PANDIT REALTOR P.LTD,GHAZIABAD vs. DCIT, CIRCLE-19(2), NEW DELHI

ITA 1011/DEL/2019Status: DisposedITAT Delhi19 May 2025AY 2014-154 pages

AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee was not given a reasonable opportunity to present its case. The final opportunity notice was issued on December 15, 2016, posted on December 16, 2016, and received on December 19, 2016. With December 20 and 21, 2016, being a weekend, the assessee had only December 22 and 23, 2016, to prepare and submit its response before the assessment order was passed on December 23, 2016. The Tribunal, following the ratio of the Supreme Court in Tin Box Co. Vs. CIT, reiterated that an assessment order must be passed only after the assessee has been afforded a reasonable opportunity to set up its case. Therefore, the impugned assessment order and the CIT(A)'s order were found to be not just, fair, reasonable, or legal. The additional grounds of appeal were allowed, and the matter was restored to the AO for fresh adjudication, with the direction that the assessee be given an adequate opportunity of hearing.

What were the facts?

The assessee, Pandit Realtor Pvt. Ltd., filed its return of income for Assessment Year 2014-15 on November 6, 2014, declaring a total income of Rs. 50,60,580. The return was selected for scrutiny, and a notice under Section 143(2) was issued. The assessee failed to respond initially but later appeared. The Assessing Officer (AO) passed an assessment order on December 23, 2016, making additions of Rs. 1,50,16,127. The assessee appealed to the Commissioner of Income-Tax (Appeals) [CIT(A)], who dismissed the appeal by an order dated November 28, 2018. The assessee then filed the present appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the AO erred in law and on facts by not providing a reasonable opportunity of being heard to the appellant, thereby violating the principles of natural justice, as per Section 143(3) of the Income-Tax Act, 1961. Assessee's contentions: The AO issued a final opportunity notice on December 15, 2016, which was posted on December 16, 2016, and received on December 19, 2016. December 20 and 21, 2016, were a Saturday and Sunday, respectively. The assessment order was passed on December 23, 2016, leaving the assessee with only two working days to respond. This did not constitute a reasonable opportunity. Reliance was placed on the Supreme Court decision in Tin Box Co. Vs. CIT. Revenue's contentions: The Revenue relied on the orders of the Departmental Authorities.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 250(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “E”: NEW DELHI

Before: SHRI SHAMIM YAHYA & SHRI VIMAL KUMAR

For Appellant: Shri Salil Kapoor, Shivam Yadav &

For Respondent: Shri Ram Kishan Meena, Sr. DR

Hearing: 15.05.2025

PER VIMAL KUMAR, JUDICIAL MEMBER:

The appeal filed by the appellant/assessee is against order dated 28.11.2018 of Learned Commissioner of Income-Tax (Appeals)-7, New Delhi (hereafter referred to as “Ld. CIT(A)”) under Section 250(6) of the Income-Tax Act,1961 (hereinafter referred to as “the Act”) arising out of assessment order dated 23.12.2016 under Section 143(3) of the Act by the Deputy Commissioner of Income Tax, Central Circle-19(2), New Delhi (hereinafter referred to as “the AO”) for assessment year 2014-15.

Brief facts of case are that assessee filed e-return of income on 06.11.2014 for assessment year 2014-15 declaring total income of Rs.50,60,580/-. The return was picked up for scrutiny under CASS. The notice under Section 143(2) dated 21.09.2015 was issued. The assessee failed to respondent. Ld. AR Shri Rajiv Ahuja and Shri Ms. Neha Sidana appeared on 02.12.2016. Ld. AR provided details to previously issued questionnaire on 08.12.2016. On completion of assessment proceedings, Ld. AO through order dated 23.12.2016 made additions of Rs.1,50,16,127/-.

Against order dated 23.12.2016 of Ld.CIT(A), appellant/assessee preferred appeal before Ld.CIT(A) which was dismissed vide order dated 28.11.2018.

Being aggrieved, appellant/assessee preferred present appeal.

Learned Authorized Representative for the appellant/assessee through application dated 16.05.2015 under Rule 11 of the Income Tax Appellate Tribunal Rules, 1963 raised additional grounds of appeal as under:

1. That in view of the facts and circumstances of the case, the AO has erred in law and on facts in not giving a reasonable opportunity of being heard to the appellant. Hence, the assessment order passed is in violation of the principles of natural justice.

2. Without prejudice to the above, the appellant was prevented by sufficient cause for not filing the replies/documents before the AO.”

Learned Authorized Representative by referring to additional grounds of appeal submitted that assessee was issued notice dated 15.12.2016 as a final opportunity to discharge onus in substantiating the identity, genuineness and creditworthiness of shareholders. The notice was posted on 16.12.2016 and received on 19.12.2016. Dates 20.12.2016 and 21.12.2016 were Saturday and Sunday. The impugned order was passed on 23.12.2016. So, the assessee was not given reasonable opportunity of setting up his case. Reliance was placed on the decision of Hon'ble Supreme Court in the case of Tin Box Co. Vs. CIT [2001] 116 Taxman 491 (SC).

Learned Authorized Representative for the Revenue relied on orders of Departmental Authorities.

From examination of record, in light of aforesaid rival submission, it is crystal clear that final opportunity dated 15.12.2016 was put to post on 06.12.2016 and received on 19.12.2016, 20.12.2016 and 21.12.2016 were Saturday and Sunday. Assessment order was passed on 23.12.2016. So, the assessee was given final opportunity of two days. As per ratio of judgment in Tin Box Co. Vs. CIT, is case (supra), it is well settled law that assessment order must be passed after the assessee is given a reasonable opportunity to set up his case.

In view of above facts and well settled principles of law, the impugned order is not just, fair, reasonable and legal. The additional ground of appeal nos. 1 and 2 are allowed. The impugned orders dated 23.12.2016 of Ld. AO and dated 28.11.2018 of Ld.CIT(A) are set aside. In interest of justice, the subject matter is restored to the file of the Ld. AO for fresh decision in accordance with law. The appellant/assessee shall be afforded adequate opportunity of hearing.

10.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 15/05/2025.

Recent GST High Court judgments

Search GST case law →