Prarthana Construction Pvt. Ltd, Ahmedabad V. Income tax Officer, Ward. 5(2), Ahmedabad

ITA 1369/AHD/2007

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6796 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-04-2011
• Assessment Year: 1995-1996
• Appeal Filed On: 05-04-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K DHANISTA
• Assessee Lawyers: M K PATEL
• Keywords: Opportunity of being heard; Period of limitation; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI G. D. AGARWAL, VP AND BHAVNESH SAINI , JM) ITA NO.1369 AND 1370/AHD/2007 A. Y.: 1995-96 AND 1997-98 M/S. PRARTHANA CONSTRUCTION PVT. LTD., 10, PRITAM SOCIETY, ELLISBRIDGE, AHMEDABAD VS THE INCOME TAX OFFICER, WARD -5 (2), AHMEDABAD PA NO. AADCP 3934 A (APPELLANT) (RESPONDENT) APPELLANT BY SHRI M. K. PATEL, AR DEPARTMENT BY SHRI R.K. DHANISTA, DR O R D E R PER BHAVNESH SAINI: BOTH THE APPEALS BY THE SAME ASSESSEE ARE DIRECTED AGAINST THE DIFFERENT ORDERS OF THE LEARNED CIT(A)-XI, AHMEDABAD DATED 24-2-2006 FOR ASSESSMEN T YEARS 1995- 96 AND 1997-98, CHALLENGING THE LEVY OF PENALTY U/S 271 (1) ( C ) OF THE IT ACT. 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE DATE OF COMMUNICATION OF THE ORDERS APPEALED AGAINST IS DATED 17-4-2006 WHEREAS BOTH THE APPEALS HAVE BEEN PREFERRED BY THE ASSESSEE IN THE OFFICE OF THE TRIBUNAL ON 5-4-2007. THUS, BOTH THE APPEALS ARE TIME BARRED BY 293 DAYS. THE LEARNED COUNSEL FOR TH E ASSESSEE FILED AN AFFIDAVIT OF THE DIRECTOR OF THE ASSESSEE COMPAN Y STATING THEREIN THAT THE IMPUGNED ORDER WERE RECEIVED BY THE OFFICE ASSISTANT WHICH WERE MISPLACED AND WHEN THE ORDERS WERE TRACED, THE APPEALS WERE IMMEDIATELY FILED. THE LEARNED COUNSEL FOR THE ASSE SSEE IN SUPPORT OF ITA NO.1369 AND 1370/AHD/2007 M/S. PRARTHANA CONSTRUCTION PVT. LTD. VS ITO, W-5(2 ), AHMEDABAD 2 THE ABOVE EXPLANATION FURTHER SUBMITTED THAT THE QU ANTUM APPEALS WERE DISMISSED BY THE LEARNED CIT(A) BECAUSE THE SA ME WERE TIME BARRED AND THE ASSESSEE PREFERRED APPEALS FOR BOTH THE ASSESSMENT YEARS BEFORE THE TRIBUNAL IN ITA NO.1332 AND 1333/A HD/2004 AND IT WAS SUBMITTED BEFORE THE TRIBUNAL THAT REASONS FOR DELAY WAS THAT THE COMPANY HAS BEEN CLOSED AND ONE OF THE DIRECTORS HA S EXPIRED, WHILE OUT OF THE REMAINING TWO DIRECTORS, ONE OF THE DIRE CTORS WAS OUT OF STATION AND THE OTHER DIRECTOR COULD NOT HANDLE THE TAXATION MATTERS AS HE WAS ALSO ILL. MEDICAL CERTIFICATE WAS FILED. THE LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT THE TRIBUNA L CONDONED THE DELAY IN FILING THE APPEALS BELATEDLY BEFORE THE LE ARNED CIT(A) AND SET ASIDE THE ORDER OF THE LEARNED CIT(A) ON QUANTUM IN BOTH THE ASSESSMENT YEARS AND RESTORED THE APPEALS ON QUANTU M TO THE FILE OF THE LEARNED CIT(A) FOR DECIDING THE SAME AFRESH IN ACCORDANCE WITH LAW. COPY OF THE ORDER OF THE TRIBUNAL DATED 28-8-2 009 IS FILED ON RECORD. THE LEARNED COUNSEL FOR THE ASSESSEE IN THE BACKGROUND OF THE ABOVE FACTS SUBMITTED THAT SINCE THE ASSESSEE C OMPANY HAS ALREADY BEEN CLOSED AND NOBODY IS LOOKING AFTER THE AFFAIRS AND HAT THE IMPUGNED ORDERS WERE MISPLACED BY THE OFFICE AS SISTANT, THERE WAS REASONABLE CAUSE NOT TO FILE THE APPEALS WITHIN THE PERIOD OF LIMITATION. HE HAS FURTHER SUBMITTED THAT THE QUANT UM APPEALS OF THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS IN APPEAL AR E PENDING BEFORE THE LEARNED CIT(A) FOR DECISION ON MERITS AN D HAVE NOT YET BEEN DECIDED. HE HAS, THEREFORE, SUBMITTED THAT THE DELAY IN FILING THE APPEALS MAY BE CONDONED AND BOTH THE APPEALS MAY BE RESTORED TO THE FILE OF THE LEARNED CIT(A) FOR DECIDING THE PEN ALTY APPEALS AFTER DECISION ON QUANTUM APPEALS. ON THE OTHER HAND, THE LEARNED DR ITA NO.1369 AND 1370/AHD/2007 M/S. PRARTHANA CONSTRUCTION PVT. LTD. VS ITO, W-5(2 ), AHMEDABAD 3 SUBMITTED THAT IN THE EARLIER OCCASION THE TRIBUNAL CONDONED THE DELAY BEFORE THE LEARNED CIT(A) BECAUSE ONE OF THE DIRECT ORS EXPIRED AND ANOTHER WAS OUT OF STATION AND THE THIRD DIRECTOR W AS ILL. THEREFORE, SUCH REASON IS NOT SUFFICIENT TO CONDONE THE DELAY IN THE MATTER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEES COUNSEL HAS FIL ED COPY OF THE ORDER OF THE TRIBUNAL DATED 28-8-2009 ON RECORD IN WHICH THE TRIBUNAL ON QUANTUM RESTORED THE MATTER IN ISSUE TO THE FILE OF THE LEARNED CIT(A) FOR FRESH ADJUDICATION. THE LEARNED CIT(A) O N QUANTUM DISMISSED BOTH THE APPEALS OF THE ASSESSEE IN LIMIN E BECAUSE APPEALS OF THE ASSESSEE WERE CONSIDERED TIME BARRED . IT IS NOTED IN THE ORDER OF THE TRIBUNAL THAT THE ASSESSEE COMPANY HAS BEEN CLOSED AND ONE OF THE DIRECTORS EXPIRED. ANOTHER DIRECTOR WAS OUT OF STATION AND THE THIRD DIRECTOR WAS ILL. THEREFORE, NO APPEA LS COULD BE MADE BEFORE THE LEARNED CIT(A). THE EXPLANATION OF THE A SSESSEE IS ACCEPTED BY THE TRIBUNAL AND DELAY WAS CONDONED IN FILING THE APPEALS BELATEDLY BEFORE THE LEARNED CIT(A). ACCORD INGLY, BOTH THE APPEALS ON QUANTUM WERE RESTORED TO THE FILE OF THE LEARNED CIT(A) FOR ADJUDICATION ON MERITS. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED AT BAR THAT THAT BOTH THE QUANTUM APPEALS ARE PENDING ADJUDICATION BEFORE THE LEARNED CIT(A) BECAUSE THE SAME HAVE NOT YET BEEN DECIDED. IT, THEREFORE, APPEARS THAT THE A SSESSEE COMPANY HAS ALREADY BEEN CLOSED AND THE QUANTUM APPEALS ARE PENDING BEFORE THE LEARNED CIT(A). THOUGH PENALTY PROCEEDIN GS ARE INDEPENDENT AND SEPARATE PROCEEDINGS, BUT THEY HAVE BEARING ON THE OUTCOME OF THE QUANTUM APPEALS ON MERITS. IN CASE, THE ADDITION ON ITA NO.1369 AND 1370/AHD/2007 M/S. PRARTHANA CONSTRUCTION PVT. LTD. VS ITO, W-5(2 ), AHMEDABAD 4 QUANTUM WOULD BE DELETED ON WHICH PENALTY HAVE BEEN IMPOSED, NO PURPOSE WOULD SERVE FOR LEVYING PENALTY. THEREFORE, FINDING OF FACT ON QUANTUM APPEALS WOULD DEFINITELY HAVE BEARING ON TH E PENALTY MATTERS. THE EXPLANATION OF THE ASSESSEE WHEN CONSI DERED IN THE LIGHT OF THIS BACKGROUND, IT IS CLEAR THAT THERE AR E POSSIBILITIES THAT ON CLOSURE OF THE ASSESSEE COMPANY, THE OFFICE ASSISTA NT WOULD HAVE MISPLACED THE IMPUGNED ORDERS AND THE APPEALS COULD NOT BE FILED WITHIN THE TIME BECAUSE OF THE ABOVE CAUSE. CONSIDE RING THE FACTS AND CIRCUMSTANCES, WE HAVE TO TAKE PRAGMATIC VIEW I N THE MATTER PARTICULARLY WHEN THE QUANTUM APPEALS ARE PENDING D ISPOSAL BEFORE THE LEARNED CIT(A). CONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES, WE ACCEPT THE EXPLANATION OF THE ASSESSEE AND CONDO NE THE DELAY IN FILING THE APPEALS BELATEDLY BEFORE THE TRIBUNAL. T HEREFORE, NOW QUESTION WOULD ARISE ABOUT DISPOSAL OF THE PENALTY APPEALS ON MERIT. SINCE THE LEARNED COUNSEL FOR THE ASSESSEE CONCEDED THAT BOTH THE QUANTUM APPEALS ARE PENDING DISPOSAL BEFORE THE LEA RNED CIT(A) AND THE DECISION ON QUANTUM COULD EFFECT THE PENALTY PR OCEEDINGS, THEREFORE, IT WOULD BE REASONABLE AND PROPER TO RES TORE BOTH THE PENALTY APPEALS TO THE FILE OF THE LEARNED CIT(A) W ITH DIRECTION TO RE- DECIDE BOTH THE APPEALS AFTER DECIDING THE APPEALS ON QUANTUM. CONSIDERING THE PECULIAR FACTS NOTED ABOVE, WE SET ASIDE THE ORDERS OF THE LEARNED CIT(A) IN BOTH THE ASSESSMENT YEARS AND RESTORE THE PENALTY APPEALS TO THE FILE OF THE LEARNED CIT(A) W ITH DIRECTION TO RE- DECIDE THE PENALTY APPEALS ON DECIDING THE QUANTUM APPEALS ON MERITS. THE LEARNED CIT(A) SHALL GIVE REASONABLE SU FFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NO.1369 AND 1370/AHD/2007 M/S. PRARTHANA CONSTRUCTION PVT. LTD. VS ITO, W-5(2 ), AHMEDABAD 5 4. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21-04-2011 SD/- SD/- (G. D. AGARWAL) VICE PRESIDENT (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 21-04-2011 LAKSHMIKANT/ LAKSHMIKANT/ LAKSHMIKANT/ LAKSHMIKANT/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD