TAS Holdings Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 4051/DEL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4122 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 03-05-2017
• Assessment Year: 2002-2003
• Appeal Filed On: 01-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRAVAN GOTRU
• Keywords: Opportunity of being heard; Principle of natural justice; Reason to believe; Reassessment proceedings
• Section: 133A; 147; 68; 148; 10; 154

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D : NEW DELHI BEFORE SHRI H.S.SIDHU , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 4051/DEL/2013 (ASSESSMENT YEAR: 2002 - 03 ) TAS HOLDINGS PVT. LTD, FLAT NO. 4, 11/17, PUNJABI BAGH WEST, NEW DELHI PAN:AAACT0390F VS. ITO, CO. WARD - 16(1), CR BUILDING, INDRAPRASTHA ESTATE, NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI Y . K KAP O OR, ADV SHRI MUKESH AGARWAL, CA REVENUE BY: SHRI SHRAVAN GOTRU, SR. DR DATE OF HEARING 16/08 /2017 DATE OF PRONOUNCEMENT 16 / 1 0/2017 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT ( A ) 19 , NEW DELHI DATED 26.03.2013 FOR THE ASSESSMENT YEAR 2002 - 03. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE IMPUGNED APPELLATE ORDER OF LEARNED CIT(A) DATED 20.03.2013 IS LIABLE TO BE QUASHED ON THE GROUND THAT NO OPPORTUNITY OF BEING HEARD WAS GRANTED TO THE APPELLANT AND ON THE DESIGNATED DATE OF HEARING AS PER ORDER LEARNED CIT(A) HIMSELF WAS NOT AVAILABLE FOR HEARING. 2. THE LOWER AUTHORITIES HAVE ACTED ARBITRARILY IN HASTE WITH PRE - DECISIONAL MINDSET AND HAVE FAILED TO FULLY APPRECIATE THE FACTS, CI RCUMSTANCES AND WRITTEN SUBMISSIONS OF THE APPELLANT ON RECORD AND HAS MERELY RETAINED THE EARLIER STANCE OF THE DEPARTMENT WITHOUT APPLICATION OF MIND OR APPRECIATION OF DOCUMENTS ON RECORD AGAINST THE LETTER & SPIRIT OF THE DIRECTIONS OF HONBLE BENCH OF ITAT. 3. THE ASSESSMENT ORDER FRAMED UNDER SECTION 147 OF THE ACT IS BAD IN LAW AND IS LIABLE TO BE QUASHED ON THE GROUND THAT PRINCIPLES OF NATURAL JUSTICE HAVE BEEN INFRINGED AND THE APPELLANT WAS NOT ALLOWED TO EXAMINE OR CROSS - EXAMINE THE WITNESS/ E VIDENCES COLLECTED AT THE BACK AND RELIED UPON BY THE AO, IN SPITE OF APPELLANTS SPECIFIC REQUEST MADE IN THIS REGARD DURING REASSESSMENT PROCEEDINGS. NO PAGE | 2 COPIES OF ANY EVIDENCE(S) RELIED UPON BY THE AO WERE PROVIDED TO THE APPELLANT TO MAKE SUBMISSIONS OR CROSS - EXAMINATION. 4. THE WHOLE PROCEEDINGS OF RE - ASSESSMENT ARE BAD IN LAW AS THE SAME ARE NOT FOUNDED ON THE MANNER AND THE SPIRIT WHICH HAS BEEN LAID OUT IN THE SECTION 147 OF THE ACT ITSELF, AS AND TO THE EXTENT THAT LEARNED AO NEVER HAD ANY OCCASIO N TO HAVE ANY REASON TO BELIEVE TO PROCEED WITH THE RE - ASSESSMENT PROCEEDINGS, AS ALLEGED IN THE IMPUGNED ASSESSMENT ORDER. 5. THAT THE AUTHORITIES BELOW HAVE ERRED IN FACTS AND LAW IN RELYING UPON THE STATEMENT OF THE ALLEGED ENTRY OPERATOR, RECORDED UN DER SECTION 133A OF THE ACT, WITHOUT APPRECIATING THAT THE SAME HAD NO EVIDENTIARY VALUE IN THE EYES OF LAW, DID NOT ON ITS OWN STANDING HELP OR ADVANCE THE CASE OF THE REVENUE, NOR DID IT SPECIFICALLY INCRIMINATE THE ASSESSEE, THUS WAS LIABLE TO BE IGNORE D. THE AUTHORITIES BELOW HAVE FURTHER IGNORED THE JUDGEMENTS ON THE POINT RELIED UPON BY THE ASSESSEE. 6. THE LEARNED AO HAS ERRED AND WAS NOT JUSTIFIED IN ARBITRARILY CONCLUDING THAT THE ASSESSEE WAS NOT ABLE TO PROVE THE GENUINENESS OF THE TRANSACTION W ITH THE PARTY, FROM WHOM THE IMPUGNED AMOUNT OF RS 8.50 LACS WAS OBTAINED, INSPITE OF THE FACT THAT DEPARTMENT WAS CARRYING HANDY ALL THE RELEVANT INFORMATION, AS APPARENT FROM THE BODY OF ASSESSMENT ORDER ITSELF. ON THE CONTRARY, THE LEARNED AO HAS FAILED TO PROVE THAT IMPUGNED AMOUNTS WERE BOGUS. 7. THE AUTHORITIES BELOW HAVE ERRED IN FACTS AND LAW IN INVOKING SECTION 68 OF THE IT ACT, AGAINST THE APPELLANT, BY FAILING TO APPRECIATE THAT ALL THE PREREQUISITES OF IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE CREDITOR STOOD ESTABLISHED IN THE PRESENT CASE AND THE TRANSACTION/S COULD NOT BE CLOTHED OR ALLEGED TO BE UNEXPLAINED. 8. THE AUTHORITIES BELOW HAVE ERRED IN FACTS AND LAW IN FAILING TO APPRECIATE AND / OR IGNORED THE JUDICIAL PRECEDENTS RELIED UP ON BY THE APPELLANT IN SUPPORT OF ITS CASE THOUGH WHICH JUDGEMENTS WERE BINDING UPON THEM. 9. THE LOWER AUTHORITIES HAVE ERRED AND WERE NOT JUSTIFIED, WITHOUT ANY ADVERSE INTERFERENCE, IN REJECTING THE CLAIM OF THE APPELLANT THAT AGGREGATE AMOUNT OF RS 5.0 0 LACS, SUBSEQUENTLY REFUNDED SHOULD NOT HAVE FORMED PART OF THE TOTAL INCOME FOR WHICH THE NECESSARY EVIDENCES WERE ALSO PRODUCED. THEREFORE, TO THE EXTENT THE AMOUNT IS ACTUALLY REFUNDED CANNOT BE TERMED AS UNEXPLAINED WITHIN THE MEANING OF SECTION 68 OF THE ACT. 10. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED AO HAS ERRED AND WAS NOT JUSTIFIED IN DISALLOWING THE CLAIM OF THE APPELLANT FOR SET - OFF OF BROUGHT FORWARD BUSINESS LOSSES AMOUNTING TO RS 2,89,288/ - , WHICH HAVE REACHED THE FINALITY, W ITHOUT ANY BASIS. 11. WITHOUT PREJUDICE TO OTHER GROUNDS OR ANY ADVERSE INFERENCES, THE LEARNED AO HAS FAILED, WITHOUT ASSIGNING ANY REASON, TO ALLOW THE TAX CREDIT OF RS 7096/ - PERTAINING TO AY 1999 - 2000, FROM THE TAX DETERMINED ON REASSESSMENT, WITHIN T HE MEANING OF SECTION 115JAA OF THE ACT. PAGE | 3 12. THE DEMAND NOTICE OF RS 814,618/ - U/S 156 OF THE ACT IS ERRONEOUS, UNJUSTIFIED AND IS PRIMARILY BASED ON PREVIOUS DEMAND NOTICE, WHICH WAS LATER RECTIFIED U/S 154 OF THE ACT VIDE ORDER DATED 18/08/2006, AND HAS NOT CONSIDERED TDS, TAXES PAID UNDER REGULAR ASSESSMENT, WRONG INTEREST CALCULATIONS ETC. 13. THE ABOVE GROUNDS OF APPEAL ARE INDEPENDENT WITH OUT PREJUDICE TO EACH OTHER. 3. BRIEF FACTS OF THE CASES THAT ASSESSEE HAS FILED ITS RETURN OF INCOME ON 27/09/2004 DECLARING LOSS OF RS. 5 3640/ . SUBSEQUENTLY THE ASSESSMENT WAS COMPLETED UNDER SECTION 143 (3) ON 22/09/2005. ASSESSING THE INCOME OF THE ASSESSEE AT RS. 7 96859/ . THE LD. ASSESSING OFFICER HAS MADE AN ADDITION UNDER SECTION 68 OF THE ACT ON ACCOUNT OF S HARE APPLICATION MONEY RECEIVED BY THE ASSESSEE. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT (A) WHO CONFIRMED THE ADDITION AND THEREFORE THE ASSESSEE PREFERRED APPEAL BEFORE THE COORDINATE BENCH. THE COORDINATE BENCH WIDE ORDER DATED 31/01/2011 UP HELD THE REOPENING OF THE ASSESSMENT UNDER SECTION 148 OF THE INCOME TAX ACT BUT RESTORE THE MATTER BACK TO THE FILE OF THE LD. ASSESSING OFFICER FOR FRESH ADJUDICATION ON ACCOUNT OF ADDITION UNDER SECTION 68 OF THE INCOME TAX ACT OF RS. 8.50 LAKHS RECEIVE D FROM FRENZY PRODUCTS. THE ASSESSEE NOT SATISFIED WITH THE ORDER OF THE COORDINATE BENCH PREFERRED AN APPEAL BEFORE THE HONBLE DELHI HIGH COURT WHICH DISMISSED THE APPEAL OF THE ASSESSEE. IN VIEW OF THIS, THE LD. ASSESSING OFFICER HAS FRAMED IN ASSESSMEN T PURSUANT TO THE DIRECTION OF THE COORDINATE BENCH BY GIVING AN OPPORTUNITY TO THE ASSESSEE. THE LD. ASSESSING OFFICER FRAMED THE SAME ASSESSMENT ORDER AS ASSESSEE FAILED TO SUBMIT ANY DOCUMENTS BEFORE THE ASSESSING OFFICER IN ORIGINAL. ASSESSMENT WAS PAS SED UNDER SECTION 143 (3) OF THE INCOME TAX ACT ON 21/ 12/ 2011 PURSUANT TO THE DIRECTION OF THE COORDINATE BENCH DETERMINING THE INCOME OF THE ASSESSEE AT RS. 7 96860/ . 4. ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE LD. ASSESSING OFFICER PREFERRED AN APP EAL BEFORE THE LD. CIT (A) 19, NEW DELHI WHO WIDE ORDER DATED 26/03/2013 DISMISSED THE APPEAL OF THE ASSESSEE IS NONE REMAINED PRESENT BEFORE HIM FOR PURSUING THE ABOVE APPEAL. THE LD. CIT (A) ALSO CONFIRMED THE ADDITION ON THE MERITS OF THE CASE. 5. ASSESS EE AGGRIEVED WITH THE ORDER OF THE LD. CIT (A) PREFERRED AN APPEAL BEFORE US STATING THAT THE ASSESSEE COULD NOT REMAINED PRESENT BEFORE THE LD. CIT (A) BUT HAS SUBMITTED THE DETAILED WRITTEN SUBMISSION, WHICH IS PAGE | 4 FURNISHED IN THE PAPER BOOK AT PAGE NO. 1 T O 20. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE SUBMITTED THE DETAILED EXPLANATION ABOUT THE AMOUNT OF SHARE APPLICATION MONEY SUBMITTING THE BANK STATEMENT OF THE DEPOSITOR AS WELL AS THE AUDITED ACCOUNTS OF THE PARTY. IT WAS FURTHER SUBMITTED BEFORE US THAT THE APPEAL OF THE INCOME TAX RETURN OF THE PARTY WAS ALSO SUBMITTED AND IN VIEW OF THIS THE ADDITION SHOULD NOT HAVE BEEN MADE BY THE LD. ASSESSING OFFICER AS WELL AS THE CONFIRMATION OF THE ADDITION BY THE LD. CIT (A) IS ALSO NOT PROPER. 6. THE LD. DEPA RTMENTAL REPRESENTATIVE VEHEMENTLY CONTESTED THAT ASSESSEE HAS PURPOSEFULLY NOT APPEARING BEFORE THE AUTHORITIES AND THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF CIT VERSUS NOVA PROMOTERS 342 ITR 169. HE THEREFOR E SUBMITTED THAT THE ORDER OF THE LOWER AUTHORITIES MAY BE UPHELD AS ASSESSEE HAS MISERABLY FAILED TO PROVE THE IDENTITY, CREDITWORTHINESS OF THE PARTY AS WELL AS THE GENUINENESS OF THE TRANSACTION AND HAS ALSO FAILED TO COMPLY WITH THE DIRECTION OF THE CO ORDINATE BENCH. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND ALSO PERUSED THE ORDERS OF THE LOWER AUTHORITIES. WE HAVE ALSO PERUSED THE DECISION OF THE COORDINATE BENCH IN CASE OF THE ASSESSEE WHICH IS PRODUCED BY THE LD. ASSESSING OFFICER IT PAG E NO. 2 3 OF HIS ORDER. THE COORDINATE BENCHES ASKED THE ASSESSEE TO PRODUCED THE FOLLOWING THINGS: - A. SHARE APPLICATION FORMS IN ORIGINAL B. SHAREHOLDER REGISTER C. SHARE TRANSFER REGISTER D. SHARE ALLOTMENT REGISTER E. PROOF OF REFUND OF SHARE APPLICATION MONEY ALONG WITH THE DETAILS OF THE SHARE APPLICANT AND ITS INCOME TAX RECORDS F. EXPLANATION WITH RESPECT TO RETENTION OF SHARE APPLICATION MONEY FOR A LONG TIME. WITHOUT ALERTING THE SHARES G. REFUND OF THE SHARE APPLICATION MONEY IN MARCH 2004 H. MINUTES OF THE MEETIN G OF THE DIRECTOR TO EXPLAIN AS TO HOW AND IN WHAT MANNER THE SHARES TO THE EXTENT OF 3.5 LACS WERE ALLOTTED TO THE SHARE APPLICANT AND BALANCE OF RS. 5 LACS WAS REFUNDED PAGE | 5 8. WE FOUND THAT AT PAGE NO. 6 OF THE WRITTEN SUBMISSION MADE BEFORE THE LD. CIT (A). THE ASSESSEE HAS TRIED TO EXPLAIN THE ABOVE DETAILS. IT IS ALSO APPARENT THAT THE ASSESSEE HAS NOT GIVEN THE COMPLETE DETAILS AS DIRECTED BY THE COORDINATE BENCH. THE ASSESS EE HAS ALSO SUBMITTED IN GROUND NO. 1 OF THE APPEAL OF THE ASSESSEE AS WELL AS IN GROUND NO. 2 OF THE APPEAL OF THE ASSESSEE THAT ON THE APPOINTED DATE OF HEARING, THE LD. CIT (A) WAS NOT AVAILABLE FOR HEARING AND THE ORDERS HAVE BEEN PASSED EX PARTE. THER EFORE, IN THE INTEREST OF THE JUSTICE, IT WOULD BE FAIR TO GIVE LAST CHANCE TO THE ASSESSEE TO COMPLY WITH THE DIRECTION OF THE COORDINATE BENCH WHICH HAS BECOME FINAL AND BINDING ON ALL THE AUTHORITIES. THE ASSESSEE MUST BE ALSO CONSCIOUS OF THE FACT THAT BY NOT COMPLYING WITH THE DIRECTION OF THE COORDINATE BENCH IT IS WASTING PRECIOUS TIME OF THE PARTIES INVOLVED AS WELL AS OF THIS COURT. IN VIEW OF THIS WE SET ASIDE THE ISSUE TO THE FILE OF THE LD. CIT (A) WITH A DIRECTION TO THE ASSESSEE TO SUBMIT THE DETAILS DIRECTED BY THE COORDINATE BENCH WITHIN 60 DAYS OF THIS ORDER. THE LD. CIT APPEAL IS DIRECTED TO EXAMINE THE SAME WHETHER THE DIRECTION GIVEN BY THE COORDINATE BENCH HAS BEEN FOLLOWED BY THE ASSESSEE OR NOT, AND TO DECIDE THE ISSUE ON THE MERITS. I N CASE ASSESSEE DOES NOT AVAIL THIS LAST OPPORTUNITY THEN THE ISSUE MAY BE DECIDED BY THE CIT APPEAL ON MERITS. IN THE RESULT GROUND NO. 1 AND 2 OF THE APPEAL OF THE ASSESSEE ARE ALLOWED WITH ABOUT DIRECTION. 9. AS WE HAVE SET ASIDE THE ISSUE BACK TO THE FILE OF THE LD. CIT (A ) ALL OTHER GROUNDS OF THE APPEAL ARE NOT ADJUDICATED AND SAME ARE DISMISSED IN LIMINE. 10. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 6 / 10 /2017. - S D / - - S D / - ( H.S.SIDHU ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 6 / 1 0/2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT PAGE | 6 ASSISTANT REGISTRAR ITAT, NEW DELHI