Uma Shankar Prop., New Delhi V. ITO, New Delhi

ITA 6014/DEL/2012

• Counselvise Citation: 601420114 RSA 2012
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 16-09-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 03-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RENUKA JAIN GUPTA
• Assessee Lawyers: ADARSH AGRAWAL
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: H NEW DELHI BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI J.S.REDDY, ACCOUNTANT MEMBER I.T.A .NO.-6014/DEL/2012 (ASSESSMENT YEAR-2006-07) UMA SHANKAR, VS ITO, PROPRIETOR M/S POOJA OVERSEAS, WARD-26(4), P-29, OLD DOUBLE STORIES, NEW DELHI. LAJPAT NAGAR-IV, NEW DELHI-110024. PAN-ADWPD5009R (APPELLANT) (RESPONDENT) I.T.A .NO.-6015/DEL/2012 (ASSESSMENT YEAR-2006-07) UMA SHANKAR, VS ITO, PROPRIETOR M/S POOJA OVERSEAS, WARD-26(4), P-29, OLD DOUBLE STORIES, NEW DELHI. LAJPAT NAGAR-IV, NEW DELHI-110024. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. ADARSH AGRAWAL, ADV. RESPONDENT BY: SMT. RENUKA JAIN GUPTA, SR. DR ORDER PER DIVA SINGH, JM THESE ARE TWO APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER DATED 31.08.2012 OF CIT(A)-XXIV, NEW DELHI PERTAINING TO 2006-07 ASSESSMENT YEAR IN QUANTUM AND IN PENALTY PROCEEDINGS IMPOSED U/S 271( 1)(C) WHICH WERE CONFIRMED BY THE CIT(A). BOTH THESE APPEALS ARE BEING DECIDE D BY A COMMON ORDER AS IDENTICAL FACTS AND ARGUMENTS WERE ADVANCED BY THE PARTIES IN THE APPEALS. 2. ITA NO-6014/DEL/2012 IS THE QUANTUM APPEAL, THE FACTS AVAILABLE ON RECORD ARE THAT CONSEQUENT TO THE ASSESSEE DECLARING AN IN COME OF RS.1,01,170/- THE INCOME WAS ASSESSED AT RS.8,99,040/-. THE RECORD SH OWS THAT THE AO AFTER ISSUANCE OF NOTICE U/S 143(2) ON 16.08.2007 WHICH REMAINED UN-COMPLIED ISSUED NOTICE U/S I.T.A .NO.-6014 & 6015/DEL/2012 2 143(2) AND 142(1) AGAIN AND AFFORDED AN OPPORTUNITY ON 11.12.2008 TO THE ASSESSEE. THE SAME ALSO REMAINED UN-COMPLIED WITH FINALLY BE SUCCEEDED IN SERVING NOTICE BY WAY OF AFFIXTURE THROUGH THE INSP ECTOR ON 13.12.2008 AT THE LAST KNOWN ADDRESS OF THE ASSESSEE AND PASSED AN EX-PART E ORDER ON 18.12.2008 WHEREIN HE MADE AN ADDITION OF RS.57,891/- BEING 25% OF OUT OF THE EXPENSES CLAIMED HOLDING IT TO BE UNVERIFIED AND ALSO ADDED THE AMOU NT OF RS.7,39,979/- SHOWN AS SUNDRY CREDITORS. 2.1. IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY THE ASSESSEE AMONGST OTHER GROUNDS RAISED THE FOLLOWING GROUNDS :- THAT THE LD. INCOME TAX OFFICER HAS ERRED IN BOTH I N LAW AND FACTS OF THE CASE COMPLETING THE ASSESSMENT AS AN EX-PARTE W HEREAS THE APPELLANT WAS PREVENTED BY THE SUFFICIENT CAUSE FOR NON ATTENDING THE PROCEEDING ON THE DATE OF FINAL HEARING AS THE ASSE SSEE WAS NOT SERVED ANY NOTICE EITHER BY REGISTERED POST OR THROUGH THE PROCESS SERVER. 2.2. A PERUSAL OF THE RECORD SHOWS THAT THE ASSESSE E SOUGHT TO PLACE ADDITIONAL EVIDENCE BEFORE THE CIT(A) WHICH ON CONSIDERING THE REMAND REPORT OF THE AO WERE REJECTED AND THE ADDITIONS STOOD CONFIRMED. A GGRIEVED BY THIS THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. BOTH THE PARTIES WE RE HEARD ON THE ADMISSION OF ADDITIONAL EVIDENCE. WHEREAS THE LD. AR ON THE BAS IS OF GROUND NO-3 RAISED BEFORE THE TRIBUNAL REQUESTED THAT ADDITIONAL EVIDE NCE MAY BE ENTERTAINED AS A PERUSAL OF THE IMPUGNED ORDER WOULD SHOW THAT THE N OTICE SENT BY THE AO IN THE REMAND PROCEEDINGS WAS NEVER RECEIVED BY THE ASSESS EE AND INVITING ATTENTION TO THE STATEMENT OF FACTS WHICH IS SUPPORTED BY THE FI NDING OF THE VERY SAME CIT(A) IN HIS ORDER DATED 05.03.2012 IN THE PENALTY PROCEEDIN G U/S 271(1)(B) (COPY PLACED ON RECORD) THAT THE NON-SERVICE OF THE NOTICE HAD BEEN ACCEPTED AND THE REASONS REMAINED THE SAME. REFERRING TO THE RECORD IT WAS STATED THAT DURING 2007 THE ASSESSEE HAD DISPUTES WITH HIS FAMILY MEMBERS AND A S A RESULT HE LEFT THE JOINT FAMILY RESIDENCE OF A-5, UTTAM NAGAR, NEW DELHI. AN D SHIFTED TO GAUTAM NAGAR, NEW DELHI BEHIND AIIMS FOR SOME TIME AND LATER HAD SHIFTED TO HIS PRESENT I.T.A .NO.-6014 & 6015/DEL/2012 3 ADDRESS AT 1 ST FLOOR, PILLANGI, KOTLA MUBARAKPUR, NEW DELHI. THE SHIFTING OF RESIDENCE AS A RESULT OF THE FAMILY DISPUTES, IT WA S STATED HAD BEEN ACCEPTED BY THE DEPARTMENT WHEREIN SECTION 271(1)(B) PROCEEDINGS HA VE BEEN QUASHED AND FOR THE VERY SAME REASONS THE ASSESSEE COULD NOT BE REPRESE NTED BEFORE THE AO DURING THE ASSESSMENT STAGE IN THE QUANTUM PROCEEDINGS AND THE PENALTY PROCEEDINGS AS THE NOTICE COULD NOT BE RECEIVED. COPY OF THE ORDER IN APPEAL NO-146/10-11 U/S 271(1)(B) PROCEEDINGS WAS MADE AVAILABLE IN THE APP EAL PAPERS AND WAS RELIED UPON. FOR READY REFERENCE THE FINDING OF CIT(A) IN SECTION 271(1)(B) PROCEEDINGS WHICH IS STATED TO BE NOT CHALLENGED IN APPEAL IS R EPRODUCED HEREUNDER:- 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MAD E BY THE APPELLANT AND I AM OF THE OPINION THAT THE APPELLAN T WAS PREVENTED BY SUFFICIENT CAUSE FROM APPEARING BEFORE THE AO DURING ASSESSMENT AND PENALTY PROCEEDINGS, SINCE, H E HAD NO KNOWLEDGE OF ANY NOTICES BEING ISSUED TO HIM ON ACC OUNT OF CHANGE OF ADDRESS. THEREFORE, THE PENALTY IMPOSED UPON HIM U/S 271(1)(B) OF THE ACT AMOUNTING TO RS.80,000/- @ RS. 10,000/- FOR EACH DEFAULT IS HEREBY DELETED. 2.3. IT IS SEEN THAT ASSERTIONS TO THIS FACT THAT N OTICE WAS NOT RECEIVED, ARE AVAILABLE IN THE PARA 4 IN THE STATEMENTS OF FACTS AVAILABLE ON RECORD. THE SAME READS AS UNDER :- 4. IN THE APPEAL, ASSESSEE SUBMITTED THAT AS HE HA D SHIFTED FROM HIS OLD ADDRESS A-5, UTTAM NAGAR, MOHAN GARDEN, DEL HI TO FIRST GAUTAM NAGAR, NEW DELHI BEHIND AIIMS AND LATER HAD TO SHIFT TO HIS PRESENT ADDRESS AT 2011, 1 ST FLOOR, PILLANGI, KOTLA MUBARAKPUR, NEW DELHI DUE TO FAMILY DISPUTE, HE DID NOT RECEIVE ANY FO THE NOTICES DURING ASSESSMENT STAGE OR DURING PENALTY P ROCEEDINGS AND THEREFORE COULD NOT ATTEND ANY PROCEEDINGS BEFORE T HE AO. HE SUBMITTED THAT HE LATER ON CAME TO KNOW THROUGH THE WARD INSPECTOR WHO TRACED HIM AND CALLED HIM UP FOR COLLECTION OF DEMAND, THAT ASSESSMENT AND PENALTY ORDERS WERE PASSED AGAINST H IM EX-PARTE. 2.4. THESE ARGUMENTS ARE ALSO FOUND ADVANCED IN THE IMPUGNED ORDER ALSO AND ARE EXTRACTED HEREUNDER:- I.T.A .NO.-6014 & 6015/DEL/2012 4 3. AGGRIEVED BY THE ORDER OF THE AO, THE APPELLANT IS IN APPEAL BEFORE THE UNDERSIGNED AND HAS IMPUGNED THE ADDITIO NS MADE TO HIS INCOME. THE APPELLANT SUBMITTED THAT HIS OLD ADDRE SS WAS A-5, UTTAM NAGAR, MOHAN GARDEN, DELHI AND THAT THERE WAS A CHA NGE OF ADDRESS AND HIS NEW ADDRESS WAS 2011, FIRST FLOOR, PILLANGI , KOTLA MUBARAKPUR, NEW DELHI. THE APPELLANT SUBMITTED THA T DUE TO CHANGE OF ADDRESS, HE DID NOT RECEIVE ANY NOTICE AND THERE FORE, HE WAS PREVENTED BY SUFFICIENT CAUSE FOR NOT ATTENDING THE PROCEEDINGS BEFORE THE AO. 2.5. IN THE ABOVE PECULIAR FACTS AND CIRCUMSTANCES, INVITING ATTENTION TO THE PRAYER PLACED ON RECORD IN SUPPORT OF THE GROUNDS MOVED IT WAS REQUESTED THAT GRAVE INJUSTICE WOULD OCCUR IF THE RELEVANT EVIDENCES ARE NOT TAKEN ON RECORD AS DUE TO NON-SERVING OF NOTICE ON THE ASSESSEE THE ASSESSEE COULD NOT PLACE NECESSARY EVIDENCES RELATABLE TO THE ADDITIONS MADE ON RECORD AND THE PRAYER CANVASSED WAS THAT THE EVIDENCES MAY BE CONSIDERED BEFORE ARRIVIN G AT A CONCLUSION AND THE ASSESSEE BE HEARD. 3.1. LD. SR. DR, SMT. RENUKA JAIN GUPTA VEHEMENTLY OPPOSED THE SAID REQUEST OF THE LD. AR. IT WAS HER SUBMISSION THAT THE ASSESSE E HAS NOT CO-OPERATED DURING THE ASSESSMENT PROCEEDINGS CONSEQUENT TO WHI CH THE ASSESSMENT ORDER WAS PASSED U/S 144 AND THAT TOO BY WAY OF AN AFFIXTURE. IT WAS HER STAND THAT IN THE REMAND PROCEEDINGS ALSO THE ASSESSEE HAS NOT PARTI CIPATED IN THE PROCEEDINGS BEFORE THE CIT(A) THE ASSESSEES COUNSEL HAS ARGUED FOR ADMISSION OF ADDITIONAL EVIDENCE AND HAS NOT CARED TO EXPLAIN WHY HE WAS NO T PRESENT BEFORE THE AO. ACCORDINGLY IT WAS HER PRAYER THAT THE EVIDENCE SHO ULD NOT BE ENTERTAINED AND THE IMPUGNED ORDER BE UPHELD. 3.2. IN REPLY THE LD. AR SUBMITTED THAT A GRAVE INJ USTICE WOULD OCCUR IF THE PRAYER OF THE LD. SR. DR IS ACCEPTED AS THE IMPUGNE D ORDER ITSELF ADDRESSES THE REASONS FOR WHY THE ASSESSEE REMAINED UNREPRESENTE D BEFORE THE AO. THIS FACT IT WAS SUBMITTED IS ADDRESSED AND THE CIT(A) HIMSELF RECORDS THE FACT THAT THE LETTERS SENT TO THE ASSESSEE REMAINED UNSERVED. IT WAS H IS SUBMISSION THAT THE ASSESSEE I.T.A .NO.-6014 & 6015/DEL/2012 5 HAS EXPLAINED THE REASONS FOR SHIFTING HIS ADDRESS AND THE DEPARTMENT HAS NOT REBUTTED THIS FACT AND THE AO HAS NOT EVEN CARED TO DISCUSS THE NATURE OF THE BUSINESS OF THE ASSESSEE WHICH IS READY-MADE GARMEN TS AND THIS FACT WOULD BE AVAILABLE IN THE LETTER ADDRESSED BY THE COUNSEL TO THE CIT(A) AND THE REASONS OF SHIFTING ADDRESS HAVE BEEN EXPLAINED. IN THESE CIR CUMSTANCES IT WAS HIS HUMBLE PRAYER THAT ADDITIONAL EVIDENCE WHICH THE AO IS DUT Y-BOUND TO CONSIDER AND HAS NOT BEEN CONSIDERED BE CONSIDERED. IT WAS HIS EARN EST PLEA THAT THE ASSESSEE IS ONLY REQUESTING FOR AN OPPORTUNITY OF BEING HEARD ON THE EVIDENCES WHICH COULD NOT BE PLACED BEFORE THE DEPARTMENT. REFERRING TO THE REC ORD IT WAS HIS SUBMISSION THAT THE ASSESSEE HAS NOT BEEN REPRESENTED BEFORE THE AO AND THE AO HAS NOT CARED TO LOOK INTO THE EVIDENCE AND NOR HAS THE CIT(A) CARED TO ADDRESS THE EVIDENCE SOUGHT TO BE FILED. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FOR READY-REFERENCE WE REPRODUCE PARA 4 & 5 OF THE IMPUGNED ORDER HEREUNDER :- 4. THE APPELLANT SUBMITTED ADDITIONAL EVIDENCES UN DER RULE 46A OF THE I.T. RULES, 1962, WHICH WERE FORWARDED TO TH E AO VIDE THIS OFFICE LETTER DT. 08.05.2012 FOR HIS COMMENTS ON TH E ADMISSIBILITY AS WELL AS MERITS OF THE SAME. THE REMAND REPORT OF T HE AO WAS RECEIVED VIDE HIS LETTER DT. 27.06.2012, WHEREIN HE HAS STATED THAT THE ASSESSMENT WAS FRAMED U/S 144 OF THE ACT AFTER THE APPELLANT REPEATEDLY FAILED TO COMPLY WITH THE NOTICES U/S 14 2(1) AND U/S 143(2) OF THE ACT WHICH HAD TO BE ULTIMATELY SERVED ON THE APPELLANT THROUGH AFFIXTURE ON THE LAST KNOWN ADDRESS OF THE APPELLA NT ON RECORD. THE AO HAS FURTHER STATED THAT AFTER RECEIPT OF THE BUN CH OF ADDITIONAL EVIDENCES SUBMITTED BY THE APPELLANT DURING APPELLA TE STAGE, HE ISSUED A LETTER OF VERIFICATION TO THE APPELLANT DATED 06. 06.2012 AT HIS NEW ADDRESS GIVEN IN THE APPEAL MEMO. HOWEVER, THIS LE TTER SENT THROUGH SPEED POST WAS RECEIVED BACK UNSERVED. THE AO, ONC E AGAIN, IN THE INTEREST OF NATURAL JUSTICE SENT THIS LETTER ON 19. 06.2012 TO HIS AUTHORIZED REPRESENTATIVE SH. J.P.UNIYAL, ADVOCATE, BUT FOR THE REASONS BEST TO KNOWN TO THE APPELLANT AND HIS AR, THE SAID LETTER WAS ALSO RECEIVED BACK UNSERVED. THE AO HAS CONCLUDED T HAT UNDER THESE CIRCUMSTANCES, HE HAS NO OPTION BUT ARRIVE AT A CON CLUSION THAT THE I.T.A .NO.-6014 & 6015/DEL/2012 6 APPELLANT IS NOT WILLING TO CO-OPERATE WITH THE DEP ARTMENT. THE AO HAS ALSO POINTED OUT THAT DUE TO THESE REASONS, THE EXPENSES AND SUNDRY CREDITORS STILL REMAIN UNVERIFIED. MOST IMP ORTANTLY, THE AO HAS POINTED OUT THAT AS PER THE PHOTOCOPIES OF THE PURCHASE INVOICES, THE APPELLANT WAS OPERATING FROM DIFFERENT ADDRESS, NAMELY, A-5, MOHAN GARDEN, UTTAM NAGAR, DELHI-110059; 1882, GROU ND FLOOR, KOTLA MUBARAKPUR, SOUTH EXTN., PART-I, NEW DELHI-11 0003; 186-A, GAUTAM NAGAR, DELHI-110048 AND 2011, FIRST FLOOR, P ILLANGI, KOTLA MUBARAKPUR, NEW DELHI. 5. THE LD. AR OF THE APPELLANT SH.J.P. UNIYAL, ADVO CATE APPEARED BEFORE THE UNDERSIGNED AND HE WAS HANDED OVER A COP Y OF THE REMAND REPORT AND WAS ASKED TO SUBMIT A REJOINDER TO THE S AME GIVING REASONS AS TO WHY THE APPELLANT DID NOT APPEAR BEFO RE THE AO DESPITE REPEATED OPPORTUNITIES AT THE ASSESSMENT STAGE AS W ELL AS AT THE REMAND STAGE. HE WAS ALSO ASKED TO EXPLAIN WHY THE VERIFICATION LETTER ISSUED BY THE AO AT THE ADDRESS OF THE LD. A R WENT BACK UNSERVED. THE LD. AR SUBMITTED THE REJOINDER VIDE HIS LETTER DT. 31.08.2012, WHEREIN ALL THESE QUERIES HAVE NOT BEEN ANSWERED. HE HAS MERELY STATED THAT THE LD. ITO HAS NOT CONSIDER ED THE PHOTOCOPIES OF EXPENSE VOUCHERS AND LEDGER ACCOUNTS AND THAT HE HAS ALSO NOT CONSIDERED THE VERIFICATION LETTERS OF THE SUNDRY C REDITORS. 4.1. IN THE CONTEXT OF THE ARGUMENTS ADVANCED BY PA RTIES BEFORE THE BENCH AND THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIE W THAT IN THE INTERESTS OF JUSTICE THE ADDITIONAL EVIDENCE RELIED UPON BEFORE THE CIT( A) SHOULD BE ADMITTED. THE FACT THAT A NOTICE WAS SENT TO THE ASSESSEE AND ALS O HIS COUNSEL CAME BACK UNSERVED SHOULD NOT BE REASON ENOUGH TO DISCARD THE EVIDENCE . THE REASONS FOR REMAINING UNREPRESENTED IN THE ASSESSMENT PROCEEDINGS HAS BEE N ADEQUATELY EXPLAINED AND NO ARGUMENTS ON FACTS HAVE BEEN ADVANCED SO AS TO DISB ELIEVE THE CLAIM OF SHIFTING RESIDENCES DUE TO FAMILY DISPUTE. IT IS SEEN THAT THE AO IN THE BODY OF THE ASSESSMENT ORDER HAS NOT EVEN CARED TO DISCUSS THE NATURE OF THE BUSINESS OF THE ASSESSEE NOR ANY OTHER FACT AS TO WHETHER THIS IS T HE FIRST YEAR OF THE ASSESSEE IN THIS LINE OF THE BUSINESS AND SIMPLY ADHOC DISALLOWANCE OF EXPENSES AND ADDITION OF THE ENTIRE SUNDRY CREDITORS HAS BEEN DONE. THE REMAND PROCEEDINGS ASSAILED BY GROUND NO-4 RAISED BEFORE US ON BEHALF OF THE ASSES SEE. ACCORDINGLY IN THE I.T.A .NO.-6014 & 6015/DEL/2012 7 PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, WE DE EM IT APPROPRIATE IN THE INTERESTS OF SUBSTANTIAL JUSTICE TO RESTORE THE ISSUE BACK TO THE FILE OF THE AO WITH THE DIRECTION TO ADMIT THE ADDITIONAL EVIDENCE AND PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPP ORTUNITY OF BEING HEARD. IT IS HOPED THAT THE OPPORTUNITY GRANTED TO THE ASSESSEE BY EXERCISING THE DISCRETION IS UTILIZED BY THE ASSESSEE IN THE CORRECT SPIRIT BY P ARTICIPATING FULLY IN LETTER AND SPIRIT IN THE PROCEEDINGS AND PLACING NECESSARY EVIDENCES BEFORE THE AO WHICH HE SHALL BE AT LIBERTY TO DO SO BEFORE THE AO. ACCORDINGLY G ROUND NO-3 OF ITA NO- 6014/DEL/2012 IS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. 6. SINCE THE FACTS AND ARGUMENTS IN ITA NO-6015/DEL /2012 WHICH IS DEPENDENT UPON THE QUANTUM PETITION IN ITA 6014/DEL/2012 IS I DENTICAL, THE SAID APPEAL IS ALSO RESTORED TO THE AO. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE ARE ALL OWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28 TH OF OCTOBER 2013. SD/- SD/- (J.S.REDDY) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 28/10/2013 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI