MAA TALUKA BUILDCON PVT LTD, FIROZABAD V. ITO WARD-2(2)(2), FIROZABAD

ITA 340/AGR/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9278 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 04-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R K AGARWAL SHRI RAHUL AGARWAL
• Keywords: Principle of natural justice; Application of stay; Initiation of penalty proceedings
• Section: 12A; 144; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH: AGRA BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER ITA NO. A.Y. APPELLANT RESPONDENT 340/AGRA/18 2009-10 M/S.MAA TALUKA BUILDCON (P) LTD., 18-MOHALLA CHAU, FIROZABAD PAN:AAECM8032F THE INCOME TAX OFFICER, WARD-2(2)(2), DABRAI, FIROZABAD 467/AGRA/15 2012-13 THE INCOME TAX OFFICER, WARD-3(2), GWALIOR M/S.PATHWAY BUSINESS SOLUTIONS PVT. LTD., C/O.SATYENDRA TRIPATHI, H.NO.02, SHAKUNTALA PURI, THATIPUR,GWALIOR PAN:AAGCP3501Q S.A. NO.07/AGRA/2018 (IN ITA NO.340/AGRA/2018) (ASSESSMENT YEAR: 2009-10) M/S.MAA TALUKA BUILDCON (P) LTD., 18-MOHALLA CHAU, FIROZABAD PAN:AAECM8032F (APPLICANT) VS. THE INCOME TAX OFFICER, WARD-2(2)(2), DABRAI, FIROZABAD (RESPONDENT) ASSESSEE BY SHRI R.K.AGARWAL& SHRI RAHUL AGARWAL REVENUE BY SHRI SUNIL BAJPAI, CIT-DR& SHRI WASEEM ARSHAD, SR. DR. ORDER PER LALIET KUMAR, J.M.: DATE OF HEARING 08-01-2020 DATE OF PRONOUNCEMENT 10-01-2020 I.T.A NOS. 340/AGRA/2018 467/AGRA/2015 & SA NO.07/AGRA/2018 2 ITA NO.340/AGRA/2018: THISAPPEAL OF ASSESSEE IS DIRECTED AGAINST THE ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-2, AGRA, DATED 30-03-2018 F OR THE AY.2009-10, RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. BECAUSE LD. COMMISSIONER OF INCOME TAX (APPEAL S) HEREINAFTER REFERRED TO AS LD.CIT(A) GROSSLY ERRED BOTH IN LAW AND ON FACTS IN SUSTAINING ORDER PASSED BY THE ASSESSING OFFICER U/S 144 / 147. LD CIT(A) FAILED T O APPRECIATE THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS WHOLLY ILLEGAL, UNJUSTIFIED AND CONTRARY TO THE ESTABLISHED JUDICIAL PRINCIPLES. 2. BECAUSE THE LD. CIT(A) GROSSLY ERRED IN NOT PROV IDING REASONABLE AND SUFFICIENT OPPORTUNITY AND AS SUCH THE ORDER PASSED BY LD. CIT (A) IS CONTRARY TO THE JUDICIAL PRINCIPLES. 3. BECAUSE, ON THE FACTS AND CIRCUMSTANCES, LD CIT( A) WAS NOT LEGALLY JUSTIFIED IN SUSTAINING THE ENTIRE ADDITION MADE BY THE ASSESSIN G OFFICER. THE FINDINGS OF LD. CIT(A), IGNORING THE FACTS AVAILABLE ON RECORDS AND RELYING ON IRRELEVANT FACTS ARE AGAINST THE PRINCIPLES OF NATURAL JUSTICE. THE ADDI TION SUSTAINED MAY KINDLY BE DIRECTED TO BE DELETED. 4. BECAUSE ON THE FACTS AND CIRCUMSTANCES, THE LD . CIT(A) WAS LEGALLY UNJUSTIFIED IN CONFIRMING INITIATION OF PENALTY PROCEEDINGS BY THE ASSESSING OFFICER. 5. BECAUSE THE ORDER IS AGAINST THE LAW & FACTS. 6. BECAUSE THE APPELLANT CRAVES LEAVE TO ALTER/ M ODIFY GROUNDS BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 2. AT THE OUTSET IT WAS SUBMITTED BY THE LD.AR THAT THE ASSESSING OFFICER HAD ISSUED NOTICES ON THE ADDRESS MENTIONED. HOWEV ER, THE NOTICES WERE ALLEGEDLY SERVED ON THE ASSESSEE. BUT NONE APPEARE D ON BEHALF OF THE ASSESSEE. THEREAFTER, NOTICES WERE ALSO ISSUED TO MR.VISHAL GUPTA CHARTED I.T.A NOS. 340/AGRA/2018 467/AGRA/2015 & SA NO.07/AGRA/2018 3 ACCOUNTANT PROMOTER OF THE ASSESSEE AT THE ADDRESS GIVEN IN THE INCOME TAX RETURN. THEREAFTER, THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS.6,14,21,974/- BY INVOKING THE PROVISIONS OF SECT ION 144 OF THE INCOME TAX ACT [ACT]. 2.1. FEELING AGGRIEVED BY THE ORDER OF ASSESSING OF FICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER RELYING UPON THE REPORT OF SECURITIES AND EXCHANGE BOARD OF INDIA [S EBI] IN THE MATTER OF ECO FRIENDLY FOOD PROCESSING PARK LIMITED, HAD UPHE LD THE ADDITION OF RS.6,14,21,974/-. PARA 6.2 OF THE CIT(A)S ORDER W AS TO THE FOLLOWING EFFECT: 6.2 DURING THE COURSE OF APPELLATE PROCEEDING ASSE SSEE SOUGHT ADJOURNMENTS AFTER ADJOURNMENTS. ASSESSEE WAS REPEATEDLY ASKED T O EXPLAIN THE NATURE AND SOURCE OF VARIOUS CREDIT ENTRIES IN THE BANK ACCOUN T THAT WERE NOT FILED. DISCUSSION WITH THE ASSESSING OFFICER ALONG WITH TH E CASE RECORDS ALSO DID NOT RESULT IN ANY ADDITIONAL INFORMATION. SINCE THE BANK STATEMENT SHOWED A PATTERN OF SUBSTA NTIAL CREDITS AND SAME DAY WITHDRAWAL OF AMOUNT IN LACS OF RUPEES, ONLINE SEARCH FOR THIS COMPANY WAS MADE. FROM THE INFORMATION GATHERED FROM THE NET WH ICH IS AVAILABLE IN THE PUBLIC DOMAIN, IT TRANSPIRED THAT THE ASSESSEE COMPANY IS FUNDING COMPANY AND IS INVOLVED IN THE RIGGING OF SHARE PRICES OF ECO FRIE NDLY FOOD PROCESSING PARK LTD IPO. IT WAS FURTHER SEEN THAT THE SEBI VIDE ORDER W TM/RKA/ISD/54/2015 HAS ISSUED DIRECTIONS UNDER SECTION 11(1), 11(4) AND 11 B OF THE SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 AND SECTION 12A O F THE SECURITIES CONTRACTS (REGULATION) ACT, 1956 AND WHILE INVESTIGATING IN THE MATTER OF DEALING IN THE SHARES OF ECO FRIENDLY FOOD PROCESSING PARK LIMI TED HAS BROUGHT OUT THAT MAA TALUKA BUILDCON (P) LTD. I.E. THE ASSESSEE COMPANY WAS USED BY ECO FRIENDLY FOOD PROCESSING PARK LIMITED FOR ARTIFICIALLY INCRE ASING THE PRICES OF ITS SHARES FROM RS.33/- TO RS.640/- AND AS FUNDING COMPANY. IN THIS CONNECTION, IN THIS I.T.A NOS. 340/AGRA/2018 467/AGRA/2015 & SA NO.07/AGRA/2018 4 SEBI'S ORDER MENTIONED ABOVE, A FUND FLOW IN THE IP O OF ECO FRIENDLY FOOD PROCESSING PARK LIMITED FOR THE FUNDING COMPANIES I S GIVEN. 2.2. LD.AR FOR THE ASSESSEE ALSO SUBMITTED THAT THE ASSESSEE WAS NOT GIVEN THE SUFFICIENT OPPORTUNITY BEFORE THE ASSESSING OFF ICER LEVEL AS WELL AS BEFORE THE CIT(A) FOR REBUTTING ITS CASE. FURTHER, IT WAS SUBMITTED THAT THE REPORT RELIED UPON BY THE CIT(A) IN THE APPELLATE P ROCEEDINGS WAS NOT PROVIDED TO THE ASSESSEE AND MOREOVER, THE FATE OF THE SAID ORDER PASSED BY THE SEBI IS ALSO NOT KNOWN TO THE ASSESSEE. IN THE LIGHT OF THE ABOVE, IT WAS SUBMITTED THAT AS THERE WAS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE, A REASONABLE OPPORTUNITY BE GRANTED TO THE ASSESSEE. HENCE, LD.AR REQUESTED THE BENCH IT IS FAIR AND JUST IF THE MATTER IS SENT BACK TO THE FILE OF CIT(A) FOR FRESH CONSIDERATION. 3. LD.DR HAS NOT SERIOUSLY DISPUTED THE CONTENTIONS OF THE LD.COUNSEL FOR THE ASSESSEE. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE SUBMISSIONS MA DE BY THE LD.COUNSEL FOR THE ASSESSEE, WE REMIT THE ENTIRE ISSUE BACK TO THE FILE OF CIT(A) FOR DENOVO CONSIDERATION, WITH A DIRECTION TO : I.T.A NOS. 340/AGRA/2018 467/AGRA/2015 & SA NO.07/AGRA/2018 5 I) TO PROVIDE THE COPIES OF ALL THE DOCUMENTS/REPOR TS AS THE CIT(A) WISHES TO RELY UPON; II) THE OPPORTUNITY OF FILING DOCUMENTS/ADDITIONAL DOCUMENTS SHALL BE PROVIDED TO THE ASSESSEE IN THE APPELLATE PROCEE DINGS; 4.1. IN CASE IF THE ASSESSEE FAILS TO PROVIDE DOCUM ENTS/EVIDENCES IN SUPPORT OF ITS CASE, THEN THE CIT(A) SHALL SEEK THE REMAND REPORT FROM THE ASSESSING OFFICER TO DECIDE THE MATTER. 4.2. AFTER PROVIDING THE OPPORTUNITY TO FILE THE DO CUMENTS /EVIDENCES, THE CIT(A) SHALL PASS A REASONED AND SPEAKING ORDER DEA LING WITH ALL THE CONTENTIONS OF ASSESSEE, WHILE PASSING THE ORDER TH E THE LEARNED COMMISSIONER APPEAL SHALL KEEP IN MIND THE DECISION OF THE HONOURABLE SUPREME COURT IN THE MATTER OF PRINCIPAL COMMISSIO NER OF INCOME TAX (CENTRAL)- I V. NRA IRON & STEEL PVT. LTD., (2019) 412 ITR 161 (SC) DECIDED ON 05.03.2019, RDS PROJECT LIMITEDW.P.(C.) NO. 1127 4/19 OF DELHI HIGH COURT DATE OF DECISION: 23.10.2019. IN THE LI GHT OF THE ABOVE, THIS APPEAL OF ASSESSEE IS TREATED AS ALLOWED FOR STATIS TICAL PURPOSES. 5. THE ASSESSEE FILED S.A.NO.07/AGRA/2018 IN THIS A PPEAL. SINCE WE ARE REMITTING THE MATTER BACK TO THE FILE OF CIT(A) FOR FRESH CONSIDERATION, THE I.T.A NOS. 340/AGRA/2018 467/AGRA/2015 & SA NO.07/AGRA/2018 6 STAY APPLICATION FILED BY THE ASSESSEE BECOMES INFR UCTUOUS AND THE SAME IS DISMISSED. ITA NO.467/AGRA/2015: 6. THIS APPEAL IS FILED BY THE REVENUE, AGAINST THE ORDER OF CIT(APPEALS)-GWALIOR, 09-06-2015 FOR THE AY.2012-13 . 7. THE LD.DR FOR THE REVENUE HAS SUBMITTED THAT THE ISSUE RAISED IN THIS APPEAL IS IDENTICAL TO THE ISSUE RAISED VIDE ITA NO .340/AGRA/2018 DECIDED BY THE TRIBUNAL HEREIN ABOVE IN THE EARLIER PARAGRA PHS. THEREFORE, IT WOULD BE IN THE INTEREST OF JUSTICE THAT IF THIS ENTIRE M ATTER IS ALSO REMANDED BACK TO THE FILE OF CIT(A) WITH A SIMILAR DIRECTION . 8. LD.AR FOR THE ASSESSEE HAD NOT OBJECTED TO REMAN D THE ISSUE TO THE FILE OF CIT(A). 9. IN THE LIGHT OF THE ABOVE, RESPECTFULLY FOLLOWIN G THE DECISION OF BENCH VIDE ITA NO.340/AGRA/2018 DECIDED BY THE TRIBUNAL H EREIN ABOVE IN THE EARLIER PARAGRAPHS, WE ALSO REMIT THIS APPEAL OF RE VENUE TO THE FILE OF CIT(A) FOR DENOVO CONSIDERATION. HENCE, THIS APPEAL OFREVENUE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. I.T.A NOS. 340/AGRA/2018 467/AGRA/2015 & SA NO.07/AGRA/2018 7 10. TO SUM-UP, BOTH THE APPEALS OF ASSESSEE AND REV ENUE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES AND THE STAY APPLI CATION FILED BY THE ASSESSEE IS TREATED AS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10-01-2020 SD/- SD/- (DR. M.L. MEENA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER TNMM COPY FORWARDED TO: 1. ASSESSEE 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT SR. PRIVAT E SECRETARY ITAT AGRA