IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC-I” NEW DELHI

ITA  No. 5613/Del/2014          AY : 2003-04
Achievers Marketing Pvt. Ltd (Appellant) vs Income-tax Officer (Respondent)
Date of Order : 09-11-2015

ORDER

PER S.V. MEHROTRA, A.M.. :
This appeal, by the assessee , has been preferred against the order dated 06-12-2012, passed by the CIT(A)-IV, New Delhi, in appeal no. 95/10-11, relating to A.Y. 2003-04.

2. Brief facts of the case are that the assessee company was incorporated on 20-7-2001. During the year under consideration the assessee company did the trading activities. It filed its return of income on 27-11-2003 declaring net loss of Rs. 45,540/-. Assessment was reopened u/s 148 and after considering the assessee’s submissions, the AO made addition of Rs. 4,25,000/-, received from Divya Secfin P:vt. Ltd., as accommodation entry u/s 68 of the Income-tax act, 1961 and Rs. 31,637/- paid for increase in authorized share capital, thereby determining the total income at Rs. 4,11,097/-.

3. Before ld. CIT(A), the assessee had submitted as under:

6.2 Before me, the Id. AR for the appellant has submitted that to augment its capital, the assessee company increased its authorized capital from Rs.5,00,0001- to Rs.90,00,0001- and paid ROC fee of Rs.1,30,5001- for increasing the capital. The assessee company received share application money from 35 applicants for subscription of 1,42,000 shares. One such applicant was M/s Divya Secfin Pvt. Ltd. which applied for 42,500 shares of RS.101- each. It was submitted .that the above share applicant company submitted a cheque NO.702572 dated 14.02.2003 drawn on Corporation Bank, Karol Bagh, New Delhi along with share application form and a copy of Board resolution. It was submitted that shares were allotted on 31.03.2003 and return of allotment in Form No. 2,was filed with ROC on 30.04.2003. It was submitted that the summons were sent by speed post as well as through Income Tax Inspector of the Ward. It was submitted that the summons were issued on 29.11.2010 by speed post and Income Tax Inspector submitted his report on 30.11.2010 in which the Inspector has reported that no company in the name of M/s Divya Section Pvt. Ltd. exists. It was further submitted that the very fact that the AO sent the summon by post to that very address shows that the AO himself disbelieved the report of the Inspector. Yet the AO relied on that very report to the prejudice of the assessee.”

4. These submissions were forwarded to AO, whose report has been reproduced in para 6.3 of ld. CIT(A)’s order, in which primarily it is pointed out that sufficient opportunities were given to assessee but the same were not availed by assessee.

5. Ld. CIT(A), after considering the detailed submissions and report of AO observed that the summons sent by the AO to the Divya Secfin Pvt. Ltd. on the address provided by the assessee company were returned unserved by the postal authorities. The additional efforts made by AO by deputing the Inspector of Income-tax to make spot verification also did not yield any result. Thus, the onus shifted from the AO to the assessee company. He further observed that the ld. AR was asked by him (ld CIT(A), during hearing of the appeal to produce the Principal Officer of share applicant company Divya Secfin Pvt. Ltd. before him, but the ld. AR expressed his inability to produce the share applicant at the appellate stage also. Ld. CIT(A), accordingly, dismissed the assessee’s appeal. Being aggrieved, the assessee is in appeal before the Tribunal.

6. Ld. counsel for the assessee submitted that the addition has been  ade because the summons issued u/s 131, sent by speed post were returned unserved by postal authorities. Before me, the assessee has filed paper book containing additional evidence of address change alongwith the petition for admission of additional evidence. It is, inter alia, stated that the same could not be produced due to negligence of AR of the assessee.

7. I have considered the submissions of both the parties and have perused the record of the case. It is well settled law that for the negligence of counsel, the assessee should not be made to suffer. I, therefore, admit this additional evidence from pages 1 to 71 of the PB and restore the matter back to the file of AO to examine the issue de novo. I may clarify that the AO will, after examining the additional evidence, send the summons at given address. If still the summons are not served on assessee, then the addition will stand confirmed. If the summons are served and principal officer appears then AO will decide the issue on merits.

8. In the result, assessee’s appeal is allowed for statistical purposes in terms of aforementioned observations.

Order pronounced in open court on 09/11/2015.

Sd/-
(S.V. MEHROTRA)
ACCOUNTANT MEMBER