MEASAGE LASA LAMA ARTS, SRINAGAR V. INCOME TAX OFFICER WARD -3 (2) , SRINAGAR

ITA 388/ASR/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5190 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 27-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHARAN DAS DR
• Assessee Lawyers: SAMRITI KOHLI
• Keywords: Bogus purchase; Opportunity of being heard; Principle of natural justice; Reasonable cause; Accommodation entries; Set aside
• Section: 143(3); 142(1); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, AMRITSAR (VIRTUAL COURT) BEFORE: SHRI. N.K.SAINI, VICE PRESIDENT AND SHRI N.K. CHOUDHRY, JUDICIAL MEMBER ./ ITA NO. 388 /ASR/2019 / ASSESSMENT YEAR : 2007-08 M/S LASA LAMA ARTS, RAINAWARI, ABI KARA PORA, SRINAGAR THE ITO, WARD-3 (2), SRINAGAR ./ TAN NO. AAAFL3656K / APPELLANT / RESPONDENT ! / ASSESSEE BY : SAMRITI KOHLI, CA ! / REVENUE BY : SHRI CHARAN DAS, DR ! &/ DATE OF HEARING : 22/09/2020 ! &/ DATE OF PRONOUNCEMENT : 22/09/2020 / // / ORDER PER N.K. SAINI, VICE PRESIDENT THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT . 14/02/2019 OF LD. CIT(A)-2, AMRITSAR. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THE ID. CIT (A) HAS ERRED IN LAW AND ON FACTS IN RE JECTING THE APPEAL FILED BY THE APPELLANT AND ADJUDICATING THE CASE EX- PARTE A ND UPHOLDING THE ORDER PASSED BY THE AO IGNORING THE EMAIL REPLIES SENT IN RESPONSE TO NOTICE BY CIT APPEALS ON 24/01/2019 AND ALSO IGNORING MERITS OF T HE CASE WHICH IS AGAINST THE NATURAL JUSTICE OF THE LAND. 2. THAT THE LEARNED CIT (A) HAS ERRED ON FACTS IN SUST AINING AN ADDITION OF RS.228000/- BEING ALLEGED BOGUS PURCHASES AS HELD B Y THE LD. AO AND RAISING UNDUE TAX OF RS 1,16,500 AND CONSEQUENTIAL INTEREST OF RS 1,20,290/- WHICH IS BAD IN LAW . 2 3. THAT THE ID AO. AS WELL AS THE ID. CIT (A) HAVE ERRE D ON FACTS IN HOLDING THAT THE PURCHASE OF GOODS MADE BY THE APPELLANT FROM M/ S NEW PLANET TRADING PVT. LTD. IS BOGUS AND THROUGH ACCOMMODATION ENTRIES ONL Y, WITHOUT CARRYING ANY INDEPENDENT INVESTIGATION INTO THE SAID TRANSACTION S AND MERELY BY RELYING ON CERTAIN INFORMATION RECEIVED FROM INVESTIGATION WIN G OF THE DEPARTMENT. 4. THAT THE ID. AO HAS ERRED IN LAW AS THE NOTICE U/ S 148 WAS NOT ISSUED BY THE AO HAVING TERRITORIAL JURISDICTION AS PER SECTION 120 BUT WAS SERVED BY ITO WARD 2 MARGAO, GOA (WHO IS NOT THE JURISDICTIONAL AO OF THE APPELLANT) ON APPELLANT'S BRANCH OFFICE AT GOA ON 24.03.2014. THAT ONLY A NOTI CE CALLING FOR INFORMATION WAS SERVED BY THE JURISDICTIONAL AO U/S 142(1) ON THE AP PELLANT ON 21.11.2014 FOR SUBMISSION OF INFORMATION, THUS THE NOTICE U/S 148 IS BAD IN LAW. 5. THAT THE LEARNED AO HAS REJECTED THE PURCHASES WITH OUT MAKING ANY COMMENT ON THE SALES ARISING OUT OF THE PURCHASED S TOCK. 6. THAT THE AO HAS ERRED IN REJECTING PARTIALLY THE AUD ITED BOOKS OF ACCOUNTS OF THE ASSESSEE. 7. THAT THE ID. AO HAS FAILED TO TAKE COGNIZANCE OF ASS ESSMENT PROCEEDINGS ALREADY COMPLETED FOR AY 2007-08 VIDE ASSESSMENT OR DER DATED 21.12.2009. 8. THAT THE ASSESSMENT PROCEEDINGS AS PER SECTION 147 CAN BE INITIATED ONLY FOR UPTO A PERIOD OF 4 YEARS IN CASES WHERE ASSESSMENT U/S 143(3) HAD ALREADY BEEN COMPLETED HOWEVER IN THE PRESENT CASE THE NOTICE U/ S SECTION 148 WAS SERVED TOWARDS SIXTH YEAR FROM END OF RELEVANT ASSESSMENT YEAR. THE RETURN OF INCOME WAS DULY FILED ON TIME ALONG WITH AUDITED BOOKS OF ACCOUNTS AND AUDIT REPORT AND THERE WAS NO FAILURE ON THE PART OF THE ASSESSE E IN FURNISHING OF ANY INFORMATION. 9. THE APPELLANT CRAVES LEAVE TO AMEND OR ADD ANY OR M ORE GROUND (S) OF APPEAL. 3. THE MAIN GRIEVANCE OF THE ASSESSEE VIDE GROUND NO. 1 R ELATES TO THE EXPARTE ORDER PASSED BY THE LD. CIT(A). 4. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE E-FILED HIS RETURN OF INCOME ON 06/03/2008 DECLARING AN INCOME OF RS. 1,17,300/- LATE R ON THE CASE WAS SELECTED FOR SCRUTINY. THE A.O. FRAMED THE ASSESSMENT AT AN INCOME O F RS. 1,49,025/- BY MAKING THE ADDITION OF RS. 31,725/- ON ACCOUNT OF DISALLOWANCE MAD E OUT OF THE EXPENSES VIDE ORDER DT. 21/12/2009 PASSED UNDER SECTION 143(3) OF T HE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT). 3 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO DISMISSED THE APPEAL BY PASSING THE EXPARTE ORDER. 6. NOW THE ASSESSEE IS IN APPEAL. 7. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) PASSED THE IMPUGNED ORDER EXPARTE WITHOUT PROVIDING DUE AND REASONABLE OPPO RTUNITY OF BEING HEARD. IT WAS STATED THAT NOTICES FOR HEARING WERE RECEIVED BY THE AS SESSEE AFTER THE DATE OF HEARING SO THERE WAS A REASONABLE CAUSE FOR NON APPEARANCE BEF ORE THE LD. CIT(A). IT WAS ALSO STATED THAT THE LD. CIT(A) HAS NOT GIVEN DUE AND PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN HIS RIVAL SUBMISSIONS THE LD. SR. DR STRONGLY SU PPORTED THE ORDERS OF THE AUTHORITIES BELOW. 9. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIE S AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE IT IS NOTICED THAT THE LD. CIT(A) IN THE IMPUGNED ORDER HAD SUSTAINED THE ADDITION OF RS. 2,2 8,000/- BY OBSERVING AT PAGE NO. 4 OF THE IMPUGNED ORDER THAT AS NO PURCHASES OF MATE RIAL WERE ESTABLISHED TO HAVE BEEN MADE BY THE ASSESSEE, THE EXPENDITURE OF RS. 2,28 ,000/- CLAIMED WAS ONLY AN ACCOMMODATION ENTRY WHICH WAS RIGHTLY DISALLOWED. HOWEV ER IN THE ASSESSMENT ORDER DT. 21/12/2009 THERE IS NO SUCH ADDITION MADE BY THE A. O. THEREFORE, THE FACTS ARE NOT CLEAR. SECONDLY THE LD. CIT(A) WHILE DISMISSING THE APP EAL OF THE ASSESSEE SIMPLY STATED THAT THE CASE WAS FIXED FOR HEARING ON 27/11/2018 & 16/ 01/2019 AND THAT NON ATTENDED NOR ANY WRITTEN SUBMISSION FILED. HOWEVER, IT IS NOT BRO UGHT ON RECORD THAT THE NOTICES FOR HEARING FOR THE AFORESAID DATE WERE SERVED UPON THE ASS ESSEE. IT IS WELL SETTLED THAT NOBODY SHOULD BE CONDEMNED, UNHEARD AS PER THE MAXIM, AU DI ALTERAM PARTEM . 10. WE THEREFORE BY CONSIDERING THE PECULIAR FACTS OF THIS CASE, 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 REASONABL E OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 22/09/2020 SD/- SD/- (N.K. CHOUDHRY) (N.K. SAINI) JUDICIAL MEMBER VICE PRESIDENT DATED : 22/09/2020 !,-, / COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. CIT 4. THE CIT(A) 5. DR, ITAT, AMRITSAR 6. GUARD FILE / BY ORDER, / ASSISTANT REGISTRAR