DUSHYANT NAGAR,NEW DELHI vs. ITO WARD-1(2), FARIDABAD

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ITA 5243/DEL/2019Status: DisposedITAT Delhi11 July 2019AY 2013-145 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that valid notice was not proven to have been served on the assessee, and the assessment orders were passed without adequate opportunity. Therefore, the Tribunal set aside the assessment to the AO for fresh adjudication after providing the assessee with a proper hearing.

What were the facts?

The Assessing Officer made additions to the assessee's income under Section 144 for licence fee, permit fee, excess interest, and miscellaneous expenses. The CIT(A) confirmed these additions. The assessee appealed to the ITAT, arguing that the assessment was made without proper opportunity and that evidence existed to reconcile payments.

What were the issues?

Whether the assessment order passed under Section 144 was in violation of natural justice due to lack of proper notice and opportunity to the assessee. Whether the additions made by the AO were justified in the absence of proper evidence and opportunity.

Which sections of the Income-tax Act were involved?

Section 144,Section 145

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘B’ : NEW DELHI

Before: SHRI R.K. PANDA & SHRI KULDIP SINGH

For Appellant: Shri Kapil Goel, Advocate
For Respondent: Ms. Ashima Neb, Senior DR
Hearing: 08.07.2019

PER KULDIP SINGH, JUDICIAL MEMBER : Appellant, Shri Dushyant Nagar (hereinafter referred to as the ‘assessee’) by filing the present appeal sought to set aside the impugned order dated 30.01.2019 passed by the Commissioner of Income-tax (Appeals), Faridabad qua the assessment year 2013-14 on the grounds inter alia that :-

1.

“1. That on the facts and in the circumstances of the case and in law, ld. CIT-A erred in sustaining the order of Ld AO u/s 144 and thereby confirming aggregate addition of Rs.236,81,279 (comprising of four additions of Rs.112,54,010, Rs.113,86,008, Rs.5,41,261, Rs 500,000) on basis of vague and incorrect reasoning as evident from the fact that latest certificate dated 10.05.2019 (enclosed with appeal memo) form office of Assistant Excise and Taxation Officer (Faridabad) establishes that not a single penny payment is non reconciled (affidavit of assessee also enclosed) and merely due to lack of proper representation by Ld AR of assessee before Ld AO same led to incorrect addition in assessment order which also got repeated at CIT-A stage .

2. That on the facts and in the circumstances of the case and in law, ld CIT-A erred in sustaining the order of Ld AO u/s 144 where assessment order passed was in blatant violation of principle of natural justice and no adequate opportunity was given to assessee to prove its case and merely on basis of material gathered at back of assessee adverse inference is drawn without any iota of evidence that any expense claimed by assessee is unexplained and no where audited book result is doubted much less rejected u/s 145 of the Act.

That the appellant craves leave to odd add/alter oily/all grounds of appeal before or at the time of hearing of the appeal.

Humble Prayer: i) To delete the 4 additions of Rs.112,54,010/-, Rs.113,86,008, Rs.541,261 and Rs.500,000 respectively ii) To set aside the assessment to file of Ld AO for denovo adjudication. iii) To restore returned income iv) Any other appropriate relief.”

2.

Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessing Officer framed the assessment under section 144 of the Income-tax Act, 1961 (for short ‘the Act’) making additions of Rs.1,12,54,010/-, Rs.1,13,86,008/-, Rs.5,41,261/- & Rs.5,00,000/- on account of licence fee, permit fee, excess interest paid claimed & misc. & personal expenses respectively on failure of the assessee to explain and bring on record the documentary evidence.

3.

Assessee carried the matter by way of an appeal before the ld. CIT (A) who has confirmed the additions by dismissing the appeal.

Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal.

4.

We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.

5.

Bare perusal of the assessment order and impugned order passed by the ld. CIT (A) goes to prove that both the orders have been passed at the back of the assessee, though numerous opportunities are stated to have been given to the assessee who has not preferred to defend his case by putting in appearance. Chronology of proceedings conducted by the ld. CIT (A) recorded in para 4 of the impugned order shows that notice has been sent 10 times to the assessee but none of the notices is claimed to have been served upon the assessee. AT one occasion, notice returned back undelivered with the report that assessee has left the residential address. Then notice on the fresh address was given thrice but did not bring on record if the same were served or not. Then on 21.01.2019, report of AO was called who has reported that ladies available at the given address stated that the addressee is out of station and they are unaware about his whereabouts and they have also refused to receive the notice.

6.

All these facts go to prove that service of valid notice is not proved to be effected on the assessee. Taking the holistic view, we are of the considered view that to decide the controversy once for all and to stop the multiplicity of the litigation, one more opportunity is required to be given to the assessee, subject to the payment of cost of Rs.5,000/-. So, present case is set aside to the AO to decide afresh after providing adequate opportunity of being heard to the assessee. Consequently, the appeal filed by the assessee is allowed for statistical purposes. 7. In view of the fact that appeal bearing , in which the present stay application was filed, has since been disposed off vide this composite order, the present stay application is hereby dismissed having been become infructuous. Order pronounced in open court on this 11th day of July, 2019.

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