Sh. Aslam, New Delhi V. ITO, New Delhi

ITA 5186/DEL/2010

• Counselvise Citation: 518620114 RSA 2010
• Duration Of Justice: 1 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-10-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 23-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PIRTHI LAL
• Keywords: Business expenditure; Principle of natural justice; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER ITA NO.5186/DEL/2010 ASSESSMENT YEAR : 2006-07 ASLAM, C/O M/S RAJ KUMAR & ASSOCIATES C.A., 4435/7, ANSARI ROAD, DARYA GANJ, NEW DELHI. PAN : ACEPA1392H VS. ITO, WARD 24 (2), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJKUMAR GUPTA, CA REVENUE BY : SHRI PIRTHI LAL, SR.DR ORDER PER A.D. JAIN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2006-07 AGAINST THE ORDER DATED 30.09.2010 PASSED BY T HE CIT (A)- XXII, NEW DELHI. THE FOLLOWING GROUNDS HAVE BEEN TA KEN:- 1. THAT NO REASONABLE AND PROPER OPPORTUNITY OF HEARI NG HAS BEEN ALLOWED BY THE LD. A.O. BEFORE PASSING THE ASSTT. ORDER U/S 143 (3)/144 OF THE IT ACT. 2. THAT NO REASONABLE AND PROPER OPPORTUNITY OF HEARING H AS BEEN ALLOWED BY THE LD. CIT (A) BEFORE DISPOSING OFF THE APPEAL FILED BY THE ASSESSEE. 3. THAT UNDER THE FACTS AND CIRCUMSTANCES, THERE IS ABSOLU TELY NO JUSTIFICATION IN LAW AS WELL AS ON MERITS IN MAKI NG AND SUSTAINING AN AD-HOC ADDITION OF ` 2,50,000/- OUT OF TRADE/SPECIAL DISCOUNT ALLOWED BY ASSESSEE OF ` 12,69,280/- WHICH IS FULLY EVIDENCED BY BILLS/CASH MEMOS. ITA NO.5186/DEL/2010 2 4. THAT UNDER THE FACTS AND CIRCUMSTANCES, THE AD-HOC DISALLOWANCE OF ` 2,00,000/- OUT OF VARIOUS NORMAL BUSINESS EXPENSES CLAIMED AT ` 10,19,992/- IS ABSOLUTELY ILLEGAL AND UN- SUSTAINABLE IN LAW AS WELL AS ON MERITS. 5. THAT THERE IS ABSOLUTELY NO LEGALITY AND JUSTIFICATION I N LAW AS WELL AS ON MERITS IN DISALLOWING ` 2,89,000/- CLAIMED AS SHOW ROOM DISPLAY CHARGES. 6. THAT UNDER THE FACTS AND CIRCUMSTANCES, ADDITION OF ` 35,721/- (22356 + 13365) MADE FOR EXPENSES SHOWN AS PAYABLE IN THE BALANCE SHEET, IS ABSOLUTELY ILLEGAL AND UN-JUS TIFIED IN LAW AS WELL AS ON MERITS. 2. THE ASSESSING OFFICER AS WELL AS THE LD. CIT (A), IT I S SEEN, HAVE DECIDED THE MATTER EX PARTE QUA THE ASSESSEE. IN THIS R EGARD, THE ASSESSING OFFICER HAS OBSERVED AS FOLLOWS:- RETURN DECLARING INCOME OF RS.3,27,380/- WAS FILED ON 31.10.2006 WHICH WAS PROCESSED U/S 143 (1) ON 12.02 .2007. THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS. F IRST NOTICE U/S 143 (2) WAS ISSUED ON 09.08.2007. THEREAFTER, NOTICE U/S 143 (2) WAS ALSO ISSUED ON 16.07.2008. IN RESPONSE TO THE NOTICE, SHRI YASH PAL, CA & A.R. OF THE ASSESSEE ATTEN DED ASSESSMENT PROCEEDINGS AND FILED DETAILS VIDE LETTER D ATED 27.08.2008 AND 11.12.2008. ON 11.12.2008 CASE WAS ADJOURNED TO 16.12.2008. TILL DATE, NEITHER ANYBODY ATTENDED THE CA SE AND NOR ANY INFORMATION/DETAILS WERE FILED. AS THE CASE IS GETTING TIME BARRED ON 31.12.2008, I AM LEFT WITH NO OPTION BUT TO COMPLETE THE ASSESSMENT ON THE BASIS OF MATERIAL AVAILA BLE ON RECORD. 3. THE LD. CIT (A) HAS OBSERVED AS FOLLOWS:- 3. THE APPELLANT WAS ISSUED NOTICE U/S 250 ON 10.02. 2010 FIXING THE CASE FOR HEARING ON 10.03.2010 AT THE ADDRE SS PROVIDED BY THE APPELLANT ON FORM NO.35 WHILE FILING THE APPEAL BEFORE ME. THE NOTICE WAS RECEIVED BACK IN THIS OFFI CE WITH THE REMARKS ADDRESSEE LEFT. THE APPELLANT WAS AGAIN IS SUED IN THE INTEREST OF NATURAL JUSTICE NOTICE U/S 250 ON 09.04.20 10 FOR APPEARING AND SUBMITTING EVIDENCES IN DEFENSE OF APPE LLANT ON 23.04.2010 BUT THIS OPPORTUNITY WAS NOT AVAILED. THIS TIME THE NOTICE WAS NOT RECEIVED BACK ESTABLISHING THAT THE NOTICE WAS SERVED ON THE APPELLANT. ITA NO.5186/DEL/2010 3 4. BEFORE US, THE ASSESSEE HAS CONTENDED THAT NO REASONABL E AND PROPER OPPORTUNITY OF HEARING WAS ALLOWED TO HIM. I N THIS REGARD, HE HAS SUBMITTED AN AFFIDAVIT. AS PER THIS AFFIDAVIT, THE ASSESSEES ASSESSMENT FOR A.Y. 2006-07 I.E., THE YEAR UNDER CONSID ERATION, WAS FRAMED EX PARTE BY THE ASSESSING OFFICER FOR NON-APPEAR ANCE ON 16.12.2008; THAT THE CASE WAS TO BE ATTENDED BY THE A SSESSEES CA; THAT HOWEVER, THE SAID CA NEITHER ATTENDED THE PROCE EDINGS BEFORE THE ASSESSING OFFICER, NOR INFORMED THE ASSESSEE THAT HE WOULD NOT BE APPEARING ON 16.12.2008; THAT IF THE ASSESSEE HAD BEEN INFORMED IN THIS REGARD, HE WOULD HAVE SURELY ATTENDED THE PROCE EDINGS BEFORE THE ASSESSING OFFICER ON 16.12.2008; THAT ON INQUIRY FROM T HE CA BY THE ASSESSEE, THE CA STATED THAT HE HAD TO GO OUT OF STATION SUDDENLY ON 16.12.2008, WHICH WAS THE REASON WHY THE CASE REMAINED UNATTENDED AND THE CA COULD ALSO NOT INFORM THE ASSESSEE ABOUT THE SAME; THAT BEFORE THE LD. CIT (A), THE ASSESSEES NEW COUNSEL INSPEC TED THE APPEAL RECORD IN THE OFFICE OF THE CIT (A), WHEREFR OM, IT CAME TO KNOWLEDGE THAT THE FIRST NOTICE DATED 10.02.2010 FOR 10.03.2010 WAS SENT BY SPEED POST ON 12.02.2010 AND THE SAME WAS RECEIV ED BACK UNSERVED IN THE OFFICE OF THE LD. CIT (A); AND THAT THE SECOND AND FINAL NOTICE DATED 09.04.2010 FOR 23.04.2010 WAS SENT BY SPE ED POST ON 10.04.2010 AND THE SAME HAD ALSO BEEN RECEIVED BACK I N THE OFFICE OF THE CIT (A) ON 21.04.2010, AS AVAILABLE FROM THE APP EAL RECORD; THAT THUS, BOTH THE NOTICES ISSUED TO THE ASSESSEE FROM THE OFFI CE OF THE CIT (A) REMAINED UNSERVED AND THE ASSESSEE DID NOT AT ALL CO ME TO KNOW OF THE DATES OF HEARING BEFORE THE LD. CIT (A). 5. IN THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE, FINDING THAT THE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE FROM ATTEND ING THE PROCEEDINGS, BOTH BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE LD. CIT (A), IN THE INTEREST OF JUSTICE, WE DEEM IT A PPROPRIATE TO REMIT THIS MATTER TO THE FILE OF THE ASSESSING OFFICER, TO BE DECIDED AFRESH IN ITA NO.5186/DEL/2010 4 ACCORDANCE WITH THE LAW ON AFFORDING ADEQUATE OPPOR TUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE, NO DOUBT, SHALL COOPERATE WI TH THE ASSESSING OFFICER. 6. SINCE THE MATTER IS BEING REMITTED TO THE FILE O F THE ASSESSING OFFICER, AS ABOVE, THE MERITS OF THE CASE ARE NOT BEIN G GONE INTO AT THIS STAGE. 7. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APPEAL O F THE ASSESSEE IS TREATED AS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 12.10.20 12. SD/- SD/- [G.D. AGRAWAL] [A.D. JAIN] VICE PRESIDENT JUDICIAL MEMBER DATED, 12.10.2012. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES ITA NO.5186/DEL/2010 5 1. DATE OF DICTATION: 03.10.2012 ..... 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 04.10.2012.. OTHER MEMBER .. 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . PS/PS . .... 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R.PS/PS ...... 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK ...... 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 8. THE DATE ON WHICH THE FILE GOES TO THE ASSTT. RE GISTRAR FOR SIGNATURE ON THE ORDER ..... 9. DATE OF DESPATCH OF THE ORDER . ...