M/s. Biotropics Pharma Pvt. Ltd., Himachal Pradesh V. ITO, New Delhi

ITA 363/DEL/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81536 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 20-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: Y S KAKKAR
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Principle of natural justice; Application of stay; Additional evidence
• Section: 142(1); 144

Judgement Text

ITA NOS. 3063/DEL/2013 & 363&364/DEL/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NOS. 3063/DEL/2013 AND 363 & 363/DEL/2014 A.Y. : 200 7 - 08, 2009 - 10 & 2007-08 M/S BIOTROPICS PHARMA PVT. LTD., FACTORY ADDRESS:- 76/II, NEAR HANUMAN MANDIR, DIC BADDI, TEHSIL NALAGARH, DISTT. SOLAN, HP (PAN:AABCB9858M) VS. INCOME TAX OFFICER, WARD 3(1), NEW DELHI (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. RAKESH GUPTA, CA AND SH. MANOJ KUMAR, CA DEPARTMENT BY : MS. Y.S. KAKKAR, SR. D.R. ORDER ORDER ORDER ORDER PER PER PER PER BENCH BENCH BENCH BENCH THESE ARE THE APPEALS FILED BY THE ASSESSEE EMAN ATE OUT OF THE SEPARATE ORDERS PASSED BY THE LD. CIT(A)-VI, NEW DELHI PERTAINING TO RESPECTIVE ASSESSMENT YEARS. SINCE SOME OF THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON, WE ARE THEREFORE, PROCEEDING TO DISPOSE THEM OFF BY THIS CONSOLIDATE D ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS. 3063/DEL/2013 & 363&364/DEL/2014 2 2. GROUNDS RAISED IN THE ITA NO. 3063/DEL/2013 READ AS UNDER:- 1. THE LD. CIT(A) IS WRONG IN CONFIRMING THE VALID ITY OF ASSESSMENT FRAMED UNDER SECTION 144 BY HOLDING THAT VARIOUS NOTICES U/S. 143(2)/142(1) WERE ISSUED TO THE APPELLANT COMPANY AT THE ADDRESS GIVEN IN THE IT RETURN WHICH WERE RETURNED BY POSTAL AUTHORITY WITH THE REMARKS NO SUCH CONCERN OR LEFT WITHOUT INFORMATION BUT BY IGNORING THE UNDISPUTED FACT THAT NOTICE U/S. 143(2) WAS NOT SERVED ON THE ASSESSEE COMPANY OR ITS DIRECTORS WHICH IS MANDATORY REQUIREMENT AS PER LAW. 2. THE LD. CIT(A) IS WRONG IN CONFIRMING THE ADDITIONS MADE BY THE AO AFTER REJECTING THE APPLICATION OF ADDITIONAL EVIDENCE UNDER RULE 46A BY IGNORING THE FACT THAT ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE INFORMATION DURING THE ASSESSMENT PROCEEDINGS AS NONE OF THE NOTICES ISSUED BY THE AO RECEIVED BY THE COMPANY AND ITS DIRECTORS. 3. IN VIEW OF ALL THESE AND SUCH OTHER GROUNDS, WHICH MAY BE TAKEN AT THE TIME OF HEARING, THE APPEAL MAY PLEASE BE ALLOWED AND JUSTICE RENDERED. ITA NOS. 3063/DEL/2013 & 363&364/DEL/2014 3 3. THE GROUNDS RAISED IN THE ITA NO. 363/DEL/2014 R EAD AS UNDER:- 1. THE LD. CIT(A) IS WRONG IN CONFIRMING THE ASSESSMENT FRAMED U/S. 144 AS NOTICES SENT U/S. 143(2) /142(1) WERE NOT SERVED ON ANY DIRECTOR / PRINCIPAL OFFICER OR AUTHORIZED PERSON OF THE ASSESSEE COMPANY. 2. THE LD. CIT(A) IS WRONG IN CONFIRMING THE ADDITIONS MADE BY THE AO AFTER REJECTING THE APPLICATION OF ADDITIONAL EVIDENCES UNDER RULE 46A BY IGNORING THE FACT THAT ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE INFORMATION DURING THE ASSESSMENT PROCEEDINGS AS NOTICES SENT U/S. 143(2)/142(1) WERE NOT SERVED ON ANY DIRECTOR/ PRINCIPAL OFFICER OR AUTHORIZED PERSON OF THE ASSESSEE COMPANY. 3. THE LD. CIT(A) IS WRONG IN CONFIRMING THE ORDER MADE U/S. 144 OF THE AO AS THE ASSESSMENT ORDER WAS SENT TO THE PREMISES OF THE ASSESSEE COMPANY ON 20.1.2012 I.E. AFTER THE EXPIRY OF TIME LIMIT PRESCRIBED UNDER THE ACT. 4. IN VIEW OF ALL THESE AND SUCH OTHER GROUNDS, WHICH MAY BE TAKEN AT THE TIME OF HEARING, THE APPEAL MAY PLEASE BE ALLOWED AND JUSTICE RENDERED. ITA NOS. 3063/DEL/2013 & 363&364/DEL/2014 4 4. THE GROUNDS RAISED IN THE ITA NO. 364/DEL/2014 R EAD AS UNDER:- 1. THE LD. CIT(A) IS WRONG IN CONFIRMING THE PENALTY UNDER SECTION 271(1)(C) BY REJECTING THE ADMISSION OF ADDITIONAL EVIDENCE UNDER RULE 46A IGNORING THE FACT THAT ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE INFORMATION DURING THE PENALTY PROCEEDINGS BECAUSE OF NON RECEIVING OF NOTICES CAUSING NON AWARENESS OF PENALTY PROCEEDINGS. 1.1 THAT THE LD. CIT(A) ON THE ONE HAND ACCEPTED THE REASON FOR DELAY IN FILING THE APPEAL, ON THE OTHER HAND, REFUSED TO ADMIT ADDITIONAL EVIDENCES WHICH COULD NOT BE FILED DUE TO SAME REASONS AS WERE FOR THE DELAY IN FILING APPEAL. 2. THE LD. CIT(A) IS FURTHER WRONG IN CONFIRMING TH E PENALTY U/S 271(1)(C) ON THE ADDITIONS MADE BY THE AO ON ARBITRARY AND ESTIMATED BASIS. 3. IN VIEW OF ALL THESE AND SUCH OTHER GROUNDS, W HICH MAY BE TAKEN AT THE TIME OF HEARING, THE APPEAL MAY PLEASE BE ALLOWED AND JUSTICE RENDERED. ITA NOS. 3063/DEL/2013 (2007 ITA NOS. 3063/DEL/2013 (2007 ITA NOS. 3063/DEL/2013 (2007 ITA NOS. 3063/DEL/2013 (2007- -- -08) AND 363/DEL/2014 08) AND 363/DEL/2014 08) AND 363/DEL/2014 08) AND 363/DEL/2014 (AY.2009 (AY.2009 (AY.2009 (AY.2009- -- -10) 10) 10) 10) 5. AS REGARD GROUND NO. 1 IN BOTH THE APPEALS RE GARDING NOT SERVING OF NOTICES UPON THE AUTHORISED PERSON OF T HE ASSESSEE COMPANY IS CONCERNED. DURING THE HEARING, THE LD. COUNSEL ITA NOS. 3063/DEL/2013 & 363&364/DEL/2014 5 FOR THE ASSESSEE HAS NOT PRESSED THE SAME, HENCE, T HE SAME IS DISMISSED AS NOT PRESSED. 6. AS REGARDS GROUND NO. 2 REGARDING CONFIRMING THE ADDITIONS MADE BY THE AO AFTER REJECTING THE APPLI CATION OF ADDITIONAL EVIDENCE UNDER RULE 46A BY IGNORING THE FACT THAT THE ASSESSEE AS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE INFORMATION DURING THE ASSESSMENT PROCEEDINGS A S NONE OF THE NOTICES ISSUED BY THE AO RECEIVED BY THE COMPAN Y AND ITS DIRECTORS. 7. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE COMPA NY HAS FILED ITS RETURN OF INCOME FOR THE RELEVANT ASSTT. YEAR 2007-08 ON 30.9.2007 DECLARING INCOME OF RS. 22,05,376/-. SUBS EQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) OF THE IT ACT WAS ISSUED BY SPEED POST ON 22.9.2008 FIXING THE CASE FOR HEARING ON 26.9.2008. THERE WAS NO COMPLIANC E FROM THE ASSESSEE. FURTHER NOTICES U/S. 143(2) AND 142(1) ALONG WITH ANNEXURE GIVING THE LIST OF DETAILS REQUIRED WERE I SSUED ON 13.7.2009 FIXING THE CASE FOR HEARING ON 25.8.2009. AGAIN THERE WAS NO COMPLIANCE TO THESE NOTICES BY THE APP ELLANT. THEREAFTER, NOTICE U/S. 142(1) DATED 11.11.2009 WAS ISSUED TO THE ASSESSEE AND ALSO TO THE DIRECTORS AT THE ADDRE SSES GIVEN IN THE INCOME TAX RETURN. THERE WAS NO COMPLIANCE T O THESE NOTICES ALSO. FINALLY, A NOTICE U/S 142(1) WAS AGAI N ISSUED ON 4.12.2009 AND WAS SERVED BY AFFIXTURE AT THE ADDRES S OF THE COMPANY. AN INSPECTOR WAS ALSO DEPUTED TO VERIFY T HE ADDRESS OF THE COMPANY AND HE REPORTED THAT THE SAID COMPAN Y DOES NOT EXIST AT THE GIVEN ADDRESS. THUS THIS NOTICE WA S NOT COMPLIED WITH. THE AO REQUISITIONED THE P&L ACCOUN T AND ITA NOS. 3063/DEL/2013 & 363&364/DEL/2014 6 BALANCE SHEET OF THE ASSESSEE COMPANY FROM THE REGI STRAR OF COMPANY, NEW DELHI AND IN THE ABSENCE OF ANY COMPLI ANCE BY THE ASSESSEE, HE PASSED ORDER U/S. 144 MAKING THE V ARIOUS DISALLOWANCES. 8. AGAINST THE ABOVE ORDER, ASSESSEE APPEALED BEFOR E THE LD. CIT(A) AND SOUGHT PERMISSION FOR ADMISSION OF ADDIT IONAL EVIDENCES UNDER RULE 46A ON THE GROUND THAT NOTICES U/S. 143(2) AND 142(1) OF THE I.T. ACT WERE NOT RECEIVED BY THE ASSESSEE COMPANY. AFTER ELABORATE CONSIDERATIONS, LD. CIT(A) REJECTED THE REQUEST OF THE ASSESSEE IN ADMITTING T HE ADDITIONAL EVIDENCES AND ACCORDINGLY, CONFIRMED THE ADDITIONS MADE BY THE AO. 9. AGAINST THE ABOVE ORDER THE ASSESSEE IS IN APPEA L BEFORE US. 10. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. LD. COUNSEL OF THE ASSESSEE HAS FILED A PAPER BOOK CONTAINING PAGES 1 TO 14 HAVING LOWER AUTHORITIES RECORDS AND COPY OF AFFIDAVIT REGARDING NON SERVICE OF NOTICES SENT U/S . 143(2)/142(1) FILED DURING STAY PROCEEDINGS. LD. CO UNSEL OF THE ASSESSEE HAS STATED THAT THE AO HAS PASSED THE EXP ARTE ASSESSMENT U/S. 144 AND MADE THE VARIOUS ADDITION S WITHOUT PROVIDING ANY ADEQUATE OPPORTUNITY TO THE ASSESSEE . SIMILARLY, LD. CIT(A) HAS NOT EVEN ADMITTED THE ADDITIONAL EVIDENCE AND ALSO CONFIRMED THE ADDITIONS MADE BY THE ASSESSEE. HE ALSO STATED THAT SUFFICIENT OPPORTUNITY WAS NOT GIVEN BY THE AUTHORITIES BELOW TO SUBSTANTIATE ITS CLAIM. LD. COUNSEL OF THE ASSESSEE HAS FAIRLY ADMITTED THAT THE ADDRESS OF T HE ASSESSEE ITA NOS. 3063/DEL/2013 & 363&364/DEL/2014 7 COMPANY HAS BEEN CHANGED, BUY ASSESSEE HAS NOT BEEN ABLE TO INFORM ABOUT THE SAME TO THE CONCERNED ASSESSING OF FICER. HE FURTHER SUBMITTED THAT THE LD. CIT(A) HAS WRONGLY F ULLY REJECTED THE PLEA OF ADMITTING OF ADDITIONAL EVIDENCES WHICH IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. LD. COUNSEL R EQUESTED THAT NOW THE ASSESSEE IS IN A POSITION TO PRODUCE ALL TH E NECESSARY DOCUMENTS / EVIDENCES TO SUBSTANTIATE ITS CLAIM, TH EREFORE, HE MAY BE GRANTED ONE MORE OPPORTUNITY TO CANVASS ITS CASE BEFORE AO AND ACCORDINGLY, THE ISSUE MAY BE REMITTE D BACK TO THE FILE OF THE AO TO CONSIDER THE SAME AFRESH, AFT ER CONSIDERING ALL THE NECESSARY DOCUMENTS/ EVIDENCES. 10.1 LD. D.R. HAS ALSO FILED A PAPER BOOK CONTAINI NG PAGES 1 TO 111 BY WAY OF WHICH VARIOUS DOCUMENTARY EVIDENCES HAVE BEEN ATTACHED. SHE SUBMITTED THAT THE AO HAS GIVE N SUFFICIENT OPPORTUNITY TO THE ASSESSEE FOR SUBSTANTIATE ITS CL AIM, BUT HE NEVER COMPLIED WITH THE NOTICES AND HENCE, AO HAS RIGHTLY PASSED THE EXPARTE ASSESSMENT ORDER U/S. 144 AND MA DE THE ADDITIONS. SHE ALSO STATED THAT LD. CIT(A) HAS ALS O RIGHTLY NOT ADMITTED THE ADDITIONAL EVIDENCES AND CONFIRMED THE ADDITIONS MADE BY THE AO. IN SUPPORT OF HER CONTENTION, SHE C ITED THE JUDGMENT REPORTED IN 249 ITR 68 (DEL) AND PUNJAB A ND HARYANA HIGH COURT DECISION IN VRA COTTON MILLS (P) LTD. VS. UOI (359 ITR 495). ACCORDINGLY, SHE REQUESTED THAT THE ORDE R OF THE LOWER AUTHORITIES ON THIS ISSUE MAY BE UPHELD. 10.2 IN VIEW OF THE ABOVE, WE FIND THAT LD. DR HAS ARGUED ON THE VALIDITY OF SERVICE OF NOTICE. HOWEVER, LD. COU NSEL OF THE ASSESSEE HAS STATED THAT HE HAS NOT RECEIVED ANY NO TICE AND REGARDING THE INFORMATION OF CHANGE OF ADDRESS WAS NOT ITA NOS. 3063/DEL/2013 & 363&364/DEL/2014 8 COMMUNICATED TO THE CONCERNED ASSESSING OFFICER. W E FIND THAT THE JUDGMENT CITED BY THE LD. DR IS OF NO HELP FUL. IN THE BACKGROUND OF THE AFORESAID DETAILED DISCUSSIONS, W E FIND CONSIDERABLE COGENCY IN THE ASSESSEES SUBMISSIONS THAT HE HAS NOT SERVED THE NOTICES AND ALSO IN THE INTEREST OF NATURAL JUSTICE, WE ARE OF THE CONSIDERED VIEW THAT ONE MORE OPPORTU NITY MAY ALSO BE GRANTED TO THE ASSESSEE TO SUBSTANTIATE ITS CLAIM BEFORE THE AO. ACCORDINGLY, WE REMIT THIS ISSUE TO THE FI LE OF THE AO WITH THE DIRECTION TO DECIDE THE SAME AFRESH. WE ALSO DIRECTED TO THE ASSESSEE THAT HE SHALL PRODUCED ALL THE RELE VANT DOCUMENTS TO THE AO TO ENABLE HIM TO DECIDE THE IS SUE. 12. IN THE RESULT, THE APPEAL NOS. 3063/DEL/2013 AND 3063/DEL/2014 ARE PARTLY ALLOWED FOR STATISTICAL PU RPOSES. ITA NO. 364/DEL/2014 (2007 ITA NO. 364/DEL/2014 (2007 ITA NO. 364/DEL/2014 (2007 ITA NO. 364/DEL/2014 (2007- -- -08) 08) 08) 08) 13. SINCE WE HAVE REMITTED THE MAIN ISSUE RELATING TO ADDITIONS MADE IN ITA NO. 3063/DEL/2013 (A.Y. 2009 -10) AND ITA NO. 363/DEL/2014 (A.Y. 2009-10) AS ABOVE TO THE FILE OF THE AO FOR FRESH ADJUDICATION. THE EFFECTIVE ISSUE RELA TING TO PENALTY U/S. 271(1)(C) IN THIS APPEAL IS NOW CONSEQUENTIAL IN NATURE AND THE SAME IS ALSO SET ASIDE TO THE FILE OF THE AO WI TH THE DIRECTION TO DECIDE THE SAME, AS PER LAW. IN THE RESULT, T HE APPEAL FILED BY ASSESSEE STANDS ALLOWED FOR STATISTICAL PU RPOSES. ITA NOS. 3063/DEL/2013 & 363&364/DEL/2014 9 14. IN THE RESULT, ITA NO. 3063/DEL/13 & 363/DEL/2 014 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE AND ITA NO. 364/DEL/2014 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT 13-8-2014. SD/- SD/- [ [[ [R.S. SYAL] R.S. SYAL] R.S. SYAL] R.S. SYAL] [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 13/8/2014 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES