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Income Tax Appellate Tribunal, DELHI BENCH: ‘C’ NEW DELHI
Before: MS SUCHITRA KAMBLE & SHRI PRASHANT MAHARISHI
This appeal is filed against the order dated 14.03.2016 passed by CIT(A)- 25, Delhi for Assessment Year 2005-06.
2. The grounds of appeal are as under :
“1. That an appeal against the impugned order of the learned A.O. was filed before CIT (Appeals) on 26th April 2013 but CIT (Appeals) has passed an Ex- parte order by confirming the demand of Ld. A.O. on 14.03.2016 without taking into consideration the reasons due to which the appellant could not provide the necessary documents and evidence and could not attend the hearings before the CIT (Appeals). Some of the reasons are provided below:-
(a) That Mr. Anand Tiwari, one of the Directors of the Appellant Company has been suffering from a chronic liver disease for the past 4-5 years. On account of his severe illness he has been admitted/treated in various hospitals in India as well as abroad on innumerable occasions and has been bed-ridden for most of the time during these years. The medical record of Mr. Anand Tiwari is voluminous and the same can be filed before this Hon’ble Tribunal, if so directed. On account of his severe medical condition, Mr. Anand Tiwari has been completely incapacitated in dealing with the affairs of the company in any manner whatsoever. In any event, the affairs of the company, particularly financial and taxation related matters of the company were being looked after by Mr. P. K. Tiwari, the other Director of the company, from the very inception.
(b) That Mr. P. K. Tiwari, the other director of the appellant company, was himself suffering from various illnesses and had also been incarcerated during the relevant time. Due to financial crisis, the company had started making defaults in paying installments to various banks and also in fulfilling other financial obligation. Consequently, the banks had filed false & frivolous complaints with the Central Bureau of Investigation (C.B.I.). The C.B.I. officials had started making inquiries not only from the directors, but also from the family/staff members etc. The C.B.I. officials had started making visits to the office of the company. Mr. P. K. Tiwari was incarcerated in connection with the CBI cases from July, 2012 to October, 2012 and from September 2014 to March 2015. The Appellant Company was going through severe financial crunch during all these years, due to which most of the company staff left the company as their salaries could not be paid. On the other hand, Mr. P. K. Tiwari could not devote time to pursue the appeals on account of the aforementioned reasons. On account of his advance age, frequent incarceration and the extra ordinary financial crises and other adverse conditions, Mr. P. K. Tiwari was under acute depression and could not therefore, focus on the matter.
(c) That the senior officials of the company in finance department left the company after committing serious acts of omissions and commission. It is learnt that such officials had been involved in various irregularities due to which the company and its present directors have suffered the extra ordinary circumstances and trauma. On account of such grave situation, the matter before the respondent could not be pursued in a proper manner.
(d) That the authorized representative, representing the appellant company before the respondent extracted huge money from the appellant but did not properly put forward the case before the respondent. They should at least have represented the difficulties being faced by the company and ought to have defended the appellant to the best of their capacity on the basis of records which were within their possession and knowledge. But most unfortunately they failed to perform their professional duty, resulting in passing of the impugned order.
(e) That the respondent ought to have considered the aforementioned bona fide reasons and extra ordinary circumstances and should have granted further time to the appellant to satisfy the respondent on the aspect that the demand raised by the Ld. A.O. was illegal and unwarranted. The ex-parte order passed by the respondent is unwarranted and has resulted in extreme prejudice to the appellant.
(f) That the appellant is entitled for hearing instead of the case being decided unheard.
(g) That the failure on part of the appellant in pursuing its appeal was neither deliberate nor intentional and the same was occasioned due to reasons mentioned above.
(h) That the extra-ordinary adverse situation suffered by the appellant entitles it for a fair hearing before this Tribunal so that the case can be decided on merits instead of being thrown out on account of non representation.
(i) The company did everything within its power by engaging professionals to represent it before the respondent but the said professionals failed to perform their duty by not advising the company in the matter and by not representing it in bona-fide manner.
(j) That the company sought a number of adjournments and tried to present its case.
(k) That due to lack of funds and non availability of documents as explained above, the company, inspite of taking many adjournments, was not able to defend its case before CIT (Appeals).
(l) That no reasonable opportunity was provided to the Company to present its case and to justify the grounds for quashing the impugned order of the learned A.O.
(m) That the impugned order, confirming the order of A.O., was passed by the CIT(Appeals) without considering the grounds provided by the Company or the documents or evidences to be provided on part of the company and the order was passed ex parte.
(n) That the Company has valid grounds and will be able to establish that the impugned order passed by the learned A.O. was bad in law and was based only on presumptions, if a reasonable opportunity is provided to the company.
(o) That the grounds provided by the company in the appeal before the CIT(Appeals) which were not considered by it before confirming the impugned order of learned A.O. are provided below.
That the assessment order dated 18.03.2013 passed u/s 144 r.w.s. 153A, deserves to be quashed, because natural justice has been denied by the Ld. A.O. to the assessee.
That on the facts of the case and under the law, the Ld. A.O. has erred in not taking into consideration the assessee’s reply. Vide letter dated 15.03.2013 (filed on 18.03.2013).
That on the facts of the case and under the law, the Ld. A.O. has erred in altogether ignoring the assessee’s reply, vide Receipt dated 15.03.2013 (dispatched through Postal Authorities Vide Receipt dated 15.03.2013 and also on the Dak counter Vide Receipt dated 18.03.2013).
That on the facts of the case and under the law, the Ld. A.O. has erred in making addition of Rs. 1,00,000/-, on account of share capital, thereby treating the said amount as unexplained credit.
The observation of the Ld. A.O. are either factually incorrect or are legally untenable.
That the total income assessed at Rs.1,00,000/- is arbitrary, unjust, illegal & highly excessive.
8. That the income tax liability created at Rs. 36,393/- is arbitrary, unjust, illegal & highly excessive.
That on the facts of the case and under the law, the Ld. A.O. has erred in charging interest u/s 234A. Without prejudice, the interest charged is highly excessive.
That on the facts of the case and under the law, the Ld. A.O. has erred in charging interest u/s 234B, Without prejudice, interest charged is highly excessive.
That the reasonable opportunity be provided to the Company for evidencing and establishing the above mentioned grounds which it could not do before the CIT (Appeals).
The appellant craves leave to raise additional ground(s) of appeal to alter/modify the ground(s) of appeal, and/or to withdraw the ground(s) of appeal, either prior to or during the course of appellate proceedings.”
The assessee company belongs to Mahuaa Media Group, in which a Search & Seizure operation was conducted on 11.03.2011, including the Assessee, i.e. M/s Pearl Vision Pvt. Ltd. Return of Income in response to Notice issued u/s 153C was filed on 27.02.2013 declaring income at NIL. During the course of Assessment Proceedings, it was found by the Assessing Officer that the assessee company had raised Share Capital amounting to Rs. 1,00,000/-. The Assessing Officer to ascertain genuineness and creditworthiness of the claimed transactions, asked the assessee to file details and document in respect of the claim relating to Share Investment, and also to produce the persons concern. However, the Assessee neither produced any person nor filed any details pertaining to the claimed transactions. As the company could not substantiate the claim of having received Share Application Money amounting to Rs. 1,00,000/-, the Assessing Officer proceeded u/s 144 of the Income Tax Act, 1961. The Assessing Officer treated the amount of Rs.1,00,000/- as Unexplained Credit u/s 68 of the Income Tax Act, 1961 and added it to the income of the assessee.
4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
5. None appeared at the time of hearing on behalf of the assessee despite giving notice. Therefore, we are taking into account the submissions of the assessee before the CIT(A) as submissions before us.
6. The Ld. DR relied upon the Assessment Order and the order of the CIT(A).
7. We have heard the Ld. DR and perused all the relevant material available on record. From the perusal of record it can be seen that the Assessing Officer has not given proper opportunity to the assessee to reply the show cause notice dated 12.03.2012 issued by the Assessing Officer and passed the Assessment Order on 18.03.2013. Before the CIT(A), the Assessee filed the rejoinder dated 23.02.2016 to the Remand Report dated 09.06.2015, but the CIT(A) has not considered the said rejoinder as well as not given the proper opportunity to the assessee. In fact, the CIT(A) has not considered the additional evidences filed by the assessee before arriving at the findings. Therefore, it will be appropriate to remand back all the issues to the file of the CIT(A) to be decided on merit. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice and the assessee is also directed to co-operate and attend the appellate proceedings, otherwise the CIT(A) is at liberty to decide the appeal on merit after considering the additional evidence filed by the assessee. The appeal of the assessee is partly allowed for statistical purpose.
In result, appeal of the Assessee is partly allowed for statistical purpose.
Order pronounced in the Open Court on 26th September, 2019.