SHLOK BRIGHT STEEL CO., MUMBAI V. ITO 15(1)(1), MUMBAI

ITA 1494/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0347 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 12-05-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 22-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR ABANI KANT A NAYAK
• Assessee Lawyers: YASH SUDARSHAN SAIN
• Keywords: Unexplained cash credit; Business income; Opportunity of being heard
• Section: 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI BEFORE S HRI B.R. BASKARAN (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 1494 /MUM/20 1 3 ASSESSMENT YEAR: 2005 - 2006 M/S SHLOK BRIGHT STEEL COMPANY, 19, CHAMPA BHUVAN, 2 ND PARSI WADA LANVE, S.V.P. RO AD, MUMBAI - 400004 PAN: AWFS8529C VS. THE INCOME TAX OFFICER - 15(1)(1), MATRU MANDIR, MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI YASH SUDARSHAN SAIN (A R) RESPONDENT BY : DR. ABANI KANT A NAYAK (D R) DAT E OF HEARING: 09/06 /201 7 DATE OF PRONOUNCEMENT: 16 / 0 6 /201 7 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST ORDER DATED 29/09/2010 PASSED BY THE LD. CIT (APPEALS ) - 26 , MUMBAI FOR THE A S S E SSMENT YEAR 2005 - 2006 , WHEREBY THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE FILED AGAINST ASSESSMENT ORDER PASSED U/S 144 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. IN THIS CASE, THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR T HE ASSESSMENT YEAR 2005 - 06 DECLARING THE TOTAL INCOME OF RS. 1,45,393/ - . THE RETURN WAS PROCESSED AND ACCORDINGLY NOTICE U/S 143 (2) AND 142 (1) WAS SERVED ON THE ASSESSEE . H OWEVER, IN RESPONSE TO THE SAID NOTICES NEITHER THE ASSESSEE APPEARED NOR FILED A NY DETAILS CALLED FOR BY THE AO. THEREAFTER , THE AO 2 ITA NO. 1494 /MUM/2013 ASSESSMENT YEAR: 2005 - 2006 ISSUED NOTICES ON SEVERAL DATES TO SECURE PRESENCE OF THE ASSESSEE. SINCE, THE ASSESSEE DID NOT APPEAR DESPITE SUFFICIENT OPPORTUNITY GIVEN BY THE AO, EX - PARTE ASSESSMENT ORDER U/S 144 OF THE ACT WAS PASS ED ON THE BASIS OF MATERIAL AVAILABLE BEFORE THE AO . T HE ASSESSEE HAD DECLARED SALE OF RS. 99,55,034/ - ON WHICH IT HAD DECLARED THE PROFIT OF RS. 1,45,393/ - . S INCE THE ASSESSEE FAILED TO ESTABLISH THE VERACITY OF PURCHASES SALES, EXPENSES ETC. TAKING A FAI R AND REASONABLE VIEW, THE AO ESTIMATED THE BUSINESS INCOME OF THE ASSESSEE AT RS. 3,00,000/ - . IT WAS FURTHER NOTICED THAT THE ASSESSEE HAD SHOWN UNSECURED LOAN OF RS. 4,71,856/ - . SINCE, THE GENUINENESS OF TRANSACTION REMAIN ED UNPROVED THE AO TREATED THE S AME AS ASSESSEES OWN MONEY FROM UNDISCLOSED SOURC ES AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE U/S 68 OF THE ACT. 3. FEELING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE FILED FIRST APPEAL BEFORE THE CIT (A). THE LD. CIT(A) ISSUED NOTICE AND S ENT THROUGH RPAD, HOWEVER, THE NOTICE WAS RETURNED UN - SERVED WITH THE REMARKS NOT KNOWN. THEREAFTER A NOTHER NOTICE WAS ISSUED WHICH WAS DULY SERVED. BUT THE ASSESSEE DID NOT APPEAR ON THE DATE FIXED FOR HEARING . ACCORDINGLY, THE LD. CIT (A) DISMISSED THE APPEAL OBSERVING THAT THE APPELLANT IS NOT INTEREST ED TO PURSUE ITS APPEAL. 4 . AGAINST THE SAID ORDER, T HE ASSESSEE HAS FILED THE PRESENT APPEAL BY RAISING THE FOLLOWING GROUNDS: 1. ASSESSMENT MADE U/S 144: THE APPELLANT SUBMITS THAT AUTHORIZED REPRES ENTATIVE HAD NOT COMPLIED WITH NOTICE ISSUED BY THE LD. AO TIME TO TIME DUE TO WHICH LD. AO HAD PASSED EX PARTE ORDER MERELY DUE TO THE FACT THAT OUR CHARTERED ACCOUNTANT HAS NOT ATTENDED THE MATTER ON DATE CALLED FOR AND WITHOUT GIVING THE ONE MORE OPPORT UNITY FOR MAKING SUBMISSION. WHILE PASSING ASSESSMENT ORDER, LD AO HAD MADE NOT ONLY ADHOC ADDITION OF RS. 3,00,000/ - TO THE PROFIT BUT 3 ITA NO. 1494 /MUM/2013 ASSESSMENT YEAR: 2005 - 2006 ALSO TREAT GENUINE LOANS OF RS. 4,71,856/ - AS UNEXPLAINED CREDIT U/S. 68 OF IT ACT. THE APPELLANT SUBMITS THAT THE ITS BUSINESS PREMISES WA S UNDER MAJOR RENOVATION AND NO BODY WAS AVAILABLE AT THE ADDRESS MENTION IN THE INCOME TAX RETURN DUE TO WHICH THE APPELLANT HAD NOT RECEIVED ANY COMMUNICATION ABOUT THE CASE IS BEING FIXED FOR HEARING IN APPEAL. NON RECEIPT OF NOTICE F OR HEARING, OUR AUTHORIZED REPRESENTATIVE HAD NOT ATTENDED OFFICE OF CIT (APPEAL) DUE TO WHICH LD. CIT APPEAL HAD DISMISSED THE CASE IN LIMINE. 2. THE APPELLANT, THEREFORE, PRAYS AND REQUEST YOU HONOR TO NOT ONLY SET ASIDE THE ASSESSMENT ORDER PASSED BY THE AO BUT ALSO DROP PENALTY PROCEEDING INITIATED U/S. 271 (1) (C) AND REMAND THE CASE BACK TO THE LEARNED AO FOR MAKING A FRESH ASSESSMENT ORDER BY OFFERING ONE MORE OPPORTUNITY TO ATTEND THE FOR THE ASSESSMENT FOR THE ABOVE MENTIONED YEAR SO THAT NECESSARY P APERS & SUBMISSIONS CAN BE SUBMITTED FOR COMPLETING THE ASSESSMENT. 5. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO HAS PASSED THE ASSESSMENT ORDER U/S 144 OF THE ACT AS THE AUTHORIZED REPRESENTATIVE FAILED TO APPEAR BEFORE THE AO. THE ADDITIONS HAVE BEEN MADE PURELY ON ADHOC BASIS. THE AUTHORIZED REPRESENTATIVE ALSO FAILED TO APPEAR BEFORE THE LD. CIT (A) DURING THE APPELLATE PROCEEDINGS AND THE LD. CIT (A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. THE LD. COUNSEL F URTHER SU BMITTED THAT IN THE INTEREST OF JUSTICE THE ASSESSE E SHOULD BE GIVEN AN OPPORTUNITY TO PRESENT HIS CASE BEFORE THE AUTHORITIES BELOW. 6. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) RELYING ON THE ORDER PASSED BY THE LD. CIT (A) SUBMITT ED THAT SINCE THE ASSESSEE HAS FAILED TO COMPLY WITH THE NOTICES ISSUED BY THE CIT (A), THE LD. CIT (A) HAS RIGHTLY DISMISSED THE APPEAL OF THE ASSESSEE. 4 ITA NO. 1494 /MUM/2013 ASSESSMENT YEAR: 2005 - 2006 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO GONE THROUGH THE MATERIAL PLACED BEFORE US. WE NO TICE D THAT THE ASSESSEE HAS FAILED TO APPEAR BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS AND BEFORE THE LD. CIT (A) DURING THE APPELLATE PROCEEDINGS DESPITE SUFFICIENT OPPORTUNITY GIVEN BY THE AUTHORITIES BELOW . T HE LD. CIT (A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE BY FOLLOWING VARIOUS DECISIONS INCLUDING THE DECISION RENDERED BY THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF MULTIPLAN INDIA P. LTD. V S. CIT 38 ITD 320 DELHI. ON THE LAST DATE OF HEARING WE HAD DIRECTED THE ASSESSEE TO PAY A FINE OF RS. 5,000/ - K EEPING IN VIEW, THE NEGLIGENCE ON THE PART OF THE ASSESSEE . TODAY, THE LD. COUNSEL APPRISED THE B ENCH THAT THE AMOUNT OF FINE HAS BEEN PAID. HENCE, IN THE INTEREST OF JUSTICE, WE SET ASIDE TH IS APPEAL TO THE FILE OF LD. CIT (A) TO DECIDE T HE GROUNDS OF APPEAL ON MERITS AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE, HOWEVER, DIRECT THE ASSESSEE NOT TO SEEK ADJOURNMENTS ON FRIVOLOUS GROUNDS DURING THE PROCEEDINGS BEFORE THE LD. CIT(A) . IN THE RESULT, APPEAL FIL ED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2005 - 2006 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH JUNE , 2017 . SD/ - SD/ - ( B.R. BASKARAN ) ( RAM LAL NEGI ) A CCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 16 / 0 6 / 2017 ALINDRA PS 5 ITA NO. 1494 /MUM/2013 ASSESSMENT YEAR: 2005 - 2006 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT( A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI