. Shree Govind Devji Biogenic (P) Ltd., Agra V. I.T.O.-4(4), Agra

ITA 286/AGR/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9218 (ITAT-AGRA)
• Duration Of Justice: 3 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 04-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL BAJPAI
• Keywords: Opportunity of being heard; Principle of natural justice; Non compliance; Competent authority; Assessment record; Borrowed satisfaction
• Section: 147; 27; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH: AGRA BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBERAND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER I.T.A NO.286/AGRA/2016 (ASSESSMENT YEAR: 2006-07) SHREE GOVIND DEVJIBIOGENIC (P) LTD., B-11, HARI WORLD COMMERCIAL COMPLEX,42/2, SANJAY PLACE, AGRA PAN: AAHCS8659P (APPELLANT) VS. INCOME TAX OFFICER-4(4), AGRA (RESPONDENT) APPELLANT BY SHRI ANURAG SINHA, AR RESPONDENT BY SHRI SUNIL BAJPAI, CIT-DR ORDER PER LALIET KUMAR, J.M.: THIS APPEAL OF ASSESSEE IS DIRECTED AGAINST THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS)-2, AGRA, DATED 31-03-2016 F OR THE AY.2006-07 ON THE FOLLOWING GROUNDS: 1. BECAUSE, UPON DUE CONSIDERATION OF THE FACTS AN D IN THE OVERALL CIRCUMSTANCES OF THE CASE THE LD.CIT(A) HAS FALLEN IN ERROR IN PASSING EX-PARTE ORDER WITHOUT DUE CONSIDERATION OF THE LEGAL POSITI ON AND EVIDENCES AVAILABLE ON ASSESSMENT RECORDS. DATE OF HEARING 06-01-2020 DATE OF PRONOUNCEMENT 07-01-2020 I.T.A NO. 286/AGRA/2016 2 2. BECAUSE, THE APPELLANT DENIES HIS LIABILITY TO B E ASSESSED IN TERMS OF NOTICE DATED 30.03.2013 ISSUED TO HIM UNDER SECTION 148 OF THE ACT. 3. BECAUSE, AUTHORITIES BELOW FAILED TO APPRECIATE THAT THERE IS NO VALID INITIATION OF PROCEEDINGS UNDER SECTION 147 OWING T O THE REASONS RECORDED, BEFORE ISSUING NOTICE AND THE NOTICE NOT BEING IN C ONFORMITY WITH LAW IN THIS REGARD, CONSEQUENTLY THE ASSESSMENT ORDER (PASSED I N PURSUANCE THEREOF) IS VOID- AB-INITIO. 4. BECAUSE, ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, AO WAS UNJUSTIFIED IN ISSUING NOTICE UNDER SECTION 148 OF THE ACT WITHOUT THERE BEING ANY INDEPENDENT APPLICATION OF HIS OWN MIND. JURISDICT ION UNDER SECTION 148 CANNOT BE ASSUMED ON THE BORROWED SATISFACTION OF ANY PE RSON OTHER THAN THE AO ISSUING NOTICE UNDER SECTION 148. 5. BECAUSE, ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE AO WAS UNJUSTIFIED IN ASSUMING JURISDICTION UNDER SECTION 148 WITHOUT THERE BEING ANY MATERIAL MUCH LESS CORROBORATIVE AND RELIABLE MATER IAL TO SUBSTANTIATE THE RECORDED REASONS AT THE TIME OF RECORDING REASONS. 6. BECAUSE, THE ISSUANCE OF NOTICE UNDER SECTION 14 8 IS ILLEGAL AND WITHOUT JURISDICTION AS THE SAME WAS NOT PRECEDED BY THE SA NCTION FROM COMPETENT AUTHORITY AS WAS REQUIRED BY SECTION 151 OF THE ACT . 7. BECAUSE, THE LD CIT(A) FAILED TO APPRECIATE TH E DETAILED OBJECTION OF THE APPELLANT AND GOT GUIDED BY IRRELEVANT CONSIDERAT IONS WHILE HOLDING PROCEEDINGS TO BE VALIDLY INITIATED. ACTION OF THE LD CIT(A) IS WRONG, ILLEGAL AND PERVERSE. WHOLLY WITHOUT PREJUDICE TO THE ABOVE 8. BECAUSE, FROM THE INITIATION OF PROCEEDINGS TILL ITS CONCLUSION THE LEARNED AO HAD NOT BEEN ABLE TO CONVERT THE REASONS RECOR DED INTO EVIDENCE REQUIRED FOR MAKING THE ADDITION. THE PROCEEDINGS CAME TO BE COM MENCED ON THE SUSPICION AND CONCLUDED WITH THE SUSPICION OF THE AUTHORITIES BEL OW. 9. BECAUSE, ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LEARNED AUTHORITIES BELOW ERRED IN MAKING AND CONFIRMING AD DITION OF RS.20,00,000/- PLUS RS.1,00,000/- TOWARDS ESTIMATED COMMISSION AGGREGAT ING TO RS.21,00,000/-. THE ADDITION IS BAD ON FACTS AND IN LAW. 10. BECAUSE, WHILE MAKING AND SUSTAINING THE ADDITI ON THE AUTHORITIES BELOW HAVE FAILED TO CONSIDER THAT ASSESSEE HAS WELL EXPL AINED THE GENUINENESS OF THE I.T.A NO. 286/AGRA/2016 3 TRANSACTION BY FURNISHING ENOUGH DOCUMENTARY EVIDEN CES PROVING THE EXISTENCE OF THE COMPANY AND RECEIPT OF AMOUNT FROM THE SUBSCRIB ER COMPANIES. 11. BECAUSE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED AUTHORITIES BELOW ERRED IN MAKING AND CONFIRMING TH E ADDITION IGNORING THE FACTUAL AND LEGAL POSITION THAT IN RE-ASSESSMENT PR OCEEDING THE ONUS IS ON THE REVENUE TO PROVE THAT THERE WAS INCOME, WHICH ESCAP ED ASSESSMENT. THE AO FROM THE INITIATION OF HIS PROCEEDINGS TILL ITS CON CLUSION HAS NOT BEEN ABLE TO DISCHARGE THE ONUS WHICH LAY ON HIM IN TERMS OF SEC TION 147 OF THE ACT. 12. BECAUSE, WHILE MAKING THE ASSESSMENT THE AUTHOR ITIES BELOW MADE VARIOUS OBSERVATIONS/CONCLUSIONS WHICH ARE CONTRARY TO FACT S AVAILABLE ON RECORDS. WHILE MAKING THE ADDITION SUBMISSION MADE AND EVIDENCES F ILED HAVE BEEN REJECTED ARBITRARILY. 13. BECAUSE, THEAPPELLANT DENIES LEVY OF INTEREST UNDER SECTION 234B. 14. BECAUSE, IN RELATION TO THE GROUNDS OF APPEAL AS HAVE BEEN TAKEN HEREINBEFORE, THE APPELLANT REFER AND RELY UPON T HE AVERMENTS MADE IN THE STATEMENT OF FACT ACCOMPANYING THE MEMO OF APPEAL. 15. BECAUSE, THEORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICES THE APPELLANT RESERVES HIS RIGHT TO ADD, DELETE, MODIFY, ALTER OR SUBSTITUTE ANY OR ALL THE GROUNDS OF APPEAL. 2. AT THE OUTSET, LD.AR HAD SUBMITTED THAT THE NOTI CES FOR APPEAL HEARING WERE NOT RECEIVED BY THE ASSESSEE AND THE LD.CIT(A) HAD DECIDED THE APPEAL,WITHOUTENSURING THE DUE SERVICE OF NOTICES O N THE ASSESSEE. FOR THAT PURPOSES, OUR ATTENTION WAS DRAWN TO PARA 3 OF THE CIT(A)S ORDER, WHICH WAS TO THE FOLLOWING EFFECT: 3. NOTICE FOR HEARING OF THE ASSESSEES APPEAL WAS ISSUED ON 11.12.2015 FIXING THE DATE OF HEARING ON 22.12.2015, HOWEVER, THE SAM E WAS RETURNED UN-SERVED BY POSTAL AUTHORITIES WITH THE REMARKS LEFT. ANOTHE R NOTICE DATED 17-12-2015 WAS ISSUED FIXING DATE OF HEARING ON 06.01.2016. THIS NOTICE WAS SOUGHT TO BE SERVED I.T.A NO. 286/AGRA/2016 4 THROUGH AO, FROM WHOSE OFFICE IT WAS REPORTED THAT OFFICE WAS CLOSED AND FROM THE NEIGHBOURS IT IS INFORMED THAT THE PREMISES ARE LOCKED FOR QUITE SOME TIME. THEREFORE, THE AO SENT BACK THE UN-SERVED NOTICE TO THIS OFFICE ACCORDINGLY. ANOTHER NOTICE DATED 18.01.2016 WAS ISSUED FROM THI S OFFICE FOR SERVICE THROUGH THE AO, WHICH THE AO GOT IT SERVED ON 21.01.2016 UP ON SRI R.M.SINGHAL. HOWEVER, NONE ATTENDED ON FIXED DATE OF HEARING ON 03.02.2016. IN VIEW OF APPELLANTS REPEATED NON COMPLIANCE, ANOTHER NOTICE DATED 04.02.2016 GIVING FINAL OPPORTUNITY TO THE ASSESSEE AND FIXING DATE OF HEAR ING ON 12.02.2016 WAS ISSUED. HOWEVER, EVEN THE SAID NOTICE WAS RETURNED BY POSTA L AUTHORITIES WITH THE REMARKS LEFT. ANOTHER NOTICE DATED 24.02.2016 WAS ISSUED FIXING DATE OF HEARING ON 29.02.2016 AND THE SAID NOTICE WAS ALSO RETURNED BY THE POSTAL AUTHORITIES WITH THE SAME REMARKS, LEFT. IN VIEW OF THE REPEATED NON COMPLIANCE, LAST AND FINAL OPPORTUNITY WAS PROVIDED TO THE ASSESSEE VICE NOTIC E DATED 21.03.2016 WAS ISSUED FIXING 29.03.2016 AS THE DATE OF HEARING. HOWEVER, THE SAID NOTICE TOO WAS RETURNED BY THE POSTAL AUTHORITIES WITH THE REMARKS THAT THERE WAS NO SUCH FIRM AT THE GIVEN ADDRESS. UNDER THE CIRCUMSTANCES, I HAVE NO ALTERNATE, BUT TO DECIDE THE CASE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 3. IT WAS SUBMITTED THAT SINCE THE MATTER HAD BEEN DECIDED BY THE LD.CIT(A) EX-PARTE, WITHOUT ENSURING THE DUE SERVICE AND PARTICIPATION BY THE ASSESSEE, THEREFORE, IT WOULD BE IN THE INTERES T OF JUSTICE THAT IF THE MATTER IS REMITTED BACK TO THE FILE OF CIT(A) FOR DECIDING THE ISSUE AFRESH FOR HEARING, DULY GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, AND TO FILE THE DOCUMENTS AS MAY BE NECESSARY TO DECIDE TH E ISSUE. 4. PER CONTRA, LD.DR HAD SUBMITTED THAT THE ADDRESS GIVEN BY THE ASSESSEE WAS THE SAME ADDRESS AS MENTIONED IN FORM- 35 AS WELL AS IN FORM- 36. THE PRESUMPTION OF SECTION 27 OF THE GENERAL C LAUSES ACT IS REQUIRED TO BE INVOKED AGAINST THE ASSESSEE AS THE NOTICES WERE SENT AT THE CORRECT I.T.A NO. 286/AGRA/2016 5 ADDRESS BY THE LD.CIT(A) AND FOR THE NON-CO-OPERATI ON AND NON-PRESENCE OF THE ASSESSEE BEFORE THE CIT(A), THE ONLY REPORTS AV AILABLE WITH THE CIT(A) IS TO DECIDE THE APPEAL ON THE BASIS OF THE MATERIAL A VAILABLE WITH THE CIT(A) AND THERE WAS NO ERROR IN DECIDING THE MATTER. 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. UNDOUBTEDLY, DUE SERVICE OF NOTICE ON ASSES SEE IS CLEAR FROM PARA 3 OF THE ORDER. WE MAY NOTICE THAT EVEN THE NOTICE S ENT BY THE TRIBUNAL TO THE ASSESSEE ON 29-05-2017 AND 11-07-2019 WERE RETURNED UN-SERVED WITH THE REMARKS THAT - DESPITE NONE WAS AVAILABLE TO RECEIVE THE NOTICE THIS CLEARLY SHOWS THAT THERE IS ISSUE IN SERVICE OF NOTICES TO THE ASSESSEE AT THE ADDRESS GIVEN BY THE ASSESSEE BEFORE THE TRIBUNAL AS WELL A S BEFORE THE CIT(A). NONETHELESS THE PURPOSES OF ADJUDICATION OF APPEAL IS TO DECIDE THE APPEAL ON MERITS, AFTER GRANTING DUE OPPORTUNITY OF BEING HEA RD TO ASSESSEE AND CONSIDERING THE DOCUMENTS. IN THE PRESENT CASE, NE EDFUL HAS NOT BEEN DONE AND AS SUCH THE ORDER PASSED BY THE LD.CIT(A) WAS P ASSED WITHOUT AFFORDING A REASONABLE OPPORTUNITY TO THE ASSESSEE. IN VIEW OF THE ABOVE, WE DEEM IT FIT AND APPROPRIATE TO REMIT THE ISSUE BACK TO THE FILE OF CIT(A) FOR DECIDING THE SAME AFRESH, ON THE BASIS OF THE MATERIAL AVAIL ABLE ON RECORD AND AS WELL AS BY AFFORDING A FAIR AND REASONABLE OPPORTUNITY O F BEING HEARD TO THE I.T.A NO. 286/AGRA/2016 6 ASSESSEE AND TO GIVE A CHANCE TO ASSESSEE TO FILE T HE DOCUMENTS IF ANY, REQUIRED. WE MAY ALSO LIKE TO MENTION THAT BOTH TH E PARTIES HAVE AGREED THAT IT IS JUSTIFIED, IF TIME BOUND DIRECTION TO BE ISSU ED TO THE CIT(A) TO DECIDE THE MATTER PREFERABLY I.E., ON OR BEFORE 31-05-2020. I N THE LIGHT OF THE ABOVE, WE EXPECT THAT THE CIT(A) TO DECIDE THE MATTER ON OR B EFORE 31-05-2020, IN ACCORDANCE WITH LAW. NEEDLESS TO SAY, WE HAVE NOT ADJUDICATED ANY OTHER GROUND, ALL THE GROUNDS ARE REQUIRED TO BE ADJUDICATED BY THE COMMISSIONER APPEAL, IN THE REMAND PROCEEDINGS WITHOUT BEING INFLUENCED BY THE OBSERVA TION MADE BY US IN THE PRESENT APPEAL. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07-01-2020 SD/- SD/- (DR. M.L. MEENA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER TNMM I.T.A NO. 286/AGRA/2016 7 COPY FORWARDED TO: 1. ASSESSEE 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT SR. PRIVATE SECRETARY ITAT AGRA