INDIA OIL AND AGRICULTURAL PRODUCTS, MUMBAI V. ITO WD 17(3)(2), MUMBAI

ITA 121/MUM/2009

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7660 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 29-12-2011
• Assessment Year: 1995-1996
• Appeal Filed On: 07-01-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Assessment record
• Section: 143(3); 142(1); 234B; 147; 144

Judgement Text

1 INDIAN OIL & AGRL. PRODUCTS IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI MUMBAI MUMBAI MUMBAI I II I BENCH BENCH BENCH BENCH MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI T R SOOD, T R SOOD, T R SOOD, T R SOOD, AM & AM & AM & AM & SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM ITA NO. ITA NO. ITA NO. ITA NO. 121/MUM/2009 121/MUM/2009 121/MUM/2009 121/MUM/2009 (ASST YEAR (ASST YEAR (ASST YEAR (ASST YEAR 1995 1995 1995 1995- -- -96 9696 96) )) ) INDIAN OIL & AGRL. PRODUCTS 205/3 LUCKY STAR CHS LTD JERBAI WADIA ROAD PAREL MUMBAI 12 VS THE INCOME TAX OFFICER WARD 17(3)(2), MUMBAI (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) PAN NO. PAN NO. PAN NO. PAN NO. AAAF1847G AAAF1847G AAAF1847G AAAF1847G ASSESSEE BY SH DHARMESH SHAH REVENUE BY SH A K NAYAK DT.OF HEARING 29 TH DEC 2011 DT OF PRONOUNCEMENT 6 TH , JAN 2012 ORDER ORDER ORDER ORDER PER PER PER PER VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO, , , , J JJ JM MM M THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 22ND SEPT 2008 OF CIT(A) FOR THE ASSESSMENT YEAR 2005-06. 1. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND FACTS IN NOT APPRECIATING THAT THE ORDER PA SSED BY THE ASSESSING OFFICER U/S. 144 R.W.S. 254 OF THE ACT IS INCORRECT AND HAD IN LAW. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE ASSES SMENT ORDER WAS PASSED AND THE APPEAL WAS DISMISSED WITHOUT COMPLYI NG WITH THE PRINCIPLES OF NATURAL JUSTICE. 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE NOTIC E ISSUED U/S. 147 OF THE ACT IS INVALID AND ILLEGAL. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) H AS FAILED TO APPRECIATE THAT VARIOUS NOTICES ISSUED BY THE ASSES SING OFFICER ARE INVALID AND ILLEGAL. 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN 2 INDIAN OIL & AGRL. PRODUCTS LAW AND IN FACTS IN CONFIRMING THE ADDITION OF `. 3 7,00,405/ - ON ACCOUNT OF UNEXPLAINED DEPOSITS IN THE BANK. 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS NOT APPRECIATING THAT THE ASSESSIN G OFFICER HAS MADE THE ADDITION WITHOUT COMPLYING WITH THE PRINCIPLES OF NATURAL JUSTICE. 7. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE LEVY OF INTEREST U/S. 234A AND 234B OF THE ACT. 8. THE APPELLANT CRAVES LEAVE OF YOUR HONOUR TO ADD TO, ALTER, AMEND AND/ OR DELETE ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL. 3 THE ONLY ISSUE ARISES FROM THE GROUNDS RAISED BY THE ASSESSEE IS WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT (A) IS JUSTIFIED IN CONFIRMING THE ADDITION OF ` 37,00,405/- ON ACCOUNT OF UNEXPLA INED DEPOSITS IN THE BANK. 3.1 THIS IS SECOND ROUND OF LITIGATION. INITIALLY, THE ASSESSMENT U/S 143(3) R.W.S 148 WAS PASSED ON 30 TH MARCH, 2001 WHEREBY THE ASSESSING OFFICER ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT ` 41,51,400/-. THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) AND VIDE ORDER DATED 31.3.2003 THE CIT( A) GRANTED THE RELIEF TO THE EXTENT OF ` 4,50,000/-. THE MATTER WAS CARRIED TO T HE TRIBUNAL BY THE ASSESSEE. THE TRIBUNAL VIDE ORDER DATED 21.2.2006 SET ASIDE T HE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR BEING CONSIDERED AFRESH IN AC CORDANCE WITH LAW. SINCE THE ASSESSEE DID NOT FILE THE NECESSARY DETAILS TO EXPL AIN THE DEPOSITS AND WITHDRAWALS IN THE BANK DESPITE THE OPPORTUNITIES G IVEN BY THE ASSESSING OFFICER, THE ASSESSING OFFICER PROCEEDED WITH THE MATTER AND PASSED ASSESSMENT ORDER U/S 144 R.W.S 154. 3.2 ON APPEAL, THE CIT(A) HAS TAKEN NOTE OF THE EAR LIER ROUND OF PROCEEDINGS BEFORE THE CIT(A) AND HELD THAT THE ASSESSEE HAS FA ILED TO EXPLAIN THE CASH 3 INDIAN OIL & AGRL. PRODUCTS CREDITS AND BANK DEPOSITS. ACCORDINGLY, THE ADDITIO N MADE BY THE ASSESSING OFFICER HAS BEEN CONFIRMED VIDE IMPUGNED ORDER. 4 BEFORE US, THE LD AR OF THE ASSESSEE HAS SUBMITTE D THAT THE ASSESSING OFFICER ISSUED NOTICE ONLY AT THE END OF THE MONTH OF DEC 2006 AND FINALLY THE ASSESSING OFFICER PASSED ORDER ON 28.12.2006. THERE FORE, THE ASSESSEE WAS NOT GIVEN PROPER OPPORTUNITY TO FILE THE RELEVANT RECOR D AND EXPLAIN THE BANK DEPOSITS AND WITHDRAWALS. THUS, THE LD AR OF THE A SSESSEE HAS SUBMITTED THAT THE ASSESSEE WAS NOT GIVEN A PROPER OPPORTUNITY OF HEARING AND THEREFORE, THERE IS A VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. HE HAS FURTHER SUBMITTED THAT THE CIT(A) HAS ALSO NOT PROVIDED AN OPPORTUNITY TO THE ASSESSEE FOR REMAND PROCEEDINGS TO THE ASSESSING OFFICER SO THAT THE R ELEVANT RECORDS AND THE EXPLANATION WAS TO BE VERIFIED AND EXAMINED. THE ASSESSEE HAS ALSO SUBMITTED THAT THE ASSESSEE HAS ALREADY FURNISHED THE RELEVAN T RECORDS BUT NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO EXPLAIN THE SOURCE OF DEPOSITS BEFORE THE ASSESSING OFFICER. THE LD AR, THUS PLEADED THAT IN THE INTERE ST OF JUSTICE, ONE MORE OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE TO EXPLAIN THE BANK DEPOSITS AND WITHDRAWALS. 4.1 THE LD DR, ON THE OTHER HAND, HAS FORCEFULLY OB JECTED TO THE CONTENTIONS OF THE ASSESSEE AND SUBMITTED THAT DESPITE SUFFICIENT OPPORTUNITIES, THE ASSESSEE FAILED TO PRODUCE THE RELEVANT MATERIAL AND EXPLAIN THE BANK DEPOSITS AND WITHDRAWALS. THEREFORE, THE ASSESSEE DOES NOT DESER VE ANY FURTHER OPPORTUNITY. 5 WE HAVE CONSIDERED THE RIVAL CONTENTION AS WELL A S THE RELEVANT MATERIAL ON RECORD. IN THE EARLIER ROUND OF LITIGATION, THE TRIBUNAL VIDE ORDER DATED 21ST FEB 2006 HAS REMANDED THE MATTER TO THE RECORD OF T HE ASSESSING OFFICER IN PARA 4 AS UNDER: 4 INDIAN OIL & AGRL. PRODUCTS 4. WE HAVE CONSIDERED THE MATERIAL ON RECORD AND S UBMISSIONS OF BOTH SIDES. IT IS CLEARLY EVIDENT FROM THE FACTS ON RECORD AND ORDER OF ITAT FOR THE ASSESSMENT YEAR 1996-97, THAT THE MATT ER HAS BEEN SET ASIDE TO THE FILE OF ASSESSING OFFICER UNDER EXACTL Y IDENTICAL FACTS. IN VIEW OF THE SAME, WE DEEM IT FIT TO SET ASIDE THE M ATTER TO THE FILE OF ASSESSING OFFICER FOR THIS ASSESSMENT YEAR ALSO FOR BEING CONSIDERED AFRESH IN ACCORDANCE WITH LAW. IN VIEW OF THESE DIR ECTIONS, IT IS NOT NECESSARY TO EITHER CONSIDER THE SPECIFIC GROUNDS U RGED REGARDING THE ADDITIONS MADE IN THE ASSESSMENT OR THE SPECIFIC GR OUNDS URGED IN THE ADDITIONAL GROUNDS IN RESPECT OF THE ADDITIONS MADE. 5.1 THOUGH THE VALIDITY OF REOPENING WAS DISMISSED BY THE TRIBUNAL; HOWEVER, THE ISSUE OF ADDITION ON ACCOUNT OF UNEXPLAINED CAS H CREDIT WAS REMANDED TO THE RECORD OF THE ASSESSING OFFICER FOR CONSIDERING AFR ESH. IN THE SUBSEQUENT PROCEEDINGS, THE ASSESSING OFFICER IN PARA 3 OF THE ASSESSMENT ORDER HAS STATED THAT NOTICE U/S 143(2) AND 142(1) WERE ISSUED TO TH E ASSESSEE AS UNDER: ACCORDINGLY, NOTICES U/S 143(2)/142(1) DATED 1.12. 2006, 18.12.2006 AND 22.12.2006 HAVE BEEN ISSUED AND DULY SERVED TO THE ASSESSEE. ASSESSEE VIDE HIS LETTER DATED 22.12.2006 REQUESTED FOR ADJOURNMENT FOR THREE WEEKS (LETTER FOR ADJOURNMENT IS FILED IN THE ASSESSMENT RECORD FOR AY 1996-97). ASSESSEES REQUEST HAS NOT BEEN ACCEPTABLE AS THIS IS TIME BARRING MATTER. ACCORDINGLY, FINAL OPPORTUNITY WAS GIVEN TO SUBMIT THE DETAILS ON 28.12.2006. 5.2 THUS, IT IS CLEAR THAT THE NOTICES WERE ISSUED ONLY IN THE MONTH OF DC 2006 AND THE ASSESSEE WAS GIVEN TIME UPTO 28.12.2006 VID E NOTICE DT 22.12.2006 TO FILE THE DETAILS. THE ASSESSEE MADE A REQUEST ON 28 .12.2006 THAT HE IS SICK AND COULD NOT GATHER THE NECESSARY DETAILS. THE ASSESSI NG OFFICER TURNDOWN THE REQUEST OF THE ASSESSEE AND PASSED THE ASSESSMENT O RDER ON THE NEXT DAY I.E. 29.12.2006. THUS, IT IS CLEAR FROM THE ASSESSMENT O RDER THAT THE ASSESSEE WAS NOT GIVEN AN EFFECTIVE AND APPROPRIATE OPPORTUNITY OF HEARING. ON APPEAL, THE CIT(A) HAS TURNDOWN THE REQUEST OF THE ASSESSEE BY CONSIDERING THE PROCEEDINGS IN THE EARLIER ROUND OF LITIGATION. IT IS TO BE NOT ED THAT ONCE THE ISSUE WAS REMANDED BY THE TRIBUNAL FOR DECIDING THE ISSUE AFR ESH, THEN WHAT HAS HAPPENED 5 INDIAN OIL & AGRL. PRODUCTS IN THE EARLIER ROUND OF LITIGATION CANNOT HAVE A B EARING IN GRANTING PROPER OPPORTUNITY TO THE ASSESSEE IN THE SUBSEQUENT PROCE EDINGS. 6 HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF T HE CASE AND IN THE INTEREST OF JUSTICE, WE GRANT ONE MORE OPPORTUNITY TO THE ASSESSEE TO APPEAR BEFORE THE ASSESSING OFFICER AND EXPLAIN THE DEPOSI TS IN THE BANK. 7 WE MAY CLARIFY THAT IF THE ASSESSEE TAKES UNNECES SARY ADJOURNMENTS THEN, THE OPPORTUNITY GRANTED BY US WILL STAND VACATED/WI THDRAWN. 7 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THE 6 TH , DAY OF JAN 2012. SD/ SD/- ( T R SOOD ) ( T R SOOD ) ( T R SOOD ) ( T R SOOD ) ACCOUNTANT MEMBER ( VIJAY PAL RAO ) ( VIJAY PAL RAO ) ( VIJAY PAL RAO ) ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 6 TH , JAN 2012 RAJ* RAJ* RAJ* RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI