Sree Hanuman Infra Private Limited , Hyderabad V. Dy. Commissioner of Income Tax , Circle-3(2), Hyderabad

ITA 1059/Hyd/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5145 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 23-01-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 23-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R MOHANKUMAR
• Keywords: Charitable institution; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO .1059 /HYD/ 2018 ASSESSMENT YEAR: 20 12 - 13 SREE HANUMAN INFRA PRIVATE LIMITED, HYDERABAD. PAN: AAQCS 9195 R VS. DCIT, CIRCLE - 3(2), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI K.C. DEVDAS REVENUE BY: SRI R. MOHAN KUMAR, DR DATE OF HEARING: 23/01/2019 DATE OF PRONOUNCEMENT: 31 /01/2019 ORDER PER SMT. P. MADHAVI DEVI, J.M.: THIS APPEAL IS FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2012 - 13 AGAINST THE ORDER OF THE CIT(A) - 3, HYDERABAD DATED 10/08/2017. 2. AT THE OUTSET, IT IS SEEN THAT THERE IS A DELAY OF 208 DAYS IN FILING OF THE APPEAL BEFORE US. THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY ALONG WITH AN AFFIDAVIT. IN THE APPLICATION IT IS MENTIONED THAT THE DELAY HAS OCCURRED AS THE ACCOUNTANT OF THE ASSESSEE - COMPANY WHO HAD RECEIVED THE CIT(A)S ORDER , HA D MISPLACED THE SAME AND THE DELAY OCCURRED IN TRACING OUT THE ORDER. THE ACCOUNTANT OF THE COMPANY HAS FILED AN AFFIDAVIT IN SUPPORT OF THE SAID 2 CONTENTION . LEARNED COUNSEL FOR THE ASSESSEE PRAYED FOR CONDONATION OF DELAY AND IN SUPPORT OF HIS CONTENTION THAT THE ABSENCE OF AN ORDER RESULTING IN DELAY WOULD BE A SUFFICIENT REASON FOR CONDONATION OF DELAY , H E PLACED RELIANCE UPON THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF SREENIVAS CHARITABLE TRUST VS. DCIT REPORTED IN [2000] (280 ITR 357). 3. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE OPPOSED THE CONDONATION OF DELAY. 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD AND ALSO THAT THE DECISION OF THE MADRAS HIGH COURT (SUPRA) WHEREIN THE RELIANCE WAS PLACED BY THE HIGH COURT ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF VEDABAI VS. SHANTARAM BABURAO PATIL [2000] (253 ITR 798) IT WAS HELD THAT T HE COURT HAS TO EXERCISE THE DISCRETION ON THE FACTS OF EACH CASE KEEP ING IN MIND THAT IN CONSTRUING THE EXPRESSION SUFFICIENT CAUSE, THE PRINCIPLE OF ADVANCING SUBSTANTIAL JUSTICE IS OF PRIME IMPORTANCE , WE FIND THAT I N THE CASE BEFORE US ALSO, IT IS NOT THE CASE THAT BY FILING THE APPEAL BELATEDLY , IS NEITHER DELIBERATE NOR DOES THE CONDONATION OF DELAY CAUSES ANY PREJUDICE TO THE RESPONDENT. THEREFORE, WE CONDONE THE DELAY OF 208 DAYS. 5. AS FAR AS THE MERITS OF THE CASE ARE CONCERNED, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 3 1. THE ORDER OF THE HONBLE CIT(A) IS ERRONEOUS IN LAW AS WELL AS FACTS OF THE FACTS OF THE CASE. 2. THE CIT(A) OUGHT TO HAVE OBSERVED THAT THE ASSESSING OFFICER ADOPTED THE HIGHER PERCENTAGE OF PROFIT I.E., 8% NORMALLY APPLIC ABLE TO MAIN CONTRACTOR WHICH NEEDS TO BE RECONSIDER. 3. THE HONBLE CIT(A) OUGHT TO HAVE OBSERVED THAT THE AO HAS NOT CONSIDERED THE FACT THAT MAJOR PORTION OF THE WORK EXECUTED IS LABOUR ORIENTED WHERE THE PROFIT PERCENTAGE IS LESS COMPARED WITH OTHER WORKS. 4. THE HONBLE CIT(A) OUGHT TO HAVE OBSERVED THAT THE A.O. HAS NOT OBSERVED THAT THE APPELLANT COMPANY HAS DONE THE WORKS UNDER FIXED RATE CONTRACT WHEREIN WHICH NO ESCALATION WILL BE PAID. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A SUB - CONTRACTOR A S WELL AS LABOUR - CONTRACTOR AND THOUGH THE ASSESSEE IS MAINTAINING BOOKS OF ACCOUNT, THE ASSESSING OFFICER HAS REJECTED THE SAME AND ESTIMATED THE INCOME @ 8% OF THE GROSS RECEIPTS. HE SUBMITTED THAT IN THE CASE OF SUB - CONTRACTS, THE TRIBUNAL HAS DIRECTED THAT THE INCOME IS TO BE ESTIMATED AT 5%, AND BETWEEN 1.5% TO 3.5% IN THE CASE OF LABOUR - CONTRACTS. HOWEVER, ON A QUERY BY THE BENCH AS TO WHETHER ASSESSEE IS MAINTAINING SEPARATE BOOKS OF ACCOUNT, THE LEA RNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS MAINTAINING ONLY CONSOLIDATED BOOKS OF ACCOUNT AND THERE ARE NO SEPARATE BOOKS OF ACCOUNT FOR EACH OF THE CONTRACTS . HE SUBMITTED THAT THE INCOME OF THE ASSESSEE CAN BE ESTIMATED @ 5% FOR THE SU B - CONTRACT WORKS AND AT LESSER PERCENTAGE FOR THE LABOUR - CONTRACTS. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE, HOWEVER, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4 8. HAVING REGARD TO THE RIVAL CONTENTIONS AND MATERIAL ON RECORD, WE FIND THAT IT IS NOT IN DISPUTE THAT THE ASSESSEE IS IN SUB - CONTRACT WORKS. SINCE THERE IS NO BIFURCATION BETWEEN THE SUB - CONTRACT WORKS AND THE LABOUR - CONTRACTS, WE ARE OF THE OPINION THAT THE ESTIMATION OF THE INCOME BETWEEN THESE TWO ITEMS OF ACTIVITIES WOULD MEET THE END S OF JUSTICE IN THESE CIRCUMSTANCES. THEREFORE, WE DEEM IT FIT AND PROPER TO ESTIMATE THE INCOME OF THE ASSESSEE @ 4% OF ITS TOTAL TURNOVER. WE ORDER ACCORDINGLY. 9. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2019 . SD/ - SD/ - (S. RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 31 ST JANUARY, 2019 OKK COPY TO: - 1) B. NARSING RAO & CO., CHARTERED ACCOUNTANTS, PLOT NO.554, RD NO.92, JUBILEE HILLS, HYD - 96. 2) DCIT, CIRCLE - 3(2), HYD. 3) THE CIT(A) - 3 , HYDERABAD 4) THE PR. CIT - 3 , HYDERABAD 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE