M/s. Mittal Creations, Bengaluru V. Assistant Commissioner of Income Tax, Circle 6(3)(1), Bengaluru

ITA 16/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7804 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-04-2019
• Assessment Year: 2006-2007
• Appeal Filed On: 03-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L V BHASKAR REDDY
• Assessee Lawyers: V SRINIVASAN
• Keywords: Opportunity of being heard; Reasonable cause; Set aside
• Section: 143(3); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI JASON P BOAZ, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO. 16 /BANG/201 8 ASSESSMENT YEAR : 20 06 - 07 M/S. MITTAL CREATIONS, #5, F-2, 1 ST PHASE, PEENYA INDUSTRIAL AREA, BANGALORE 560 058. PAN : AAEFM 6030 C VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 6[1], NOW C-6[3][1], BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI. V. SRINIVASAN, ADVOCATE REVENUE BY : SHRI. L. V. BHASKAR REDDY, ADDL. CIT DATE OF HEARING : 03 . 04 .201 9 DATE OF PRONOUNCEMENT : 24 . 0 4 .201 9 O R D E R PER SHRI JASON P BOAZ, A.M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE EX-PARTE ORDER OF THE CIT(A)-14, BANGALORE, DATED 13.10.2017 FOR ASSESSMENT YEAR 2006-07. 2. BRIEFLY STATED, THE FACTS RELEVANT FOR DISPOSAL OF THIS APPEAL ARE AS UNDER: 2.1 THE ASSESSEE, A FIRM ENGAGED IN MANUFACTURING AND EXPORT OF READY-MADE GARMENTS, FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2006-07 ON 30.10.2006 DECLARING INCOME OF RS.67,24,320/-. THE RETURN WAS PROCESSED UNDER SECTION 143(1) ITA NO. 16/BANG/2018 PAGE 2 OF 7 OF THE INCOME TAX ACT (IN SHORT THE ACT) AND THE CASE WAS SUBSEQUENTLY TAKEN UP FOR SCRUTINY FOR THIS ASSESSMENT YEAR. THE ASSESSMENT WAS CONCLUDED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 12.12.2008 WHEREIN THE ASSESSEES INCOME WAS DETERMINED AT RS.79,88,410/-. 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT DATED 12.12.2008 FOR ASSESSMENT YEAR 2006-07, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A)-14, BANGALORE. THE CIT(A) DISMISSED THE ASSESSEES APPEAL EX-PARTE FOR NON-PROSECUTION, FOLLOWING, INTER ALIA, THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. B. BHATTACHARJEE AND OTHERS (118 ITR 461). 3. THE ASSESSEE, BEING AGGRIEVED BY THE EX-PARTE ORDER OF CIT(A)-14, BANGALORE, DATED 13.10.2017 HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL, WHEREIN IT HAS RAISED THE FOLLOWING GROUNDS:- ITA NO. 16/BANG/2018 PAGE 3 OF 7 4. GROUND NOS. 2 AND 3 4.1 IN THESE GROUNDS (SUPRA), THE ASSESSEE CONTENDS THAT THE CIT(A) WAS NOT JUSTIFIED IN DISPOSING OFF THE ASSESSEES APPEAL EX-PARTE WITHOUT PROVIDING SUFFICIENT AND EFFECTIVE OPPORTUNITY. IT IS CONTENDED THAT THE ASSESSEE HAD NOT RECEIVED THE HEARING NOTICE ISSUED BY THE CIT(A) AND CONSEQUENTLY, THE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE IN NOT APPEARING BEFORE THE CIT(A). THEREFORE, THE IMPUGNED EX-PARTE ORDER OF CIT(A) IS UNJUSTIFIED. ITA NO. 16/BANG/2018 PAGE 4 OF 7 THE LEARNED AR WAS HEARD AND REITERATED THE SUBMISSIONS AS PUT FORTH IN THE STATEMENT OF FACTS WHICH ARE EXTRACTED HEREUNDER:- ITA NO. 16/BANG/2018 PAGE 5 OF 7 IT IS FURTHER SUBMITTED THAT THE ULTIMATE OBJECT OF ASSESSMENT BEING THAT THE CORRECT INCOME OF THE ASSESSEE BE BROUGHT TO TAX. IN THIS CONTEXT IT IS PRAYED BY THE LEARNED AR THAT THE IMPUGNED EX-PARTE ORDER OF THE CIT(A) BE SET ASIDE AND MATTER RESTORED TO FILE OF CIT(A) FOR HEARING AND ADJUDICATION ON MERITS. 4.2 PER CONTRA, THE LEARNED DR FOR REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4.3.1 WE HAVE HEARD AND CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS PUT FORTH BY BOTH LEARNED DR FOR REVENUE AND THE LEARNED AR OF THE ASSESSEE. A PERUSAL OF THE IMPUGNED ORDER CONFIRMS THE FACT THAT THE CIT(A) DISMISSED THE ASSESSEES APPEAL EX-PARTE FOR NON-PROSECUTION. IT IS SEEN THAT THE APPEAL WAS FILED BEFORE CIT(A)-III, BANGALORE AND THE ASSESSEE DID NOT ATTEND THE HEARINGS ON 04.08.2011 AND 06.09.2011. SUBSEQUENTLY, THE APPEAL WAS TRANSFERRED TO CIT(A)-6, BANGALORE, AS PER NOTICE OF HEARING RECEIVED BY THE LEARNED AR OF THE ASSESSEE DATED 05.05.2015. IT IS SUBMITTED ITA NO. 16/BANG/2018 PAGE 6 OF 7 THAT THE LEARNED AR SOUGHT ADJOURNMENTS FOR HEARINGS ON 11.05.2015 AND 16.03.2016 WHICH WERE GRANTED. IN THE NEXT DATE OF HEARING ON 19.12.2016, THE AR SOUGHT FOR ADJOURNMENT. NEXT THING WAS THE RECEIPT OF THE IMPUGNED EX-PARTE ORDER DATED 13.10.2017. ACCORDING TO THE LEARNED AR, THE ASSESSEE DID NOT RECEIVE THE NOTICES FOR HEARINGS ON 21.09.2017 AND THE ASSESSEE WAS NOT EVEN AWARE THE APPEAL WAS TRANSFERRED TO CIT(A)-14, BANGALORE. IT WAS PLEADED THAT THE DEFAULT WAS NEITHER DELIBERATE NOR INTENTIONAL, BUT WAS FOR CAUSES BEYOND THE ASSESSEES CONTROL AND CONSTITUTED REASONABLE CAUSE. TAKING INTO ACCOUNT THE FACTS OF THE MATTER AND IN THE INTEREST OF SUBSTANTIAL JUSTICE, WE ARE INCLINED TO CONCUR WITH THIS PLEA OF ASSESSEE, AS IT IS HIGHLY UNLIKELY THAT THE ASSESSEE WOULD INTENTIONALLY OR DELIBERATELY NOT ATTEND HEARINGS BEFORE THE CIT(A); AS THIS WOULD CAUSE IMMENSE HARM TO HIS OWN INTERESTS. ADMITTEDLY, THE ASSESSEES APPEAL HAS NOT BEEN DISPOSED OFF BY ADJUDICATION ON MERITS OF THE ISSUES RAISED BEFORE THE CIT(A). SINCE THE ULTIMATE AIM OF THE ASSESSMENT IS THAT ONLY THE CORRECT TAXES DUE BY THE ASSESSEE BE COLLECTED BY REVENUE, IN OUR VIEW, IT IS IMPERATIVE THAT THE ASSESSEES APPEAL BEFORE THE CIT(A) BE HEARD AND DISPOSED OFF ON MERITS. 4.3.2 IN THIS VIEW OF THE MATTER, WE ARE OF THE CONSIDERED OPINION THAT THE INTEREST OF SUBSTANTIAL JUSTICE WILL BE WELL SERVED IF THE IMPUGNED ORDER OF THE CIT(A) DATED 13.10.2017 FOR ASSESSMENT YEAR 2006-07 BE SET ASIDE. WE, THEREFORE, SET ASIDE THE AFORESAID IMPUGNED ORDER OF THE CIT(A) AND RESTORE THE MATTER TO HIS FILE FOR FRESH HEARINGS, EXAMINATION AND ADJUDICATION OF THE ISSUES RAISED BY THE ASSESSEE IN THE APPEAL BEFORE HIM. NEEDLESS TO ADD, THE CIT(A) SHALL AFFORD THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND TO FILE DETAILS/SUBMISSIONS REQUIRED, WHICH SHALL BE DULY CONSIDERED BEFORE DECIDING THE ISSUES. THE ASSESSEE IS ALSO DIRECTED TO COMPLY WITH AND ATTEND THE HEARINGS BEFORE THE CIT(A). WE HOLD AND DIRECT ACCORDINGLY. CONSEQUENTLY, GROUNDS 2 AND 3 ARE ALLOWED. ITA NO. 16/BANG/2018 PAGE 7 OF 7 5. IN VIEW OF THE ABOVE, WE REFRAIN FROM COMMENTING ON OR ADJUDICATING THE ISSUES RAISED ON TECHNICAL ISSUES/MERITS IN GROUNDS AT NOS. 1 AND 4 TO 6 OF THIS APPEAL. 6. IN THE RESULT, THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2006-07 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF APRIL, 2019. SD/ - SD/ - (LALIET KUMAR) JUDICIAL MEMBER (JASON P BOAZ) ACCOUNTANT MEMBER SD/- BANGALORE. DATED: 24 TH APRIL, 2019. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.