M/s. Paulson Machines (P) Ltd., New Delhi V. Addl. CIT, New Delhi

ITA 934/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91399 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 29-06-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 18-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAGAN SOOD
• Keywords: Opportunity of being heard; Reasonable cause

Judgement Text

1 ITA NO. 934/DE L/14 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO.-934/DEL /2014 (ASSESSMENT YEAR-2006- 07) PAULSON MACHINES (P.) LTD., BE-48, HARI NAGAR, NEW DELHI PAN-AAACP0034C (APPELLANT) VS ACIT, RANGE-14, NEW DELHI (RESPONDENT) APPELLANT BY PROXY COUNSEL. APPLICATION REJECTED PRESENT TO TAKE A DATE RESPONDENT BY SH.GAGAN SOOD, SR.DR ORDER THE APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILIN G THE CORRECTNESS OF THE ORDER DATED 03.12.2013 OF CIT(A)-XVII, NEW DELHI PE RTAINING TO 2006-07 ASSESSMENT YEAR. AT THE TIME OF HEARING, AN ADJOUR NMENT PETITION WAS MOVED BY THE ASSESSEE STATING THAT THE LD. AR IS BUSY IN PRE-ASSIGNED CASE BEFORE THE PUNE BENCH OF THE ITAT. SH. ASHISH SINGH, ADV. WAS PRESENT IN SUPPORT OF THE PETITION MOVED. CONSIDERING THE MATERIAL AVAILABLE ON RECORD, IT WAS CONSIDERED APPROPRIATE TO REJECT THE PETITION AND LD.AR WAS RE QUIRED TO ADDRESS WHETHER HE WOULD LIKE TO ARGUE. HOWEVER, SH. SINGH STATED THAT HE IS NOT INSTRUCTED TO ARGUE AND IS PRESENT ONLY TO TAKE A DATE. IN THE C IRCUMSTANCES REJECTING THE PETITION MOVED THE APPEAL IS BEING DECIDED EX-PARTE QUA THE ASSESSEE-APPELLANT ON MERITS AFTER HEARING THE LD. SR. DR . 2. THE RELEVANT FACTS OF THE CASE ARE THAT PENALTY U/S 271D OF RS.12,88,000/- WAS IMPOSED ON THE GROUND THAT THE A SSESSEE HAD ACCEPTED DATE OF HEARING 29.06.2015 DATE OF PRONOUNCEMENT 08.07.2015 2 ITA NO. 934/DE L/14 SHARE APPLICATION MONEY OF THE SAID AMOUNT IN CONTR AVENTION OF SECTION 269SS. THE EXPLANATION OF THE ASSESSEE OFFERED BEFORE THE AO THAT BANKING CHANNEL WAS AVOIDED DUE TO THE CUMBERSOME DELAYS IN THE PR OCESS OF BANKING; AND ALSO THAT THE NEED AROSE DUE TO SOME DEATHS IN THE FAMIL Y OF THE DIRECTOR AND MANAGING DIRECTOR WERE CONSIDERED TO BE NOT APPROPR IATE JUSTIFICATION FOR THE VIOLATIONS AS THE BANKS IT WAS CONSIDERED DO NOT TA KE MORE THAN A WEEK TO CLEAR ANY CHEQUE OF THE SAME STATION AND THE DEATHS IN THE FAMILY OF THE DIRECTOR AND THE MANAGING DIRECTOR IT WAS CONSIDERE D DID NOT RELATE TO THE SHORTAGE OF FUNDS AS THE COMPANY WAS A COMPLETELY D IFFERENT ENTITY FROM ITS DIRECTOR. THE EXPLANATION WAS CONSIDERED TO BE NOT LEADING TO ANY REASONABLE CAUSE. 3. AGGRIEVED BY THIS, THE ASSESSEE CAME IN APPEAL B EFORE THE CIT(A) WHO UPHELD THE ACTION OF THE AO HOLDING AS UNDER:- 6.6. THE APPELLANT HAS UNEQUIVOCALLY ACCEPTED THAT HE HAD ACCEPTED LOANS ABOVE RS.20,000/- IN CASH. THE APPELLANT HAS GIVEN SEVERAL REASONS FOR ACCEPTING LOANS IN CASH NONE OF WHICH A PPEAR VERY CONVINCING. THE REASONS ADVANCED BY THE APPELLANT DO NOT APPEAR TO BE REASONABLE AND DO NOT JUSTIFY TAKING OF LOANS IN CASH. ( EMPHASIS PROVIDED) 4. THE ABOVE FINDING OF THE LD. CIT(A) IS OPEN TO T HE CHALLENGE OF PERVERSITY AND ABRITRARINESS AS THE LD. CIT(A) HAS NOT EVEN CA RED TO ADDRESS THE SO-CALLED SEVERAL REASONS FOR ACCEPTING THE LOANS IN CASH NOR DOES THE LD. CIT(A) CARE TO ADDRESS WHY THESE SEVERAL REASONS DID NOT APPEAR VERY CONVINCING. A PERUSAL OF SECTION 250(6) OF THE INCOME TAX ACT 1961SHOWS THAT THE STATUTE MANDATES THAT THE LD. CIT(A) WHILE PASSING AN ORDER IS REQUIRED TO ADDRESS NOT ONLY THE POINTS FOR DETERMINATION BUT ALSO THE DECISION THEREON AND THE REASONS FOR THE DECISION . THE SAID EXERCISE CANNOT BE CONTEMPLATED WITHOU T FIRST ADDRESSING THE EXPLANATION OFFERED BY THE ASS ESSEE ON THE POINTS FOR DETERMINATION. THE SAID EXERCISE HAS BEEN SCUTTLLE D. IT IS ONLY ONCE THE ASSESSEES EXPLANATION OFFERED QUA THE ISSUES IS AD DRESSED THAT A MEANINGFUL DISCUSSION ON TO REASONS FOR ACCEPTING OR REJECTING THEM CAN TAKE PLACE. IN THE ABSENCE OF THIS NECESSARY EXERCISE THE ORDER IS OPE N TO THE CRITICISM OF BEING ARBITRARY AND NON-SPEAKING WHICH MAKES THE ORDER PE RVERSE AND HENCE 3 ITA NO. 934/DE L/14 UNSUSTAINABLE IN LAW. IT IS OBLIGATORY ON THE PART OF THE CIT(A) AS PER THE STATUTORY MANDATE TO ASCRIBE COGENT AND GERMANE REA SONS FOR ITS CONCLUSIONS. IT CANNOT BE OVER EMPHASIZED THAT IT IS THE REASONS WHICH ARE THE HEART AND SOUL OF THE MATTER AND FACILITATE AN APPRECIATION O F THE ORDER WHEN THE ORDER IS CALLED IN QUESTION EITHER BEFORE A SUPERIOR FORUM O R AN APPELLATE FORUM. IN THE ABSENCE OF ANY DISCUSSION ON THE SEVERAL EXPLANATI ONS OFFERED THE REASONING FOR THE CONCLUSION IS CONSPICUOUS BY ITS ABSENCE. THE ORDER IN THE CIRCUMSTANCES IS LIABLE TO THE CHALLENGE OF BEING T ERMED AS PERVERSE IN LAW AND CANNOT BE SUSTAINED. IN ORDER TO ADDRESS THE SAID STATUTORY SHORT-COMINGS THE ISSUE IS RESTORED BACK TO THE FILE OF THE CIT(A) WI TH THE DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. THE SAID ORDER WAS PRO NOUNCED IN THE OPEN COURT IN THE PRESENCE OF THE PARTIES ON THE DATE OF HEARI NG ITSELF. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 8 TH OF JULY, 2015. SD/- (DIVA SINGH) JUDICIAL MEMBER DATED: 08/07/2015 *AMIT KUMAR/R.N*/KAVITA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REG ISTRAR ITAT NEW DELHI 4 ITA NO. 934/DE L/14 DATE 1. DRAFT DICTATED ON 29.06.2015 PS 2. DRAFT PLACED BEFORE AUTHOR 08.07.2015 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 08.07.2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 08.07.2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 08 .07.2015 PS/PS 6. KEPT FOR PRONOUNCEMENT ON 08.07.2015 PS 7. FILE SENT TO THE BENCH CLERK 08.07.2015 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.