Continental Construction Ltd., New Delhi V. ITO WARD - 6(4), New Delhi

ITA 680/DEL/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0513 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 05-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 250; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SH. BHAVNESH SAINI, JUDICIAL MEMBER AND SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO.680/DEL/2020 FOR A.Y. 2010-11 CONTINENTAL CONSTRUCTION LTD., 28-29 NEHRU PLACE NEW DELHI - 110019 PAN- AAACC 2309 R VS. ITO WARD 6(4) NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY SH. M. P. RASTOGI, ADV. RE VENUE BY MS. NIDHI SRIVASTAVA, CIT - D.R. DATE OF HEARING: 23 /12 /2020 DATE OF PRONOUNCEMENT: 23 /12 /2020 ORDER PER ANIL CHATURVEDI, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 15.07.2019 OF THE COMMISSIONER OF INCOME TAX (A)-31 NEW DELHI RELATING TO ASSESSMENT YEAR 2010-11. 2. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTORS AND IS ALSO STATED TO BE PARTNER IN JOINT VENTURE. AO NOTED THAT FROM THE INFORMATION AVAILABLE ON I-TAXNET OF THE DEPARTMENT TOTAL RECEIPT AS PER 26AS WAS RS.38.54 CRORES ITA NO. 680/DEL/2020 PAGE | 2 (ROUNDED OFF) BUT NO RETURN OF INCOME WAS FILED BY THE ASSESSEE. AO THEREFORE INITIATED PROCEEDINGS U/S 147/148 BY ISSUING OF NOTICE U/S 148 OF THE ACT. THE CASE WAS TAKEN UP FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3)/147 BY ORDER DATED 31.12.2017 AND THE TOTAL INCOME WAS DETERMINED AT RS.67,31,23,320/-. 3. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO VIDE ORDER DATED 15.07.2019 IN APPEAL NO.238/18-19/10358/17-18 DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF CIT(A) ASSESSEE IS NOW BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED CIT [A] HAS ERRED IN NOT GIVING A REASONABLE OPPORTUNITY OF BEING HEARD. 2. THE LEARNED CIT [A] HAS ERRED IN NOT QUASHING THE ORDER OF THE LEARNED AO AS THE RE-OPENING WAS BARRED BY LIMITATION AS THE PURPORTED NOTICE DATED 30-3- 2017 WAS NOT SERVED ON THE APPELLANT. 3. THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF THE WRITE-OFF INTEREST INCOME OF RS 5744.67 LAKHS ADMITTED AS INCOME DURING THE YEARS 1991 TO 2002 UNDER DEFERRED AGREEMENT BETWEEN IRAQ & INDIA WRITTEN OFF THIS YEAR AS BECOMING IRRECOVERABLE. 4. THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF THE WHOLE OF CONTRACT EXPENSES OF RS 195.67 LAKHS. 5. THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS 181.46 LAKHS BEING 50% OF SALARIES & ADMINISTRATIVE EXPENSES. 6. THE LEARNED CIT (A) HAS ERRED IN NOT DIRECTING THE EXCLUSION OF FEES OF RS3,715.00 LAKHS RECEIVED AS FROM AN AOP IN WHICH ITA NO. 680/DEL/2020 PAGE | 3 THE APPELLANT IS A MEMBER AND NOT ALLOWED IN AOP U/S 40(BA) READ WITH SECTION 86 OF THE ACT. 7. THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PREJUDICE TO EACH OTHER. 8. THAT THE APPELLANT SEEKS LEAVE TO ADD, AMEND, ALTER OR ABANDON ANY OF THE ABOVE GROUNDS AT THE TIME OF HEARING OF THE APPEAL. 4. BEFORE US, LEARNED AR SUBMITTED THAT CIT(A) HAS PASSED AN EX PARTE ORDER AND HAS NOT DECIDED THE ISSUE ON MERITS. HE SUBMITTED THAT ASSESSEE IF GIVEN A CHANCE, ASSESSEE UNDERTAKES TO APPEAR BEFORE THE LOWER AUTHORITIES AND FURNISH ALL THE REQUIRED DETAILS TO SUBSTANTIATE ITS CASE. HE THEREFORE, SUBMITTED THAT ASSESSEE BE GRANTED ONE MORE OPPORTUNITY TO EXPLAIN ITS CASE. 5. LEARNED DR ON THE OTHER HAND OBJECTED TO LEARNED ARS PRAYER FOR SECOND INNINGS. HE SUPPORTED THE ORDER OF THE LOWER AUTHORITIES. 6. WE HAVE HEARD LEARNED DR AND PERUSED THE MATERIAL ON RECORD. THE PERUSAL OF CIT(A) ORDER REVEALS THAT CIT(A) HAS PASSED AN EX PARTE ORDER WITHOUT DECIDING THE ISSUE ON MERITS. SUB SECTION (6) OF SECTION 250 OF I. T. ACT MANDATE THE CIT(A) TO STATE THE POINTS IN DISPUTE AND THEREAFTER ASSIGN THE REASONS IN SUPPORT OF HIS CONCLUSION. WE ARE OF THE VIEW THAT BY DISMISSING THE APPEAL WITHOUT CONSIDERING THE ISSUE ON MERITS, LEARNED CIT(A) HAS FAILED TO FOLLOW THE MANDATE REQUIRED IN SUB SECTION (6) OF SECTION 250 OF THE ACT. FURTHER IT IS ALSO A WELL SETTLED PRINCIPLE OF ITA NO. 680/DEL/2020 PAGE | 4 NATURAL JUSTICE THAT SUFFICIENT OPPORTUNITY OF HEARING SHOULD BE OFFERED TO THE PARTIES AND NO PARTIES SHOULD BE CONDEMNED UNHEARD. IN VIEW OF THESE FACTS, WE SET ASIDE THE IMPUGNED ORDER OF CIT(A) DATED 15.07.2019 AND RESTORE THE ISSUE TO THE FILE OF CIT(A) FOR RE-ADJUDICATION OF THE ISSUES AFTER GRANTING SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE. ASSESSEE IS ALSO DIRECTED TO FURNISH THE DETAILS CALLED FOR BY THE LOWER AUTHORITIES. IN VIEW OF OUR DECISION TO RESTORE THE ISSUE TO CIT(A), WE ARE NOT ADJUDICATING ON MERITS THE GROUNDS RAISED BY THE ASSESSEE. THUS THE GROUND OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23.12.2020 SD/- SD/- (BHAVNESH SAINI) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER PY* DATE:- 23 .12.2020 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI