M/s. Rohini Contractors Pvt. Ltd., Meerut V. ITO, New Delhi

ITA 5220/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4400 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2004-2005
• Appeal Filed On: 24-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Opportunity of being heard; Accommodation entries; Reassessment proceedings
• Section: 142(1); 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F: NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 5219/DEL /2014 ASSESSMENT YEAR: 2004-05 ITA NO. 5220/DEL /2014 ASSESSMENT YEAR: 2004-05 ROHINI CONTRACTORS PVT. LTD., C/O VINOD KUMAR GOEL, 282, BOUNDARY ROAD, CIVIL LINES, MEERUT. (PAN: AABCR8721P) VS ITO, WARD 15(4), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINOD KUMAR GOEL, ADV. RESPONDENT BY : SHRI ATIQ AHMAD, SR. DR DATE OF HEARING : 14.09.2017 DATE OF PRONOUNCEMENT: 20.09.2017 ORDER PER BENCH ITA NO. 5219/D/2014 HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 16.07.2014 PASSED BY THE LD. CIT(A)-XVIII, NEW DELHI FOR ASSESSMENT YEAR 2004- 05 WHEREAS I.T.A. NO. 5220/DEL/2014 IS ASSESSEES ITA 5219 & 5220/D/2014 ASSESSMENT YEAR 2004-05 2 APPEAL FOR THE SAME YEAR AGAINST THE ORDER DATED 17.7.2014 CONFIRMING PENALTY OF RS. 21,70,438/- IMP OSED U/S 271(1)(C) OF THE ACT. THE GROUNDS OF APPEAL IN I.T.A. NO. 5219/DEL/2014 READ AS UNDER:- 1. THAT IN THIS CASE, CIT(A) HAS NOT PROPERLY CONSIDERED THE WRITTEN SUBMISSION AND CASE LAWS FILED BY THE ASSESSEE THEREFORE, PENALTY IMPOSED BY ASSESSING OFFICER AND CONFIRMED BY CIT(A) IS BAD IN LAW. 2. THAT IN THE WRITTEN SUBMISSION, THE ASSESSEE HAS FILED DETAILED REPLY WITH THE CASE LAW WHICH IS NOT CONSIDERED BY THE CIT(A) AND CIT(A) HAS NOT JUSTIFIED CONFIRMING THE PENALTY U/S 271(1)( C) OF THE I.T. ACT. 3. THAT THE ASSESSEE HAS RIGHT TO ADD, DELETE OR MODIFY ANY GROUNDS DURING THE APPEAL PROCEEDING. 2. THE ASSESSEE HAS FILED REVISED GROUNDS OF APPEAL IN I.T.A. NO. 5219/DEL/14 WHICH READ AS UNDER:- 1. THAT IN THIS CASE HONBLE I.T.A.T. DIRECT CIT( A) TO DECIDE THE APPEAL GOING INTO THE MERITS OF THE CASE AFTER PROVIDING PROPER AND REASONABLE OPPORTUNITY BEING H EARD TO THE ASSESSEE. THE MAIN CONTENTION OF THE ASSESSE E AS PER GROUND NO. 1 & 2 THAT NO NOTICE U/S 147/143(3) WAS SERVED UPON THE ASSESSEE. ALTHOUGH, LD. CIT(A) DISC USSED THIS ISSUE BUT HE HAS NOT APPRECIATE THAT THE ASSES SEE CONTENTION THAT NOTICE U/S 147, 143(2), 142(1) WAS NOT SERVED UPON THE ASSESSEE. THEREFORE, CIT(A) IS IN E RROR IN DECIDING FIRST AND SECOND ISSUE OF THE GROUNDS OF A PPEAL TAKING BY THE ASSESSEE BEFORE CIT(A) AT ORIGINAL ST AGE. 2. THAT CIT(A) HAS NOT GONE THROUGH THE REASON REC ORDED BY THE A.O. WAS DEBATABLE AND THE A.O. HAS NOT APPL IED ITA 5219 & 5220/D/2014 ASSESSMENT YEAR 2004-05 3 THEIR MIND WHILE RECORDING THE REASON HE SIMPLY END ORSED THE LETTER WRITTEN BY OFFICE OF THE DIRECTOR OF INC OME TAX INVESTIGATION, NEW DELHI. HENCE, ORDER MADE BY THE A.O. AND CONFIRM BY CIT(A) IS ERRONEOUS AND AGAINST THE FACTS AND LAW. 3. THAT ON MERITS ALSO CIT(A) AS WELL AS A.O. HAS NOT CONSIDERED THE VARIOUS CASE LAWS QUOTED BY THE ASSE SSEE, THEREFORE, ORDER PASSED BY CIT(A) AS WELL AS A.O. I S AGAINST THE FACTS, LAW AND DIRECTION GIVEN BY THE I .T.A.T. 4. THAT THE ASSESSEE HAS RIGHT TO ADD, DELETE OR M ODIFY ANY GROUNDS DURING THE APPEAL PROCEEDING. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPA NY HAD FILED ITS RETURN OF INCOME FOR THE RELEVANT YEAR DE CLARING TOTAL INCOME OF RS. 1,73,280/- WHICH WAS PROCESSED U/S 14 3(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) . SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE OFFIC E OF DIRECTOR OF INCOME TAX (INV.), NEW DELHI THAT THE ASSESSEE HAD ALLEGEDLY RECEIVED ACCOMMODATION ENTRIES AMOUNTING TO RS. 1,2 5,00,000/- FROM VARIOUS PARTIES, REASSESSMENT PROCEEDINGS WERE INITIATED U/S 147/148 OF THE ACT. THE ASSESSEE COMPANY FAILE D TO RESPOND TO THE NOTICE ISSUED U/S 148 AND THEREAFTER, THE AS SESSING OFFICER PROCEEDED TO COMPLETE THE ASSESSMENT U/S 147/144 OF THE ACT AT RS. 62,23,280/- AFTER ADDING AN AMOUNT OF RS. 60,5 0,000/- AS INCOME FROM UNDISCLOSED SOURCES U/S 68 OF THE ACT. THE ASSESSEES APPEAL BEFORE THE LD. CIT(A) WAS ALSO DI SMISSED EX ITA 5219 & 5220/D/2014 ASSESSMENT YEAR 2004-05 4 PARTE QUA THE ASSESSEE AS THE ASSESSEE DID NOT APPE AR BEFORE THE LD. CIT(A) ALSO. ON AN APPEAL BEFORE THE ITAT, ITA T DELHI BENCH VIDE ORDER DATED 6.12.2013 IN I.T.A. NO. 2036/DEL/2 013 RESTORED THE CASE TO THE FILE OF THE LD. CIT(A) ON THE GROUN D THAT THERE WAS NO MENTION OF THE SERVICE OF NOTICE TO THE ASSESSEE IN THE ORDER OF THE LD. CIT(A) AND ALSO ON THE GROUND THAT THE LD. CIT(A) HAD DISMISSED THE APPEAL EX PARTE WITHOUT GOING INTO TH E MERITS OF THE CASE. SUBSEQUENT TO THE ITATS ORDER, THE LD. CIT( A) AGAIN DISMISSED THE ASSESSEES APPEAL ON MERITS ON THE GR OUND THAT THE ASSESSEE HAD FAILED TO DISCHARGE THE ONUS REGARDING ACCOMMODATION ENTRIES AS ALLEGED IN THE LETTER RECE IVED FROM THE DIRECTOR OF INVESTIGATION. MEANWHILE, PENALTY U/S 271(1)(C) AGAINST THE QUANTUM WAS ALSO IMPOSED WHICH WAS UPHE LD BY THE LD. CIT(A). NOW, THE ASSESSEE IS BEFORE US IN BOTH THE QUANTUM AS WELL AS THE PENALTY APPEALS. 4. LD. AR SUBMITTED THAT ALTHOUGH THE ITAT HAD DIRE CTED THE LD. CIT(A) TO ADJUDICATE THE ISSUE ON MERITS AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD, THE SAME WAS NOT DONE BY THE LD. CIT(A). IT WAS ALSO SUBMITTED THAT THE ASS ESSEE HAD RAISED THE ISSUE OF SERVICE OF NOTICE U/S 147/143(3) BUT T HE SAME HAD NOT BEEN ADJUDICATED BY THE LD. CIT(A). IT WAS ALS O SUBMITTED ITA 5219 & 5220/D/2014 ASSESSMENT YEAR 2004-05 5 THAT THE LD. CIT(A) HAS NOT DISCUSSED THE MERITS OF THE IMPUGNED ADDITION BUT HAD SIMPLY BASED THE ADJUDICATION ON T HE LETTER WRITTEN BY THE DIRECTOR OF INCOME TAX (INV.). IT W AS ALSO SUBMITTED THAT BEFORE DECIDING THE ISSUE REGARDING SERVICE OF NOTICE, THE CONFIRMATION OF ADDITION WAS BAD IN LAW AND THE CONSEQUENTIAL PENALTY WAS ALSO NOT MAINTAINABLE. 5. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED IN SUPPORT OF THE ORDER OF THE LD. CIT(A) AND SUBMITTE D THAT THE ASSESSEE HAD NOT MADE SINCERE EFFORTS TO DISCHARGE THE ONUS CAST UPON HIM AND, THEREFORE, QUANTUM ADDITION AS WELL A S THE PENALTY, BOTH, WERE JUSTIFIED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE RELEVANT MATERIAL PLACED ON RECORD. AT THE OUTS ET, WE DO FEEL THAT THE ASSESSEE HAS BEEN UTMOST CARELESS IN PURSU ING MATTERS BEFORE THE ASSESSING OFFICER AS WELL AS THE LD. CIT (A). HE DID NOT APPEAR BEFORE THE LD. CIT(A) IN THE FIRST ROUND AND IN THE SECOND ROUND HAS NOT MADE ANY EFFORTS TO DISCHARGE THE ONU S CAST UPON IT ON MERITS BUT HAS SIMPLY HARPED ON THE ISSUE OF NON-SERVICE OF NOTICE. HOWEVER, A PERUSAL OF THE IMPUGNED ORDER I .E. THE ORDER PASSED BY THE LD. CIT(A) IN THE SECOND ROUND BEFORE HIM ALSO REVEALS THAT THE LD. CIT(A) HAS NOT ADJUDICATED ON THE ISSUE OF ITA 5219 & 5220/D/2014 ASSESSMENT YEAR 2004-05 6 SERVICE OF NOTICE AS AGITATED BY THE ASSESSEE AND H AS CONFIRMED THE ADDITION ON MERITS BY SIMPLY QUOTING THE FINDIN GS OF THE ASSESSING OFFICER AND ALSO ON THE LETTER RECEIVED F ROM DIRECTOR OF INCOME TAX (INV.) WITHOUT ANY EXAMINATION. THEREFO RE, LOOKING INTO THE ENTIRETY OF CIRCUMSTANCES, WE ARE OF THE O PINION THAT THE INTEREST OF JUSTICE WOULD BE SERVED IF THE QUANTUM AS WELL AS THE PENALTY FILES ARE RESTORED TO THE FILE OF THE ASSES SING OFFICER FOR DE NOVO ADJUDICATION AFTER GIVING A PROPER OPPORTUNITY TO THE ASSESSEE. WE ALSO DIRECT THAT THE ASSESSEE SHOULD FULLY COOPERATE WITH THE ASSESSING AUTHORITY IN BOTH THE MATTERS TH IS TIME, FAILING WHICH THE ASSESSING AUTHORITY SHALL BE AT LIBERTY T O DRAW AN ADVERSE INFERENCE. ACCORDINGLY, BOTH THE APPEALS S TAND ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE ASSESSEES APPEALS STAND ALLO WED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 20 TH SEPTEMBER, 2017. SD/- SD/- (G.D. AGRAWAL) (SUDHANSHU SRIVASTAVA) PRESIDENT JUDICIAL MEMBER DATED: SEPTEMBER, 2017 GS ITA 5219 & 5220/D/2014 ASSESSMENT YEAR 2004-05 7 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR