Crown Essential Oil Company, Hyderabad V. ADIT., Range-8, Hyderabad

ITA 1355/HYD/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8969 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-01-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 28-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: L K PISSAY
• Keywords: Business income; Opportunity of being heard
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI P. M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.1355/HYD/2014 ASSESSMENT YEAR 2007-2008 CROWN ESSENTIAL OIL CO., TONDAPALLI (V), R.R.DIST. PAN AAAFC6080G VS. ADDL. CIT, RANGE-8 HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. L.K. PISSAY FOR REVENUE : MR. SUMAN MALIK DATE OF HEARING : 20.01.2015 DATE OF PRONOUNCEMENT : 20.01.2015 ORDER PER P.M. JAGTAP, A.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-III, HYDERABAD DATED 15 TH APRIL, 2014 PASSED EX-PARTE WHEREBY HE CONFIRMED TH E TRADING ADDITION OF RS.19,97,367 MADE BY THE ASSESSING OFFI CER. 2. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSH IP FIRM WHICH IS ENGAGED IN THE BUSINESS OF PURCHASE A ND SALE OF SANDAL OIL. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 24.10.2007 DECLARI NG TOTAL INCOME OF RS.43,46,250. DURING THE COURSE OF ASSESS MENT PROCEEDINGS, IT WAS NOTICED BY THE A.O. THAT THERE IS A SHARP DECLINE IN THE RATE OF GROSS PROFIT FROM 7.11% AND 6.31% IN A.YS. 2005-06 AND 2006-07 TO 4.68% IN THE YEAR UNDE R CONSIDERATION I.E, A.Y. 2007-08. IN THIS REGARD, TH E EXPLANATION OFFERED BY THE ASSESSEE FOR FALL IN GROSS PROFIT RA TE WAS NOT 2 ITA.NO.1355/HYD/2014 CROWN ESSENTIAL OIL CO., TONDAPALLI (V), RANGA REDDY DIST., FOUND ACCEPTABLE BY THE A.O. AND REJECTING THE BOOK RESULTS DECLARED BY THE ASSESSEE, HE PROCEEDED TO ESTIMATE THE BUSINESS INCOME OF THE ASSESSEE BY APPLYING AVERAGE GROSS PROFIT RATE OF 6.03% FOR A.YS. 2005-06 TO 2007-08 A S AGAINST THE GROSS PROFIT RATE OF 4.68% DECLARED BY THE ASSE SSEE WHICH RESULTED IN THE TRADING ADDITION OF RS.19,97,367. 2.1. THE TRADING ADDITION MADE BY THE A.O. IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE ORDE R DATED 29.12.2009 WAS CHALLENGED BY THE ASSESSEE IN AN APP EAL FILED BEFORE THE LD. CIT(A). DURING THE APPELLATE PROCEED INGS BEFORE THE LD. CIT(A), THERE WAS NO COMPLIANCE ON THE PART OF THE ASSESSEE TO THE NOTICES ISSUED BY THE LD. CIT(A) FI XING THE HEARING FROM TIME TO TIME. THE LD. CIT(A), THEREFOR E, PROCEEDED TO DISPOSE OF THE APPEAL OF THE ASSESSEE EX-PARTE O N MERIT AND CONFIRMED THE TRADING ADDITION MADE BY THE ASSESSIN G OFFICER. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND ALSO PERUSED THE MATERIAL ON RECORD. THE PRELIM INARY ISSUE RAISED BY THE ASSESSEE IN THIS APPEAL IS THAT NO OP PORTUNITY WAS GIVEN BY THE LD. CIT(A) OF BEING HEARD ON MERIT WHILE DISPOSING OF ITS APPEAL FILED BEFORE HIM. IN THIS R EGARD, IT IS OBSERVED THAT THE APPEAL OF THE ASSESSEE FILED BEFO RE HIM HAS BEEN DISMISSED BY THE LD. CIT(A) BY HIS IMPUGNED OR DER PASSED EX-PARTE AFTER TAKING NOTE OF THE NON-COMPLI ANCE ON THE PART OF THE ASSESSEE IN PARAGRAPH NO.4 WHICH READS AS UNDER : 4. IN THIS CASE, THE FIRST NOTICE OF HEARING WAS G IVEN IN THE YEAR 2012 FIXING THE CASE WERE HEARING ON 13.07.2012. THEREAFTER, VARIOUS NOTICES HAVE BEEN G IVEN AND ADJOURNMENTS HAVE BEEN ALLOWED TO THE APPELLANT ON 3 ITA.NO.1355/HYD/2014 CROWN ESSENTIAL OIL CO., TONDAPALLI (V), RANGA REDDY DIST., AT LEAST THREE OCCASIONS. AFTER THAT A FINAL OPPORT UNITY OF HEARING WAS PROVIDED ON 7.07.2013. THEREAFTER, YET ANOTHER NOTICE WAS GIVEN FIXING THE CASE WERE HEARI NG ON 8.04.2014. IN SPITE OF A LAPSE OF TWO YEARS, THE AP PELLANT HAS NOT APPEARED EVEN ONCE. ITS REQUEST FOR ADJOUR NMENT WAS FINELY REJECTED ON 7.4.2014. GIVEN THE ABOVE FA CTS, THERE IS ONLY ONE CONCLUSION TO BE DRAWN THAT THE APPELLANT IS NOT INTERESTED IN PURSING ITS OWN APPE AL. THEREFORE, I HAVE NO OPTION BUT TO ADJUDICATE ON TH IS APPEAL GIVEN THE FACTS ON RECORD. 4. A PERUSAL OF THE RELEVANT PORTION OF THE LD. CIT(A)S, IMPUGNED ORDER EXTRACTED ABOVE SHOWS THAT THE ASSESSEE SOUGHT ADJOURNMENTS ON ALL THE FIVE OCCASI ONS WHEN ITS CASE WAS FIXED FOR HEARING BY THE LD. CIT(A) AN D ALTHOUGH THE LD. CIT(A) GRANTED ADJOURNMENTS TO THE ASSESSEE ON THE FIRST FOUR OCCASIONS, HE REJECTED THE REQUEST OF TH E ASSESSEE FOR ADJOURNMENT ON THE FIFTH OCCASION AND PROCEEDED TO DISPOSE OF THE APPEAL OF THE ASSESSEE EX-PARTE ON MERIT. THE A SSESSEE THUS, HAS NOT GOT AN OPPORTUNITY OF BEING HEARD ON MERIT EFFECTIVELY BEFORE THE LD. CIT(A) AND IN OUR OPINIO N, IT WOULD BE FAIR AND PROPER AND IN THE INTEREST OF JUSTICE THAT THE ASSESSEE SHOULD GET ATLEAST ONE MORE OPPORTUNITY OF BEING HE ARD ON MERIT FROM THE LD. CIT(A). AT THE SAME TIME, WE ALS O FEEL THAT THE ACTION OF THE ASSESSEE IN SEEKING ADJOURNMENTS OF THE HEARINGS FIXED BEFORE THE LD. CIT(A) FROM TIME TO T IME CONTINUOUSLY ON FIVE OCCASIONS OVER A PERIOD OF ABO UT TWO YEARS SHOWS ITS CASUAL APPROACH WHICH NEEDS TO BE DEPLORE D. WE, THEREFORE, CONSIDER IT PROPER TO IMPOSE A TOKEN COS T OF RS.2000/- (RS. TWO THOUSAND ONLY) ON THE ASSESSEE F OR SUCH CASUAL APPROACH. THE ASSESSEE IS ACCORDINGLY DIRECT ED TO PAY A CONTRIBUTION OF RS.2000/- (RS. TWO THOUSAND ONLY) T O THE PRIME MINISTERS RELIEF FUND AND PRODUCE THE PROOF OF SUCH PAYMENT BEFORE THE LD. CIT(A). THE IMPUGNED ORDER O F THE LD. 4 ITA.NO.1355/HYD/2014 CROWN ESSENTIAL OIL CO., TONDAPALLI (V), RANGA REDDY DIST., CIT(A) PASSED EX-PARTE IS THEREFORE SET ASIDE AND THE MATTER IS REMITTED BACK TO HIM WITH A DIRECTION TO DISPOSE OF THE APPEAL OF THE ASSESSEE AFRESH ON MERIT AFTER GIVING ONE MO RE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE SUBJECT TO THE PAYMENT OF COST OF RS.2000 BY THE ASSESSEE. THE ASS ESSEE IS ALSO DIRECTED TO EXTEND ALL THE POSSIBLE COOPERATIO N TO THE LD. CIT(A) IN ORDER TO ENABLE HIM TO DISPOSE OF THE APP EAL EXPEDITIOUSLY. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20.01.2015. SD/- SD/- (SAKTIJIT DEY) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 20 TH JANUARY, 2015 VBP/- COPY TO 1. CROWN ESSENTIAL OIL CO., TONDAPALLI (V), RANGA REDD Y DIST., C/O. PISSAY & COMPANY, 5-8-548, ABID ROAD, HYDERABA D. 2. THE ADDL. COMMISSIONER OF INCOME TAX, RANGE-8, HYDERABAD. 3. CIT(A)-III, HYDERABAD 4. CIT-II, HYDERABAD. 5. D.R. I.T.A.T. A BENCH, HYDERABAD.