Rajasthan Cereals Pvt. Ltd., Jaipur V. ACIT, New Delhi

ITA 592/DEL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1438 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2006-2007
• Appeal Filed On: 02-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: MAYANK PATAWARI ACA
• Keywords: Opportunity of being heard; Set aside
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO. 4587/DEL/2016 (A.Y. 2006-07) AND ITA NOS. 592 & 593/DEL/2017 (A.Y. 2006-07) RAJASTHAN CEREALS PVT. LTD. VS. ACIT, CIRCLE 15(1 ), SP-01, RAJDHANI MANDI YARD, NEW DELHI KUKAR KHERA, KRISHI UPAJ MANDI SAMITI, OP. VKI AREA, SIKAR ROAD, OPP. SHOP NO. E-1 JAIPUR (PAN: AACCS2980C) (ASSESSEE) (RESPONDENT) ASSESSEE BY : SH. MAYANK PATAWARI, ACA REVENUE BY : SH. SURENDER PAL, SR. DR. ORDER PER H.S. SIDHU, JM THESE APPEALS ARE FILED BY ASSESSEE AGAINST THE RES PECTIVE ORDERS PASSED BY THE LD. CIT(A)-7, NEW DELHI RELATING TO ASSESSMENT YEAR 2006-07. SINCE THESE APPEALS ARE INTER-CONNECTED, BEING QUANTUM APPEAL AND ITS PENALTY APPEALS, HENCE, THE SAME WER E HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE, BY FIRST DEALING WITH QUANTUM APPEAL I .E. ITA NO. 2 4587/DEL/2016 (AY 2006-07). HOWEVER, THE GROUNDS OF ALL THE 03 APPEALS ARE REPRODUCED HEREUNDER:- 2. THE GROUNDS RAISED IN QUANTUM APPEAL BEING ITA NO. 4587/DEL/2016 (AY 2006-07) READ AS UNDER:- 1. THAT THE ORDER OF THE LD. CIT(A) IS BAD IN LAW A ND IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE LD. CIT(A) HAS ERRED IN DISMISSING THE APPEAL ON THE GROUND THAT THE SAME IS NOT MAINTAINABLE. 3. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN NOT QUA SHING THE ASSESSMENT FOR BEING WITHOUT JURISDICTION AS TH E INITIAL NOTICE U/S. 143(2) WAS NEVER SERVED UPON T HE APPELLANT. 4. THAT THE LD. CIT(A) HAS ERRED IN NOT QUASHING T HE IMPUGNED ASSESSMENT FRAMED U/S. 144 AS THE PROCEDURE LAID DOWN FOR FRAMING ASSESSMENT U/S. 144 HAD NOT BEEN FOLLOWED BY THE AO. 5. THAT HAVING REGARDS TO THE FACTS OF THE CASE THE LD. CIT(A) HAS ERRED IN NOT DELETING THE ADDITION MADE BY DISALLOWING THE ENTIRE EXPENDITURE CLAIMED IN THE P &L ACCOUNT. 6. THAT HAVING REGARDS TO THE FACTS OF THE CASE TH E LD. CIT(A) HAS ERRED IN NOT DELETING THE ADDITION OF RS. 35,00,000/- MADE U/S. 69 OF THE ACT. 7. THAT ABOVE GROUNDS ARE INDEPENDENT OF ONE ANOTH ER AND THE APPELLANT CRAVES THE LEAVE TO ADD, MODIFY, 3 AMEND OR DELETE ANY OF THE GROUNDS OF THE APPEAL AT THE TIME OF HEARING. PRAYER:- IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) DI SMISSING THE APPEAL MAY KINDLY BE SET ASIDE AND THE PENALTY IMPOSED BE DELETED OR ANY OTHER RELIEF, WHICH THIS HONBLE COURT DEEMS FIT AND PROPER, BE GIVEN. 3. THE GROUNDS RAISED IN PENALTY APPEAL BEING ITA N O. 592/DEL/2017 (AY 2006-07) READ AS UNDER:- 1. THAT THE ORDER OF THE LD. CIT(A) IS BAD IN LAW A ND IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE LD. CIT(A) HAS ERRED IN DISMISSING THE APPEAL ON THE GROUND THAT THE SAME IS NOT MAINTAINABLE. 3. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN NOT DEL ETING THE PENALTY OF RS. 20,000/- AS THE SAME WAS IMPOSED WITHOUT SERVING ANY NOTICE UPON THE ASSESSEE. 4. THAT THE GROUNDS ARE INDEPENDENT OF ONE ANOTHER AND THE APPELLANT CRAVES THE LEAVE TO ADD, MODIFY, AMEN D OR DELETE ANY OF THE GROUNDS OF THE APPEAL AT THE TIME OF HEARING. PRAYER:- IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE , THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) DISMISSING THE APPEAL MAY KINDLY BE SET ASIDE AND T HE 4 PENALTY IMPOSED BE DELETED OR ANY OTHER RELIEF, WHI CH THIS HONBLE COURT DEEMS FIT AND PROPER, BE GIVEN. 4. THE GROUNDS RAISED IN ANOTHER PENALTY APPEAL BEI NG ITA NO. 593/DEL/2016 (AY 2006-07) READ AS UNDER:- 1. THAT THE ORDER OF THE LD. CIT(A) IS BAD IN LAW A ND IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE LD. CIT(A) HAS ERRED IN DISMISSING THE APPEAL ON THE GROUND THAT THE SAME IS NOT MAINTAINABLE. 3. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN NOT DEL ETING THE PENALTY OF RS. 27,83,160/-- AS THE SAME WAS IMPOSED WITHOUT SERVING ANY NOTICE UPON THE ASSESSEE. 4. THAT THE GROUNDS ARE INDEPENDENT OF ONE ANOTHER AND THE APPELLANT CRAVES THE LEAVE TO ADD, MODIFY, AMEN D OR DELETE ANY OF THE GROUNDS OF THE APPEAL AT THE TIME OF HEARING. PRAYER:- IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) DI SMISSING THE APPEAL MAY KINDLY BE SET ASIDE AND THE PENALTY IMPOSED BE DELETED OR ANY OTHER RELIEF, WHICH THIS HONBLE COURT DEEMS FIT AND PROPER, BE GIVEN. 5 5. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NO T DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE NOT REPEATED HERE FOR THE SAKE OF BREVITY. 6. DURING THE HEARING, LD. COUNSEL FOR THE ASSESSEE HAS STATED THAT LD. CIT(A) HAS ERRED IN NOT QUASHING THE ASSESSMENT FOR BEING WITHOUT JURISDICTION AS THE INITIAL NOTICE U/S. 143(2) OF T HE ACT WAS NEVER SERVED UPON THE ASSESSEE. HE FURTHER SUBMITTED THAT LD. CIT(A) HAS ERRED IN NOT QUASHING THE ASSESSMENT FRAMED U/S. 14 4 OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) AS THE PROCEDURE LAI D DOWN FOR FRAMING ASSESSMENT U/S. 144 OF THE ACT HAD NOT BEEN FOLLOWE D BY THE AO AND PROPER OPPORTUNITY OF HEARING WAS NOT PROVIDED TO THE ASSESSEE. HE FURTHER SUBMITTED THAT LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE BEING NOT MAINTAINABLE ON ACCOUNT OF DELAY IN FILING THE APPEAL. HE FURTHER STATED THAT ASSESSEE HAS FILED A LL THE NECESSARY DOCUMENTS/ EVIDENCES BEFORE THE LOWER AUTHORITIES, BUT THE SAME WERE NOT CONSIDERED BY THEM. HENCE, HE REQUESTED TO REM IT BACK THE ISSUES TO THE FILE OF THE AO FOR FRESH CONSIDERATION IN TH E QUANTUM APPEAL. 7. LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND OPPOSED THE REQUEST OF THE LD. COUNSEL FOR THE ASSE SSEE. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. WE FIND THAT AO HAS PASSED THE EXPARTE ORDER DATED 31.10.20 18 WITHOUT GIVING PROPER OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE ITS CASE. IT IS 6 FURTHER NOTED THAT LD. CIT(A) HAS DISMISSED THE APP EAL OF THE ASSESSEE BEING NOT MAINTAINABLE ON ACCOUNT OF DELAY IN FILIN G THE APPEAL. WE FURTHER NOTE THAT ASSESSEE HAS FILED A PAPER BOOK C ONTAINING PAGES 1- 87 IN WHICH HE HAS ATTACHED THE COPY OF ACKNOWLEDGE MENT OF INCOME TAX RETURN FOR THE YEAR; COPY OF COMPUTATION OF INC OME FOR THE YEAR; COPY OF AUDITED ACCOUNTS OF THE ASSESSEE COMPANY F OR YEAR; COPY OF STATEMENT OF BIRLA MUTUAL FUND; COPY OF BANK STATE MENT OF IDBI BANK FOR THE RELEVANT PERIOD REFLECTING THE ENTRY OF INV ESTMENT IN MUTUAL FUND AND SOURCE OF INVESTMENT; COPY OF REPLY DATED 24.6.2016 STATING THE REASONS TO CONDONE THE DELAY IN APPEAL FILING; COPY REJOINDER DATED 21.12.2015 TO REMAND REPORT 4.11.2015; COPY OF REMA ND REPORT DATED 4.11.2015, RECEIVED BY CIT(A); COPY OF ASSESSMENT O RDER ENCLOSED WITH SPEED POST LIST AS ANNEXURE-1; COPY OF REJOINDER DA TED 8.10.2015 TO REMAND REPORT DATED 13.7.2015; COPY OF SUBMISSION DATED 25.9.2014 BEFORE THE CIT(A); COPY OF LETTER DATED 7.4.2014 R EQUESTING FOR CERTIFIED COPIES OF ALL NOTICES AND ORDERS; COPY OF LETTER DATED 4.3.2011 FOR TRANSFER OF INCOME TAX RECORDS; COPY OF NOTICE UNDER SECTION 143(2) DATED 7.1.2008; COPY OF LETTER DATED 26.5.2008 REQU ESTING FOR CHANGING OF BANK ACCOUNT NUMBER AND ALSO CHANGE IN CORRESPON DENCE ADDRESS; COPY OF REPLY TO NOTICE UNDER SECTION 142(1) DATED 16.2.2008 ALONG WITH THIS BALANCE SHEET, PROFIT AND LOSS ACCOUNT IN CLUDING ALL SCHEDULES AND ANNEXURES, AUDIT REPORT IN FORM 3CD A ND COMPUTATION AS PER INCOME TAX ACT AND COPY OF NOTICE UNDER SECT ION 142(1) DATED 7 8.2.2008 SERVED TO DIRECTOR OF THE ASSESSEE COMPANY , WHICH WERE NOT DISCUSSED/CONSIDERED BY THE LOWER AUTHORITIES, WHIL E ADJUDICATING THE ISSUES. IN VIEW OF FACTS AND CIRCUMSTANCES AS EXPLA INED ABOVE AND IN THE INTEREST OF JUSTICE AND KEEPING IN VIEW THE EXP ARTE ORDER PASSED BY THE AO U./S 144 OF THE ACT AS WELL AS NON-CONSIDERA TION OF SUFFICIENT REASONS FOR NOT CONDONING THE DELAY BY THE LD. CIT( A) IN FILING THE APPEAL BEFORE HIM, WE ARE OF THE CONSIDERED VIEW T HAT THE DELAY DESERVE TO BE CONDONED AND THE ISSUES IN DISPUTE NE ED TO BE RE- ADJUDICATED BY THE AO, AFTER CONSIDERING ALL THE EV IDENCES/DOCUMENTS FILED BY THE ASSESSEE AND ASSESSEE BE GIVEN ADEQUAT E OPPORTUNITY OF BEING HEARD. ACCORDINGLY, WE REMIT BACK THE ISSUE S IN DISPUTE TO THE FILE OF THE AO FOR DO NOVO CONSIDERATION, AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND ALS O CONSIDER ALL THE DOCUMENTS/EVIDENCES FILED BY THE ASSESSEE AND THEN PASS A SPEAKING ORDER. ASSESSEE IS AT LIBERTY TO FILE ANY OTHER D OCUMENT/ EVIDENCE BEFORE THE AO TO SUBSTANTIATE ITS CASE. HOWEVER, THE ASSESSEE IS DIRECTED TO FULLY COOPERATE WITH THE ASSESSING OFF ICER IN THE PROCEEDINGS AND DID NOT TAKE ANY UNNECESSARY ADJOUR NMENT IN THE PROCEEDINGS. IN THE RESULT, THE QUANTUM APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 9. AS REGARDS PENALTY APPEALS I.E. ITA NO. 592/DEL/ 2017 (AY 2006- 07) AND ITA NO. 593/DEL/2017 (AY 2007-08) GROUNDS O F WHICH ARE REPRODUCED IN PARA NO. 3 & 4 OF THIS ORDER, ARE C ONCERNED, SINCE WE HAVE REMITTED BACK THE ISSUES IN DISPUTE TO THE FIL E OF THE AO FOR DO NOVO CONSIDERATION IN RESPECT OF QUANTUM APPEAL BEING ITA NO. 4587/DEL/2016 (AY 2006-07), AS AFORESAID, THEREFOR E, THE PENALTIES IN QUESTION INVOLVED IN ITA NO. 592/DEL/2017 (AY 20 06-07) AND ITA NO. 593/DEL/2017 (AY 2007-08) ARE ALSO SET ASIDE T O THE FILE OF THE AO 8 WITH THE SIMILAR DIRECTIONS, AS GIVEN ABOVE IN QUAN TUM APPEAL VIDE PARA NO. 8 OF THIS ORDER. ACCORDINGLY, BOTH THE I TA NO. 592/DEL/2017 (AY 2006-07) AND ITA NO. 593/DEL/2017 (AY 2007-08) ARE ALSO ALLOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, ALL THE 03 APPEALS FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 06/06/2019. SD/- SD/- [B.R.R. KUMAR] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 06/06/2019 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES