Nayyar Ali, New Delhi V. ITO, Ward- 62(2), New Delhi

ITA 3170/DEL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7315 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 03-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VK SABHARWAL
• Keywords: Opportunity of being heard; Assessment record
• Section: 271(1)(c); 142(1); 234B; 143(2); 13; 147; 148; 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC BENCH, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 3170/DEL/2018 [ASSESSMENT YEAR: 2009-10] NAYYAR ALI, VS. ITO, WARD-62(2), FLAT NO. 9/8, 4 TH FLOOR, NEW DELHI STREET NO. 6/4, ZAKIR NAGAR, NEW DELHI 25 (PAN: AGHPA1023C) [APPELLANT] [RESPONDENT] ASSESSEE BY: SHRI V.K. SABHARWAL, ADV. REVENUE BY : SH. PRADEEP SINGH GAUTAM, SR . DR. ORDER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE LD. COMMISSIONER OF INCOME TAX [APPEALS-20], NEW DELHI DATED 21.02.2018 PERTAINING TO ASSESSMENT YEAR 2009-10 O N THE FOLLOWING GROUNDS:- 1. THAT THE EX-PARTE ORDERS PASSED U/S 147 1 144 O F THE INCOME TAX ACT, 1961 ON 05.12.2016, IS PERVERSE TO THE PROVISIONS OF LAW AND FACTS OF THE CASE, BECAUSE OF NOT INVOKING INDEPENDENTLY THE PROVISIONS OF LAW CONTAI NED U/S 147 OF THE ACT, AS THE SAME WAS INVOKED ONLY ON THE BORROWED INFORMATION RECEIVED FROM THE INVESTIGATIO N WING OF THE DEPTT. WHICH THE LD. CIT(A) HAS FAILED TO APPRECIATE. 2. THAT THE ORDER PASSED U/S 147/144 OF THE INCOME TAX ACT, 1961 ON 05.12.2016 IS FURTHER ILLEGAL AS NOT T ENABLE BECAUSE OF THE NON-RECEIPT SERVICE OF ANY NOTICE CL AIMED 2 TO BE ISSUED U/S 148 OF THE I.T. ACT, WHICH HAS FUR THER NOT BEEN CONSIDERED BY THE LD. CIT(A) WHILE PASSING THE APPELLATE ORDERS ON 21.02.2018. 3. THAT THE ORDERS PASSED U/S 147/144 OF THE I.T. A CT WAS FURTHER PERVERSE TO THE LAW AND TO THE FACTS OF THE CASE, BECAUSE OF THE NON-ISSUANCE OF ANY MANDATORY NOTICE U/S 143(2) OF THE ACT PRIOR TO COMPLETE THE EX-PART E ASSESSMENT PROCEEDINGS, WHICH HAS ALSO NOT BEEN CONSIDERED BY THE LD. CIT(A) 4. THAT THE ADDITIONS MADE OF RS. 2,90,789/- IN THE INCOME OF THE APPELLANT WAS FURTHER NOT JUSTIFIED, AS THE APPELLANT HAS ALREADY DISCLOSED / REFLECTED THE SAID AMOUNT A S REFUND OF SECURITY FROM M/S PRATIBHA INDUSTRIES, FO R WHICH CONFIRMATION OF ACCOUNTS, COPIES OF BANK 'STATEMENT , COPIES OF BALANCE SHEETS OF THE PRECEDING AND FOR T HE ASSESSMENT YEAR 2009-10 WERE ALSO FILED BEFORE THE CIT(A) WHICH SHE HAS FAILED TO CONSIDER WHILE UPHOL DING THE ADDITIONS OF RS. 2,90,789/- IN THE HANDS OF THE APPELLANT. 5. THAT THE ORDER PASSED BY THE LD. CIT(A) WAS FURT HER NOT TENABLE UNDER THE LAW AND TO THE FACTS OF THE CASE, AS SHE WAS HAVING HER OPINION, THAT BECAUSE OF THE SAID AM OUNT OF RS. 2,90,789/- FOR THE REFUND OF SECURITY AMOUNT IS NOT SPECIFICALLY REFLECTED/ CREDITED IN THE BANK ACCOUN TS OF THE APPELLANT, THEREFORE, THE ADDITIONS MADE BY THE ASS ESSING OFFICER WAS JUSTIFIED, THOUGH THE APPELLANT EXPLAIN ED THAT THE PAYMENT RECEIVED IN RUNNING ACCOUNT FROM M/S PRATIBHA INDUSTRIES INCLUDES THE AMOUNT OF RS. 2,90,789/- AS REFUND OF SECURITY. 3 6. THAT THE APPELLANT WAS NOT AFFORDED ANY REASONAB LE AND PROPER OPPORTUNITY BY THE ASSESSING OFFICER TO EXPL AIN THE DIFFERENCE IN THE GROSS RECEIPTS OF RS. 2,90,789/- WHICH WAS FACTUALLY THE AMOUNT AS REFUND OF SECURITY DEDU CTED EARLIER. 7. THAT EX-PARTE ORDERS PASSED WERE ILLEGAL AGAINST THE LAW AND TO THE FACTS OF THE CASE, BECAUSE OF FORMING HI S OPINION BY THE ASSESSING OFFICER, THAT AS PER THE INFORMATION PASSED OVER TO HIM, THE APPELLANT HAS RECEIVED THE GROSS CONTRACT AMOUNT OF RS. 14637708/ - FROM M/S PRATIBHA INDUSTRIES, OUT OF WHICH HE HAS DECLARED ONLY THE GROSS CONTRACT AMOUNT OF RS.1,43,38,920/-, AS SUCH THE DIFFERENCE OF RS. 298 601/- WAS ADDED IN THE INCOME OF THE APPELLANT. 8. THAT THE LD. CIT(A) HAS FAILED TO CONSIDER THE CONFIRMATION FILED AND PLACED UPON RECORDS BY M/S PRATIBHA INDUSTRIES, CONFIRMING THAT THEY HAVE PAID RS. 1,46,37,708/- TO THE APPELLANT (GROSS CONTRACT RECE IPTS OF RS. 1,43,38,920/- AND REFUND OF SECURITY AMOUNT OF RS. 2,98,789/-) TOTAL OF WHICH COMES TO RS. 1,46,37,708 /-. IN SUPPORT OF WHICH THE APPELLANT HAS ALSO FILED THE C OPIES OF BALANCE SHEETS, BANK STATEMENTS, BUT THE SAME WERE NOT CONTROVERTED WHILE PASSING THE APPELLATE ORDERS . 9. THAT PRIOR TO PASS THE APPELLATE ORDERS, THE CIT (A) HAS NOT COLLECTED ANY MATERIAL WHICH COULD SUPPORT THE UPHOLDING OF RS. 2,98,789/- IN THE HANDS OF THE APPELLANT. 10. THAT THE PENALTY PROCEEDINGS INITIATED U/S 271( 1)(C) AND INTEREST CHARGED U/S 234B OF THE ACT WHILE COMPLETI NG 4 THE ORDER WAS FURTHER NOT IN CONSONANCE OF THE ILL EGAL AND IMPUGNED ADDITIONS MADE IN THE HANDS OF THE APPELLANT WHILE FINALIZING THE ORDER. 11. THAT THE APPELLANT ASSESSEE ASSAILS HIS RIGHT T O AMEND, ALTER, CHANGE ANY GROUNDS OF APPEAL AT ANY TIME EV EN AT THE STAGE OF HEARING OF THE INSTANT APPEAL. PRAYER:- IT IS, THEREFORE, PRAYED THAT: 1. THAT THE PROCEEDINGS COMMENCED AND CONCLUDED U/S 147 / 144 OF THE INCOME TAX ACT, 1961 VIDE ORDERS DATED 05.12.2016 WHICH UPHELD BY THE LD. CIT(A), MAY PLEA SE BE QUASHED / CANCELLED. 2. THAT ALTERNATIVELY THE ILLEGAL AND IMPUGNED ADDI TIONS MADE OF RS. 2,90,789/- IN THE DECLARED INCOME OF TH E APPELLANT MAY ALSO BE DELETED / QUASHED. 3. THAT THE INTEREST CHARGED U/S 234B AND PENALTY I NITIATED U/S. 271(1)(C) OF THE ACT, MAY ALSO BE WAIVED BEING CONSEQUENTIAL TO THE ILLEGAL AND IMPUGNED ADDITIONS MADE AND RELIEF CLAIMED THEREFROM. 4. THAT ANY OTHER RELIEF WHICH THIS HON'BLE COURT M AY PLEASE BE DEEMED FIT AND PROPER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. IT IS PRAYED ACCORDINGLY. 2. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSE SSEE DRAW MY ATTENTION TOWARDS THE GROUND NO. 2 WHICH WAS ALSO R AISED BY THE ASSESSEE BEFORE THE LD. CIT(A) IN WHICH THE ASS ESSEE HAS CHALLENGED THE NON-RECEIPT / SERVICE OF ANY NOTICE WHICH ALLEGED AND CLAIMED TO BE ISSUED OR EVER SERVED U/S. 148 OF THE I.T. ACT, 1961 AND THEREAFTER/ CONSEQUENTLY U/S. 142(1) OF THE INC OME TAX ACT, 5 1961, PRIOR TO PASS SUCH ORDERS. LD. COUNSEL FOR TH E ASSESSEE STATED THAT LD. CIT(A) HAS NOT ADJUDICATED THE SAME AND RE QUESTED THAT THE LEGAL ISSUE AS WELL AS OTHER ISSUES RAISED IN T HE GROUNDS OF APPEAL BEFORE THE LD. CIT(A) MAY BE DECIDED AFRESH , AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESEE. IN SUPPORT OF HIS CONTENTION, HE HAS FILED THE COPY OF WRITTEN SU BMISSIONS WITH SUPPORTING CASE LAWS AND A PAPER BOOK CONTAINING PA GES 1-13 TO SUBSTANTIATE HIS CASE. 3. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS O F THE AUTHORITIES BELOW AND ALSO FILED WRITTEN SUBMISSION S. HE CONTROVERTED THE ARGUMENTS ADVANCED BY THE LD. COUN SEL FOR THE ASSESSEE AND STATED THAT AO HAS ISSUED ALL THE NOTI CES AS PER LAW AND COMPLETED THE ASSESSMENT AFTER HEARING THE ASSE SSEE AND REQUESTED THAT THE APPEAL FILED BY THE ASSESSEE MAY BE DISMISSED. 4. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE OR DERS OF THE REVENUE AUTHORITIES, WRITTEN SUBMISSION OF BOTH THE PARTIES AND THE CASE LAWS RELIED THEREIN AS WELL AS PAPER BOOK CONT AINING PAGES 1- 13 IN WHICH HE HAS ATTACHED THE COPY OF ITR FILED F OR THE AY 2009-10 (ANNEXURE-A); COPY OF BALANCE SHEET, PROFIT AND LOS S ACCOUNT AS ON 31.3.2009 (AY 2009-10) (ANNEXURE B&C); COPY OF LEDG ER A/C CONFIRMED BY M/S PRATIBHA INDUSTRIES FOR THE YEAR 1 .4.2008 TO 31.3.2009 RELATING TO THE PAYMENT MADE TO MR. NAYYA R ALI AND COPY OF CONFIRMATION OF ACCOUNT ISSUED BY M/S PRATIBHA I NDUSTRIES FOR THE FINANCIAL YEAR 2008-09, CONFIRMING THAT THEY HAVE P AID THE TOTAL AMOUNT OF RS. 1,46,37,708/- DURING THE YEAR (RS. 1, 43,38,920/- FOR THE JOB DONE BY MR. NAYYAR ALI AND RS,. 2,98,601/- TOWARDS THE REFUND OF HIS SECURITY AMOUNT). I HAVE ALSO PERU SED THE IMPUGNED ORDER AND OF THE VIEW THAT ASSESSE HAS RAISED GROUN D NO. 2 BEFORE THE LD.CIT(A) WHICH IS REPRODUCED AS UNDER:- 6 2. THAT THE ORDER PASSED U/S. 147/144 OF THE INCOME TAX ACT, 1961, ON 05.12.2016, IS FURTHER ILLEGAL AS NOT TENABLE BECAUSE OF THE NON-RECEIPT / SERVICE OF ANY NOTICE, WHICH ALLEGED AND CLAIMED TO BE ISSUED OR EVER SERVED U/S. 148 OF THE ACT, AND THEREAFTER/ CONSEQUENTLY U/S. 142(1) OF THE INCOME TAX ACT, 1961, PRIOR TO PASS SUCH ORDERS. 4.1 AFTER GOING THROUGH THE IMPUGNED ORDER, I AM O F THE VIEW THAT LD. CIT(A) HAS NOT DECIDED THE GROUND NO. 2 WHICH REQUIRE THOROUGHLY CONSIDERATION AT THE LEVEL OF THE LD. CI T(A), AFTER EXAMINATION OF THE ASSESSMENT RECORDS. THEREFORE, IN THE INTEREST OF JUSTICE, I AM SETTING ASIDE THE ISSUES INVOLVED IN THE APPEAL, AS REPRODUCED ABOVE, ESPECIALLY WITH THE DIRECTION TO THE LD. CIT(A) TO DECIDE THE GROUND NO. 2 AFRESH RAISED BY THE ASSESS EE, AS MENTIONED IN COLUMN NO. 35 BEFORE HIM, AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED ON 03.02.2020. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATED:03-02-2020 SRB COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) ASST. REGISTRAR, 5. DR ITAT, NEW DELHI