Smt. Monika Arora, New Delhi V. ITO, New Delhi

ITA 3735/DEL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7317 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 3
• Next Hearing Date: 14-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 25-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K JAISWAL
• Keywords: Principle of natural justice; Reasonable cause
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC-3: NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 3735/DEL/2014 A.Y. : 2009-10 SMT. MONIKA ARORA, VS. ITO, WARD-26(2) AE-10, 3 RD FLOOR, TOWER WALI BUILDING, NEW DELHI OPP. METRO PILLAR NO. 445, NEAR TAGORE GARDEN METRO STATION, TAGORE GARDEN, NEW DELHI 110 027 (PAN: AGXPA5889N) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SH. KK JAISWAL, SR. DR DATE OF HEARING : 14-06-2016 DATE OF ORDER : 14-06-2016 O R D E R PER H.S. SIDHU, JM THIS APPEAL IS FILED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DATED 24.3.2014 OF THE LD. CIT(A)-XXIV, NEW DELHI RELEVANT TO ASSESSMENT YEAR 2009-10 ON THE FOLLOWING GROUNDS:- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) XXIV, NEW DELHI HAS GROSSLY ERRED BOTH IN LAW AND O N FACTS IN DISPOSING OFF THE APPEAL ON EX-PARTE BASIS BY AN OR DER DATED 24.3.2014 BY CONCLUDING THAT APPELLANT IS NOT INTER ESTED IN PURSUING THE PRESENT APPEAL. 2 1.1 THAT SINCE THERE WAS SUFFICIENT AND REASONABLE CAUSE ON THE PART OF THE APPELLANT FOR NOT CAUSING ON APPE ARANCE ON THE DATES FIXED FOR HEARING, THE IMPUGNED ORDER MAY KIN DLY BE SET- ASIDE, 2. THAT EVEN OTHERWISE THE ORDER FRAMED BY THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS) DISPOSING OFF THE APPEAL FILED BY THE APPELLANT IN LIMINE IS ILLEGAL, INVALI D AND NOT IN ACCORDANCE WITH LAW. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS FAILED TO APPRECIATE THAT SINCE NO NOTICE ULS 143(2 ) OF THE ACT WAS SERVED WITHIN THE STATUTORY PERIOD THE ORDER OF ASS ESSMENT WAS WITHOUT JURISDICTION AND DESERVED TO BE QUASHED AS SUCH. 4. THAT FURTHERMORE THE LEARNED COMMISSIONER OFINC OME TAX (APPEALS) HAS FURTHER ERRED BOTH IN LAW AND ON FACT S IN SUSTAINING THE FOLLOWING DISALLOWANCES MADE IN THE ORDER OF AS SESSMENT: SR. PARTICULARS AMOUNT NO. (IN RS.) I) OUT OF EXPENDITURE INCURRED ON SALARY 19,62,52 3/- II) OUT OF VEHICLE RUNNING AND MAINTENANCE EXPENSES 4,010/- III) OUT OF MISCELLANEOUS EXPENSES 22,548/- 5. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS FURTHER ERRED BOTH IN LAW AND ON FACTS IN UPHOLDING THE LEVY OF INTEREST OF RS. 1,40,118/- UNDER SECTION 234B OF TH E ACT. IT IS THEREFORE PRAYED THAT ORDER OF. THE LEARNED C OMMISSIONER OF INCOME TAX (APPEALS) MAY KINDLY BE SET-ASIDE AND FURTHER MORE ORDER OF ASSESSMENT BE HELD TO BE WITHOUT JURISDICT ION AND 3 DISALLOWANCES MADE ALONGWITH INTEREST LEVIED MAY KI NDLY BE DELETED AND, APPEAL OF THE APPELLANT BE ALLOWED. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE FILED H ER RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR 2009-10 ON 28.09.2009 DECLARING INCOME OF RS. 8,27,065/-. THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS. NOTICE U/S 143(2) WAS ISSUED AND SERVED UPON THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HA S NOTED THAT AN AMOUNT OF RS. 28,00,000/- WAS DEBITED TO THE P & L ACCOUNT OF THE ASSESSEE UNDER THE HEAD SALARIES ON THE TOTAL TURNO VER OF RS. 41,87,378/- WHICH WORKS OUT TO 66.8% OF THE TURNOVER. THE ASSES SING OFFICER HAS ASKED THE ASSESSEE TO FURNISH THE DETAILS OF EMPLOY EES, THEIR PAN, SALARY ETC. FROM THE DETAILS FURNISHED BY THE ASSESSEE IT WAS CLEAR THAT THE EXPENSES CLAIMED UNDER THE HEAD SALARIES DO NOT APP EAR TO BE GENUINE. ACCORDINGLY, TO MEET THE ENDS OF JUSTICE, THE CLAIM OF THE ASSESSEE UNDER THE HEAD SALARY WAS RESTRICTED TO 20% OF THE TURNOV ER WHICH WORKS OUT TO RS. 8,37,475/- AND THE REMAINING AMOUNT OF RS. 19,6 2,525/- WAS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASS ESSEE. THE ASSESSING OFFICER ALSO DISALLOWED 1/5TH OF VEHICLE RUNNING AN D MAINTENANCE AND MISCELLANEOUS EXPENSES ON ACCOUNT OF PERSONAL USE T O THE TUNE OF RS/ 26,558/-. THEREAFTER ASSESSMENT WAS COMPLETED U/ S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED THE ACT) VIDE ORDER DATED 30.12.2011 AT THE INCOME OF RS. 28,16,150/- AGAINST THE RETURNED INCOME OF RS. 8,27,065/-. 4 3. AGGRIEVED BY THE AFORESAID ADDITION, ASSESSEE AP PEALED BEFORE THE LD. CIT(A) WHO VIDE IMPUGNED ORDER DATED 24.3.2014 HAS DISMISSED THE APPEAL EXPARTE BY HOLDING AS UNDER:- 4. DURING THE COURSE OF APPELLATE PROCEEDINGS, NOT ICE U/S 250 OF THE INCOME TAX ACT, WAS ISSUED TO THE APPELLANT ON 29.07.2013 FIXING THE CASE FOR HEARING ON 3.08.2013 . THIS NOTICE WAS SENT THROUGH SPEED POST AT THE GIVEN ADD RESS OF THE APPELLANT IN FORM NO. 35 I.E. C/O M/S N.DHAWAN & CO., 411, BHERA ENCLAVE, PASCHIM,VIHAR, OUTER RING ROAD, DELHI 110087. NONE ATTENDED ON THIS DATE. ANOTHER NOTICE DATED 01.10.2013 FIXING THE CASE FOR HEARING ON 10.10.201 3 WAS SENT THROUGH SPEED POST. NONE ATTENDED NOR ANY ADJO URNMENT APPLICATION WAS FILED ON THIS DATE. THE CASE WAS RE -FIXED FOR 12.02.2014 VIDE NOTICE DATED 03.02.2014. NO COMPLIA NCE WAS MADE ON THIS DATE ALSO. A FINAL NOTICE DATED 13.03. 2014 FIXING THE CASE FOR HEARING ON 24.03.2014 WAS SENT THROUGH SPEED POST. THIS NOTICE ALSO NOT COMPLIED WITH. ALL THESE NOTICES WERE SENT THROUGH SPEED POST AT THE GIVEN ADDRESS M ENTIONED IN COLUMN NO.13 FORM NO. 35, FILED BY THE APPELLANT ON 27.01.2012. NO NOTICE WAS RETURNED TO THIS OFFICE. NO DOCUMENTS/ EVIDENCES IN SUPPORT OF THE GROUNDS RAIS ED IN THIS APPEAL HAS BEEN FILED BY THE APPELLANT. IN VIEW OF THESE FACTS, IT IS CRYSTAL CLEAR THAT THE APPELLANT IS NOT INTER ESTED IN PURSUING HIS PRESENT APPEAL. IN THE CASE OF CIT VS B.N.BHATTACHARYA (1977) 118 ITR 461 (SC), THE HON'B LE APEX COURT WHILE DEALING WITH THE ISSUE OF PROSECUTION O F APPEAL HAS HELD THAT 'PREFERRING AN APPEAL MEANS MORE THAN FOR MALLY FILING IT BUT EFFECTIVELY PURSUING IT' . RELYING UPON THE AFORESAID DECISION OF THE HON'BLE APEX COURT, THE PRESENT APPEAL IS BEING DISMISSED. 5 5. IN THE RESULT, THE APPEAL IS DISMISSED. 4. AGAINST THE AFORESAID ORDER OF THE LD. CIT(A), A SSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. IN THIS CASE, NOTICE OF HEARING TO THE ASSESSEE WAS SENT BY THE REGISTERED AD POST, IN SPITE OF THE SAME, ASSESSEE, NOR HER AUTHORIZED REPRESENTATIVE APPEARED TO PROSECUTE THE MATTER IN DISPUTE, NOR FILED ANY APPLICATION FOR ADJOURNMENT. KEEPING IN VIEW THE F ACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE ISSUE INV OLVED IN THE PRESENT APPEAL, I AM OF THE VIEW THAT NO USEFUL PURPOSE WOU LD BE SERVED TO ISSUE NOTICE AGAIN AND AGAIN TO THE ASSESSEE, THEREFORE, I AM DECIDING THE PRESENT APPEAL EXPARTE QUA ASSESSEE, AFTER HEARING THE LD. DR AND PERUSING THE RECORDS. 6. DURING THE HEARING, LD. DR RELIED UPON THE ORD ERS PASSED BY THE LD. CIT(A) AND STATED THAT THE SUFFICIENT OPPORTUNI TY HAS BEEN GIVEN TO THE ASSESSEE BY THE LD. CIT(A), BUT ASSESSEE REMAIN ED NON-COOPERATIVE. THEREFORE, HE REQUESTED THAT THE IMPUGNED ORDER MAY BE UPHELD. 7. I HAVE HEARD THE LD. DR AND PERUSED THE RECORDS, ESPECIALLY THE ORDER OF THE FIRST APPELLATE AUTHORITY. AFTER PERU SING THE IMPUGNED ORDER OF THE LD. CIT(A), I FIND THAT LD. CIT(A) HAS NOT P ASSED A SPEAKING ORDER BECAUSE HE SUMMARILY DISMISSED THE APPEAL BY APPL YING THE APEX COURT DECISION IN THE CASE OF CIT VS. BN BHATTACHARYA (1 997) 118 ITR 461 (SC). IN MY CONSIDERED OPINION, LD. CIT(A) HAS ERRED IN THIS REGARD. LD. CIT(A) SHOULD HAVE ADJUDICATED THE ISSUE ON MER ITS. IT IS A SETTLED LAW 6 THAT EVEN THE ADMINISTRATIVE ORDERS HAVE TO BE CONS ISTENT WITH THE RULES OF NATURAL JUSTICE. HOWEVER, THERE IS NO DOUBT THAT T HE ASSESSEE REMAINED NON-COOPERATIVE BEFORE THE LOWER AUTHORITIES AS WEL L AS BEFORE THE TRIBUNAL. BUT IN THE INTEREST OF JUSTICE, I AM OF THE VIEW THAT IN THIS CASE THE ISSUES IN DISPUTE NEEDS TO BE REMITTED BACK TO THE FILE OF THE LD. CIT(A) TO DECIDE THE SAME AFRESH ON MERITS, AS PER LAW. ACCORDINGLY, LD. CIT(A) IS DIRECTED TO CONSIDER THE ISSUES IN DISPUT E AFRESH AND PASS A PROPER AND SPEAKING ORDER CONSIDERING THE MERITS OF THE CASE. NEEDLESS TO ADD THAT THE ASSESSEE SHOULD BE GIVEN ADEQUATE O PPORTUNITY OF BEING HEARD. THE ASSESSEE IS DIRECTED TO FULLY COOPER ATE WITH THE LD. CIT(A) AND NOT TO TAKE UNNECESSARY ADJOURNMENT. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14-06-2016. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE: 14/6/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. D R, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES