The ITO, Ward-1(3), Baroda V. Indo-Isreal Agrotech Ltd., Baroda

ITA 159/AHD/2009

• Counselvise Citation: 15920514 RSA 2009
• Duration Of Justice: 2 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 12-12-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 15-01-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Keywords: Opportunity of being heard; Additional evidence; Corroborative evidences
• Section: 40A(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE SHRI BHAVNESH SAINI, JM AND SHRI A. MOHAN A LANKAMONY, AM) ITA NO. 159/AHD/2009 A. Y.: 2004-05 THE INCOME TAX OFFICER, WARD 1 (3), ROOM NO.105, 1 ST FLOOR, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA VS INDO-ISREAL AGROTECH LTD., 503-506, MONALISHA COMPLEX, SAYAJIGUNJ, VADODARA 390 005 PA NO. AAACI 6018 D (APPELLANT) (RESPONDENT) APPELLANT BY SHRI B. L. YADAV, DR RESPONDENT BY NONE DATE OF HEARING: 12-12-2011 DATE OF PRONOUNCEMENT: 16-12-12-2011 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-V, BARODA DATED 24 TH OCTOBER, 2008 FOR ASSESSMENT YEAR 2004-05 ON THE FO LLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE ASSESSEE S CLAIM OF DEDUCTION U/S 80JJA AMOUNTING TO RS.2,52,923/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE U/S 40A(3) OF RS.11,70,540/-. ITA NO.159/AHD/2009 ITO, WARD 1(3), BARODAVS INDO-ISRAEL AGROTECH LTD. 2 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION ON AMOUNT OF ESTIMATION OF PROFIT OF RS.15,60,375/-. 2. WE HAVE HEARD THE LEARNED DR AND PERUSED THE FIN DING OF THE AUTHORITIES BELOW. NONE APPEARED ON BEHALF OF THE A SSESSEE DESPITE SERVICE OF THE NOTICE OF HEARING. THE ASSESSEE IS, THEREFORE, PROCEEDED EX-PARTE. 3. BRIEFLY, THE FACTS OF THIS CASE ARE THAT THE AO MADE EX-PARTE ASSESSMENT ORDER U/S 144 OF THE IT ACT BECAUSE THE ASSESSEE DID NOT ATTEND THE ASSESSMENT PROCEEDINGS BEFORE THE AO. SI NCE THE ASSESSEE DID NOT COMPLY WITH THE STATUTORY NOTICES AND NO SUPPORTING EVIDENCES WERE FILED THE AO GAVE SPECIFIC NOTICE TO THE ASSESSEE FOR FINALIZATION OF THE EX-PARTE ASSESSMENT ORDER. THER EAFTER, THE AO PASSED THE EX-PARTE ASSESSMENT ORDER. THE AO ON GRO UND NO.1 WITH REGARD TO DEDUCTION U/S 80JJA OF THE IT ACT NOTED T HAT THE ASSESSEE FILED RETURN OF INCOME IN ASSESSMENT YEAR 1999-2000 AND PRODUCTION STARTED FROM JUNE, 1995. THE AO WAS, THEREFORE, OF THE VIEW THAT DEDUCTION IN THE ASSESSMENT YEAR IS NOT ALLOWABLE T O THE ASSESSEE AFTER LAPSE OF A PERIOD OF FIVE YEARS. FURTHER, THE AO NOTED THAT THE ASSESSEE HAD MADE CASH PAYMENT IN VIOLATION OF PROV ISIONS OF SECTION 40A (3) OF THE IT ACT. DUE TO NON-COMPLIANC E BY THE ASSESSEE THE ADDITION WAS ACCORDINGLY MADE AND FURTHER PROFI T WAS ESTIMATED AND ADDITION WAS ACCORDINGLY MADE ON WHICH GROUNDS NO.2 AND 3 HAVE BEEN RAISED AS ABOVE. THE LEARNED CIT(A) CONSI DERED THE EVIDENCES AT THE APPELLATE STAGE AND GRANTED DEDUCT ION U/S 80JJA OF THE IT ACT TO THE ASSESSEE ON CONSIDERING THE PROVI SIONAL CERTIFICATE OF ITA NO.159/AHD/2009 ITO, WARD 1(3), BARODAVS INDO-ISRAEL AGROTECH LTD. 3 SMALL SCALE INDUSTRY WHICH WAS OBTAINED ON 14-08-20 03. THE LEARNED CIT(A) FURTHER ON EXAMINING THE EVIDENCES AT THE AP PELLATE STAGE DELETED THE ADDITION U/S 40A(3) OF THE IT ACT AND A SSESSMENT ON PROFIT WAS ALSO NOT FOUND JUSTIFIED ON EXAMINATION OF THE EVIDENCES. THEREFORE, ADDITION WAS ALSO DELETED. REVENUE IS IN APPEAL ON ALL THE ABOVE THREE GROUNDS OF APPEAL. 4. THE LEARNED DR MAINLY SUBMITTED THAT SINCE EX-PA RTE ORDER WAS PASSED BY THE AO DUE TO NON-COMPLIANCE OF STATUTORY NOTICES AND NON-PRODUCTION OF DOCUMENTS AND EVIDENCES AT THE AS SESSMENT STAGE, THEREFORE, PROVISIONS OF RULE 46A OF THE IT RULES HAVE BEEN VIOLATED BY THE LEARNED CIT(A) AND AS SUCH THE MATT ER REQUIRES RECONSIDERATION AT THE APPELLATE STAGE. THE ASSESSE E THOUGH DID NOT PUT IN APPEARANCE BEFORE THE TRIBUNAL AT THE TIME O F HEARING BUT WRITTEN SUBMISSION IS FORWARDED IN THE PAPER BOOK I N WHICH IT IS BRIEFLY EXPLAINED THAT ON THE SUBMISSION AND DOCUMENTS FILE D AT THE APPELLATE STAGE BEFORE THE LEARNED CIT(A), REMAND R EPORT FROM THE AO WAS CALLED FOR, BUT NO REMAND REPORT WAS FILED A ND THE APPEAL HAS BEEN DECIDED BY THE LEARNED CIT(A). THE ASSESSEE, T HEREFORE, PRAYS IN THE WRITTEN SUBMISSION THAT ADDITIONS HAVE BEEN RIGHTLY DELETED BY THE LEARNED CIT(A). ON CONSIDERATION OF THE FACTS OF THE CASE IN THE LIGHT OF THE ABOVE SUBMISSIONS, WE ARE OF THE VIEW THE MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF THE LEARNED CIT(A). THE LEARNED CIT(A) IN PARA 4 OF THE APPELLATE ORDER DECIDED THE ISSUE OF FRAMING OF EX- PARTE ASSESSMENT ORDER U/S 144 OF THE IT ACT AND NO TED THAT THERE IS NO SUBMISSION OF THE ASSESSEE ON THIS ISSUE, THEREF ORE, ASSESSEES GROUND OF APPEAL CHALLENGING THE EX-PARTE ASSESSMEN T ORDER U/S 144 ITA NO.159/AHD/2009 ITO, WARD 1(3), BARODAVS INDO-ISRAEL AGROTECH LTD. 4 OF THE IT ACT WAS DISMISSED. IT IS ALSO ADMITTED FA CT THAT THE ASSESSEE DID NOT COMPLY WITH THE STATUTORY NOTICES BEFORE TH E AO AT THE ASSESSMENT STAGE, THEREFORE, EX-PARTE ASSESSMENT OR DER U/S 144 OF THE IT ACT WAS PASSED BY THE AO. ACCORDING TO THE W RITTEN SUBMISSION OF THE ASSESSEE, THE ASSESSEE FILED ADDITIONAL EVID ENCES AT THE APPELLATE STAGE ON WHICH REMAND REPORT WAS CALLED F OR BY THE LEARNED CIT(A) FROM THE AO AND FURTHER ACCORDING TO THE WRI TTEN SUBMISSIONS OF THE ASSESSEE,THE ASSESSEE MADE A DEMAND OF COPY OF THE REMAND REPORT FROM THE LEARNED CIT(A) BUT CAME TO KNOW THA T REMAND REPORT WAS NOT SUBMITTED BEFORE THE LEARNED CIT(A). RULE 4 6A OF THE IT RULES PROVIDES THAT THE ASSESSEE SHALL NOT BE ENTIT LED TO PRODUCE BEFORE THE COMMISSIONER (APPEALS) ANY EVIDENCE WHET HER ORAL OR DOCUMENTARY OTHER THAN THE EVIDENCES PRODUCED BEFOR E THE AO EXCEPT IN THE CIRCUMSTANCES NAMELY:- WHERE THE AO H AS REFUSED TO ACCEPT THE EVIDENCE, OR WHERE THE ASSESSEE WAS PREV ENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCE, OR WH ERE EVIDENCES COULD NOT BE PRODUCED BEFORE THE AO DUE TO REASONAB LE CAUSE AND THAT THE ORDER APPEALED WAS PASSED WITHOUT GIVING R EASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE AFO RESAID RULE FURTHER PROVIDES THAT NO EVIDENCE SHALL BE ADMITTED UNDER T HIS RULE UNLESS REASONS ARE RECORDED BY THE COMMISSIONER (APPEALS) FOR ITS ADMISSION AND THAT OPPORTUNITY SHALL BE GIVEN TO TH E AO TO REBUT SUCH EVIDENCES. IN THIS CASE, THE LEARNED CIT(A) ADMITTE DLY CONSIDERED ADDITIONAL EVIDENCES AT THE APPELLATE STAGE WITHOUT FOLLOWING RULE 46A OF THE IT RULES AND NONE OF THE CONDITIONS OF R ULE 46 A OF THE IT RULES NOTED ABOVE HAVE BEEN COMPLIED WITH BY THE LE ARNED CIT(A). THE LEARNED CIT(A) THUS SHOULD NOT HAVE DELETED THE SUBSTANTIAL ITA NO.159/AHD/2009 ITO, WARD 1(3), BARODAVS INDO-ISRAEL AGROTECH LTD. 5 ADDITION ON THE MATTER IN ISSUE WITHOUT CONSIDERING THE PROVISIONS OF RULE 46A OF THE IT RULES AND WITHOUT FOLLOWING THE PROVISIONS OF LAW. THEREFORE, THE MATTER REQUIRES RECONSIDERATION AT T HE LEVEL OF THE LEARNED CIT(A). 4.1 CONSIDERING THE ABOVE FACTS AND FURTHER THAT TH E LEARNED CIT(A) DID NOT MENTION ANYTHING IN THE APPELLATE ORDER IF CONDITIONS OF RULE 46A OF THE IT RULES HAVE BEEN SATISFIED IN THIS CAS E AND FURTHER THE LEARNED CIT(A) JUSTIFIED THE ACTION OF THE AO IN FR AMING EX-PARTE ASSESSMENT ORDER U/S 144 OF THE IT ACT CLEARLY SUPP ORT THE SUBMISSIONS OF THE LEARNED DR THAT THE MATTER REQUI RES RECONSIDERATION AT THE LEVEL OF THE LEARNED CIT(A). WE MAY FURTHER NOTE HERE THAT IF THE LEARNED CIT(A) CALLED FOR THE REMAND REPORT FROM THE AO, THE SAME SHOULD BE PLACED ON HIS RECORD AND COPY SHOULD BE SUPPLIED TO THE ASSESSEE FOR FINALIZATION OF THE MA TTER. IN VIEW OF THE ABOVE DISCUSSIONS, WE SET ASIDE THE ORDER OF THE LE ARNED CIT(A) AND RESTORE ALL THE 3 GROUNDS OF APPEAL TO HIS FILE WIT H DIRECTION TO RE- DECIDE THE APPEAL OF THE ASSESSEE ON ALL THE GROUND S BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE AO AS WELL AS TO THE ASSESSEE. THE LEARNED CIT(A) SHALL PASS A SP EAKING ORDER ON THE MATTER IN ISSUE IN THE LIGHT OF THE PROVISIONS OF RULE 46A OF THE IT RULES. ITA NO.159/AHD/2009 ITO, WARD 1(3), BARODAVS INDO-ISRAEL AGROTECH LTD. 6 5. IN THE RESULT, THE DEPARTMENTAL APPEAL IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD