ITO, New Delhi V. M/s Newtech Steels (P) Ltd., New Delhi

ITA 5751/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91273 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 13-05-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 09-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Section: 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E NEW DELHI) BEFORE SHRI I.C. SUDHIR AND SHRI INTURI RAMA RAO ITA NOS. 5749 TO 5751/DEL/2011 ASSESSMENT YEARS: 2001-02 , 2003-04 & 2004 -05 INCOME-TAX OFFICER, VS. M/S. NEWTECH STEELS PVT. LTD., WARD 13(2), 71- CHITRA GUPTA ROAD, NEW DELHI. A-10, C-BLOCK, COMMUNITY CENTRE, NARAIN VIHAR, NEW DELHI. (PAN: AAACN2891F) (APPELLANT) (RESPONDENT) CROSS OBJ. NOS . 155 TO 157/DEL/2014 ITA NOS. 5749 TO 5751/DEL/2011 ASSESSMENT YEARS: 2001-02 , 2003-04 & 2004 -05 INCOME-TAX OFFICER, VS. M/S. NEWTECH STEELS PVT. LTD., WARD 13(2), 71- CHITRA GUPTA ROAD, NEW DELHI. A-10, C-BLOCK, COMMUNITY CENTRE, NARAIN VIHAR, NEW DELHI. (PAN: AAACN2891F) (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI P.C. YA DAV, ADV. DEPARTMENT BY: SHRI P. DAM KANU NJNA, SR. DR DATE OF HEARING : 14.05.2015 DATE OF PRONOUNCEMENT: 23 :06.2015 ORDER PER I.C. SUDHIR: JUDICIAL MEMBER IN THE APPEALS PREFERRED BY THE REVENUE, THE FIRST APPELLATE ORDER HAS BEEN IMPUGNED ON THE GROUND THAT THE LEARNED CIT(AP PEALS) HAS ERRED IN 2 DELETING THE ADDITION MADE BY THE ASSESSING OFFICER UNDER SEC. 68 OF THE INCOME-TAX ACT, 1961. THE ASSESSEE ON THE OTHER HAN D HAS OBJECTED THE FIRST APPELLATE ORDER IN THEIR CROSS OBJECTIONS ON THE BA SIS THAT THE ASSESSMENT WAS BARRED BY LIMITATION. 2. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVAN CED BY THE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW, MATERIA L AVAILABLE ON RECORD AND THE DECISIONS RELIED UPON. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY WAS ENGAGED IN THE ACTIVITY OF INVESTMENT IN SHARES AND SECURITIES. TH E ASSESSEE WAS REQUIRED TO ESTABLISH THE GENUINENESS OF THE CLAIMED TRANSACTIO N OF SALE/PURCHASE OF SHARES. THE ASSESSING OFFICER MADE ADDITION UNDER S EC. 68 OF THE ACT SINCE THE ASSESSEE FAILED TO ESTABLISH THE GENUINENESS OF THE CLAIMED TRANSACTION. THE ASSESSEE PREFERRED FIRST APPEAL AND THE LEARNED CIT(APPEALS) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. REVENUE FILED APPEAL TO THE ITAT AGAINST THE FIRST APPELLATE ORDER AND THE ITAT SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH THE FOLLOWIN G DIRECTIONS: 7. IN THE SET ASIDE PROCEEDINGS, THE A.O. SHALL GI VE THE ASSESSEE ADEQUATE OPPORTUNITY TO PRODUCE THE SHARE APPLICANT S AS ALSO THE PURCHASERS OF THE SHARES. THE A.O. IS ALSO AT LIBER TY TO VERIFY THE RETURNS FILED BY THE SHARE APPLICANTS AS ALSO THE P URCHASERS OF THE 3 SHARES AFTER OBTAINING THE RELEVANT RETURN COPIES F ROM THE CONCERNED A.OS ON THE BASIS OF THE PAN PROVIDED. THE A.O. MAY ALSO CALL FOR THE SHAREHOLDERS REGISTER FROM THE COMPANY WHOSE SH ARES HAVE BEEN SOLD BY THE ASSESSEE TO VERIFY AS TO WHETHER THE SH ARES AS HAVE BEEN IDENTIFIED BY THE SPECIFIC IDENTIFICATION NUMBER HA VE BEEN TRANSFERRED FROM HANDS OF THE ASSESSEE COMPANY TO THE PURCHASER S. THE A.O. SHALL IN THE SET ASIDE PROCEEDINGS GIVE A COPY OF ALL SUC H EVIDENCES, WHICH HE PROPOSES TO USE AGAINST THE ASSESSEE FOR THE ASS ESSEES REBUTTAL. NO STATEMENT SHALL BE USED AGAINST THE ASSESSEE WITHOU T GIVING THE ASSESSEE ADEQUATE OPPORTUNITY TO CROSS-EXAMINE. 5. IN COMPLIANCE, THE ASSESSING OFFICER ISSUED NOTI CES TO THE ASSESSEE AND IN ABSENCE OF ANY RESPONSE FROM THE ASSESSEE, T HE ASSESSING OFFICER PROCEEDED EX PARTE AND REPEATED THE SAME ADDITION. BEFORE THE LEARNED CIT(APPEALS), THE ASSESSEE CONTENDED THAT IT HAD NO T RECEIVED ANY NOTICE FROM THE ASSESSING OFFICER AND ONLY ASSESSMENT ORDE R HAS BEEN RECEIVED. IT WAS ALLEGED THAT THE ASSESSING OFFICER HAD ISSUED N OTICES DURING THE ASSESSMENT PROCEEDINGS ON THE OLD ADDRESS OF THE AS SESSEE AND THAT WAS THE REASON THE ASSESSEE COULD NOT BE SERVED WITH THOSE NOTICES AND APPEAR BEFORE THE ASSESSING OFFICER AND SINCE EX PARTE ASSESSMENT ORDER WAS SENT ON THE NEW ADDRESS OF THE ASSESSEE AND IT WAS RECEIVED. TH E LEARNED CIT(APPEALS) ON VERIFICATION FOUND THE ABOVE CONTENTION OF THE A SSESSEE AS CORRECT AND THUS ALLOWED THE APPEAL. 4 6. FOR ALL THE ASSESSMENT YEARS UNDER CONSIDERATION , FACTS ARE SAME AS DISCUSSED ABOVE AND THE LEARNED CIT(APPEALS) HAS AL SO PASSED SIMILAR IN ALL THESE ASSESSMENT YEARS. 7. IN SUPPORT OF THE GROUNDS OF THE APPEALS, PREFER RED BY THE REVENUE, THE LEARNED SENIOR DR SUBMITTED THAT IN COMPLIANCE OF T HE ORDER OF THE ITAT, THE ASSESSING OFFICER HAD AFFORDED SUFFICIENT OPPOR TUNITIES BY ISSUING SEVERAL NOTICES TO THE ASSESSEE BUT THE ASSESSEE IN TENTIONALLY AVOIDED SERVICE OF THOSE NOTICES UPON IT AND DID NOT RESPOND THE SA ME. THUS, THE ASSESSING OFFICER WAS HAVING NO OPTION BUT TO FRAME THE ASSES SMENT EX PARTE. 8. THE LEARNED AR ON THE OTHER HAND TRIED TO JUSTIF Y THE FIRST APPELLATE ORDER. HE SUBMITTED THAT UNDISPUTEDLY THE ASSESSING OFFICER SENT COPY OF THE EX PARTE ASSESSMENT ORDERS THROUGH SPEED POST ON TH E NEW ADDRESS OF THE ASSESSEE BUT HAD ISSUED NOTICES ON 23.9.2011 AND 0 3.11.2011 ON THE OLD ADDRESS OF THE ASSESSEE DESPITE BEING AWARE THAT TH E ASSESSEE HAS SHIFTED ITS ADDRESS AT 71-CHITRA GUPTA ROAD, PAHARGANJ, NEW DEL HI-1100 55 FROM ITS PREVIOUS ADDRESS UG-4D, SOM DUTT CHAMBERS I, 5-BHI KAJIKAMA PLACE, NEW DELHI-1100 66 W.E.F. 09.01.2010 AND BEFORE THAT ADDRESS WAS 824- VIKAS DEEP DISTRICT CENTRE, LAXMI NAGAR, NEW DELHI- 1100 92 SINCE ITS 5 INCORPORATION. THE LEARNED AR SUBMITTED FURTHER THA T FORMALITIES REGARDING SHIFTING OF REGISTERED OFFICE OF THE ASSESSEE HAD B EEN DULY COMPLIED WITH, WHICH ARE AS UNDER: 1. TWO FORMS 18 SHOWING CHANGE OF OFFICE IN ROC; 2. COPY OF DOCUMENTS REGARDING CHANGE OF ADDRESS I N THE PAN; & 3. COPY OF RETURN FOR ASSESSMENT YEAR 2011-12 SHOW ING ADDRESS FROM WHICH RETURN WAS CURRENTLY FILED. 9. THE LEARNED AR SUBMITTED THAT BEFORE PROCEEDING FOR THE ASSESSMENT UNDER SEC. 144 OF THE ACT, THE ASSESSING OFFICER SH OULD HAVE MADE SINCERE EFFORTS TO SERVE THE NOTICES UPON THE ASSESSEE ON I TS CORRECT ADDRESS. THE ASSESSING OFFICER HAS ALSO NEVER CONDUCTED ANY ENQU IRIES FROM THE RESPECTIVE SHARE SUBSCRIPTIONS OR SHARE PURCHASES A S DIRECTED BY THE ITAT VIDE ITS ORDER DATED 29.10.2010. 10. WE FIND THAT BEFORE THE LEARNED CIT(APPEALS), T HE ASSESSEE HAD MADE DETAILED SUBMISSIONS REGARDING NON-SERVICE OF NOTIC ES UPON THE ASSESSEE ISSUED BY THE ASSESSING OFFICER DURING THE COURSE O F THE ASSESSMENT PROCEEDINGS IN COMPLIANCE OF THE ORDER OF THE ITAT AND THAT THE ASSESSING OFFICER WAS HAVING NEW ADDRESS OF THE ASSESSEE ON W HICH THE ASSESSMENT FRAMED UNDER SEC. 144 OF THE ACT WAS SERVED. DISCUS SING ALL THESE FACTS IN DETAIL, THE LEARNED CIT(APPEALS) HAS GIVEN THE FOLL OWING FINDINGS: 6 5. I HAVE GONE THROUGH THE ASSESSMENT ORDER, CONSI DERED THE WRITTEN SUBMISSIONS OF THE APPELLANT, AND THE CASE LAWS RELIED UPON BY IT. THE ADDRESS MENTIONED IN THE ASSESSMENT ORDER IS 82 4, VIKAS DEEP, LAXMI NAGAR, NEW DELHI-1100 92. I HAVE FOUND THAT THE APPELLANT HAS FURNISHED THE PROOF THAT A.O. DELIVER ED THE ASSESSMENT ORDER AT THE NEW ADDRESS OF THE APPELLAN T I.E. 71- CHITRA GUPTA ROAD, PAHARAGANJ, NEW DELHI-1100 55. T HIS ESTABLISHES THAT THE A.O. HAD KNOWLEDGE ABOUT THE N EW ADDRESS OF THE COMPANY BUT CHOSE TO SEND NOTICES TO THE APP ELLANT TILL THE PASSING OF THE ASSESSMENT ORDER AT THE OLD ADDR ESS, WHICH SUPPORTS THE CONTENTION OF THE APPELLANT THAT IT DI D NOT RECEIVE THE NOTICES SENT TO IT BY THE A.O. I HAVE ALSO FOUN D THAT, THE APPELLANT HAS FURNISHED COMPLETE DOCUMENTARY EVIDEN CES BEFORE ME, REGARDING CHANGE OF ADDRESS AND ALSO CHANGE IN THE PAN DATA. FURTHER, A PERUSAL OF THE ASSESSMENT ORDER RE VEALS THAT THE A.O. HAS NOT MADE ANY EFFORTS WHATSOEVER TO CARRY O UT ANY FURTHER INVESTIGATION/VERIFICATION IN THE CASE AS D IRECTED BY THE HONBLE ITAT. THE PARTICULARS OF THE SHAREHOLDERS/P URCHASERS OF SHARES WERE AVAILABLE WITH THE A.O. AND NECESSAR Y VERIFICATION COULD HAVE BEEN MADE BY THE A.O. THE JUDICIAL DECISIONS RELIED UPON BY THE APPELLAN T ALSO SUGGEST THAT IT HAS DISCHARGED THE BURDEN CAST UPON IT AND THE ASSESSING OFFICER HAS FAILED TO REBUT THE EVIDENCE PRODUCED BY THE APPELLANT. THESE GROUNDS OF APPEALS ARE ALLOWED . 6.0 GROUND NO. 7 OF THE APPEAL IS ABOUT THE CHARGIN G OF INTEREST U/S. 234B. THE CHARGING OF INTEREST IS MAN DATORY AND 7 CONSEQUENTIAL IN NATURE. THE A.O.IS DIRECTED TO GIV E EFFECT TO THIS ORDER FIRST AND THEN CHARGE INTEREST AS PER LA W. 7.0 IN THE RESULT, THE APPEAL IS ALLOWED. 11. WE DO NOT FIND INFIRMITY IN THE FIRST APPELLATE ORDER HOLDING THAT THE A.O. CHOOSE TO SEND NOTICES TO THE ASSESSEE TILL TH E PASSING OF THE ASSESSMENT ORDERS AT THE OLD ADDRESS, HENCE, THE ASSESSEE DUE TO NON-SERVICES OF NOTICES COULD NOT PARTICIPATE IN THE PROCEEDINGS ESPECIALLY WHEN IT IS AN UNDISPUTED FACT THAT THE ASSESSING OFFICER HAD SERVED THE ASSE SSMENT ORDERS PASSED UNDER SEC. 254/144 OF THE ACT ON THE NEW ADDRESS OF THE ASSESSEE. WITHOUT COMMENTING UPON THIS ASPECT AS TO WHETHER THE ABOVE ACTION ON THE PART OF THE ASSESSING OFFICER WAS INTENTIONAL OR NOT, BUT T HE INFERENCE CERTAINLY GOES AGAINST HER THAT WHEN NEW ADDRESS OF THE ASSESSEE W AS AVAILABLE WITH HER, THEN WHY THE NOTICES WERE SENT ON OLD ADDRESS OF TH E ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER HAS A LSO NOT BOTHERED HERSELF TO CONDUCT ANY ENQUIRY FROM THE RESPECTIVE SHARE SU BSCRIBERS OR SHARE PURCHASERS AS DIRECTED BY THE ITAT. WE ARE THUS NOT INCLINED TO INTERFERE WITH THE FIRST APPELLATE ORDER DELETING THE ADDITIO NS MADE IN THOSE ASSESSMENT ORDERS. THE FIRST APPELLATE ORDER IN THI S REGARD IS THUS UPHELD. THE GROUND IS ACCORDINGLY REJECTED. 12. IN RESULT, THE APPEALS PREFERRED BY THE REVENUE ARE DISMISSED. 8 CROSS OBJECTIONS NOS. 155 TO 157/DEL/2014 : 13. THE LEARNED AR DID NOT PRESS THE ABOVE CROSS OB JECTIONS, THE SAME ARE ACCORDINGLY DISMISSED AS NOT PRESSED. 14. IN SUMMARY, THE APPEALS AS WELL AS CROSS OBJECT IONS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 .06.2015 SD/- SD/- ( INTURI RAMA RAO ) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23 /06/2015 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR DATE DRAFT DICTATED ON COMPUTER 18.06.2015 DRAFT PLACED BEFORE AUTHOR 18.06.2015 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 23.06.20 15 APPROVED DRAFT COMES TO THE SR.PS/PS 31.06.2015 KEPT FOR PRONOUNCEMENT ON 23.06.2015 FILE SENT TO THE BENCH CLERK 31.06.2015 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.