Bhardwaj Metal (India) Prop. Ved Parkash , Delhi V. ITO, Ward- 63(3), New Delhi

ITA 3042/DEL/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2828 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 08-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus purchase; Opportunity of being heard; Principle of natural justice
• Section: 271(1)(c); 69C; 274; 2

Judgement Text

ITA NO. 3042/DEL/2019 IN THE INCOME TAX APPELLAT E TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBE R AND MS SUCHITRA KAMBLE, JUDIC IAL MEMBER ITA NO. 3042/DEL/2019 ( A .Y 2008-09) (THROUGH VIDEO CONFEREN CING) BHARDWAJ METAL (INDIA) PROP. VED PRAKASH 5852, BASTI HARPHOOL SINGH, SADAR BAZAR, DELHI - 110006 AADPV4179J (APPELLANT) VS ITO, WARD-63(3), ROOM NO. 2102, J. L. NEHRU MARG, CIVIC CENTRE, NEW DELHI - 110002. (RESPONDENT) APPELLANT BY SH. AKSHIT GOEL, CA RESPONDENT BY SH. AJAY KUMAR, SR. DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER DATED 14/03/2019 PASSED BY CIT(A)-20, NEW DELHI FOR ASSESSMENT YEAR 2008-09. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) {CIT(A )} IS BAD BOTH IN THE EYES OF LAW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED CIT(A) IS BAD IN LAW HAVING BEEN PASSED EXP ARTE WITHOUT GIVING THE DATE OF HEARING 19.11.2020 DATE OF PRONOUNCEMENT 25.11.2020 ITA NO. 3042/DEL/2019 ASSESSEE AN APPROPRIATE AND ADEQUATE OPPORTUNITY OF BEING HEARD IN CLEAR VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. 3. ON THE FACTS AND CIRCUMSTANCE OF THE CASE, THE L EARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAWS IN CONFIRMING THE ACTION OF THE AO LEVYING PENALTY U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING PENALTY OF R S. 3,50,870/- LEVIED BY AO U/S 271(1)(C) OF THE ACT ON THE ADDITION OF RS. 11, 35,484/- MADE BY THE AO ON ACCOUNT OF ADDITION MADE UNDER SECTION 69C ALLEGING THE PURCHASES MADE BY THE ASSESSEE AS BOGUS. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED, BOTH ON FACTS AND IN LAW, IN CONFIRMING THE PENALTY AND REJECTING THE CONTENTION OF THE ASSESSEE THAT ON AN ADDITION MADE ON THE BASIS OF ESTIMATION NO PENALTY UNDER SECTION 271(1)(C) CAN B E LEVIED. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING PENALTY LEVI ED BY AO DESPITE THE FACT THAT THE ADDITIONS ITSELF ARE NOT TENABLE IN LAW. 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE PENALTY LEVIED BY AO DESPITE THE FACT THAT THE PENALTY WAS LEVIED BY THE AO WITHOUT GIVING ANY FINDING AS TO THE MERITS OF THE CASE ON CONCEALMENT OF INCOME AS WELL AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. 8. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L EARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN IGNORING THE CONTENTION OF THE ASSESSEE THAT THE PENALTY PROCEEDINGS ARE INDEPENDENT PROCEEDINGS, AS SUCH MERE ADDITION DOES NOT LEAD TO LEVY OF PENALTY. 9. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE PENALTY LEVIED DESPITE THE FACT THAT THE NOTICE ISSUED BY AO U/S 274 READ WITH SECTION 2 71(1)(C) OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO W HETHER IT IS FOR ITA NO. 3042/DEL/2019 CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 10. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH THE FACTS AND IN LAW IN CONFIRMING THE ORDER P ASSED BY THE AO DESPITE THE FACT THAT THE AO HAS PASSED THE PENALTY ORDER W ITHOUT SPECIFYING THE ALLEGATION WHETHER THE PENALTY IS BEING LEVIED FOR CONCEALMENT OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 11. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, OR AL TER ANY OF THE GROUNDS OF THE APPEAL. 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADI NG OF METAL SCRAP UNDER THE NAME OF BHARDWAJ METAL (INDIA). THE ASSESSMENT WAS COMPLETED U/S 143(3)/147 OF THE INCOME TAX ACT, 1961 ON 18.03.201 6 AT AN INCOME OF RS. 12,68,350/- AGAINST THE RETURN OF INCOME OF RS. 1,3 2,870/- BY MAKING ADDITION OF RS. 11,35,484/- ON ACCOUNT OF BOGUS PURCHASES. T HE PENALTY ORDER DATED 29.09.2016 WAS PASSED BY THE ASSESSING OFFICER IN R ESPECT OF CONCEALMENT OF INCOME THEREBY LEVYING PENALTY OF RS. 3,50,865/-. 4. BEING AGGRIEVED BY THE PENALTY ORDER, THE ASSESS EE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASS ESSEE. 5. THE LD. AR SUBMITTED THAT THE CIT(A) HAS NOT GIV EN THE APPROPRIATE OPPORTUNITY OF HEARING TO THE ASSESSEE TO REPRESEN T HIS CASE. 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS NOT APPEARED BEFORE THE CIT(A) AND THE ORDER IS PASSED EX-PARTE. FROM THE PERUSAL OF THE ORDER OF THE CIT(A), IT CAN BE SEEN THAT THE CIT(A) HAS NOT GIVE N ANY CATEGORICAL FINDING ON MERIT OF THE CASE. THEREFORE, IT WILL BE APPROPRIA TE TO GIVE THE OPPORTUNITY OF ITA NO. 3042/DEL/2019 HEARING TO THE ASSESSEE BEFORE THE CIT(A). HENCE, WE ARE REMANDING BACK THE ENTIRE ISSUE TO THE FILE OF THE CIT(A) TO BE DECIDE D ON MERIT. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN OPPORTUNITY OF HEARING BY FOLLOWI NG PRINCIPLES OF NATURAL JUSTICE. WE FURTHER DIRECT THE ASSESSEE TO CO-OPERA TE THE REVENUE AUTHORITIES FOR JUST AND PROPER DISPOSAL BY REMAINING PRESENT ON TH E HEARING DATES AND SUBMIT THE RELEVANT DOCUMENTS, OTHERWISE, THE REVENUE IS A T LIBERTY TO DISMISS THE APPEAL OF THE ASSESSEE EX-PARTE ON MERIT. THE APPEA L OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 8. IN RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25TH DAY OF NOVEMBER, 2020 . SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL M EMBER DATED: 25/11/2020 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO. 3042/DEL/2019