M/s NALANDA BUILDERS & DEVELOPERS I. PVT. LTD., Agra V. DCIT CENTRAL CIRCLE, Agra

ITA 35/AGR/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1779 (ITAT-AGRA)
• Duration Of Justice: 2 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 03-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Document seized; Opportunity of being heard; Principle of natural justice; Reasonable cause; Documents seized; Set aside
• Section: 68; 27

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 NOS.35 TO 38/AGR/2017 ASSESSMENT YEARS: 2009-10 TO 2012-13 NALANDA BUILDERS & DEVELOPERS (I) LTD, FIRST FLOOR, SHANTI MALL, CHURCH ROAD, AGRA. PAN AACCN2200J (APPELLANT) VS. DCIT, CENTRAL CIRCLE, AGRA (RESPONDENT) APPELLANT BY S/SH. RAJENDRA SHARMA, MANUJ SHARMA, ADVOCATES RESPONDENT BY SH. WASEEM ARSHAD, SR. DR ORDER PER BENCH: THESE ARE FOUR CONNECTED APPEALS FILED BY THE ASS ESSEE, FEELING AGGRIEVED BY THE ORDER PASSED BY LD. CIT(A) DATED 30.11.2016 ON THE FOLLOWING GROUNDS : 1. THAT THE LEARNED CIT (APPEAL) HAS ARBITRARY AND UN JUST WHILE DECIDING THE APPEAL EXPARTE IGNORING THE ASSESSEE'S APPLICATION MOVED FOR ADJOURNMENT OF THE HEARING. THE APPELLATE ORDER PASSED WITHOUT ALLOWING OF AN OPPORTUNITY OF BEING HEARD, IS AGAINST THE NATURAL JUSTICE, THE ORDER PA SSED BY THE LEARNED CIT (APPEAL) IS LIABLE TO BE SET ASIDE. 2. THAT THE LEARNED CIT (APPEALS) HAS ERRED ON FACTS AND IN LAW WHILE SUSTAINING THE ADDITION FOR RS. 1,54,24,5007- MADE BY THE AO U NDER SECTION 68 OF THE INCOME TAX ACT. THE ADDITION SUSTAINED IS HIGHLY UNJU STIFIED, LIABLE TO BE DELETED. 3. THAT WHILE SUSTAINING THE ADDITION FOR RS, 1,54.2 4,5007- TREATING THE ENTRIES WRITTEN IN THE SEIZED DOCUMENTS FOUND DURING THE CO URSE OF SEARCH AS UNEXPLAINED INCOME WITHIN THE MEANING OF SECTION 68 OF THE INCOME TAX ACT, THE DATE OF HEARING 15.07.2019 DATE OF PRONOUNCEMENT 16 .07.2019 ITA NOS. 35 TO 38/AGR/2017 2 AUTHORITIES BELOW HAVE COMPLETELY IGNORED THE SUBMI SSIONS AND THE EXPLANATION OFFERED BEFORE THEM WITHOUT APPRECIATING THE NATURE OF ASSESSEE'S BUSINESS AND ALSO OF ITS ENTRIES, NO ADDITION IS LIABLE TO BE MA DE. THE ADDITION SUSTAINED BY THE LEARNED CIT (APPEAL) IS LIABLE TO BE DELETED. 4. THAT THE APPELLATE ORDER DATED 30.11.2016 I S BAD IN LAW. 2. BRIEF FACTS ARE THAT A SEARCH AND SEIZURE OPERAT ION WAS CONDUCTED BY THE DEPARTMENT AT THE RESIDENTIAL PREMISES OF ONE OF TH E DIRECTORS OF THE APPELLANT COMPANY, WHERE SEVERAL BONDS, BILL BOOKS AND A FEW LOOSE RECEIPTS OF BOOKING OF DIFFERENT PROPERTIES IN VARIOUS PROJECTS OF APPELLA NT COMPANY WERE FOUND. THE DETAILS ARE GIVEN BY THE ASSESSING OFFICER IN THE A SSESSMENT ORDER. THE ASSESSING OFFICER WAS OF THE OPINION THAT THE AMOUNTS WRITTEN IN THE RECEIPTS WERE NOT RECORDED IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. ACCORDINGLY, AFTER AFFORDING THE OPPORTUNITY OF HEARING TO THE ASSESSE E, THE ADDITIONS WERE MADE BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2009-10, 2010-11, 2011-12 AND 2012-13. 3. IT WAS THE CASE OF THE ASSESSEE THAT THE ASSESSE E DURING THE COURSE OF SEARCH HAD SURRENDERED AN AMOUNT OF RS.3 CRORES, AS ADDITI ONAL INCOME ON ACCOUNT OF SEIZURE OF THESE DOCUMENTS. HOWEVER, THE ASSESSING OFFICER IGNORING THE SURRENDERED AMOUNT OF RS.3 CRORES, MADE ADDITIONS I N VARIOUS YEARS AS MENTIONED IN THE ASSESSMENT ORDER. 4. FEELING AGGRIEVED BY TE ORDER PASSED BY THE ASSE SSING OFFICER THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AND THE L D. CIT(A) IN PARAGRAPH NO. 3 HAS MENTIONED AS UNDER : ITA NOS. 35 TO 38/AGR/2017 3 3. DISCUSSION: IT IS SEEN THAT THE APPELLANT FILED AN APPEAL AGAIN ST THE ORDER DATED 31.03.2015 OF THE DCIT- CENTRAL CIRCLE, AGRA PERTAINING TO A.Y. 2009-10 TO A.Y. 2012-13. HOWEVER, AT THE TIME OF HEARING ON 28.11.2016, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE. HOWEVER, ONLY AN APPLICATION SEEKING ADJOURNMENT WAS RECEIVED ON 28. 11.2016. THE RECORD SHOWS THAT NOTICE FOR THE SPECIFIC DATE OF HEARING WAS SENT ON 08.11.2016 AT THE ADDRESS GIVEN BY THE ASSESSEE IN COLUMN/NO. 1 OF FORM NO. 35. EARLIER TO THE ABOVE NOTICE, FOLLOWING NOTICES WERE ALSO ISSUED AS PER FOLLOWING, WHICH WERE EITHER REMAINED UNATTENDED OR APPELLANT SOUGHT ADJO URNMENT; DATE OF HEARING REMARK 28.06.2016 NONE ATTENDED NOR ANY APPLICATI ON SEEKING ADJOURNMENT FILED 19.07.2016 NONE ATTENDED ONLY APPLICATION SEEKING ADJOURNMENT SENT THROUGH POST 12.08.2016 NONE ATTENDED ONLY APPLIC ATION SEEKING ADJOURNMENT SENT THROUGH POST 28.11.2016 NONE ATTENDED ONLY APPLI CATION SEEKING ADJOURNMENT SENT THROUGH POST IT MAY BE SEEN THAT THE APPELLANT IS NOT INTERESTED IN PURSUING THE APPEAL. THE DATE FIXED FOR 28.11.2016, THE APPELL ANT HAS ONLY APPLIED FOR ANOTHER ADJOURNMENT WITHOUT COGENT REASONS, THEREFORE, THE ADJOURNMENT IS DECLINED AND I PROCEED TO DECIDE THE APPEAL ON THE BASIS OF MATERIAL AVAIL ABLE ON RECORD. SERVICE OF THE NOTICE: ALL THE ABOVE NOTICES OF HEARING HAVE BEEN SENT BY SPEED POST AND IS PRESUMED TO HAVE BEEN DULY RECEIVED BY THE ASSESSEE AS THE SAME WERE NOT RETURNED AS 'UNSERVED' BY POST OFFICE. ITAT MUMBAI IN THE CASE OF COLOR CRAFT V ITO HELD T HAT THE NOTICE SENT THROUGH THE 'SPEED POST 1 IS TOTALLY VALID IN THE EYES OF LAW AS 'REGISTERED POST'. THE HON'BLE TRIBUNAL WHILE SUBSTANTIATING THEIR DEC ISION RELIED ON SECTION 27 OF GENERAL CLAUSES ACT WHICH MENTIONS ABOUT 'SERVICE BY POST' AND ALSO ON SECTION 114(F) OF THE EVIDENCE ACT WHERE THE 'PRESUMPTION ABOUT THE PROPE R MAINTAINING OF RECORDS HAVE BEEN MENTIONED. THE CASE WAS ALSO FIXED AND SEVERAL A NOTICES FOR H EARING WERE ALSO ISSUED BUT NONE ATTENDED. THE MAXIM 'VIGILANTIBUS NOIJ-DERMIENTIBUS JURASUBVEIUMT I.E. 'THE LAW ASSISTS THOSE WHO ARE VIGILANT AND NO T THOSE WHO SLEEP OVER THEIR RIGHTS' IS APPLICABLE. HON'BLE MADHYA PRADESH HIGH COURT IN THE CA SE OF ESTATE OF LATE TUKOJIRAO HOLKAR VS. CWT (223 ITR 480) WHEREIN IT HAS BEEN HELD AS UNDER : ITA NOS. 35 TO 38/AGR/2017 4 '... IF THE PARTY, AT WHOSE INSTANCE THE REFERENCE/ IS MADE, FAILS TO APPEAR AT THE HEARING, OR FAILS IN TAKING STEPS FOR PREPARATION OF THE PAPER BOOKS SO AS TO ENABLE HEARING OF THE REFERENCE, THE COURT IS NOT BOUND TO ANSWER THE REFERENCE.' SIMILARLY, HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF NEW DIWAN OIL MIL LS VS. CIT (2008) 296 ITR 495) RETURNED THE/REFERENCE UNANSWER ED 'SINCE THE ASSESSEE REMAINED ABSENT AND THERE WAS N OT ANY ASSISTANCE FROM THE ASSESSEE.' THEIR LORDSHIPS OF HON'BLE SUPREME COURT IN THE CAS E OF CIT VS. B. BHATTACHARGEE & ANOTHER (118 ITR 461 AT PAGE 477-78) HELD THAT 'THE APPEAL DOES NOT MEAN, MERE FILING OF THE MEMO OF APPEAL BUT EFFECTIVELY PURSUING THE SAME.' HON'BLE ITAT 'B' BENCH, LUCKNOW IN THE CASE OF M/S. KANCHAN SINGH BHULI DEVI SHIKSHA VS CIT-1 IN ITA NO. 706 & 707 (LKW)/2010 IN ITS ORDER DATED 12-01-2012 AND BY THE HON'BLE ITAT, AMRITSAR IN ITS ORDER DATED 21-06-2011 IN ITA NO. 488(ASR)/2010 IN THE CASE OF M/S SHAMSHER JANG BAHADUR VS ACIT, CC-1, JALANDHAR THAT 'THE APPEAL IS TO BE DISMISSED FOR WANT OF ASSESSEE.' THEREFORE, IN THE ABOVE FACTS AN D CIRCUMSTANCES AS DISCUSSED ABOVE AND IN THE ABSENCE OF ATTENDANCE, IT IS SEEN THAT THE A SSESSEE IS NOT INTERESTED IN PURSUING THE APPEAL. ACCORDINGLY, BY APPLYING THE RATIO LAID DOWN BY THE ITAT DELHI BENCH IN THE CASE OF CIT VS. MULTIPLAN INDIA (P.) LTD. [(1991) 38 ITD 320], THIS APPEAL FILED BY THE APPELLANT DESERVES TO BE DISMISSED ON THIS SCORE ONLY. HOWEVER, THE CASE IS DISCUSSED AS PER ITS MERITS. 5. DESPITE ABOVE, NONE APPEARED ON BEHALF OF THE AS SESSEE BEFORE THE LD. CIT(A). IT WAS SUBMITTED BY THE ASSESSEE THAT AN ADJOURNMEN T WAS REQUESTED ON 28.11.2016. HOWEVER, THE LD. CIT(A) WITHOUT CONSIDERING THE APP LICATION HAD DECIDED TO PASS THE ORDER BY APPLYING THE RATIO OF CIT VS. MULTIPLAN IN DIA (P.) LTD. [(1991) 38 ITD 320]. HOWEVER, IT WAS ALSO THE CASE OF THE ASSESSEE THAT THE LD. CIT(A) HAS ALSO DECIDED THE APPEAL ON MERITS AND THEREAFTER HAD CONFIRMED THE O RDER PASSED BY THE ASSESSING OFFICER. IT WAS URGED BEFORE THE BENCH THAT THE ORD ER PASSED BY THE LD. CIT(A) BE SET ASIDE AS THE ORDER WAS PASSED IN VIOLATION OF PRINC IPLES OF NATURAL JUSTICE. ITA NOS. 35 TO 38/AGR/2017 5 6. PER CONTRA, THE LD. DR HAD SUBMITTED THAT THE OR DER PASSED BY THE COMMISSIONER IS IN ACCORDANCE WITH THE LAW AND NO I NTERFERENCE IS CALL UPON, AS THE CIT(A) HAS NOT ONLY PROCEEDED EXPARTE BY INVOKING T HE JUDGMENT IN THE CASE OF MULTIPLAN INDIA, BUT HAS ALSO DECIDED THE APPEAL ON MERITS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PARTI ES AND HAVE GONE THROUGH THE MATERIAL ON RECORD. UNDISPUTEDLY ON THE DATE WHEN T HE ASSESSEE WAS PROCEEDED EXPARTE, I.E., 28.11.2016, THE ASSESSEE HAD MADE AN APPLICATION SEEKING ADJOURNMENT. HOWEVER, THE LD. CIT(A) HAS NOT CONSIDERED THE SAME AND HAS PROCEEDED EXPARTE AGAINST THE ASSESSEE AND HAD ALSO PASSED THE ORDER ON MERITS. DURING THE COURSE OF HEARING, WE HAVE EXPRESSED OUR DISPLEASURE IN THE W AY THE ASSESSEE HAD CONDUCTED ITSELF BEFORE THE LD. CIT(A) EITHER IN THE QUANTUM PROCEEDINGS OR IN PENALTY PROCEEDINGS AND WE HAD EXPRESSED TO IMPOSE COST OF RS.1 LACS IN TOTAL IN ALL THE APPEALS. HOWEVER, ON GOING THROUGH THE RECORD AND C ONSIDERING THAT ON 28.11.2016, SPECIFIC APPLICATION WAS MOVED BY THE ASSESSEE FOR GRANT OF ADJOURNMENT, WHICH WAS TURNED DOWN BY THE LD. CIT(A), THEREFORE, WE ARE NO T IMPOSING ANY COST ON THE ASSESSEE. IN OUR VIEW, THE LD.CIT(A) SHOULD HAVE GR ANTED ADJOURNMENT AND SHOULD NOT HAVE DECIDED THE APPEAL EXPARTE. EVEN IF THE LD . CIT(A) WAS CONSIDERING TO DECIDE THE APPEAL ON MERITS, THEN ALSO IT WAS INCUMBENT UP ON THE LD. CIT(A) TO CONSIDER THE ITA NOS. 35 TO 38/AGR/2017 6 AMOUNT SURRENDERED BY THE ASSESSEE DURING THE COURS E OF SEARCH TO THE TUNE OF RS.3 CRORES. THUS, TAKING INTO ACCOUNT, THE TOTALITY OF FACTS AND ALSO IN THE INTEREST OF JUSTICE, WE ARE INCLINED TO CONCUR WITH THE PLEA OF THE ASSESSEE THAT THE ASSESSEE WAS PREVENTED BY JUST AND REASONABLE CAUSE FROM APPEARI NG IN THE APPEAL PROCEEDINGS BEFORE THE LD. CIT(A). AS MENTIONED IN MANY JUDGMEN TS AND ORDERS PASSED BY THE TRIBUNAL THAT ULTIMATE AIM OF THE ASSESSMENT PROCEE DINGS IS TO TAX CORRECT INCOME OF THE ASSESSEE AND TO DECIDE THE TAXABLE INCOME OF TH E ASSESSEE. WITH THESE OBSERVATIONS, THE MATTER IS REMANDED BACK TO THE FI LE OF LD. CIT(A) WITH THE DIRECTION TO FIX ANY SUITABLE DATE AFTER GIVING NOTICE OF TWO WEEKS TO THE ASSESSEE AND THEREAFTER TO PASS A REASONED SPEAKING ORDER AFTER AFFORDING THE OPPORTUNITY OF HEARING AND AFTER AFFORDING OPPORTUNITY TO PRODUCE ANY DOCUMENT OR SUBMISSION WITHIN THE PERIOD OF SIX MONTHS FROM THE DATE OF PA SSING OF THIS ORDER. IN THE LIGHT OF THE ABOVE, THESE APPEALS ARE ALLOWED FOR STATISTICA L PURPOSES 8. IN THE RESULT, ALL THE APPEALS ARE ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (DR. MITHA LAL MEENA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: *AKS*