M/s Prem Colonisers Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 4753/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58806 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 18-01-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 01-11-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Assessee Lawyers: S K GOYAL
• Keywords: Opportunity of being heard; Principle of natural justice; Accommodation entries
• Section: 142(1); 147; 148; 144; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `F : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI A.N. PAHUJA, ACCOUNTANT MEMBER ITA NO.4753/DEL./2010) (ASSESSMENT YEAR : 2002-03) PREM COLONISERS PVT. LTD., VS. ITO, WARD 14(3), C1/1213, VASANT KUNJ, NEW DELHI NEW DELHI. (PAN/GIR NO.AACCP5682J) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.K. GOYAL, CA. REVENUE BY : SHRI B.R.R. KUMAR, SR.DR ORDER PER U.B.S. BEDI, J.M. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT(A)- XVII, NEW DELHI 20.09.2010, RELEVANT TO ASSESSMENT YEAR 2002-03 BY RAISING EFFECTIVE GROUNDS FROM 1 TO 6 AS UNDER: 1. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE, T HE ORDER PASSED BY CIT(A) IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN PASSING AN ORDER WITHOU T GIVING ASSESSEE AN OPPORTUNITY OF BEING HEARD IN CLEAR VIOLATION OF TH E PRINCIPLE OF NATURAL JUSTICE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW CONFIRMING THE ORDER OF TH E ASSESSING OFFICER MADE U/S 147 IGNORING THE FACT THAT THE SAME HAS BE EN PASSED ON THE BASIS OF A NOTICE U/S 148 ISSUED, WITHOUT COMPLYING THE S TATUTORY PROCEDURE AND CONDITIONS PRESCRIBED UNDER LAW. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ORDER MA DE BY ASSESSING I.T.A. NO.4753/DEL./2010 (A.Y. : 2002-03) 2 OFFICER U/S 147 ON THE BASIS OF REASON WHICH ARE VA GUE, BAD IN LAW AND THE ASSESSMENT BEING REOPENED WITHOUT APPLICATION OF MI ND. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS.10,01,500/- MADE BY ASSESSING OFFICER ON ACCOUNT OF ACCOMMODATION EN TRY. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS.2,50,000/- MADE BY ASSESSING OFFICER ON ACCOUNT OF CASH DEPOSIT IN THE BANK ACCOUNT. 2. BRIEF FACTS OF THE CASE ARE THAT THE AO RECEIVED INFORMATION FROM DIRECTORATE OF INVESTIGATION THAT THE ASSESSEE COMPANY HAS RECEIVE D ACCOMMODATION ENTRIES AMOUNTING TO RS.10,01,500/- FROM M/S PERFORMANCE TRADING & IN VESTMENT, A-261, SHASTRI NAGAR, DELHI ON 18.03.2002 FROM A/C NO. 4281 OF STATE BANK OF PATIALA, DARYA GANJ, NEW DELHI. ACCORDINGLY, THE AO ISSUED NOTICE TO THE ASS ESSEE COMPANY U/S 148 ON 30.03.2009. THE ASSESSEE VIDE ITS LETTER STATED THAT RETURN OF INCOME ALREADY FILED VIDE RECEIPT NO. 4415 DATED 31.03.2003 IN RANGE-14 MAY BE TREATED TO HAVE BEEN FILED IN RESPONSE TO NOTICE U/S 148 DATED 30.03.2009. THE AO ISSUED A NO TICE U/S 143(2) TO THE ASSESSEE ON 29.04.2009 FIXING THE CASE FOR HEARING ON 12.05.200 9 BUT THIS REMAINED UN-COMPLIED WITH. THE AO ISSUED ANOTHER NOTICE U/S 142(1) ON 16 .07.2009 ALONG WITH QUESTIONNAIRE AND THE CASE WAS FIXED FOR HEARING ON 03.08.2009. T HE ASSESSEE MADE NO COMPLIANCE ON THAT DATE. THE AO OBTAINED BANK STATEMENT FROM THE BANK WHICH REVEALED THAT THE ASSESSEE HAS DEPOSITED CASH AMOUNTING TO RS.2,50,00 0/- IN HIS BANK ACCOUNT ON 13.02.2002. THE AO ISSUED A FINAL SHOW CAUSE NOTICE ON 21.10.2009 WHEREIN THE ASSESSEE WAS INFORMED OF THE PROPOSED ADDITION AND THE CASE WAS FIXED FOR HEARING ON 30.10.2009. HOWEVER, THE ASSESSEE FAILED TO ATTEND. THEREFORE, THE AO COMPLETED ASSESSMENT IN THE MANNER PROVIDED U/S 144 AND MADE ADDITION OF RS.12, 51,000/-. I.T.A. NO.4753/DEL./2010 (A.Y. : 2002-03) 3 3. AGGRIEVED BY THE ACTION OF THE ASSESSING OFFICER , THE ASSESSEE TOOK UP THE MATTER IN APPEAL, AND CIT(A) AFTER NOTING THE DETAILS OF V ARIOUS HEARING NOTICES HAS PROCEEDED TO DECIDE THE APPEAL ON MERIT AS PER PARAS. 2.2 TO 5 O F HIS ORDER TO DISMISS THE APPEAL OF THE ASSESSEE AS UNDER: 2.2 IN GROUND NO. THE APPELLANT HAS CONTENDED THA T THE AO HAS NOT ALLOWED REASONABLE OPPORTUNITIES TO PRESENT THE CASE. HOWEV ER, FROM THE PERUSAL OF ASSESSMENT ORDER AS DISCUSSED IN PARA. 2.1, IT IS S EEN THAT THE AO HAS ALLOWED SUFFICIENT OPPORTUNITIES TO THE ASSESSEE. HENCE, TH IS GROUND IS REJECTED. 2.3. GROUND NO. 2 RELATES TO ADDITION OF RS.1O,01,5 001- ON ACCOUNT OF ACCOMMODATION ENTRIES OF SHARE CAPITAL RECEIVED FRO M M/S PERFORMANCE TRADING AND INVESTMENT. IT IS SEEN THAT THE APPELLANT COMPA NY HAS RECEIVED ACCOMMODATION ENTRIES OF RS.10,01,5001- FROM M/S PE RFORMANCE TRADING AND INVESTMENT ON 8.03.2002 FROM ACCOUNT NO. 4281 OF ST ATE_BANK OF PATIALA, DARYA GANJ, NEW DELHI. IT IS A SETTLED PRINCIPLE OF LAW T HAT WHEN ANY AMOUNT IS CREDITED IN THE BOOKS OF THE ASSESSEE, THE ONUS LIES UPON TH E ASSESSEE TO PROVE THE IDENTITY OF THE PERSON, CREDITWORTHINESS OF SUCH PERSON AND GENUINENESS OF THE TRANSACTION. HOWEVER, IN THE CASE UNDER CONSIDERATION THE APPELL ANT COMPANY HAS CHOSEN FOR THE REASONS BEST KNOWN TO THE APPELLANT NOT TO SUBM IT ANY DETAILS WHATSOEVER EITHER BEFORE THE AO OR BEFORE THE UNDERSIGNED IN R ESPECT OF AMOUNT OF RS.10,01,500/-. IN VIEW OF THE ABOVE FACTS, I DO NO T FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE AG. HENCE, THIS GROUND OF APP EAL IS REJECTED. 2.4. GROUND NO. 3 RELATES TO ADDITION OF RS.2,25,00 0/- ON ACCOUNT OF CASH DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE. IT I S SEEN THAT THE APPELLANT COMPANY HAS DEPOSITED CASH OF RS.2,50,000/- IN ITS BANK ACCOUNT. HOWEVER, NO DETAIL HAS BEEN SUBMITTED REGARDING THE SOURCE OF T HE CASH DEPOSITS EITHER BEFORE THE AO OR BEFORE THE UNDERSIGNED. UNDER THESE CIRCU MSTANCES, I DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE AG. THEREFORE, THE AD DITION OF RS.2,25,OOO/- MADE BY THE AO IS HEREBY CONFIRMED. THIS GROUND OF APPEA L IS REJECTED. 3. GROUND NO.4 RELATES TO CHARGING OF INTEREST U/S 234B. CHARGING OF INTEREST IS MANDATORY UNDER THE INCOME TAX ACT. HENCE, THIS GROUND OF APPEAL IS REJECTED. 4. GROUND NO.5 RELATES TO INITIATION OF PENALTY U/S 271 (1)(C). SINCE THE PENALTY HAS NOT BEEN LEVIED, THIS GROUND IS PREMATU RE AND HENCE REJECT/ 5. GROUND NO.6 RELATES TO INITIATION OF PENALTY U/ S 271 (1)(B). SINCE THE PENALTY HAS NOT BEEN LEVIED, THIS GROUND IS PREMATU RE AND HENCE REJECTED. I.T.A. NO.4753/DEL./2010 (A.Y. : 2002-03) 4 4. STILL AGGRIEVED, THE ASSESSEE HAS FILED FURTHER APPEAL AND WHILE REITERATING THE SUBMISSIONS MADE IN THE MEMORANDUM OF APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSESSEE HAS PLEADED FOR SETTING ASIDE THE ORDERS O F THE AUTHORITIES BELOW AND RESTORING THE MATTER BACK ON THE FILE OF THE ASSESSING OFFICER WI TH THE DIRECTION TO AFFORD OPPORTUNITY TO THE ASSESSEE TO DECIDE THE CASE AFRESH AFTER DUE OP PORTUNITY TO THE ASSESSEE. IT WAS ALSO SUBMITTED THAT ASSESSEES COUNSEL DID NOT APPEAR EI THER BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A) WHEN THE CASES WERE FIXED FOR HEA RING. ASSESSEE CANNOT BE PENALIZED FOR THE DEFAULT ON THE PART OF THE LD.COUNSEL FOR T HE ASSESSEE WHOM HE ENGAGED BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE CIT(A). THEREF ORE, WITHOUT NAMING OR CITING ANY AUTHORITY, LD. COUNSEL FOR THE ASSESSEE LAID STRES S ON THE POINT THAT FOR THE DEFAULT ON THE PART OF THE ASSESSEES COUNSEL, ASSESSEE CANNOT BE PENALIZED. HENCE, ORDERS OF THE AUTHORITIES BELOW SHOULD BE SET ASIDE AND THE MATTE R RESTORED BACK ON THE FILE OF THE ASSESSING OFFICER. 5. LD.DR SUBMITTED THAT FIRSTLY, THE ASSESSEE DID N OT COMPLY WITH THE NOTICES OF HEARING ISSUED BY THE ASSESSING OFFICER AND NOTICE U/S 143(2) READ WITH SECTION 142(1) OF THE I.T. ACT, 1961 WERE ISSUED TO THE ASSESSEE ALON G WITH QUESTIONNAIRE AND CASE WAS FIXED UP FOR HEARING ON MORE THAN ONE OCCASION. BU T, ASSESSEE DID NOT MAKE ANY COMPLIANCE AND ORDER U/S 144 OF THE ACT, HAD TO BE PASSED. SIMILARLY, AFTER FILING OF THE APPEAL, ASSESSEES ATTITUDE DID NOT CHANGE AND DESP ITE HAVING BEEN GIVEN NUMBER OF OPPORTUNITIES, HE DID NOT COMPLY WITH THE HEARING N OTICES AND LD. FIRST APPELLATE AUTHORITY HAD NO OPTION EXCEPT TO DECIDE THE APPEAL ON MERIT ON THE MATERIAL AVAILABLE ON RECORD AND ASSESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE ITS CLAIM IN THE GROUNDS OF APPEAL MADE BEFORE FIRST APPELLATE AUTHORITY. THEREFORE, HE HA D TO REJECT THE APPEAL ON MERITS. I.T.A. NO.4753/DEL./2010 (A.Y. : 2002-03) 5 ASSESSEE BEFORE THIS BENCH, ASSESSEE HAS ALSO NOT B EEN ABLE TO POINT OUT ANY BONA FIDE REASON OR EXPLANATION AS TO WHY HE HAS NOT EITHER A PPEARED BEFORE THE ASSESSING OFFICER OR CIT(A) DESPITE HAVING BEEN GIVEN NUMBER OF OPPOR TUNITIES AND ASSESSEE HAS NOT BEEN ABLE TO MAKE OUT A CASE ON MERITS ALSO BEFORE THE C IT(A), WHO WAS JUSTIFIED IN CONFIRMING THE ACTION OF ASSESSING OFFICER WHICH MAY FURTHER B E CONFIRMED. 6. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE MAT ERIAL ON RECORD AS WELL AS WRITTEN SUBMISSIONS FILED BEFORE THIS BENCH, CONTAINED FROM PAGES 1-6 OF THE PAPER BOOK, AND FIND THAT DURING THE ASSESSMENT PROCEEDINGS NOT ONLY NUM BER OF OPPORTUNITIES WERE GIVEN TO THE ASSESSEE BY ISSUING VARIOUS NOTICES ALONG WITH QUESTIONNAIRE FROM TIME TO TIME, BUT ASSESSEE WAS GIVEN FINAL NOTICE PROPOSING TWO ADDIT IONS OF RS.10,01,500/- AND RS.2,50,000/- WITH THE STIPULATION THAT IN CASE OF NON-COMPLIANCE, ASSESSING OFFICER WOULD PROCEED TO DECIDE THE CASE ON MERITS ON THE B ASIS OF MATERIAL AVAILABLE ON RECORD U/S 144 OF THE I.T. ACT, 1961. AND THERE WAS NO CO MPLIANCE WITH REGARD TO EITHER OF THE NOTICES, QUESTIONNAIRE OR FINAL NOTICE, ASSESSMENT ORDER CAME TO BE PASSED MAKING PROPOSED ADDITIONS AS INTIMATED TO THE ASSESSEE. A SSESSEE TOOK UP THE MATTER IN APPEAL AND IN APPEAL PROCEEDINGS, VARIOUS NOTICES WERE ISS UED, ASSESSEES COUNSEL ALSO ATTENDED AND APPLIED FOR ADJOURNMENT ON THE PLEA THAT LD.COU NSEL FOR THE ASSESSEE WAS NOT WELL. THE CASE WAS ADJOURNED, BUT NOBODY ATTENDED ON THE ADJOURNED DATE. ANOTHER OPPORTUNITY WAS FURTHER GRANTED, BUT NEITHER ASSESS EE NOR HIS COUNSEL ATTENDED AND THE APPEAL HAS BEEN DECIDED BY FIRST APPELLATE AUTHORIT Y ON MERITS AND IN FURTHER APPEAL BEFORE THIS BENCH IT IS THE MAIN CONTENTION OF THE ASSESSE E THAT HE HAD ENGAGED A COUNSEL, WHO DID NOT APPEAR. SO, IT IS NOT THE FAULT OF THE ASS ESSEE. THEREFORE, ORDERS OF THE AUTHORITIES I.T.A. NO.4753/DEL./2010 (A.Y. : 2002-03) 6 BELOW SHOULD BE SET ASIDE AND THE MATTER SHOULD BE REMANDED BACK TO THE ASSESSING OFFICER FOR RECONSIDERATION. 7. FROM THE MATERIAL ON RECORD, IT IS FOUND THAT TH E ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH THAT COUNSEL OF THE ASSESSEE COULD NOT AP PEAR BEFORE THE CIT(A) IN APPEAL PROCEEDINGS FOR ANY BONAFIDE REASON. NO DOUBT, MIS TAKE OF COUNSEL MAY IN CIRCUMSTANCES BE TAKEN INTO ACCOUNT, ALTHOUGH THERE IS NO GENERAL PROPOSITION THAT MISTAKE OF COUNSEL BY ITSELF IS ALWAYS A SUFFICIENT CAUSE, SO IT IS ALWAY S A QUESTION WHETHER THE MISTAKE WAS BONA FIDE OR WAS MERELY A DEVISE TO COVER AN ULTERIOR PU RPOSE. IN THIS CASE, NOTHING HAS BEEN BROUGHT ON RECORD TO SHOW THAT ACTION OF THE ASSESS EE WAS BONA FIDE AND THERE WAS NO TAINT OF MALAFIDE OR ELEMENT OF RECKLESSNESS OR RUES. TH EREFORE, WE ARE OF THE VIEW THAT NON- APPEARANCE BY THE COUNSEL IN APPEAL PROCEEDINGS COU LD NOT BE A VALID GROUND. AS SUCH PLEA OF THE ASSESSEE IN THIS REGARD IS REJECTED. SO FAR AS CASE ON MERIT IS CONCERNED, DESPITE VARIOUS OPPORTUNITIES GIVEN BY THE ASSESSIN G OFFICER INCLUDING PROPOSED ACTION WITH REGARD TO BOTH THE ADDITIONS AND BASIS FOR MAK ING THE ADDITIONS, ASSESSEE DID NOT RESPOND EITHER BEFORE THE ASSESSING OFFICER OR BEF ORE CIT(A) ALSO. NO MATERIAL OR EVIDENCE HAS BEEN PRODUCED IN THIS REGARD BEFORE TH IS BENCH ALSO. ASSESSEE HAS FAILED TO ESTABLISH THAT ADDITIONS MADE BY THE ASSESSING OFFI CER AND CONFIRMED BY THE CIT(A) ARE NOT WARRANTED WHEN THERE WAS PROPER BASIS FOR MAKIN G/CONFIRMING SUCH ADDITIONS. AS SUCH WHILE CONSIDERING ENTIRETY OF FACTS, CIRCUMSTA NCES AND MATERIAL ON RECORD, WE DO NOT FIND ANY JUSTIFICATION TO ACCEPT THE APPEAL OF THE ASSESSEE ON MERITS TOO. HENCE, ORDER OF AUTHORITIES BELOW IS CONFIRMED AND APPEAL OF THE AS SESSEE IS DISMISSED. I.T.A. NO.4753/DEL./2010 (A.Y. : 2002-03) 7 8. AS A RESULT, THE APPEAL OF THE ASSESSEE GETS RE JECTED. ORDER PRONOUNCED IN OPEN COURT ON 29.02.2012. SD/- SD/ - (A.N. PAHUJA) ACCOUNTANT MEMBER (U.B.S. BEDI ) JUDICIAL MEMBER DATED : FEBRUARY 29, 2012 SKB COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-XVII, NEW DELHI. 5. CIT(ITAT) DEPUTY REGISTRAR, ITAT