Tanish Associates, Pune V. Income-tax Officer, Ward - 7(4), Pune

ITA 1503/PUN/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4917 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 21-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Assessee Lawyers: JEETENDRA TIWARI
• Keywords: Principle of natural justice
• Section: 143(3)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, AM . / ITA NO.1503/PUN/2018 / ASSESSMENT YEAR : 2013-14 TANISH ASSOCIATES, TANISH SRUSHTI, SY.NO.498, CHARHOLI, KHURD, ALANDIMARKAL ROAD, PUNE. PAN AAFFT0549J. . / APPELLANT V/S INCOME TAX OFFICER, WARD 7(4), PUNE. . / RESPONDENT ASSESSEE BY : SHRI JEETENDRA TIWARI. REVENUE BY : SHRI M.K. VERMA. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) 8, PUNE DT.22.0 6.2018 FOR THE ASSESSMENT YEAR 2013-14. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN CONSTRUCTION ACTIVITY. ASSESSEE ELECTRONICALLY FILED ITS RETU RN OF INCOME FOR A.Y. 2013-14 ON 29.03.2016 DECLARING TOTAL INCOME OF / DATE OF HEARING : 30.01.2019 / DATE OF PRONOUNCEMENT: 14.02.2019 2 ITA NO.1503/PUN/2018 RS.14,59,422/-. THE CASE WAS SELECTED FOR SCRUTINY AND TH EREAFTER ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DATED 29.03.2016 AND THE TOTAL INCOME WAS DETERMINED AT RS.26,77,815/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CA RRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.22.06.2018 (IN APP EAL NO.PN/CIT(A)-8/ITO, WD.7(4)/551/2018-19) DISMISSED THE APPE AL OF ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL AND HAS RAISED THE FOLLOWING EFFECTIVE GROUND : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITIONS MADE BY THE AO ON ESTIMATE BASIS AT 1% OF THE LABOUR CHARGE S OF RS.12,18,39,325/-. THE ASSESSMENT ORDER PASSED U/S 143(3) BE SET ASIDE. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ON PERU SING THE DETAILS OF EXPENSES, AO NOTICED THAT ASSESSEE HAD IN CURRED LABOUR CHARGES FOR VARIOUS PROJECTS, THE DETAILS OF WHICH A RE GIVEN IN PARA 2 OF THE ASSESSMENT ORDER AND THE AGGREGATE O F SUCH EXPENSES WAS RS.12,18,39,325/-. THE ASSESSEE WAS ASKED TO EXPLAIN THE NEXUS OF EXPENSES WITH THE BUSINESS ACTIVITY O F THE ASSESSEE, TO WHICH ASSESSEE INTER-ALIA SUBMITTED THAT IT W AS NOT POSSIBLE TO MAINTAIN VOUCHERS NARRATING THE TOTAL DESCRIP TION OF WORK, SITE, NAME AND ADDRESS OF PAYEE ETC., DUE TO THE ILLITE RACY OF SUPERVISORS AND PAYERS. AO DID NOT ACCEPT THE CONTENT ION OF THE ASSESSEE. HE WAS OF THE VIEW THAT THE EXPENSES ARE NO T FULLY VERIFIABLE. HE ACCORDINGLY DISALLOWED 1% OF SUCH EXPENSES ON ESTIMATED BASIS AND THEREBY DISALLOWED RS.12,18,393/-. AGGR IEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFOR E LD.CIT(A), WHO VIDE EX-PARTE ORDER DT.22.06.2018 DISMISSED THE APPE AL OF THE 3 ITA NO.1503/PUN/2018 ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL. 4. BEFORE ME, LD.A.R. SUBMITTED THAT NO SPECIFIC INSTANCE OF T HE EXPENSES NOT BEING FOR THE PURPOSE OF BUSINESS HAS BEEN POINTED OUT BY THE AO. HE FURTHER SUBMITTED THAT IN SUCH CIRC UMSTANCES, ADHOC DISALLOWANCE OF RS.12,18,393/- IS UNCALLED FOR. WITH RESP ECT TO THE NON-APPEARANCE BEFORE LD.CIT(A), HE SUBMITTED THAT ASSESSEE COULD NOT APPEAR BEFORE LD.CIT(A), DUE TO NON RE CEIPT OF NOTICE. HE SUBMITTED THAT IN CASE, THE MATTER IS REMITTED BACK TO LD.CIT(A) THE ASSESSEE WILL FURNISH ALL THE RECORDS CALLED FOR BY LD.CIT(A). HE THEREFORE SUBMITTED THAT ONE OPPORTUNITY BE GIVEN TO THE ASSESSEE. LD.D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF AO. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MA TERIAL ON RECORD. IN THE PRESENT CASE, I FIND THAT OUT OF TOTA L LABOUR CHARGES OF RS.12,18,39,325/- AO HAS DISALLOWED EXPENSES OF RS.12,18,393/- ON ADHOC BASIS. I FIND THAT THERE WAS NO APPEARANCE BY THE ASSESSEE BEFORE AO AND NO WRITTEN S UBMISSIONS WERE FILED BY THE ASSESSEE BEFORE LD.CIT(A) IN SUPPORT OF HIS CONTENTION. THE PERUSAL OF ORDER OF LD.CIT(A) REVEALS THAT LD.CIT(A) HAS PASSED AN EX-PARTE ORDER WITHOUT DECIDING THE ISSUE ON MERITS. I N VIEW OF THE WELL SETTLED PRINCIPLE OF NATURAL JUSTICE THAT SUFFICIENT OPPORTUNITY OF HEARING SHOULD BE AFFORDED TO THE P ARTIES AND NO PARTY SHOULD BE CONDEMNED UNHEARD, I AM OF THE VIEW THAT ONE MORE OPPORTUNITY BE GRANTED TO ASSESSEE TO PRESE NT HIS CASE. I THEREFORE RESTORE THE MATTER BACK TO THE FILE OF LD.CIT(A) TO DECIDE 4 ITA NO.1503/PUN/2018 THE ISSUE ON MERITS IN ACCORDANCE WITH LAW. NEEDLESS TO STATE THAT LD.CIT(A) SHALL GRANT ADEQUATE OPPORTUNITY OF HEARING TO BO TH THE PARTIES. ASSESSEE IS ALSO DIRECTED TO PROMPTLY FURNISH ALL T HE DETAILS CALLED FOR BY THE LOWER AUTHORITIES. IN VIEW OF MY DECISION TO RESTORE THE ISSUE TO LD.CIT(A), I AM NOT ADJUDICATING ON M ERITS THE GROUNDS OF THE APPEAL RAISED BY THE ASSESSEE. THUS, THE GROUND OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 14 TH DAY OF FEBRUARY, 2019. SD/- ( ANIL CHATURVEDI ) ' / ACCOUNTANT MEMBER PUNE; DATED : 14 TH FEBRUARY, 2019. YAMINI #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-8, PUNE. PR. CIT-4, PUNE. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // // 012%3&4 / SR. PRIVATE SECRETARY ) &' , / ITAT, PUNE.