M/s. Shamken spinners Ltd, New Delhi V. DCIT, New Delhi

ITA 1212/DEL/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 8141 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 08-06-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 30-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `D : NEW DELHI) BEFORE SHRI R.P. TOLANI AND SHRI K.G. BANSAL ITA NO.1209/DEL./2009 (ASSESSMENT YEAR : 2004-05) M/S SHAMKEN MULTIFAB LTD., VS. DCIT, CENTRAL CIRC LE 11, B-1/A-20, MOHAN COOP. INDUSTRIAL ESTATE, NEW DELHI . NEW DELHI. (PAN/GIR NO.AAACS0356C) AND ITA NOS.1210, 1213 & 1214/DEL./2009 (ASSESSMENT YEARS : 2003-04, 04-05 & 05-06) M/S SHAMKEN COTSYN LTD., VS. -DO- NEW DELHI. (PAN/GIR NO.AABCS6791G) AND ITA NOS.1211 & 1212/DEL./2009 (ASSESSMENT YEARS : 2003-04 & 04-05) SHAMKEN SPINNERS LTD., VS. -DO- NEW DELHI. (PAN/GIR NO.AABCS6791G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL SHARMA, ADV. REVENUE BY : SHRI KAVITA BHATNAGAR, CIT(DR) ORDER PER K.G. BANSAL, AM ALL THESE APPEALS INVOLVE A COMMON GROUND TO THE EF FECT THAT THE LD.CIT(A) ERRED ON FACTS AND IN LAW IN DISALLOWING THE LOSS RETURNE D BY THE ASSESSEE AND IN CONFIRMING THE ITA NOS.1209 TO 1214/DEL./2009 (AYS : 2003-04 TO 2005-06) 2 ASSESSMENT MADE BY THE AO AT NIL INCOME. IT IS MEN TIONED THAT THE LD. CIT(A) WAS NOT RIGHT IN DISMISSING THE APPEAL AND DIRECTING THE AO TO MODIFY THE ASSESSMENT, WHENEVER THE BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTI ON (BIFR) DECIDES THE LOSSES. IT IS FURTHER MENTIONED THAT THE LD.CIT(A) OUGHT TO HAVE ALLOWED THE APPEALS IN ACCEPTING THE LOSS DECLARED BY THE ASSESSEE. 2. IT WAS FOUND THAT THE APPEALS WERE LATE BY 86 DA YS AND THE ASSESSEE HAD ENCLOSED LETTER DATED 30.3.2009 WITH THE APPEALS, SEEKING CO NDONATION OF DELAY IN FILING THE APPEALS. IN THIS APPLICATION, IT WAS SUBMITTED THA T THE CIT(A) MADE CERTAIN OBSERVATIONS IN THE LAST PARAGRAPH OF HIS ORDER REGARDING COMPUT ATION OF LOSSES. HOWEVER, THE APPEALS WERE DISMISSED. THE ASSESSEE WAS OF THE VIEW THAT THE OBSERVATIONS OF THE LD.CIT(A) DID NOT EFFECT THE INTERESTS OF THE ASSESSEE COMPANY AS THE LOSSES WERE DIRECTED TO BE COMPUTED AS PER THE ORDER OF THE BIFR. HOWEVER, TH E AO ISSUED SHOW-CAUSE NOTICE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT, CONSEQUEN T TO WHICH IT WAS THOUGHT FIT TO FILE THE APPEALS. SINCE THE APPEALS WERE NOT INITIALLY FILE D UNDER A BONA FIDE BELIEF THAT THE ORDER IS NOT ADVERSED TO THE ASSESSEE, IT WAS ARGUED THAT THE SAME CONSTITUTED A REASONABLE CAUSE FOR DELAY IN FILING THE APPEALS. THIS MATTER WAS D ISCUSSED AT THE OUTSET. THE LD.DR AGREED THAT THE AVERMENTS MADE IN THE APPLICATION W ERE CORRECT AS CAN BE SEEN FROM PARAGRAPH 5 OF THE ORDER OF THE LD. CIT(A) IN ITA N O.1209/DEL./09. IT IS MENTIONED THAT THE AO IS DIRECTED TO MODIFY THE ASSESSMENT WHENEVE R BIFR DECIDES LOSSES RELATING TO ACCUMULATED LOSS EFFECTING THIS YEAR. THESE OBSERV ATIONS SHOW THAT ALTHOUGH THE APPEALS WERE DISMISSED, THE ASSESSEE WAS TO BE ALLOWED LOSS ES AS PER THE ORDER OF THE BIFR FOR THE PURPOSE OF THE CARRY FORWARD AND SET OFF. THEREFOR E, WE ARE OF THE VIEW THAT IT WILL BE IN THE INTEREST OF JUSTICE TO COUNT THE PERIOD OF FILI NG OF THE APPEALS FROM THE DATE OF RECEIPT OF NOTICE U/S 271(1)(C) OF THE ACT. IF IT IS DONE, THERE IS NO DELAY IN FILING ANY OF THE APPEALS. 3. COMING TO THE MERITS, IT WAS COMMON CASE OF BOTH THE PARTIES THAT THE LD.CIT(A) HAS NOT DECIDED THE ISSUE OF COMPUTATION OF LOSS AN D LEFT THE MATTER TO BE DECIDED AS PER THE ORDER OF THE BIFR. CONSEQUENTLY, IT WAS THE CO MMON POSITION OF BOTH THE PARTIES THAT THE INTEREST OF JUSTICE WILL BE SERVED IF THE APPEA LS ARE RESTORED TO HIS FILE FOR DECIDING THEM AFRESH AFTER HEARING BOTH THE PARTIES. IT IS ORDERED ACCORDINGLY. IN VIEW OF THIS ORDER, ITA NOS.1209 TO 1214/DEL./2009 (AYS : 2003-04 TO 2005-06) 3 IT IS NOT NECESSARY TO DECIDE OTHER GROUNDS TAKEN I N SOME APPEALS, WHICH ARE ALSO RESTORED TO THE FILE OF LD.COMMISSIONER OF INCOME-TAX (APPEA LS) TO BE DECIDED AFTER CONSIDERING THE GROUND REGARDING LOSSES. 4. IN THE RESULT, THE APPEALS ARE TREATED AS ALLOWE D FOR STATISTICAL PURPOSE. 5. ORDER PRONOUNCED IN OPEN COURT ON 19 TH JUNE, 2009. (R.P. TOLANI) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: JUNE 19, 2009. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A)-I, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT