Swastik Trading Co., New Delhi V. JCIT, New Delhi

ITA 424/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97283 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 17-09-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 27-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Section: 143(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : G : NEW DELHI BEFORE SHRI R.S. SYAL, AM AND SHRI C.M. GARG, JM ITA NO.424/DEL/2012 ASSESSMENT YEAR : 2007-08 SWASTIK TRADING CO., 1209, VIKRAM TOWER, 16, RAJINDRA PLACE, NEW DELHI. PAN: AADFS9347M VS. JCIT, RANGE-33, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI GURJEET SINGH, CA DEPARTMENT BY : SHRI T. VASANTHAN, SR. DR DATE OF HEARING : 17.09.2015 DATE OF PRONOUNCEMENT : 18.09.2015 ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT(A) ON 31.10.2011 IN RELATION TO THE ASSESSM ENT YEAR 2007-08. 2. GROUND NO. 3, CHALLENGING THE LIMITATION FOR THE PASSING OF THE ASSESSMENT ORDER, WAS NOT PRESSED. THE SAME, THERE FORE, STANDS DISMISSED. ITA NO.424/DEL/2012 2 3. THE ONLY OTHER ISSUE WHICH SURVIVES FOR OUR CONSIDERATION IS AGAINST THE ESTIMATION OF ADDITION AT RS.15 LAC. BRIEFLY S TATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM EN GAGED IN THE BUSINESS OF YARNS. RETURN DECLARING TOTAL INCOME OF RS.17,76,4 40/- WAS FILED ON 27.10.2007. INITIALLY, THE NOTICE U/S 143(2) WAS I SSUED BY THE AO, LUDHIANA. AFTER TRANSFER OF JURISDICTION, ONE MORE NOTICE U/S 143(2) WAS ISSUED BY ACIT, NEW DELHI. ONCE AGAIN, THE JURISDIC TION WAS ASSIGNED TO THE JCIT, RANGE-33, NEW DELHI, WHO, EVENTUALLY, ISSUED NOTICE U/S 143(2) ON 21.12.2009 AND PASSED THE ASSESSMENT ORDE R. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS REQUIRED TO FILE DETAILS IN SUPPORT OF THE INCOME DECLARED. SINCE T HE TIME LIMIT FOR COMPLETION OF ASSESSMENT WAS APPROACHING FAST AND T HE ASSESSEE DID NOT FILE NECESSARY DETAILS, THE JCIT PASSED THE ASSESSM ENT ORDER U/S 144 OF THE ACT, WITHIN A PERIOD OF THREE DAYS FROM THE DA TE OF ISSUE OF NOTICE U/S 143(2) ON 24.12.2009, ESTIMATING ENHANCEMENT OF IN COME AT RS.15 LAC. THE LD. CIT(A) CONFIRMED THE ASSESSMENT ORDER ON ME RITS. THE ASSESSEE IS AGGRIEVED AGAINST THE CONFIRMATION OF ENHANCEMEN T OF INCOME TO THIS EXTENT. ITA NO.424/DEL/2012 3 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE DID NOT SUPPLY THE NECESSARY DETAILS AS CALLED FOR BY THE AO WITHIN THE LIMITED TIME ALLOWED. THIS LED TO THE PASSING OF T HE ASSESSMENT ORDER U/S 144 OF THE ACT, IN WHICH THE RETURNED INCOME OF RS. 17.76 LAC WAS ENHANCED ON AD HOC BASIS BY A SUM OF RS.15 LAC, THEREBY ASSESSING THE TOTAL INCOME AT RS.32,76,440/-. WE AGREE THAT IF TH E ASSESSEE DOES NOT EXTEND COOPERATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THEN, THE ONLY OPTION WHICH REMAINS WITH THE AO IS TO PAS S BEST JUDGMENT ASSESSMENT ORDER U/S 144. PASSING OF AN ORDER U/S 144 PRE-SUPPOSES THE ESTIMATION OF INCOME ON A RATIONAL AND SOME REASONA BLE BASIS. THIS SECTION DOES NOT EMPOWER THE AO TO MAKE HIGH-PITCHE D ASSESSMENT DEVOID OF THE FACTUAL AND LEGAL SCENARIO AVAILABLE BEFORE HIM. IN SUCH CIRCUMSTANCES, THE BEST COURSE FOR THE AO IN THE PR OCESS OF DETERMINATION OF TOTAL INCOME IS TO BE GUIDED BY TH E COMPLETED ASSESSMENTS OF THE ASSESSEE, IF ANY, OF THE IMMEDIA TELY PRECEDING YEARS, UNLESS THERE ARE CIRCUMSTANCES SUGGESTING DEPARTURE FROM THE PAST. ITA NO.424/DEL/2012 4 5. ADVERTING TO THE FACTS OF THE INSTANT CASE, W E FIND THAT THE ASSESSEE FURNISHED ITS RETURN OF INCOME FOR THE AY 2005-06 D ECLARING TOTAL INCOME OF RS.20.17 LAC. THE AO COMPLETED ASSESSMENT U/S 143(3) BY MAKING AN ADDITION OF RS.10,000/-. SIMILARLY, FOR THE IMME DIATELY PRECEDING ASSESSMENT YEAR, NAMELY, 2006-07, THE ASSESSEE FILE D RETURN DECLARING INCOME OF RS.10.63 LAC. THE ASSESSMENT WAS COMPLETE D U/S 143(3) WITH AN ADDITION OF RS.10,000/- DETERMINING TOTAL INCOME AT RS.10.73 LAC. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FURNISHE D RETURN DECLARING INCOME OF RS.17.76 LAC. IN OUR CONSIDERED OPINION, THE AO OUGHT TO HAVE BEEN GUIDED BY THE REGULAR ASSESSMENTS FRAMED BY HIM FOR THE IMMEDIATELY TWO PRECEDING ASSESSMENT YEARS U/S 143( 3) IN WHICH ONLY AN ADDITION OF RS.10,000/- EACH WAS MADE. WE ARE U NABLE TO FIND ANY BASIS WHATSOEVER IN THE ASSESSMENT ORDER FOR MAKING AN AD HOC ADDITION OF RS.15 LAC. AS SUCH, WE ARE CONSTRAINED NOT TO A CCEPT THE ADDITION SO MADE BY THE AO IN AN ARBITRARY MANNER. GOING BY TH E ASSESSMENT ORDERS PASSED BY THE AO FOR THE IMMEDIATELY PRECEDING TWO ASSESSMENT YEARS AND TAKING A HOLISTIC VIEW OF THE MATTER, WE ARE OF THE CONSIDERED OPINION THAT THE ENDS OF JUSTICE WOULD MEET ADEQUATELY IF T HE ADDITION IS ITA NO.424/DEL/2012 5 SUSTAINED AT RS.20,000/-, WHICH IS IN LINE WITH THE ADDITIONS MADE BY THE AO HIMSELF FOR THE IMMEDIATELY TWO PRECEDING ASSESS MENT YEARS AT RS.10,000 EACH. WE, THEREFORE, ORDER FOR THE SUSTE NANCE OF ADDITION AT RS.20,000/-. 6. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 18.09.201 5. SD/- SD/- [C.M. GARG] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 18 TH SEPTEMBER, 2015. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.