M/s. Etisha Finance & Investment Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 437/DEL/2013

• Counselvise Citation: 43720114 RSA 2013
• Duration Of Justice: 2 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 24-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR
• Assessee Lawyers: SANJAY MEHRA
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice
• Section: 143(3); 142(1); 68

Judgement Text

ITA NO. 437/ DEL/ 2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTANT MEMBER I.T.A. NO. 437 /DEL/2013 A.Y. : 2009 - 10 M/S ETISHA FINANCE & INVESTMENT PVT. LTD., C/O OSWAL SUNIL & COMPANY, 71, DARYAGANJ, NEW DELHI 110 002 (PAN: AAACE1803C) VS. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 11, NEW DELHI 110 055 (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SANJAY MEHRA, CA DEPARTMENT BY : S MT. PARWINDER KAUR, SR. DR DATE OF HEARING : 11 - 6 - 201 5 DATE OF ORDER : 15 - 6 - 201 5 ORDER PER H.S. SIDHU : J M TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE O RDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) - XXXI , NEW DELHI DATED 27.11.2012 P ERTAINING TO ASSESSMENT YEAR 2009 - 10 ON THE FOLLOWING GROUNDS: - 1. THE CIT(A) - XXXI HAS ERRED IN PASSING THE EXPARTE ORDER AGAINST THE PRINCIPLE OF NATURAL JUSTICE WITHOUT AFFORDING THE PROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT AND SUBMITTING HIS CASE ON MERITS. ITA NO. 437/ DEL/ 2013 2 2. THAT HAVING REGARD TO THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE AO HAS ERRED IN LAW IN MAKING AND THE LD. CIT(A) - XXXI IN CONFIRMING THE ADDITION OF RS. 60,00,000/ - AS UNEXPLAINED CREDIT U/S. 68 OF THE I.T. ACT, 19 61 DESPITE OR PROVIDING DOCUMENTARY EVIDENCES AND PROVING IDENTITY OF THE CREDITOR, CREDITWORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION. 3. THAT HAVING REGARD TO THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE AO HAS ERRED IN LAW IN MAK ING AND THE LD. CIT(A) IN CONFIRMING THE ADDITION OF RS. 60,00,000/ - AS UNEXPLAINED CREDIT U/S. 68 OF THE I.T. ACT, 1961, WITHOUT HAVING ANY ADVERSE OBSERVATION ON THE DOCUMENTARY EVIDENCES SUBMITTED BY THE APPELLANT. THAT THE APPELLANT CRAVES LEAVE TO ALTER, AMEND AND SUBSTITUTE ANY OF THE ABOVE MENTIONED GROUNDS AND ADD ANY FURTHER GROUND BEFORE OR AT THE TIME OF HEARING O THE APPEAL. 2. THE BRIEF FACTS OF THE CASE ARE THE E - RETURN DECLARING NIL INCOME WAS FILED BY THE ASSESSEE ON 30 TH SEPTEMBER, 2009. THE SAME WAS PROCESSED UNDER SECTION 143(2) OF THE ACT. NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT, 1961 WAS ISSUED ON 27.9.2010 AND SERVED UPON THE ASSESSEE. THEREAFTER, A QUESTIONNAIRE WAS ISSUED ON 28.7.2011 UNDER SECTION 142(1) ALONGWITH NOTICE UNDER SECTION 143(2) OF THE I.T. ACT, 1961. THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE ATTENDED THE ASSESSMENT PROCEEDINGS IN COMPLIANCE ITA NO. 437/ DEL/ 2013 3 TO THE NOTICE UNDER SECTION 142(1)./143(2) OF THE INCOME TAX ACT, 1961 AND FURNISHED INFORMATION CALLED FOR FROM TIME TO TIME ALONGWITH NECESSARY DOCUMENTS. AFTER GOING THROUGH THE DOCUMENTS, AO HAS COMPLETED THE ASSESSMENT U/S. 143(3) OF THE I.T. ACT, MAKING THE FOLLOWING ADDITIONS / DISALLOWANCES VIDE ORDER DATED 27.12.2011. - RS. 60,00,000/ - ON ACCOUNT OF UNEXPLAINED CREDITS U/S 68 OF THE I.T. ACT,1961. 3. AGGRIEVED WITH THE AFORESAID ASSESSMENT ORDER DATED 27.12.2011, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 27.11.2012 HAS DISMISSED THE APPEAL OF THE ASSESSEE BY UPHOLDIN G THE ACTION OF THE AO HAS HELD AS UNDER: - 3. DETERMINATION 3.1 THE ASSESSEE FILED APPEAL ON 20/1/2012. HE WAS GIVEN OPPORTUNITIES OF HEARING ON 1/6/2012, 25/06/2012, 2/7/2012, 8/1112012 AND 26111/2012. OUT OF THE ABOVE SAID DATES, ON 3 DATES NA MELY 11/06/2012, 25.6.2012 AND 07.11.2012 LETTERS HAVE BEEN FILED FROM M/S OSWAL SUNIL & COMPANY THE AR, EVERY TIME REQUESTING FOR ADJOURNMENT AS THE COUNSEL MR. SUNIL BHANSALI WAS NOT WELL TO ATTEND THE CASE. ON 7/11/2012, WHILE ADJOURNING THE CASE TO 26 /11/2912 AT 3:00 PM - IT WAS CLEARLY WRITTEN ON THE REQUEST LETTER THAT TWO ADJOURNMENTS HAVE ALREADY BEEN TAKEN IN THE PAST AND NONE APPEARED OR 21/7/2012. ITA NO. 437/ DEL/ 2013 4 THEREFORE FINAL OPPORTUNITY WAS BEING GIVEN FOR HEARING ON 26/11/2012. 3.2 ON THIS DATE I.E. IS 2 6.11.2012 NONE APPEARED. HOWEVER, A LETTER HAS BEEN RECEIVED FROM THE APPELLANT THROUGH SPEED POST ONCE AGAIN STATING THAT THEIR COUNSEL MR. SUNIL BHANSALI WAS DOWN WITH VIRAL FEVER AND HENCE ONE MONTH S TIME WAS REQUESTED. AS NOTED IN THE PREVIOUS PARAGRA PH THE APPELLANT HAS NOT BEEN AVAILING THE OPPORTUNITIES GIVEN DURING THE APPEAL PROCEEDINGS. STANDARD LETTERS ARE BEING SENT SEEKING ADJOURNMENTS EVERY TIME CITING THAT MR. SUNIL BHANSALI WAS NOT WELL TO ATTEND THE HEARING. 3.3 IT IS NOTED THAT IF THE APPEAL HAS BEEN FILED BY THE APPELLANT, IT IS HIS RIGHT TO BE HEARD. HOWEVER, FOR THE REASONS BEST KNOWN TO THEM THE COMPANY HAS NOT BEEN AVAILING OPPORTUNITIES AND THE CONDUCT OF THE APPELLANT CLEARLY INDICATES THAT IT IS NOT SERIOUS ABOUT PURSUING THE AP PEAL. IT IS AN ESTABLISHED PRINCIPLE THAT IF ONE WANTS TO AVAIL THE BENEFITS UNDER THE LAW, HE CANNOT SIMPLY SLEEP OVER HIS RIGHTS. THE PRINCIPLE OF 'VIGILANTIBUS NON DORMETIBUS JURA SUBVENIENT CLEARLY APPLIES IN THIS CASE. 3.4 I, THEREFORE PROCEED TO DECIDE THE APPEAL EX - PARTE ON MERITS. THIS COURSE OF ACTION IS ALSO IN LINE WITH THE PRINCIPLE LAID DOWN IN THE CASE OF CIT VS. MULTIPLAN (INDIA) LTD. 38(DEL) 320 AND LATE TUKOJI RAO HOLKAR VS. CWT (1997) 223 ITR 480 (MP - INDORE BEACH). 3.5 THE AO HAS NOTI CED THAT THE ASSESSEE RECEIVED AN ADVANCE OF RS. 60,00,000/ - AGAINST PROPERTIES FROM M / S BHAVSAGAR VINIMAY PVT. LTD. AND M/S. RAUNAK VVAPAR & ITA NO. 437/ DEL/ 2013 5 VINIYOG PVT. LTD. INSPITE OF GIVING OPPORTUNITIES AND INSPITE OF REQUESTING FOR PRODUCTION OF THE DIRECTOR FOR EXA MINATION AND VERIFICATION OF THE INFORMATION, THE ASSESSEE DID NOT FURNISH ANY DETAILS ABOUT THE ADVANCE. INFACT ASSESSEE DID NOT ATTEND ON THE FINAL DAY FIX FOR HEARING. THEREFORE THE ASSESSMENT HAD TO BE COMPLETED EX - PARTE WHEREIN AO HAS HELD RS. 60,00, 0 00/ - AS UNEXPLAINED CASH CREDIT U/S 68. 3.6 IN THE ABSENCE OF ANY WRITTEN ARGUMENT TILED ALONGWITH THE FORM NO. 35, NO FRESH FACTS ARE AVAILABLE BEFORE ME. IF THERE ARE CREDITS IN THE BOOKS OF ACCOUNTS WITH NARRATION ADVANCE AGAINST PROPERTY: IT WAS TILE DUTY OF THE ASSESSEE TO FURNISH COMPLETE DETAILS OF THE TRANSACTION AND FILE CONFIRMATIONS AND PROVE THE GENUINENESS. AS PER THE ASSESSMENT ORDER, THE ASSESSEE HAS FAILED TO AVAIL THE OPPORTUNITIES GIVEN. EVEN DURING THE APPELLATE PROCEEDINGS THE APPELLANT HAS NOT FURNISHED ANY CONFIRMATION AND DETAILS ABOUT THE SAID RECEIPT OF RS. 60,00,000/ - . I THEREFORE FIND NO OTHER ALTERNATIVE BUT TO CONFIRM THE ADDITION. 4. AT THE TIME OF HEARING, LD. COUNSEL OF THE ASSESSEE REITERATED THE CONTENTIONS RAISED IN T HE GROUNDS OF APPEAL AND STATED THAT LD. CIT(A) ERRED IN PASSING THE EXPARTE ORDER AGAINST THE PRINCIPLE OF NATURAL JUSTICE WITHOUT AFFORDING THE PROPER OPPORTUNITY OF BEING HEARD TO THE A SSESSEE AND SUBMITTING HIS CASE ON MERITS. THEREFORE, HE REQUESTED THAT THE ISSUE IN DISPUTE MAY BE SENT BACK TO THE FILE ITA NO. 437/ DEL/ 2013 6 OF THE LD. CIT(A) TO DECIDE THE SAME AFRESH, UNDER THE LAW, AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER OF THE LOWER AUTHORITIES AND REQUESTED THAT THE SAME MAY BE UPHELD AND OPPOSED THE REQUEST OF THE ASSESSEE 6 . WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE ORDERS PASSED BY THE REVENUE AUTHORITIES , GROUNDS RAISED BY THE ASSESSEE AND WE ARE OF THE VIEW THAT THE ASSESSEE HAS RAISED 4 GROUNDS OF APPEAL IN WHICH MAINLY THE ASSESSEE CHALLENGED THE ORDER OF THE LD. CIT(A) ON THE GROUND THAT LD. CIT(A) HAS ERRED IN PASSING THE EX - PARTE ORDER AGAINST THE PRINCIPLES OF NATURAL JUSTICE WITHOUT AFFORDING THE PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSSEE AND SUBMITTING HIS CASE ON MERITS. WE ALSO FIND THAT ON 26.11.2012 THE DATE ON WHICH THE FINAL OPPORTUNITY WAS GIVEN BY THE LD. CIT(A), A LETTER HAS BEEN RECEI VED FROM THE ASSESSEE THROUGH SPEED POST STATING THAT THEIR COUNSEL MR. SUNIL BHANSALI WAS DOWN WITH VIRAL FEVER AND HENCE ONE MONTH S TIME WAS REQUESTED, WHICH THE LD. CIT(A) HAS NOT CONSIDERED AND PROCEEDED EXPARTE QUA ASSESSEE. 6.1 KEEPING IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION, THAT LD. CIT(A) HAS NOT GIVEN SUFFICIENT OPPORTUNITY TO THE ASSESEE AND PROCEEDED EXPARTE QUA ASSESSEE, WHICH IS CONTRARY TO THE PRINCIPLES OF NATURAL JUSTICE. ITA NO. 437/ DEL/ 2013 7 THEREF ORE, THE IMPUGNED ORDER IS NOT SUSTAINABLE IN THE EYES OF LAW. IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ISSUE IN DISPUTE TO THE FILE OF THE LD. CIT(A) WITH THE DIRECTION TO DECIDE THE SAME AFRESH, UNDER THE LAW, AFTER PROVIDING SUFFICIENT OPPORTUN ITY TO THE ASSESSEE. ASSESSEE IS ALSO DIRECTED TO COOPERATE WITH THE LD. CIT(A) AND NOT TO TAKE UNNECESSARY ADJOURNMENT. 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE O PEN C OURT O N 15 /06 /20 1 5 . SD/ - SD/ - [ J.S. REDDY ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 15 / 6 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 437/ DEL/ 2013 8