Pearl Vision Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 3744/DEL/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 8985 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 23-06-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Principle of natural justice; Additional evidence
• Section: 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE MS SUCHITRA KAMBLE, JU DICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEM BER I.T.A. NO. 3744/DEL/2 016 (A.Y. 2005-16) PEARL VISION PVT. LTD. FLAT NO. 909, KAILASH BUILDING K. G. MARG, NEW DELHI 110001 PAN: AADCP2919D (APPELLANT) VS. DCIT CENTRAL CIRCLE - 13, NEW DELHI (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED AGAINST THE ORDER DATED 14.03. 2016 PASSED BY CIT(A)- 25, DELHI FOR ASSESSMENT YEAR 2005-06. 2. THE GROUNDS OF APPEAL ARE AS UNDER : 1. THAT AN APPEAL AGAINST THE IMPUGNED ORDER OF TH E LEARNED A.O. WAS FILED BEFORE CIT (APPEALS) ON 26 TH APRIL 2013 BUT CIT (APPEALS) HAS PASSED AN EX- PARTE ORDER BY CONFIRMING THE DEMAND OF LD. A.O. ON 14.03.2016 WITHOUT TAKING INTO CONSIDERATION THE REASONS DUE TO WHICH THE APPELLANT COULD NOT PROVIDE THE NECESSARY DOCUMENTS AND EVIDENCE AND CO ULD NOT ATTEND THE HEARINGS BEFORE THE CIT (APPEALS). SOME OF THE REAS ONS ARE PROVIDED BELOW:- (A) THAT MR. ANAND TIWARI, ONE OF THE DIRECTORS OF THE APPELLANT COMPANY HAS BEEN SUFFERING FROM A CHRONIC LIVER DISEASE FOR THE PAST 4-5 YEARS. ON ACCOUNT APPELLANT BY NONE RESPONDENT BY SH. SAMEER BHADRA, CIT DR DATE OF HEARING 08.08.2019 DATE OF PRONOUNCEMENT 26.09.2019 OF HIS SEVERE ILLNESS HE HAS BEEN ADMITTED/TREATED IN VARIOUS HOSPITALS IN INDIA AS WELL AS ABROAD ON INNUMERABLE OCCASIONS AN D HAS BEEN BED-RIDDEN FOR MOST OF THE TIME DURING THESE YEARS. THE MEDICA L RECORD OF MR. ANAND TIWARI IS VOLUMINOUS AND THE SAME CAN BE FILED BEFO RE THIS HONBLE TRIBUNAL, IF SO DIRECTED. ON ACCOUNT OF HIS SEVERE MEDICAL CONDI TION, MR. ANAND TIWARI HAS BEEN COMPLETELY INCAPACITATED IN DEALING WITH THE A FFAIRS OF THE COMPANY IN ANY MANNER WHATSOEVER. IN ANY EVENT, THE AFFAIRS OF THE COMPANY, PARTICULARLY FINANCIAL AND TAXATION RELATED MATTERS OF THE COMPANY WERE BEING LOOKED AFTER BY MR. P. K. TIWARI, THE OTHER DIRECTO R OF THE COMPANY, FROM THE VERY INCEPTION. (B) THAT MR. P. K. TIWARI, THE OTHER DIRECTOR OF TH E APPELLANT COMPANY, WAS HIMSELF SUFFERING FROM VARIOUS ILLNESSES AND HAD AL SO BEEN INCARCERATED DURING THE RELEVANT TIME. DUE TO FINANCIAL CRISIS, THE COMPANY HAD STARTED MAKING DEFAULTS IN PAYING INSTALLMENTS TO VARIOUS B ANKS AND ALSO IN FULFILLING OTHER FINANCIAL OBLIGATION. CONSEQUENTLY, THE BANKS HAD FILED FALSE & FRIVOLOUS COMPLAINTS WITH THE CENTRAL BUREAU OF INVESTIGATION (C.B.I.). THE C.B.I. OFFICIALS HAD STARTED MAKING INQUIRIES NOT ONLY FROM THE DIRE CTORS, BUT ALSO FROM THE FAMILY/STAFF MEMBERS ETC. THE C.B.I. OFFICIALS HAD STARTED MAKING VISITS TO THE OFFICE OF THE COMPANY. MR. P. K. TIWARI WAS INCARCE RATED IN CONNECTION WITH THE CBI CASES FROM JULY, 2012 TO OCTOBER, 2012 AND FROM SEPTEMBER 2014 TO MARCH 2015. THE APPELLANT COMPANY WAS GOING THROUGH SEVERE FINANCIAL CRUNCH DURING ALL THESE YEARS, DUE TO WHICH MOST OF THE COMPANY STAFF LEFT THE COMPANY AS THEIR SALARIES COULD NOT BE PAID. ON THE OTHER HAND, MR. P. K. TIWARI COULD NOT DEVOTE TIME TO PURSUE THE APPEALS ON ACCOUNT OF THE AFOREMENTIONED REASONS. ON ACCOUNT OF HIS ADVANCE A GE, FREQUENT INCARCERATION AND THE EXTRA ORDINARY FINANCIAL CRIS ES AND OTHER ADVERSE CONDITIONS, MR. P. K. TIWARI WAS UNDER ACUTE DEPRES SION AND COULD NOT THEREFORE, FOCUS ON THE MATTER. (C) THAT THE SENIOR OFFICIALS OF THE COMPANY IN FIN ANCE DEPARTMENT LEFT THE COMPANY AFTER COMMITTING SERIOUS ACTS OF OMISSIONS AND COMMISSION. IT IS LEARNT THAT SUCH OFFICIALS HAD BEEN INVOLVED IN VAR IOUS IRREGULARITIES DUE TO WHICH THE COMPANY AND ITS PRESENT DIRECTORS HAVE SU FFERED THE EXTRA ORDINARY CIRCUMSTANCES AND TRAUMA. ON ACCOUNT OF SUCH GRAVE SITUATION, THE MATTER BEFORE THE RESPONDENT COULD NOT BE PURSUED IN A PRO PER MANNER. (D) THAT THE AUTHORIZED REPRESENTATIVE, REPRESENTIN G THE APPELLANT COMPANY BEFORE THE RESPONDENT EXTRACTED HUGE MONEY FROM THE APPELLANT BUT DID NOT PROPERLY PUT FORWARD THE CASE BEFORE THE RESPONDENT . THEY SHOULD AT LEAST HAVE REPRESENTED THE DIFFICULTIES BEING FACED BY TH E COMPANY AND OUGHT TO HAVE DEFENDED THE APPELLANT TO THE BEST OF THEIR CA PACITY ON THE BASIS OF RECORDS WHICH WERE WITHIN THEIR POSSESSION AND KNOW LEDGE. BUT MOST UNFORTUNATELY THEY FAILED TO PERFORM THEIR PROFESSI ONAL DUTY, RESULTING IN PASSING OF THE IMPUGNED ORDER. (E) THAT THE RESPONDENT OUGHT TO HAVE CONSIDERED TH E AFOREMENTIONED BONA FIDE REASONS AND EXTRA ORDINARY CIRCUMSTANCES AND S HOULD HAVE GRANTED FURTHER TIME TO THE APPELLANT TO SATISFY THE RESPON DENT ON THE ASPECT THAT THE DEMAND RAISED BY THE LD. A.O. WAS ILLEGAL AND UNWAR RANTED. THE EX-PARTE ORDER PASSED BY THE RESPONDENT IS UNWARRANTED AND H AS RESULTED IN EXTREME PREJUDICE TO THE APPELLANT. (F) THAT THE APPELLANT IS ENTITLED FOR HEARING INST EAD OF THE CASE BEING DECIDED UNHEARD. (G) THAT THE FAILURE ON PART OF THE APPELLANT IN PU RSUING ITS APPEAL WAS NEITHER DELIBERATE NOR INTENTIONAL AND THE SAME WAS OCCASIO NED DUE TO REASONS MENTIONED ABOVE. (H) THAT THE EXTRA-ORDINARY ADVERSE SITUATION SUFFE RED BY THE APPELLANT ENTITLES IT FOR A FAIR HEARING BEFORE THIS TRIBUNAL SO THAT THE CASE CAN BE DECIDED ON MERITS INSTEAD OF BEING THROWN OUT ON ACCOUNT OF NO N REPRESENTATION. (I) THE COMPANY DID EVERYTHING WITHIN ITS POWER BY ENGAGING PROFESSIONALS TO REPRESENT IT BEFORE THE RESPONDENT BUT THE SAID PRO FESSIONALS FAILED TO PERFORM THEIR DUTY BY NOT ADVISING THE COMPANY IN THE MATTE R AND BY NOT REPRESENTING IT IN BONA-FIDE MANNER. (J) THAT THE COMPANY SOUGHT A NUMBER OF ADJOURNMENT S AND TRIED TO PRESENT ITS CASE. (K) THAT DUE TO LACK OF FUNDS AND NON AVAILABILITY OF DOCUMENTS AS EXPLAINED ABOVE, THE COMPANY, INSPITE OF TAKING MANY ADJOURNM ENTS, WAS NOT ABLE TO DEFEND ITS CASE BEFORE CIT (APPEALS). (L) THAT NO REASONABLE OPPORTUNITY WAS PROVIDED TO THE COMPANY TO PRESENT ITS CASE AND TO JUSTIFY THE GROUNDS FOR QUASHING TH E IMPUGNED ORDER OF THE LEARNED A.O. (M) THAT THE IMPUGNED ORDER, CONFIRMING THE ORDER O F A.O., WAS PASSED BY THE CIT(APPEALS) WITHOUT CONSIDERING THE GROUNDS PROVID ED BY THE COMPANY OR THE DOCUMENTS OR EVIDENCES TO BE PROVIDED ON PART O F THE COMPANY AND THE ORDER WAS PASSED EX PARTE. (N) THAT THE COMPANY HAS VALID GROUNDS AND WILL BE ABLE TO ESTABLISH THAT THE IMPUGNED ORDER PASSED BY THE LEARNED A.O. WAS BAD I N LAW AND WAS BASED ONLY ON PRESUMPTIONS, IF A REASONABLE OPPORTUNITY I S PROVIDED TO THE COMPANY. (O) THAT THE GROUNDS PROVIDED BY THE COMPANY IN THE APPEAL BEFORE THE CIT(APPEALS) WHICH WERE NOT CONSIDERED BY IT BEFORE CONFIRMING THE IMPUGNED ORDER OF LEARNED A.O. ARE PROVIDED BELOW. 2. THAT THE ASSESSMENT ORDER DATED 18.03.2013 PASSE D U/S 144 R.W.S. 153A, DESERVES TO BE QUASHED, BECAUSE NATURAL JUSTICE HAS BEEN DENIED BY THE LD. A.O. TO THE ASSESSEE. 4. THAT ON THE FACTS OF THE CASE AND UNDER THE LAW, THE LD. A.O. HAS ERRED IN NOT TAKING INTO CONSIDERATION THE ASSESSEES REPLY. VIDE LETTER DATED 15.03.2013 (FILED ON 18.03.2013). 5. THAT ON THE FACTS OF THE CASE AND UNDER THE LAW, THE LD. A.O. HAS ERRED IN ALTOGETHER IGNORING THE ASSESSEES REPLY, VIDE RECE IPT DATED 15.03.2013 (DISPATCHED THROUGH POSTAL AUTHORITIES VIDE RECEIPT DATED 15.03.2013 AND ALSO ON THE DAK COUNTER VIDE RECEIPT DATED 18.03.20 13). 6. THAT ON THE FACTS OF THE CASE AND UNDER THE LAW, THE LD. A.O. HAS ERRED IN MAKING ADDITION OF RS. 1,00,000/-, ON ACCOUNT OF SH ARE CAPITAL, THEREBY TREATING THE SAID AMOUNT AS UNEXPLAINED CREDIT. THE OBSERVATION OF THE LD. A.O. ARE EITHER FACTUALL Y INCORRECT OR ARE LEGALLY UNTENABLE. 7. THAT THE TOTAL INCOME ASSESSED AT RS.1,00,000/- IS ARBITRARY, UNJUST, ILLEGAL & HIGHLY EXCESSIVE. 8. THAT THE INCOME TAX LIABILITY CREATED AT RS. 36, 393/- IS ARBITRARY, UNJUST, ILLEGAL & HIGHLY EXCESSIVE. 9. THAT ON THE FACTS OF THE CASE AND UNDER THE LAW , THE LD. A.O. HAS ERRED IN CHARGING INTEREST U/S 234A. WITHOUT PREJUDICE, THE INTEREST CHARGED IS HIGHLY EXCESSIVE. 10. THAT ON THE FACTS OF THE CASE AND UNDER THE LAW , THE LD. A.O. HAS ERRED IN CHARGING INTEREST U/S 234B, WITHOUT PREJUDICE, INTE REST CHARGED IS HIGHLY EXCESSIVE. THAT THE REASONABLE OPPORTUNITY BE PROVIDED TO THE COMPANY FOR EVIDENCING AND ESTABLISHING THE ABOVE MENTIONED GROUNDS WHICH IT COULD NOT DO BEFORE THE CIT (APPEALS). THE APPELLANT CRAVES LEAVE TO RAISE ADDITIONAL GROU ND(S) OF APPEAL TO ALTER/MODIFY THE GROUND(S) OF APPEAL, AND/OR TO WIT HDRAW THE GROUND(S) OF APPEAL, EITHER PRIOR TO OR DURING THE COURSE OF APP ELLATE PROCEEDINGS. 3. THE ASSESSEE COMPANY BELONGS TO MAHUAA MEDIA GRO UP, IN WHICH A SEARCH & SEIZURE OPERATION WAS CONDUCTED ON 11.03.2 011, INCLUDING THE ASSESSEE, I.E. M/S PEARL VISION PVT. LTD. RETURN OF INCOME IN RESPONSE TO NOTICE ISSUED U/S 153C WAS FILED ON 27.02.2013 DECLARING I NCOME AT NIL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS FOUND BY T HE ASSESSING OFFICER THAT THE ASSESSEE COMPANY HAD RAISED SHARE CAPITAL AMOUN TING TO RS. 1,00,000/-. THE ASSESSING OFFICER TO ASCERTAIN GENUINENESS AND CREDITWORTHINESS OF THE CLAIMED TRANSACTIONS, ASKED THE ASSESSEE TO FILE DE TAILS AND DOCUMENT IN RESPECT OF THE CLAIM RELATING TO SHARE INVESTMENT, AND ALSO TO PRODUCE THE PERSONS CONCERN. HOWEVER, THE ASSESSEE NEITHER PROD UCED ANY PERSON NOR FILED ANY DETAILS PERTAINING TO THE CLAIMED TRANSACTIONS. AS THE COMPANY COULD NOT SUBSTANTIATE THE CLAIM OF HAVING RECEIVED SHARE APP LICATION MONEY AMOUNTING TO RS. 1,00,000/-, THE ASSESSING OFFICER PROCEEDED U/S 144 OF THE INCOME TAX ACT, 1961. THE ASSESSING OFFICER TREATED THE AMOUNT OF RS.1,00,000/- AS UNEXPLAINED CREDIT U/S 68 OF THE INCOME TAX ACT, 19 61 AND ADDED IT TO THE INCOME OF THE ASSESSEE. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 5. NONE APPEARED AT THE TIME OF HEARING ON BEHALF O F THE ASSESSEE DESPITE GIVING NOTICE. THEREFORE, WE ARE TAKING INTO ACCOUN T THE SUBMISSIONS OF THE ASSESSEE BEFORE THE CIT(A) AS SUBMISSIONS BEFORE US . 6. THE LD. DR RELIED UPON THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 7. WE HAVE HEARD THE LD. DR AND PERUSED ALL THE REL EVANT MATERIAL AVAILABLE ON RECORD. FROM THE PERUSAL OF RECORD IT CAN BE SEE N THAT THE ASSESSING OFFICER HAS NOT GIVEN PROPER OPPORTUNITY TO THE ASSESSEE TO REPLY THE SHOW CAUSE NOTICE DATED 12.03.2012 ISSUED BY THE ASSESSING OFFICER AN D PASSED THE ASSESSMENT ORDER ON 18.03.2013. BEFORE THE CIT(A), THE ASSESSE E FILED THE REJOINDER DATED 23.02.2016 TO THE REMAND REPORT DATED 09.06.2015, B UT THE CIT(A) HAS NOT CONSIDERED THE SAID REJOINDER AS WELL AS NOT GIVEN THE PROPER OPPORTUNITY TO THE ASSESSEE. IN FACT, THE CIT(A) HAS NOT CONSIDERED TH E ADDITIONAL EVIDENCES FILED BY THE ASSESSEE BEFORE ARRIVING AT THE FINDINGS. TH EREFORE, IT WILL BE APPROPRIATE TO REMAND BACK ALL THE ISSUES TO THE FILE OF THE CI T(A) TO BE DECIDED ON MERIT. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN OPPORTUNITY OF HEARING BY FOLLOWING PRINCIPLES OF NATURAL JUSTICE AND THE ASSESSEE IS A LSO DIRECTED TO CO-OPERATE AND ATTEND THE APPELLATE PROCEEDINGS, OTHERWISE THE CIT (A) IS AT LIBERTY TO DECIDE THE APPEAL ON MERIT AFTER CONSIDERING THE ADDITIONAL EV IDENCE FILED BY THE ASSESSEE. THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR ST ATISTICAL PURPOSE. 8. IN RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLO WED FOR STATISTICAL PURPOSE. O RDER PRONOUNCED IN THE OPEN COURT ON 26 TH SEPTEMBER, 2019 . SD/- SD/- (PRASHANT MAHARISHI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIA L MEMBER DATED: 26/09/2019 *BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION .0 9 .2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .0 9 .2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK