M/s. I Novate Technologies Ltd., Indore V. THE DCIT 1(1), Indore

ITA 3/IND/2017

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5682 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 05-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: S N AGRAWAL
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 142(1); 144

Judgement Text

I NOVATE TECHNOLOGIES ITA NO. 3/IND/2017 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .. , . . , !'!# BEFORE SHRI C. M. GARG, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER . . $ /. I.T.A. NO.3/IND/2017 %& / ASSESSMENT YEAR: 2011-12 M/S I NOVATE TECHNOLOGIES LTD. 80, KALINDI MID TOWN INDORE VS. DY. COMMISSIONER OF INCOME TAX OFFICER 1(1) INDORE / // / APPELLANT / // / RESPONDENT . . ./ PAN: AACCI 1276M / // / APPELLANT BY SHRI S.N. AGRAWAL AND SHRI PANKAJ MOGRA / // / RESPONDENT BY SHRI MOHD. JAVED / // / DATE OF HEARING 21.03.2017 / // / DATE OF PRONOUNCEMENT 27.03.2017 / // / O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-I, INDORE [HER EINAFTER REFERRED TO AS THE CIT (A)] DATED 19.8.2016. THIS APPEAL PER TAINS TO ASSESSMENT YEAR 2011-12 AS AGAINST APPEAL DECIDED I N RESPECT OF I NOVATE TECHNOLOGIES ITA NO. 3/IND/2017 2 ASSESSMENT ORDER DATED 21.3.2014 PASSED U/S. 144 R. W.S. 143(3) OF THE INCOME TAX ACT, 1961(HEREIN AFTER REFERRED TO A S 'THE ACT) BY THE DCIT 2(3), INDORE [HEREINAFTER REFERRED TO AS THE A O]. 1. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APP EAL BEFORE THE TRIBUNAL :- 1. THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CASE, (I) THE LD. CIT(A) HAS ERRED IN INTERPRETING THAT ASSES SEE HAD SHIFTED ITS ADDRESS FROM THE PLACE TO ANOTHER TO AV OID ANY VERIFICATION OF ITS CLAIM MADE IN THE RETURN OF INC OME OF THE APPELLANT. (II) THE LD. CIT(A) HAS ERRED IN NOT GIVING PROPER OPPOR TUNITY OF BEING HEARD. SO WE REQUEST YOU TO SET ASIDE THE CAS E TO A.O. 1.1 SUCCINCTLY, THE FACTS AS CULLED OUT FROM THE OR DERS OF LOWER AUTHORITIES ARE THAT THE ASSESSEE HAD FILED ITS E-R ETURN OF INCOME DECLARING TOTAL INCOME AT RS. 30,27,470/-. THE RETU RN OF INCOME WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) OF THE ACT WAS ISSUED IN RESPONSE TO WHICH THE DIRECTOR OF THE COMPANY FILED REPLY ON 28.8.2012 AND SOUGHT ADJOURNMENT. A NOTICE U/S 142( 1) OF THE ACT ALONG WITH QUESTIONNAIRE WAS ISSUED TO THE ASSESSEE ON 17.10.2013 I NOVATE TECHNOLOGIES ITA NO. 3/IND/2017 3 AND THEREAFTER ON 9.12.2013. HOWEVER, THE ASSESSEE DID NOT RESPOND. ANOTHER NOTICE U/S 142(1) OF THE ACT AND A LETTER DATED 14.3.2014 WERE ALSO ISSUED TO THE ASSESSEE BUT THE ASSESSEE DID NOT RESPOND TO THE SAME. ON ENQUIRY IT WAS REVEALED THA T AT THE GIVEN ADDRESS, THE ASSESSEE COMPANY DID NOT EXIST. THE AS SESSING OFFICER, THEREFORE, HAD NO ALTERNATE BUT TO FRAME THE ASSESS MENT U/S 144 OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDING S, THE ASSESSING OFFICER FOUND THAT IN THE PROFIT AND LOSS ACCOUNT THE ASSESSEE HAD DEBITED RS.1,58,46,923/- UNDER THE HEA D OTHER EXPENSES. SINCE THE ASSESSEE DID NOT FURNISH ANY DETAIL IN SU PPORT OF ITS CLAIM, THE ASSESSING OFFICER DISALLOWED 20% OF THE EXPENSES ON ESTIMATE BASIS AND ACCORDINGLY DISALLOWED EXPEND ITURE OF RS.31,69,385/- BEING 20% OF THE AMOUNT OF RS.1,58,4 6,923/-. 1.2 BEING AGGRIEVED WITH THE ABOVE DISALLOWANCE, T HE ASSESSEE PREFERRED FIRST APPEAL BEFORE THE LEARNED CIT(A). BEFORE THE LEARNED CIT(A) ALSO THE ASSESSEE DID NOT REMAIN PRESENT. TH E LEARNED CIT(A), THEREFORE, CONSIDERING THE FACTS OF THE CASE, CONFI RMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. I NOVATE TECHNOLOGIES ITA NO. 3/IND/2017 4 1.3 AGAINST THE ABOVE FINDINGS OF THE LOWER AU THORITIES, THE ASSESSEE HAS FILED THE PRESENT APPEAL ON THE GROUND S MENTIONED ABOVE. 1.4 BEFORE US, THE LEARNED COUNSEL FOR THE ASSESS EE SUBMITTED THAT IT IS IN DISPUTE BETWEEN THE MANAGEMENT, HENCE BOOK S OF ACCOUNTS COULD NOT BE OBTAINED. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSEE IS READY AND WILLING TO PUT-FORTH ITS CLAIM BEFORE THE ASSESSING OFFICER IF THE MATTER IS SET ASIDE TO HIS FILE. TO THIS PROPOSITION, THE LEARNED DR HAS NO OB JECTION. 1.5 WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH T HE SIDES. AFTER CAREFUL CONSIDERATION OF THE SUBMISSIONS OF THE PAR TIES IN VIEW OF THE FACTS OF THE CASE, WE FIND THAT IN THIS CASE THE AS SESSING OFFICER HAS MADE THE ASSESSMENT U/S 144 OF THE IT ACT. IT IS A WELL SETTLED PRINCIPLE OF NATURAL JUSTICE THAT NO-BODY SHOULD BE CONDEMNED UNHEARD. PRINCIPLE OF NATURAL REQUIRES THAT SUFFICI ENT OPPORTUNITY OF BEING HEARD SHOULD BE PROVIDED TO THE ASSESSEE BEFO RE DECIDING THE ISSUE AGAINST HIM. WE ARE OF THE VIEW THAT SINCE TH E ASSESSING OFFICER AND THE LEARNED CIT(A) HAVE DECIDED THE MAT TER WITHOUT HEARING THE ASSESSEES IN VIOLATION OF THE PRINCIPLE S OF NATURAL JUSTICE AND FAIR PLAY, THIS APPEAL NEEDS TO BE RESTORED TO THE FILE OF THE I NOVATE TECHNOLOGIES ITA NO. 3/IND/2017 5 ASSESSING OFFICER FOR DECIDING THE SAME AFTER PROVI DING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEES. WE, TH EREFORE, FOLLOWING THE PRINCIPLE OF NATURAL JUSTICE, RESTORE THIS APPE AL TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO FRAME FRESH ASSESSMENT AFTER PROVIDING THE ASSESSEES DUE OPPORTUNITY OF BEING HE ARD. NEEDLESS TO MENTION THAT THE ASSESSEE IS AT LIBERTY TO FILE EVI DENCE, IF ANY, IN SUPPORT OF ITS CLAIM BEFORE THE ASSESSING OFFICER. 2. IN THE RESULT, THE APPEAL OF THE ASSESSEES IS AL LOWED FOR STATISTICAL PURPOSES. 3. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH MARCH, 2017. S D / - S D / - ( . . ) (C.M.GARG) JUDICIAL MEMBER ( . . ) (O.P.MEENA) ACCOUNTANT MEMBER / DATED : 27 TH MARCH , 2017 DN/-