REGISTAN EXIM PVT LTD,NEW DELHI vs. ITO WARD - 21(2), NEW DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI (Through Virtual Hearing) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER Assessment Year: 2011-12 Registan Exim Pvt. Ltd., Vs. ITO, 835/836, Kucha Pati Ram, Ward 21(2), Sita Ram Bazar, New Delhi. Chandni Chowk, New Delhi. PAN: AAECR5891F (Appellant) (Respondent) Assessee by : None Revenue by : Shri R.K. Gupta, Sr. DR Date of Hearing : 13.10.2021 Date of Pronouncement : 13.10.2021 ORDER

This appeal filed by the assessee is directed against the ex parte order dated 15th May, 2019 of the CIT(A)-7, New Delhi, relating to Assessment Year 2011- 12.

4 Facts of the case, in brief, are that the assessee is a private limited company engaged in the business of trading of fabrics. It filed its return of income on 14th September, 2011 declaring total income of Rs.1,88,420/-. The return was processed u/s 143(1) of the IT Act, 1961. Subsequently, information was received from the Investigation Wing, Unit-4, New Delhi that the assessee company has voluminous transaction with entities having varied business lines and showing miniscule income of Rs.1,88,418/- as against the large turnover of Rs.28.72 crores. The AO, therefore, reopened the assessment after recording reasons as per the provisions of section 147 and notice u/s 148 was issued to the assessee on 27th March, 2017. The assessee filed the return in response to notice u/s 148 on 26th September, 2018 declaring the same income as declared in the original return. A copy of the reasons recorded was also supplied to the assessee. The assessee did not file any objection to the notice u/s 148 nor challenged the assumption of jurisdiction u/s 148.

4.1 During the course of assessment proceedings, the assessee filed various details as asked for by the AO from time to time. However, from the financial statements filed by the assessee, the AO noted that the assessee had shown huge liabilities in his balance sheet on account of unsecured loans and sundry creditors.

The AO asked the assessee to file confirmed ledger accounts along with copy of ITR and bank statements reflecting the transaction of all sundry creditors and entities from whom loans were raised. The assessee filed the requisite details. The AO, thereafter, issued notice u/s 133(6) to all the parties in the address provided by the assessee. However, he noted that the notice sent to Ashi International was returned back by the Postal Authorities with the remark “left W/A.” The AO confronted the same to the assessee. In absence of any explanation from the assessee, the AO made addition of Rs.8,33,908/- to the total income of the assessee. The AO further made addition of Rs.23,190/- being ad hoc disallowance of 15% out of the expenses on account of conveyance and travelling (Rs.89,398/-), telephone expenses (Rs.46,228/-) and vehicle running expenses (Rs.18,970/-). The AO also disallowed the donation of Rs.7,100/-. Thus, the AO determined the total income of the assessee at Rs.10,52,618/-. Since the assessee did not appear before the CIT(A), the ld.CIT(A), in his ex parte order, dismissed the appeal filed by the assessee.

2019 on which date, the ld. AR of the assessee appeared and filed adjournment application and the case was adjourned to 14th May, 2019. However, on 14th May, 2019, none appeared for which the ld.CIT(A) dismissed the appeal filed by the assessee on 15th May, 2019. It is the grievance of the assessee in the grounds of appeal that no proper opportunity was granted by ld. CIT(A). Considering the totality of the facts of the case and in the interest of justice, I deem it proper to restore the issue to the file of the CIT(A) with a direction to grant one final opportunity to the assessee to substantiate its case and decide the appeal as per fact and law. The assessee is also hereby directed to appear before the CIT(A) and substantiate its case without seeking any adjournment under any pretext failing which the ld.CIT(A) is at liberty to pass appropriate order as per law. I hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.