Monsoon Agro Bio Ltd., Pune V. Income-tax Officer,

ITA 158/PUN/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0473 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 16-08-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 09-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMITRA BANERJI
• Assessee Lawyers: NILESH KHANDELWAL
• Keywords: Reasonable cause; Condonation of delay; Reassessment proceedings
• Section: 143(3)

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 158 /PN/201 5 / ASSESSM ENT YEAR : 20 0 7 - 0 8 MONSOON AGRO BIO LTD., M/S. MZSK & ASSOCIATES, CHARTERED ACCOUNTANTS, LEVEL 3, RIVERSIDE BUSINESS BAY, PLOT NO.84, WELLESLEY ROAD, NEAR RTO, PUNE - 41100 1 . / APPELLANT PAN: A A DCM1840L VS. THE INCOME TAX OFFICER , THE INCOME TAX OFFICER , WARD 11(1), PUNE . / RESPONDENT / APPELLANT BY : SHRI N ILESH KHANDELWAL / RESPONDENT BY : SMT. SUMITRA BANERJI / DATE OF HEARING : 0 4 . 1 0 .201 6 / DATE OF PRONO UNCEMENT: 11 . 1 1 .201 6 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - 1 , PUNE , DATED 28 . 0 8 .20 1 3 RELATING TO ASSESSMENT YEAR 20 0 7 - 0 8 AGAINST ORDER PASSED UNDER SECTION 1 4 3(3) R.W.S. 147 OF THE I NCOME - TAX ACT , 1961 (IN SHORT THE ACT) . ITA NO. 158 /PN/20 1 5 MONSOON AGRO BIO LTD. 2 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS 1. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, THE APPELLANT IS ELIGIBLE TO THE CLAIM I N TERMS OF PROVISIONS OF SEC . 80IB(11A) OF THE ACT. IT FURTHER BE HELD THAT DISALLOWANCE AND CONSEQUENT ADDITION MADE BY THE A O REJECTING THE CLAIM MADE BY THE APPELLANT AND THAT CONFIRMED BY THE HON'BLE ITAT, PUNE BENCH IN TERMS OF PROVISIONS OF SEC.80IB(1 1A) OF THE ACT IS IMPROPER, UNJUSTIFIED, AND CONTRARY TO THE PROVISIONS AND SCHEME OF THE ACT AND FACTS PREVAILING IN THE CASE. THE CLAIM OF RS . 41,03,048/ - BE HELD AS ALLOWABLE IN THE HANDS OF THE APPELLANT, THE ADDITION MADE BY THE A O AND CONFIRMED BY THE 1 ST APPELLANT AUTHORITY IN THAT RESPECT BE DELETED. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THE RESPECT . 2. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, RESORTING TO THE PROVISION S OF SEC. 148/147 BY THE A O FOR REOPENING THE ASSESSMENT IS IMPROPER, WITHOUT 148/147 BY THE A O FOR REOPENING THE ASSESSMENT IS IMPROPER, WITHOUT SATISFYING THE CONDITIONS FOR RESUMING THE JURISDICTION IN TERMS OF PROVISIONS OF SEC.147. THE ASSESSMENT FRAMED BY THE A O & THAT CONFIRMED BY THE 1 ST APPELLATE AUTHORITY U/S. 14 3(3) R . W.S 147 BE SET ASIDE. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT . 3. ON FACTS AND CIRCUMSTANCES PREVAILING IN THE CASE AND AS PER PROVISIONS & SCHEME OF THE ACT IT BE HELD THAT, NOT ADMITTING AND DISMISSING APPEAL BY REJECTING PRAYER FOR CONDONATION OF DELAY IN FILING OF APPEAL BEFORE 1 ST APPELLATE AUTHORITY IS IMPROPER, UNJUSTIFIED, AND CONTRARY TO THE PROVISIONS AND SCHEME OF THE ACT AND FACTS PREVAILING IN THE CASE. THE APPEAL FILED BEFORE 1 ST APPELLATE AUTHORITY BE ADMITTED BY CONDONATION OF DELAY. THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THIS RESPECT . 4. WITHOUT PREJUDICE, IT SHOULD FURTHER BE HELD THAT CIT(A) SHOULD HAVE FOLLOWED THE EARLIER ORDER OF ITAT IN ASSESSEE'S OWN CASE AS PER SETTLED LEGAL JURISPRUDENCE. THE ORDER PASSED BY THE CIT(A) IN CONTRAVENTION TO THE SETTLED LEGAL POSITION AS PER EARLIER ORDER IS NOT AS PER THE RULES OF JUDICIAL DISCIPLINE AND THE SAME NEEDS TO BE SET ASIDE ON THIS SCORE. THE APPELLANT BE GRANTED COST INCURRED FOR FILING OF APPEAL . THE APPELLANT BE GRANTED JUST AND PROPER RELIEF IN THE RESPECT . 3. THE PRESENT APPEAL WAS FILED AFTER DELAY OF 287 DAYS. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS FURNISHED AN APPLICATION FOR CONDONATION OF DELAY, WHICH READS AS UNDER: - AFFIDAVIT I, SHRI RAHUL MH A SKE, DIRECTOR OF MONSOON AGRO BIO LTD., WITH ADDRESS OF COMMUNICATION AS 106 - 1 2 , RAMTEKDI INDUSTRIAL AREA, OFF SOLAPUR ROAD, HADAPSAR, PUNE 411013, IDENTIFIED BY PAN: AA DCM1840LDO HEREBY STATE ON SOLEMN AFFIRMATION AND E XECUTE THE AFFIDAVIT AS UNDER: 1 . THAT FOR THE ASSESSMENT YEARS 2005 - 06 AND 2006 - 07, THE DEDUCTION CLAIMED BY THE COMPANY U / S 80IB(11A) WAS DISALLOWED DURING THE REGULAR ASSESSMENT PROCEEDINGS AND CONSEQUENTLY REASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 20 07 - 08 WERE INITIATED. ASSESSMENT YEAR 20 07 - 08 WERE INITIATED. ITA NO. 158 /PN/20 1 5 MONSOON AGRO BIO LTD. 3 2 . THAT THE CASES FOR AY 2005 - 06 AND AY 2006 - 07 TRAVELLED UPTO ITAT AND WAS DECIDED BY THE HON'BLE ITAT BY ITS ORDER ON 29/02/2012 WHEREIN DEDUCTION U/S.80IB(11A) WAS ALLOWED TO THE APPELLANT. 3 . THAT M/S MZSK & ASSOCIATES, CHARTERED AC COUNTANTS, PUNE RESIGNED AS AUDITOR OF THE APPELLANT COMPANY ON 25/9/2013 AND ALSO TAX ADVISORY SERVICES WERE DISCONTINUED. 4 . THAT THE COMPANY APPOINTED CA AMIT SUBHASH GANDHI, CHARTERED ACCOUNTANTS VIDE EGM HELD ON 27TH JANUARY, 2014. 5 . THAT NEW AUDITOR A CCEPTED HIS APPOINTMENT AFTER OBTA I N I NG NO OBJECTION CERTIFICATE FROM M ZS K & T ASSOCIATES VIDE LETTER DATED 17/02 / 2014. 6 . THAT THE STATUTORY AUDITOR HAS IN STATUTORY REPORT DATED 01/09/2014 FOR THE YEAR ENDED 31 ST MARCH, 2014 REPORTED THAT APPEAL MATTER FOR ASSESSMENT YEAR 2007 - 08 IS STILL PENDING BEFORE CIT(A), PUNE. 7 . THAT THE CIT(A) ORDER DATED 25/08/2013 FOR AY 2007 - 08 WAS RECEIVED ON 27/02 / 2014 BY ONE OF EMPLOYEE AND I AM NOT AWARE EXACTLY WHO DID, RECEIVE THE ORDER ON 2712 / 2014. 8 . THAT THE SAID APPEAL OR DER WASN'T PRODUCED BEFORE ME AND WAS DIRECTLY FILED IN THE INCOME TAX RECORDS MAINTAINED BY THE ASSESSEE COMPANY. 9 . THAT THE COMPANY GOT TO KNOW THAT THE CIT(A) ORDER FOR AY 2007 - 08 HAS BEEN PASSED ONLY AFTER THE COMPANY RECEIVED NOTICE U/S. 271 (1)(C) DA TED 31/1 2/20 14 REGARDING PENALTY PROCEEDINGS CONSEQUENT TO ORDER OF THE CIT(A). CIT(A). 10 . THAT ON BEING APPROACHED BY THE DEPARTMENT WE FOUND THE ORDER IN THE RECORDS AND GOT TO KNOW THAT THE ISSUES RAISED IN THE APPEAL HAS IN FACT BEEN DISPOSED OFF AGAINST THE COM PANY AND IN FAVOUR OF DEPARTMENT. 11 . DUE TO T HIS REASON AFTER RECEIPT OF ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) PUNE - I THERE WAS DELAY TO PROVIDE OUR CONSULTANT THE COPY OF ORDER. 12 . THAT, DUE TO ABOVE GENUINE REASONS THERE IS DELAY OF 2 87 DAYS IN FILI NG THE APPEAL . 13 . THAT WE HAD NO INTENTION TO JEOPARDIZE THE INTEREST OF THE REVENUE BY DELAYING THE FILING OF THE APPEAL AS THE DISPUTE WITH AO HAS ALREADY BEEN SETTLED IN FAVOUR OF THE APPELLANT. 14 . THAT WE ARE NOT A HABITUAL DEFAULTER AND THIS IS THE FIRS T TIME DUE TO ABOVE SAID CONTENTS THAT WE MISSED THE TIME LINE FIXED BY THE ACT. 15 . ON FACTS AND CIRCUMSTANCES PREVAILING IN OUR CASE AND AS PER PROVISIONS & SCHEME OF THE ACT AND IN THE INTEREST OF JUSTICE, CONDONATION FOR DELAY BE GRANTED AND APPEAL FILED MAY BE ADJUDICATED. THIS AFFIDAVIT IS EXECUTED IN ORDER TO BRING ON RECORD, FACTS HAPPENED IN OUR CASE. IT IS ALSO TO BRING ON RECORD THAT THE DELAY HAS BEEN CAUSED DUE TO REASONABLE CAUSE AND IT IS HUMBLY REQUESTED THAT DELAY CAUSED BE CONDONED AND THE APPEAL FILED BE DECIDED ON MERIT. ITA NO. 158 /PN/20 1 5 MONSOON AGRO BIO LTD. 4 WHATEVER STATED ABOVE IS TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE & BELIEF. THE ABOVE AFFIDAVIT IS EXECUTED ON 16 TH DAY OF JULY, 2016. SD/ - (RAHUL MHASKE) (AFFIANT) 4. THE LEARNED AUTHORIZED R EPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE APPELLATE ORDER WAS PASSED ON 25.08.2013 AND APPELLATE ORDER WAS RECEIVED ON 27.02.2014 BY ONE OF THE EMPLOYEES. HOWEVER, THE DIRECTOR OF ASSESSEE COMPANY CLAIMS THAT THE SAID ORDER WAS NOT BROUGHT TO TH E KNOWLEDGE OF MANAGEMENT AND WAS DIRECTLY FILED IN THE INCOME TAX RECORDS. ONLY ON RECEIPT OF NOTICE LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT DATED 31.12.2014, THE ASSESSEE CLAIMS THAT THE SAID ORDER OF CIT(A) CAME TO HIS KNOWLEDGE. BECAUSE OF THIS, THERE WAS DELAY IN FURNISHING THE APPEAL BEFORE THE TRIBUNAL OF 287 DAYS. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE ORDER OF TRIBUNAL IN EARLIER YEAR AN D PREJUDICE WOULD BE CAUSED IF THE APPEAL IS NOT ADMITTED. 5. ON PERUSAL OF RECORD, THE FACTUAL MATRIX IS THAT THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80IB(11A) OF THE ACT TO THE TUNE OF RS.41,03,048/ - AND HAD FURNISHED THE RETURN OF INCOME AT RS . 83,737/ - . THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT DETERMINING THE INCOME AT RS.41,86,790/ - , WHEREIN THE DEDUCTION CLAIMED UNDER SECTION 80I B(11A ) OF THE ACT WAS NOT ALLOWED. THE ASSESSEE HAD MADE THE AFORESAID CLAIM AGAINST GROWING SWEET CORN. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE SAID SWEET CORN WAS CEREAL WHICH WAS GRAIN AND NOT VEGETABLE AND HENCE, IT COULD NOT BE SAID THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF PROCESSING, ITA NO. 158 /PN/20 1 5 MONSOON AGRO BIO LTD. 5 PRESERVATION AND PACKAGING OF VEGETABLES. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT AND THE ASSESSMENT ORDER WAS SERVED UPON THE ASSESSEE ON 31.12.2010. HOWEVER, THE APPEAL BEFORE THE CIT(A) WAS FILED ON 17.05.2012 I.E. AFTER DELAY OF 472 DAYS. THE ASSESSEE MADE AN APPLICATIO N FOR CONDONATION OF DELAY IN FILING THE APPEAL LATE BEFORE THE CIT(A) ON THE GROUND THAT THE ASSESSMENT ORDER WAS RECEIVED BY CA ARATI GANDHI, WHO LEFT THE JOB OF CA FIRM AND FORGET TO HANDOVER THE ASSESSMENT ORDER AND DEMAND NOTICE TO HER COLLEAGUE. FOR THIS REASON, THE APPEAL WAS DELAYED TO BE FILED OF ALMOST TWO YEARS. ANOTHER POINT WHICH WAS BROUGHT BEFORE THE CIT(A) WAS THAT FOR ASSESSMENT YEARS 2005 - 06 AND 2006 - 07, SIMILAR DEDUCTION CLAIMED UNDER SECTION 80IB(11A) OF THE ACT WAS DISALLOWED BY THE A SSESSING OFFICER, WHICH WAS UPHELD BY THE CIT(A). HOWEVER, THE TRIBUNAL VIDE ORDER DATED 29. 0 2.2012 DECIDED THE APPEAL IN FAVOUR OF ASSESSEE BY TREATING SWEET CORN AS VEGETABLE AND NOT CEREAL. 6. THE ASSESSMENT PROCEEDINGS FOR INSTANT ASSESSMENT YEAR W ERE REOPENED UNDER SECTION 147 OF THE ACT AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT RAISING DEMAND OF RS.13,69,055/ - . AFTER THE ORDER WAS PASSED BY THE TRIBUNAL, THE ASSESSING OFFICER GIVING EFFECT TO THE SAID ORDER FOR A SSESSMENT YEARS 2005 - 06 AND 2006 - 07, ADJUSTED THE REFUND ARISING THEREFROM AGAINST THE DEMAND RAISED FOR ASSESSMENT YEAR 2007 - 08. THE ASSESSEE CLAIMS THAT AT THAT POINT OF TIME IT CAME TO HIS KNOWLEDGE THAT THE ASSESSMENT FOR ASSESSMENT YEAR 2007 - 08 WAS F INALIZED AND DEMAND WAS RAISED. THE CIT(A) WHILE DECIDING THE PETITION FOR CONDONATION OF DELAY IN FILING THE APPEAL LATE BEFORE HIM, WAS OF THE VIEW THAT THE CLAIM MADE BY THE ASSESSEE THAT CA ARATI GANDHI HAD LEFT THE JOB AND DID NOT HANDOVER THE ASSESS MENT ORDER AND DEMAND NOTICE TO HER COLLEAGUE WAS DEVOID OF MERIT. ITA NO. 158 /PN/20 1 5 MONSOON AGRO BIO LTD. 6 SECONDLY, SINCE THE ASSESSEE WAS AWARE OF THE FACT THAT SCRUTINY ASSESSMENT PROCEEDINGS WERE UNDER PROCESS, IT COULD NOT BE SAID THAT IT WAS NOT AWARE OF THE STATUS OF COMPLETION OF ASSESS MENT AGAINST THE ASSESSEE FOR THE SAID YEAR. ANOTHER POINT NOTED BY THE CIT(A) WAS THAT THE ASSESSEE HAD FILED AN APPEAL AGAINST THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2009 - 10 ON 04.02.2012 , WHERE IN THAT YEAR, THERE WAS MENTION OF REOPENING OF ASSESSME NT FOR THE EARLIER YEAR ALSO. THE CIT(A) ALSO NOTED THE FACT THAT THE ASSESSEE WAS ATTENDING PROCEEDINGS BEFORE THE TRIBUNAL IN WHICH CASE THE ORDER WAS PASSED ON 29.02.2012. IN THE ABOVE SAID FACTS AND CIRCUMSTANCES, THE CIT(A) HELD THAT THERE WAS NO RE ASONABLE AND SUFFICIENT CAUSE FOR NOT PRESENTING THE APPEAL WITHIN THE TIME LIMIT PRESCRIBED UNDER THE ACT AND THE APPEAL OF ASSESSEE WAS DISMISSED IN LIMINE. 7 . THE APPEAL BEFORE THE TRIBUNAL IS FILED AFTER DELAY OF 287 DAYS. THE FIRST ISSUE WHICH NEE DS TO BE ADJUDICATED IS THE CONDONATION OF DELAY IN FILING THE APPEAL LATE BEFORE THE TRIBUNAL. THE ASSESSEE HAS FILED APPEAL LATE BY 287 DAYS. THE CASE OF THE ASSESSEE WAS THAT BECAUSE OF CERTAIN CIRCUMSTANCES BEYOND THE CONTROL OF ASSESSEE, THE SAID AP PEAL COULD NOT BE FILED IN TIME AS ELABORATED IN THE AFFIDAVIT FILED BY THE DIRECTOR OF ASSESSEE COMPANY. ANOTHER ASPECT POINTED OUT BY THE ASSESSEE IN THIS REGARD WAS THAT EVEN THE AUDITOR IN THE STATUTORY AUDIT REPORT DATED 01.09.2014 HAS REPORTED THAT THE APPEAL WAS PENDING BEFORE THE CIT(A), PUNE THOUGH THE ORDER OF CIT(A) WAS CLAIMED TO HAVE BEEN RECEIVED BY ONE OF THE EMPLOYEES ON 27.02.201 4. THE BONAFIDES OF ASSESSEE IN THIS REGARD ARE THUS, ESTABLISHED AND THE DELAY IN FILING THE APPEAL IS CONDONE D. IN THE TOTALITY OF T HE ABOVE SAID FACTS AND CIRCUMSTANCES, THERE IS MERIT IN THE CLAIM OF ASSESSEE AS FAR AS PETITION FOR CONDONATION OF APPEAL IS CONCERNED. ACCORDINGLY, THE CLAIM OF ASSESSEE IS ALLOWED IN THIS REGARD. IT MAY ITA NO. 158 /PN/20 1 5 MONSOON AGRO BIO LTD. 7 ALSO TO BE KEPT IN MIND THAT THE ISSUE OF CLAIM OF DEDUCTION UNDER SECTION 80IB(11A) OF THE ACT HAS BEEN ADJUDICATED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL VIDE ITA NO.1156/PN/2010, RELATING TO ASSESSMENT YEAR 2006 - 07 VIDE ORDER DATED 29.02.2012. THE APPEAL OF ASSESSEE WAS D ISMISSED BY THE CIT(A) AS THE APPEAL BEFORE HIM WAS ALSO FILED AFTER DELAY. ACCORDINGLY, THE ISSUE IS REMITTED BACK TO THE FILE OF CIT(A), WHO SHALL DECIDE THE ISSUE OF CONDONATION OF DELAY IN FILING THE APPEAL LATE BEFORE THE CIT(A) IN ACCORDANCE WITH LAW AND ALSO DECIDE ISSUE ON MERITS . THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED AS INDICATED ABOVE. 8 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED ON THIS 11 TH DAY OF NOVEMBER , 201 6 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 11 TH NOVEMBER , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESP ONDENT; 3. ( ) / THE CIT(A) - 1 , PUNE ; 4. / THE CIT - 1 , PUNE ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE