Ram Avtar Gupta & Co., Delhi V. ITO, New Delhi

ITA 2970/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7043 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC 3
• Next Hearing Date: 09-11-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 25-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus purchase; Principle of natural justice; Condonation of delay; Reassessment proceedings
• Section: 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-3 NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 2970/DEL/2016 ASSESSMENT YEAR: 2006-07 RAM AVTAR GUPTA & CO., VS. ITO, WARD 39(3), PROP. MANOHAR LAL, NEW DELHI 2116, BASTI PIPAL WALI, SADAR BAZAR, DELHI 110 006 (PAN: AADPL8310K) (ASSESSEE) (RESPONDENT) ASSESSEE BY : SH. VED JAIN, CA REVENUE BY : SH. ANIL KUMAR SHARMA, SR. DR ORDER THIS APPEAL IS FILED BY ASSESSEE AGAINST THE ORDE R DATED 09.12.2014 PASSED BY THE LD. CIT(A)-XX, NEW DELHI R ELATING TO ASSESSMENT YEAR 2006-07. 2. THE GROUNDS RAISED READ AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED CIT(A) IS BAD, BOTH IN THE EYE OF LAW AND O N THE FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, CIT( A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CON TENTION OF THE ASSESSEE THAT THE INITIATION OF THE REASSESSMEN T PROCEEDINGS AND THE REASSESSMENT ORDER ARE BAD BOTH ON FACTS AND IN LAW AND LIABLE TO BE QUASHED AS THE ST ATUTORY 2 CONDITIONS AND PROCEDURE PRESCRIBED UNDER 'THE STAT UTE HAVE NOT BEEN COMPLIED WITH. 3 (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CON TENTION OF THE ASSESSEE THAT THE REASSESSMENT PROCEEDINGS INIT IATED BY THE LEARNED A.O. ARE BAD IN THE EYE OF LAW AS THE R EASONS RECORDED FOR THE ISSUE OF NOTICE UNDER SECTION 148 ARE BAD IN THE EYE OF LAW AND ARE CONTRARY TO THE FACTS. (II) ON THE FACTS-AND CIRCUMSTANCES OF THE CASE, CI T(A) HAS ERRED BOTH ON FACTS AND IN LAW 'IN REJECTING THE CO NTENTION OF THE ASSESSEE THAT THE REASSESSMENT ORDER PASSED BY THE A.O. IS BAD AND LIABLE TO BE QUASHED AS THE SAME HA S BEEN REOPENED ON THE BASIS OF THE REASONS WHICH ARE VAGU E AND HAS BEEN RECORDED WITHOUT APPLICATION OF MIND ON TH E PART OF THE A.O. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CFT(A) HAS ERRED BOTH ON FACTS & IN LAW IN CONFIRMING THE REJECTION OF THE BOOKS OF ACCOUNTS OF THE ASSES SEE BY THE AO, DESPITE THE FACT THAT THE ASSESSEE HAS BEEN MAI NTAINING PROPER BOOKS OF ACCOUNTS AS PER LAW. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS & IN LAW IN CONFIRMING THE ADDITION OF AN AMOUNT OF RS.1,21,893/- ON ACCOU NT OF BOGUS PURCHASES. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION TO THE EXTENT OF 20% OF THE PURCHASES OF RS. 6,09,463/-, W ITHOUT THERE BEING ANY BASIS FOR THE SAME. 3 7.(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS & IN LAW IN CONFIRMING THAT THE FIRM M/S SHREE BANKEY BIHARI TRADING CO. I S NOT ENGAGED IN THE ACTUAL BUSINESS IGNORING THE FACT TH AT DURING THE COURSE OF THE SEARCH SUBSTANTIAL INVENTORY IN R ESPECT OF THE MATERIAL BEING PURCHASED BY THE ASSESSEE WERE F OUND WHICH CONFIRM THE FACT THAT THIS FIRM WAS DOING ACT UAL BUSINESS. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LEARNED CIT(A) HAS ERRED BOTH ON FACTS & IN LAW IN REJECTING THAT THE INFERENCE DRAWN BY THE AO MERELY ON THE BA SIS OF A STATEMENT THAT THESE FIRMS ARE NOT IN ACTUAL BUSINE SS IS BASELESS AND CONTRARY TO THE FACTS ON RECORD. 8. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED CIT(A) HAS ERRED BOTH ON FACTS & IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE IN IGNORING THE FACT THAT THERE BEING A COMPLETE TALLY OF THE QUANTITY PURCHASED AN D SOLD THE ALLEGATION THAT THE ASSESSEE HAS NOT MADE PURCH ASES CANNOT BE SUSTAINED. 9. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS & IN LAW IN CONFIRMING THE ADDITION TO THE EXTENT OF 20% OF THE PURCHASES REJECTING THE MATERIAL AND EVIDENCES BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT THE PURCHASES WERE MADE IN RE GULAR COURSE OF THE BUSINESS AND MATERIAL SO PURCHASED WA S SOLD IN THE REGULAR COURSE OF BUSINESS. 10. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS & IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT THE ADDITION SO MADE ON 4 THE BASIS OF MATERIAL COLLECTED AT THE BACK OF THE ASSESSEE IS BAD IN LAW & LIABLE TO BE DELETED. 11. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS & IN LAW IN REJECTING THE CONTENTION OF THE ASSESSEE THAT THE ADDITION MA DE BY THE LEARNED AO IS UNTENABLE IN THE EYE OF LAW HAVING BE EN MADE WITHOUT PROVIDING OPPORTUNITY TO CROSS EXAMINE THE PERSON ON THE BASIS OF WHOSE STATEMENT THE ALLEGATIONS HAV E BEEN MADE AGAINST THE ASSESSEE AND WITHOUT FOLLOWING THE PRINCIPLE OF NATURAL JUSTICE. 12. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALT ER ANY OF THE GROUNDS OF APPEAL. 3. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NO T DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE NOT REPEATED HERE FOR THE SAKE OF CONVENIENCE. 4. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS. I FIND THAT AT THE TIME OF FILING THE APPEAL BEFORE THE TRIBUNA L ON 25.5.2016, THE REGISTRY HAS ISSUED THE DEFECT NOTICE AND RAISED TH E DEFECT VIDE SERIAL NO. 11 STATING THEREIN THAT APPEAL IS PRIMA FACIE TIME BARRED BY 460 DAYS. IN RESPONSE TO ABOVE SAID DEFECT NOTICE, ASSESSEE S AR HAS FILED A LETTER DATED 27.5.2016 REGARDING REMOVAL OF DEFECT ATTACHING THEREWITH A REQUEST FOR CONDONATION OF DELAY OF 458 DAYS WHICH WAS PLACED ON RECORD. ON 9.11.2016 AGAIN THE ASSESSEES AR FILED ANOTHER APPLICATION DATED 9.11.2016 REGARDING REMOVAL OF DE FECT ATTACHING THEREWITH A REQUEST OF CONDONATION OF DELAY OF 460 DAYS. FOR THE SAKE 5 OF CLARITY, I AM REPRODUCING THE CONTENTS OF THE AP PLICATION FOR CONDONATION OF DELAY AS UNDER:- 1. THE APPLICANT HAS FILED AN APPEAL BEFORE THE HO N'BLE TRIBUNAL AGAINST THE ORDER DATED 09.12'.2016 PASSED BY THE LEARNED CIT(A)-20, NEW DELHI, FOR THE ASSESSMENT YE AR 2006- 07 AND THE SAID APPEAL IS LATE BY 460 DAYS. 2. THE APPLICANT IS AN INDIVIDUAL AND PROPRIETOR OF MIS A.B. ENTERPRISES. 3. THE ASSESSEE HAS FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 ON 30.10.2006 DECLARING AN INCOME OF RS.2,37,100/-. 4. THE RETURN OF THE ASSESSEE WAS PROCESSED U/S143( 1) ON 20.08.2007 AT RETURNED INCOME AND THE SAID CASE WAS TAKEN UP FOR SCRUTINY AS PER THE GUIDELINES OF THE BOARD AND THE ASSESSMENT WAS COMPLETED BY THE AO AT AN INCOME OF RS.8,46,560/-. 5. AGGRIEVED BY THE SAME, THE ASSESSEE DECIDED TO F ILE AN APPEAL BEFORE THE CIT(A) AGAINST THE SAID ORDER. TH E LD. CIT(A) UPHELD THE AO'S ORDER 6. THE ASSESSEE WAS PROVIDED THE COPY OF THE CIT (A ) ORDER WHICH WAS HANDED OVER TO ONE OF THE CLERKS WO RKING IN THE OFFICE OF ITS CA TO DRAFT AN APPEAL TO BE FILED IN THE AFORESAID CASE BEFORE THE ITAT. 7. HOWEVER, THE CLERK KEPT THE ABOVE MENTIONED ORDE R IN HIS DRAWER AND FORGOT TO FILE THE APPEAL IN THE ABO VE MENTIONED CASE. 6 8. LATER ON, ON THE RECEIPT OF THE PENALTY NOTICE, WHEN THE ASSESSEE ENQUIRED FROM ITS CA REGARDING THE STATUS OF THE APPEAL TO BE FILED BEFORE THE ITAT, IT CAME TO LIGH T AT THAT TIME THAT THE CLERK TO WHOM THE ORDER WAS HANDED OV ER HAS NOT FILED THE APPEAL AGAINST THE ORDER PASSED BY TH E CIT(A). 9. THEREAFTER, THE APPLICANT IMMEDIATELY TOOK NECES SARY STEPS TO FILE THE APPEAL BEFORE THE HON'BLE ITA T. 10. THAT DUE TO THE UNAVOIDABLE CIRCUMSTANCES WHICH HAVE HAPPENED, THERE IS A DELAY IN FILING OF THIS APPEAL BY 458 DAYS. 11. THAT AS EXPLAINED ABOVE, IT IS HUMBLY SUBMITTED THAT THE DELAY IN FILING THE APPEAL WAS UNINTENTIONAL AN D BY REASON, BEYOND THE CONTROL OF THE APPLICANT. ACCORDINGLY, IT IS HUMBLY PRAYED THAT THE DELAY IN FILING THE APPEAL MAY PLEASE BE CONDONED AND THE APPEAL MAY BE HEARD ON MERITS. FOR THIS ACT OF KINDNESS THE APPLICANT SHALL EVER B E GRATEFUL. PRAYED ACCORDINGLY. 5. AFTER GOING THROUGH THE CONTENTIONS RAISED BY TH E ASSESSEE IN THE APPLICATION FOR CONDONATION OF DELAY OF 460 DAYS, I AM OF THE CONSIDERED VIEW THAT ASSESSEE HAS NOT GIVEN ANY PLA USIBLE REASONS FOR CONDONING THE HUGE DELAY OF 460 DAYS IN THE SAID A PPLICATION. ASSESSE HAS ALSO NOT FILED ANY EVIDENCE AS PER THE AVERMENT S MADE BY THE ASSESSEE IN THE APPLICATION FOR CONDONATION OF DELA Y. THEREFORE, KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE AND 7 THE CONTENTION RAISED BY THE ASSESSEE IN THE APPLIC ATION FOR CONDONATION OF DELAY, WHICH IS NOT SUPPORTED BY AN Y EVIDENCE, I AM UNABLE TO CONDONE THE HUGE DELAY OF 460 DAYS IN FIL ING THE PRESENT APPEAL. HENCE, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED BEING TIME BARRED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/01/2017 . SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 04/01/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES 8