M/s. A-one Quality Impex Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 2633/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6823 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-05-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 01-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Assessment record
• Section: 143(3); 144

Judgement Text

1 ITA NO. 26 33/DEL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE VICE PRESIDENT & SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.-2633/DEL/2014 ( ASSESSMENT YEAR: 2007-08) A - ONE QUALITY IMPEX P. LTD. B-32, GYAN DEEP APARTMENTS, MAYUR VIHAR, NEW DELHI. AACCA3051A VS ITO WARD 1(1) NEW DELHI. ASSESSEE BY SH. R.S. SINGHVI, CA SH. SATYAJEET GOEL, CA REVENUE BY SH. SARABJEET SINGH, SR. DR ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER : THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 27.02.2014 PASSED BY THE LD. CIT (A) IV, NE W DELHI FOR AY 2007- 08 AND CHALLENGES THE IMPUGNED ACTION OF THE FIRST APPELLATE AUTHORITY IN DISMISSING THE APPEAL FILED BY THE ASSESSEE AGAINST ORDER PASSED U/S 143(3) OF DATE OF HEARING 03.05.2016 DATE OF PRONOUNCEMENT 28.07.2016 2 ITA NO. 26 33/DEL/2014 THE INCOME TAX ACT, 1961 AS BEING BARRED BY LIMITAT ION AND HENCE NOT MAINTAINABLE. 2. THE ASSESSEE IS SAID TO BE DEALING IN EXPORT OF GARMENTS, BOTH FABRIC AS WELL AS READY-MADE. THE RETURN OF IN COME WAS E-FILED DECLARING NIL INCOME. THE CASE WAS SELECTED FOR SCR UTINY. IT HAS BEEN THE ASSESSEES CONTENTION THAT DUE TO HEAVY LOSSES, THE BUSINESS OF THE COMPANY HAD BEEN CLOSED AND THE REGISTERED OFFICE OF THE CO MPANY WAS TAKEN OVER BY THE BANK AND SOLD TO SETTLE THE OUTSTANDING DUE TO THE BANK AND IT IS FOR THIS REASON THAT THE NOTICES ISSUED BY THE DEPARTME NT WERE NEVER RECEIVED BY THE ASSESSEE COMPANY. SUBSEQUENTLY, THE ASSESSMENT WAS COMPLETED U/S 144 OF THE ACT AT AN INCOME OF RS. 2,52,14,400/-. AGGRI EVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE FIRST APPELLATE AUTHORITY. IT IS A MATTER OF RECORD THAT THE APPEAL WAS FILED AFTER ALMOST THREE YEARS FROM THE PASSING OF THE ASSESSMENT ORDER. IN ITS APPLICATION FOR CONDONATIO N OF DELAY BEFORE THE LD. CIT (A), THE ASSESSEE FILED AN AFFIDAVIT STATING TH AT NO NOTICE WAS EVER RECEIVED BY THE ASSESSEE COMPANY OR ITS DIRECTORS A S THE REGISTERED OFFICE OF THE COMPANY WAS TAKEN OVER AND SOLD BY THE INDIAN O VERSEAS BANK. IT WAS ALSO SUBMITTED THAT THE ASSESSEE BECAME AWARE OF TH E EX-PARTE ASSESSMENT THROUGH THE AO ONLY IN DECEMBER 2012 AND A COPY OF A CERTIFIED ASSESSMENT ORDER WAS RECEIVED ONLY ON 15 TH FEBRUARY, 2013. HOWEVER, ON PERUSAL OF THE 3 ITA NO. 26 33/DEL/2014 ASSESSMENT RECORDS, THE LD. CIT (A) NOTICED THAT ON E SHRI PRAMOD SHARMA, THE AR OF THE ASSESSEE, HAD APPLIED FOR A COPY OF T HE CERTIFIED ASSESSMENT ORDER ON 31.10.2011 AND THE CERTIFIED COPY WAS SUPP LIED TO THE ASSESSEE ON 11.01.2012 ITSELF. THE APPEAL WAS FILED ON 14.03.20 13 AND THUS THERE WAS A DELAY OF 399 DAYS IN FILING THE APPEAL. THE LD. CIT (A) REQUIRED THE ASSESSEE TO EXPLAIN THE DELAY BUT NO EXPLANATION WAS FORTHCO MING FROM THE ASSESSEE. THE LD. CIT (A) HAS ALSO NOTED THAT THE FACT REGARD ING CHANGE IN THE REGISTERED OFFICE OF THE COMPANY WAS NOT INTIMATED TO THE AO AND THAT THE CHANGE OF ADDRESS IN PAN DATA WAS ALSO NOT UNDERTAK EN. ACCORDINGLY, THE LD. CIT (A) DISMISSED THE APPEAL OF THE ASSESSEE AS BARRED BY LIMITATION. AGGRIEVED, THE ASSESSEE HAS APPROACHED THE TRIBUNAL AND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(APPEALS) HAS ERRED IN LAW WHILE HOLDING THE THREE APPEALS FI LED AGAINST THE ASSESSMENT ORDER U/S 143(3)/144, PENALTY ORDER U/S 271(1)(B) AND PENALTY ORDER U/S 271(1)(C) BEING BARRED BY LIMITAT ION AND THEREFORE, NOT MAINTAINABLE. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (APPEALS) HAS ERRED IN LAW WHILE IGNORING THE REMAND REPORT O F THE AO WHICH SUPPORTS THE CLAIM OF THE APPELLANT COMPANY. 3. THE LD. AR SUBMITTED THAT AN APPLICATION UNDER R ULE 46A WAS FILED 4 ITA NO. 26 33/DEL/2014 BEFORE THE LD. CIT (A) FOR ADMISSION OF EVIDENCE RE LATING TO THE ADDITIONS MADE IN THE ASSESSMENT ORDER AND THE LD. CIT (A) HA D ALSO CALLED FOR A REMAND REPORT FROM THE AO ON THE ISSUE WHICH WAS DU LY RESPONDED TO BY ITO WARD 1(1), NEW DELHI VIDE COMMUNICATION DATED 1 7.01.2014 AND THE ASSESSEE ALSO SUBMITTED A REJOINDER TO THE REMAND R EPORT. HOWEVER, WITHOUT GOING INTO THE MERITS, THE LD. CIT (A) DISMISSED TH E ASSESSEES APPEAL AS BARRED BY LIMITATION. IT WAS FURTHER SUBMITTED THAT THE ENTIRE DELAY OCCURRED DUE TO THE NEGLIGENCE OF THE AR OF THE ASSESSEE, WH O AFTER OBTAINING A CERTIFIED COPY OF THE ASSESSMENT ORDER, DUE TO INADVERTENCE/OVERSIGHT/NEGLIGENCE FAILED TO FILE TH E APPEAL WITHIN THE PRESCRIBED TIME LIMIT AND HAD TO SUBSEQUENTLY APPLY FOR ANOTHER COPY OF THE CERTIFIED ORDER. IT WAS SUBMITTED THAT THE DELAY CO ULD NOT BE ATTRIBUTED TO ANY MALA FIDE ON THE PART OF THE ASSESSEE AND HENCE THE ASSESSEE SHOULD NOT BE DENIED THE BENEFIT OF CONTESTING THE CASE ON MERITS . 4. THE LD. DR VEHEMENTLY OBJECTED TO THE ASSESSEES PLEA AND SUBMITTED THAT THERE WAS A GROSS NEGLIGENCE ON THE PART OF THE ASS ESSEE WHICH DOES NOT DESERVE CONDONATION. IT WAS SUBMITTED THAT THE ASSE SSEES EXPLANATION WAS A MERE COVER-UP AND NOT SUFFICIENT TO WARRANT CONDONA TION OF THE DELAY. 5 ITA NO. 26 33/DEL/2014 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE DO AGREE WITH THE SUBMISSIONS OF THE LD. DR THAT THE ASSESSEE HAS BEEN VERY CARELESS AND NEGLIGENT IN KEEPING TRACK OF THE INCOME TAX PROCEEDINGS. HOWEVER, AT THE SAME TIME, WE ARE OF THE CONSIDERED OPINION THAT THE FACTS OF THE CASE DO NOT SUGGEST THAT THE ASSESSEE HAS ACTED IN A MALA FIDE MANNER OR THE REASON EXPLAINED IS ONLY A DEVICE TO COVER AN U LTERIOR MOTIVE. IT IS A SETTLED PROPOSITION OF LAW THAT A LENIENT VIEW SHOU LD BE TAKEN IN MATTERS PERTAINING TO CONDONATION OF DELAY. THE HONBLE APE X HIGH COURT HAS OPINED IN COLLECTOR, LAND ACQUISITION VS. MST KATIJ I AND OTHERS 167 ITR 471 (SC) AS UNDER: 1. ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITO RIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTI CE BEING DEFEATED. AS AGAINST THIS WHEN DELAY IS CONDONED THE HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARI NG THE PARTIES. 3. EVERY DAYS DELAY MUST BE EXPLAINED DOES NOT MAE NTHAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOURS DELAY , EVERY SECONDS DELAY? THE DOCTRINE MUST BE APPLIED IN A RATIONAL C OMMON SENSE PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS ARE PITTED AGAINST EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE DE SERVES TO BE PREFERRED FOR THE OTHER SIDE CANNOT CLAIM TO HAVE V ESTED RIGHT IN 6 ITA NO. 26 33/DEL/2014 INJUSTICE BEING DONE BECAUSE OF A NON-DELIBERATE DE LAY. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BE RESORTING TO DELAY. IN FACT HE RUNS A SERIOUS RISK. 6. IT MUST BE GRASPED THAT JUDICIARY IS RESPECTED N OT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNICAL GROUNDS BU T BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND R ESPECTFULLY FOLLOWING THE DICTA OF THE HONBLE APEX COURT IN THE CASE OF COLL ECTOR, LAND ACQUISITION VS. MST KATIJI AND OTHERS (SUPRA) WE ALLOW THE ASSE SSEES APPEAL AND DIRECT THE LD. CIT(A) TO ADMIT AND ADJUDICATE THE APPEAL O N MERITS AFTER GIVING THE ASSESSEE DUE OPPORTUNITY OF BEING HEARD. WE ALSO HA STEN TO ADD THAT THE ASSESSEE IS EXPECTED NOT TO SEEK UNNECESSARY ADJOUR NMENTS AND TO EXTEND ALL CO-OPERATION IN AN EARLY DISPOSAL OF THE APPEAL. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 28/07/2016 SD/- SD/- (G.D. AGRAWAL) (SUDHANSHU SRIVASTAVA ) VICE PRESIDENT JUDICIAL MEMBER DATED: 28/07/2016 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 7 ITA NO. 26 33/DEL/2014 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI