Saunak Mitra, Kolkata V. ACIT, CIR-25, KOLKATA, Kolkata

ITA 1421/KOL/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3103 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 30-11-2015
• Court: TRIBUNAL
• Department Lawyers: ALOK NAG
• Assessee Lawyers: K M ROY
• Keywords: Opportunity of being heard; Condonation of delay

Judgement Text

S.P.NO.50/KOL/2015 & ITA NO.1421/KOL/2015 SAUNAK MITRA-A.Y.2009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C, KO LKATA [BEFORE SHRI N.V.VASUDEVAN, JM & SHRI WASEEM AHME D, AM] S.P.NO.50/KOL/2015 A/O ITA NO.1421/KOL/2015 ASSESSMENT YEAR : 2009-10 SAUNAK MITRA -VERSUS- A.C.I.T., CIRCLE-25, KOLKATA KOLKATA (PAN:AHSPM6241J) ( APPELLANT ) (RESPONDENT) ITA NO.1421/KOL/2015 ASSESSMENT YEAR : 2009-10 SAUNAK MITRA -VERSUS- A.C.I.T., CIRCLE-25, KOLKATA KOLKATA (PAN:AHSPM6241J) ( APPELLANT ) (RESPONDENT) FOR THE APPELLANT : SHRI K.M.ROY, FCA FOR THE RESPONDENT : SHRI ALOK NAG, JCIT, SR.DR DATE OF HEARING : 15.01.2016. DATE OF PRONOUNCEMENT : 3.2.2016. ORDER PER SHRI N.V.VASUDEVAN, JM THE ASSESSEE HAS FILED THE ABOVE PETITION PRAYING F OR AN ORDER OF STAY OF RECOVERY OF OUTSTANDING DEMAND OF RS.59,80,950/-. WHEN THE STAY PETITION WAS LISTED FOR HEARING, WE FOUND THAT THE ISSUE INVOLVED IN TH E APPEAL WAS VERY NARROW AND THEREFORE WE TOOK UP THE APPEAL FOR CONSIDERATION/H EARING. 2. THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 24.2.2015 OF CIT(A)-7, KOLKATA, RELATING TO AY 2009-10. 3. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BU SINESS OF ADVERTISING IN THE NAME AND STYLE OF M/S.COLOUR PURPLE. THE ASSESSEE FILED HIS RETURN OF INCOME FOR AY 2009-10 DECLARING TOTAL INCOME OF RS.16,63,243. AN ORDER OF ASSESSMENT U/S.143(3) OF S.P.NO.50/KOL/2015 & ITA NO.1421/KOL/2015 SAUNAK MITRA-A.Y.2009-10 2 THE INCOME TAX ACT, 1961 (ACT) WAS PASSED BY THE AO DATED 29.12.2011 IN WHICH THE AO MADE THE FOLLOWING ADDITIONS TO THE TOTAL INCOME OF THE ASSESSEE: (I) STUDIO HIRE CHARGES ATTRACTING PROVISIONS OF 40(A) (IA) RS.2,59,770 (II) DIFFERENCE IN SUNDRY CREDITORS (A) ORIENT PUBLICITY SERVICE PVT.LTD. RS.10,17,063 (B) SELVEL ADVERTISING PVT.LTD. RS.1,18,01,138 RS.1,28,18,201 (III) DISALLOWANCE OF DONATION RS.11,400 (IV) DISALLOWANCE OF PRODUCTION EXPENSES RS.1,58,045 4. HOWEVER IN THE SAID ASSESSMENT ORDER IN THE COM PUTATION OF TOTAL INCOME, THE AO DID NOT ADD THE ADDITION OF RS.1,18,01,138/-. THE ASSESSEE AT THIS STAGE DID NOT FILE APPEAL AGAINST THE ORDER DATED 29.12.2011 BECAUSE T HE THEN COUNSEL ADVISED HIM THAT SINCE NO ADDITION OF RS.1,18,01,138 WAS MADE IN THE ORDER, THERE IS NO NEED TO FILE ANY APPEAL. ACCORDING TO THE ASSESSEE, IT BELIEVED THE ADVICE SO GIVEN AND DID NOT FILE APPEAL BEFORE THE CIT(A) AGAINST THE ORDER DATED 29 .12.2011. 5. THE AO THEREAFTER FOUND THAT THERE WAS AN OMISS ION TO ADD THE AFORESAID SUM OF RS.1,18,01,138 TO THE TOTAL INCOME OF THE ASSESSEE IN THE ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE ACT, DATED 29.12.2011. HE ACCORD INGLY PASSED AN ORDER U/S.154 OF THE ACT DATED 4.6.2012 RECTIFYING THE AFORESAID MIS TAKE AND ADDING THE AFORESAID SUM TO THE TOTAL INCOME OF THE ASSESSEE. 6. THE ASSESSEE FILED APPEAL AGAINST THE AFORESAID ORDER 4.6.2012 BEFORE CIT(A). THE CIT(A) DISMISSED THE AFORESAID APPEAL HOLDING THAT THE ORDER U/S.154 OF THE ACT WAS JUSTIFIED AS THERE WAS A MISTAKE APPARENT ON THE FA CE OF THE ORDER DATED 29.12.2011. THE ORDER WAS PASSED IN JANUARY, 2014 AS STATED BY THE LEARNED COUNSEL FOR THE ASSESSEE, ACROSS THE BAR. 7. AT THIS STAGE, THE ASSESSEE APPROACHED THE PRES ENT COUNSEL MR.K.M.ROY WHO ADVISED THE ASSESSEE THAT THE ASSESSEE OUGHT TO HAV E FILED AN APPEAL AGAINST THE ORDER U/S.143(3) DATED 29.12.2011. AN APPEAL WAS FILED A GAINST THE ORDER DATED 29.12.2011 S.P.NO.50/KOL/2015 & ITA NO.1421/KOL/2015 SAUNAK MITRA-A.Y.2009-10 3 CHALLENGING ALL THE ADDITIONS MADE IN THE ORDER U/S .143(3) OF THE ACT BEFORE THE CIT(A) ON 31.1.2014. THERE WAS A DELAY OF ABOUT 717 DAYS IN FILING THE APPEAL BEFORE THE CIT(A). 8. THE ASSESSEE FILED AN APPLICATION FOR CONDONA TION OF DELAY IN FILING APPEAL BEFORE CIT(A). THE ASSESSEE POINTED OUT TO THE ABOVE CIRC UMSTANCES WHICH LEAD TO THE BELATED FILING OF APPEAL AND PRAYED FOR CONDONATION OF DELAY. THE ASSESSEE FILED AN AFFIDAVIT AFFIRMING THE FACTS AS STATED ABOVE AND P RAYED FOR CONDONATION OF DELAY. 9. THE CIT(A) HOWEVER REFUSED TO CONDONE THE DELAY IN FILING APPEAL BY OBSERVING THAT THE ASSESSEE CHANGED HIS LAWYER AND HE ADVISED THAT APPEAL SHOULD BE FILED. THE CIT(A) HELD THAT THE ABOVE REASON IS NOT GENUINE RE ASON WHICH IS NOT OUT OF CONTROL OF THE ASSESSEE. THE CIT(A) HELD THAT THE ASSESSEE FA ILED TO DISCHARGE HIS LEGAL OBLIGATION WITHOUT GENUINE CAUSE. THE CIT(A) ALSO OBSERVED THAT THE ASSESSEE DID NOT BOTHER TO ATTACH ANY IMPORTANCE TO FILING OF APPEAL IN TIME. 10. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSE SSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LEAR NED COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION V. MST. KATIJI & ORS. (1987) 167 I TR 47. THE LD. DR FOR THE REVENUE, HOWEVER, OPPOSED THE APPLICATION FOR CONDO NATION OF DELAY. IT WAS SUBMITTED BY HIM THAT THE REASONS GIVEN IN THE APPLICATION FO R CONDONATION OF DELAY ARE NOT SUFFICIENT TO CONDONE THE DELAY WHICH IS INORDINATE . 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT T HE OUTSET, WE OBSERVE THAT THE HONBLE SUPREME COURT IN THE CASE OF MST. KATIJI (S UPRA) HAS EXPLAINED THE PRINCIPLES THAT NEED TO BE KEPT IN MIND WHILE CONSIDERING AN A PPLICATION FOR CONDONATION OF DELAY. THE HONBLE APEX COURT HAS EMPHASIZED THAT SUBSTANTIAL JUSTICE SHOULD PREVAIL OVER TECHNICAL CONSIDERATIONS. THE COURT H AS ALSO EXPLAINED THAT A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING THE APPEAL LATE. T HE COURT HAS ALSO EXPLAINED THAT EVERY DAYS DELAY MUST BE EXPLAINED DOES NOT MEAN T HAT A PEDANTIC APPROACH SHOULD BE S.P.NO.50/KOL/2015 & ITA NO.1421/KOL/2015 SAUNAK MITRA-A.Y.2009-10 4 TAKEN. THE DOCTRINE MUST BE APPLIED IN A RATIONAL COMMON SENSE AND PRAGMATIC MANNER. 13. KEEPING IN MIND THE AFORESAID PRINCIPLES, WE S HALL CONSIDER THE CLAIM OF THE ASSESSEE IN THE PRESENT CASE. ADMITTEDLY THE ADVIC E WAS GIVEN BY THE COUNSEL WHO APPEARED ON BEHALF OF THE ASSESSEE IN THE ASSESSMEN T PROCEEDINGS NOT TO PREFER ANY APPEAL AGAINST THE ORDER OF ASSESSMENT AS THE ADDIT ION OF RS.1,18,01,138 WAS NOT MADE IN THE COMPUTATION OF TOTAL INCOME IN THE ORDER DAT ED 29.12.2011. SUBSEQUENTLY WHEN AN ORDER U/S.154 OF THE ACT WAS PASSED RECTIFYING T HE AFORESAID MISTAKE AND WHEN THE APPEAL AGAINST THE SAID ORDER WAS DISMISSED BY THE CIT(A) IN JANUARY, 2014, THE ASSESSEE APPROACHED THE PRESENT C.A. WHO ADVISED TH E ASSESSEE TO FILE APPEAL BEFORE THE CIT(A) AGAINST THE ORDER OF ASSESSMENT DATED 29 .12.2011. THEREAFTER THE APPEAL WAS FILED BEFORE CIT(A) WITHOUT MUCH DELAY. THESE FACTS ARE NOT DENIED BY THE CIT(A). THE APPEAL HAS BEEN FILED BY THE ASSESSEE BEFORE THE CIT(A) ON 31.1.2014. HENCE, WE FIND THAT THERE HAS BEEN NO WILLFUL NEGLE CT ON THE PART OF THE ASSESSEE. IN SUCH MATTERS THE ADVICE OF THE PROFESSIONAL WOULD B E THE POINT OF TIME AT WHICH THE ASSESSEE WOULD BEGIN TO EXPLORE THE OPTION OF EXHAU STING ALL LEGAL REMEDIES. WE ARE ALSO OF THE VIEW THAT BY CONDONATION OF DELAY THERE IS NO LOSS TO THE REVENUE AS LEGITIMATE TAXES PAYABLE IN ACCORDANCE WITH LAW ALO NE WOULD BE COLLECTED. WE ARE THEREFORE OF THE VIEW THAT THE CIT(A) OUGHT TO HAVE CONDONED THE DELAY AS THE DELAY IN FILING THE APPEAL BEFORE CIT(A) WAS OWING TO A REAS ONABLE AND SUFFICIENT CAUSE. WE ACCORDING CONDONE THE DELAY IN FILING THE APPEAL BE FORE CIT(A). SINCE THE CIT(A) HAS NOT DECIDED THE APPEAL OF THE ASSESSEE ON MERITS OF THE ISSUES RAISED IN THE GROUNDS OF APPEAL, WE SET ASIDE HIS ORDER AND REMAND FOR ADJUD ICATION THE GROUNDS RAISED BY THE ASSESSEE IN THE GROUNDS OF APPEAL ON MERITS. THE CIT(A) WILL AFFORD OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE SET ASIDE PROCEE DINGS. S.P.NO.50/KOL/2015 & ITA NO.1421/KOL/2015 SAUNAK MITRA-A.Y.2009-10 5 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. IN VIEW OF THE DECISION IN THE MAIN APPEAL, THE STAY PETITION DOES NOT REQUIRE ANY CONSIDERATION AND THE SAME IS DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE COURT ON 3.2.2016. SD/- SD/- [WASEEM AHMED] [N.V.VASUDEVAN] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 3.2.2016. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1. SAUNAK MITRA, 39, MAHANIRBAN ROAD, KOLKATA-7000 029. 2.THE A.C.I.T.-25, KOLKATA. 3.CIT(A)-7, KOLKATA 4. CIT-9, KOLKATA. 5.DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES