M/s A.C.Construction, Kolkata V. I.T.O Wd - 41(1),kolkata., Kolkata

ITA 1018/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4152 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 28-09-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 30-04-2013
• Court: TRIBUNAL
• Department Lawyers: S M SARFARAZUT TAUHEED
• Keywords: Unexplained cash credit; Opportunity of being heard; Corroborative evidences; Non compliance; Revised return
• Section: 194C; 148

Judgement Text

ITA NO.1018/KOL/2013 M/S. A.C.CONSTRUCTION A.Y.2007 -08 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & SHRI M.B ALAGANESH, AM ] ITA NO.1018/KOL/2013 ASSESSMENT YEAR : 2007-08 M/S. A.C.CONSTRUCTION -VERSUS- I.T.O., WARD-41(1) , KOLKATA KOLKATA (PAN:AAKFA8508K) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: NONE FOR THE RESPONDENT: SHRI S.M.SARFARAZUT TAUHEED, JC IT, SR.DR DATE OF HEARING : 07.12.2016. DATE OF PRONOUNCEMENT : 09.12.2016. ORDER PER N.V.VASUDEVAN, JM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 28.02.2013 OF CIT(A)- XIX, KOLKATA RELATING TO A.Y.2007-08. 2. THE ASSESSEE IS A PARTNERSHIP FIRM. IT DERIVE S INCOME FROM THE BUSINESS OF CARRYING OUT CONSTRUCTION CONTRACTS. THE ASSESSEE F ILED RETURN OF INCOME FOR A.Y.2007- 08 ON 31.10.2007 DECLARING A TOTAL INCOME OF RS.4,5 2,355/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (ACT) ON 28. 03.2009. THE ASSESSEE HOWEVER ON 27.03.2009 FILED A REVISED RETURN OF INCOME DECL ARING TOTAL INCOME OF RS.4,52,360/- BUT CLAIMING AN ENHANCED REFUND. SINCE THE ORIGINAL RETURN WAS NOT FILED WITHIN THE TIME U/S 139(1) OF THE ACT, THE REVISED RETURN WAS NOT TAKEN COGNISANCE BY THE AO. THE AO HOWEVER ON PERUSAL OF THE ORIGINAL AND REVIS ED RETURN FOUND THAT THERE WAS DISCREPANCY IN THE CONTRACT RECEIPTS SHOWN IN THE O RIGINAL AND REVISED RETURN. THE PURCHASES WERE SHOWN AT A HIGHER FIGURE IN THE REVI SED RETURN THAN IN THE ORIGINAL RETURN. BOTH THE RETURNS WERE ACCOMPANIED BY THE AU DIT REPORTS SIGNED ON THE VERY SAME DAY. ALL THESE DISCREPANCIES LED THE AO TO BEL IEVE THAT INCOME OF THE ASSESSEE ITA NO.1018/KOL/2013 M/S. A.C.CONSTRUCTION A.Y.2007 -08 2 CHARGEABLE TO TAX HAS ESCAPED FROM INCOME. ACCORDIN GLY PROCEEDINGS U/S 148 OF THE ACT WAS INITIATED BY ISSUING OF NOTICE ON 26.03.201 0. 3. THE ASSESSEE WAS REPRESENTED BY ONE SHRI S.R.BH OWMICK, TAX CONSULTANT IN THE PROCEEDINGS BEFORE THE AO. ON 07.10.2010 A NOTICE W AS ISSUED TO THE ASSESSEE BY THE AO REQUESTING TO FURNISH BOOKS OF ACCOUNTS ETC. ON 25.10.2010. SHRI S.R.BHOWMICK APPEARED BEFORE THE AO BUT DID NOT EXPLAIN THE ISSU ES RAISED BY THE AO IN HIS SHOW CAUSE NOTICE. THE ASSESSEES AR WAS ASKED BY THE AO TO GIVE CERTAIN DETAILS AND THE HEARING WAS FIXED ON 3.11.2010. THERE WAS NO COMPLI ANCE BY THE ASSESSEE ON 03.11.2010. A FINAL SHOW CAUSE NOTICE DATED 09.12. 2010 WAS ISSUED AND EVEN THIS REMAINED NOT COMPLIED WITH BY THE ASSESSEE. SINCE T HE TIME LIMIT FOR COMPLETION OF ASSESSMENT WAS GETTING BARRED BY 31.12.2010, THE AO PROCEEDED TO PASS ORDER OF ASSESSMENT ON 24.12.2010 WHEREIN THE AO DETERMINED THE TOTAL INCOME OF THE ASSESSEE BY ADDING A SUM OF RS.11,68.,786/-. THE ADDITION S O MADE WAS NOTHING BUT THE DISCREPANCY BETWEEN THE FIGURES SHOWN IN THE AUDIT REPORT FILED ALONG WITH THE ORIGINAL RETURN AND AUDIT REPORT FILED ALONG WITH THE REVISE D RETURN. THE ADDITION WAS MADE U/S 68/69C OF THE ACT AS UNEXPLAINED CREDIT/EXPENDITURE . ANOTHER SUM OF RS.26,73,067/- WAS DISALLOWED BEING LABOUR CHARGES DEBITED IN THE PROFIT AND LOSS ACCOUNT. THE DISALLOWANCE WAS MADE FOR THE RESON THAT THE ASSESS EE FAILED TO DEDUCT TAX AT SOURCE ON THESE PAYMENTS U/S 194C OF THE ACT. THE AO INVOKED THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AND MADE THE AFORESAID ADDITIO N. 4. AGGRIEVED BY THE AFORESAID ADDITIONS THE ASS ESSEE PREFERRED THE APPEAL BEFORE CIT(A). IT APPEARS THAT THERE WAS AGAIN NO COMPLIAN CE BY THE ASSESSEE BEFORE CIT(A) AS THE VERY SAME AR APPOINTED BY THE ASSESSEE SHRI S.R.BOWMICK WAS HANDLING THE APPEAL OF THE ASSESSEE BEFORE CIT(A). THERE WAS ALM OST ABOUT SEVEN HEARINGS BEFORE CIT(A). ON 22.01.2013 THERE WAS NO COMPLIANCE ON BE HALF OF THE ASSESSEE NOR ANY PRAYER FOR ADJOURNMENT AND IN THESE CIRCUMSTANCES T HE CIT(A) WAS OF THE VIEW THAT THE ASSESSEE HAS NO MATERIAL TO SHOW THAT THE ORDER OF AO WAS NOT CORRECT. ACCORDINGLY THE APPEAL OF THE ASSESSEE WAS DISMISSED BY CIT(A) FOR NON COMPLIANCE. ITA NO.1018/KOL/2013 M/S. A.C.CONSTRUCTION A.Y.2007 -08 3 5. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 6. GROUNDS OF APPEAL RAISED BY THE ASSESSEE BEFO RE THE TRIBUNAL READ AS FOLLOWS :- 1. THAT, THE ORDER OF THE LD. COMMISSIONER OF INCO ME TAX (APPEALS) IS ARBITRARY AND IMPROPER. 2. THAT, LD. COMMISSIONER OF INCOME TAX (APPEALS) F AILED TO APPRECIATE THAT THE 'GROUNDS OF APPEAL'' PREFERRED BEFORE HIM IS NOT IN CONSONANCE WITH THE ASSESSMENT ORDER. 3. THAT, THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) FAILED TO APPRECIATE THAT THE NON-COMPLIANCE TO THE NOTICES OF HEARING WAS DUE TO NEGLIGENCE AND INCOMPETENCE ON THE PART OF SRI.S.R.BHOWMICK,TAX CONSULTANT. 4. THAT, THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN NOT APPRECIATING THAT THE ACCOUNTS OF THE APPELLANT WERE DULY AUDITED AND THERE WAS NO SCOPE FOR ANY ADDITION/DISALLOWANCE AS WERE MADE BY THE ASSESSING OFFICER. 5. THAT, THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) FAILED TO APPRECIATE THAT THE ACCOUNTS OF THE APPELLANT WERE DULY AUDITED AND THE RE WAS NO SCOPE FOR ANY ADDITION/ DISALLOWANCE AS WERE MADE BY THE ASSESSING OFFICER. 6. THAT, THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IS NOT APPRECIATING THAT THE ADDITION OF RS. 11 ,68,786/ - MADE BY THE ASSES SING OFFICER ON THE GROUNDS OF ALLEGED DISCREPANCIES WERE ARBITRARY AND ILLEGAL AS THE ASS ESSING OFFICER WAS NOT EVEN SURE ABOUT THE APPLICABILITY OF THE PROPER PROVISIONS IN THIS REGARD. 7. THAT, THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IS NOT APPRECIATING THAT THE DISALLOWANCE OF RS. 26,73,067.00 UNDER SECTION 40(A) (IA) BY THE ASSESSING OFFICER WAS ARBITRARY AND ILLEGAL AS THERE WAS NO CONTRACT IN RESPECT OF LABOUR PAYMENTS AND AS SUCH THERE WAS NO LIABILITY TO DEDUCT TAX AT SOURCE UNDER SECTION 194C OF THE INCOME TAX ACT, 1961. 8. THAT, YOUR PETITIONER CRAVES THE RIGHT TO PUT AD DITIONAL GROUNDS AND/OR TO ALTER/ANNEX/MODIFY THE PRESENT GROUND(S) AT THE TIM E OF HEARING OF THE APPEAL. 7. THIS APPEAL WAS FIXED FOR HEARING ON 29.01.20 16. ON THAT DATE THE WRITTEN SUBMISSION WAS FILED ON BEHALF OF THE ASSESSEE, WHI CH HAS BEEN SENT BY POST. THE CASE WAS ADJOURNED TO 30.03.2016, 18.05.2016, 20.07.2016 AND 28.09.2016. ON THESE DATES THERE WAS NO COMPLIANCE ON BEHALF OF THE ASSESSEE. THE NOTICE OF HEARING ON ALL THESE DATES WERE SENT TO THE ASSESSEE BUT COULD NOT BE SE RVED ON THE ASSESSEE. ON 07.12.2016 ITA NO.1018/KOL/2013 M/S. A.C.CONSTRUCTION A.Y.2007 -08 4 WHEN THE CASE WAS CALLED FOR HEARING NONE APPEARED ON BEHALF OF THE ASSESSEE. IT IS CLEAR FROM THE WRITTEN SUBMISSION FILED BY THE ASSE SSEE DATED 14.01.2016 BEFORE THE TRIBUNAL THAT HE INTENDS THAT THE WRITTEN SUBMISSIO NS BE CONSIDERED AND THE APPEAL BE DECIDED ON THE BASIS OF THE CONTENTIONS RAISED IN T HE WRITTEN SUBMISSIONS. IN FACT A LETTER DATED 03.03.2016 HAS ALSO BEEN FILED BEFORE THE TRIBUNAL REQUESTING THE WRITTEN SUBMISSIONS BE TREATED AS THE PLEA OF THE ASSESSEE BEFORE THE TRIBUNAL. 8. IT IS SEEN FROM THE WRITTEN SUBMISSIONS FILE D BY THE ASSESSEE THAT THE ASSESSEE HAS RELIED ON THE TAX CONSULTANT SHR S.R.BHOWMICK, WHO HAD NOT PROPERLY REPRESENTED THE ASSESSEES CASE BEFORE THE REVENUE AUTHORITIES. IT HAS ALSO BEEN STATED IN THE WRITTEN SUBMISSIONS THAT THE ACCOUNTS FILED WITH THE ORIGIN AL RETURN WAS ON THE BASIS OF UNAPPROVED BOOKS OF ACCOUNTS AND THAT THE DISCREPAN CIES COULD BE PROPERLY EXPLAINED WITH SUPPORTING EVIDENCE. IT IS ALSO SUBMITTED THE AMOUNT DISALLOWED U/S 40(A)(IA) OF TEH ACT WERE LABOUR CHARGES WHICH ARE NOT SUBJECTED TO TDS U/S 194C OF THE ACT AND THEREFORE THE SAID DISALLOWANCE WAS ALSO UNCALLED F OR. IT HAS BEEN PRAYED THAT IT IS ONLY BECAUSE OF THE NEGLIGENCE ON THE PART OF THE ASSESS EES AUTHORISED REPRESENTATIVE THAT THE CASE WAS NOT PROPERLY REPRESENTED. THE ASSESSEE HAS SOUGHT FOR AN OPPORTUNITY TO EXPLAIN HIS CASE BEFORE AO AND PRAYED FOR SETTING A SIDE THE ORDER OF CIT(A) AND RESTORATION OF THE ISSUE TO THE FILE OF AO TO ENABL E THE ASSESSEE TO PRODUCE BOOKS OF ACCOUNT AND EXPLAIN OF THE DISCREPANCIES. THE LD. D R RELIED ON THE ORDER OF CIT(A). 9. WE HAVE CAREFULLY CONSIDERED THE WRITTEN SUBM ISSIONS AND THE ORDERS OF THE AUTHORITIES BELOW. IN OUR VIEW GOING BY THE NON COM PLIANCE BEFORE AO AND CIT(A) THE PLEA OF THE ASSESSEE THAT THE NON COMPLIANCE WA S BECAUSE OF NEGLIGENCE ON THE PART OF THE ASSESSEES AR, APPEARS TO BE TRUE. WE FIND THAT THERE IS A RING TO TRUTH IN THE STATEMENTS MADE IN THE WRITTEN SUBMISSION. WE T HEREFORE ACCEPT THE PLEA OF THE ASSESSEE AND SET ASIDE THE ORDER OF CIT(A) AND REMA ND THE ISSUES DISPUTED BY THE ASSESSEE BEFORE THE TRIBUNAL NAMELY GROUND NOS. 4 T O 7 FOR FRESH CONSIDERATION BY THE AO AFTER AFFORDING DUE OPPORTUNITY OF BEING HEARD T O THE ASSESSEE. ITA NO.1018/KOL/2013 M/S. A.C.CONSTRUCTION A.Y.2007 -08 5 10. IN THE RESULT THE APPEAL OF THE ASSESSEE I S TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 09.12.2016. SD/- SD/- [M.BALAGANESH ] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 09.12.2016. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.M/S. A.C.CONSTRUCTION, 22/1, BALARAM GHOSH STREET , KOLKATA-700004. 2. .I.T.O., WARD-41(1), KOLKATA. 3. CIT(A)-XIX, KOLKATA 4. CIT-XIV, KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, ASST. REGISTRAR, ITAT, KOLKATA BENCHES