Income Tax Appellate Tribunal - Delhi
Salman Steels Private Limited, ... vs Dcit Circle-2,, Muzaffarnagar on 10 July, 2023
THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'G', NEW DELHI
Before Sh. C. M. Garg, Judicial Member
Dr. B. R. R. Kumar, Accountant Member
ITA No. 1510/Del/2020 : Asstt. Year: 2015-16
Salman Steels Pvt. Ltd., Vs DCIT,
8, IQRA Market, Meerut Road, Circle-2,
Muzaffarnagar, Muzaffarnagar,
Uttar Pradesh-251001 Uttar Pradesh-251001
(APPELLANT) (RESPONDENT)
PAN No. AANCS4093F
Assessee by : Sh. Sujit Kumar, AR
Revenue by : Sh. Anuj Garg, Sr. DR
Date of Hearing: 04.07.2023 Date of Pronouncement: 10.07.2023
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by assessee against the order of ld. CIT(A), Muzaffarnagar dated 28.03.20 18.
2. Following grounds have been raised by the assessee:
"01. That on the facts and in the circumstances o f the case and in law, the ld. CIT-A erred in passing Ex- Parte order in most mechanical manner without granting any opportunity of being heard to the assessee and without adjudicating the grounds of appeal taken before him, more particularly ground No. 1 tha t no proper oppor tunity of being heard was given by the ld. AO to the assessee and thus the impugned order of ld. CIT-A is arbitrary , unlawful, unjustified, against the specific provisions of law and also against the principle of natural justice and the same therefore is liable to be quashed.2 ITA No. 1510/Del/2020
Salman Steels Pvt. Ltd.
02. That on the facts and in the circumstances o f the case and in law, the ld. CIT-A exceeded his jurisdiction in rejecting the books of account by invok ing provisions of section 145(3), which is de -hors his powers because CIT-A has no such power under the said section to reject books of account and at any rate without prejudice , the same was done without any iota of any communication or opportunity of being heard to the assessee and the same therefore is liable to be quashed.
03. That on the facts and in the circumstances o f the case and in law, the ld. CIT erred in confirming the impugned disallowances/additions aggregating to Rs. 331,10,200/-; made by the ld. AO in most arbitrary and mechanical manner with a prejudice d view and on ad-ho c basis @ 40% across the board, without any iota of any adverse findings by the ld. AO or by the ld. CIT-A and the said disallowances/additions therefore are absolute ly unwarranted, unlawful, untenable, unjus tified and against the spe cific provisions of law and contrary to the contempor ary juris prudence and are liable to be deleted.
04. That on the facts and in the circumstances o f the case and in law, the impugned assessment order dated 19.06.2017 is illegal, unlawful, untenable and null and void ab-initio ; because the same was passed by the ld. AO without issuing any notice under section 143(2) of the Income Tax Act, 196 1 and therefore the impugned order being passed without jurisdiction, has no legal force to sustain and is liable to be quashe d.
05. That on the facts and in the circumstances o f the case and in law, the impugned disallowances/additions made on ad-hoc basis @40% are abso lutely unwarranted and arbitrary, because the ld. AO failed to appreciate the fact that the Books of Account of the Asse ssee were Audited twice, once under the Companies Act, 2013 and also under the provisio ns of section 44AB of the Income Tax Act, 1961 and ld. AO did not point out any iota of any dis crepancies in books of acco unt nor rejected the same and therefore the impugned disallowances additions have no io ta of any basis and at any rate without prejudice, the same 3 ITA No. 1510/Del/2020 Salman Steels Pvt. Ltd.
are exorbitantly excessive and are liable to be deleted.
06. T hat all the expenses claimed by the assessee in profit and loss acco unt are genuine, bona -fide, expe nded wholly and exclusive ly for the purpose of business and duly supported with all co gent documentary evidences, bills and vouchers and stood duly recorded in books of account, whic h are audited twice under the provisions of relevant laws and the Asse ssee was deprived to furnish such documents on records to rebut the purported premise of the ld. AO and therefore in the interest of justice, such adhoc disallowances have no legal force to sustain in law and the s ame are liable to deleted.
07. That the impugned major dis allowanc e of Rs.321,83,310 /-, made on adhoc basis @ 40% of power expenses is absolutely arbitrary , unwarr anted and is based on mere prejudice view, surmises and conjectures and without any iota of any adverse findings by the ld. AO and the same is agains t the pertinent fact that power expenses is prerequisite expe nses for manufacturing activities and the same are genuine, bona-fide, suppor ted with docume ntary evidences, bills and vouchers and duly paid through banking channel to the power corporation and thus the same is fully verifiable indepe ndently also and has absolutely no basis for any such disallowance and the same therefore deserves to be allowed in full and such impugned disallowance made by ld. AO is liable to be deleted.
08. That the impugned other disallowance aggregating to Rs.926,890/-, made on adhoc bas is @ 40% of freight expe nses, re pair to Machinery, Salaries, workmen and staff expenses, telephone etc are also absolutely ar bitrary, unwarranted and is base d on mere prejudice view, surmises and conjectures and witho ut any io ta of any adverse findings by the ld. AO and the same being fully verifiable deserves to be allowed in full and such disallowance is liable to be deleted.4 ITA No. 1510/Del/2020
Salman Steels Pvt. Ltd.
09. That without prejudice to all above grounds and witho ut conce ding any thing with regard to impugned disallowances, the ld. AO erred in computing assessed income by wrongly taking the returned loss for the year at Rs. 28,55,576/- instead of correct amount of loss at Rs. 1,31,09,652/-, apart from not considering the brought forward losses of earlier years and MAT credit as per return of income and therefore the assessed inco me and impugned demand, at any rate witho ut prejudice, is incorrect and very excessiv e on this count too and the same therefore is liable to be deleted.
10. That all the above grounds are independent grounds, which are without prejudice to one another.
11. The interest as levied by the ld. AO under section 234A, 234B and 234C is unwarranted as the same is levied without any direction, discussion or pointing out the facts and circumstances of the case giving c ause to levy such interest as per the law and the same there fore is liable to be omitted."
3. The asse ssee field return of income declaring total loss of Rs.28 ,55,576/-. The assessment has been comple ted making an addition of R s.3,31,10 ,200/- o n account of various expenses unproved.
4. The proceedings before the ld. CIT(A) were as under:
S. D at e o fD at e o fRe m a r k s
No No t ic e/ s ho w H e a rin g
c a u s e/
a d jo u r n me nt
1 2 6. 1 2 .20 1 7 0 9. 0 1 .21 8 N on e a t t en d ed , n o r a ny r equ e s t f o r
a dj ou rn ed was fi l ed nor any
s ub mi ss i on s w e r e f u rn i sh ed .
2 1 5. 0 1 .20 1 8 2 3. 0 1 .20 1 8 N on e a t t en d ed , n o r a ny r equ e s t f o r
a dj ou rn ed was fi l ed nor any
s ub mi ss i on s w e r e f u rn i sh ed .
3 2 4. 0 1 .20 1 8 0 6. 0 2 .20 1 8 N on e a t t en d ed , n o r a ny r equ e s t f o r
a dj ou rn ed was fi l ed nor any
s ub mi ss i on s w e r e f u rn i sh ed .
5 ITA No. 1510/Del/2020
Salman Steels Pvt. Ltd.
4 2 6. 0 2 .20 1 8 0 6. 0 3 .20 1 8 N on e a t t en d ed , n o r a ny r equ e s t f o r
a dj ou rn ed was f il ed nor any
s ub mi ss i on s w e r e f u rn i sh ed .
5 2 0. 0 3 .20 1 8 2 8. 0 3 .20 1 8 N on e a t t en d ed , n o r a ny r equ e s t f o r
a dj ou rn ed was fi l ed nor any
s ub mi ss i on s w e r e f u rn i sh ed .
5. Aggrieve d with the order of the ld. CIT(A) confirming the order of the Assessing Officer, the assessee filed appeal before the Tribunal on 31.08.2020. The assessee has fa iled to a ppear on 5 occasio ns before the ld. CIT(A) and has taken up the grounds before the Tribunal pertaining to legal principles of "audi alteram partem" and sustenance of order of the AO by the ld. CIT(A) on "ex-parte" basis. We strongly believe that every assessee has a right to appeal before the authorities against any addition or disallowance made to the returned income, at the same time, it is least expected that the assessee would comply to the notices issued by the authorities in an appropriate way. The assessee having miserably failed to attend before the ld. CIT(A) has taken the grounds of "audi alteram partem" before us. W hile the grievance of the assessee is not be ing pree mpted by us, at the same time, we feel that the c onduct of the assessee is clogging the alre ady bur dened justice delivery syste m. Hence , we hereby direct the assessee to pay an amount of Rs.5,000/- to the "Prime Minister's National Relief Fund" and approach the ld. CIT(A) for a fresh hearing deno vo whic h shall be considered. The ld. CIT(A) is hereby direc ted to afford an opportunity of being heard to the assessee befor e conclus ion of the proceedings.
6 ITA No. 1510/Del/2020Salman Steels Pvt. Ltd.
6. In the result, the appeal of the assessee is allowe d for statistical pur pose.
Order Pronounced in the Open Court on 10/07/202 3.
Sd/- Sd/-
(C. M. Garg) (Dr. B. R. R. Kumar)
Judicial Member Accountant Member
Dated: 10/07/2023
*Subodh Kumar, Sr. PS*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR