Blue Sky Portfolios Private Limited, Delhi V. ITO, Ward-5(1), New Delhi

ITA 75/DEL/2020

AI Insights

The case involves Blue Sky Portfolios Pvt. Ltd., the appellant, contesting an order from the Commissioner of Income Tax (Appeals) which dismissed their appeal ex parte. The primary contention was the alleged violation of natural justice and statutory provisions under section 250(6) of the Income Tax Act, 1961. The appellant argued that the CIT(A) dismissed the appeal without a proper hearing and failed to provide a reasoned decision, which is mandatory under the law. Additionally, the reassessment by the Assessing Officer (AO) was challenged based on information from the investigation wing, which the appellant claimed was unsubstantiated. The Tribunal found merit in the appellant's arguments regarding the dismissal of the appeal without adjudication on merits and the lack of a speaking order from the CIT(A).

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 112551 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-01-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 02-01-2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 68

Judgement Text

1 ITA No. 75/Del/2020 Blue Sky Portfolios Vs. ITO IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘A’ NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER I.T.A. No. 75/DEL/2020 (A.Y 2011-12) Blue Sky Portfolios Pvt. Ltd. WZ 150, Flat No. 120, Jail road Pratap Nagar, Delhi PAN: AADCB9442P (APPELLANT) Vs. ITO Ward-5(1) Room No. 379, C. R. Building, New Delhi (RESPONDENT) ORDER PER YOGESH KUMAR U.S., JM The present appeal is filed by the assessee against the order dated 31/10/2019 of the ld. Commissioner of Income Tax (Appeals)-2. New Delhi [hereinafter referred to CIT (Appeals)] for Assessment Year 2011-12. 2. The grounds of appeal are as under:- Assessee by : Sh. Sahil gupta, CA Department by: Sh. Kanv Bali Sr. DR Date of Hearing 31.01.2023 Date of Pronouncement 01.02.2023 2 ITA No. 75/Del/2020 Blue Sky Portfolios Vs. ITO 1. That the Ld. Commissioner of Income Tax (Appeals) has grossly erred in law and on facts in passing the order in utter disregard of the statutory provisions contained under section 250(6) of the Act by dismissing the appeal of the appellant ex parte, violating the principles of natural justice. 2. That the Ld. Commissioner of Income Tax (Appeals) has overlooked the provisions of Section 250(6) of the Act, as the order passed by him is non-speaking and without affording any proper opportunity of being heard to the appellant. 3. That the Ld. Commissioner of Income Tax (Appeals) has ignored various judicial rulings, wherein it was held that section 250(6) makes it obligatory for the CIT(A) to pass speaking order deciding the points raised in appeal, stating his reasons for the decision, as such. 4. The Ld.CIT(A) is not justified in disposing off the appeal ex- parte without allowing sufficient and real opportunity to the appellant to represent the case and hence, the impugned order passed requires to be set-aside/cancelled. 5. That the order of Ld.CIT(A) is bad in law, against facts of the case and equity. 6. The reassessment proceedings initiated by the Ld. AO is based on the information received from investigation wing and there was no material before him to substantiate the allegation contained in the information and therefore initiation of proceedings is bad in law. 3 ITA No. 75/Del/2020 Blue Sky Portfolios Vs. ITO 7. That on the basis of facts and in the circumstances of the case and in law, Ld. CIT (A) erred in confirming the addition of Rs. 1,55,03,500/- made by Ld. AO on account of alleged accommodation entry, merely following the investigation report, ignoring the voluminous evidence to the contrary brought on record by the assessee. The addition is made on the basis of conjectures and surmises is treated undisclosed income u/s 68 of Income Tax Act, 1961. 8. That on the basis of facts and in the circumstances of the case and in law, Ld. CIT (A) erred in confirming the addition of Rs. 1,55,035/- (Rs. 1,55,03,500/- @1%) made by Ld. AO by making addition on account of commission income at the rate of 1 percent of the transactions. 9. That the appellant craves leave to add, amend, modify, rescind, supplement or alter any of the grounds of appeal before the appeal is finally adjudicated upon.” 3. Brief facts of the case are that, the assessment order came to be passed on 30/12/2018 against the assessee u/s 147/143(3) of the Act by making addition on account of share capital and share premium u/s 68 of the Act to the tune of Rs. 1,55,03,500/- and further addition has been made on account of commission of Rs. 1,55,035/-, accordingly, the total income of the assessee has been assessed at Rs.1,57,21,265/- as against returned income of Rs.62,730/- . 4. As against the assessment order, the assessee has preferred an appeal before the Ld.CIT(A). The Ld.CIT(A) had issued several notices for hearing, but in spite of issuing notices by way of speed post and e-mail, the assessee has not participated in the appeal proceedings. Therefore, the Ld.CIT(A) proceeded to 4 ITA No. 75/Del/2020 Blue Sky Portfolios Vs. ITO dismiss the appeal limine. It is found that the Ld.CIT(A) while dismissing the appeal filed by the assessee has not adjudicated the issues involved in the appeal on merit. Therefore, we deem it fit to restore the appeal to the file of Ld.CIT(A) for de-novo consideration on merit and further direct the assessee to cooperate with the appeal proceedings before the CIT(A). Ordered accordingly. 5. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 01 st February, 2023. Sd/- Sd/- ( SHAMIM YAHYA ) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 01/02/2023 *R.N* Sr PS Copy forwarded to : 1. Appellant 2. Respondent 3. CIT 4. CIT (Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA No. 75/Del/2020 Blue Sky Portfolios Vs. ITO