTUN ITY OF HEARING THE ORDER PASSED BY CIT(A) IS VITIATED IN LAW. 4. EACH OF THE ABOVE GROUND IS INDEPENDENT AND WITH OUT PREJUDICE TO THE OTHER GROUNDS OF APPEAL PREFERRED BY THE APPELLANT. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY, OMIT, SUBSTITUTE OR AMEND THE ABOVE GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT TH E TIME OF HEARING OF THE APPEAL, SO AS TO ENABLE THE HONBLE TRIBUNAL TO DEC IDE THIS APPEAL ACCORDING TO LAW. ITA NO. 2606/DEL/2018 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE C ASE, LD. CIT(A) HAS ERRED IN LAW AS MUCH AS IN FACT IN DISMISSING THE APPEAL FIL ED BY THE ASSESSEE, CONTESTING THE LEVY OF PENALTY OF RS. 33,60,500/- U /S 271D OF THE ACT, ON THE GROUND THAT THE ASSESSMENT ORDER DATED 29-03-2016 W AS SET ASIDE BY THE PR. CIT MUZAFFARNAGAR VIDE HIS ORDER DATED 13-03-2018 P ASSED U/S 263 OF THE ACT. ITA NOS.- 2605 & 2606/DEL/2018. M/S DURGESH AUTOFIN PVT. LTD. PAGE 3 OF 8 WHILE DISMISSING THE APPEAL, LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE APPEAL FILED BY THE ASSESSEE WAS ALREADY FINALLY HEARD BY CIT(A) ON 09-01-2018 I.E. MUCH BEFORE THE DATE ON WHICH THE REVISION PROCEEDI NGS WERE STARTED BY PR. CIT MUZAFFARNAGAR VIDE SHOW-CAUSE NOTICE DATED 22-0 1-2018. 2. THE ORDER PASSED BY CIT(A) IS INVALID AS HE DID NOT FOLLOW CBDTS INSTRUCTIONS NO. F. NO. DGIT (VIG.)/HQ/SI/APPEALS/2017-18/9959 D ATED 08-03-2018, ACCORDING TO WHICH THE ORDER WAS REQUIRED TO BE PAS SED WITHIN 15 DAYS OF THE LAST DAYS OF HEARING. 3. THAT LD. CIT(A) HAS FAILED TO APPRECIATE THAT TH E ORDER PASSED BY PR. CIT MUZAFFARNAGAR U/S 263 IN INVALID IN THE EYES OF LAW . IN ANY CASE, LD. CIT(A) WAS REQUIRED TO GIVE REASONABLE OPPORTUNITY OF HEAR ING TO THE ASSESSEE BEFORE DISMISSING THE APPEAL. IN ABSENCE OF SUCH OPPORTUN ITY OF HEARING THE ORDER PASSED BY CIT(A) IS VITIATED IN LAW. 4. EACH OF THE ABOVE GROUND IS INDEPENDENT AND WITH OUT PREJUDICE TO THE OTHER GROUNDS OF APPEAL PREFERRED BY THE APPELLANT. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY, OMIT, SUBSTITUTE OR AMEND THE ABOVE GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT TH E TIME OF HEARING OF THE APPEAL, SO AS TO ENABLE THE HONBLE TRIBUNAL TO DEC IDE THIS APPEAL ACCORDING TO LAW. (2) THE ASSESSMENT ORDER U/S 143(3) WAS PASSED ON 29.0 3.2016 WHEREIN THE FOLLOWING ADDITIONS WERE MADE: REJECTION OF BOOKS OF ACCOUNTS U/S 145(3) LOSS DISALLOWED RS. 2,17,09,248 ADDITION U/S 68 RS. 3,77,000 ADDITION U/S 41(1) RS. 3,88,79,832 DISALLOWANCE OF CLAIM AS TO CAPITAL EXPENDITURE RS. 1,14,775 (2.1) THE ASSESSING OFFICER (AO, FOR SHORT), IN PARAGR APH 4 OF THE ASSESSMENT ORDER, TAKING NOTICE OF THE AUDIT REPORT, ALSO TOOK THE VI EW THAT THERE WAS VIOLATION OF SECTION 269SS OF INCOME TAX ACT, 1961 (I.T. ACT, FOR SHOR T) ON THE PART OF THE ASSESSEE, FOR WHICH, ACCORDING TO THE AO, PENALTY PROCEEDING U/S 271D OF I.T. ACT WERE REQUIRED TO BE INITIATED. ITA NOS.- 2605 & 2606/DEL/2018. M/S DURGESH AUTOFIN PVT. LTD. PAGE 4 OF 8 ADDITIONAL CIT, RANGE-1, MUZAFFARNAGAR LEVIED PENAL TY AMOUNTING TO RS. 33,60,500/- U/S 271D OF I.T. ACT, VIDE ORDER DATED 05/12/2016. (2.2) THE ASSESSEE FILED AFORESAID APPEAL NO. 1722-1249- 1160-516 BEFORE THE LD. CIT(A) AGAINST AFORESAID ASSESSMENT ORDER DATED 29.03.2016 . THE ASSESSEE ALSO FILED SEPARATE APPEAL VIDE APPEAL NO. 5920-6403-1140-117 BEFORE TH E LD. CIT(A) AGAINST AFORESAID ORDER DATED 30.03.2018 PASSED U/S 271D OF I.T. ACT. (2.3) IN THE MEANTIME, LD. PRINCIPAL COMMISSIONER OF INC OME TAX, MUZAFFARNAGAR (PR. CIT, FOR SHORT) PASSED ORDER DATED 13.03.2018 U/S 263 OF I.T. ACT WHEREUNDER SHE SET ASIDE THE AFORESAID ASSESSMENT ORDER DATED 29.03.20 16 AND DIRECTED THE AO TO PASS FRESH ASSESSMENT ORDER IN ACCORDANCE WITH LAW. THE LD. C IT(A) TOOK NOTICE OF THE AFORESAID ORDER DATED 13.03.2018 OF THE LD. PR. CIT PASSED U/ S 263 OF I.T. ACT; AND VIDE SEPARATE IMPUGNED ORDERS DATED 30.03.2018 IN APPEAL NOS. 172 2-1249-1160-516 AND 5920-6403- 1140-11; DISMISSED THE APPEALS FILED BY THE ASSESSE E. RELEVANT PORTIONS OF THE AFORESAID IMPUGNED ORDERS OF CIT(A), EACH DATED 30.03.2018, A RE REPRODUCED AS UNDER: RELEVANT PORTION OF ORDER OF LD. CIT(A) IN AFORESA ID APPEAL NO.- 1722-1249-1160-516 4. THE APPELLANT HAS MADE WRITTEN SUBMISSIONS WHICH ARE PLACED ON RECORD. IT IS GATHERED THAT THE ASSESSMENT ORDER PASSED BY THE AO U/S 143(3) OF THE ACT DATED 29-03-2016 HAS BEEN SET ASIDE BY THE PRINCIPAL COMM ISSIONER OF INCOME TAX, MUZAFFARNAGAR VIDE ORDER DATED 13-03-2018 U/S 263 O F THE ACT WITH THE DIRECTION TO PASS THE FRESH ASSESSMENT ORDER IN ACCORDANCE WITH THE PROVISIONS OF THE LAW. THUS, IT IS NOTED THAT THE GROUNDS OF APPEAL RAISED BY THE APPELLANT AS ABOVE HAVE BECOME INFRACTUOUS AS THE ASSESSMENT ORDER FROM WHI CH THE SAME EMANATES DOES NOT EXIST AS ON DATE. THEREFORE, WITHOUT GOING INT O MERITS OF THE SUBMISSION OF THE APPELLANT MADE DURING THE APPELLATE PROCEEDINGS, TH E GROUNDS OF APPEAL AS ITA NOS.- 2605 & 2606/DEL/2018. M/S DURGESH AUTOFIN PVT. LTD. PAGE 5 OF 8 REPRODUCED ABOVE ARE DISMISSED AS THE SAME HAVE LOS T THEIR RELEVANT IN VIEW OF THE ABOVE FACTS. RELEVANT PORTION OF ORDER OF LD. CIT(A) IN AFORESA ID APPEAL NO.- 5920- 6403-1140-11; 4. THE APPELLANT HAS MADE WRITTEN SUBMISSIONS WHICH ARE PLACED ON RECORD. IT IS GATHERED THAT THE ASSESSMENT ORDER PASSED BY THE AO U/S 143(3) OF THE ACT DATED 29-03-2016 HAS BEEN SET ASIDE BY THE PRINCIPAL COMM ISSIONER OF INCOME TAX, MUZAFFARNAGAR VIDE ORDER DATED 13-03-2018 U/S 263 O F THE ACT WITH THE DIRECTION TO PASS THE FRESH ASSESSMENT ORDER IN ACCORDANCE WITH THE PROVISIONS OF THE LAW. THUS, IT IS NOTED THAT THE GROUNDS OF APPEAL RAISED BY THE APPELLANT AS ABOVE HAVE BECOME INFRACTUOUS AS THE PENALTY ORDER U/S 271D OF THE ACT IS BASED UPON THE ASSESSMENT ORDER (SUPRA) WHICH DOES NOT EXIST AS ON DATED. THEREFORE, WITHOUT GOING INTO MERITS OF THE SUBMISSION OF THE APPELLAN T MADE DURING THE APPELLATE PROCEEDINGS, THE GROUNDS OF APPEAL AS REPRODUCED AB OVE ARE DISMISSED AS THE SAME HAVE LOST THEIR RELEVANT IN VIEW OF THE ABOVE FACTS . (2.4) THE PERUSAL OF THE AFORESAID IMPUGNED ORDERS, EAC H DATED 30.03.2018, PASSED BY THE LD. CIT(A), RELEVANT PORTIONS OF WHICH HAVE BEE N REPRODUCED ALREADY IN FOREGOING PARAGRAPH (2.3) OF THIS ORDER; SHOWS THAT THE LD. CIT(A) DISMISSED THE APPEALS OF THE ASSESSEE WITHOUT ADJUDICATING THE DISPUTED ISSUES O N MERITS, ON THE GROUND THAT THE APPEALS HAD BECOME INFRUCTUOUS AFTER THE AFORESAID ORDER DA TED 13.03.2018 OF THE LD. PR. CIT PASSED U/S 263 OF I.T. ACT WHEREIN THE LD. PR. CIT HAD SET ASIDE THE AFORESAID ASSESSMENT ORDER DATED 29.03.2016. THE PRESENT APPEALS BEFORE US WERE FILED BY THE ASSESSEE AGAINST THESE AFORESAID SEPARATE ORDERS OF THE LD. CIT(A), EACH DATED 30.03.2018. (2.5) SUBSEQUENTLY, THE ASSESSEE FILED APPEAL IN ITAT, V IDE ITA NO.- 2539/DEL/2018 AGAINST THE AFORESAID ORDER DATED 13.03.2018 OF LD. PR. CIT. VIDE ORDER DATED 09.10.2018 IN ITA NO.-2539/DEL/2018 FOR THE ASSESSMENT YEAR 20 13-14, CO-ORDINATE BENCH OF ITAT, DELHI QUASHED THE AFORESAID ORDER DATED 13.03.2018 OF LD. PR. CIT AND ALLOWED ASSESSEES APPEAL. ITA NOS.- 2605 & 2606/DEL/2018. M/S DURGESH AUTOFIN PVT. LTD. PAGE 6 OF 8 (3) AT THE TIME OF HEARING BEFORE US, THE LD. COUNSEL FOR ASSESSEE SUBMITTED THAT THE LD. CIT(A) HAD DISMISSED THE APPEALS OF THE ASSESSEE WI THOUT ADJUDICATING THE DISPUTED ISSUES ON MERITS, ON THE GROUND THAT THE APPEALS HAD BECOM E INFRUCTUOUS AFTER THE AFORESAID ORDER DATED 13.03.2018 OF THE LD. PR. CIT PASSED U/S 263 OF I.T. ACT WHEREIN THE LD. PR. CIT HAD SET ASIDE THE AFORESAID ASSESSMENT ORDER DATED 29.0 3.2016. HOWEVER, THE LD. COUNSEL FOR ASSESSEE SUBMITTED, NOW THAT THE AFORESAID ORDER DA TED 13.03.2018 OF THE LD. PR. CIT PASSED U/S 263 OF I.T. ACT HAS BEEN QUASHED BY ITAT VIDE AFORESAID ORDER DATED 09.10.2018; THE IMPUGNED ORDERS OF THE LD. CIT(A) S HOULD BE SET ASIDE WITH THE DIRECTION TO PASS FRESH ORDERS ON MERITS OF THE ISSUES IN DISPUT E IN THE APPEALS FILED BY THE ASSESSEE BEFORE CIT(A) IN APPEAL NOS.- 1722-1249-1160-516 AN D 5920-6403-1140-11. THE LD. CIT(DR) APPEARING FOR REVENUE AGREED WITH THIS SUBM ISSION OF THE LD. COUNSEL FOR ASSESSEE. (3.1) WE HAVE HEARD BOTH SIDES PATIENTLY. WE HAVE PERUS ED THE MATERIALS AVAILABLE ON RECORD CAREFULLY. BOTH SIDES AGREE THAT THE AFORES AID ORDER DATED 13.03.2018 OF THE LD. PR. CIT PASSED U/S 263 OF I.T. ACT HAVING BEEN QUASHED BY ITAT VIDE AFORESAID ORDER DATED 09.10.2018; THE IMPUGNED ORDERS OF THE LD. CIT(A) S HOULD BE SET ASIDE WITH THE DIRECTION TO PASS FRESH ORDERS ON MERITS OF THE ISSUES IN DISPUT E IN THE APPEALS FILED BY THE ASSESSEE BEFORE CIT(A) IN AFORESAID APPEAL NOS.- 1722-1249-1 160-516 AND 5920-6403-1140-11. WE FIND THAT THE AFORESAID ORDER DATED 13.03.2018 OF L D. PR. CIT [ON THE BASIS OF WHICH THE LD. CIT(A) TREATED THE ASSESSEES APPEALS AS INFRUCTUOU S AND DISMISSED ASSESSEES APPEALS WITHOUT ADJUDICATING DISPUTED ISSUES ON MERITS] DOE S NOT SURVIVE AS ON DATE, HAVING BEEN QUASHED BY ITAT VIDE AFORESAID ORDER DATED 09.10.20 18. THEREFORE, IN FITNESS OF THINGS, AS ITA NOS.- 2605 & 2606/DEL/2018. M/S DURGESH AUTOFIN PVT. LTD. PAGE 7 OF 8 BOTH SIDES AGREE, WE SET ASIDE THE IMPUGNED ORDERS OF THE LD. CIT(A) WITH THE DIRECTION TO THE LD. CIT(A) TO PASS FRESH ORDERS ON ISSUES IN DI SPUTE IN THE APPEALS FILED BY THE ASSESSEE VIDE AFORESAID APPEAL NOS.- 1722-1249-1160-516 AND 5920-6403-1140-11. (4) IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE AR E PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 0 8 TH DAY OF MARCH, 2019. SD/- SD/- (DIVA SINGH) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 08.03.2019 (POOJA) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NOS.- 2605 & 2606/DEL/2018. M/S DURGESH AUTOFIN PVT. LTD. PAGE 8 OF 8 DATE OF DICTATION DIRECT ON COMPUTER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER