M/s. United Head Hunters Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 3580/DEL/2012

• Counselvise Citation: 358020114 RSA 2012
• Duration Of Justice: 1 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-05-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 06-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAGAN SOOD
• Assessee Lawyers: MANOJ KR
• Keywords: Accommodation entries; Assessment record
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO.-3580/DEL/2012 (ASSESSMENT YEAR- 2001-02) M/S UNITED HEAD HUNTERS PVT. LTD. 3522/3, NARANG COLONY, TRI NAGAR, NEW DELHI-110005. PAN-AAACU0380L (APPELLANT) VS ITO, WARD-18(1), NEW DELHI (RESPONDENT) APPELLANT BY SH.MANOJ KR., CA RESPONDENT BY SH. GAGAN SOOD, SR. DR ORDER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER DATED 28.04.2011 OF THE CIT(A)-XXI, NEW DELHI PERTAINING TO 2001-02 AS SESSMENT YEAR. 2. RIGHT AT THE OUTSET IT WAS SUBMITTED BY THE LD.A R THAT GROUND NO-2 & 8 RAISED BEFORE THE CIT(A) HAVE NOT BEEN ADJUDICATED UPON. FOR READY-REFERENCE THEY ARE REPRODUCED HEREUNDER:- 2. THE HAVING REGARD TO THE FACTS CIRCUMSTANCES OF THE CASE, LD. AR HAS ERRED IN LAW AND ON FACTS IN FRAMING IMPUGNED ASSES SMENT ORDER WITHOUT ASSUMING JURISDICTION AS PER LAW AND WITHOUT SERVIN G THE MANDATORY NOTICES U/S 148/147 AND 143(2) OF THE INCOME TAX ACT, 1961. TH E LD. CIT(A)-XXI HAS ALSO ERRED IN CONFIRMING THE ASSESSMENT WHICH IS ILLEGAL AND NOT AS PER LAW. HENCE, THE ASSESSMENT BEING ILLEGAL MAY BE QUASHED FOR NON SERVICE OF NOTICE U/S 148. 8. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. AO HAS ERRED IN LAW AND ON FACTS IN FRAMING THE ASSESS MENT WITHOUT DISPOSING OFF THE VARIOUS OBJECTIONS FILED BY THE ASSESSEE AND TH E HONORABLE CIT(A) HAS ERRED IN CONFIRMING THE SAME ON ILLEGAL AND UNTENABLE GRO UNDS. HENCE, THE ASSESSMENT AS SUCH MAY BE QUASHED. 2 I.T.A .NO.-3580/DEL/2012 3. INVITING ATTENTION TO THE COPY OF GROUNDS RAISED BEFORE THE CIT(A) ACCOMPANIED IN FORM NO-35 WHICH HAS BEEN FILED BEFO RE THE BENCH, ATTENTION WAS INVITED TO GROUND NO-2 & 8 RAISED BEFORE THE CIT(A) . THE SAME ARE ALSO REPRODUCED FOR READY-REFERENCE:- 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. A.O. HAS ERRED IN LAW AND ON FACTS IN FRAMING IMPUGNED A SSESSMENT ORDER WITHOUT ASSUMING JURISDICTION AS PER LAW AND WITHOUT SERVIN G THE MANDATORY NOTICES UNDER SECTIONS 147 AND 143(2) OF THE INCOME TAX ACT , 1961. 8. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. A.O. HAS ERRED IN LAW AND ON FACTS IN FRAMING THE ASSESS MENT WITHOUT DISPOSING OFF THE VARIOUS OBJECTIONS FILED BY THE ASSESSEE. 3.1. ACCORDINGLY IN THE CIRCUMSTANCES, IT WAS HIS P RAYER THAT THE ISSUE MAY BE RESTORED TO THE CIT(A) FOR ADJUDICATING ON THE ISSU ES RAISED. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY WHO IS ENGAG ED IN THE BUSINESS OF PLACEMENT CONSULTANT HAVING A REGISTERED OFFICE IN DELHI DECLARED A LOSS OF RS.3570/- BY WAY OF FILING A RETURN ON 25.10.2001. VIDE ORDER U/S 143(3)/148 THE ASSESSMENT WAS COMPLETED BY THE AO AT A FIGURE OF R S.4,09,530/- HOLDING THAT THE ASSESSEE HAD RECEIVED ACCOMMODATION ENTRY FROM M/S SOLO MIO MARKETING PVT. LTD. OF RS. 2,35,000/- AND M/S SWATI AGENCIES AMOU NTING TO RS.1,70,000/-. THIS ACTION AND THE ADDITIONS WERE CHALLENGED IN APPEAL BEFORE THE CIT(A) ON VARIOUS GROUNDS. A PERUSAL OF THE IMPUGNED ORDER SHOWS THA T THE CONTENTION OF THE LD.AR THAT SPECIFIC GROUNDS NOS.-2 & 8 RAISED BEFORE THE CIT(A) WERE NOT ADJUDICATED WAS CORRECT. THE GROUNDS IT IS SEEN CHALLENGE THE VERY JURISDICTION OF THE ACTION AND BY NON-DISPOSAL OF THE SAME THE GRIEVANCE POSED BY THE ASSESSEE IS JUSTIFIED. AFTER HEARING THE LD. SR. DR WHO HAD NO OBJECTION TO RESTORING THE ISSUES BACK TO THE FILE TO THE CIT(A) AND ON A CONSIDERATION OF T HE MATERIAL AVAILABLE THE ISSUE IS RESTORED BACK TO THE CIT(A) WITH THE DIRECTION TO D ECIDE GROUND NO-2 & 8 AS THESE GROUNDS GO TO THE VERY JURISDICTION. THE IMPUGNED ORDER ACCORDINGLY IS SET ASIDE AS 3 I.T.A .NO.-3580/DEL/2012 IT IS A SETTLED LEGAL POSITION THAT BEFORE ADDRESSI NG THE ISSUE ON MERITS, IT IS NECESSARY TO FIRST ADDRESS THE JURISDICTIONAL ISSUE S. IN THE EVENTUALITY THE JURISDICTIONAL GROUNDS ARE DECIDED AGAINST THE ASSE SSEE IT IS ONLY THEREAFTER THE ISSUE ON MERIT HAS TO BE DECIDED. ACCORDINGLY THE ENTIR E ORDER IS SET ASIDE IN VIEW OF THE ABOVE REASONING. THE LD. CIT(A) SHALL PASS A SPEAK ING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUN ITY OF BEING HEARD. 4. BEFORE CONCLUDING THE LD. AR FURTHER REQUESTED T HAT THE AO BE DIRECTED TO ALLOW THE ASSESSEE INSPECTION OF THE RECORD AND AL SO MAKE AVAILABLE TO THE ASSESSEE WHATEVER ADVERSE MATERIAL IT IS RELYING UPON. ATTE NTION WAS INVITED TO PAPER BOOK PAGE NO-2 WHICH CONTAINS AT PAGES 1 TO 27 WRITTEN S UBMISSIONS FILED BEFORE THE CIT(A) WHEREIN ATTENTION WAS INVITED TO THE FOLLOWI NG PARA AT PAGE 2:- IT IS FURTHER SUBMITTED THAT IN THIS COMPANY SHRI KRISHAN KUMAR BANSAL WAS ONE OF THE DIRECTOR WHO WAS LOOKING AFTER THE AFFAI RS OF THE COMPANY. SHRI KRISHAN KUMAR BANSAL EXPIRED IN THE YEAR 2010, AND THEREAFTER THE PRESENT DIRECTORS OF THE COMPANY HAVE NOT MUCH INFORMATION AVAILABLE WITH THEM. IN VIEW OF THESE REASONS A REQUEST WAS MADE TO THE AO TO ALLOW THE INSPECTION OF THE RECORDS AVAILABLE WITH HIM, BUT THE SAME HAS NO T BEEN ALLOWED TO THE APPELLANT COMPANY BY THE AO. IT IS, THEREFORE, HUM BLY PRAYED THAT ASSESSMENT RECORDS MAY KINDLY BE CALLED AND THE REASONS RECORD ED AFTER CONSIDERING THE ADVERSE MATERIAL IF ANY AGAINST THE ASSESSEE, AND I N CASE THE SAME IS THERE A COPY OF THE SAME MAY ALSO KINDLY BE PROVIDED TO US SO THAT WE MAY FURNISH OUR SUPPLEMENTARY SUBMISSIONS ON THE ADVERSE MATERIAL. IN CASE YOUR HONOUR FIND THAT THE REASONS RECORDED BY THE AO ARE JUST BECAUS E HE RECEIVED CERTAIN INFORMATION FROM THE INVESTIGATION WING BUT HAS NOT MADE ANY VERIFICATION, ENQUIRIES OR EXAMINATION OF THE PARTIES FROM WHOM S UCH ALLEGED ENTRIES ARE SAID TO HAVE BEEN RECEIVED AS ACCOMMODATION ENTRIES, THE REASONS RECORDED MAY KINDLY BE CONSIDERED AS ILLEGAL, BEYOND JURISDICTIO N AND VOID AB INITIO. 4.1. A PERUSAL OF THE PAPER BOOK SHOWS THAT PAGE 1 TO 27 THOUGH ARE STATED TO BE WRITTEN SUBMISSIONS FILED BEFORE THE CIT(A) HOWEVER THE SAME ARE UNDATED AND UNSIGNED. EVEN OTHERWISE THERE IS NO REASON TO PRE SUME IN THE ABSENCE OF ANY MATERIAL TO THE CONTRARY THAT THE AO IS DENYING THE ASSESSEE AN OPPORTUNITY TO INSPECT THE RELEVANT RECORD OR MAKE AVAILABLE TO TH E ASSESSEE THE MATERIAL RELIED UPON BY THE DEPARTMENT. ACCORDINGLY THE REQUEST FO R DIRECTING THE DEPARTMENT TO 4 I.T.A .NO.-3580/DEL/2012 DO WHAT IT IS DUTY BOUND TO DO CANNOT BE ACCEDED TO WITHOUT FIRST A DEMONSTRATION BY THE AFFECTED PARTY THAT THE AO IS DELIBERATELY D ENYING INSPECTION TO THE ASSESSEE. THE PRESUMPTION THAT INSPECTION IS BEING DENIED IN THE ABSENCE OF ANY MATERIAL CANNOT BE MADE. THE ISSUE AS SUCH REQUIRES NO DIREC TION. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES AS PER THE PRONOUNCEMENT MADE AT THE TIME OF HEARING I N THE OPEN COURT ITSELF. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30 TH OF MAY 2014. SD/- (DIVA SINGH) JUDICIAL MEMBER DATED:- 30/05/2014 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGI STRAR ITAT NEW DELHI