Order Passed under sec 143(3) is not valid in the absence of service of notice under sec 143(2) and AO must give proper findings on the order

IN THE INCOME TAX APPELLATE TRIBUNAL

DELHI BENCH “A”, NEW DELHI

BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER

AND

SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER

I.T.A. No. 2681/DEL/2010

A.Y.: 2003-04

Adarsh Kanch Udyog Pvt. Ltd.,

Coal Siding Road,

Firozabad (UP)-283203

(Appellant)

vs.

 Income Tax Officer,

Ward 1(2),

Central Revenue Building,

New Delhi

(PAN: AACCA5631N)

 (Respondent)

Asseessee by: Sh. K.R. Manjhani, Advocate

Department by: M rs. Anusha Khurana, Sr. D.R.

ORDER

PER SHAMIM YAHYA: AM

This appeal by the Assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals) dated 2.3.2010 pertaining to assessment year 2003-04.

2. The grounds raised read as under:-

(i) Ld. CIT (Appeal) is not justified in law and facts and circumstances of the case in holding the order passed under section 143(3) as valid without proving the valid service of notice under section 143(2) with in the limitation period of 12 months as per proviso 143(2) under the circumstances when receipt of notice is denied by the Appellant Company and service of notice is not confronted to the appellant company inspite of request made.

 (ii) Ld. CIT (Appeal) is not justified in law and facts and circumstances of the case in holding the assessment order passed by the assessing officer as valid under the circumstances when it is passed by the assessing officer against the principal of natural justice and appreciating the correct facts of the case and without giving proper opportunity of being heard.

(iii) Ld. CIT (Appeal) is not justified in law and facts and circumstances of the case in confirming the action of assessing officer in making the addition of Rs. 25,00,000/- in the hands of appellant without bringing any material on record to prove that amounts so surrendered during the course of survey by department officials at Firozabad, actually belongs to the income of appellant, under the circumstances and ignoring the fact, that along with cash found in the possession of the director of appellant company at the time of survey, a slip containing the name of the person to whom cash· so found actually belongs, and later on amount so surrendered in the name of such person was accepted by assessing officers at Firozabad, and tax was paid by such individual persons.

(iv) Ld. CIT (Appeal) is not justified in law and facts and circumstances of the case in not accepting the additional evidences filed by appellant company in respect of addition to share capital of Rs. 7,00,000/- and thus confirming the addition of RS.7,00,000/- made by assessing officer under  section 68 of the I.T. Act ignoring the various case laws relied upon by appellant in respect of admissibility of additional evidence and as well as on the merits of the case.

(v) Ld CIT(Appeal) is not justified in law and facts and circumstances of the case in confirming the addition of Rs. 4,45,000/- on estimation basis out of total addition of Rs. 8,90,156/- made by assessing officer under the head purchase of building material (capital expenditure).

(vi) Ld. CIT (Appeal) is not justified in law and facts and circumstances of the case in confirming the addition of Rs. 26,229/- on account of ESI penalty paid for late payment,

(vii) Ld. CIT (Appeal) is not justified in law and facts and circumstances of the case in confirming the disallowance of Rs. 36,000/- paid for consultancy charges to Shri R. N. Hari and others.

(viii) Ld. CIT (Appeal) is not justified in law and facts and circumstances of the case in confirming the addition of Rs. 6,84,999/- on account of expenditure on repair and maintenance expenses.

(ix) Ld CIT(Appeal) is not justified in law and facts and circumstances of the case in confirming the action of assessing officer in disallowing the claim of deduction under section SOIA under the circumstances appellant company is an industrial undertaking and is registered as a SSI Unit and fulfill all the conditions as laid down under the provision of I.T. Act.

 (x) Assessee has every right to make, add, delete, modify or alter any ground of appeal at the time of hearing.

3. We have heard both the counsel and perused the records.

4. Apropos ground no. (i), we find that assessee has raised a specific ground that order passed u/s 143(3) was not valid in as much as there is no proof of valid service of notice u/s 143(2) within the limitation period of 12 months, as per proviso to section 143(2). We further find that Ld. Commissioner of Income Tax (Appeals) has not properly given a finding on this issue. He has only observed that the grounds and the arguments of the assessee are not very strong. In our considered opinion, Ld. Commissioner of Income Tax (Appeals) should pass a speaking order on this issue incorporating his specific finding in this regard. Accordingly, we remit this issue to the file of the Ld. Commissioner of Income Tax (Appeals), to consider the same afresh.

5. As regards other grounds on merits of the case, we find that assessee has submitted various submissions, additional evidences before the Ld. Commissioner of Income Tax (Appeals) who has adjudicated the matter without considering the same. In our considered opinion, interest of justice will be served, if all the submissions including additional evidences filed by the assessee are considered by the Ld. Commissioner of Income Tax (Appeals) in adjudicating the matter on merits. Thus, we remit the other issues raised in the appeal, to the file of the Ld. Commissioner of Income Tax (Appeals), who shall adjudicate the same after taking into account all the submissions and additional evidences filed by the assessee.

6. In the result, the appeal filed by the Assessee stands allowed for statistical purposes.

Order pronounced in the open court on 28/12/2011.

                                                         SD/-                                   SD/-

                                             [I.P. BANSAL]                [SHAMIM YAHYA]

                                        JUDICIAL MEMBER     ACCOUNTANT MEMBER

Date 28/12/2011

SRB

Copy forwarded to: -

1. Appellant    2.Respondent    3.CIT    4.CIT (A)

5. DR, ITAT

TRUE COPY

                                                                                                                          By Order,

Assistant Registrar,

ITAT, Delhi Benches