PROJECT PORTFOLIO MANAGEMENT LLP (PREVIOUSLY KNOWN AS PROJECT PORTFOLIO MANAGEMENT (P) LTD.),NEW DELHI vs. ITO, WARD- 20(2), NEW DELHI

Brief facts of the case are that the assessee filed return of income for the assessment year 2013-14 on 01.10.2013, declaring an income of Rs.45,340/-. The Assessing Officer by order dated 31.03.2016 passed u/s. 143(3) of the Income-tax Act (“the Act”) determined income of assessee at Rs.26,63,95,340/- by making addition of Rs.16,15,50,000/- in respect of sale of investment and Rs.10,48,00,000/- in respect of share capital received from United Equity Pvt. Ltd., holding those to be bogus transactions. According to ld. Assessing Officer, this is a classic case of money laundering using the fictitious companies with investments as tools.

Aggrieved by said addition, the assessee preferred appeal before ld. CIT(A). Ld. CIT(A) noted that as many as 15 adjournments were granted to the assessee during the course of appeal, but in spite of the same, assessee failed to avail them and therefore, there was no option for him, but to proceed ex parte. Observation of the ld. CIT(A) is that inasmuch as there is no evidence from the side of the assessee to rebut the findings returned by the Assessing Officer, the finding reached by Assessing Officer were to be confirmed. CIT(A), therefore, dismissed the appeal.

At the outset, it is the submission on behalf of the assessee that CIT(A) failed to afford reasonable opportunity to the assessee and on the instruction of the CIT(A), adjournment petition was presented at the DAK counter on 28.01.2019 and the assessee was waiting to know the next date of hearing, but the order was passed behind the back of the assessee. Ld. AR submitted that the CIT(A) did not refer to any of the material available before him and there was no specific finding that the material submitted before the Assessing Officer justifies the conclusions reached by the Assessing Officer, or as to need of the CIT(A) to look for any further and fresh material. In these circumstances, it is prayed that given an opportunity, assessee is ready to cooperate with the CIT(A) to get the matter disposed of on merit and having regard to the huge quantum of additions, it is just and proper to grant an opportunity. We heard the ld. DR also, who submits that more than sufficient opportunities were granted to the assessee by ld. CIT(A), which the they failed to avail.

On the face of the finding of the ld. Assessing Officer that the addition of Rs.16,15,50,000/- was on account of bogus sales of investment and also the addition of Rs.10,48,00,000/- on account of share capital received from United Equity Pvt. Ltd., we are of the considered opinion that it was necessary for the CIT(A) to look into the factual matrix and the material based by the Assessing Officer to reach a conclusion for such addition.

Learned CIT(A) should have considered the material available on record in the first instance and dependent upon the sufficiency or otherwise of such material, he should have felt the need of any new evidence. In the circumstances, we are of the considered opinion that it is a fit case to set aside the impugned order and remand the matter to the file of ld. CIT(A) for disposal afresh by way of speaking order after giving an opportunity to the assessee to set forth their case. We make it clear that it is incumbent upon the assessee to proceed with the hearing before the ld. CIT(A) on the date fixed for hearing without seeking any adjournment and the ld. CIT(A) is free to deal with the request of adjournment, if any, as per his discretion, but only requirement is affording an opportunity and disposal by way of a detailed speaking order.

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