M/s Qutab Realcon (P) Ltd., New Delhi V. DCIT, CC-I, Ludhiana

ITA 375/CHANDI/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1833 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 01-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice; TDS; Set aside; Audi alteram partem; FORM 26AS
• Section: 131; 68; 143(3); 143(2)

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “बी” , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH ी एन.के .सैनी, उपा य! एवं ी स ु धांश ु ीवा&तव, या(यक सद&य BEFORE: SHRI. N.K.SAINI, VP & SHRI. SUDHANSHU SRIVASTAVA, JM ITA NO. 375/Chd/2019 Assessment Year : 2014-15 M/s Qutab Realcon(P) Ltd. 65/17, New Rohtak Road, Karol Bagh, New Delhi The DCIT Central Circle-1 Ludhiana PAN NO: !" # Appellant $% # Respondent & ' ( ) Assessee by : Shri Vibhor Garg, C.A * ( ) Revenue by : Dr. Ranjeet Kaur, Sr. DR + , ( ' - Date of Hearing : 18/05/2022 ./01 ( ' - Date of Pronouncement : 19/05/2022 आदेश/Order PER N.K. SAINI, VICE PRESIDENT This is an appeal by the assessee against the order dt. 11/02/2019 by the Ld. CIT(A)-5, Ludhiana. 2. Following grounds has been raised in this appeal. 1. The Id. Commissioner of Income Tax (Appeals) - 5, Ludhiana [hereafter the Id. CIT(A)] erred in confirming the addition of Rs. 1,15,99,360 being the share capital / premium under section 68 of the Income tax Act, 1961 (hereafter the Act). 1.1 The Id. CIT(A) failed to appreciate the facts and circumstances of the case, inter alia that (1) Rs. 39,00,000 was received in earlier years; (2) the financial statements of some of the shareholders reflects investment in shares of the Assessee. 1.2 The Id. CIT(A) failed to direct the Id. Deputy Commissioner of Income Tax, Central Circle - 1, Ludhiana (hereafter the DCIT) to exercise the powers vested in him by section 131 of the Act to issue summons to the shareholder, despite there being specific request and offer to deposit the diet money and any other fees. 2. The Id. CIT(A) failed to allow the correct depreciation. 3. The assessment made under section 143(3) of the Act is bad in law, null and void ab initio inter alia because: (1) the case for scrutiny was selected by CASS, which is in gross 2 violation of provisions of section 143(2) of the Act; (2) any notice u/s 143(2) of the Act, which is sine qua non for assumption of jurisdiction, was not served upon the Assessee within the statutory mandatory limitation of time period provided by proviso to section 143(2) of the Act. 4. The Id. CIT(A) as well as Id. DCIT failed to allow the credit of TDS, which is duly reflected in Form 26AS. 5. The Id. DCIT erred in charging interest u/s 234A, 234B, 234C and 234D of the Act and without prejudice the same is excessive. 6. The assessment order as well as the impugned order is against the facts of the case as well as law. 7. The observations of the Id. CIT (A) as well as Id. DCIT are against the facts of the case. 3. Facts of the case in brief are that the assessee filed the return of income on 28/09/2012 declaring loss of Rs. 16,32,208/-, later on the case was selected for scrutiny. The AO during the course of assessment proceedings noticed that the assessee had received share application money amounting to Rs. 1,15,99,360/- for 100864 shares @ Rs. 115/- per share [Face Value Rs. 10/- and share premium of Rs. 105/- per equity share]. Since the assessee failed to prove the identity of the investor the AO made the addition of the said amount by invoking the provisions of Section 68 of the Act. 4. Being aggrieved the assessee carried the matter to the Ld. CIT(A) who sustained the addition made by the AO by passing the impugned order exporte. 4.1. The Ld. CIT(A) mentioned that in the case of the assessee notice was issued on 05/01/2018 for hearing on 30/01/2018 but the notice was returned by postal aluthority on 17/01/2018 with remarks “ no such company here with such name”. The Ld. CIT(A) again issued the notice on 01/08/2018 for hearing on 24/08/2018 which was also returned by the postal authority with remarks “no such company”. Again notice was issued on 13/08/2018 fixing the case for 04/09/2018. Thereafter, the Ld. CIT(A) issued notice dt. 24/10/2018 fixing the case for 05/11/2018, in response application for adjournment was received on 02/11/2018 which has been reproduced by the Ld. CIT(A) at page no. 3 of the impugned order and reads as under: Before The Hon'ble Commissioner of Income Tax (Appeals) - 5, Ludhiana. In the matter of: Qutab Realcon Private Limited Appeal No.: 519/IT/CIT(A)-5/LDH/16-17 Assessment Year: 2014-15 3 Respected Sir, Kindly refer to the notice, dated 24-10-2018, issued from office of your honour on 25-10- 2018, served upon the Assessee Company on 31-10-2018, fixing the hearing for 05-11-2018. In this regard, it is respectfully submitted for kind consideration and favourable action by your honour as under: It is submitted that paper book and written submissions have to be prepared and the time allowed is very short. Your honour is, therefore, requested to kindly adjourn the hearing for three week. Power of Attorney is enclosed herewith Thanking You, Yours Faithfully, For M/s Qutab Realcon Private Limited Sd/- Director 4.2 The Ld. CIT(A) again issued notice on 05/11/2018 fixing case for hearing on 20/11/2018, the assessee again moved an application for adjournment for the reason that its counsel who was to represent the case was pre occupied in time barring income tax assessment and GST audit. Thereafter, the Ld. CIT(A) passed the impugned order exparte by observing that the case was fixed for 06/02/2019, however, none attended on the said date and that neither any adjournment nor any further submission was received. 5. Now the assessee is in appeal. 6. The Ld. Counsel for the assessee submitted that the Ld. CIT(A) passed the impugned order exparte without affording due and reasonable opportunity of being heard to the assessee. It was further submitted that a specific ground challenging the validity of the assessment without serving the notice under section 143(2) of the Act within mandatory limitation of time period was raised but the said ground was not disposed off by the Ld. CIT(A). 7. In her rival submissions the Ld. Sr. DR strongly supported the impugned order and submitted that ample opportunities of being heard were provided to the assessee who remained absent, so there was no alternative except to pass the impugned order exparte. 4 8. We have considered the submissions of both the parties and perused the material available on the record. In the present case it is not in dispute that the impugned order has been passed by the Ld. CIT(A) exparte, he simply stated that the case was fixed for hearing on 06/02/2019 and none attended on the said date. However nothing is brought on record to substantiate that the notice for hearing was served upon the assessee. It is well settled that nobody should be condemned, unheard as per the maxim, “audi alteram partem”. We, therefore, by keeping in view the principles of natural justice, deem it appropriate to set aside this case back to the file of Ld. CIT(A) to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee. 9. In the result, appeal of the Assessee is allowed for statistical purposes. (Order pronounced in the open Court on 19/05/2022) Sd/- Sd/- स ु धांश ु ीवा&तव एन.के .सैनी, (SUDHANSHU SRIVASTAVA) ( N.K. SAINI) या(यक सद&य/ JUDICIAL MEMBER उपा य! / VICE PRESIDENT AG Date: 19/05/2022 / 2 ( $ '3 4 5 4 ' Copy of the order forwarded to : 1. # The Appellant 2. $% # The Respondent 3. + 6' CIT 4. + 6' 7 8 The CIT(A) 5. 4 9 ग $ ' ; < - ; < =>? ग@ DR, ITAT, CHANDIGARH 6. ग ? A , Guard File / 2 + By order, B * Assistant Registrar