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Income Tax Appellate Tribunal, DELHI BENCHES: ‘G’, NEW DELHI
Alcome Perfumes and ITO, Ward 1(3) Cosmetics P Ltd. vs. New Delhi 201/1, Bakshi House 4041, Nehru Place New Delhi 110 019 PAN: AABCA0430G (Appellant) (Respondent) Appellant by None Respondent by Sh. Kaushalendra Tiwari, Sr.D.R Date of Hearing 27/12/2017 Date of 28/12/2017 Pronouncement ORDER PER BEENA A PILLAI, JUDICIAL MEMBER The present appeal has been filed by assessee against the order dated 23/03/16 passed by Ld.CIT(A)-1, New Delhi for assessment year 2009-10 on the following grounds of appeal: “1. That the Ld.CIT(A) has erred and unjust in allowing the penalty u/s 271(1)(c ) on account of cash expenses of Rs.22,62,292/-. This amount should not be considered as concealed income for the Assessment Year 2009-10 Alcome Perfumes and Cosmetics P.Ltd. purpose of levying penalty u/s 271(1)(c ) of the Income Tax Act, 1961 (the Act).
2. That the Ld.CIT(A) has wrongly allowed penalty u/s 271(1)(c ) on account of genuine cash receipts of Rs.14,86,530/- for sale of plant and machinery which was duly accounted in books. There is no concealment of income and it was genuine transaction.
3. That the assessee does not fall in any of clauses of explanation 1 of section 271(1)(c ). Therefore provision of penalty u/s 271(1)(c ) does not applicable to assessee.
4. That the assessee company is bankrupt since last 3 years due to the huge losses and facing turmoil in its business operations. At present, company has been sealed by the bankers.
5. That the appellant reserves its right to add, alter, amend or withdraw any ground of appeal either before or at the time of hearing of this appeal.”
Brief facts of the case are that: Assessee is a company incorporated in India and during the year under consideration it was engaged in the business of manufacturing and trading of perfumes and related articles to the Indian and overseas markets. Assessee filed its return of income on 30/11/09 declaring a total income of Rs. 48,78,620/-and the income under section 115 JB at Rs. 1,56,18,527/-. The return was selected under scrutiny and notices under section 143 (2) was issued to assessee. The Ld. AO determined the taxable income at Rs.86,48,744/-and penalty proceedings were initiated under section 271 (1) (c) of the act. 2.1. Ld. AO in the penalty proceedings levied penalty of Rs.15,11,883/- for concealment and submission of inaccurate particulars of income for the year under consideration. Page 2 of 7 Assessment Year 2009-10 Alcome Perfumes and Cosmetics P.Ltd. 2.2. Aggrieved by the penalty order, assessee preferred appeal before Ld. CIT (A) who confirmed the penalty levied by assessing officer.
Aggrieved by the order of Ld. CIT (A) assessee is in appeal before us. 3.1. On perusal of penalty order passed by Ld. CIT (A), it is observed as under: “5. Opportunity provided: Appeal was filed in this case on 02.05.2014. Appellant was issued notice u/s 250 of the I.T. Act on 28.05.2015 fixing the case for hearing on 16.06.2015. But, on this appointed date none attended nor any application for adjournment was received. Again, notice u/s 250 of the I.T. Act was issued on 25.06.2015 fixing the case for hearing on 02.07.2015. But, on this appointed date none attended nor any application for adjournment was received. Again, notice u/s 250 of the I.T. Act was issued on 06.07.2015 fixing the case for hearing on 28.07.2015. But, on this appointed date none attended nor any application for adjournment was received. Again, notice u/s 250 of the I.T. Act was issued on 28.07.2015 fixing the case for hearing on 27.08.2015. This notice was sent to appellant through AO at the address given in appeal memo. This notice was sent to appellant along with a letter signed by undersigned informing the appellant that this notice may be treated as last and final opportunity given to him, failing which appeal will be decided on basis of information available on record. This notice was served upon the appellant. In response to said notice, appellant filed a letter dated Assessment Year 2009-10 Alcome Perfumes and Cosmetics P.Ltd. 27.08.2015 in which AR of the appellant had mentioned that they are passing through very difficult business cycle and not able to meet the overhead cost to run the business operation and Company Accountant had also left them and they do not have any resources to compile the required detail to be furnished. They had also mentioned that they were executing their business operations at their factory situated at Noida Special Economic Zone which had also been sealed by the bankers in July due to huge debt burden. They had also informed that all of their documents, files, computers, accounting data had been impounded inside the factory and they are not able to access any information. In view of above, they had asked for two months time so that they can get their documents recovered from the bankers. On 15.09.2015 and 27.10.2015, AR of the appellant filed written submissions. On 29.10.2015, AR of the appellant filed a letter requesting for adjournment as they had not compiled the information/details due to non-availability of records. Again, notice u/s 250 of the IT Act was issued on 17.11.2015 fixing the case for hearing on 01.12.2015. This notice was sent on another address of the appellant at 59-J(A), SEZ, Phase-II, Noida-201305. But the same was returned back unserved with the remarks "company is closed". Again, notice u/s 250 of the IT Act was issued on 03.12.2015 fixing the case for hearing on 28.12.2015. But the same was again returned back unserved with the remarks "company is closed". Again, two notices u/s 250 of the I.T. Act were issued on 17.03.2016 fixing the case for hearing on 23.03.2016. One of the notice was sent at 59- J(A), NSEZ, Phase-II, Noida-201305. But the same was returned back Assessment Year 2009-10 Alcome Perfumes and Cosmetics P.Ltd. unserved with the remarks "company is closed". Another notice was sent on the address of the appellant given in appeal memo at W-54, Greater Kailash, Part-I, New Delhi-48. This notice was served upon the appellant. But, on appointed date none attended nor any application for adjournment was received. It is therefore, established that the appellant is not interested in disposal of its appeal. Therefore, the undersigned has no option but to decide the appeal of the appellant ex-parte on the basis of information available on records.” 3.2. From the above it is observed that, though notices were issued to assessee on various dates in reply to which assessee filed letter dated 27/08/15, wherein it was mentioned that they are passing through very difficult business cycle and are not able to meet the overhead cost to run the business operation. It was also informed by assessee that all documents, files, computers accounting data had been impounded inside the factory, and they are unable to access any information in order to make any relevant submissions to the authorities. Thereafter the notice issued by Ld. CIT(A) on 17/11/15 returned back unserved with remarks as “company closed”.
We are of the considered opinion that the assessee was precluded sufficiently from appearing before Ld. CIT (A) as all the relevant documents were impounded inside the factory which was sealed by bankers due to heavy debt burden. Under such circumstances we find it fit and proper to grant one more opportunity to assessee to present its case before Ld. CIT (A).
Assessment Year 2009-10 Alcome Perfumes and Cosmetics P.Ltd. Accordingly we set aside this issue to Ld. CIT (A) for deciding the issue as per law by giving proper opportunity to assessee. Needless to say that Ld. CIT (A) shall pass a speaking order on merits of the issue. 5. In the result appeal filed by assessee stands allowed for statistical purposes. Order pronounced in the open court on 28.12.2017.