A.Ramakrushna, CHENNAI V. ITO, CHENNAI

ITA 1580/CHNY/2011

• Counselvise Citation: 158021714 RSA 2011
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 18-01-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 21-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R B NAIK
• Assessee Lawyers: T BANUSEKAR
• Keywords: Reopening of assessment; Principle of natural justice
• Section: 234B; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER ITA NO.1580/MDS/2011 (ASSESSMENT YEAR: 2003-04) SHRI A.RAMAKRUSHNA, 1, NORTH CRESENT ROAD, T.NAGAR, CHENNAI-600 017 PAN:AEMPR 5434F VS. INCOME TAX OFFICER, WARD-II(3), CHENNAI-600 034. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. T.BANUSEKAR, C.A., RESPONDENT BY : MR. R.B. NAIK, CIT DR DATE OF HEARING : 18 TH JANUARY, 2012 DATE OF PRONOUNCEMENT : 30 TH JANUARY, 2012 O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE, FOR THE ASSESSMENT YEA R 2003-04, IS DIRECTED AGAINST THE ORDER OF THE LEAR NED CIT(A)- VI, CHENNAI, DATED 31.05.2011. 2. THE APPEAL WAS FOUND BARRED BY LIMITATION BY 51 DAYS. A CONDONATION PETITION STATING THE REASONS FOR THE DELAY HAS BEEN FILED WHICH IS SUPPORTED BY SWORN AFFIDAVIT M ENTIONING THE REASONS FOR THE DELAY. THE REASONS ARE AS UNDER :- ITA NO. 1580/MD S/2011 2 THAT SHRI N.SIVA PRASAD, CHARTERED ACCOUNTANT HANDED OVER THE ORDER OF THE CIT(A) OF MR. A.RAMAKRUSHNA FOR THE ASST.YEAR 2003-04 DATED 31.5.2011 THAT WAS RECEIVED ON 2.6.2011 TO ME AND INSTRUCTED ME TO SEND THE SAME TO THE OFFICE OF SHR I T.BANUSEKAR, C.A. FOR PREPARING AN APPEAL TO BE FIL ED BEFORE THE HONBLE ITAT BEFORE HE LEFT FOR ANANTPUR TO ATTEND ON HIS MOTHER WHO WAS SERIOUS AND WHO PASSED AWAY IN FEW DAYS AND HE STAYED BACK THERE TO PERFOR M HIS MOTHERS LAST RITES. THAT I FORGOT TO SEND THE PAPERS TO THE OFFICE OF S HRI T.BANUSEKAR, CA AND THE SAME GOT MIXED UP WITH THE OTHER PAPERS. THAT ONLY IN THE THIRD WEEK OF SEPTEMBER, 2011 WHEN SHRI N.SIVA PRASAD, CA ENQUIRED ABOUT THE STATUS OF THE APPEAL, I REALIZED THAT I HAD FORGOTTEN TO SEND THE ORDER OF THE CIT(A) TO THE OFFICE OF SHRI T.BANUSEKAR, CA AND INFORMED THE SAME TO SHRI N.SHIVA PRASAD, CA. 3. THE LEARNED CIT DR OPPOSED THE CONDONATION OF DE LAY. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND IN THE LIGHT OF HONBLE SUPREME COURTS DICTUM THAT SUBSTANTIAL JUS TICE SHOULD NOT BE DEFEATED BY STATIC REASONS, WE FIND THE REASONS ITA NO. 1580/MD S/2011 3 FOR THE DELAY ARE SUFFICIENT TO EXPLAIN THIS DEFAUL T AND THEREFORE WE CONDONE THIS DELAY AND ADMIT THE APPEAL. 4. ON MERITS, THE FACTS OF THE CASE ARE THAT THE AS SESSEE FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2003 -04 ON 01.12.2003 DECLARING TOTAL INCOME OF ` 1,52,750/-. ON THE BASIS OF INFORMATION RECEIVED FROM ITO WARD-XV(2), THAT A SURVEY WAS CONDUCTED IN THE BUSINESS PREMISES OF TH E ASSESSEE ON 28.03.2003 DURING WHICH HIS SWORN STATE MENT WAS RECORDED IN WHICH HE STATED THAT HE WILL DISCLO SE AN ADDITIONAL INCOME OF ` 2 LAKHS FROM THIS YEAR IN HIS INDIVIDUAL HANDS. BUT THE ASSESSEE HAD NOT HONOURED HIS WORDS WHICH RESULTED IN TAKING ACTION UNDER SECTION 147 READ WI TH SECTION 148 OF THE INCOME TAX ACT, 1961. THIS RESULTED INTO ADDITION OF ` 2 LAKHS IN ASSESSEES HANDS BY WAY OF REASSESSMENT . BEFORE THE CIT(A) VARIOUS LEGAL GROUNDS WERE RAISED AGAINST THE ADDITION AND CHARGING OF INTEREST U/S.234A, 234 B & 234C OF THE ACT. THE LEARNED CIT(A) DID NOT AGREE WITH THE LEGAL ARGUMENTS OF THE ASSESSEE AND CONFIRMED THE IMPUGNE D ADDITION AND SO ALSO THE CHARGING OF INTEREST UNDER SECTION ITA NO. 1580/MD S/2011 4 234A, 234B & 234C OF THE ACT. THE MAIN REASON FOR T HIS ACTION OF ASSESSING OFFICER IS THAT ON 22.03.2006 THE ASSESSEE FILED A LETTER WHEREIN HE AGREED TO THE CO NFIRMATION OF ADDITION OF ` 2 LAKHS IN ORDER TO AVOID PROTRACTED LITIGATION AND ON THAT BASIS THIS ADDITION WAS CONFIRMED. 5. BEFORE US, THE FOLLOWING GROUNDS WERE TAKEN:- 1. THE ORDER OF CIT(A) IS CONTRARY TO LAW, FACTS AN D CIRCUMSTANCES OF THE CASE AND AT ANY RATE IS OPPOSE D TO THE PRINCIPLES OF NATURAL JUSTICE, EQUITY AND FAIR PLAY. 2. THE REOPENING OF ASSESSMENT IS BAD IN LAW. 3. THE CIT(A) ERRED IN HOLDING THE ALLEGED SURVEY PROCEEDINGS TO BE VALID AND WELL WITHIN THE JURISD ICTION. 4. THE CIT(A) FAILED TO APPRECIATE THAT NO NOTICE U /S.143(2) WAS SERVED. 5. THE CIT(A) FAILED TO APPRECIATE THAT THE STATEME NT OBTAINED DURING THE COURSE OF THE SURVEY DOES NOT H AVE ANY EVIDENTIARY VALUE AS IT IS NOT A SWORN STATEMEN T AND IS NOT CORROBORATED BY ANY INDEPENDENT EVIDENCE OR RECORDS. 6. THE CIT(A) ERRED IN UPHOLDING THE ADDITION OF ` .2 LAKHS. 7. THE APPELLANT OBJECTS TO LEVY OF INTEREST U/S.23 4A, 234B & 234C. 6. WE HAVE HEARD RIVAL SUBMISSIONS AND FOUND THAT STATEMENT RECORDED DURING THE SURVEY HAS NO EVIDENT IARY VALUE AS PER THE DECISION OF THE HONBLE JURISDICTI ONAL HIGH COURT WHICH IS BEING OFTEN QUOTED BY US IN ALL THE ORDERS. ITA NO. 1580/MD S/2011 5 IN SO FAR AS THE LETTER DATED 22.03.2006 RETRACTED BY THE ASSESSEE SEEMS TO BE A FORCED EVIDENCE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE. THERE BEING NO MATER IAL TO SUPPORT THIS ADDITION, WE ARE OF THE CONSIDERED OPI NION THAT SUCH AD-HOC ADDITIONS CANNOT BE ALLOWED TO SUSTAIN IN THE EYES OF LAW. ACCORDINGLY, WE ORDER TO RELEASE THIS ADDITION. IN SO FAR AS THE LEGAL GROUND TAKEN REGARDING SERVI CE OF NOTICE WAS NOT ACTUALLY ARGUED AND SO IT STANDS D ISMISSED AS NOT PRESSED. THE CHARGING OF INTEREST UNDER SECT ION 234A, 234B & 234C BEING MANDATORY AND COMPENSATORY IN NATURE HAS TO TAKE ITS COLOUR FROM THE ADDITION. 7. ACCORDINGLY, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JANUARY, 2012 AT CHENNAI. SD/- SD/- (DR. O.K.NARAYANAN) (HARI OM MARATHA) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 30 TH JANUARY, 2012. SOMU COPY TO: (1) APPELLANT (4) CIT(A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.