M/s. Rudra Construction, Baroda V. The Dy. CIT, Circle-1(2), Baroda

ITA 1439/AHD/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6344 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 13-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 68

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH D BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA NO.1439/AHD/2017 / ASSTT.YEAR : 2012-2013 M/S.RUDRA CONSTRUCT IO N 806, OZONE SARABHAI CAMPUS VADI WADI BARODA 390 007 PAN : AAHFR 2616 J VS. DCIT, CIR.1(2) BARODA. ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : SMT.KINJAL SHAH, AR REVENUE BY : SHRI VINOD TANWANI, SR.DR / DATE OF HEARING : 26/08/2019 / DATE OF PRONOUNCEMENT: 15/10/2019 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)- 2, BARODA DATED 30.3.2017 PASSED FOR THE ASSESSMENT YEAR 2012-13. 2. ASSESSEE HAS TAKEN TWO GROUNDS OF APPEAL WHEREB Y IT HAS PLEADED THAT THE LD.CIT(A) HAS ERRED IN NOT CONDONING THE D ELAY IN FILING THE APPEAL OF 677 DAYS, AND THEREBY CONFIRMED THE ADDITION OF RS.35,34,100/- WHICH WAS ADDED BY THE AO UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. 3. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD. IT EMERGES OUT FROM THE RECORD THAT TH E ASSESSEE HAS FILED APPEAL ITA NO.1439/AHD/2017 2 BEFORE THE LD.CIT(A) ON 28.4.2015. HOWEVER, IT FAI LED TO PAY SELF- ASSESSMENT TAX OF RS.23,87,220/- BEFORE FILING THE APPEAL BEFORE THE CIT(A). IT ALSO MERGES OUT THAT DURING THE COURSE OF PENDENCY OF THE APPEAL BEFORE THE LD.CIT(A), THE ASSESSEE HAS PAID SELF-ASSESSMENT TAX ALONG WITH INTEREST. THE DETAILS OF SUCH PAYMENTS A RE NOTICED BY THE LD.CIT(A) ON PAGE 3 WHICH READS ASUNDER: DATE PARTICULARS AMOUNT RS. 18.03.2015 TAX ON REGULAR ASSESSMENT 6 ,36,430/- 11.02.2016 TAX ON REGULAR ASSESSMENT 2 ,50,000/- 06.03.2017 TAX ON REGULAR ASSESSMENT 2 0,00,000/- TOTAL RS. 28,86,430/- 5. THE ASSESSEE THEREAFTER FILED AN APPLICATION FOR CONDONATION OF DELAY, PLEADING THEREIN THAT NON-PAYMENT OF SELF-ASSESSMEN T TAX BEYOND CONTROL OF THE ASSESSEE, AND THEREFORE, IT BE TAKEN AS PLAUSIB LE EXPLANATION FOR NOT FILING THE APPEAL WITHIN THE PERIOD STIPULATED IN T HE ACT. SUCH APPLICATION HAS BEEN REPRODUCED BY THE LD.CIT(A), WHICH READS A S UNDER: 3.2. SUBSEQUENTLY, VIDE LETTER DATED 15.03.2017 TH E LD. AUTHORIZED REPRESENTATIVE HAS FILED AN APPLICATION FOR CONDONA TION OF DELAY IN PAYMENT OF TAXES AS WELL AS IN REMOVING THE DEFECTS IN THE APPEAL. THIS WRITTEN SUBMISSION IS ALSO REPRODUCED AS UNDER :- 'IN THE ABOVE MENTIONED REFERENCE AND SUBJECT, FURT HER TO SUBMISSION DATED 07.03.2017, IT IS SUBMITTED THAT THE DELAY IN PAYMENT OF ADMITTED TAX LIABILITIES WAS DUE TO THE FACT THAT Y OUR APPELLANT WAS FACING ACUTE FINANCIAL CRISIS, AS THE APPELLANT HAS UNDER TAKEN MASSIVE EXPANSION OF THE PRODUCTION CAPACITY IN THE FY 2010-11 AND 2011-12 AND TAKEN BANK LOANS FOR THE EXPANSION PURP OSE. THE APPELLANT FIRM COULD NOT ACHIEVE THE PROJECTED SALE S TURNOVER TO MATCH THE CAPACITY EXPANSION BADLY EFFECTING ITS FI NANCIAL POSITION. CONSEQUENTLY , - COULD NOT PAY INSTALLMENTS OF LOANS IN PRESCRI BED TIME AND REQUIRED TO PAY PENAL INTEREST FOR LATE PAYMENT OF INSTALLMENTS. - THE INSTALLMENTS OFTEN BECOME OVERDUE FOR PAYM ENTS. ITA NO.1439/AHD/2017 3 THERE ARE ALSO NUMBER OF INCIDENTS, WERE THE CHEQUE ISSUED BY YOUR APPELLANT RETURN UNPAID DUE TO THE REASON OF INSUFF ICIENT OF FUNDS OR EXCESS ARRANGEMENT OF FUNDS. - THE FIRM ALSO REQUIRED TO HAVE TEMPORARY OVERD RAFTS TO MEET THE LIABILITIES TOWARD ROUTINE EXPENDITURES. - IN THE ENDEAVOR OF ACHIEVING OF PROJECTED SALE S, THE APPELLANT HAS MADE CREDIT SALES TO THE PARTIES. HOWEVER AT THIS F RONT ALSO THE APPELLANT FACED PROBLEMS OF TIMELY REALIZATION OF D UES FROM THE PARTIES AND IN THE RESULTS THE RECEIVABLE LEVEL HAS INCREASED CONSIDERABLY. - THE APPELLANT FIRM ALSO COULD NOT MAKE TIMELY PAYMENTS TO ITS CREDITORS. - THE APPELLANT FIRM EVEN COULD NOT MAKE TIMELY PAYMENTS TO GOVERNMENT DUES LIKE ROYALTIES AND VAT. FURTHERMORE SOME PARTIES HAVE ALSO DEFAULTED IN PAY MENT OF DUES AND CONSEQUENTLY YOUR APPELLANT REQUIRED TO FILE RECOVE RY PROCEEDINGS AND FIR WHERE IN SOME CASES DEFAULTER PARTIES HAS BECOME IN SOLVENT AND HENCE YOUR APPELLANT HAD REQUIRED TO WRITE OFF AS BAD DEB TS IN THE FY 2015-16. IN ADDITION TO THE ABOVE YOUR APPELLANT HAS ALSO FACED SLACKNESS IN THE MARKET AND HENCE THE TURNOVER OF THE FIRM HAS REDUCED CONS IDERABLY. IN SUPPORT OF THE ABOVE YOUR APPELLANT ENCLOSES THE FOLLOWING DOCUMENTS FOR PERUSAL - COPY OF SANCTION LETTER FOR TERM LOAN AND CASH CREDIT - TERM LOAN STATEMENTS FROM APRIL 2012 TO TILL D ATE - YEAR WISE COMPARATIVE STATEMENT OF SALES, TRAD E RECEIVABLE, TRADE PAYABLE, STATUTORY DUES AND PROFIT/LOSS. - COPIES OF BALANCE SHEET AND PROFIT & LOSS A/C. FOR THE FY 2011- 12 TO 2015-16. CONSIDERING THE ABOVE IT IS PRAYED THAT THE DELAY I N PAYMENT OF ADMITTED TAX LIABILITIES MAY BE CONDONED AND THE PRESENT APPEAL MAY BE ADMITTED FOR FINAL HEARING ON MERITS.' 6. THE LD.CIT(A) WAS NO SATISFIED WITH THE EXPLANAT ION OF THE ASSESSEE, AND OBSERVED THAT THE ASSESSEE HAS SUFFICIENT PROFI T BEFORE THE DEPRECIATION AND TAXES. IT COULD EASILY DISCHARGE ITS LIABILITY OF PAYMENT OF TAXES, AND THEREFORE, THERE IS NO BONA FIDE EXPLANATION IN THE CONENTION OF THE ASSESSEE. THE LD.CIT(A) HAS DISMISSED THE APPEAL VIDE ORDER D ATED 30.3.2017 ON THE GROUND THAT A VALID APPEAL WAS NOT FILED BY THE ASS ESSEE WITHIN THE TIME LIMIT. IT WAS A DEFECTIVE ONE. ITA NO.1439/AHD/2017 4 7. ON DUE CONSIDERATION OF THE ABOVE FACTS AND CIRC UMSTANCES, WE ARE OF THE VIEW THAT ONCE DURING THE PENDENCY OF APPEAL, T HE ASSESSEE HAS DISCHARGED THE TAX LIABILITY ON SELF-ASSESSMENT TAX ES ALONG WITH INTEREST, THEN THE LD.CIT(A) OUGHT TO HAVE NOT DISMISSED THE APPEAL BEING DEFECTIVE AND TIME BARRED. QUASI-JUDICIAL AUTHORITIES ARE BE ING RESPECTED NOT ON ACCOUNT OF THEIR POWER TO LEGALIZE INJUSTICE ON TEC HNICALITIES, RATHER ON ACCOUNT OF THEIR POWER TO REMOVE SUCH INJUSTICE. O NCE TAXES HAVE BEEN PAID AND PLAUSIBLE REASONS HAS BEEN SHOWN OF ITS NO N-PAYMENT, MORE SO DURING THE PENDENCY OF APPEAL, THEN THE APPEAL OUGH T TO HAVE BEEN DECIDED ON MERIT. WE ALLOW THE APPEAL OF THE ASSESSEE AND DIRECT THE LD.CIT(A) TO DECIDE THE APPEAL ON MERIT. THE OBSERVATIONS MADE BY US WILL NOT IMPAIR OR INJU RE THE CASE OF THE AO AND WILL NOT CAUSE ANY PREJUDICE TO THE DEFENCE/EXPLANATION OF THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 15 TH OCTOBER, 2019 AT AHMEDABAD. S D / - (AMARJIT SINGH) ACCOUNTANT MEMBER S D / - (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 15/10/2019