M/s. Gill Power Generation Co. (P) Ltd., New Delhi V. ITO, New Delhi

ITA 309/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58977 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-03-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 20-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SAKSENA
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Principle of natural justice; Additional evidence
• Section: 143(3); 234B; 133(6); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C DELHI) BEFORE SHRI G.D. AGRAWAL, HONBLE VICE PRESIDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER ITA NO. 309(DEL)2012 ASSESSMENT YEAR: 2005-06 M/S. GILL POWER GENERATION CO.(P)LTD. IN COME TAX OFFICER, J-1, KAILASH COLONY, NEW DELHI. V. WARD 12(1), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ASHWANI TANEJA, CA & SHRI TARUN, ADVOCATE RESPONDENT BY: SHRI V.K. SAKSENA, CIT/DR ORDER PER A.D. JAIN, J.M . THIS IS ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2 005-06, TAKING THE FOLLOWING GROUNDS:- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT DELETIN G THE ADDITION OF ` 1,86,55,000/- ON ACCOUNT OF INCREASE IN SHARE CAPIT AL. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTAN CES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT DEL ETING THE ADDITION OF ` 42,47,000/- ON ACCOUNT OF SHARE APPLICATION MONEY. ITA 309(DEL)2012 2 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTAN CES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT DELETIN G THE ADDITION OF ` 99,44,122/- ON ACCOUNT OF SUNDRY CREDITORS. 4. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTAN CES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT DELETIN G THE ADDITION OF ` 6,36,252/- ON ACCOUNT OF INTEREST INCOME. 5. THAT IN ANY CASE AND ANY VIEW OF THE MATTER, AC TION OF LD. CIT(A) IN NOT GRANTING THE ADEQUATE OPPORTUNITY OF HEARING AN D IN NOT CONSIDERING THE SUBMISSIONS AND EVIDENCES ON RECORD AND HAS FURTHER ERRED IN PASSING THE NON-SPEAKING AND PERVERSE ORDE R AND HAS FURTHER ERRED IN PASSING THE ORDER VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 6. THAT IN ANY CASE AND ANY VIEW OF THE MATTER, ORD ER OF LD. CIT(A) AND ORDER OF LD. AO AND ADDITIONS/DISALLOWANCES MAD E THEREIN ARE BEYOND JURISDICTION, CONTRARY TO LAW AND FACTS, VOI D AB INITIO, AND THE SAME ARE NOT SUSTAINABLE ON VARIOUS LEGAL AND FACTU AL GROUNDS. 7. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT REVERSI NG THE ACTION OF LD. AO IN CHARGING THE INTEREST U/S 234A AND 234B OF TH E INCOME TAX ACT, 1961. 2. THE BRIEF FACTS, AS AVAILABLE FROM THE STATEMENT OF FACTS (COPY AT PAGE 145 OF THE ASSESSEES PAPER BOOK, APB FOR SHORT), STATED TO HAVE BEEN FILED BY THE ASSESSEE BEFORE THE LD. CIT(A) DURING THE FIRST APPELLATE PROCEEDINGS, AS ALSO REITERATED BEFORE US BY THE LE ARNED COUNSEL FOR THE ASSESSEE, ARE THAT THE ASSESSEE COMPANY FILED ITS R ETURN OF INCOME FOR THE ASSESSMENT YEAR 2005-06 VOLUNTARILY WITH WARD 12(1) , NEW DELHI ON 30.03.2006, DECLARING NIL INCOME; THAT THE ASSESSEE COMPANY SUBMITTED ALL ITA 309(DEL)2012 3 THE REQUISITE ANNEXURE, COMPUTATION OF INCOME, AUDI TED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT WITH COMPLETE ANNEXURE; THA T THE ASSESSEE COMPANY WAS ENGAGED IN THE IMPLEMENTATION OF PROJECT(MINI H YDRO PROJECT) FOR GENERATION OF ELECTRICITY AND HAD NOT STARTED COMME RCIAL OPERATIONS DURING THE PERIOD UNDER QUESTION; THAT THE MANAGEMENT OF T HE ASSESSEE COMPANY CONSISTS OF TWO BROTHERS, I.E., MR. PRITAM SINGH GI LL AND MR. AVTAR SINGH GILL; THAT THE PROJECT WAS CONCEIVED IN THE YEAR 19 98 AND THE FAMILY INVESTED ALL THEIR SAVINGS OF THE LIFE IN THE PROJECT; THAT THE PROJECT COST INCREASED MANY TIMES DURING THE IMPLEMENTATION OF THE PROJECT AND THE PROJECT FACED MANY INTERNAL AND EXTERNAL PROBLEMS INCLUDING FINAN CIAL AND TECHNICAL; THAT THE ASSESSEE COULD NOT SUBMIT SOME OF THE DOCUMENTS AS REQUIRED BY THE AO DURING ASSESSMENT PROCEEDINGS U/S 143(3) AND THE CA SE WAS ASSESSED BY THE AO EX-PARTE U/S 144 OF THE INCOME TAX ACT, 1961; TH AT THE ASSESSEE COULD NOT PROVIDE NECESSARY INFORMATION TO THE AO DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) DUE TO ACUTE FINANCIAL PROBL EMS LEADING TO MANAGEMENT DISPUTE IN THE FAMILY AND BOTH THE DIREC TORS AND MAJORITY SHAREHOLDER (ACTUALLY BROTHERS) WERE HOSTILE TO EAC H OTHER AND THE INTEREST OF THE COMPANY WAS OVERLOOKED; THAT THE ADMINISTRATIVE OFFICE WAS LOCKED BY BOTH THE BROTHERS IN ORDER TO SETTLE THEIR SCORES B ETWEEN EACH OTHER AND THE IMPLEMENTATION OF THE PROJECT WAS ALSO SUSPENDED; T HAT DURING THIS PERIOD, ITA 309(DEL)2012 4 THE WORKING OF THE COMPANY CAME TO A STANDSTILL POS ITION; AND THAT AS SUCH, THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE AO THE EVIDENCE/DETAILS WHICH HE CALLED UPON AND EV IDENCE WHICH ARE RELEVANT TO THE GROUNDS OF APPEAL. 3. BY VIRTUE OF THE IMPUGNED ORDER DATED 25.11.2011 , THE APPEAL OF THE ASSESSEE WAS DISMISSED BY THE LD. CIT(A). AGGRIEV ED THERE-FROM, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. THE MAIN CHALLENGE OF THE ASSESSEE BEFORE US, AS CONVASSED BY THE LEARNED COUNSEL FOR THE ASSESSEE, IS THAT THE LD. C IT(A) ERRED IN NOT CONSIDERING THE EVIDENCE FILED BY THE ASSESSEE AS A DDITIONAL EVIDENCE BEFORE THE LD. CIT(A), EVEN THOUGH THE ASSESSEE WAS PREVEN TED BY SUFFICIENT CAUSE FROM FILING SUCH EVIDENCE BEFORE THE AO IN THE ASSE SSMENT PROCEEDINGS; THAT THE LD. CIT(A) FAILED TO CONSIDER THAT THE AO DID N OT RAISE ANY OBJECTION TO THE ADMISSION OF THE ADDITIONAL EVIDENCE WHEN THE M ATTER WAS INITIALLY REMITTED TO HIM BY THE LD. CIT(A); AND THAT THE LD. CIT(A) HAS ALSO FAILED TO TAKE COGNIZANCE OF THE FACT THAT IT WAS ONLY IN THE SECOND REMAND REPORT THAT THE AO OBJECTED TO THE ADMISSION OF THE ADDITIONAL EVIDENCE, WHEN SUCH EVIDENCE STOOD ALREADY ADMITTED IN THE FIRST ROUND; THAT MOREOVER, FOR THE IMMEDIATELY SUCCEEDING ASSESSMENT YEAR, I.E., ASSES SMENT YEAR 2006-07, VIDE ITA 309(DEL)2012 5 ORDER DATED 10.12.08 (COPY PLACED ON RECORD), THE A O HAS ACCEPTED THE ASSESSEES CLAIM. FURTHER, THE LEARNED COUNSEL FO R THE ASSESSEE HAS PLACED ON RECORD AFFIDAVITS OF SHRI PRITAM SINGH GILL, SHRI A VTAR SINGH GILL, SMT. NAVJOT KAUR CHEEMA (TWO AFFIDAVITS) ONE IN HER IN DIVIDUAL CAPACITY AND THE OTHER AS DIRECTOR OF M/S. MEGA HYDEL GEN.PVT. L TD., CONTENDING THEREIN, INTER ALIA, THAT THEY DID NOT RECEIVE ANY NOTICE U/ S 133(6) OF THE I.T. ACT, AS MENTIONED IN THE AOS REPORT DATED 23.9.2009, THAT VIDE LETTERS DATED 25.1.2011 AND 27.1.2011, THE COUNSEL FOR THE ASSESS EE HAD STATED BEFORE THE LD. CIT(A) ABOUT THE ASSESSEE COMPANY BEING NOT AWA RE OF THE ISSUANCE OF ANY SUCH NOTICE OR OF ANY NON-COMPLIANCE BY THE SHA RE-HOLDERS OF THE ASSESSEE COMPANY, THAT IF THEY HAD BEEN INFORMED, THE ASSESSEE WAS READY TO MAKE EFFORT TO PERSUADE THE PARTIES FOR PROVIDING T HE REQUIRED DETAILS/EVIDENCE BEFORE THE AO AND TO MAKE ADEQUATE REPRESENTATION BEFORE THE AO, THAT THE AO DID NOT ACCEPT THE ASSESSEES S UBMISSIONS AND DID NOT ALLOW ANY OPPORTUNITY TO THE ASSESSEE COMPANY AND T O THE SHARE-HOLDERS AND IN HIS SECOND REMAND REPORT DATED 27.6.2011, AND TH AT IN CASE AN OPPORTUNITY IS GIVEN, THE DEPONENTS UNDERTOOK TO EXTEND FULL CO -OPERATION WITH REGARD TO THE DETAILS AND EVIDENCE CONCERNING THE SHARE APPLI CATION MONEY/SHARE CAPITAL ENVISAGED IN THE ASSESSEE COMPANY AND TO MA KE REQUISITE EFFORTS TO ITA 309(DEL)2012 6 PERSUADE THE OTHER SHAREHOLDERS TO EXTEND THE REQ UISITE CO-OPERATION TO THE AO AND TO PROVIDE COMPLETE DETAILS/EVIDENCE AS MAY BE REQUIRED BY THE AO. 5. IN THIS MANNER, THE LEARNED COUNSEL FOR THE ASSE SSEE HAS REQUESTED THAT THE MATTER BE REMITTED TO THE FILE OF THE AO FOR DE CISION AFRESH IN ACCORDANCE WITH LAW ON AFFORDING ADEQUATE OPPORTUNITY OF HEARI NG TO THE ASSESSEE. 6. THE LD. DR, ON THE OTHER HAND, HAS STRONGLY SUPP ORTED THE IMPUGNED ORDER. OUR ATTENTION HAS BEEN ATTRACTED TO THE OBS ERVATIONS MADE BY THE LD. CIT(A) IN PARA 3.3 ONWARDS OF THE IMPUGNED ORDER, W HEREIN ACCORDING TO THE LD. DR, THE LD. CIT(A) HAS OBSERVED THAT DESPITE AD EQUATE OPPORTUNITY AFFORDED TO THE ASSESSEE, THE REQUISITE EVIDENCE WA S NEVER FILED. THE LD. DR HAS CONTENDED THAT IN VIEW OF THESE OBSERVATIONS, T HE ORDER OF THE LD. CIT(A) DOES NOT REQUIRE ANY INTERFERENCE WHATSOEVER. 7. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE M ATERIAL ON RECORD. APB 115 IS A COPY OF THE APPLICATION DATED 27.4.09 FILED BY THE ASSESSEE REQUESTING ADMISSION OF ADDITIONAL EVIDENCE. THER EIN, IT HAS BEEN CONTENDED THAT IT WAS DUE TO ACUTE FINANCIAL PROBLEMS AND MAN AGEMENT DISPUTE IN THE FAMILY AND DUE TO THE FACT THAT BOTH THE DIRECTORS AND MAJORITY OF THE SHAREHOLDERS, WHO WERE BROTHERS INTER SE, WERE HOST ILE TO EACH OTHER, THAT THE ITA 309(DEL)2012 7 INTEREST OF THE ASSESSEE COMPANY WAS OVER-LOOKED; T HAT THE ADMINISTRATIVE OFFICE OF THE COMPANY WAS LOCKED BY BOTH THE BROTHE RS; AND THAT, IT WAS THEREFORE THAT THE ASSESSEE WAS PREVENTED BY SUFFIC IENT CAUSE FROM PRODUCING THE EVIDENCE BEFORE THE AO. 8. AS IS EVIDENT FROM THE SECOND SUB-PARA OF PARA 3 .3 AT PAGE 3 OF THE IMPUGNED ORDER, THE ASSESSEES AFORESAID REQUEST FO R ADMISSION OF ADDITIONAL EVIDENCE WAS FORWARDED BY THE CIT(A) TO THE AO, VID E LETTER DATED 27.4.09, WHEREIN THE AO HAD BEEN DIRECTED TO EXAMINE THE DOC UMENTS FILED AS ADDITIONAL EVIDENCE BY THE ASSESSEE AND TO MAKE FUR THER INVESTIGATION. 9. IN THE FIRST REMAND REPORT DATED 23.9.09 (COPY A T APB 116 & 117), THE AO DID NOT RAISE ANY OBJECTION AGAINST THE ADMISSIO N OF ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. RATHER, IT WAS STATED, ON MERITS, INTER ALIA, THAT SO AS TO VERIFY THE SUBMISSIONS FILED BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS, NOTICES U/S 133(6) OF THE I.T. ACT HAD BEEN ISSUED TO PERSONS WHO HAD CONTRIBUTED TO THE SHARE CAPITAL AND SHARE APPLICATION MONEY DURING THE YEAR AND TO EIGHT CREDITORS OF THE ASSESSEE COM PANY, AT THE ADDRESSES PROVIDED BY THE ASSESSEE COMPANY IN ITS SUBMISSIONS ; AND THAT THE NOTICES ISSUED TO THE CONTRIBUTORS OF THE SHARE CAPITAL AND SHARE APPLICATION MONEY REMAINED UNCOMPLIED WITH. ITA 309(DEL)2012 8 10. WHEN THIS REMAND REPORT WAS PUT TO THE ASSESSEE BY THE CIT(A), TWO REPLIES DATED 25.1.2011 (COPY AT APB 118 TO 122) AN D 27.1.2011 (COPY AT APB 123 AND 124) RESPECTIVELY, WERE FILED BEFORE TH E LD. CIT(A) ON BEHALF OF THE ASSESSEE. IN PARA 3 (APB 119) OF THE ASSESS EES REPLY DATED 25.1.2011, THE ASSESSEE STATED AS FOLLOWS:- AT THE TIME OF FRAMING HIS REPORT UNDER RULE 46A T HE ASSESSING OFFICER ISSUED NOTICES TO THE CREDITORS/S HAREHOLDERS U/S 133(6) OF THE INCOME TAX ACT, 1961. THE ASSES SEE HAD REASONABLY AND GENUINELY EXPECTED THAT THE CREDITORS/SHAREHOLDERS/APPLICANTS WILL APPEAR BEFOR E THE INCOME TAX OFFICER IN COMPLIANCE WITH THE SUMMONS I SSUED BY THE AO U/S 133(6) OF THE INCOME TAX ACT, 1961. TH E ASSESSEE WAS NEVER INFORMED BY THE AO THAT THE CREDITORS/SHA REHOLDERS WERE NOT AVAILABLE OR UNIDENTIFIABLE. IF HE HAD BE EN INFORMED BY THE INCOME TAX OFFICER IN THE COURSE OF FRAMING HIS REPORT UNDER RULE 46A, THE ASSESSEE COULD HAVE TRIED TO SA TISFY HIM ABOUT THE GENUINENESS OF THE TRANSACTIONS/PARTIES B Y PRODUCING OTHER EVIDENCE. 11. IN THE LAST PARA OF THE FIRST PAGE (APB 123) OF THE ASSESSEES REPLY DATED 27.1.2011, THE ASSESSEE STATED AS FOLLOWS:- THE ASSESSEE WAS NOT AWARE OF THE NOTICES ISSUED T O THE PARTIES AND AS EXPLAINED EARLIER THE PARTIES WERE N ON CO- OPERATIVE DUE TO NON-PAYMENT OF DUES TO THEM. WE MAY RE- ITERATE THAT THE ASSESSEE WAS UNDER GENUINE IMPRESS ION THAT THE PARTIES WOULD CO-OPERATE AND PROVIDE NECESSARY CONFIRMATIONS BEFORE THE AO. THE AO HAS ALSO NEV ER INFORMED THE ASSESSEE REGARDING NON-COMPLIANCE OF T HE ITA 309(DEL)2012 9 NOTICES, OTHERWISE THE ASSESSEE WOULD HAVE MADE EFF ORTS TO PERSUADE THE PARTIES FOR SUBMISSION OF THE INFORMAT ION AS CALLED FOR. 12. THE MATTER WAS AGAIN REMITTED TO THE AO BY THE LD. CIT(A) AND VIDE LETTER DATED 27.6.2011 (APB 125), THE ASSESSEE SUBM ITTED THE FOLLOWING SECOND REMAND REPORT TO THE CIT(A):- SUBJECT:- REMAND REPORT IN THE CASE OF M/S. GILL POWER GENERATION PVT. LTD.- A.Y. 2005-06-REG. .. KINDLY REFER TO YOUR OFFICE LETTER F.NO. CIT(A)-XV/MISC./2011-12/176 DATED 22.06.2011 & LETTER NO. 528 DATED 29.03.2011 VIDE WHICH THE UNDERSIGNED WAS DIRECTED TO EXAMINE THE REJOINDER OF THE APPELLANT. IN THIS REGARD, IT IS SUBMITTED THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE COMPANY WAS AFFORDED SUFFICIENT OPPORTUNITY AS DETAILED IN THE ASSESSMENT ORDER BUT NO DETAILS WER E FILED BY THE ASSESSEE. SUBSEQUENTLY, AS DIRECTED BY YOUR PREDECESSOR, CERTAIN ENQUIRIES WERE CONDUCTED AND THE RESULTS WERE DULY REPORTED TO YOUR OFFICE VIDE THIS OFFICE LETTER NO. 112 DATED 23.09.2009. THE SUBMISSIONS FILED VIDE LETTER DATED 27.01.2011 FORWARDED VIDE YOUR OFFICE LETTER NO. 52 8 DATED 29.03.2011 HAVE BEEN EXAMINED. AT THE OUTSET IT IS REQUESTED THAT THE ASSESSEES REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE BE REJECTED AS THE ASSESSEE WAS AFFORDED SUFFICIENT OPPORTUNITY DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSEES CASE I S NOT COVERED UNDER ANY OF THE CLAUSES OF RULE 46A AND THE EXPLANATIONS AND SUBMISSIONS OF THE ASSESSEE DESERVE TO BE REJECTED. HENCE, IT IS ITA 309(DEL)2012 10 RESPECTFULLY SUBMITTED THAT THE ASSESSMENT MADE BY THE AO DESERVES TO BE UPHELD. THE ASSESSEES SUBMISSION AT POINT NO. 2 OF THE LETTER ARE NOT RELEVANT AS THE PENALTY PROCEEDINGS HAVE BEEN KEPT IN ABEYANCE AS THE ASSESSEE IS IN APPEAL AND HENCE THE SUBMISSIONS MADE IN THE PENALTY PROCEEDINGS HAVE NOT BEEN EXAMINED. IN CASE YOUR HONOUR REQUIRES ANY FURTHER INQUIRY TO BE MADE, A SPECIFIC DIRECTION U/S 250(4) MAY KINDLY BE ISSUED. 13. IT WAS ON CONSIDERING THIS REMAND REPORT THAT THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE, HOLDING THAT THE ASSESSEE HAS NOT SUBMITTED ANY EXPLANATION AS TO WHY EVEN IN THE REMAND PROCEE DINGS (SECOND TIME), NO COMPLIANCE WAS MADE AND NOTHING W AS STATED AS TO WHY THE FOUR DIRECTORS OF THE ASSESSEE COMPANY, WHO WER E CLOSELY RELATED TO EACH OTHER AND HAD HIGH STAKES IN THE BUSINESS OF THE AS SESSEE COMPANY, DID NOT RESPOND TO THE NOTICE ISSUED BY THE AO EVEN IN THE REMAND PROCEEDINGS. 14. IT IS OBSERVED THAT THE ASSESSEE HAD MADE A SPE CIFIC CONTENTION IN THE FIRST ROUND OF REMAND PROCEEDINGS BEFORE THE AO, WH EREIN IT HAD BEEN SUBMITTED, INTER ALIA, THAT THE ASSESSEE WAS NEVER INFORMED THAT THE CREDITORS/SHARE-HOLDERS WERE NOT AVAILABLE OR WERE UNIDENTIFIABLE AND THAT IF THE ASSESSEE HAD BEEN SO INFORMED, THE ASSESSEE WOU LD HAVE TRIED TO SATISFY HIM ABOUT THE GENUINENESS OF THE TRANSACTIONS/PARTI ES BY PRODUCING OTHER EVIDENCE. THE FIRST REMAND REPORT DATED 23.9.2009 (SUPRA) DOES NOT MAKE ITA 309(DEL)2012 11 MENTION OF ANY SUCH INTIMATION/INFORMATION HAVING B EEN GIVEN TO THE ASSESSEE COMPANY REGARDING THE NON-AVAILABILITY/NON -IDENTIFIABILITY OF THE CREDITORS/SHARE-HOLDERS. MOREOVER, ALL THE SHARE- HOLDERS OF THE ASSESSEE COMPANY HAVE GIVEN AFFIDAVITS TO STATE THAT THEY HA D NEVER BEEN SERVED WITH ANY NOTICE U/S 133(6) OF THE ACT. THERE IS NOTHIN G ON RECORD TO SHOW OTHERWISE. 15. EVEN IN THE REPLY DATED 27.1.2011(SUPRA), THE A SSESSEE CONTENDED BEFORE THE LD. CIT(A) THAT THE ASSESSEE WAS NOT AWA RE OF THE NOTICE ISSUED TO THE PARTIES AND THAT THE AO HAD NOT INFORMED THE AS SESSEE REGARDING THE NON- COMPLIANCE OF THE NOTICES, OTHERWISE THE ASSESSEE W OULD HAVE MADE EFFORTS TO PERSUADE THE PARTIES, WHO WERE NON-CO-OPERATIVE DUE TO NON-PAYMENT OF THE DUES, FOR SUBMISSION OF THE INFORMATION AS CALL ED FOR. 16. THEN, IN PARA 4 OF THE IMPUGNED ORDER, IT HAS B EEN OBSERVED BY THE LD. CIT(A) HIMSELF THAT THE AO HAD NOT RAISED ANY OBJEC TION IN THE FIRST REMAND REPORT TO THE ADMISSION OF THE ADDITIONAL EVIDENCE. STILL, THE LD. CIT(A) DEEMED IT FIT TO DISMISS THE APPEAL OF THE ASSESSEE WITHOUT TAKING INTO CONSIDERATION THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. 17. THE FACT OF THE MATTER REMAINS UNDISPUTED BEFOR E US IS THAT THE MANAGEMENT OF THE ASSESSEE COMPANY CONSISTS OF TWO BROTHERS, I.E., SHRI ITA 309(DEL)2012 12 PRITAM SINGH GILL AND SHRI AVTAR SINGH GILL. TH E ASSESSEE COMPANY WAS INCORPORATED ON 27.5.98 AS A PRIVATE LIMITED COMPAN Y FOR SETTING UP OF A POWER GENERATION PLANT, BEING INSPIRED BY THE OPENI NG UP OF POWER GENERATION FOR PRIVATE SECTOR AND IN PURSUANCE OF T HE POLICY OF THE PUNJAB GOVERNMENT TO ALLOW PRIVATE PARTICIPATION IN POWER GENERATION. THE COMPANY WAS ALLOTTED PROJECT SITE FOR SETTING UP OF SMALL HYDRO PLANT, LOCATED ON UPPER BARI DOAB CANAL AT BABEHALLI BRIDG E, V& P.O. BABEHALLI, GURDASPUR, PUNJAB IN THE PRIVATE SECTOR BY PUNJAB E NERGY DEVELOPMENT AGENCY (PEDA) AS NODAL AGENCY FOR POWER GENERATION PROJECTS FOR GOVERNMENT OF PUNJAB ON 29.11.1999 ON BOO (BUILT OW N AND OPERATE)BASIS. THE PROJECT WAS ALSO APPRAISED BY IREDA (INDIAN RENEWABLE ENERGY DEVELOPMENT AGENCY LIMITED) WITH S ANCTION OF CREDIT FACILITIES. IREDA IS GOVERNMENT OF INDIA ENTERPRIS E UNDER THE AEGIS OF MINISTRY OF NON-CONVENTIONAL ENERGY SOURCES, AND TH E LOAN SANCTIONED TO THE ASSESSEE COMPANY IS RE-FINANCED BY THE WORLD BA NK LINE OF CREDIT SUBJECT TO COMPLIANCE FOR NORMS LAID BY THE WORLD B ANK. 18. THE COMPANY HAS ACQUIRED PROJECT SITE LAND ALLO TTED BY PEDA ON LEASE BASIS AND THE CONSTRUCTION WORK WAS STARTED DURING THE FINANCIAL YEAR 2003- 04 AFTER OBTAINING VARIOUS CLEARANCE AND SANCTIONS FROM DIFFERENT GOVERNMENT DEPARTMENTS. CONTRACTS FOR CIVIL WORK A ND INSTALLATION OF OTHER ITA 309(DEL)2012 13 ELECTRO-MECHANICAL WORKS WERE AWARDED BY FLOATING G LOBAL TENDERS UNDER THE SUPERVISION OF IREDA, AS PER WORLD BANK NORMS. TH E PROJECT WAS CONCEIVED IN THE YEAR 1998 AND THE FAMILY INVESTED ALL THEIR SAVINGS OF THE LIFE IN THE PROJECT. THEY WERE FACED WITH ACUTE F INANCIAL PROBLEMS, WHICH LED TO A DISPUTE BETWEEN THE BROTHERS, WHO WERE DIR ECTORS AND MAJORITY SHARE-HOLDERS IN THE ASSESSEE COMPANY. THE HOSTIL ITY BETWEEN THEM LED TO THE ENTIRE INTEREST OF THE COMPANY HAVE OVER-LOOKED . SO MUCH SO, EVEN THE ADMINISTRATIVE OFFICE WAS LOCKED BY BOTH THE BROTHE RS. THE WORKING OF THE COMPANY CAME TO A STAND-STILL. IT WAS THESE ADVER SE CIRCUMSTANCES WHICH PREVENTED THE ASSESSEE FROM FURNISHING THE REQUISIT E EVIDENCE BEFORE THE AO. BEFORE THE LD. CIT(A), AN APPLICATION FOR ADDITIONA L EVIDENCE WAS FILED AND THE MATTER WAS REMANDED. THE AO, IN THE REMAND PR OCEEDINGS, DID NOT OPPOSE THE ADMISSION OF THE ADDITIONAL EVIDENCE. I N THE FIRST REMAND REPORT, HOWEVER, HE STATED NON-COMPLIANCE OF THE NOTICE ISS UED U/S 133(6) OF THE ACT. THE ASSESSEE CONTRADICTED RECEIPT OF ANY SUC H NOTICE BY THE SHARE- HOLDERS/CREDITORS. IN THE SECOND REMAND REPORT, HO WEVER, THE AO OBJECTED TO THE ADMISSION OF THE ADDITIONAL EVIDENCE, WHICH EFF ECTIVELY STOOD ALREADY ADMITTED ONCE THE AO HAD ACTED UPON SUCH EVIDENCE I N THE FIRST REMAND. THE LD. CIT(A), HOWEVER, THREW THE ASSESSEE OUT NEC K AND CROP WITHOUT AS MUCH AS ADVERTING THE EVIDENCE FILED. ITA 309(DEL)2012 14 19. THIS ACTION OF THE LD. CIT(A), HAVING CONSIDERE D ALL THE FACTS AS DISCUSSED HEREIN ABOVE, HAS NOT FOUND TO BE SUSTAIN ABLE. THE ASSESSEE, EVEN AT THIS STAGE, IS READY AND WILLING TO CO-OPERATE I N FULL TO SUPPORT AND SUBSTANTIATE ITS CLAIM MADE AND TO THIS END, THE AF ORESAID AFFIDAVITS HAVE BEEN FILED. 20. IN THE ABOVE FACTS AND CIRCUMSTANCES, WE DEEM I T APPROPRIATE, IN THE INTEREST OF JUSTICE, TO REMIT THIS MATTER TO THE FI LE OF THE AO, TO BE DECIDED AFRESH IN ACCORDANCE WITH A LAW ON AFFORDING DUE OP PORTUNITY TO THE ASSESSEE. THE ASSESSEE, NO DOUBT, AS UNDERTAKEN BY IT, SHALL CO-OPERATE IN THE FRESH ASSESSMENT PROCEEDINGS. 21. ORDERED ACCORDINGLY. 22. IN THE RESULT, FOR STATISTICAL PURPOSES, THE AP PEAL OF THE ASSESSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.03.2012. SD/- SD/- (G.D. AGRAWAL) (A.D. JAIN) VICE PRESIDENT JUDICIAL MEMBER DATED: 26.03.2012 ITA 309(DEL)2012 15 *RM COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER ASSISTANT REGISTRAR