Bhandari Fibretech P.Ltd, New Delhi V. ITO, Ward-4(4), New Delhi

ITA 2694/DEL/2019

• Counselvise Citation: [2019] 114 COUNSELVISE.COM (IT) 2188 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 28-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHALINI VERMA
• Assessee Lawyers: RAM GUPTA
• Section: 250; 251; 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ANEW DLEHI BEFORE SHRI G.S. PANNU, VICE PRESIDENT AND SHRI K. NARSIMHA CHARY, JUDICIAL MEMBER ITA.NO.2694/DEL/2019 ASSESSMENT YEAR: 2012-13 M/S. BHANDARI FIBRETECH PVT. LTD. VS ITO, S-20, OKHLA INDUSTRIAL AREA, WARD-4(4), PHASE-2, NEW DELHI NEW DELHI-110020. PAN-AACCB6563A (APPLICANT) (RESPONDENT) APPELLANT BY: SHRI RAM GUPTA, C.A. RESPONDENT BY: MS. SHALINI VERMA, CIT-DR DATE OF HEARING: 10/10/2019 DATE OF ORDER : 18 /11/2019 ORDER PER K. NARSIMHA CHARY, J.M. FELT AGGRIEVED BY THE ORDER DATED 31/01/2017 IN APP EAL NO.262/2015-16, PASSED BY THE COMMISSIONER OF INCOM E TAX (APPEALS)-2, NEW DELHI, M/S BHANDARI FIBRETECH PVT. LTD. (ASSESSEE) FILED THIS APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY AND FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012-13 ON 30/09/2012, DECLARING AN INCOME OF RS.10,66,490/-. DURING THE ITA.NO-2694/DEL/2019 ASSESSMENT YEAR: 2012-13 PAGE | 2 ASSESSMENT PROCEEDINGS, LD. ASSESSING OFFICER ISSUE D SEVERAL NOTICES TO THE ASSESSEE BUT IN VAIN AND THEREFORE, WHILE RE CORDING THAT HE WAS LEFT WITH NO OPTION BUT TO FINALISE THE ASSESSM ENT AS BEST JUDGMENT ASSESSMENT IN THE MANNER PROVIDED U/S 144 OF THE INCOME TAXACT, 1961 (THE ACT) LD. ASSESSING OFFICER PROC EEDED WITH THE WORK OF ASSESSMENT.AFTER CONSIDERING THE BALANCE SH EET OF THE COMPANY AS ON 31/03/2012 FOUND SHARE APPLICATION MO NEY TO THE TUNE OF RS.2.956 CRORES AGAINST UNALLOTTED SHARES. LD. ASSESSING OFFICER FURTHER FOUND THAT THERE IS PAUCITY OF INFO RMATION TO REACH ANY CONCLUSION AS TO THE FINANCIAL STATUS OF THE CO MPANY, SUFFICIENCY OF AUTHORISED CAPITAL TO COVER THE SHARE CAPITAL AM OUNT RESULTING FROM THE ALLOTMENT OF THE SHARES, ETC. HELD THAT TH E SAID AMOUNT HAS TO BE ADDED TO THE INCOME OF THE ASSESSEE U/S 68 OF THE ACT IN ABSENCE OF THE MATERIAL ESTABLISHING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS OF THE SHARE AP PLICANTS. LD. ASSESSING OFFICER ACCORDINGLY ADDED SUCH AMOUNT OF RS.2.956 CORES TO THE INCOME OF THE ASSESSEE. 3. ASSESSEE PREFERRED APPEAL TO THE LD. CIT(A). THE IMPUGNED ORDER REVEALS THAT SEVERAL OPPORTUNITIES WERE GRANT ED TO THE ASSESSEE BY WAY OF ISSUING SEVERAL NOTICES TO COOPE RATE WITH THE DISPOSAL OF THE APPEAL ON MERITS. ON SOME DATES, TH ERE WAS NO REPRESENTATION AND ON SOME DATES THE ADJOURNMENT WA S SOUGHT. THE LD. CIT(A) RECORDED THAT THE ASSESSEE COMPANY W AS SUBMITTING ONE SINGLE LETTER OF ADJOURNMENT BY THREE DIFFERENT MODES I.E. VIA ITA.NO-2694/DEL/2019 ASSESSMENT YEAR: 2012-13 PAGE | 3 SPEED POST, REGISTRY POST AND COURIER BUT DID NOT E NTER APPEARANCE WITH COMPLETE DETAILS, DESPITE THE FACT THAT THE AP PEAL WAS PENDING FROM 2015. IN THESE CIRCUMSTANCES, LD. CIT(A) PROCE EDED TO DECIDE THE MATTER EX-PARTE BASING ON THE MATERIAL ON RECOR D. AFTER ADVERTING TO THE FACTS AND THE CASE LAWS ON THE ASP ECT, LD. CIT(A) DISMISSED THE APPEAL 4. CHALLENGING SUCH DISMISSAL OF APPEAL, ASSESSEE P REFERRED THIS APPEAL BEFORE US STATING THAT THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN CONCLUDING THAT THE ASSESSEE DID NOT WANT TO PRO DUCE THE EVIDENCES AS IT WOULD EXPOSE THE TRANSACTION OF RS. 2.956 CRORES AS NOT GENUINE AND FRAUDULENT. ACCORDING TO THE LD. AR , THE TRANSACTIONS WERE GENUINE ONE. FURTHER SUBMISSION O F THE LD. AR IS THAT THE IMPUGNED ORDER DATED 31/01/2017 WAS NOT SE RVED UPON THE ASSESSEE BUT IT WAS ONLY AT THE REQUEST OF THE ASSESSEE, THE CERTIFIED COPY WAS ISSUED ON 20/03/2019. IT IS FURT HER PLEADED THAT THE ASSESSEE WAS NOT GIVEN ADEQUATE OPPORTUNITY BEF ORE CONFIRMING THE ADDITION. 5. IT IS FURTHER SUBMITTED THAT WHETHER OR NOT THE ASSESSEE ATTENDED BEFORE THE CIT(A) AND WHETHER OR NOT THE A SSESSEE COMPLIED WITH THE NOTICE ISSUED BY THE LD. CIT(A) A ND WHETHER OR NOT THE ASSESSEE PARTICIPATED THE APPELLATE PROCEED INGS BEFORE THE LD. CIT(A) AND WHETHER OR NOT THE ASSESSEE COMPLIED WITH THE DIRECTION OF THE LD. CIT(A), THE PROVISIONS U/S 250 (6) AND 251 OF THE ACT CONTINUE TO HAVE APPLICATION AND THE LD. CIT(A) AGAIN DISREGARD ITA.NO-2694/DEL/2019 ASSESSMENT YEAR: 2012-13 PAGE | 4 HER STATUTORY ROLE UNDER THIS PROVISION. ACCORDING TO THE ASSESSEE, THE LD. CIT(A) HAS NO POWER TO PERMIT THE ASSESSEE TO WITHDRAW THE APPEAL AND ON THE SAME ANALOGY, LD. CIT(A) HAS NO P OWER TO DISMISS THE APPEAL FOR NON-PROSECUTION WHICH IN EFFECT LEAD S TO THE SAME RESULT AS WITHDRAWAL OF THE APPEAL BY THE ASSESSEE, AND THE FIRST APPELLATE AUTHORITY IS DUTY BOUND NOT TO ALLOW A SI TUATION TO ARISE THROUGH DISMISSAL OF APPEAL IN A SUMMARY MANNER. 6. PER CONTRA, IT IS THE SUBMISSION OF THE LD. DR T HAT A READING OF THE IMPUGNED ORDER CLEARLY SHOWS THAT THE APPEAL WA S NOT DEALT WITH IN A SUMMARY MANNER AND ON THE OTHER HAND, LD. CIT(A) ADVERTED TO THE FACTS OF THE CASE AND ALSO TO THE C ASE LAWS AND REACHED A CONCLUSION ON MERITS, THEREFORE, IT CANNO T BE SAID THAT THERE IS VIOLATION OF THE MANDATE U/S 250(6) AND SE CTION 251 OF THE ACT. SHE FURTHER SUBMITTED THAT THE LAW DOES NOT CO NTEMPLATE THAT APPELLATE AUTHORITIES SHALL KEEP THE APPEALS PENDIN G FOR AN INDEFINITE PERIOD OF TIME MERELY BECAUSE OF APPELLA NT CHOOSES NOT TO APPEARING IN THE PROCEEDINGS. SHE SUBMITTED THAT THE EX-PARTE PROCEEDINGS ARE THE RESULT OF THE CONDUCT OF THE AS SESSEE AND THE ASSESSEE CANNOT TAKE ADVANTAGE OF THEIR OWN BEHAVIO UR. 7. WE HAVE GONE THROUGH THE RECORD. IT IS AN UNDISP UTED FACT THAT THE ASSESSMENT ORDER WAS PASSED U/S 144 OF THE ACT AND THE FIRST APPELLATE AUTHORITY HAS ENUMERATED THE DATES OF HEARING IN THE APPEAL. IT CLEARLY ESTABLISHES THAT THE ASSESSEE IS AT FAULT WITHOUT COOPERATING WITH THE FIRST APPELLATE AUTHORITY TO D ISPOSE OF APPEAL ITA.NO-2694/DEL/2019 ASSESSMENT YEAR: 2012-13 PAGE | 5 ON MERITS. FURTHER, INSTEAD OF EXPLAINING THE REAS ONS FOR THE CONDUCT OF THE ASSESSEE IN NON-COOPERATIVE THE FIRS T APPELLATE AUTHORITY, THE ASSESSEE IS QUESTIONING THE PUBLIC A UTHORITIES BY STATING THAT WHETHER OR NOT THE ASSESSEE ATTENDED T HE APPELLATE PROCEEDINGS OR WHETHER OR NOT WHETHER OR NOT THE A SSESSEE PARTICIPATED THE APPELLATE PROCEEDINGS AND WHETHER OR NOT THE ASSESSEE COMPLIED WITH THE DIRECTIONS OF ADJUDICATI NG AUTHORITY, THE PROVISIONS U/S 250(6) AND 251 OF THE ACT CONTINUE T O APPLY TO THEM. ON PERUSAL OF THE IMPUGNED ORDER, WE FIND THAT THE LD. CIT(A) DID NOT DISMISSED THE APPEAL IN LIMINE MERELY BECAUSE THE ASSESSEE DID NOT COOPERATE WITH THE PROCEEDINGS, THE LD CIT(A) A DVERTED TO THE FACT OF THE CASE AND ALSO TO THE DECISION IN CIT VS EMPIRE BUILTECH PVT. LTD. [2014] 366 ITR 110 (DEL.) TO SUPPORT HER CONCLUSION THAT THE BURDEN IS ON THE ASSESSEE TO SHOW THE GENUINENE SS, IDENTITY AND CREDITWORTHINESS OF THE SHAREHOLDERS IN RESPECT OF TRANSACTIONS AND SINCE THE ASSESSEE FAILED TO ESTABLISH THE SAME, TH E APPEAL HAD TO BE DISMISSED. 8. BE THAT AS IT MAY, NOW THE ASSESSEE COMES FORWAR D WITH A REQUEST THAT GIVEN AN OPPORTUNITY, THE ASSESSEE IS READY TO CONDUCT ITS CASE DILIGENTLY BEFORE THE CIT(A). HAVING REGAR D TO THE SPIRIT OF THE ASSESSMENT PROCEEDINGS I.E., TO DETERMINE THE J UST TAX LIABILITY OF THE ASSESSEE INSTEAD OF DISMISSING THE REQUEST OF T HE ASSESSEE AT THE THRESHOLD, WE ARE OF THE CONSIDERED OPINION THAT BY PUTTING THE ASSESSEE ON CONDITION AN OPPORTUNITY WOULD BE GRANT ED TO THEM. ITA.NO-2694/DEL/2019 ASSESSMENT YEAR: 2012-13 PAGE | 6 WITH THIS VIEW OF THE MATTER, WE DIRECT THE ASSESSE E TO DEPOSIT A SUM OF RS.10,000/- TOWARDS COST IN THE PRIME MINIST ER RELIEF FUND ON OR BEFORE 16/12/2019 AND PRODUCE THE RECEIPT BEF ORE THE CIT(A) AND WHICH THE CIT(A) WILL RESTORE THE APPEAL AND DI SPOSE OF IT ON MERIT AFTER AFFORDING ALL THE OPPORTUNITY TO THE AS SESSEE TO PUT-FORTH THEIR CASE. WE ORDER SO. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18/11/2019 . SD/- SD/- (G.S. PANNU) (K. NARSIMHA CHARY) VICE PRESIDENT JUDICIAL MEMBER DATED: 18/11/2019 F{X~{T? FA P.S COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI