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Income Tax Appellate Tribunal, DELHI
Before: SH. G.S.PANNU, HON’BLE & SH. ANUBHAV SHARMA
The appeal has been preferred by the assessee against the order dated 13.11.2018 passed by Commissioner of Income Tax (Appeals)-3, New Delhi GTV Tech Sez P. Ltd. 2 (hereinafter referred to as the “Ld. First Appellate Authority or FAA in brief). The appeal before FAA had arisen out of order dated 22.12.2017 passed by ITO, Ward-1(4), New Delhi (hereinafter referred to as the “Ld. AO) u/s 144/147 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).
The brief facts are that present appellant was earlier known by name Dr Fresh Property Development Pvt ltd which was merged with Dr Fresh Health Care Pvt Ltd vide order dt 10.10.2014 passed by Hon’ble Punjab and Haryana High court. M/s. Dr. Fresh Property Development Pvt. Ltd. filed the return of income at loss of Rs 110048/- on 27-09-2010. The address of the said assessee was stated to be B-1/E-24 Mohan Co-operative Industrial Area, New Delhi. That, during the AY 2010-11 the said assessee ‘Dr. Fresh Property Development Pvt. Ltd.’ had purchased an immoveable property of Rs 1,27,50,000/- on 19.02.2010. The said property is situated in Village - Gamroj, Sohna in Gurgaon and was purchased from Ashok Kumar after payment of full consideration and stamp duties. The said property was declared in the return of income filed for the AY 2010-11.That, Ld AO of Gurgaon re-opened the case u/s 148/ 147 and passed orders u/s 144 of the Act.
The First Appellate Authority had passed the impugned order dated 13.11.2018 which has been challenged before this Tribunal on following grounds of appeal :- “1. On the facts and circumstances of the case and in law, both the learned CIT-A and Ld AO has erred in passing ex-parte order against the assessee, without giving any opportunity of been heard.
2. That the order passed by the Ld AO u/s 148 suffered from jurisdictional issues and as such could not be passed. The CIT- GTV Tech Sez P. Ltd. 3 A appeal erred in passing the order on merits without taking into account or establishing u/s 148 whether tax has been avoided or not by the assessee.
3. That the addition of Rs 1,27,50,000/- made by the AO and sustained by the CIT- A on account of purchase of property by the assessee in AY 2010-11 is without any basis, based on conjectures and surmises and on incomplete facts.
4. The appellant craves leave to alter, amend or withdraw all or any of the Grounds of Appeal herein or add any further grounds as may be considered necessary and to submit such statements, documents and papers as may be considered necessary either before or during the hearing.”
Heard the Ld. Counsel for assessee and the Ld. Sr. DR. It was contended on behalf of the assessee by the Counsel that the order was passed ex parte based upon notices issued on incorrect address.
The Ld. Sr. DR submitted that the address of appellant before the FAA was “M/s. Dr. Fresh Health Care Pvt. Ltd., Village – Ghamroj, Gurgaon Sohna Road, Tehsil Sohna, Gurgaon, Haryana – 122102 and here also before the Tribunal the assessee has mentioned the same address while filing appeal in Form no. 36. Thus, he defended the orders of ld. AO and Ld. FAA.
Given thoughtful consideration to the submissions and the matter on record it can be observed that the assessment order dated 22.12.2017 was passed u/s 144 r.w.s. 147 of the Act. The notices u/s 148 and 142(1) were issued on seven occasions to the assessee M/s. Dr. Fresh Property Development Pvt. Ltd. but as no one attended on behalf of the assessee, assessment u/s 144 was conducted and the income was assessed at Rs. 1,27,50,000/-, on the basis of investment in purchase of immovable property.
GTV Tech Sez P. Ltd. 4 The order of ld. AO mentions that notices were sent at all the addresses which were available with the department, though in body of the order the addresses were not mentioned. The title of assessment order shows the address of the assessee as “ M/s. Dr. Fresh Property Dev Pvt. Ltd., 11A, 1B- 43C, Old DLF, Gurugram- 122001.
It can be further appreciated from the matter on record that in Form No. 35 before the Ld. FAA it was contended as one of the grounds of appeal that the notices were sent on wrong addresses at 11A, 1B-43C, Old DLF Gurugram which assessee claimed is not the address as stated in the return of income. In this Form 35 the name of Assessee is Dr. Fresh Healthcare Pvt. Ltd. And address mentioned of the assessee is Village- Ghamroj, Gurgaon Sohna Road, Tehsil Sohna, Gurgaon, Haryana. The Form also shows e-mail address marwaha @ dabur.com, has been mentioned of the assessee.
It can be further appreciated from the order dated 13.11.2018 of Ld. FAA that on the aforesaid e-mail notice on 28.08.2018 were issued and the date of hearing was fixed at 25.09.2018 and thereafter on request of Ld. AR, the hearing was adjourned to 17.10.2018 and 12.11.2018. On 12.11.2018 there was no submission and the Ld. FAA observed that,
“despite fixing the case for hearing on various dates on the specific request of the appellant, no written submission has been made by the appellant in support of the grounds taken during the appeal. It appears that the appellant is not keen to pursue the appeal and no material/argument has been brought on record by the appellant against the order of the AO and in support of the grounds taken in appeal. Reference is made to the decision of Hon’ble Supreme Court
GTV Tech Sez P. Ltd. 5 in the case of CIT vs. BN Bhattacharya (1997) 118 ITR 461 (SC), in which the Hon’ble Apex Court while dealing with the issue of prosecution of appeal has stated that-
“Preferring an appeal means more than formally filing it but effectively pursuing it”.
The Delhi Tribunal in CIT vs. Multiplan India Pvt. Ltd. As reported in 38 ITD 320 (Delhi) when faced with a similar situation of non- prosecution of appeal, dismissed the appeal of revenue. In view of these facts, I am of the opinion that no interference is called for in the AO’s order and therefore, the grounds of appeal are dismissed and the addition made by the AO is confirmed.
Even on merits, it is observed from the assessment order that the AO had reopened the case u/s .147 of the Act based on the information received by him that the appellant has made an investment of Rs. 1,27,50,000/- in purchase of immovable property during the year under consideration. During the course of assessment proceedings, the AO repeatedly issued notices u/s 142(1) of the Act. in order to provide opportunity to the appellant. However, the appellant tailed to file the ITR in response to notice issued u/s 148 of the Act. The AO also issued a show cause notice asking for the source of the investment made by the appellant. Despite specific query raised by the AO, the appellant did not furnish any explanation and therefore, the AO has treated the said investment as unexplained and has made the addition of Rs. 1,27,50,000/-. In appeal also, the appellant has not furnished any explanation in support of the grounds of appeal and GTV Tech Sez P. Ltd. 6 therefore, the addition made by the AO is confirmed and the grounds of appeal are dismissed.”
9. Now, again before this Tribunal, the assessee which is now GTV TECH SEZ P. Ltd. has submitted that the ld. CIT(A) and Ld. AO both erred in passing ex parte order against the assessee without giving any opportunity of being heard.
The aforesaid discussion makes this Bench conclude that their appears to be some apparent mistake or ambiguity in the address of assessee upon which notices were served by the Ld. AO. Most likely due to merger and re-name of Assessee. The order of ld. First Appellate Authority indicate that only one notice was issued on 28.08.2018 and the same was also through e-mail and not by post while postal address of the assessee was shown to be of village Ghamroj, Gurgaon Sohna Road, Tehsil Sohna, Gurgaon, Haryana and there was specific ground of appeal before Ld. FAA that Ld. AO issued notices on wrong address of Old DLF Gurgaon.
Thus, there appears to be an error in conduct of proceedings by both Ld. AO and Ld. FAA in not giving adequate and reasonable opportunity of hearing to the assessee after serving the assessee on correct postal address.
Even otherwise the order of Ld. First Appellate Authority has an inherent vice as can observed from discussion in para 4.1 to 5 of Ld. CIT(A) orders, reproduced above, that at one end the appeal is being dismissed for non prosecution on the other hand a discussion on merits has also been made to dismiss the appeal on merits.
GTV Tech Sez P. Ltd. 7 13. In the light of aforesaid, the appeal deserves to be allowed on ground no. 1 alone requiring restoration of the appeal to the files of Ld. First Appellate Authority for fresh decision on merits after giving hearing opportunity to the assessee. The assessee shall appear before the ld. FAA on First working day of May, 2022.
Accordingly, the appeals succeed with aforesaid order of remand to the files of Ld. First Appellate Authority.