Mega International Pvt. Ltd., Gurgaon V. DCIT, Circle- 16(2), New Delhi

ITA 7525/DEL/2017

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1016 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 14-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.- 7525 /DEL/2017 (ASSESSMENT YEAR: 2013-14) MEGA INTERNATIONAL PRIVATE LIMITED, 34, MILESTONE, BEGUMPURKHATOLA INDUSTRIAL AREA, GURGAON, HARYANA-120 2001 VS. DCIT CIRCLE-16 (2), NEW DELHI. PAN NO. AACCM1722E APPELLANT RESPONDENT ASSESSEE BY NONE REVENUE BY SH. RAMESH KUMAR, SR. DR DATE OF HEARING: 8/7/2021 PRONOUNCEMENT ON 8/7/2021 ORDER PER K. NARASIMHA CHARY, JM AGGRIEVED BY THE ORDER DATED 13/10/2017 PASSED IN APPEAL NO. 244/16-17 BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-6, DELHI (LD. CIT(A)) IN THE CASE OF M/S MEGA INTERNATIONA L PRIVATE LIMITED (THE ASSESSEE), FOR THE ASSESSMENT YEAR 2013-14, ASSESS EE PREFERRED THIS APPEAL. 2 2. BRIEF FACTS OF THE CASE NECESSARY FOR THE DISPOS AL OF THIS APPEAL ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINES S OF MANUFACTURING OF PHARMACEUTICAL PRODUCTS LIKE TABLETS, CAPSULES, SYRUP, OINTMENT ETC. FOR THE ASSESSMENT YEAR 2013-14 THEY HAVE FILED THE IR RETURN OF INCOME ON 30/9/2013 DECLARING AN INCOME OF RS. 3, 88, 56, 210/-. ASSESSMENT WAS COMPLETE BY ORDER DATED 31/3/2016 UNDER SECTION 143 (3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) AT A SUM OF RS. 4, 23, 67, 920/-AFTER MAKING SO MANY ADDITIONS INCLUDING THE ADDITION OF RS. 12, 76, 381/-ON ACCOUNT OF SUNDRY CREDITORS, WHICH ADDITION IS RELE VANT FOR THIS APPEAL. 3. ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A) AND CONTENDED THAT NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO PU T FORTH THEIR CASE OR TO FURNISH THE RELEVANT MATERIAL BEFORE MAKING THIS ADDITION AND THEREFORE, WHILE FURNISHING ALL THE RELEVANT INFORM ATION AND MATERIAL, ASSESSEE PRAYED TO DELETE. LD. CIT(A), HOWEVER, REF USED TO DELETE THE ADDITION ON THE GROUND THAT THOUGH THE ASSESSEE FUR NISHED THE RELEVANT RECORD IN CONFIRMATION, THE SAME WAS NOT EXAMINED B Y THE LEARNED ASSESSING OFFICER. ASSESSEE IS AGGRIEVED BY SUCH AN ACTION OF THE LD. CIT(A) AND PREFERRED THIS APPEAL. 4. WHEN THE MATTER IS CALLED, NEITHER THE ASSESSEE NOR ANY AUTHORISED REPRESENTATIVE ENTERED APPEARANCE. IT COULD BE SEEN FROM THE RECORD THAT THE NOTICE WAS SENT TO THE ASSESSEE TO THE ADDRESS GIVEN IN FORM NO. 36 IF THE ASSESSEE IS AVAILABLE IN SUCH ADDRESS, SUCH NOT ICE SHOULD HAVE BEEN SERVED ON THE ASSESSEE. IF FOR ANY REASON, THE ASSE SSEE IS NOT AVAILABLE THERE, IT IS FOR THE ASSESSEE TO MAKE ARRANGEMENTS FOR SERVICE OF SUCH NOTICE BY FURNISHING THE ADDRESS WHERE THE ASSESSEE WOULD BE AVAILABLE, OR TO DELIVER IT TO SOME AUTHORISED PERSON, OR BY M AKING REQUEST TO THE 3 POSTAL DEPARTMENT TO DETAIN THE MAIL TILL THE ASSES SEE CLAIMS THE SAME. SINCE THE ASSESSEE DOES NOT SEEM TO HAVE ADOPTED AN Y OF THESE METHODS, WE ARE THE CONSIDERED OPINION THAT THE REASON FOR N ONSERVICE OF NOTICE IS SOLELY ATTRIBUTABLE TO THE CONDUCT OF THE ASSESSEE ONLY. WE, THEREFORE, PROCEED TO HEAR LD. DR AND TO DECIDE THE ISSUE BASI NG ON THE MATERIAL AVAILABLE ON RECORD. 5. LD. DR SUBMITTED THAT THE LETTER UNDER SECTION 1 33 (6) OF THE ACT WAS ISSUED TO M/S AMBIENT PRENTERS PRIVATE LIMITED, M/S PHARMACARE AND M/S ABS MERCANTILE PRIVATE LIMITED; THAT THE AS SESSEE ITSELF FURNISHING INFORMATION RELATING TO TWO PARTIES BUT FAILED TO FURNISH ANY CONFIRMATION IN RESPECT OF M/S AMBIENT PRENTERS PRI VATE LIMITED IN SPITE OF LETTER WRITTEN TO THEM; AND THAT, THEREFORE, LEA RNED ASSESSING OFFICER HAD NO OPTION BUT TO DRAW AN ADVERSE INFERENCE AND TO MAKE THE ADDITION. HE FURTHER SUBMITTED THAT INASMUCH AS THE CONFIRMATION LETTER PRODUCED BY THE ASSESSEE BEFORE THE LD. CIT(A) REQU IRED VERIFICATION AT THE END OF THE LEARNED ASSESSING OFFICER, LD. CIT(A ) WAS ALSO JUSTIFY IN CONFIRMING THE ADDITION. HE ACCORDINGLY JUSTIFIES T HE ORDERS OF THE AUTHORITIES BELOW AND PRAYED TO DISMISS THE APPEAL. 6. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS MADE BY THE LD. DR. INSOFAR AS THE SUNDRY CREDITORS ARE CONCERNED, ASSESSMENT ORDER IS CLEAR THAT IN THE LETTER UNDER SECTION 133(6) OF THE ACT WAS ISSUED TO THREE PARTIES, ASSESSEE ITSELF PR ODUCED CONFIRMATION FROM TWO PARTIES, BUT IN SPITE OF LETTER ISSUED TO THE ASSESSEE, ASSESSEE FAILED TO FILE ANY CONFIRMATION IN RESPECT OF M/S A MBIENT PRENTERS PRIVATE LIMITED. IT COULD BE SEEN FROM THE IMPUGNED ORDER T HAT THE ASSESSEE PLEADED BEFORE THE LD. CIT(A) THAT THE LEARNED ASSE SSING OFFICER THOUGH 4 ISSUED SHOW CAUSE NOTICE ON 28/3/2016 INFORMING THE ASSESSEE IN RESPECT OF THE TWO PARTIES, THERE IS NO SUCH MENTION IN RES PECT OF M/S AMBIENT PRENTERS PRIVATE LIMITED, AND THAT IS THE REASON WH Y THE CONFIRMATION IN RESPECT OF M/S AMBIENT PRENTERS PRIVATE LIMITED COU LD NOT BE PRODUCED. 7. ON A PERUSAL OF IMPUGNED ORDER AND ALSO THE ASSE SSMENT ORDER, WE UNDERSTAND THAT THE LETTER ADDRESSED TO M/S AMBI ENT PRENTERS PRIVATE LIMITED WAS RETURNED WITH THE REMARK INCOMPLETE AD DRESS ON 29/3/2016, AND, THEREFORE, IT IS EVIDENT THAT SUCH A FACT WAS NOT WITHIN THE KNOWLEDGE OF THE LEARNED ASSESSING OFFICER WHEN HE ISSUED THE SHOW CAUSE NOTICE DATED 28/3/2016. IT MAKES THE THINGS C LEAR THAT THE LEARNED ASSESSING OFFICER COULD NOT MAKE A MENTION OF THE L ETTER ADDRESSED TO M/S AMBIENT PRENTERS PRIVATE LIMITED BEING RETURNED WITH ENDORSEMENT OF INCOMPLETE ADDRESS. THE LETTER WAS RETURNED ON 29/3/2016 AND THE ASSESSMENT ORDER WAS PASSED ON 31/3/2016 THAT IS LE AVING ONLY TWO DAYS AT THE DISPOSAL OF THE LEARNED ASSESSING OFFICER IN BETWEEN. THIS FACT SUPPORTS THE CONTENTION OF THE ASSESSEE THAT NO SUF FICIENT OPPORTUNITY WAS GRANTED TO THE ASSESSEE TO CLARIFY THE ISSUE OR TO FILE THE CONFIRMATION FROM M/S AMBIENT PRENTERS PRIVATE LIMITED ALSO. 8. WHEN THE ASSESSEE ITSELF COULD PRODUCE THE CONFI RMATION LETTERS IN RESPECT OF TWO OTHER PARTIES, AND THE ASSESSEE COUL D HAVE PRODUCED SUCH CONFIRMATION IN RESPECT OF THE OTHER PARTY ALSO BEF ORE THE LD. CIT(A), WE ARE OF THE OPINION THAT THERE WOULD NOT HAVE BEEN A NY DIFFICULTY FOR THE ASSESSEE TO PRODUCE SUCH CONFIRMATION BEFORE THE LE ARNED ASSESSING OFFICER HIMSELF. WE, THEREFORE, BELIEVE THAT ASSESS EE COULD NOT PRODUCE SUCH A LETTER BEFORE THE LEARNED ASSESSING OFFICER BECAUSE HE WAS NOT PUT ON NOTICE OF THIS FACT, WITH REASONABLE TIME AT THE IR DISPOSAL, BEFORE 5 PASSING OF THE ASSESSMENT ORDER. ON NOTING THIS FAC T, WE HOLD THAT SUFFICIENT OPPORTUNITY WAS NOT RENDERED TO THE ASSE SSEE BEFORE MAKING ADDITION IN RESPECT OF M/S AMBIENT PRENTERS PRIVATE LIMITED. 9. VALID THE CONFIRMATION LETTER IN RESPECT OF M/S AMBIENT PRENTERS PRIVATE LIMITED WAS PRODUCED BEFORE THE LD. CIT(A), LD. CIT(A) HAD AN OPTION OF EXAMINING IT AT HIS END, AND IF NECESSARY BY CALLING FOR THE REMAND REPORT FROM THE LEARNED ASSESSING OFFICER. L D. CIT(A), HOWEVER, OBSERVED THAT PROPER EXAMINATION BY THE LEARNED ASS ESSING OFFICER WAS REQUIRED. NO DOUBT, IN SUCH AN EVENT, LD. CIT(A) CO ULD HAVE TAKEN STEPS IN SUCH DIRECTION. HE, HOWEVER, DID NOT RESORT TO THE PROCEDURE AVAILABLE TO HIM, BUT HE REJECTED THE LETTER AND DISMISSED THE G ROUND OF APPEAL. ACCORDING TO US, IT IS NOT PROPER EXERCISE OF JURIS DICTION BY THE LD. CIT(A). THE FACT REMAINS THAT THE ASSESSEE PRODUCED THE CON FIRMATION LETTERS IN RESPECT OF TWO PARTIES OUT OF THREE BEFORE THE LEAR NED ASSESSING OFFICER, AND THE ASSESSING OFFICER ACCEPTED THE SAME, BUT WI THOUT AFFORDING AN OPPORTUNITY TO THE ASSESSEE, THE LEARNED ASSESSING OFFICER PROCEEDED TO MAKE ADDITION IN RESPECT OF THE 3 RD PARTY AND THE RECORD SUPPORTS THE CONTENTION OF THE ASSESSEE THAT THE ASSESSING OFFIC ER HAD NO SUFFICIENT TIME AT HIS DISPOSAL TO GET THE CONFIRMATION LETTER RELATING TO M/S AMBIENT PRENTERS PRIVATE LIMITED THROUGH THE ASSESSEE. AND WHEN SUCH LETTER WAS PRODUCED BEFORE THE LD. CIT(A), LD. CIT(A) ERRONEOU SLY REJECTED THE SAME. REVENUE DID NOT AVAIL THE OPPORTUNITY AVAILABLE TO THEM FOR VERIFICATION OF SUCH A LETTER. 10. IN THE CIRCUMSTANCES, KEEPING IN VIEW THE FACT THAT THE BUSINESS ACTIVITY OF THE ASSESSEE IS NOT IN DISPUTE AND THE SUNDRY CREDITORS ARE NOT GENERALLY IN DISPUTED, AND FURTHER IN VIEW OF THE S MALLNESS OF ADDITION, WE 6 DO NOT FIND ANY JUSTIFICATION TO REMAND ISSUE BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER. INASMUCH AS THERE IS NO ADVERSE COMMENT BY THE LD. CIT(A) ON THE CONFIRMATION LETTER, WE ACCEP T THE CONTENTION OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION IMPUGNED IN THIS APPEAL. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS THE 8 TH DAY OF JULY, 2021 IMMEDIATELY ON CONCLUSION OF HEARING OVER VIRT UAL MODE. SD/- SD/- (PRASHANT MAHARISHI) (K. NARSIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 8/7/2021