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Income Tax Appellate Tribunal, DELHI BENCH ‘E’ : NEW DELHI
Before: SHRI R.K. PANDA & SHRI KULDIP SINGH
PER KULDIP SINGH, JUDICIAL MEMBER :
The Appellant, M/s. Vivid Builders Pvt. Ltd. (hereinafter referred to as the ‘assessee’) by filing the present appeal sought to set aside the impugned order dated 09.04.2015 passed by the Commissioner of Income-tax (Appeals)-XXVI, New Delhi, qua the assessment year 2006-07 on the grounds inter alia that :-
“1.1 The order of the learned Commissioner of Income Tax (A) is arbitrary, against law and facts on record. 1.2 The learned Commissioner of Income Tax (A) while passing the order has not considered that the fact that the case has been reopened U/S 148 of the Income Tax Act on the basis of general allegation without any incriminating material against the assessee. 1.3 The learned Commissioner of Income Tax (A) has also erred in not considering the fact that the addition on account of share capital have also been made during the course of original assessment and the assessee have got the relief in respect of the same from Hon’ble High Court of Delhi. 1.4 The learned Commissioner of Income Tax (A) while confirming the addition in respect of share capital has not considered the fact that the identity, creditworthiness as well genuineness of amount of share capital received during the year has been proved during the course of assessment proceeding. 1.5 The learned Commissioner of Income Tax (A) has not considered that the addition made by invoking the provisions of section 68 of the Income Tax Act in the hands of the recipient is bad in law and hence liable to be deleted 1.6 The learned Commissioner of Income Tax (A) has also erred in confirming the addition of Rs.3,05,000/- which have been made by the Assessing officer by assuming that the assessee has paid commission @0.5% on the amount of share capital raised during the year.”
Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessee is into the real estate dealings.
During search and seizure operation conducted in M/s. Consortium Group of cases on 28.07.2011, certain documents were found and seized relating to the assessee viz. page 14 to 36 of Annexure A-8 and page nos.94 to 139 of Annexure A-11. AO initiated the proceedings under section 153C of the Income-tax Act, 1961 (for short ‘the Act’) and this case was also subjected to proceedings u/s 147 r.w.s. 148 of the Act on the basis of information received from investigation wing regarding receipts of accommodation entries by the assessee company. Assessee declared an income of Rs.23,710/- by filing return of income which was assessed u/s 143 (3) of the Act at an income of Rs.6,10,23,710/-. Declining the contentions raised by the assessee, AO made addition of Rs.6,10,00,000/- as undisclosed income having been introduced in the form of share capital and share premium through non-descript entities as unexplained cash credit u/s 68 of the Act. AO also made addition of Rs.3,05,000/- on account of commission @ 0.5% on an amount of Rs.6,10,00,000/- and thereby assessed the income at Rs.6,13,28,711/- u/s 153C/147 read with section 148 of the Act.
Assessee carried the matter by way of an appeal before the ld. CIT (A) who has dismissed the appeal ex-parte and thereby confirmed the addition made by the AO. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal.
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.
Ld. AR for the assessee contended that opportunity of being heard is not provided by the ld. CIT (A) to the assessee and none of the notice issued to the assessee has been received and requested for providing an opportunity at the stage of first appellate forum.
However, on the other hand, ld. DR for the Revenue in order to repel the arguments addressed by the ld. AR for the assessee contended that since the assessee has failed to appear despite issuance of three notices and the ld. CIT (A) has decided the appeal on merit, the appeal filed by the assessee is liable to be dismissed and relied upon the order passed by the AO as well as ld. CIT (A).
Bare perusal of para 3 of the impugned order passed by the ld. CIT (A) goes to prove that in response to the notice issued for 19.09.2014, none appeared but on 22.09.2014 a letter was filed on behalf of the assessee seeking adjournment to collect and compile the relevant information. Thereafter, ld. CIT (A) issued notice for 13.11.2014, 22.12.2014 and 17.02.2015 in response to which assessee has again sought some more time for the reason that its entire staff is busy in the time barring assessment. However, no time was granted and the ld. CIT (A) proceeded to pass the ex- parte order on 09.04.2015. Chronology of the dates of adjournment recorded by the ld. CIT (A) goes to prove that the entire exercise of passing the impugned order by the ld. CIT (A) has been completed within three months by declining the request of the assessee. Since the voluminous record pertaining to numerous companies in which assessee alleged to have introduced share capital and share premium which are held to be non-descript entities is involved, we are of the considered view that adequate opportunity of being heard has not been provided to the assessee rather ld. CIT (A) has passed the order in haste and thereby violated the principles of natural justice. So, the assessee is required to be heard by ld. CIT (A) by providing adequate opportunity.
In view of what has been discussed above, the impugned order passed by the ld. CIT (A) is set aside and the file is remanded to the ld. CIT (A) who shall decide afresh after providing adequate opportunity of being heard to the assessee. However, it is made clear that the assessee shall appear before the ld. CIT (A) within 15 days from the receipt of order and thereafter ld. CIT (A) shall decide the appeal within six months in view of the law laid down by Hon’ble Supreme Court on the issue in question. Consequently, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in open court on this 15th day of April, 2019.