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Income Tax Appellate Tribunal, DELHI BENCH: ‘E’: NEW DELHI
Before: SHRI N.K SAINI & SHRI KULDIP SINGH
way of consolidated order to avoid repetition of discussion.
The Appellants, Ms. Kiran Lata Kapoor, New Delhi and Mr. Sunil Kapoor, New Delhi (hereinafter referred to as ‘the Assessees’) by filing the present appeals bearing & 4820/Del/2015, sought to set aside the impugned orders dated 28.10.2013 & 27.09.2013 respectively qua Assessment Year 2009-10 passed by Ld. CIT(A)-XXIII, New Delhi on the identical grounds that:-
Grounds of ITA No. 4819/Del/2015
“1. That the Ld. CIT (Appeal) has erred in law and on facts in passing an ex- parte order despite the fact that the appellant filed an application for adjournment on valid grounds.
2. That the Ld. CIT (Appeal) has erred in law and on facts in not deciding the grounds raised
in the appeal on merit and simply dismissing the appeal on non filing written submissions. Without prejudice to aforesaid grounds of appeal, the grounds of appeal on item wise additions are as under:
3. That the Ld. CIT (Appeal) has erred in law and on facts in confirming the addition of Rs. 6,39,263/-in respect of TDS deducted by various parties, though the income was not accrued during the year under consideration.
4. That the Ld. CIT (Appeal) has erred in law and on facts in confirming the disallowance of repair & maintenance expenses of Rs. 6,01,833/- which was incurred by the assessee in the routine course of business.
That the impugned appellate order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence.
6. That the Appellant craves leave to add/alter any/all grounds of appeal before or at the time of hearing of the Appeal.”
Grounds of ITA No.-4820/Del/2015
“1. That the Ld. CIT (Appeal) has erred in law and on facts in passing an ex-parte order despite the fact that the appellant filed an application for adjournment on valid grounds. 2. That the Ld. CIT (Appeal) has erred in law and on facts in not deciding the grounds raised in the appeal on merit and simply dismissing the appeal on non filing written submissions.
Without prejudice to aforesaid grounds of appeal, the grounds of appeal on tem wise additions are as under:
3. That the Ld. CIT (Appeal) has erred in law and on facts in confirming the addition of Rs. 24,43,105/-in respect of TDS deducted by various parties, though the income was not accrued during the year under consideration.
4. That the Ld. CIT (Appeal) has erred in law and on facts in confirming the disallowance of project expenses of Rs. 5,92,597/- .which was incurred by the assessee in the routine course of business.
5. That the Ld. CIT (Appeal) has erred in law and on facts in confirming the addition of travelling expenses of Rs. 1,68,948/- which was incurred by the assessee for business purposes.
6. That the Ld. CIT (Appeal) has erred in law and on facts in confirming the addition of business promotion expenses of Rs. 3,04,165/- which was incurred by the assessee for business purposes. 7. That the Ld. CIT (Appeal) has erred in law and on facts in confirming the adhok disallowance of car expenses of Rs. 92,781/- without any basis or reasoning thereof. 8. That the Ldj.CIT(A) has erred in law and on facts in confirming the adhok disallowance of telephone expenses of Rs. 5,072/- without any basis of reasoning thereof. 9. That the impugned appellate order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence. 10. That the Appellant craves leave to add/alter any/all grounds of appeal before or at the time of hearing of the Appeal.”
Brief Facts of ITA No.-4819/Del/2015 for A.Y. 2009-10.
During the scrutiny proceeding, the Assessing Officer (AO) noticed that the TDS amount of Rs. 6,39,263/- in respect of DLF Commercial Complex Ltd., has not been shown by the Assessee in her income as per provisions contained u/s 198 of the Income-tax Act, 1961 (for short ‘the Act’). On failure of the assessee to explain, the AO made addition of Rs. 6,39,263/- to the income of the assessee. The assessee has also debited Rs. 6,68,703 under the head repair and maintenance of office. AO proceeded to conclude that the cabins made by the assessee in the office are covered under the block of ‘Furniture and Fixture’ and as such are in the capital nature and thereby allowed depreciation @ 10% of ‘furniture and fixture’ and thereby made addition of Rs. 6,01,833/-.
Brief Facts of A.Y. 2009-10
The Assessing Officer noticed that the assessee has declared ‘Other Creditors (due to TDS Paid by them)’ at Rs. 24,43,105/- in his Balance Sheet. Declining the contentions raised by the assessee, AO made addition of Rs. 24,43,105/- by treating the same as income of the assessee. AO also noticed that from the account of M/s K.K. Real Estate that the assessee has debited an amount of Rs. 5,92,597/- as project expenses. On failure of the assessee to discharge his onus AO made addition of Rs. 24,43,105/-. The assessee further debited an amount of Rs. 2,74,770/- , Rs. 5,03,823/-, Rs. 4,63,908/- and Rs. 50,721/- on account of Travelling Expenses, Business Promotion Expenses, Car Expenses and Telephone Expenses respectively out of which the AO has disallowed an amounts of Rs. 1,68,948/- Rs. 1,32,465/- and Rs. 92,781/- on account of travelling expenses, business promotion expenses and car expenses respectively. The Assessing Officer also disallowed an amount of Rs. 1,71,700/- claimed by the assessee as business expenses on the ground that the same are having no business nexus. AO, thereby assessed total income of the assessee at Rs. 78,36,838/-.
5. Assessees carried the matter before the Ld. CIT(A) by way of filing the appeal, who has dismissed the appeal. Feeling aggrieved, the assessee has come up before the Tribunal.
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.
Undisputedly, the Ld. CIT(A) has passed impugned order ex parte.
It is also not in dispute that the assessees Mr. Sunil Kapoor and Ms. Kiran Lata Kapoor are brother and sister.
Perusal of the impugned orders passed by Ld. CIT(A), go to prove that initially one Sh. Pawan, CA had appeared on behalf of the assessees, but thereafter none appeared on behalf of the assessees and Ld. CIT(A) has proceeded to decide the appeal ex parte.
Bare perusal of the impugned orders go to show that except in Para 4.7 of the impugned orders passed in case of both the assessees, there is not in iota material to show, if the Ld. CIT(A) has given an adequate opportunity of being heard to the assessee, in para 4.7 of the impugned order which reads as under:-
“4.7 Since more than enough opportunity was given and the appellant has chosen not to appear or to file any written submissions, it appears that she has been purposely avoiding attendance before the undersigned. Since the appellant and her Authorized Representatives have not attended the appellate proceedings despite repeated opportunities provided to them, I am considered to uphold the assessment order and to sustain the additions made by the Assessing Officer.” 4.7 Since more than enough opportunity was given and the appellant has chosen not to appear or to file any written submissions, it appears that he has been purposely avoiding attendance before the undersigned. Since the appellant and her Authorized Representatives have not attended the appellate proceedings despite repeated opportunities provided to them, I am considered to uphold the assessment order and to sustain the additions made by the Assessing Officer.”
In the body of the impugned orders, nowhere it is mentioned by Ld. CIT(A), if after disappearance of Mr. Pawan, CA as Authorized Representative of the assessees, any notice has been issued to the assessees to argue their case. So it is a clear case of not providing opportunity of being heard to the assessee by Ld. CIT(A) as a Quasi Judicial Authority. Furthermore, Ld. AR for the assessees brought on record certificate issued by Sir Ganga Ram Hospital, New Delhi-110060 along with detail of medical charges to prove that Sh. Joginder Lal Kapoor, father of both the assessees remained sick and admitted in Sir Ganga Ram Hospital, providing reasonable cause to the assessees not to appear before Ld. CIT(A) to pursue their cases.
In view of what has been discussed above, we are of the considered view that to meet with the ends of the justice, it is a fit case which can be remanded to the Ld. CIT(A) to decide afresh, after providing an opportunity of being heard to the assessees, hence, both the appeal are remanded to Ld. CIT(A). Consequently, both the appeals filed by the assessees stand allowed.
Order pronounced in the open court on 22/6//2018