V.P. ENGINEERING, NAVI MUMBAI V. ITO 22(3)(4), NAVI MUMBAI

ITA 1394/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4033 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 17-07-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 17-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH R PRASAD
• Keywords: Opportunity of being heard; Principle of natural justice; Non compliance
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 1394 /MUM/2011 ASSESSMENT YEAR: 2007-08 M/S. V.P. ENGINEERING PLOT NO. 977, KHADAK PADA KALAMBOLI MARKET NAVI MUMBAI PAN: AADFV 0830 C VS. ITO 22(3)(4) VASHI NAVI MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. VASANTI PATEL RESPONDENT BY : MR. RAJESH R. PRASAD DATE OF HEARING : 17.07.2013 DATE OF PRONOUNCEMENT : 26.07.2013 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD.CIT(A)-33, MUMBAI DATED 15.12.2010 FOR THE ASSESSMENT YEAR 200 7-08. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED VARIOUS GROUNDS WHICH RELATE TO THE EX PARTE ORDER PASSED BY THE LD.CIT(A) CONFIRMING VARIOUS AD DITIONS/DISALLOWANCES MADE BY THE AO. 3. BRIEFLY STATED, THE ASSESSEE, A PARTNERSHIP FIRM , ENGAGED IN THE BUSINESS OF ENGINEERS, FABRICATORS, ERECTORS OF CHEMICAL PLANT EQUIPMENTS HAD FILED THE E-RETURN OF INCOME DECLARING A LOSS AT RS.6,49,051/-. THE AO, I N THE ASSESSMENT FRAMED, HAD PASSED AN EX PARTE ASSESSMENT ORDER UNDER SECTION 144 OF T HE INCOME TAX ACT WHERE HE HAD MADE AN ADDITION OF RS.6,26,69,438/- U/S 69 OF THE ACT AND A DISALLOWANCE OF RS.1,50,000/-. THE SAID EX PARTE ASSESSMENT HAD BEE N PASSED BY THE AO AS THE ASSESSEE HAD FILED INCOMPLETE DETAILS AND NOT COMPLIED WITH THE NOTICE U/S 142(1). ON APPEAL, THE LD.CIT (A) DISMISSED THE APPEAL OF THE ASSESSEE BY FOLLOWING THE JUDGMENT IN THE CASE OF MULTIPLAN INDIA (P) LTD. [38 ITD 320] AS THE ASSESS EE HAD FAILED TO APPEAR ON THE DATE OF ITA NO. 1394 /MUM/2011 M/S. V.P. ENGINEERING ASSESSMENT YEAR: 2007-08 2 HEARING (03.12.2010). AGGRIEVED BY THE IMPUGNED ORD ER, THE ASSESSEE IS IN APPEAL BEFORE US. 4. BEFORE US, THE LD. AR HAS FILED AN AFFIDAVIT SWO RN BY THE ASSESSEE STATING THE REASONS FOR THE NON COMPLIANCE OF THE NOTICES SERVE D BY THE LD.CIT(A). THE REASONS STATED IN THE SAID AFFIDAVIT READS AS FOLLOWS: 1. I SAY THAT I AM THE PARTNER OF M/S. V.P. ENGINE ERING, A PARTNERSHIP FIRM DULY REGISTERED UNDER THE PROVISIONS OF THE INDIAN PARTNERSHIP ACT, 1932, HAVING PREVIOUSLY REGISTERED OFFICE AT PLOT NO. D-130, TTC INDUSTRIAL AREA, MIDC, NERUL, BEHIND LONDON PILSNER, NAVI MUMBAI AND NOW SHIFTED TO PLOT NO. 977, KHADAPADA, KALAMBOLI MARKET, NAVI MUMBAI. 2. I SAY THAT THE SAID PARTNERSHIP FIRMS IS ALSO RE GISTERED UNDER THE PROVISIONS OF THE INDIAN PARTNERSHIP ACT, 1932, AND ASSESSEE F ROM TIME TO TIME I.E. SINCE A.Y. 2001-02 SINCE THE DATE IF INCORPORATION (HEREINAFTE R REFERRED TO AS THE SAID FIRM). THE ACCOUNTS WERE DULY AUDITED AND RETURN OF INCOME FILED BY MR. BAPAT OF THE SAID FIRM AND FIRM IS DULY ASSESSED UNDER PAN:- AADFV 08 30 C. 3. I SAY THAT THE RELEVANT ASSESSMENT YEAR 2007-08, THE FIRM HAS FILED THE INCOME TAX RETURN ON 15.11.2007 AND DECLARED A LOSS OF RS.6,49,051/-. 4. I SAY THAT THE SAID PARTNERSHIP FIRM HAS ALSO GO T THE ACCOUNTS AUDITED UNDER SECTION 44AB OF THE INCOME TAX ACT, 1961 FROM THE Q UALIFIED CHARTERED ACCOUNTANT, MR. MRITYUNJAYA A. HEGDE, ALL DOCUMENTS PERTAINS TO THE SAID A.Y. 2007-08 WERE KEPT IN HIS CUSTODY SUBSEQUENTLY IN THE YEAR 2008 H E PASSED AWAY. HE WAS REGISTERED WITH THE INSTITUTE OF CHARTERED ACCOUNTA NTS, AND NOW SHOWING AS COP STATUS AS NOT HOLDING COP (HERETO ANNEXED AND MAR KED AS ANNEXURE A). 5. I SAY THAT ALL THE ORIGINAL DOCUMENTS PERTAINING TO THE CASE UNDER CONSIDERATION WERE IN CUSTODY OF LATE SHRI MRITYUNJ AYA A. HEGDE. I SAY THAT I HAVE THE CERTIFIED COPY OF THE AUDIT REPORT DULY SIGNED BY THE CHARTERED ACCOUNTANT SINCE HIS IS NO MORE ALIVE, WE ARE UNABLE TO TRACE OUT TH E ORIGINAL CERTIFIED COPY OF THE AUDIT REPORT FURNISHED BEFORE THE ASSESSING OFFICER AND CIT(A). 6. I SAY THAT THE XEROX COPY, CERTIFIED COPY WHICH ARE SUBMITTED BEFORE THE ASSESSING OFFICER AND CIT(A) ARE THE ONLY CERTIFIED COPY OF THE ORIGINAL ONE AND DUE TO NON AVAILABILITY OF THE SAID CONCERN, PERSON PAR TICULARLY DECEASED CHARTERED ACCOUNTANT MR. MRITYUNJAY A HEGDE, WE COULD NOT BE ABLE TO PRODUCE THE ORIGINAL COPY OF THE AUDIT REPORT BEFORE THE LOWER AUTHORITY . 7. I SAY THAT AFTER THE DEMISE OF CHARTERED ACCOUNT ANT, MR. MRITYUNJAYA A. HEGDE, I HAVE APPOINTED ANOTHER CHARTERED ACCOUNTAN T, MR. SREEKUMAR NAIR ALONG WITH HIS ASSOCIATE MR. DEEPAK ASHAR AND I HAVE HAND ED OVER ALL MY AVAILABLE RECORDS TO HIM TO COMPLETE AND COMPLY WITH THE PEND ING ISSUES WITH THE INCOME TAX, SALES TAX AND SUCH OTHER CONCERNED AUTHORITIES AND ALSO TO FURNISH WITH THE FURTHER FILING, AS REQUIRED UNDER THE PROVISIONS FO RM TIME TO TIME. 8. I SAY, THAT THE ASSESSMENT PROCEEDINGS INITIATED BY THE LEARNED ASSESSING OFFICER HAS PASSED THE ASSESSMENT ORDER IN THE MONT H OF DECEMBER, SINCE THE ASSESSMENT WAS GOT TIME BARRED AS OF 31.12.2012 AND DURING THE COURSE OF ITA NO. 1394 /MUM/2011 M/S. V.P. ENGINEERING ASSESSMENT YEAR: 2007-08 3 ASSESSMENT PROCEEDINGS, MR. SREEKUMAR NAIR ALONG WI TH MY EX ACCOUNTANT, MR. JOY KUTTY HAS APPROACHED BEFORE THE LEARNED ASSESSING O FFICER FROM TIME TO TIME AND ALSO TAKEN LOTS OF EFFORTS TO SUBMIT THE DETAILS AS AND WHEN REQUIRED AND CALLED BY THE ASSESSING OFFICER FROM TIME TO TIME. 9. I SAY THAT HOWEVER LEARNED ASSESSING OFFICER HAS PASSED EX PARTE ORDER AND ON THE AGGRIEVED ORDER PASSED BY THE LEARNED ASSESS ING OFFICER, DEPONENT HAS FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEA LS) AND APPOINTED ADVOCATE, MR. NILESH JOSHI, FOR CONDUCTING THE APPEAL MATTER AND DURING THE COURSE OF APPEAL PROCEEDINGS BEFORE CIT(A), HE HAS FILED WRITTEN SUB MISSIONS AND IN REPLY THERETO, THE HONORABLE COMMISSIONER OF INCOME TAX (APPEALS)- 33 WAS PLEASED TO CALL FOR REMAND REPORT FROM THE ASSESSING OFFICER AND DURING THE COURSE OF REMAND PROCEEDING, I HAVE INTIMATED TO MY REGULAR CHARTERE D ACCOUNTANT, MR. SREEKUMAR NAIR ALONG WITH MR. JOY KUTTY, THE ACCOUNTANT TO CO MPLETE AND COMPLY WITH ALL FORMALITIES AS REQUIRED. HOWEVER THEY COULD NOT COM PLETE SINCE PART DETAILS WAS AVAILABLE. 10. I SAY THAT DURING THE APPEAL PROCEEDING, I HAVE FILED CONFIRMATION LETTER IN RESPECT OF BORROWED FUNDS, WHICH ARE VERY WELL ON R ECORD AND THE ORIGINAL CONFIRMATION LETTER WILL BE FILED AS AND WHEN REQUI RED BY THE LEARNED ASSESSING OFFICER. 11. I SAY THAT THE LEARNED ASSESSING OFFICER HAS IS SUED NOTICE TO COMPLY WITH REMAND REPORT AND DUE TO REGULAR ACCOUNTANT MR. JOY KUTTY LEFT THE JOB WITH EFFECT FROM JUNE 2010, THE APPELLANT COULD NOT FURNISH THE DETAILS AND DOCUMENTS AS REQUIRED DURING THE COURSE OF REMAND PROCEEDINGS, A ND ACCORDINGLY THE LEARNED ASSESSING OFFICER HAS PASSED REMAND REPORT. I WAS E ARLIER RESIDING AT 1. OLD ADDRESS: OLIVE EXCEL, P LOT NO. 16, SECTOR 4, NERUL, NAVI MUMBAI, AND IN THE YEAR 2008 DEPONENT SHIFTED TO 2. NEW ADDRESS: SHRI CO-OPERAT IVE HOUSING SOCIETY LIMITED, ROOM NO.601, SECTOR 6, KALAMBOLI, RAIGAD DISTRICT NAVI M UMBAI. IT APPEARS THAT OFFICE AT THE COMMISSIONER OF INCOM E TAX (APPEAL) HAS ISSUED NOTICE AT THE OLD ADDRESS AND IN THE SAID NOTICE WA S NOT RECEIVED BY DEPONENT. ON THE RECEIPT OF THE REMAND REPORT, BY THE COMMISSION ER OF INCOME TAX (APPEALS), THE COMMISSIONER OF INCOME TAX (APPEALS) HERSELF FO UND THAT THE CIT (APPEALS) COULD NOT DECIDE THE MATTER AND THEREFORE THE CIT ( APPEALS) HAD ALSO ISSUED LETTER ON 24.11.2010 AND FIXED FOR HEARING ON 3.12.2010, H OWEVER THE SAID LETTER NEVER RECEIVED AND ACKNOWLEDGED BY THE DEPONENT/APPELLANT AND ULTIMATELY THE COMMISSIONER OF INCOME TAX (APPEALS) HAS DISMISSED THE DEPONENT/APPELLANTS APPEAL WITHOUT GIVING REASONABLE OPPORTUNITY OF BEI NG HEARD. IN VIEW OF THE REASONS AFOREMENTIONED, THE LD. AR O F THE ASSESSEE HAS REQUESTED FOR ONE MORE OPPORTUNITY OF BEING HEARD SO THAT THE ASSESSE E CAN SUBSTANTIATE THE CLAIM BEFORE THE AO. THE LD. AR HAS ALSO AGREED FOR IMPOSING A C OST ON THE ASSESSEE FOR THE ALLEGED NON-COOPERATION DURING THE ASSESSMENT/APPEAL PROCEE DINGS BEFORE THE AO/LD.CIT(A). ON THE OTHER HAND, THE LD. DR HAS RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND CONTENDED THAT IT IS THE NON-COOPERATING ATTITUDE O F THE ASSESSEE WHICH CAUSED THE AO AND THE LD.CIT(A) TO PASS THE RESPECTIVE EX PARTE O RDERS. ITA NO. 1394 /MUM/2011 M/S. V.P. ENGINEERING ASSESSMENT YEAR: 2007-08 4 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THOUGH THE REASONS GIVEN IN THE AFFIDAVIT AFOREMENTIONED ARE N OT COMPLETELY CONVINCING US FOR THE ASSESSEES NON COMPLIANCES OF THE NOTICES BY THE AO /LD.CIT (A), HAVING DUE REGARD TO THE PRINCIPLE OF NATURAL JUSTICE, WE ARE OF THE OPINION THAT IT WILL BE JUST AND PROPER TO SET ASIDE THE ENTIRE ASSESSMENT BACK TO THE FILE OF THE AO FO R DECIDING THE ISSUES AFRESH AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE PLACING ALL THE MATERIALS TO SUBSTANTIATE HIS CLAIM. CONSIDERING THE FACT THAT T HE REASONS CITED BY THE ASSESSEE ARE NOT CONVINCING, AS AGREED BY THE LD. AR, WE IMPOSE A CO ST OF RS.10,000/- ON THE ASSESSEE TO BE PAID TO THE REVENUE. AFTER PRODUCING THE RECEIPT FOR THE PAYMENT OF THE SAID COST, THE AO WILL HEAR THE MATTER AFRESH IN THE AFORESAID MAN NER. WE DIRECT AND ORDER ACCORDINGLY. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF JULY, 2013. SD/- SD/- (B. RAMAKOTAIAH) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 26.07.2013. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR F BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.