Universal Energies Ltd., New Delhi V. DCIT, Circle- 18(1), New Delhi

ITA 5297/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3561 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 07-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Period of limitation; Time period of passing order; Set aside
• Section: 143(3); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G: NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI ANADEE NATH MISSHRA , ACCOUNTANT MEMBE R I.T.A NO. 5297/DEL/2018 (ASSESSMENT YEAR: 2011-12) UNIVERSAL ENERGIES LTD. SF, SETHI CHAMBERS, 24-KALINGA CHOWK, WEST PATEL NAGAR, NEW DELHI. PAN NO. AAACU9022F VS. DCIT CIRCLE 18(1) NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY NONE RESPONDENT BY SH. KANV BALI, SR. DR DATE OF HEARING 11.10.2021 DATE OF PRONOUNCEMENT 14.10.2021 HEARING CONDUCTED VIA WEBEX ORDER PER DIVA SINGH, J.M. THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE, WHEREIN THE CORRECTNESS OF THE ORDER DATED 19.06.2018 OF LD. CI T(APPEALS)-3, NEW DELHI PERTAINING TO 2011-12 ASSESSMENT YEAR IS ASSA ILED ON THE FOLLOWING GROUNDS: - 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DI SMISSING THE CONDONATION APPLICATION OF THE APPELLANT WITHOUT PROVIDING ANY PROPER OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DIS MISSING THE APPEAL OF THE APPELLANT AFTER HEARING THE MATTER ON MERITS IN DET AILS WITHOUT RAISING ANY QUESTIONS WITH RESPECT TO MAINTAINABILITY OF THE AP PEAL ON ACCOUNT OF DELAY. 3. THE APPELLANT CRAVES FOR LIBERTY TO ADD FRESH GROUN D(S) OF APPEAL AND ALSO TO AMEND, ALTER AND MODIFY ANY OF THE GROUNDS OF APPEA L. 2. AT THE TIME OF HEARING, NO ONE WAS PRESENT ON BE HALF OF THE ASSESSEE. HOWEVER, ON CONSIDERING THE AFORESAID GR OUNDS AND THE FACTS AVAILABLE ON RECORD IT WAS DEEMED APPROPRIATE TO PR OCEED WITH THE PRESENT APPEAL EX PARTE QUA THE ASSESSEE APPELLANT ON MERITS AFTER HEARING THE LD. SR. DR. ITA NO.5297/DEL/20 18 UNIVERSAL ENERGIES LTD. PAGE 2 OF 5 3. A PERUSAL OF THE RECORD SHOWS THAT THE ADDITIONS MADE TO THE RETURNED INCOME OF THE ASSESSEE AMOUNTING TO RS. 41 ,38,342/- BY THE ASSESSING OFFICER VIDE HIS ORDER DATED 28.03.2014 P ASSED U/S 143(3) OF THE ACT WERE CHALLENGED IN APPEAL BEFORE THE LD. CI T(A). IN THE AFORESAID ORDER RUNNING INTO 29 UNNUMBERED PAGES IT IS SEEN T HAT FROM UNNUMBERED PAGES 2 TO 22 THE LD. CIT(A) HAS REPRODU CED THE SUBMISSIONS ADVANCED BY THE ASSESSEE QUA THE GROUND S RAISED BEFORE HIM AND FROM PAGES 23 TO 24 IN PARAS 4.2 AND 4.3 TH E LD. COMMISSIONER CARRIES OUT A DISCUSSION ON THE CONDONATION OF DELA Y APPLICATION AVAILABLE ON RECORD, WHEREIN THE DELAY OF FOUR MONT HS IN THE FILING OF THE APPEAL WAS BEING CONSIDERED VIDE PARAS 4.4 TO PARA 4.9 (PAGES 24 TO 27 OF THE IMPUGNED ORDER) AND IN PARAS 4.10 TO 4.12 CO NSIDERING THE JUDICIAL PRECEDENTS AS AVAILABLE IN AJIT SINGH THAKUR SINGH AND ANR. VS. STATE OF GUJARAT, 1981 AIR 1981 SC 733; CIVIL APPEAL NO. 6974 OF 2013 BASAWARAJ & ANR.; BRIJESH KUMAR VS. STATE OF HARYANA, AIR 2014 SC 161 2 AND P.K. RAMACHANDRAN VS. STATE OF KERALA, (1997) 7 SCC 556 HE SUMMED UP THE REASONS FOR DELAY CANVASSED AS UNDER: - A) THE COMPANY PASSED THROUGH SOME VERY SEVERE CRISES DURING THE LAST MORE THAN 2 YEARS; B) THREE MAJOR PROJECTS OF THE COMPANY NAMELY RAM GARH , CHAKULIA & GODDA SUNDERPURPAHARI COULD NOT EFFECTIVELY TAKE OFF AND AS A CONSEQUENCE THERE WAS MASSIVE DEBT BURDEN ON THE COMPANY; C) THE KEY PERSONNEL AND THE EMPLOYEES HAVE LEFT THE C OMPANY; D) FILING OF APPEAL BEFORE YOUR HONOR ALSO GOT DELAYED ON ACCOUNT OF PEOPLE RESPONSIBLE FOR COMPLIANCE HAVING LEFT THE COMPANY. THESE REASONS CONSIDERING THE JUDICIAL PRECEDENT WE RE REJECTED DISMISSING THE APPEAL. AGGRIEVED THE ASSESSEE IS B EFORE THE ITAT ON THE ABOVE MENTIONED GROUNDS. 4. THE LD. SR. DR HEAVILY RELIES UPON THE ORDER STA TING THAT COGENT REASONS HAVE BEEN GIVEN FOR REJECTION OF ASSESSEES APPEAL AND HENCE, IT WAS HIS SUBMISSION THAT THE ASSESSEES APPEAL MAY B E DISMISSED. 5. WE HAVE HEARD THE SUBMISSION AS ADVANCED ON BEHA LF OF THE REVENUE. ON CONSIDERING THE SAME, WE FIND OURSELVE S UNABLE TO CONFIRM THE ORDER PASSED. IT IS SEEN THAT THE ASSESSEE HAS SPECIFICALLY INVOKED ITA NO.5297/DEL/20 18 UNIVERSAL ENERGIES LTD. PAGE 3 OF 5 LACK OF PROPER OPPORTUNITY BEFORE THE LD. CIT(A) IN THE GROUNDS RAISED BEFORE US SPECIFICALLY ALLEGING THAT IN THE COURSE OF THE HEARING NO QUESTIONS WITH RESPECT TO THE MAINTAINABILITY OF TH E APPEAL ON ACCOUNT OF DELAY HAVE BEEN RAISED BY THE LD. CIT(A). IT IS SE EN FROM THE EXPLANATION EXTRACTED IN THE ORDER REPRODUCE IN PARA 4.2 OF THE ORDER THAT NO DOUBT GENERALISTIC FACTUAL STATEMENTS BY WAY OF AN EXPLAN ATION WERE ADVANCED. FOR READY REFERENCE THESE ARE REPRODUCED HEREUNDER FOR THE SAKE OF COMPLETENESS: - WE WISH TO SUBMIT BEFORE YOUR HONOR THAT THE COMP ANY PASSED THROUGH SOME VERY SEVERE CRISES DURING THE LAST MORE THAN 2 YEAR S. DUE TO VARIOUS ISSUES, THREE MAJOR PROJECTS OF THE COMPANY NAMELY RAM GARH , CHAKULIA & GODDA SUNDERPURPAHARI COULD NOT EFFECTIVELY TAKE OFF AND AS A COMSEQUENCE THERE WAS MASSIVE DEBT BURDEN ON THE COMPANY. THERE WAS A DE BT RESTRUCTURING WITH THE FOUR MAJOR LENDER BANKS ALSO. THE COMPANY SUFFERED A LOSS OF AROUND RS. 15 CRORE D URING THE FY 2012-13 AND AROUND RS. 6 CRORES DURING THE FY 2013-14. FOR THE CURRENT FY 2014-15 WE HAVE AN EXPECTED LOSS OF MORE THAN RS. 5 CRORE. AS A CONS EQUENCE MOST OF THE KEY PERSONNEL AND THE EMPLOYEES HAVE LEFT THE COMPANY R ESULTING INTO NON- COMPLIANCE AND DELAYS IN VARIOUS LEGAL PROCESSES AN D A BREAKDOWN IN THE OPERATIONAL EFFICIENCIES OF THE COMPANY. THE COMPANY IS FIGHTING FOR SURVIVAL ON ACCOUNT OF MULTIPLE FACTORS CAUSED PRIMARILY BY THE FINANCIAL CRISES. THE FILING OF A PPEAL BEFORE YOUR HONOR ALSO GOT DELAYED ON ACCOUNT OF PEOPLE RESPONSIBLE FOR COMPLI ANCE HAVING LEFT THE COMPANY LEADING TO THE BREAKDOWN OF EFFICIENT OPERATIONS OF THE COMPANY. 6. THE EXPLANATION OFFERED WAS DISCARDED HOLDING TH AT THE APPELLANT HOWEVER HAS NOT INDICATED ANY SPECIFIC DE TAIL AS TO WHAT WAS THE REASON WITHIN THE LIMITATION PERIOD PENDING ON 02.04.2014 AND 01.05.2014 FOR THE CAUSE OF DELAY. THEREAFTER RELYING UPON THE PRINCIPLES OF LAW AS CONSIDERED BY THE COURTS IN TH E DECISIONS CITED IN THE ORDER THE LD. COMMISSIONER HAS CONCLUDED THAT T HERE IS NO GROUND FOR CONDONATION OF DELAY. WE FIND THAT THE ARGUMEN TS ADVANCED ON BEHALF OF THE REVENUE THAT THE CONCLUSION IS NOT A MECHANICAL CONCLUSION AND IS A REASONED CONCLUSION DOES NOT DI STRACT FROM THE FACTUAL POSITION AS EMANATING FROM THE RECORD NAMEL Y THAT EFFECTIVE OPPORTUNITY OF BEING HEARD IS NOT GRANTED. IT ALSO DOES NOT ADDRESS THE ALLEGATION SET OUT IN THE GROUNDS OF APPEAL ITSELF NAMELY THAT IN THE COURSE OF HEARING NO QUESTIONS WERE ASKED/RAISED WI TH RESPECT TO THE ITA NO.5297/DEL/20 18 UNIVERSAL ENERGIES LTD. PAGE 4 OF 5 MAINTAINABILITY OF THE APPEAL ON ACCOUNT OF LIMITAT ION. WE ARE OF THE VIEW THAT IN A FAIR EXERCISE OF POWER THE LD. COMMI SSIONER SHOULD HAVE SPECIFICALLY CONFRONTED THE ASSESSEE WITH THE SHORT COMING NOTICED NAMELY MAKE GOOD THE SPECIFIC FACTS RELATABLE TO TH E SPECIFIC PERIOD WHICH IS REQUIRED TO BE ADDRESSED. THE GENERALISTI C ARGUMENTS EVEN IF CORRECT BY THEMSELVES CANNOT BE SAID TO ADDRESS THE DELAY SOUGHT TO BE EXPLAINED FOR A SPECIFIC PERIOD. IT IS SEEN THAT N O SPECIFIC OPPORTUNITY FOR THIS PURPOSE APPEARS TO HAVE BEEN AFFORDED. THE CO NCLUSION ARRIVED AT CANNOT BE SAID TO BE A FAIR AND EFFECTIVE EXERCISE OF POWER AND A DENIAL OF EFFECTIVE OPPORTUNITY OF BEING HEARD IS MADE OUT. ACCORDINGLY, TO SET RIGHT THIS SHORT COMING, WE DEEM IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER BACK TO THE FILE OF THE LD. COMMISSI ONER WITH A DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFT ER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. THE ASSESSEE IN ITS OWN INTEREST IS ALSO DIRECTED TO ENSURE THAT FULL S UPPORTING FACTS RELEVANT FOR EXPLAINING THE SPECIFIC DELAY DURING THE PERIOD POINTED OUT BE PLACED ON RECORD AS FAILING WHICH IT IS MADE CLEAR THAT IN THE EVENTUALITY OF ABUSE OF THE TRUST REPOSED IN THE ASSESSEE THE LD. CIT(A) WOULD BE AT LIBERTY TO PASS AN ORDER IN ACCORDANCE WITH LAW ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 7. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT T HE TIME OF HEARING ITSELF. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14/10/2021 SD/- SD/- (ANADEE NATH MISSHRA) (DIVA SINGH) ACCOUNTANT MEMBER JUDICI AL MEMBER *KAVITA ARORA, SPS ITA NO.5297/DEL/20 18 UNIVERSAL ENERGIES LTD. PAGE 5 OF 5 COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT CONCERNED BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR, ITAT DELHI BENCHES: DELHI.