MEDICAL SECOND OPINION PVT LTD.,GURGAON V. ACIT, CIRCLE-2(1), GURGAON

ITA 4458/DEL/2024

AI Insights

The case involves Medical Second Opinion Pvt. Ltd., which appealed against the orders of the National Faceless Appeal Centre (NFAC) for the Assessment Year 2016-17. The appeals were related to an ex-parte assessment order and a subsequent penalty under Section 271(1)(c) of the Income Tax Act. The primary contention was the non-compliance with notices due to non-service at the correct address, leading to substantial additions under Section 56(2)(viib) and Section 68 of the Act. The assessee argued that the additions included share premium from earlier assessment years and that the provisions of Section 56(2)(viib) did not apply as the shares were issued to a parent company in Singapore. The Tribunal found merit in the assessee's arguments and restored both the assessment and penalty matters to the Assessing Officer for re-evaluation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 40191 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT KATOCH
• Assessee Lawyers: MUKESH JAIN; SAMYAK JAIN
• Keywords: Set aside
• Section: 271(1)(c); 68

Judgement Text

" ITA No.- 4457 & 4458/Del/2024 Medical Second Opinion P. Ltd. Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: ‘E’: NEW DELHI) BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, JUDICIAL MEMBER ITA Nos:- 4457 & 4458/Del/2024 (Assessment Year- 2016-17) Medical Second Opinion Pvt. Ltd. 417, DLF Star Tower Sector-30, Gurgaon Vs. Asst. Commissioner of Income Tax Circle 2(1) Gurgaon PAN No: AADCG1703A APPELLANT RESPONDENT Assessee by : Shri Mukesh Jain, CA & Shri Samyak Jain, Adv. Revenue by : Shri Amit Katoch, Sr. DR Date of Hearing : 25.02.2025 Date of Pronouncement : 25.02.2025 ORDER PER PRADIP KUMAR KEDIA, AM: These two appeals are preferred by the Assessee against the order dated 29.07.2024 passed by the National Faceless Appeal Centre (NFAC), Delhi, [hereinafter referred to as ‘CIT(A)’], for the Assessment Year (‘AY’) 2016-17. ITA No.- 4457 & 4458/Del/2024 Medical Second Opinion P. Ltd. Page 2 of 4 2. When the matter was called for hearing, the Ld. Counsel for the assessee pointed out that the Assessment Order was passed ex-parte by the Assessing Officer due to non-compliance with the notices issued. However, he pointed out that the non- compliance has happened due to non-service of the notice, as it was not served at the correct address. The Ld. Counsel for the assessee adverted to the additions carried out, amounting to Rs. 3,60,94,600/-, under Section 56(2)(viib) of the Act and Section 68 of the Act. In this regard, the Ld. Counsel for the assessee referred to documentary evidences to contend that the assessee has received total consideration of Rs.62,77,750/- only during the year against the issue of preference shares including a premium of Rs. 60,26,640/-. The preference shares have been issued to the parent company situated at Singapore, namely GAP Investment Pte. Ltd. The Ld. Counsel submitted that addition made by the AO included the share premium relating to earlier Assessment Years. The Ld. Counsel also submitted that since the shares have been issued to its parent company at Singapore only, the provision of Section 56(2)(viib) of the Act, could not apply as held in several judicial precedents. 3. The Ld. Counsel thus, submitted that the non-compliance before the Assessing Officer was only to the prejudice of the assessee resulting in serious jeopardy the interest of tax payer alone. The bonafides in non-compliance is implicit. The Ld. Counsel further submitted before the CIT(A), that the notices could not be complied with due to lack of proper advice despite clear merit ITA No.- 4457 & 4458/Del/2024 Medical Second Opinion P. Ltd. Page 3 of 4 on the issue involved. The Ld. Counsel emphasised that, in these circumstances, where substantial additions have been carried out dehors of the records and dehors the provisions of law, a reasonable opportunity may be granted to the assessee to appear before the Assessing Officer afresh, to address the controversy. 4. The Ld. Sr. DR for the Revenue, on the other hand, referred to and relied upon the assessment order and the first appellate order, both of which have been passed ex-parte due to continued non- compliance. 5. Having regard to the facts narrated on behalf of the assessee, we are convinced that the non-compliance has resulted in serious detriment to the interest of the assessee. The bona fides are implicit, having regard to the facts of the case. Therefore, it is expedient to set aside the first appellate order and restore the matter to the file of the AO for a denovo assessment in accordance with the law, after giving an opportunity to the assessee. 6. The appeal filed in ITA No. 4458/Del/2024 relates to the penalty imposed under Section 271(1)(c) of the Act in consequence of the addition arising in appeal no. 4457/Del/2024. Having set aside and restored the matter to the file of the AO in the quantum proceedings in ITA No. 4457/Del/2024, the first appellate order in the penalty proceedings in ITA No. 4458/Del/2024 is also set aside and the matter is restored to the file of the AO. The Assessing Officer shall pass a fresh penalty order, if so required, in accordance with law, after giving an opportunity to the assessee. ITA No.- 4457 & 4458/Del/2024 Medical Second Opinion P. Ltd. Page 4 of 4 7. In the result, both appeals of the assessee are allowed for statistical purposes. Order dictated and pronounced in the open Court on 25.02.2025. Sd/- Sd/- (SUDHIR PAREEK) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 25/02/2025. Pooja & Amit Kumar Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI "