SH. LALA RAM CHOUDHARY, Jaipur V. ITO, Jaipur

ITA 1058/JPR/2011

• Counselvise Citation: 105823114 RSA 2011
• Duration Of Justice: 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 05-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VINOD JOHARI
• Keywords: Opportunity of being heard; Condonation of delay
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH : JAIPUR BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND SHRI N.L. KALRA, ACCOUNTANT MEMBER ITA NO.1006 /JP/2011 ASSTT. YEAR : 2006-07 PAN:ARETR5683D LATE SHRI GALKA RAM CHOUDHARY, VS. INCOME TAX OFFIC ER, LEGAL REPRESENTATIVE: SH. LALARAM WARD 7(2), JAIPU R. CHOUDHARY, JAIPUR. JAIPUR. (APPELLANT) (RESPONDENT) ITA NO.1058 /JP/2011 ASSTT. YEAR : 2006-07 PAN:ALXPC7928D SH. LALARAM CHOUDHARY, VS. INCOME TAX OFFICER, JAIPUR. WARD 7(2), JAIPUR. (APPELLANT) (RESPONDENT) APPELLANTS BY : SHRI ANIL SHARMA, AR RESPONDENT BY : SHRI VINOD JOHARI, DR DATE OF HEARING : 28/12/2011 DATE OF PRONOUNCEMENT:03.01.2012 ORDER PER R.K. GUPTA, JM THESE TWO APPEALS FILED DIFFERENT ASSESSEES ARE DI RECTED AGAINST SEPARATE ORDERS OF THE CIT(A)-III, JAIPUR, EACH DAT ED 25.11.2009 RELATING TO ASSESSMENT YEAR 2006-07. SINCE FACTS ARE IDENTICAL IN BOTH THE APPEALS, 2 THEREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST OF ALL, WE WILL DISCUSS THE FACTS IN THE C ASE OF LATE SHRI GALKA RAM CHOUDHARY, (IN ITA NO. 1006/JP/2011) AND THE OU TCOME OF THE SAME WILL BE APPLICABLE TO THE CASE OF OTHER ASSESSEE I .E. LALA RAM CHOUDHARY, AS THE FACTS ARE IDENTICAL. 3. THE APPEAL FILED BY THE ASSESSEE IN ITA NO.1106/ JP/2011, IS BARRED BY LIMITATION BY 9 MONTHS & 7 DAYS. THE CONDONATIO N APPLICATION IS PLACED ON RECORD ALONGWITH AFFIDAVIT OF THE ASSESSEE. IN T HE AFFIDAVIT OF THE ASSESSEE, IT HAS BEEN STATED THAT THE CONTENTS OF THE APPLICA TION FOR CONDONATION OF DELAY IN FILING THE APPEAL MAY BE TREATED AS CONTEN TS OF THE AFFIDAVIT. IN THE APPLICATION, IT IS MENTIONED THAT THE ASSESSEE WAS HAVING AGRICULTURAL INCOME EXEMPT FROM CHARGE OF INCOME-TAX, WAS NEITHER HAVIN G ANY PAN NOR FILING HIS RETURN OF INCOME REGULARLY. THE ASSESSEE DURING THE PREVIOUS YEAR HAS SOLD HIS AGRICULTURAL LAND AND RECEIVED CERTAIN AMO UNT IN HIS BANK ACCOUNT. THE ITO WARD 7(4), JAIPUR ISSUED NOTICE DATED 15.11 .2006 UNDER SECTION 142(1)(I) OF THE ACT, IN THE NAME OF THE ASSESSEE T O EXPLAIN THE SOURCE OF THE AMOUNT CREDITED IN HIS BANK ACCOUNT. THE ASSESSEE E NGAGED SH. RAHUL SHARMA, CA AS HIS AR TO REPRESENT THE CASE BEFORE T HE AO AND PROVIDE NECESSARY DETAILS, INFORMATION AND DOCUMENTS TO BE SUBMITTED BEFORE THE 3 AO. THE ASSESSEE HAS ALSO MADE PAYMENT OF PROFESSIO NAL FEE, AS AGREED BETWEEN THE ASSESSEE AND THE AR. HOWEVER, THE AR I. E. SH. RAHUL SHARMA, CA UNFORTUNATELY COULD NOT SATISFACTORILY ATTEND BE FORE THE AO THEREFORE, THE ASSESSMENT WAS COMPLETED UNDER SECTION 144 AND THEREBY A HUGE DEMAND WAS CREATED AGAINST THE ASSESSEE ON TECHNICA L GROUNDS. ON RECEIPT OF ASSESSMENT ORDER, THE ASSESSEE CONTACTED HIS AR AND INQUIRED ABOUT THE EX- PARTE ASSESSMENT AND DEMAND NOTICE. THE AR OF THE A SSESSEE EXPLAINED TO THE ASSESSEE THAT HE HAS FILED REPLY DATED 10.12.20 08 BEFORE THE AO AND THE AO ACTING UNFAIRLY HAS NOT TAKEN THE SAME ON RECORD AND COMPLETED THE ASSESSMENT ORDER EX-PARTE. THE AR ASSURED THE ASSES SEE TO TAKE NECESSARY STEPS TO QUASH THE ASSESSMENT ORDER AND TO DELETE T HE DEMAND. THE ASSESSEE BEING SATISFIED SIGNED THE NECESSARY PAPERS/FORMS A S DIRECTED BY HIS AR. IN THIS BACKGROUND, THE AR FILED REPLY BEFORE THE LD. CIT(A). HOWEVER, HE AGAIN DID NOT APPEAR BEFORE THE LD. CIT(A) AND THE LD. CIT(A) HAS ALSO DECIDED THE APPEAL OF THE ASSESSEE EX-PARTE VIDE OR DER DATED 22.11.2009. THEREAFTER, DEMAND NOTICE WAS RECEIVED BY THE ASSES SEE ONLY THEN HE APPROACHED THE AR WHO EXPLAINED THE REASONS FOR NOT ATTENDING THE APPELLATE PROCEEDINGS. HOWEVER, HE ASSURED THE ASSESSEE THAT HE WILL LOOK AFTER THE ISSUE AND TO GET THE DEMAND DELETED. ACCORDINGLY, T HE ASSESSEE AGAIN SIGNED THE PAPERS AND HANDED OVER TO THE AR. HOWEVER, THE AR DID NOT FILE ANY 4 APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF THE CIT(A). THEREAFTER, THE ASSESSEE CAME TO KNOW THAT THE APPEAL HAS NOT BEEN FILED THEN WITH GREAT EFFORTS, HE TOOK THE PAPERS FROM THE CA I.E. SH. RA HUL SHARMA AND ENGAGED ANOTHER LAWYER TO FILE APPEAL BEFORE THE TRIBUNAL. IN THESE CIRCUMSTANCES, THE APPEAL IS FILED BEFORE THE TRIBUNAL AND REQUEST HAS BEEN MADE TO CONDONE THE DELAY, AS THERE WAS NO FAULT OF THE ASSESSEE IN FI LING THE APPEAL LATE. 4. THE LD. COUNSEL FOR THE ASSESSEE ALSO EXPLAINED THE ABOVE CIRCUMSTANCES AND STATED THAT EARLIER CA DELIBERATE LY DID NOT FILE ANY APPEAL BEFORE THE TRIBUNAL AND BECAUSE OF THIS REASON THE ASSESSEE SHOULD NOT SUFFER. OTHERWISE IT WILL BE A GREAT HARDSHIP BECAUSE THE A MOUNT RECEIVED BY THE ASSESSEE IS ON ACCOUNT OF AGRICULTURAL LAND WHICH I S BEYOND 8 KMS MUNICIPAL LIMITS AND, THEREFORE, IS NOT LIABLE TO TAX. IT WAS ALSO SUBMITTED THAT IF IT IS LIABLE TO TAX THEN CAPITAL GAIN HAS TO BE PAID AS P ER PROVISIONS OF LAW, WHICH HAS NOT BEEN EXAMINED BY AO OR BY THE LD. CIT(A) AS BOTH THE AUTHORITIES HAVE DECIDED THE CASE EX-PARTE. 4.1. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES O F THE CASE, THE LD. COUNSEL OF THE ASSESSEE REQUESTED THAT THE DELAY IN FILING THE APPEAL SHOULD BE CONDONED AND THE MATTER BE SENT BACK TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD. RELIANCE IS PLACED ON THE DECISION OF THE HONBLE SUPREME CO URT, IN THE CASE OF THE 5 COLLECTOR, LAND ACQUISITION VS. MST KATJI, 167 ITR 471. HE FURTHER PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT, IN THE CASE OF RADHA KRISHAN RAI VS. ALLAHABAD BANK (2003) 9 SCC 733. RE LIANCE WAS ALSO PLACED ON THE DECISION OF HONBLE ANDHRA PRADESH HI GH COURT IN THE CASE OF SURYA GENERAL TRADERS VS. CTO, 133 STC 388. FURTHER , RELIANCE WAS PLACED ON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF GUPTA RICE MILLS VS. CST, 91 STC 208. HE ALSO PLACED RELIANCE ON THE WRITTEN SUBMISSIONS PLACED ON RECORD. 5. THE LD. DR, ON THE OTHER HAND, SUBMITTED THAT AP PLICATION FOR CONDONATION OF DELAY MAY BE DISPOSED OF ON MERIT. I T WAS FURTHER SUBMITTED THAT IF THE DELAY IS CONDONED THEN THE MATTER CAN B E SENT BACK TO THE FILE OF THE AO, AS THE ASSESSMENT AS WELL APPEAL OF THE ASS ESSEE HAS BEEN DECIDED EX-PARTE. 6. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY PERUSING THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE ASSESSEE DESERVES TO SUCCEED IN RESPECT TO DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL. THE HONBLE ANDHRA PRADESH HIGH COURT, IN THE CASE OF S URYA GENERAL TRADERS VS. COMMERCIAL TAX OFFICER AND OTHERS, HELD, THAT S AVE THE QUESTION OF LIMITATION, THE DEALER WAS ENTITLED TO THE RELIEF A S WAS OBTAINED BY HIM FOR THE PREVIOUS YEAR. WHEN A PERSON HAS A GOOD CASE ON MER ITS, DEFEAT OF HIS CLAIM 6 ON TECHNICAL PLEA OF LIMITATION WOULD ULTIMATELY LE AD TO INJUSTICE. STATE SHOULD NOT STAND BY A TECHNICAL PLEA OF LIMITATION IF A CITIZENS CASE WAS OTHERWISE MERITORIOUS. WHILE HOLDING SO, RELIANCE W AS PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF THE COLLECT OR, LAND ACQUISITION VS. MST KATIJI (SUPRA). SIMILAR VIEW HAS BEEN TAKE N IN THE CASE OF GUPTA RICE MILLS VS. COMMISSIONER OF SALES TAX (SUPRA). I N THE CASE OF RADHA KRISHNA RAI VS. ALLAHABAD BANK AND OTHERS (SUPRA), THE HONBLE SUPREME COURT, HAS OBSERVED THAT IT IS A CASE WHERE THE AP PELLANT WAS KEPT UNDER THE IMPRESSION THAT THE APPELLANT HAD ALREADY BEEN FILE D. WHEN THE APPELLANT TRIED TO CONTACT HIS ADVOCATE MR.M.M. VERMA, TO KNO W ABOUT THE PROGRESS OF HIS CASE, HE DID NOT RECEIVE ANY SATISFACTORY INFOR MATION. THE APPELLANT FOUND THAT THE PROGRESS OF THE MATTER WAS NOT SATISFACTOR Y, HE ENGAGED ANOTHER ADVOCATE, MRS. HEERA JAIN. ON ENQUIRY BY MRS. HEERA JAIN, ADVOCATE IT CAME TO HER KNOWLEDGE THAT NO APPEAL BEFORE THE DIVISION BENCH WITH A PETITION TO CONDONE THE DELAY IN THE CIRCUMSTANCES MENTIONED ABOVE. THE DELAY WAS NOT CONDONE BY THE HONBLE HIGH COURT. THE ASSESSEE FILED APPEAL BEFORE THE HONBLE SUPREME COURT. THE HONBLE SUPREME COURT, A FTER CONSIDERING THE FACTS NARRATED ABOVE, FOUND THAT THOUGH THE PERIOD OF DELAY IS UNDULY LONG, THE CIRCUMSTANCES ARE ALSO VERY UNUSUAL. THE PETITI ONER HAS BEEN A VICTIM OF MISREPRESENTATION OF FACTS BY HIS OWN ADVOCATE AND WAS KEPT UNDER THE 7 IMPRESSION THAT THE APPEAL IS PENDING BEFORE THE HI GH COURT WHEREAS NO APPEAL WAS IN FACT FILED BY THE ADVOCATE. IT CANNOT BE SAID THAT THE APPELLANT HAS NOT BEEN VIGILANT IN PROSECUTING THE APPEAL. TH E CAUSE SHOWN BY THE PETITIONER IS SUFFICIENT TO JUSTIFY CONDONING THE D ELAY IN FILING THE APPEAL. WE ACCORDINGLY CONDONE THE DELAY AND REMIT THE MATTER TO THE HIGH COURT FOR DISPOSING OF THE APPEAL IN ACCORDANCE WITH LAW. 6.1. THE RATIO OF THE DECISION OF HONBLE APEX COUR T IS SQUARELY APPLICABLE ON THE FACTS OF THE PRESENT CASE. IN THE PRESENT CA SE ALSO, THE CA SH. RAHUL SHARMA, WHO WAS ENGAGED BY THE ASSESSEE WAS NOT VIG ILANT AND WAS NOT ATTENDING THE PROCEEDINGS SINCE STARTING EITHER BEF ORE THE AO OR BEFORE THE CIT(A) AND NEITHER FILED THE APPEAL AGAINST THE ORD ER OF THE CIT(A) BEFORE THE TRIBUNAL, WHEREAS ALL THE PAPERS WERE HANDED O VER TO HIM IN TIME. WE NOTED THAT THE PAPERS DULY SIGNED BY THE ASSESSEE W ERE HANDED OVER TO THE CA, WHICH ARE PLACED ON RECORD AT PAGES 14 TO 21 O F THE PAPER BOOK. POWER OF ATTORNEY WAS ALSO EXECUTED BY THE ASSESSEE IN TI ME I.E. ON 14.12.2009. HOWEVER, MR. RAHUL SHARMA, HAS NOT FILED THE APPEAL BEFORE THE TRIBUNAL. THEREFORE, IT IS CLEARLY ESTABLISHED THAT THE CA OF THE ASSESSEE WAS NOT VIGILANT AND THE ASSESSEE WAS VIGILANT AND HE WAS F OLLOING HIS CASE AND WHEN HE CAME TO KNOW THAT HIS ADVOCATE IS NOT ATTENDING HIS PROCEEDINGS SATISFACTORILY THEN HE ENGAGED ANOTHER LAWYER WHO F ILED THE APPEAL BEFORE THE 8 TRIBUNAL ALONGWITH CONDONATION APPLICATION SIGNED B Y THE ASSESSEE. COPY OF THE AFFIDAVIT ON OATH WAS ALSO FILED, WHICH IS PLAC ED ON RECORD. 6.2. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE AND TAKING INTO CONSIDERATION THE VARIOUS CASES DISCUSSED ABOV E, WE FOUND THAT THERE WAS REASONABLE AND SUFFICIENT CAUSE IN NOT FILING T HE APPEAL BEFORE THE TRIBUNAL. ACCORDINGLY, WE CONDONE THE DELAY IN FILI NG THE APPEAL BEFORE THE TRIBUNAL AND REMIT THE MATTER BACK TO THE FILE OF T HE AO WITH THE DIRECTION TO PASS ORDER AFRESH IN ACCORDANCE WITH THE PROVISIONS OF LAW AND AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. ITA NO.1058/JP/2011 : WE FOUND THAT SIMILAR FACTS ARE INVOLVED IN THIS CASE ALSO. IN THIS CASE ALSO, THE APPEAL WAS N OT FILED BY THE LD. COUNSEL FOR THE ASSESSEE I.E. SH. RAHUL SHARMA, CA, WHO WAS ALSO ENGAGED BY THIS ASSESSEE. AS STATED, THE FACTS AND CIRCUMSTANCES OF THE CASE ARE IDENTICAL EXCEPT DIFFERENCE OF NUMBER OF DAYS IN FILING THE A PPEAL. WE HAVE ALREADY CONDONED THE DELAY IN RESPECT OF LATE SH. GALKA RAM CHAUDHARY. ON THE SAME REASONING, WE CONDONE THE DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL IN THE CASE OF THIS ASSESSEE I.E. SH. LALA RAM CHOUDHARY AND REMIT THE MATTER BACK TO THE FILE OF THE AO TO PASS A FRE SH ORDER IN ACCORDANCE WITH LAW AND AFTER AFFORDING REASONABLE OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. IN THIS CASE ALSO, THE ASSESSMENT AS WELL AS APPEAL OF THE ASSESSEE 9 BEFORE THE CIT(A), WERE COMPLETED EX-PARTE, AS AR O F THE ASSESSEE DID NOT APPEAR BEFORE BOTH THE AUTHORITIES. WE ORDER ACCORD INGLY. 8. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSE. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 03.01 .2012 SD/- SD/- (N.L. KALRA) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBE R DATED : 03.01.2012 /SKR/ COPY FORWARDED TO :- THE ASSESSEE: LATE SH. GALKA RAM CHOUDHARY (II) SH . LAL RAM CHOUDHARY, JAIPUR THE ITO, WARD-7(2), JAIPUR. THE CIT (A), JAIPUR. THE CIT, THE D/R, ITAT, JAIPUR. GUARD FILE (ITA NOS. 1006 & 1058/JP/2011 BY ORDE R,