M/S. TUTICORIN PORT ROAD COMPANY LTD.,NEW DELHI vs. ACIT, NEW DELHI

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ITA 587/DEL/2013Status: DisposedITAT Delhi09 May 2016AY 2006-075 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessment order was a nullity as no income was computed or assessed by the AO. The CIT(A) also did not decide the matter on merits. The Tribunal found that the assessee had dispatched documents, but their non-receipt could not be ruled out.

What were the facts?

The assessee showed capital work-in-progress at the end of the previous year. The Assessing Officer (AO) did not accept this claim due to the failure of the assessee to produce complete books of accounts, bills, and vouchers. The CIT(A) dismissed the appeal.

What were the issues?

Whether the assessment order is valid when no income is computed, and whether the assessee was denied a proper opportunity to be heard due to non-receipt of documents.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘H’ : NEW DELHI

Before: SHRI S.V. MEHROTRA & SHRI KULDIP SINGH

For Appellant: Shri S.S. Gupta, CA
For Respondent: Shri Amit Mohan Govil, CITDR
Hearing: 10.03.2016

PER KULDIP SINGH, JUDICIAL MEMBER :

1.

Appellant, M/s. Tuticorin Port Road Company Limited (hereinafter referred to as ‘the assessee’), by filing the present appeal sought to set aside the impugned order dated 15.11.2012 passed by the Commissioner of Income-tax (Appeals)-19, New Delhi qua the assessment year 2006-07 on the grounds inter alia that :-

“1. That the Assessing Officer is wrong in concluding that there was any capital work-in-progress amounting to Rs.300670522/-, which is based on the distorted version of facts and against all material evidences available on record in support of the above capital expenditure. i.e. duly audited Balance Sheet as on 31-03-2006 and Auditor's Report thereon.

2 That the Assessing Officer's conclusion is without any basis, without verifying the facts himself and without an evidence in his possession.

3 That non-production of certain books of accounts and documents cannot lead to the evidence of non-incurring of capital expenditure itself.

4 That the default of non-production of books of accounts and furnishing of other informations was not willful and was on account of circumstances beyond its control.

5 That the recovery of tax of Rs.99431298/- and interest of Rs.32189328/- simply on the basis of income tax computation sheet is wrong and illegal since no such income of Rs.300670522/- has been computed in the assessment order and also no interest has been charged in the assessment order.

6.

That the order has been passed without allowing due and proper opportunity to the appellant before passing the impugned order and thus the cannons of natural justice has been violated.

7. That the learned CITCA) has erred in passing the ex-parte order on the basis of default of non-appearance on the date of hearing on 07-11-2012; since the notice dated 29-10-12 fixing the appeal for 07-11-2012 never reached to the Appellant and thus he was prevented by sufficient cause in non-appearance on the date of hearing.

8. That the order of the learned CIT(A) is also wrong, illegal, baseless and unjustified even on merits since no such alleged income was assessed by the Assessing Officer and there was sufficient evidence in possession of the Department for incurring of expenditure of Rs.300670522/- under the head 'Capital work-in- progress'.

9.

That any other or further ground of appeal may allowed to be taken at the time of hearing of the appeal which may be deemed necessary in the facts and circumstances of the case.

10. That the appellant be allowed to file additional evidence, if so required for proper prosecution of the case based on facts and circumstances, which has not been or could not be educed or filed before lower authorities either because proper and sufficient opportunity was not provided or because it was not solicited or its need was not appreciated."

3. Briefly stated the facts of this case are : consequent upon the notices along with questionnaire issued under section 143(2) and 142 (1) of the Income-tax Act, 1961 (hereinafter ‘the Act’), during the scrutiny proceedings, Shri V.K. Jain, CA/AR put in appearance and filed required details. But, despite specific directions, AR of the assessee has failed to produce the complete books of account with bills and vouchers of all projects including civil sub- contractors. Assessee shown the capital work-in-progress at the end of the previous year at Rs.30,06,70,521.80 as on 31.03.2006 and in these circumstances, the AO has not accepted the version of the assessee that there was any capital work-in-progress amounting to Rs.30,06,70,521.80 and declined to grant any depreciation etc. in the succeeding years on the said amount to the assessee.

4.

Assessee carried the matter before the ld. CIT (A) who has dismissed the appeal vide impugned order. Feeling aggrieved, the assessee has approached the Tribunal by way of filing the present appeal.

5.

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.

6. At the very outset, it has come on record from the order of the AO as well as findings returned by the CIT (A) in para 4.3 of the impugned order, that despite several opportunities, the assessee has failed to furnish the requisite details called for by the AO in the form of complete books of account with bills and vouchers. Even during the appellate proceedings, the assessee has failed to seek indulgence of the ld. CIT (A) to bring on record any such documents to controvert the findings returned by the AO.

7.

In the backdrop of the facts and circumstances, we are of the considered view that when the AO has not computed any income nor assessed the income, which was otherwise not possible without the documents required to be furnished by the assessee, the order itself is a nullity. At the same time, the CIT (A) has also not decided the matter on merits.

8.

However, from the perusal of letter dated 10.12.2008, available at page 6 of the paper book, supported with copy of “dispatch register postal dak”, it is proved on file that the assessee has dispatched the requisite documents with the AO but the possibility of the same not reaching at the destination cannot be ruled out and in these circumstances, assessee cannot be made to suffer who is otherwise entitled for adequate opportunity of being heard.

8. In view of what has been discussed above, when assessment order has been passed without assessing any tax payable by the assessee, the same is no assessment order in the eyes of law and as such, we hereby set aside the order passed by CIT (A) and restore the case back to the AO to decide afresh after providing an opportunity of being heard to the assessee. Consequently, the present appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in open court on this 9th day of May, 2016.

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