Shri Mohan kumar krishnamurty, Nagpur V. ACIT CIRCLE-2, Nagpur

ITA 126/NAG/2015

• Counselvise Citation: [2014] 117 COUNSELVISE.COM (IT) 8869 (ITAT-NAGPUR)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 23-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 15-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R K BARAL
• Assessee Lawyers: KAILASH JOGWANI
• Keywords: Opportunity of being heard; Revised return; Set aside
• Section: 142(1); 147; 131; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE S HRI SHAMIM YAHYA (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 126 / NAG/2015 ASSESSMENT Y EAR: 2010 - 11 SHRI MOHAN KUMAR KRISHNAMURTY, PLOT A - 14, SAROJ NAGAR, NEAR FRIENDS COLONY, HAZARI PAHAD, YA YUSENA NAGAR, NAGPUR - 440007 PAN: AJHPK0462A VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 2, AAYAKAR BHAWAN, NAGPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MUKESH AGRAWAL (ADVO C ATE) & SHRI KAILASH JOGWANI ( CA ) REVENUE BY : SHRI R.K. BARAL ( SR. D R ) DATE OF HEARING: 07/05 /201 8 DATE OF PRONOUNCEMENT: 10 / 05 /201 8 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN PREFERRED BY THE APPELLANT/ ASSESSEE AGAINST THE ORDER DATED 22.0 1.2015 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - II , NAGPUR, WHEREBY THE LD. COMMISSIONER (APPEALS) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED UNDER SECTION (U/S) 143 (3) READ WITH SECTION 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING THE TOTAL INCOME OF RS. 16,71,430/ - . THE RETURN WAS PROCESSED U/S 143 (1). SUBSEQUE NTLY, THE CASE WAS RE - OPENED U/S 147 OF THE ACT ON THE BASIS OF INFORMATION RECEIVED FROM ACIT - CENTRAL CIRCLE - 2 (3), NAGPUR ALLEGING THAT THE ASSESSEE HAS NOT DISCLOSED THAT PART OF INCOME , WHICH HE HAD RECEIVED IN CASH FROM M/S GUPTA COAL 2 ITA NO. 126 / NAG /2015 AS SESSMENT YEAR: 20 10 - 11 GROUP OF C OMPAN IE S . IN RESPONSE TO NOTICE U/S 148 OF THE ACT, THE ASSESSEE FILED REVISED RETURN DECLARING TOTAL INCOME OF RS. 21,69,510 . THE ASSESSEE WAS SUMMONED AND HIS STATEMENT U/S 131 OF THE ACT WAS RECORDED . F ROM THE STATEMENT OF THE ASSESSEE , T HE AO REACHED AT THE CONCLUSION THAT THE ASSESSEE HAD RECEIVED RS. 10,000/ - PER MONTH IN CASH FROM 01.05.2007 AND 30.04.2009 AND RS. 5,000/ - PER MONTH FROM 01.05.2009 TO JULY, 2009 FROM M/S GUPTA COAL & WASHERIES LTD., NAGPUR AND THE SAID AMOUNT WAS NOT SHOWN IN THE IT RETURN FILED IN ITS IT RETURN. 3. FURTHER INFORMATION FROM HIGHER AUTHORITIES WAS RECEIVED REGARDING INVOLVEMENT OF THE ASSESSEE IN MONEY LAUNDERING ACTIVITY AND EV ASION OF TAX ON KICKBACKS RECEIVED FROM VARIOUS SOURCE . I N ORDER TO CONFIRM THE GENUINENESS OF TRA NSACTION AO ISSUED NOTICE U/S 142 (1) AND IN RESPONSE TO THE ABOVE NOTICE, THE ASSESSEE PRODUCED STATEMENT OF BANK ACCOUNT OF THE STANDARD CHARTERED BANK, DUBAI. THE AO NOTICED CREDIT ENTRIES IN THE SAID ACCOUNT AND BALANCE OF 149,688.50 US DOLLAR EQUIVALE NT TO RS. 89,87,790/ - AS ON 18 JAN, 2010. SINCE, THE DETAILS OF TRANSACTION NAME OF THE PARTIES ETC. WERE NOT REFLECTED IN THE DOCUMENTS SUBMITTED BY THE ASSESSEE , FURTHER NOTICE S WERE ISSUED TO THE ASSESSEE AND THE ASSESSEE WAS ASKED TO FURNISH COMPLETE DETAILS. ACCORDINGLY THE ASSESSEE SUBMITTED THE FURTHER DETAILS. SINCE, THE AO WAS NOT SATISFIED WITH THE DETAILS SUBMITTED AND EXPLANATION MADE BY THE ASSESSEE, THE AO RECORDED THE STATEMENT OF THE ASSESSEE U/S 131 OF THE ACT. THEREAFTER THE AO ISSUED FUR THER NOTICE TO THE ASSESSEE TO SUBMIT FURTHER DETAILS TO SUBSTANTIATE HIS CONTENTIONS. SINCE THE ASSESSEE WAS OUT OF THE COUNTRY NO REPLY WAS RECEIVED BY THE AO. AGAIN NOTICE U/S 142(1) WAS ISSUED THROUGH AUTHORIZED REPRESENTATIVE OF THE ASSESSEE. ULTIMATE LY, O N THE BASIS OF THE DOCUMENTS PRODUCED BY THE ASSESSEE AND THE SUBMISSIONS MADE BY THE AUTHORIZED REPRESENTATIVE, THE ASSESSING OFFICER MADE ADDITION OF RS. 89,87,790/ - AS UNDISCLOSED INCOME AND DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS. 1,11,5 7,300/ - . 3 ITA NO. 126 / NAG /2015 AS SESSMENT YEAR: 20 10 - 11 4. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT (A) . AS PER THE DETAILS MENTIONED IN THE APPELLATE ORDER, THE LD. CIT(A) POSTED THE CASE FOR HEARING FOR EIGHT TIMES. O N TWO OCCASIONS, THE REPRESENTATIVE OF THE ASSESSEE SOUGHT ADJOURNMENTS AND ON THE REMAINING DATES NEITHER THE ASSESSEE NOR HIS AUTHORIZED REPRESENTATIVE APPEARED BEFORE THE LD. CIT (A). ACCORDINGLY, THE LD. CIT (A) RELYING ON THE VARIOUS DECISIONS OF THE HONBLE HIGH COURTS AND HONBLE SUPREME COURT DISMISSED THE APPEAL EX - PARTE . THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL THE SAID ORDER. 5. THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER PASSED BY THE LD.CIT (A) ON THE FOLLOWING EFFECTIVE GROUNDS : - 1. THE ORDER PASSED BY A.O. U/S 143 (3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 IS ILLEGAL, INVALID AND BAD IN LAW, 2. THE HONBLE CIT (A) - II, NAGPUR ERRED IN DISMISSING THE CASE AND UPHOLDING THE INTERFERE OF LEARNED A.O. FOR MAKING THE ADDITION OF RS. 89,87,790/ - AS UNDISCLOSED INCOME AS PROPER ONLY ON THE GROUNDS OF NO N - APPEARANCE. 3. THE CIT (A) - II, NAGPUR ERRED IN HOLDING THAT THE APPELLANT ASSESSEE WAS APPROACHING THE APPEAL IN VERY CASUAL MANNER AND NOT INTEREST IN PURSUING THE SAME. THE NOTICES WERE NOT SERVED PROPERLY, THE ASSESSEE DULY MADE COMPLIANCES OF THE NOTIC ES WHEN RECEIVED. THE ASSESSEE FULLY CO - OPERATIVE IN ASSESSMENT PROCEEDINGS EVEN THOUGH HE WAS OUT OF INDIA AND IT SHOWS THE INTENTIONS. AS THERE WAS TRANSFER OF CASES FROM CIT (A) - I, NAGPUR TO CIT (A) - II, NAGPUR THE NOTICES WERE SERVED TO SOME OTHER COUNS EL. THEREFORE THE COUNSEL COULD NOT BE ABLE TO ATTEND THE APPEAL HENCE THE APPEAL WAS DISMISSED. 4. THE HONBLE CIT (A) - II, NAGPUR ERRED IN HOLDING THE ORDER OF ASSESSING OFFICER ASSESSING TOTAL INCOME AT RS. 1,11,57,300/ - AS PROPER. 4 ITA NO. 126 / NAG /2015 AS SESSMENT YEAR: 20 10 - 11 5. THE ASSESSEE HAS NOT BE EN PROVIDED REASONABLE OPPORTUNITY OF BEING HEARD. 6. AT THE OUTSET , THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE COULD NOT APPEAR BEFORE THE LD. CIT(A) AS THE NOTICE FOR HEARING WAS NOT SERVED ON THE ADDRESS OF THE ASSESSEE MENTIONED I N FORM NO. 35. LATER ON THE ASSESSEE CAME TO KNOW THAT THE NOTICES WERE SERVED ON OTHER CHARTERED ACCOUNTANT HAVING RESEMBLING NAME . NON APPEARANCE OF THE ASSESSEE WAS THEREFORE DUE TO THE CIRCUMSTANCES BEYOND CONTROL OF THE ASSESSEE. SINCE, THE LD. CIT (A ) HAS PASSED THE ORDER WITHOUT HEARING THE ASSESSEE, GREAT PREJU DICE HAS BEEN CAUSED TO THE ASS ESSEE . THE LD. COUNSEL ACCORDINGLY SUBMITTED THAT THE ASSESSEE SHOULD GET AN OPPORTUNITY TO PRESENT ITS CASE BEFORE THE LD. CIT(A) 7. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) RELYING ON THE ORDER PASSED BY THE LD. CIT (A) SUBMITTED THAT SINCE THE ASSESSEE HAS FAILED TO APPEAR BEFORE THE LD. CIT (A) DESPITE SUFFICIENT OPPORTUNITY AFFORDED BY THE LD. CIT(A) , T HE LD. CIT (A) HAS RIGHTLY PASSED TH E ORDER EX - PARTE. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. T HE LD. CIT (A) HAS DISMISSED THE APPEAL EX - PARTE WITHOUT HEARING THE ASSESSEE . WE NOTICE THAT ON THE LAST THREE DATES , WHEN THE APPEAL WAS POSTED FOR HEARING, NE ITHER THE ASSESSEE NOR HIS REPRESENTATIV E APPEAR BEFORE THE LD. CIT(A). UNDER THESE CIRCUMSTANCES, PLEA OF THE LD. COUNSEL THAT THE NOTICE WAS NOT RECEIVED BY THE ASSESSEE APPEARS TO BE GENUINE. FURTHER WE DO NOT FIND ANY MALA FIDE ON THE PART OF THE ASSES SEE IN NON APPEARING BEFORE THE LD. CIT(A). WE FURTHER NOTICE THAT THE LD. CIT(A) HAS NOT DECIDED THE APPEAL ON THE BASIS OF EVIDENCE ON RECORD AND ONLY ENDORSED THE ORDER OF THE AO. 5 ITA NO. 126 / NAG /2015 AS SESSMENT YEAR: 20 10 - 11 9. IN CIT ( CENTRA L), NAGPUR VS. PREMKUMAR ARJUNDAS LUTHRA (HUF) 297 CT R 614 (BOM) , THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT UNDER SECTION 251 (1)(A)(B) AND EXPLANATION TO SECTION 251 (2) THE COMMISSIONER (APPEALS) IS REQUIRED TO APPLY HIS MIND TO ALL THE ISSUES WHICH ARISE FROM THE IMPUGNED ORDER BEFORE HIM WHETHE R OR NOT THE SAME HAD BEEN RAISED BY THE APPELLANT BEFORE HIM. THE HONBLE COURT HAS FURTHER HELD THAT T HE LAW DOES NOT EMPOWER THE COMMISSIONER (APPEALS) TO DISMISS THE APPEAL FOR NON PROSECUTION. 10. IN VIEW OF THE FACTS AND THE CIRCUMSTANCES UNDER WHI CH THE LD. CIT(A) HAS PASSED THE IMPUGNED ORDER AND IN THE LIGHT OF THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT DISCUSSED ABOVE, WE SET ASIDE THE EX - PARTE ORDER PASSED BY THE LD. CIT (A) WITHOUT GOING IN TO THE MERITS OF THE APPEAL AND SEND THE A PPEAL BACK TO THE LD. CIT (A) FOR DECIDING THE SAME ON MERITS AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPELLANT/ASSESSEE. WE ALSO DIRECT THE APPELLANT/ ASSESSEE TO APPEAL BEFORE THE LD. CIT(A) AND NOT TO SEEK ADJOURNMENTS ON FRIVOLOUS GROUNDS DURING THE PROCEEDINGS . THE APPEAL IS DISPOSED OF ACCORDINGLY. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR A SSESSMENT YEAR 2010 - 2011 ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH MAY , 2018 . SD / - SD/ - ( SHAMIM YAHYA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER NAGPUR, DATED: 10 / 0 5 /201 8 ALINDRA, PS 6 ITA NO. 126 / NAG /2015 AS SESSMENT YEAR: 20 10 - 11 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) 4. CIT 5. DR, ITAT, NAGPUR 6. GUARD FILE . BY ORDER, // TRUE COPY// ( SR. PS/PS ) ITAT, NAGPUR