The DCIT, Circle-3, Surat V. Shri Shrikant A.Shah, Surat

ITA 126/AHD/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0912 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 28-07-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 19-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M J SHAH
• Keywords: Principle of natural justice
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER THE DCIT, CIRCLE - 3, SURAT (APPELLANT) VS SHRI SHRIKANT A. SHAH, POP. OF ASHOK PRESTRESS, 101, AMIZARA APARTMENT, NR. TENNIS CLUB, ATHWALINES, SURAT PAN: AWEPS2344F (RESPONDENT) REVENUE BY : S H RI PRASOON KABRA , SR. D . R. ASSESSEE BY: S H RI M.J. SHAH , A.R. DATE OF HEARING : 28 - 07 - 2 016 DATE OF PRONOUNCEMENT : 05 - 08 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMB ER : - THIS REVENUE S APPEAL FOR A.Y. 2007 - 08 , AR ISES FROM ORDER OF THE CIT(A) - II, SURAT DATED 19 - 10 - 2010 IN APPEAL NO. CAS - II/405/09 - 10/133 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 126 / A HD/20 11 A SSESSMENT YEAR 200 7 - 08 I.T.A NO. 126 /AHD/20 11 A.Y. 2007 - 08 PAGE NO DCIT VS. SHRI SHRIKANT A. SHAH 2 2. THE REVENUE S SOLE SUBST ANTIVE GROUND RAISED IN THE INSTANT APPEAL CHALLENGES CORRECTNESS OF THE CIT(A) S ORDER DELETING DISALLOWANCE/ADDITION OF RS. 67,04,346/ - @ 20% OF THE TOTAL EXPENSES AMOUNTING TO RS. 3,35,21,728/ - AS MADE BY THE ASSESSING OFFICER IN ORDER DATED 29 - 12 - 2009. 3. FACTS OF THE CASE ARE IN A LITTLE NARROW COMPASS. THE ASSESSEE INDIVIDUAL MANUFACTURES PRE - STRESSED CONCRETE POLLS. HE FILED RETURN ON 31 - 010 - 2007 STATING INCOME OF RS. 16,79,259/ - . THE SAME I NCLUDED AGRICULTURAL INCOME OF R S. 1,89,911/ - . THE ASS ESSING OFFICER TOOK UP SCRUTINY . HE SOUGHT TO VERIFY ASSESSEE S EXPENSES OF RS. 3,35,21,728/ - . THE ASSESSEE S CO U NSEL APPEARED ON VARIOUS DATES. THE ASSESSING OFFICER RECORDED THAT THE COUNSEL SOUGHT MORE TIME TO PRODUCE DETAILS OF EXPENSES IN QUESTION . HE DECLINED THIS REQUEST TO INVOKE EX - PARTE PROCEEDINGS IN THESE FACTS AND CIRCUMSTANCES BY RECORDING COUNSEL S INABILITY TO PRODUCE THE RELEVANT DETAILS. ALL THIS LED TO IMPUGNED DISALLOWANCE COMPUTED @ 20% OF THE GROSS EXPENDITURE FIGURE COMING TO RS. 67,04,346/ - IN QUESTION. 4. THE ASSESSEE PREFERRED APPEAL. THE CIT(A) ACCEPTS HIS CONTENTIONS AS UNDER: - 3.1. IN VIEW THAT ALL THE THREE GROUNDS OF APPEAL ARE COMMON, I TAKE UP THE SAME TOGETHER FOR DISCUSSION AND DISPOSAL. I HAVE DULY CONSIDERED T HE SUBMISSION OF THE APPELLANT AND THE CONTENTION REGARDING THE FINDING, GIVEN IN THE ORDER OF APPELLANT'S FAI LURE IN NOT PRODUCING THE BOOKS OF A/C., AS APPEARING IN PARA 2(C) AND (D) OF THE REPLY REPRODUCED ABOVE. I ALSO .FIND THAT THE ASSE SSING OFFICER HAD ISSUED QUESTIONNAIRE IN THE CASE OF APPELLANT VIDE NOTICE DTD.06.4.2009 AND HE CALLED FOR BOOKS OF A/C. FROM THE APPELLANT I.T.A NO. 126 /AHD/20 11 A.Y. 2007 - 08 PAGE NO DCIT VS. SHRI SHRIKANT A. SHAH 3 TELEPHONICALLY WHEN FOUR DAYS ONLY WERE LEFT BEFORE THE LIMITATION DATE, I.E. 31.12,2009. THIS IS CLEARLY EVIDENT F ROM PARA 4.1 OF THE ORDER. THOUGH THE ASSESSING OFFICER HAS MENTIONED IN THE SAID PARA THAT THE APPELLANT WAS REQUIRED TO PRODUCE THE BOOKS OF A/C., VIDE NOTICE DTD. 06.4.2009, BUT THE SAME WERE NOT PRODUCED BY THE APPELLANT, HE HAS NOT GIVEN ANY DETAILS O F THE SUBSEQUENT REMINDERS ISSUED EITHER BY ORDER SHEET OR LETTERS, DESPITE RECORDING IN THE ORDER THAT THE BOOKS OF A/C. WERE NOT PRODUCED BY THE APPELLANT FROM 6.4.2009 ONWARDS TILL HE TELEPHONICALLY ASKED THE APPELLANT TO PRODUCE THE BOOKS OF A/C, IT: I S ALSO SEEN THAT THE APPELLANT WAS ASKED TO PRODUCE THE BOOKS OF A/C. TELEPHONICALLY AND THE SAME IS NOT DENIED BY THE APPELLANT, HOWEVER, THE BOOKS OF A/C. WERE CALLED FOR ONLY WHEN FOUR DAYS WERE LEFT BEFORE COMPLETION OF THE ASSESSMENT AND, AS RECORDED IN PARA 4.1 OF THE ORDER THE APPELLANT FURNISHED THE REASON THAT SINCE HE WILL HAVE TO BRING THE BOOKS OF A/C. FROM FACTORY WHICH IS AT A FAR OF PLACE, IT IS NOT POSSIBLE FOR HIM TO PRODUCE THE SAME IMMEDIATELY. THE ASSESSING OFFICER HAS MADE THE DISALLOWA NCE OUT OF EXPENSES WITHOUT GIVING SHOW CAUSE NOTICE TO THE APPELLANT TO THE FACT AS TO WHY BECAUSE OF THE ABOVE NON - COMPLIANCE DISALLOWANCE MAY NOT BE MADE FROM THE EXPENSES ON ACCOUNT OF SAME BEING UNVERIFIABLE. I, THEREFORE, FIND THAT THE ASSESSING OFFI CER HAD AMPLE TIME FROM 06.4.2009 TILL THE DATE OF COMPLETION OF ASSESSMENT TO ISSUE SHOW CAUSE TO THE APPELLANT BEFORE MAKING THE ABOVE DISALLOWANCE. HE HAS, THEREFORE, ARBITRARILY PASSED THE ASSESSMENT ORDER WHICH IS NOT IN TERMS OF PRINCIPLES OF NATURAL JUSTICE. I, THEREFORE, DO NOT FIND ANY REASON TO SUSTAIN THE DISALLOWANCE MADE BY THE ASSESSING OFFICER, HENCE DELETE THE SAME. THE GROUNDS OF APPEAL ARE, THEREFORE ALLOWED. 5. WE HAVE HEARD BOTH THE PARTIES. CASE FILE PERUSED. LE ARNED REPRESENTATIV ES REITERATE THEIR RESPECTIVE STANDS IN SUPPORT OF ASSESSING OFFICER S ACTION AND THE LOWER APPELLATE ORDER; RESPECTIVELY. THERE IS NO DISPUTE THAT NEITHER OF THE AUTHORITIES BELOW HAS ADVERTED TO RELEVANT MERITS AND EVIDENCE PERTAINING TO THE IMPU GNED GR OSS EXPENDITURE SUM OF RS . 3,35,21,728/ - HEREINABOVE. WE DO NOT FIND ANY SUCH ADJUDICATION BEING DEMONSTRATED IN THE CASE FILE. WE OBSERVE IN THESE PECULIAR FACTS THAT THIS ISSUE DESERVES TO BE RE - I.T.A NO. 126 /AHD/20 11 A.Y. 2007 - 08 PAGE NO DCIT VS. SHRI SHRIKANT A. SHAH 4 EXAMINED AFRESH. SHRI SHAH AT THIS STAGE SUBMITS THE REL EVANT STATEMENTS ALONG WITH THE RELEVANT DETAILS FORMS PART OF THE CASE RECORD. WE DEEM IT APPROPRIATE IN THESE CIRCUMSTANCES THAT LARGER INTEREST OF JUSTICE WOULD BE MET IN CA SE LEARNED CIT(A) RE - ADJUDICATE THIS ISSUE ON MERITS. WE MADE IT CLEAR THAT HE SHALL BE AT LIBERTY TO SEEK REMAND REPORT; IF FOUND APPROPRIATE. THE ASSESSEE SHALL BE ENTITLED TO RAISE ALL LEGAL/FACTUAL PLEAS IN THE CONSEQUENTIAL LOWER APPELLATE PROCEEDINGS. IT WOULD BE APPRECIATED IF THE LEARNED CIT(A) FINALIZES CONSEQUENTIAL PROC EEDINGS AS EXPEDITIOUSLY AS POSSIBLE. 6. THIS REVENUE S APPEAL SUCCEEDS FOR STATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN C OURT ON 05 - 08 - 201 6 SD/ - SD/ - ( MANISH BORAD ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 05 /08 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,