Techno Fac Contracts Pvt. Ltd., Delhi V. ITO, New Delhi

ITA 2849/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61656 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 17-05-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 01-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMARDR
• Keywords: Principle of natural justice
• Section: 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI H BENC H BEFORE SHRI A.N. PAHUJA, AM AND SHRI C.M. GARG, JM ITA NO.2849/D/2011 ASSESSMENT YEAR: 2006-07 M/S TECHNO FAC CONTACTS PVT. LTD., C-1/5,53, MANGLA APARTMENTS, I.P. EXTENSION, DELHI-92 VS. INCOME TAX OFFICER, WARD-16(2),NEW DELHI. (PAN/GIR NO.AAACT4539J) (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI ANIL JAIN, AR REVENUE BY DR. B.R.R. KUMAR,DR DATE OF HEARING 17-05-2012 DATE OF PRONOUNCEMENT 17-05-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 01.06.2011 BY THE ASSESSEE AG AINST AN ORDER DATED 15.09.2010 OF THE CIT(A)-XIX, NEW DELHI, RAIS ES THE FOLLOWING GROUNDS:- 1) THE LD. CIT(A) HAS ERRED IN PASSING THE EX-PART E ORDER WITHOUT GIVING A PROPER OPPORTUNITY TO THE APPELLANT TO PRE SENT ITS CASE BEFORE HIM. THE APPELLANT HAS NOT RECEIVED ANY NOTI CE EXCEPT THE FIRST NOTICE DATED 9.6.09 WHEN THE CASE WAS NOT TAK EN UP. AN OPPORTUNITY OF HEARING MAY PLEASE BE ALLOWED IN THE INTEREST OF NATURAL JUSTICE. 2) THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDIT ION OF ` ` 2,76,750/- MADE BY THE ASSESSING OFFICER. 3) THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER DISALLOWING THE VARIOUS EXPENSES CLAIMED BY THE APPELLANT AMOUNTING TO ` `25,90,158/-. 4) THE ORDER OF THE LEARNED CIT(A) IS AGAINST LAW A ND FACTS OF THE CASE. ITA NO.2849/D/2011 2 5) THE APPELLANT CRAVES THE RIGHT TO ADD, AMEND OR WITHDRAW ANY GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. AT THE OUTSET, THE LD. AR ON BEHALF OF THE SOUG HT TO WITHDRAW THE REQUEST FOR ADJOURNMENT. ACCORDINGLY, THE LD. AR WA S PERMITTED TO WITHDRAW THE SAID REQUEST FOR ADJOURNMENT AND THE BENCH PROCEED ED TO HEAR THE MATTER. 3. ADVERTING FIRST TO GROUND NO.1 IN THE APPEAL , FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING INCOME OF ` ` 5,54,492/- FILED ON 28.11.2006 BY THE ASSESSEE, ENGAGED IN THE BUSINESS OF CIVIL CONTRACT S, AFTER BEING PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT), WAS SELECTED FOR SCRUTINY WITH THE SERVICE OF A NOTICE ISSUED U/S 143(2) OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER (A.O. IN SHORT) NOTICED THAT THE ASSESSEE REFLECTED CONTRACT RECEIPTS OF ` `1,81,45,557/- AND CLAIMED DIRECT EXPENSES OF ` `1,43,08,886/- .IN ORDER TO ASCERTAIN THE GENUINENESS OF THE CREDITORS AND CLAIM OF EXPENSES, THE AO ISSUED NOTICES U/S 133(6) OF THE ACT TO THE FOLLOWING 12 PARTIES: 1. VISHAL ASSOCIATES 2. ANIL KUMAR 3. MARK VIEW CHITS PVT. LTD. 4. MODERN BRICKS TRADING COMPANY. 5. MOHINDER 6. MAGHAV SANITARY & ELECTRICAL STORE 7. J.K. BUILDING MATERIAL SUPPLIER 8. JAI DURGA CEMENT TRADERS 9. HOME DCOR 10. HARVINDER SINGH DHIR 11. FRIENDS MOTORS 12. BHAWANI ASSOCIATES 3.1 IN RESPONSE, ONE OF THE PARTIES WITH SHRI HARV INDER SINGH DHIR DENIED HAVING SUPPLIED ANY MATERIAL TO THE ASSESSEE COMPANY. THE RESULT OF THE ITA NO.2849/D/2011 3 INQUIRIES FROM SHRI HARVINDER SINGH DHIR, WAS CONFR ONTED TO THE ASSESSEE AND THE LATTER WAS FURTHER ASKED TO PRODUCE AFORESAID P ARTIES FROM WHOM PURCHASES HAD BEEN MADE. IN RESPONSE, THE ASSESSEE EXPRESSED HIS INABILITY TO PRODUCE THE SAID PARTIES ON THE GROUND THAT THE PARTIES WER E NOT WILLING TO COME FORWARD AND INSTEAD REQUESTED FOR ISSUANCE OF SUMMONS U/S 1 31 OF THE ACT. EVEN THOUGH,IN PURSUANCE TO REQUEST BY THE ASSESSEE, TH E AO CALLED SHRI DHIR FOR CROSS-EXAMINATION, NONE APPEARED ON THE SCHEDULED D ATE FOR CROSS EXAMINATION. ACCORDINGLY, THE AO CONCLUDED THAT THE PURCHASES MA DE FROM THE SAID PARTY WERE BOGUS AND ADDED THE AMOUNT. SINCE THE ASSESSEE DID NOT FURNISH CONFIRMATION OF THE SUNDRY CREDITORS WHILE MOST OF THEM WERE FOUND TO BE NONEXISTENT AT THE ADDRESS GIVEN BY THE ASSESSEE, THE AO DISALLOWED AN AMOUNT OF ` ` 25,90,158/- AS DETAILED IN PARA 4.9 OF THE ASSESSMENT ORDER. 4. ON APPEAL, THE LD. CIT(A) ISSUED NOTICES DATED 9 TH JUNE, 2009, 27 TH OCTOBER, 2009 AND 13 TH AUGUST, 2010 AT THE ADDRESS GIVEN BY THE ASSESSEE IN FORM NO.35 FOR HEARING THE APPEAL. HOWEVER, NONE A PPEARED BEFORE HIM. IN THESE CIRCUMSTANCES, IN THE ABSENCE OF ANY REPLY FR OM THE ASSESSEE, THE LD. CIT(A) UPHELD THE ADDITION OF ` 2,76,750/- ON ACCOUNT OF UNPROVED PURCHASES FROM SHRI DHIR AS ALSO DISALLOWANCE OF EXPENDITURE ` 25,90,158/-. 5. THE ASSESSEE IS NOW IN APPEAL BEFORE US A GAINST THE AFORESAID FINDINGS OF THE LD. CIT(A).AT THE OUTSET, THE LD. AR ON BEHALF OF THE ASSESSEE CLAIMED THAT EXCEPT FIRST NOTICE DATED 9 TH JUNE, 2009 ISSUED BY THE LD. CIT(A), NONE OF THE NOTICES WERE SERVED UPON THE ASSESSEE. SINCE THE LD . CIT(A) DID NOT ALLOW SUFFICIENT OPPORTUNITY TO THE ASSESSEE, THE MATTER MAY BE RESTORED TO HIS FILE FOR ALLOWING ANOTHER OPPORTUNITY IN THE INTEREST OF JU STICE. THE LD. DR DID NOT OPPOSE THESE SUBMISSIONS OF THE LD. AR. 6.. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. AS CONTENDED BY THE LD. AR ON BEHALF OF THE ASSESSE E, THE LD. CIT(A) MERELY AFFIRMED THE FINDINGS OF THE AO IN THE ABSENCE OF A NY REPLY SUBMITTED ON BEHALF OF ITA NO.2849/D/2011 4 THE ASSESSEE. THE ASSESSEE NOW SEEKS ANOTHER OPPORT UNITY TO CONTEST THE TWO ADDITIONS BEFORE THE LD. CIT(A). A MERE GLANCE AT T HE IMPUGNED ORDER REVEALS THAT THE ORDER PASSED BY THE LD. CIT(A) IS CRYPTIC AND GROSSLY VIOLATIVE OF ONE OF THE FACETS OF THE RULES OF NATURAL JUSTICE, NAMELY, THAT EVERY JUDICIAL/QUASI-JUDICIAL BODY/AUT HORITY MUST PASS REASONED ORDER, WHICH SHOULD REFLECT APPLICATION OF MIND BY THE CONCERNED AUTHORITY TO THE ISSUES/POINTS RAISED BEF ORE IT. THE APPLICATION OF MIND TO THE MATERIAL FACTS AND THE A RGUMENTS SHOULD MANIFEST ITSELF IN THE ORDER. SECTION 250(6) OF T HE ACT MANDATES THAT THE ORDER OF THE CIT(A) WHILE DISPOSING OF THE APPEAL SHALL BE IN WRITING AND SHALL STATE THE POINTS FOR DETERMINATIO N, THE DECISION THEREON AND THE REASONS FOR THE DECISION. THE REQUI REMENT OF RECORDING OF REASONS AND COMMUNICATION THEREOF BY T HE QUASI- JUDICIAL AUTHORITIES HAS BEEN READ AS AN INTEGRAL P ART OF THE CONCEPT OF FAIR PROCEDURE AND IS AN IMPORTANT SAFEGUARD TO ENSURE OBSERVANCE OF THE RULE OF LAW. IT INTRODUCES CLARIT Y, CHECKS THE INTRODUCTION OF EXTRANEOUS OR IRRELEVANT CONSIDERAT IONS AND MINIMIZES ARBITRARINESS IN THE DECISION-MAKING PROC ESS. HONBLE JURISDICTIONAL HIGH COURT IN THEIR DECISION IN VODA FONE ESSAR LTD. VS. DRP,196 TAXMAN423(DELHI) HELD THAT WHEN A QUASI JUDICIAL AUTHORITY DEALS WITH A LIS, IT IS OBLIGATORY ON ITS PART TO ASCRIBE COGENT AND GERMAN E REASONS AS THE SAME IS THE HEART AND SOUL OF THE MATTER AND FURTHER, THE SAME ALSO FACILITATES APPRECIATION WHEN THE ORDER IS CALLED IN QUESTION BEFORE THE SUP ERIOR FORUM. WE MAY POINT OUT THAT A DECISION DOES NOT MERELY MEAN THE CO NCLUSION. IT EMBRACES WITHIN ITS FOLD THE REASONS FORMING BASIS FOR THE CONCLUSION.[MUKHTIAR SINGH VS. STATE OF PUNJAB,(199 5)1SCC 760(SC)]. THIS IS NOT A CASE OF A MERE ROUTINE OR S IMPLE MATTER .IN VIEW OF THE FOREGOING, ESPECIALLY WHEN THE LD. CIT(A) HAVE NOT PASSED A SPEAKING ORDER ON VARIOUS ISSUES RAISED IN THE APP EAL BEFORE HIM, WE CONSIDER IT FAIR AND APPROPRIATE TO SET ASIDE TH E ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE FOR DECID ING THE ISSUES ITA NO.2849/D/2011 5 RAISED IN THE GROUND NOS. 2 & 3 BEFORE US , AFRESH IN ACCORDANCE WITH LAW, AFTER ALLOWING SUFFICIENT OPPORTUNITY TO BOTH THE PARTIES. NEEDLESS TO SAY THAT WHILE REDECIDING THE APPEAL, T HE LEARNED CIT(A) SHALL PASS A SPEAKING ORDER, KEEPING IN MIND, INTER ALIA, THE MANDATE OF PROVISIONS OF SEC. 250(6) OF THE ACT. WITH THESE OBSERVATIONS, GROUND NO. 1 IS DISPOSED OF. WE MAY CLARIFY THAT T HE ASSESSEE SHALL NOT SEEK ANY ADJOURNMENT BEFORE THE LD. CIT(A),WITH OUT ANY COGENT REASONS. AS A COROLLARY, GROUND NOS. 2 & 3 IN TH E APPEAL OF THE REVENUE DO NOT SURVIVE FOR OUR ADJUDICATION AT THIS STAGE. 7. GROUND NO.4 IN THE APPEAL BEING GENERAL IN NAT URE, DOES NOT REQUIRE ANY SEPARATE ADJUDICATION WHILE NO ADDITIONAL GROUN D HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND NO.5 IN THE APPEAL, ACCORDINGLY, THESE GROUNDS ARE DISMISSED. 8. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US. 9. IN RESULT, APPEAL IS ALLOWED BUT FOR STATISTICA L PURPOSES. ORDER PRONOUNCED IN OPEN COURT SD/- SD/- (C.M. GARG) (A.N. PAHUJA) JUDICIAL MEMBER ACCOUNTANT MEMBER NS COPY OF THE ORDER FORWARDED TO :- 1. ASSESSEE 2. INCOME TAX OFFICER, WARD-16(2),NEW DELHI 3. CIT CONCERNED 4. CIT (APPEALS)-XIX, NEW DELHI. 5. DR, ITAT,H BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI