VIJ Buildcon Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 6327/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6546 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 09-03-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 09-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEDOBINA CHAUDHARI
• Assessee Lawyers: RAJEEV GOEL
• Keywords: Opportunity of being heard; Principle of natural justice; Accommodation entries
• Section: 143(3); 147; 148

Judgement Text

ITA NO. 632 7 /DEL./201 6 ASSESSMENT Y EAR: 2006 - 07 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH SM C NEW DELHI) BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMB E R ITA NO. 6327 /DEL./201 6 ASSESSMENT YEAR: 20 06 - 07 VIJ BUILDCON PVT. LTD. 2971/3, CHUNA MANDI, PAHARGANJ, NEW DELHI VS. IT O WARD - 17 ( 3 ) NEW DELHI (APPLICANT) (RESPONDENT) (PAN: A A CCV0087B ) ASSESSEE BY: MS. RANO JAIN, ADV. AND SH. RAJEEV GOEL , CA REVENUE BY: MS. BEDOBINA CHAUDHARI, SR. DR DATE OF HEARING 0 9 / 0 3 /201 7 DATE OF PRONOUNCEMENT 1 5 / 0 3 /201 7 ORDER PER B.P. JAIN , ACCOUNTANT MEMBER : 1. THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF LD. CIT(A) - 9 , NEW DELHI VI DE ORDER DATED 1 7 . 8 .201 6 FOR THE A.Y. 20 06 - 07 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. PAGE 2 OF 6 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN PASSING THE ORDER WITHOUT GIVING ASSESSEE A PROPER AND ADEQUATE OPPORTUNITY OF BEING HEARD IN CLEAR VIOLATION OF PRINCIPLE OF NATURAL JUSTICE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRE D BOTH ON FACTS AND IN LAW IN CONFIRMING THE ORDER PASSED BY THE AO UNDER SECTION 147 READ WITH SECTION 148 OF THE ACT DESPITE THE FACT THAT PROCEDURE FOR INITIATION OF PROCEEDING AS PROVIDED UNDER THE ACT HAS NOT BEEN FOLLOWED. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ORDER PASSED BY THE AO UNDER SECTION 147 DESPITE THE FACT THAT REASONS ON THE BASIS OF WHICH THE PROCEEDINGS HAVE BEEN INITIATED ARE VAGUE AND NOT AS PER THE FACTS OF THE CASE. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ORDER PASSED BY THE AO UNDER SECTION 147 DESPITE THE FACT THAT THE NOTICE UNDER SECTION 148 HAVING BEEN ISSUED AFTER THE END OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR AND ASSESSEE HAVING DISCLOSED FULLY AND TRULY ALL MATERIAL FACTS RELEVANT TO ASSESSMENT DURING PROCEEDINGS UNDER SECTION 143(3) OF THE ACT, THE REOPENED PROCEEDINGS ARE BARRED BY LIMITATION. 2. IT WAS ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSMENT ORDER DATED 27.11.2008 U/S 143(3) OF THE ACT WHILE RECORDING THE REASONS THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND. SHE POINTED OUT THE REASONS WHICH ARE ON REC ORD AND DEFECT IN THE SAID REASONS IS THAT FROM WHICH ENTITY OF RS. 10 LAC HAVE BEEN RAISED AND THE NATURE OF RS. 10 LAC WHE THER THE SAME IS SHARE CAPITAL OR LOAN HAS NOT BEEN NOTED . THEREFORE THIS IS COMPLETE NON APPLICATION OF MIND OF THE ASSESSING PAGE 3 OF 6 OFFIC ER . S HE RELIED UPON THE DECISION OF M/S. G. & G. PHARMA INDIA LTD. IN ITA NO. 545/2015 DATED 8.10.2015 (2016) 384 ITR 147 . 3. THE LD. DR ON THE OTHER HAND RELIED UPON THE ORDER OF THE AUTHORITIES BELOW. 4. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. I FIND THAT THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND WHILE RECORDING THE REASONS THAT FROM WHICH ENTITY AMOUNT HAS BEEN RECEIVED BY THE ASSESSEE AND WHAT IS THE NATURE OF THE AMOUNT SO RECEIVED AND THEREFORE DUE TO NON APPLICATION OF MIND , THE REASONS SO RECORDED ARE BAD IN LAW AND ASSESSMENT SO MADE IS WITHOUT JURISDICTION AND IS LIABLE TO QUASHED. THE RELIANCE IS PLACED IN THE CASE M/S. G. & G. PHARMA INDIA LTD. (SUPRA) RELEVANT PARA IS REPRODUCED HEREIN BELOW: - 12 . IN THE PRESENT CASE, AFTER SETTING OUT FOUR ENTRIES, STATED TO HAVE BEEN RECEIVED BY THE ASSESSEE ON A SINGLE DATE I.E. 10TH FEBRUARY 2003, FROM FOUR ENTITIES WHICH WERE TERMED AS ACCOMMODATION ENTRIES, WHICH INFORMATION WAS GIVEN TO HIM BY THE DIRECTORA TE OF INVESTIGATION, THE AO STATED: 'I HAVE ALSO PERUSED VARIOUS MATERIALS AND REPORT FROM INVESTIGATION WING AND ON THAT BASIS IT IS EVIDENT THAT THE ASSESSEE COMPANY HAS INTRODUCED ITS OWN UNACCOUNTED MONEY IN ITS BANK ACCOUNT BY WAY OF ABOVE ACCOMMODATI ON PAGE 4 OF 6 ENTRIES.' THE ABOVE CONCLUSION IS UNHELPFUL IN UNDERSTANDING WHETHER THE AO APPLIED HIS MIND TO THE MATERIALS THAT HE TALKS ABOUT PARTICULARLY SINCE HE DID NOT DESCRIBE WHAT THOSE MATERIALS WERE. ONCE THE DATE ON WHICH THE SO CALLED ACCOMMODATION ENTRIE S WERE PROVIDED IS KNOWN, IT WOULD NOT HAVE BEEN DIFFICULT FOR THE AO, IF HE HAD IN FACT UNDERTAKEN THE EXERCISE, TO MAKE A REFERENCE TO THE MANNER IN WHICH THOSE VERY ENTRIES WERE PROVIDED IN THE ACCOUNTS OF THE ASSESSEE, WHICH MUST HAVE BEEN TENDERED ALO NG WITH THE RETURN, WHICH WAS FILED ON 14TH NOVEMBER 2004 AND WAS PROCESSED UNDER SECTION 143(3) OF THE ACT. WITHOUT FORMING A PRIMA FACIE OPINION, ON THE BASIS OF SUCH MATERIAL, IT WAS NOT POSSIBLE FOR TH E AO TO HAVE SIMPLY CONCLUDED: 'IT IS EVIDENT THAT THE ASSESSEE COMPANY HAS INTRODUCED ITS OWN UNACCOUNTED MONEY IN ITS BANK BY WAY OF ACCOMMODATION ENTRIES'. IN THE CONSIDERED VIEW OF THE COURT, IN LIGHT OF THE LAW EXPLAINED WITH SUFFICIENT CLARITY BY THE SUPREME COURT IN THE DECISIONS DISCUSSED HEREINBEFORE, THE BASIC REQUIREMENT THAT THE AO MUST APPLY HIS MIND TO THE MATERIALS IN ORDER TO HAVE REASONS TO BELIEVE THAT THE INCOME OF THE ASSESSEE ESCAPED ASSESSMENT IS MISSING IN THE PRESENT CASE. 5. IN T HE CIRCUMSTANCES AND FACTS OF THE CASE THE DECISION OF THE HON BLE HIGH COURT IN THE CASE OF M/S. G. & G. PHARMA INDIA LTD. (SUPRA) THE ASSESSMENT IS DIRECTED TO BE QUASHED AND ALL THE LEGAL GROUNDS IN THE APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO. 6327 /DEL/2016 IS ALLOWED. PAGE 5 OF 6 8 . P RONOUNCED IN THE OPEN COURT ON 1 5 . 0 3 .201 7. S D / - ( B.P. JAIN ) ACCOUNTANT MEMB E R DATED: 1 5 . 0 3 .2017 NARENDER COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT (APPEALS) 5) DR: ITAT ASSISTANT REGISTRAR DATE DRAFT DICTATED ON 9 .0 3 .2017 DRAFT PLACED BEFORE AUTHOR 10 .0 3 .2017 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 1 5 .3.2017 PAGE 6 OF 6 KEPT FOR PRONOUNCEMENT ON FILE SENT TO THE BENCH CLERK 1 5 .3.2017 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.