M/S. DELUXE ALLOYS PVT. LTD.,NEW DELHI vs. DCIT, NEW DELHI

PER H.S. SIDHU, JM:

“1. On the facts and circumstances of the case, the order passed by the Ld. Commissioner 1 of Income Tax (Appeals) and Ld. AO is bad both in the eye of law and on facts.

2. On the facts and circumstances of the case, the order passed in gross violation of the principle of natural justice being sufficient opportunity of being heard is not provided to the appellant and thus is illegal and untenable in the eyes of Law.

3. On the fact and circumstances of the case, Ld. CIT-A has erred in confirming the additions of Rs.6,43,30,175/- made by the Ld. AO in the assessment order under best judgment assessment u/s 144 of the Act.

4. (i) On the facts and circumstances of the case, Ld. CIT(A) has erred in eyes of law and facts of case in confirming the additions of Rs.5,18,70,453/- made by the Ld. AO by applying Gross Profit rate of 11%, being G. P. Rate declared in preceding assessment year, on the total turnover of the assessee.

(ii) On the facts and circumstances of the case, Ld. CIT(A) has erred in eyes of law and facts of case by confirming the addition of Rs.24,09,722/- made by Ld. AO by not allowing adjustment of loss of Rs.17,81,127/- against income from capital gain and income from other sources.

(iii) On the facts and circumstances of the case, Ld. CIT(A) has erred in eyes of law and facts of case in confirming the addition of Rs.1,00,50,000/- made by the Ld. AO by not allowing indexed cost of acquisition of Rs.88,97,468/-.

5. In alternative and without prejudice to the above grounds, although the assessment was framed ex-parte u/s 144 of the Act, however additions were made without following the principle of best judgment assessment as envisaged in the law and settled by the judiciary.

“PERMISSION TO SEEK, RAISE, URGE AN ADDITIONAL GROUND OF APPEAL

The aforesaid appeal is fixed for hearing on 10-02-2020. During the course of hearing, it was argued that assessment u/s 144 is bad in law as notice u/s 143(2) was not served within the stipulated period as provided under the statutory provision. Hence, assessment made is required to be quashed. The Hon'ble Bench has asked the Ld. DR to produce the assessment record as directed by the Hon'ble Bench on the earlier date of hearing for which Ld. DR sought time and the same was granted by the Hon'ble Bench. It is found necessary that apart from the legal grounds already taken, following specific additional ground of appeal may also be raised which are purely legal and can be raised at any time as they do not require any additional facts or material other than the assessment record or already on record.

2 It is submitted that on 04-12-2019 an application for inspection was also moved before the Dy. CIT, Central Circle-20, New Delhi, requesting inspection of the assessment records. Inspection was made and from the inspection of the assessment records because notices have not been served on the assessee i.e. on the Principal Officer as provided under the provision. Due to which ex-parte 4 assessment has been made u/s 144 of the IT Act. After perusing the assessment order it was noticed that assessing officer himself has admitted that notice u/s 143(2) was issued on 19-08-2016 (incorrectly stated instead on 19- 08-2015), further notices u/s 142(1) was also issued on 19-08-2015 (Incorrectly stated instead of 19-08-2015) and 12-01-2016. These notices are beyond the time limit as provided under the statutory provision i.e. within six months from the end of the relevant assessment year, notice uls 143(2) has to be served for initiating assessment proceedings. In the aforesaid circumstances, the appellant seeks the permission to raise, urge, amend and argue the ground no. I as under:-

The Ground no. 1 which may be read as under:

a. They have failed to notice that before initiating assessment proceedings it is mandatory to serve notice u/s 143(2) of the Income Tax Act, 1961, before the expiry of six months of the end of financial year in which the return is furnished. b. The assessing officer has issued notice u/s 143(2) on 19-08-2015(incorrectly stated 19-08-2016) which is beyond the limitation period and any assessment thereafter is bad in law. c. Merely issuance of a notice u/s 143(2) is not sufficient unless it is served on the assessee as provided in the relevant provision for completing the assessment. d. The assessing officer has not provided reasonable and sufficient opportunity to the assessee before completing the assessment. e. The Ld. CIT (Appeals) has also ignored these facts and despite making request for seeking time has not allowed reasonable and sufficient opportunity to the assessee. f. The Ld. ClT (Appeals) has also failed to appreciate that assessee company has declared huge turnover and financial loss due to recession in the industry as well as various internal reasons for which it was necessary to grant sufficient time for submissions of details for which sufficient opportunity was not granted.

4 In view of the aforesaid, it is prayed that, the assessee may be permitted to raise, urge, and amend the ground no.1 as an additional ground of appeal as submitted above, in support of its contention that, the instant assessment framed is non-est in law.”

3. Facts narrated by the Revenue Authorities are not disputed by both the parties, therefore, no need to repeat the same for the sake of convenience.

4.1 Shri Rajiv Saxena, Ld. Counsel for the assessee stated that the issues raised by the assesee in the additional grounds may also be sent back to the Assessing Officer to adjudicate the same, as per law, alongwith the original grounds of appeal for fresh adjudication. He undertakes to cooperate before the AO, if this Bench set aside the issues in dispute to the Assessing Officer.

The decision is pronounced in the Open Court on 16.09.2020.