Totem Infrastructure Limited, Hyderabad, Hyderabad V. DCIT, Circle-2(3), Hyderabad, Hyderabad

ITA 158/HYD/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2245 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 01-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Keywords: Opportunity of being heard; Condonation of delay
• Section: 143(3); 194C; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NOS. 156, 157, 158, 159 AND 203/HYD/2017 ASSESSMENT YEARS: 2006-07, 2007-08, 2008-09, 2010-1 1 & 2011-12 TOTEM INFRASTRUCTURE LTD., HYDERABAD. PAN AABCK 7020Q VS. DY. COMMISSIONER OF INCOME-TAX, CIRCLE 2(3) HYD. APPELLANT RESPONDENT ASSESSEE BY: SRI K.C. DEVDAS REVENUE BY: SMT. SUMAN MALIK DATE OF HEARING: 12/12/2017 DATE OF PRONOUNCEMENT: 15/12/2017 O R D E R PER S. RIFAUR RAHMAN, AM: THESE APPEALS ARE FILED BY THE ASSESSEE AGAINST SEPARATE ORDERS OF CIT(A) - 2, HYDERABAD, ALL DATED 20/03/2015, RELATE TO THE AYS 2006-07 TO 2008-09 AN D 2010-11 & 2011-12. AS IDENTICAL ISSUES ARE INVOLVED IN THES E APPEALS, THEY WERE CLUBBED AND HEARD TOGETHER AND, THEREFORE , FOR THE SAKE OF CONVENIENCE, A COMMON ORDER IS PASSED. 2. ON PERUSAL OF RECORD, WE FIND THAT THERE WAS A D ELAY OF 14 DAYS IN FILING THESE APPEALS BY THE ASSESSEE. AS SESSEE FILED A PETITION FOR CONDONATION OF DELAY EXPLAININ G THE REASONS, INTER-ALIA, THAT AS THE BUSINESS WAS CLOS ED AND THE OTHER DIRECTORS LEFT THERE WERE NO PROPER PERSONS T O LOOK AFTER THE MATTERS. THUS, THE ASSESSE COMPANY COULD NOT RE SPOND ANY OF THE NOTICES ISSUED BY EITHER THE AO OR THE A PPELLATE AUTHORITIES AND VIRTUALLY THE COMPANY WAS CLOSED AN D THE PREMISES WHERE THE REGISTERED OFFICE WAS LOCATED, W AS KEPT I.T.A. NOS. 156/HYD/2017 AND OTHERS TOTEM INFRASTRUCTURE LTD., HYD. 2 UNDER LOCK. ANY NOTICES RECEIVED FROM THE DEPARTMEN T USED TO BE COLLECTED BY THE WATCHMAN AND WARD STAFF OF THE PREMISES, THEREFORE, THE DIRECTOR OF THE COMPANY HAD NO OCCAS ION TO KNOW THAT CERTAIN PAPERS SENT BY THE DEPARTMENT WER E RECEIVED BY THEM. WHEN NOTICED LATER, THE DELAY OCC URRED IN FILING THE APPEALS. CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE OBJECTION OF THE LD. DR, WE HEREBY CONDONE THE DELAY AS THE ASSESSEE WAS PREVENTED BY REASONAB LE CAUSE IN NOT FILING THE APPEALS WITHIN THE STIPULATED TIM E. 3. BRIEFLY THE FACTS, AS TAKEN FROM AY 2006-07 ARE , ASSESSEE A CIVIL CONTRACTOR, DEALING WITH LAYING OF ROADS, HIGHWAYS AND CONSTRUCTION OF BUILDINGS AND DAMS, FI LED ITS RETURN OF INCOME FOR THE AY 2006-07 ON 30/11/2006 D ECLARING TOTAL INCOME OF RS. 1,84,55,574/-. THE ASSESSMENT W AS COMPLETED U/S 143(3) OF THE INCOME-TAX ACT, 1961 (I N SHORT THE ACT) BY ASSESSING THE TOTAL INCOME AT RS. 3,08,27, 762/-. SUBSEQUENTLY, THE ASSESSMENT WAS REOPENED U/S 147 BY ISSUE OF NOTICE U/S 148 ON 02/03/2011 AND DULY SERV ED ON THE ASSESSEE. NOTICE U/S 143(2) OF THE ACT WAS ALSO ISS UED AND SERVED ON THE ASSESSEE. SINCE THERE WAS NO COMPLIAN CE FROM THE ASSESSEE AND AR OF THE ASSESSEE ALSO EXPRESSED HIS INABILITY TO FURNISH THE DETAILS CALLED FOR BY THE AO, THE AO DISALLOWED THE FOLLOWING EXPENSES: 1. MACHINERY HIRE CHARGES: ASSESSEE HAD CLAIMED MATERIAL CONSUMPTION OF RS. 95,12,330/-, FOR WHICH ASSESSEE HAS NOT FURNISHED THE DETAILS. THEREFORE, THE SAME WERE DISALLOWED. 2. FURTHER, AO OBSERVED THAT ASSESSEE HAD DEBITED TOWARDS MATERIAL AND DIRECT EXPENSES TO THE EXTENT OF RS. 17,78,44,425/-, WHICH INCLUDED AN AMOUNT OF RS. 83,40,933/- TOWARDS SUB-CONTRACT CHARGES. SINCE I.T.A. NOS. 156/HYD/2017 AND OTHERS TOTEM INFRASTRUCTURE LTD., HYD. 3 ASSESSEE HAD NOT DEDUCTED TAX AT SOURCE U/S 194C OF THE ACT, THE AO DISALLOWED THE SAID EXPENSES U/S 40(A)(IA) OF THE ACT. 4. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE CIT(A) AND THE CIT(A) HAD ISSUED NOTICES ON THREE OCCASIONS FOR HEARING AND DUE TO REASONS KNOW N TO ASSESSEE, NONE APPEARED ON BEHALF OF THE ASSESSEE F OR HEARING BEFORE THE CIT(A). THE CIT(A), THEREFORE, D ISMISSED THESE APPEALS BY OBSERVING THAT ASSESSEE HAD NOT UT ILIZED OPPORTUNITIES EXTENDED TO IT BY HIS OFFICE AND ASS ESSEE HAS TREATED THESE OPPORTUNITIES IN A CASUAL MANNER. 5. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE I S IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF A PPEAL: 1. THE ORDER OF THE HON'BLE CIT(A) IS ERRONEOUS IN LAW AS WELL AS FACTS OF THE CASE. 2. THE HON'BLE CIT(A) DECIDED THE APPEAL EXPARTE WITHOUT ALLOWING PROPER OPPORTUNITY TO THE APPELLAN T. 3. THE HON'BLE CIT(A) OUGHT TO HAVE TAKEN INTO CONSIDERATION THE CIRCUMSTANCES UNDER WHICH THE APPELLANT COULD NOT APPEAR IN CONNECTION WITH APPEA L PROCEEDINGS AND OUGHT NOT TO HAVE DISMISSED THE APPEAL. 4. THE HON'BLE CIT(A) OUGHT TO HAVE OBSERVED THAT T HE ASSESSING OFFICER COMPLETED THE SCRUTINY ASSESSMENT PROCEEDINGS U/S.143(3) RWS 147 OF THE IT ACT WITHOU T ALLOWING PROPER OPPORTUNITY TO THE ASSESSEE AND THEREFORE, OUGHT NOT TO HAVE UPHELD THE ASSESSMENT ORDER. 5. ANY OTHER GROUND WILL BE RAISED AT THE TIME OF HEARING. 6. CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL FA CTS ON RECORD. AS PER THE SUBMISSIONS OF THE LD. AR OF THE ASSESSEE AND ALSO CONDONATION PETITION FILED BY THE ASSESSEE , WE FIND THAT THE BUSINESS WAS CLOSED DUE TO THE FACT THAT C OMPANY HAS I.T.A. NOS. 156/HYD/2017 AND OTHERS TOTEM INFRASTRUCTURE LTD., HYD. 4 BECOME NPA AND THE MONEY LENT BY VARIOUS BANKS HAVE FILED A CASE UNDER DRT. THE BANKS HAVE SOLD ALL THE COLLA TERAL SECURITIES BELONGING TO THE COMPANY AND MOREOVER TH ERE WAS NO PROPER PERSON TO LOOK AFTER THE MATTERS AND, THE REFORE, THE ASSESSEE COULD NOT RESPOND TO ANY OF THE NOTICE ISS UED BY VARIOUS AUTHORITIES. EVEN THOUGH, LD. CIT(A) HAS IS SUED NOTICES FOR HEARING, BUT, IT IS NOT BROUGHT ON RECORD WHETH ER IT WAS PROPERLY SERVED ON THE ASSESSEE. FURTHER, AS PER SE CTION 251, CIT(A) HAS POWERS TO CONFIRM, REDUCE, ENHANCE OR AN NUL THE ASSESSMENT. IT SHOWS THAT HE HAS TO DISPOSE OF THE APPEAL ON MERIT AND ALSO IT IS EXTENSION OF ASSESSMENT PROCEE DINGS. IN THE GIVEN CASE, CIT(A) SHOULD HAVE DISPOSED OF THE APPEAL ON MERITS. CONSIDERING THE TOTALITY OF THE FACTS AND C IRCUMSTANCES OF THE CASE, IN OUR CONSIDERED VIEW, ASSESSEE DESER VES TO HAVE ONE MORE OPPORTUNITY TO BE EXTENDED TO IT CONS IDERING THE DIFFICULT SITUATION THAT IS BEING FACED BY IT. FOR THE SAKE OF JUSTICE, WE REMIT THIS CASE BACK TO THE FILE OF THE CIT(A) WITH A DIRECTION TO ADJUDICATE THE MATTER ON MERITS AND IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. AS THE FACTS AND GROUNDS ARE MATERIALLY IDENTICA L IN ALL THE APPEALS TO THAT OF AY 2006-07, FOLLOWING THE DE CISION THEREIN, WE REMIT THESE APPEALS ALSO TO THE FILE OF CIT(A) WITH IDENTICAL DIRECTIONS. I.T.A. NOS. 156/HYD/2017 AND OTHERS TOTEM INFRASTRUCTURE LTD., HYD. 5 8. IN THE RESULT, ALL THE APPEALS UNDER CONSIDERATI ON ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 15 TH DECEMBER, 2017 SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER SD/- (S. RIFAUR RAHMAN) ACCOUNTANT MEMBER HYDERABAD, DATED 15 TH DECEMBER, 2017 KV COPY FORWARDED TO: 1. M/S TOTEM INFRASTRUCTURE LTD., C/O B. NARSING RA O & CO., CAS., PLOT NO. 554, ROAD NO. 92, JUBILEE HILLS, HYD . - 96 2. DCIT, CIRCLE 2(3), IT TOWERS, HYD. 3. CIT(A) - 2, HYDERABAD 4 PR. CIT - 2, HYDERABAD 5 THE DR, ITAT, HYDERABAD 6 GUARD FILE