Ingrain Securities (P) Ltd., New Delhi V. ITO, New Delhi

ITA 5440/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81514 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-06-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 26-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: S C SINGHAL
• Keywords: Unexplained cash credit; Opportunity of being heard; Additional evidence; Reassessment proceedings
• Section: 147; 68; 148; 144

Judgement Text

ITA NO. 5440/DEL/2012 ASSTT.YEAR: 2004-05 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `C NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER I.T.A.NO.5440/DEL/2012 ASSESSMENT YEAR : 2004-05 INGRAIN SECURITIES (P) LTD., VS INCOME TAX OFFICER, 1/561, G.T. ROAD, WARD-11(4), SHAHDARA, NEW DELHI. NEW DELHI. (PAN: AAAC1511R) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI S.C. SINGHAL, CA RESPONDENT BY : SHRI SAT PAL SINGH, S R. DR O R D E R PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THE ABOVE APPEAL HAS BEEN FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A)-XV, NEW DELHI DATED 3.9.2012 IN APPEAL NO. 3 67/11-12/CIT(A)- XV PERTAINING TO AY 2004-05 PASSED U/S 144/147 OF T HE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). ALTHOUGH THE ASSESSEE HA S TAKEN AS MANY AS 10 GROUNDS IN THIS APPEAL BUT AT THE REQUEST OF BOTH T HE PARTIES, WE TAKE UP GROUND NO. 6, 7 AND 8 FIRST WHICH READ AS UNDER:- 6. THE REQUESTS BEFORE CIT(A) FOR ADDITIONAL EVIDENCE AS THE ASSESSMENT BY ITO IS EX PARTE HAS N OT BEEN CONSIDERED BY THE CIT(A). ITA NO. 5440/DEL/2012 ASSTT.YEAR: 2004-05 2 7. ON 16TH AUGUST THERE WAS A HUGE TRAFFIC JAM NEAR ITO CROSSING DUE TO A REALLY AND CA COULD NOT REACH THE CIT(A) OFFICE TO PRESENT THE CASE IN APPEAL. RA MDEV WAS ARRESTED IN DELHI ON 13TH AUG.,2012. IT IS NOT THAT THE APPELLANT IS NOT INTERESTED OR CAREFUL ABOUT THIS A PPEAL THE HEARING FIXED BY CIT (A) FOR 16/08/2012 COULD NOT B E ATTENDED ON THAT DATE. THE CA MET CIT (A)- MR TUTEJ A NEXT DAY THEREOF (ON 17TH MORNING), BUT WAS DECLINED ANY OPPORTUNITY OF HEARING. AN AFFIDAVIT ON OATH FROM C A IS ENCLOSED TO THIS EFFECT. 8. THE ORDER OF CIT(A) IS WITHOUT APPRISING THE FACTS ON THE FILE OF THE ITO AS SUBMITTED BY ASSESS EE DURING HEARINGS ATTENDED. THERE WERE 10 GROUNDS OF APPEAL BEFORE CIT(A). THE ORDER OF APPEAL IS NON-SPEAKING WHEREAS SECTION 250(6) MANDATES THAT THE ORDER OF C IT(A) SHOULD BE REASONED AND SPEAKING ONE. FURTHER IT IS SUBJECT TO CONSIDERATION BY SUPERIOR AUTHORITIES, IT MUST B E COGENT AND REASONED- 196 TAXMAN 423 (DELHI). 2. BRIEFLY STATED THE FACTS GIVING RISE TO THIS APP EAL ARE THAT THE ORIGINAL ASSESSMENT WAS COMPLETED U/ 143(1) OF THE ACT AND S UBSEQUENTLY ON THE INFORMATION OF THE DIRECTORATE OF INCOME TAX (INV.) , NEW DELHI, PROCEEDINGS FOR REASSESSMENT U/S 147 OF THE ACT WERE INITIATED BY ISSUING A NOTICE U/S 148 OF THE ACT ON 17.3.2011 AFTER RECORDING THE REASONS AND TAKING NECESSARY APPROVAL FROM ACIT, RANGE-11, NEW DELHI. DURING TH E REASSESSMENT PROCEEDINGS, SHRI A.K. JHA CA AND SHRI MANOJ MITTAL , DIRECTOR OF THE ASSESSEE COMPANY APPEARED ON 12.12.2011 AND THEY WE RE ASKED TO FURNISH CERTAIN DOCUMENTARY EVIDENCE AND EXPLANATION FIXING THE DATE OF HEARING AND ADJOURNING THE CASE TO 16.12.2011. THE AO NOTED TH AT NEITHER THE ASSESSEE ITA NO. 5440/DEL/2012 ASSTT.YEAR: 2004-05 3 NOR ANY REPRESENTATIVE APPEARED WHEN THE CASE WAS C ALLED FOR HEARING NOR ANY APPLICATION FOR ADJOURNMENT WAS FILED, THEREFOR E, THE AO PROCEEDED TO COMPLETE REASSESSMENT U/S 144 OF THE ACT. THE AO P ASSED ASSESSMENT ORDER ON 19.12.2011 BY MAKING ADDITION OF RS. 1,71,07,315 U/S 68 OF THE ACT PERTAINING TO SHARE APPLICATION MONEY, TREATING THE SAME AS UNEXPLAINED CREDIT AND ANOTHER ADDITION OF RS.42,768/- RELATED TO COMMISSION EXPENSES TO THE INCOME OF THE ASSESSEE. THE AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHICH WAS ALSO DISMISSED BY PASSI NG IMPUGNED ORDER ON 3.9.2012. IT IS PERTINENT TO NOTE THAT THE ASSESSM ENT PROCEEDINGS AS WELL AS PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY I. E. CIT(A) WERE COMPLETED EX PARTE IN THE ABSENCE OF ASSESSEE AND HIS REPRESENTATIVE. NOW, THE EMPTY HANDED ASSESSEE IS BEFORE THIS TRIBUNAL IN THIS APP EAL. GROUND NO. 6, 7 & 8 3. APROPOS THE ABOVE GROUNDS, THE LD. AR SUBMITTED THAT THE AO COMPLETED ASSESSMENT EX PARTE U/S 144 OF THE ACT, THEREFORE, THE ASSESSEE SUBMITTED ADDITIONAL EVIDENCE BEFORE THE CIT(A) UND ER RULE 46A OF THE INCOME TAX RULES 1962. THE AR FURTHER CONTENDED TH AT NEITHER THE AO NOR THE CIT(A) PROVIDED DUE OPPORTUNITY OF HEARING FOR THE ASSESSEE COMPANY AND IT WAS DEPRIVED OF THE RIGHT OF BEING HEARD BEF ORE THE AUTHORITIES BELOW. THE AR ALSO CONTENDED THAT THE ADDITIONAL EVIDENCE SUBMITTED BEFORE THE ITA NO. 5440/DEL/2012 ASSTT.YEAR: 2004-05 4 CIT(A) WAS ALSO NOT CONSIDERED DENYING JUSTICE TO T HE ASSESSEE. THE AR HAS DRAWN OUR ATTENTION TOWARDS AFFIDAVIT OF CA SHRI SU BHASH C. SINGHAL SWORN ON 26.10.2012 AND SUBMITTED THAT ON 16 TH AUGUST, THERE WAS A HUGE TRAFFIC JAM NEAR ITO CROSSING DUE TO A RALLY AND THE CA COU LD NOT REACH THE CIT OFFICE TO PRESENT THE CASE IN APPEAL. THE AR FURTH ER EXPLAINED THAT THE CAUSE OF HUGE TRAFFIC JAM WAS BEYOND THE CONTROL OF THE A SSESSEE AS BABA RAMDEV WAS ARRESTED IN DELHI ON 13.8.2012 AND HIS SUPPORTE RS WERE ORGANIZING A RALLY IN FAVOUR OF BABA RAMDEV, THEREFORE, THE CA C OULD NOT REACH AND ATTEND THE PROCEEDINGS BEFORE THE CIT(A) ON THE DAT E OF HEARING I.E. 16.8.2012. THE AR FURTHER CONTENDED THAT THE CA ME T LD. CIT(A) ON NEXT DATE I.E. 17.8.2012 BUT THE CIT(A) DENIED TO GRANT OPPORTUNITY OF HEARING FOR THE ASSESSEE. THIS AFFIDAVIT HAS BEEN PLACED ON RE CORD ON PAGE 181-183 OF THE PAPER BOOK FILED BY THE ASSESSEE AND REVENUE HA S NOT FILED ANY REBUTTAL TO THE SAME. 4. THE AR VEHEMENTLY CONTENDED THAT THE ASSESSEE RA ISED TEN GROUNDS BEFORE THE CIT(A) BUT THE APPEAL OF THE ASSESSEE WA S DISMISSED EX PARTE WITHOUT PROVIDING DUE OPPORTUNITY OF HEARING AND BY PASSING A NON-SPEAKING ORDER WHEREAS SECTION 250(6) OF THE ACT MANDATES TH AT THE ORDER OF THE CIT(A) SHOULD BE WELL-REASONED AND SPEAKING ONE. T HE AR FURTHER CONTENDED THAT WHEN THE IMPUGNED ORDER IS A SUBJECT FOR CONSIDERATION BY ITA NO. 5440/DEL/2012 ASSTT.YEAR: 2004-05 5 STATUTORY AUTHORITIES AT A HIGHER LEVEL, IT MUST BE COGENT AND WELL-REASONED ON ALL ISSUES WHICH HAVE BEEN RAISED BEFORE THE QUASI- JUDICIAL OR JUDICIAL AUTHORITY BY THE APPELLANT/APPLICANT. 5. REPLYING TO THE ABOVE, LD. DR SUBMITTED THAT WHEN THE ASSESSEE IS NOT COOPERATING DURING THE PROCEEDINGS, THEN THE REVENU E AUTHORITIES HAVE NO OPTION BUT TO COMPLETE THE PROCEEDINGS U/S 144 OF T HE ACT EX PARTE . THE DR FURTHER CONTENDED THAT NEITHER THE ASSESSEE NOR HIS REPRESENTATIVE ATTENDED THE PROCEEDINGS BEFORE THE REVENUE AUTHORITIES DESP ITE DUE SERVICE OF NOTICE AND KNOWLEDGE OF DATE OF HEARING FIXED BY THE CONCE RNED AUTHORITIES. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE WAS DEPRIVED OF OPPORTUNITY OF BEING HEARD. THE DR FURTHER CONTENDED THAT, IF IT IS FOUND JUST AND PROPER TO REMIT THE CASE FOR FRESH ADJUDICATION, THEN THE REV ENUE HAS NO SERIOUS OBJECTION TO THAT IN THE INTEREST OF JUSTICE. 6. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS, A T THE OUTSET, WE OBSERVE THAT THE PROCEEDINGS BEFORE THE AO AS WELL AS BEFORE THE CIT(A) WERE COMPLETED EX PARTE AND ASSESSEE COULD NOT GET DUE OPPORTUNITY OF HEARING DURING THESE PROCEEDINGS BEFORE THE AUTHORI TIES BELOW. WE ALSO OBSERVE THAT THE AO COMPLETED REASSESSMENT PROCEEDI NGS U/S 144 OF THE ACT EX PARTE AND ASSESSEE SUBMITTED ADDITIONAL EVIDENCE BEFORE THE CIT(A) UNDER RULE 46A OF THE INCOME TAX RULES, 1962 WHICH WAS AL SO NOT CONSIDERED AS ITA NO. 5440/DEL/2012 ASSTT.YEAR: 2004-05 6 THE APPEAL WAS ALSO DISMISSED EX PARTE . FROM THE IMPUGNED ORDER WE OBSERVE THAT THE CIT(A) PROCEEDED TO DECIDE THE APP EAL EX PARTE WITH FOLLOWING OBSERVATIONS:- 4. AS IS EVIDENT FORM THE ABOVE TABLE, THE HEARING IN THIS CASE WAS FIXED ON 22.6.2012 AND SINCE THEN TILL 16. 8.2012, THE APPELLANT WAS GIVEN ALMOST TWO MONTHS TO FILE T HE EVIDENCES/INFORMATION IN SUPPORT OF VARIOUS GROUNDS OF APPEAL RAISED BUT NO INFORMATION HAS BEEN GIVEN BY THE APPELLANT. IT IS ALSO PERTINENT TO MENTION HERE TH AT EVEN BEFORE THE AO ALSO, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IN A SPAN OF SIX MONTHS MORE THAN DUE OPPORTUNITIES WERE GIVEN TO THE APPELLANT, AS WILL BE EVIDENT FROM THE BELOW MENTIONED TABLE BUT SINCE NO DETAILS HAVE BEEN SUBMITTED TO THE AO AS A RESULT H E WAS CONSTRAINED TO PASS THE BEST JUDGMENT ORDER UNDER S ECTION 144. 7. IN VIEW OF ABOVE AND CONSIDERING THE FACTS M ENTIONED IN THE UNREBUTTED AFFIDAVIT OF MR. SUBHASH C. SINGHAL, THE CA AND REP RESENTATIVE OF THE ASSESSEE, WE ARE OF THE CONSIDERED OPINION THAT THE RE WAS A SUFFICIENT CAUSE WHICH PREVENTED THE ASSESSEES REPRESENTATIVE FROM GIVING HIS APPEARANCE BEFORE THE CIT(A) ON 16.8.2012 AND THE REASON WAS O BVIOUSLY BEYOND THE CONTROL OF THE ASSESSEE AND HIS REPRESENTATIVE. WE FURTHER OBSERVE THAT THE CIT(A) PASSED IMPUGNED ORDER ON 3.9.2012 WITHOUT AF FORDING DUE OPPORTUNITY OF HEARING FOR THE ASSESSEE AND WITHOUT CONSIDERING EXPLANATION AND ADDITIONAL EVIDENCE FURNISHED BY THE ASSESSEE. FROM PARA 5 OF IMPUGNED ORDER, WE ALSO OBSERVE THAT THE CIT(A) HAS DISMISSE D TEN GROUNDS OF APPEAL ITA NO. 5440/DEL/2012 ASSTT.YEAR: 2004-05 7 BY PASSING A VERY SHORT AND CRYPTIC ORDER WITHOUT A SSIGNING ANY REASON FOR ADJUDICATION ON ALL ISSUES PLACED BEFORE HIM BY THE ASSESSEE. THE HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF V ODAFONE ESSAR LTD. 169 TAXMAN 4 (DELHI) HAS HELD THAT WHEN A QUASI-JUDICIAL AUTHORITY DEAL S WITH A LIS , IT IS OBLIGATORY ON ITS PART TO ASCRIBE COGENT AN D JUSTIFIED REASONS AS THE SAME IS THE HEART AND SOUL OF THE MATTER AND TH E SAME ALSO FACILITATES APPRECIATION WHEN THE ORDER IS CALLED IN QUESTION B EFORE THE SUPERIOR FORUM. 8. WE MAY ALSO POINT OUT THAT A DECISION DOES NOT MERELY MEAN THE CONCLUSION BUT IT EMBRACES WITHIN ITS FOLD, THE R EASONS FORMING BASIS FOR THE CONCLUSION. (PLEASE SEE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MUKHTIAR SINGH VS STATE OF PUNJAB 1995 AIR 686, 1995 SCC (1) 760). WE HAVE ALSO OBSERVED THAT THE IMPUGNED ORDER SUF FERS FROM LACK OF REASONING AND IT IS NOT A WELL-REASONED AND SPEAKIN G ORDER ON ALL GROUNDS RAISED BY THE ASSESSEE WHICH HAS BEEN PASSED WITHOU T CONSIDERING ADDITIONAL EVIDENCE AND EXPLANATION OF THE ASSESSEE. 9. IN VIEW OF FOREGOING DISCUSSION, SPECIALLY WHEN ASSESSEE COULD NOT GET OPPORTUNITY OF BEING HEARD BEFORE THE REVENUE AUTHO RITIES BELOW AND THE LD. CIT(A) HAS NOT PASSED A SPEAKING AND WELL-REASONED ORDER ON VARIOUS ISSUES/GROUNDS RAISED BY THE ASSESSEE IN THE APPEAL PREFERRED BEFORE HIM AND ALSO CONSIDERING SUBMISSIONS OF THE ASSESSEE BEFORE US, WE FIND IT JUST AND ITA NO. 5440/DEL/2012 ASSTT.YEAR: 2004-05 8 PROPER TO SET ASIDE THE ORDER OF CIT(A) AS WELL AS EX PARTE ASSESSMENT ORDER PASSED BY THE AO CONCERNED. AS WE HAVE NOTED THAT THE ASSESSEE ALSO FILED ADDITIONAL EVIDENCE BEFORE CIT(A) WHICH WAS NOT CON SIDERED WHILE PASSING IMPUGNED ORDER, THEN WE ALSO FIND IT JUST AND PROPE R TO RESTORE THE MATTER TO THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LA W AND PROVISIONS OF THE ACT AFTER ALLOWING SUFFICIENT OPPORTUNITY OF BEING HEARD FOR THE ASSESSEE. NEEDLESS TO SAY THAT DURING THE PROCEEDINGS BEFORE THE AO, THE AO SHALL PROVIDE DUE OPPORTUNITY OF HEARING FOR THE ASSESSEE AND THE ASSESSEE SHALL COOPERATE DURING THE REASSESSMENT PROCEEDINGS VIGIL ANTLY AND THE AO SHALL PASS AN APPROPRIATE ORDER WITHOUT BEING PREJUDICED BY THE EARLIER ASSESSMENT AND IMPUGNED ORDER. ACCORDINGLY, GROUND NO. 6, 7 A ND 8 OF THE ASSESSEE ARE DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES. REMAINING GROUNDS OF THE ASSESSEE 10. SINCE BY EARLIER PART OF THIS ORDER, LEGAL CONT ENTIONS OF THE ASSESSEE HAVE BEEN ALLOWED AND THE ENTIRE CONTROVERSY ON ALL ISSUES/GROUNDS HAS BEEN RESTORED TO THE FILE OF THE AO, THEN OTHER REMAININ G GROUNDS OF THE ASSESSEE DO NOT SURVIVE FOR ADJUDICATION AND WE DISMISS THE SAME WITHOUT ANY CONCLUSION OR FINDING ON MERITS. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DE EMED TO BE ALLOWED FOR STATISTICAL PURPOSES AS INDICATED ABOVE. ITA NO. 5440/DEL/2012 ASSTT.YEAR: 2004-05 9 ORDER PRONOUNCED IN THE OPEN COURT ON 07/08/2014. SD/- SD/- (S. V. MEHROTRA) (CHANDRAMOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 7 TH AUGUST, 2014 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. C.I.T.(A) 4. C.I.T. 5. DR BY ORDER ASSTT.REGISTRAR