Indo Solar Ltd., New Delhi V. ACIT, Circle-12(1), New Delhi

ITA 4855/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2419 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 09-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Tax effect; TDS
• Section: 68; 37; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C : NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 4855/DEL/2018 ASSESSMENT YEAR: 2014-15 M/S INDO SOLAR LTD. VS. ACIT, CIRCLE-12(1), C-12, FRIENDS COLONY (EAST), NEW DELHI NEW DELHI 110 065 (PAN: AADCR2872D) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SALIL AGGARWAL, ADV., SH. SHAILESH GUPTA, CA AND SH. MADHUR AGGARWAL, ADV REVENUE BY : SH. AMIT KATOCH, SR. DR. ORDER PER H.S. SIDHU, JM THE ASSESSEE HAS FILED THIS APPEAL AGAINST THE ORD ER DATED 03.5.2018 OF THE LD. CIT(A)-22, NEW DELHI PERTAINI NG TO ASSESSMENT YEAR 2014-15 ON THE FOLLOWING GROUNDS:- 1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS GROSSLY ERRED IN LAW AND ON FACTS IN PASSING THE IMPUGNED ORDER IN UTTER DISREGARD OF THE STATUT ORY PROVISIONS CONTAINED UNDER SECTION 250(6) OF THE AC T BY DISMISSING THE APPEAL OF THE APPELLANT EX PARTE, TH EREBY, VIOLATING THE PRINCIPLES OF NATURAL JUSTICE. 2 2 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS OVERLOOKED THE PROVISIONS OF SECTION 250(6) OF THE ACT, AS THE ORDER PASSED BY HIM HAS N OT BEEN DECIDED ON MERITS AND IS THUS, WHOLLY NON SPEA KING AND DESERVES TO BE SET ASIDE ON THIS GROUND ALONE. 3 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT NOT TO HAVE DECIDED THE APPEAL OF T HE APPELLANT EX PARTE, AS DUE APPEARANCE WAS CAUSED BY THE COUNSEL OF ASSESSEE - APPELLANT ON THE LAST DAT E OF HEARING I.E. ON 16.04.2018 AND THE MATTER WAS ADJOU RNED AT THE BEHEST OF LEARNED CIT (A) AND NO ORDER SHEET ENTRY WAS MADE SIGNED BY HIM, IN VIEW OF CBDT INSTRUCTION F. NO. 380/1/2018-IT(B), AS HE STATED THAT ONLY MATTER S INVOLVING TAX EFFECT OF LESS THAN RS. 10 LACS WOULD BE DISPOSED OFF TILL 30.06.2018 3.1 THE LEARNED CIT (A) WHILE DISPOSING OFF THE APP EAL EX PARTE, WAS NOT JUSTIFIED IN NOT ACCEPTING THE SUBMI SSIONS MADE IN WRITING, ON THE PRETEXT THAT THE SAME MAY B E TAKEN UP ON THE DATE OF HEARING, AS AND WHEN, THE S AME WILL BE COMMUNICATED THROUGH NOTICE. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED BOTH IN LAW AND ON FACT S IN UPHOLDING THE ORDER OF ASSESSMENT AT A LOSS OF RS.60,77,49,876/-, AS AGAINST THE RETURNED LOSS OF RS. 3 63, 95, 61. 964/- IN AN ORDER OF ASSESSMENT DATED 30.12.2016 UNDER SECTION 143(3) OF THE ACT. 4.1 THAT FURTHER, THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS) HAS ALSO FAILED TO APPRECIATE THE FAC T THAT ADDITION SO MADE BY LEARNED ASSESSING OFFICER IS BA SED ON PRECONCEIVED NOTIONS AND BY ARBITRARILY BRUSHING AS IDE THE DETAILED SUBMISSIONS/EVIDENCES/MATERIAL PLACED ON RECORD, WHICH WERE FURNISHED IN ORDER TO SUPPORT TH E FACT THAT NO ADDITION WAS CALLED FOR IN THE INSTANT CASE . 5. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED BOTH IN LAW AND ON FACTS IN SUS TAINING THE ADDITION OF RS. 2, 50, 00, 000/- MADE UNDER SEC TION 68 OF THE ACT, BEING UNSECURED LOAN RECEIVED BY THE APPELLANT FROM M/S SKYBASE INFRA PVT. LTD. 5.1 THAT IN DOING SO, THE LEARNED CIT (A) HAS GROSS LY ERRED IN FAILING TO APPRECIATE THAT THE APPELLANT H AD FILED COMPLETE DOCUMENTARY EVIDENCES WHICH ESTABLISHED TH E GENUINENESS OF THE TRANSACTION AND FURTHER, THE SAM E WAS DULY CONFIRMED BY THE SAID PARTY BY FILING A REPLY DIRECTLY TO THE LEARNED ACIT, AS SUCH, BURDEN WHICH LAY UPON THE APPELLANT STOOD DISCHARGED AND FURTHER, THE LEARNED ACIT BASED HIS DECISION PURELY ON SUSPICION, SURMISES AN D CONJECTURES, WITHOUT CARRYING OUT ANY INVESTIGATION / 4 VERIFICATION AND AS SUCH, THE ADDITION SO MADE SHOU LD BE DELETED. 6. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN SUSTAINI NG AN ADHOC DISALLOWANCE OF RS.7,24,690/- ON ACCOUNT OF BUSINESS PROMOTION EXPENSES. 7. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN LAW AND ON FACTS IN SUSTAINING A DISALLOWANCE OF RS. 1,284/- ON ACCOUNT OF INTEREST ON TDS CLAIMED AND WRONGLY DISALLOWED UNDE R SECTION 37 OF THE ACT. 8. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN LAW AND ON FACTS IN SUSTAINING A DISALLOWANCE OF RS. 7,75,839/- ON ACCO UNT OF STALE CHEQUES AND THE SAID ADDITION IN UNJUSTIFIED AND CONTRARY TO FACTS OF THE INSTANT CASE. 9. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN LAW AND ON FACTS IN SUSTAINING A DISALLOWANCE OF RS. 36, 00, 000/- ON A CCOUNT OF EXPENSES CLAIMED IN THE NATURE OF PENALTY, WHERE AS, THE SAID EXPENSE WERE PAID DURING THE REGULAR RUNNI NG OF THE BUSINESS AND WERE NOT IN NATURE OF PENALTY AND THUS, WERE ALLOWABLE UNDER THE ACT. 5 10. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN SUSTAINI NG A DISALLOWANCE OF RS.17,16,275/- ON ACCOUNT OF NON- DEDUCTION OF TDS ON PROVISION OF LEGAL AND PROFESSI ONAL EXPENSES. 2. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASS ESSEE HAS DRAWN OUR ATTENTION TOWARDS SECTION 250(6) OF THE INCOM E TAX ACT, 1961 AND STATED THAT AS PER SECTION 250(6) OF THE ACT, LD. CIT(A) SHOULD HAVE DECIDED THE CASE OF THE ASSESSEE ON MERITS, AF TER ADJUDICATING ALL THE GROUNDS RAISED BY THE ASSESSEE IN THE GRO UNDS OF APPEAL IN FORM NO. 35. BUT THE LD. CIT(A) HAS NOT FOLLOWED TH E PRESCRIBED PROCEDURE UNDER THE LAW. THEREFORE, THE IMPUGNED O RDER IS LIABLE TO BE CANCELLED. HE FURTHER STATED THAT ASSESSEE APPE ARED BEFORE THE LD. CIT(A) MANY TIMES AND ALSO FILED ADJOURNMENT AP PLICATIONS AND JOINED THE PROCEEDINGS, BUT THE LD. CIT(A) HAS NOT GIVEN SUFFICIENT OPPORTUNITY OF HEARING AND DISMISSED THE APPEAL OF THE ASSESSEE IN LIMINI, WITHOUT DECIDING THE ISSUE IN DISPUTE ON ME RITS, WHICH IS CONTRARY TO THE PROVISIONS OF LAW AND, THEREFORE, H E REQUESTED THAT THE ISSUES IN DISPUTE MAY BE REMITTED BACK TO THE LD. CIT(A) TO DECIDE THE SAME AFRESH, AS PER LAW AFTER GIVING ADE QUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 3. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER OF THE LD. CIT(A) AND STATED THAT LD. CIT(A) HAS GIVEN VARIOUS OPPORTUNITIES TO THE ASSESSEE, BUT THE ASSESSEE REMAINED NON-COOPERA TIVE AND AS A 6 RESULT THEREOF, THE LD. CIT(A) HAS NO OPTION BUT TO DISMISS THE APPEAL OF THE ASSESSEE IN LIMINI. BUT HE AGREED FOR SET TING ASIDE THE ISSUES IN DISPUTE TO THE FILE OF THE LD. CIT(A) FOR DECI DING THE SAME AFRESH, SUBJECT TO THE CONDITION THAT IF THIS BENCH DIRECTE D THE ASSESSEE THROUGH HIS COUNSEL TO APPEAR BEFORE THE LD. CIT(A ) TO SUBSTANTIATE ITS CLAIM ON THE FIXED DATE AND LD. CIT(A) WILL N OT ISSUE ANY NOTICE TO THE ASSESSEE. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS AS WELL AS THE RELEVANT PROVISIONS OF LAW, WE ARE OF T HE VIEW THAT THERE IS NO DOUBT ASSESSEE REMAINED NON-COOPERATIVE BEFORE T HE LD. CIT(A) AND THE LD. CIT(A) HAS PASSED THE EXPARTE ORDER, W ITHOUT DISCUSSING IN DETAIL THE FACTS AND CIRCUMSTANCE OF THE CASE A ND ALSO DID NOT DEAL THE ISSUE ON MERIT AND PASSED A NON-SPEAKING O RDER, WHICH IN OUR OPINION, IS NOT IN ACCORDANCE WITH THE PRINCI PLES OF NATURAL JUSTICE AND IT IS AN ERRONEOUS APPROACH. AFTER R EADING SECTION 250(6) OF THE ACT, WE ARE ALSO OF THE CONSIDERED VI EW THAT ASSESSEES CASE SHOULD BE DECIDED ON MERITS, WHICH THE LD. CIT (A) HAS NOT DONE. HOWEVER, IT IS A SETTLED LAW THAT EVEN AN ADMINISTR ATIVE ORDER HAS TO BE SPEAKING ONE. IN THIS REGARD WE DRAW SUPPORT FROM HONBLE APEX COURT IN THE CASE M/S SAHARA INDIA (FARMS) VS. CIT & ANR. IN [2008] 300 ITR 403 WHEREIN IT HAS BEEN HELD THAT EVEN AN ADMINISTRATIVE ORDER HAS TO BE CONSISTENT WITH THE RULES OF NATURAL JUSTICE. 7 4.1 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND IN THE INTEREST OF JUSTICE AS WELL AS AGREED BY BOTH THE PARTIES, WE REMIT BACK THE ISSUES IN DISPUTE TO THE FILES OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FOR HEARING ON 22.05.2019 AT 10.00 AM WITH THE DIRECTIONS TO CONSIDER EACH AND EVERY ASPECT S OF THE ISSUES INVOLVED IN THE APPEAL AND DECIDE THE SAME AFRESH, AFTER CONSIDERING ALL THE EVIDENCES/DOCUMENTS AND PASS A SPEAKING ORD ER. IT IS MADE CLEAR THAT NO NOTICE FOR HEARING WILL BE ISSUED BY THE LD. CIT(A). ASSESSEE IS ALSO DIRECTED THROUGH HIS COUNSEL TO AP PEAR BEFORE THE LD. CIT(A) ON 22.5.2019 AT 10.00 AM FOR HEARING TO SUBSTANTIATE ITS CASE AND FILE ALL THE NECESSARY DOCUMENTS BEFOR E HIM AND DID NOT TAKE ANY UNNECESSARY ADJOURNMENT IN THE CASE. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 13-03-2019. SD/- SD/- (L.P. SAHU) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :13-03-2019 SR BHATANGAR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.