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Income Tax Appellate Tribunal, DELHI BENCH ‘D’, NEW DELHI
ORDER
Per N. K. Saini, AM:
This is an appeal by the assessee against the order dated 11.12.2013 of ld. CIT(A)-VI, New Delhi.
Following grounds have been raised in this appeal: “That on the facts and in the circumstances of the case and in law, the CIT(A) erred in passing the order arbitrarily, precipitately and without considering the evidence attempted to be submitted in support of the pleas. Further, the CIT(A) erred in confirming the following additions made by the Assessing Officer:- i) Rs.12,73,645/- on account of unsecured loss; ii) Rs.55,11,479/- on account of fresh investment; and Dhruv Loaders (P) Ltd. iii) Rs.18,17,450/- on account of pro-rata disallowance of operational expenses. The dismissal of the appeal without considering the evidence sought to be filed is unfair and unjust and must be quashed. Also the additions as made are all misconceived, arbitrary, erroneous and unjust which must be quashed with directions for appropriate relief.”
3. Facts of the case in brief are that the assessee was engaged in the business of transporter and filed its return of income on 29.09.2008 by declaring a loss of Rs.8,14,149/- which included unabsorbed depreciation of Rs.7,29,699/-. Later on, the case was selected for scrutiny and the AO framed the assessment ex-parte u/s 144 of the Income Tax Act, 1961 by observing that there was no compliance whatsoever made by the assessee on date of hearing i.e. 15.11.2010. The AO framed the assessment at an income of Rs.77,88,425/- by making the following additions: “(i) Rs 12,73,645/- towards non-filing of detail about lenders. (ii) Rs 55,11,479/- towards non-furnishing the source of investments. (iii) Rs 18,17,450/- towards 25% of Rs 72,69,804/- (incurred Rs 5,81,474/- on consumption of stores, Rs 23,33,452/- on power & fuel, Rs 3,19,453/- on repair of machinery and Rs 40,35,425/- on other expenses).”
4. Being aggrieved the assessee carried the matter to the ld. CIT(A) and gave the reasons for non-compliance which has been mentioned in para 4.3 of the impugned order and read as under:
Dhruv Loaders (P) Ltd. “It may be noted that the appellant had its transport business purely outside Delhi. Mr. Indersen Singh, the Director of the Company is the only person who look after the business affairs of the company and the second Director is his wife who is non- working. On 15.07.2010, Sh. Indersen Singh was not available in town for some business due to this reason the date remained un-complied. On second hearing date 11.11.2010, the AR of the assessee had requested to AO for adjournment of ten days, as the questionnaire was too lengthy. AO had given the small adjournment of four days and again called on 15.11.2010. AR had requested and expressed his inability that it is not possible for him to prepare the case in such short dates but AO had refused to extend the adjournment. However, on 15.11.2010, again AR of the appellant met with AO and requested that kindly extend the hearing date finally for another five days. AO strictly refused adjournment. Also this fact has not been taken on records and the AO decided the case ex-parte. Hence, the findings and determinations as given by Ld. ITO in the order are not tenable and require to be quashed.”
The assessee also furnished certain additional evidences under Rule 46A of the Income Tax Rules, 1962 which were forwarded by the ld. CIT(A) to the AO who stated in his remand report that copy of the questionnaire was duly handed over to the counsel of the assessee for compliance on 15.07.2010 but the assessee did not care to furnish even a single details and there was no compliance when the case was adjourned for hearing on 11.11.2010 and 15.11.2010. He also stated that the AO had no alternative but to complete the proceedings ex- parte on merit. In response to the remand report of the AO, the assessee stated that the said remand report was silent on any of the issue as being contested by the assessee in the appeal, therefore, it Dhruv Loaders (P) Ltd. was unable to substantiate its reply, particularly when while preparing the remand report, no inquiry or any notice letter had been issued to the assessee by the AO.
However, the ld. CIT(A) did not find merit in the submissions of the assessee by observing that the AO had issued notice u/s 143(2) and 143(1) of the Act which remained uncomplied with by the assessee and the AO was expected to make the assessment to the best of his judgment done with complete application of mind and by way of a speaking order. He also held that the estimate by the AO was bonafide estimate based on rational basis and material on record. Accordingly, the additions made by the AO were confirmed.
Now the assessee is in appeal. The ld. Counsel for the assessee submitted that the proper opportunity of being heard was not afforded by the AO and even the additional evidences which go to the root of the matter although admitted by the ld. CIT(A) were not appreciated in right perspective because no finding has been given by the ld. CIT(A) in the impugned order on the additional evidences. He prayed to set aside the case back to the file of the AO for fresh adjudication.
In his rival submissions the ld. DR supported the orders of the authorities below and submitted that the AO gave full opportunity of being heard to the assessee and asked certain details by issuing the various notices but the assessee did not comply with. As such the AO Dhruv Loaders (P) Ltd. had no alternative except to complete the assessment u/s 144 of the Act by making a reasonable estimate.
We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, to resolve the present controversy relating to proper opportunity of being heard, we asked the ld. DR to produce the assessment record on last date of hearing on 29.11.2016. The ld. DR complied with the directions and brought the assessment record. In the said record, the letter dated 11.11.2010 written by the assessee to the AO for seeking adjournments is placed at page no. 24 (copy of which is also furnished by the ld. DR which is placed on record). In the said letter, the AO noted as under: “Case adjourned to 15.11.2010. No further time will be allowed and case will be decide on merit on the basis of material available on record.” Below the said noting, the AO on a slip affixed on the said letter noted as under: “Telephonically adjourned to 17.11.2010, invalid PAN.”
From the aforesaid noting, it is crystal clear that the AO adjourned telephonically the case to 17.11.2010. On the said paper, the mobile number of the Counsel for the assessee namely, Sh. R.K. Malik, CA is also mentioned. It is therefore, clear that the AO adjourned the case to 17.11.2010, but in the body of the assessment Dhruv Loaders (P) Ltd. order, he has mentioned that the assessee has not complied on 15.11.2010 when the case was fixed for hearing. It is noticed that in the body of the impugned order, nothing has been mentioned about the above said facts and the ld. CIT(A) had also not dealt with the additional evidences which were admitted by him under Rules 46A of the Income Tax Rules, 1962. We, therefore, by considering the totality of the facts, deem it appropriate to set aside this case back to the file of the AO for fresh adjudication in accordance with law after providing due and reasonable opportunity of being heard. The assessee is also directed to cooperate and not to seek undue or unwarranted adjournments.