Parshwanath Metal Processors India Pvt.Ltd, Pune V. Deputy Commissioner of Income-tax, Circle - 10, Pune

ITA 1637/PUN/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5064 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 10-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Principle of natural justice

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, P UNE BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NO. 1637/PUN/2018 / ASSESSMENT YEAR : 2012-13 PARSHWANATH METAL PROCESSORS INDIA PVT. LTD. S- BLOCK, W-79, MIDC, BHOSARI, PUNE-411 026 PAN : AAACP 9733A .... / APPELLANT ! / V/S. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-10, PUNE. / RESPONDENT ASSESSEE BY : SHRI SUHAS BORA & SHRI SANKET BORA REVENUE BY : SHRI RAJESH GAWALI & SHRI M.K. VERMA / DATE OF HEARING : 05.02.2019 / DATE OF PRONOUNCEMENT : 06.02.2019 ' / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM TH E ORDER OF LD. CIT(APPEALS)-6, PUNE DATED 09.05.2018 FOR THE ASSESSMENT YEAR 2012-13 AS PER FOLLOWING GROUNDS OF APPEAL ON RECORD: 1. THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING THE A DDITION AMOUNTING TO RS.5,20,988/- ON ACCOUNT OF DISALLOWANCE OF INTE REST U/S.36(1)(III) ON THE GROUND THAT THE ASSESSEE WAS UNABLE TO PROVE TH E UTILIZATION OF BORROWED FUNDS FOR THE BUSINESS OF THE COMPANY. 2. THE LEARNED CIT (APPEALS) ERRED IN CONFIRMING TH E ADDITION ON ACCOUNT OF NOT CHARGING INTEREST ON THE AMOUNT OUTSTANDING FROM TRADE RECEIVABLES ON THE GROUND THAT THE SUBMISSION MADE WERE WITHOUT PROVING THAT THE 2 ITA NO. 1637/PUN/2018 A.Y.2012-13 AMOUNT REFLECTED UNDER TRADE RECEIVABLES ARE ARISIN G OUT OF TRADING ACTIVITY AND NOT OUT OF ADVANCES IN SPITE OF THE FA CT THAT THE AO NEVER DISPUTED THAT THE AMOUNT OF SUNDRY DEBTORS ARE NOT OUT OF THE TRADING TRANSACTIONS. 3. THE APPELLANT MAY KINDLY BE PERMITTED TO ADD TO OR ALTER ANY OF GROUNDS OF APPEAL, IF DEEMED NECESSARY. 2. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESSEE AP PRAISED THE BENCH THAT THE ORDER PASSED BY THE LD. CIT(APPEALS) IS AN EX-P ARTE ORDER AND THERE WAS NON-COMPLIANCE BY THE ASSESSEE, SINCE THEY WERE PRE VENTED FOR REASONS BEYOND CONTROL AND THEREFORE, THE LD. AR SUBMITTED THAT RIGHTS AND LIABILITIES OF THE ASSESSEE WERE NOT ADJUDICATED UPON BY THE LD. C IT(APPEALS). FURTHER, LD. AR OF THE ASSESSEE INVITED OUR ATTENTION TO PARA 4.2 OF CIT(APPEA LS)S ORDER WHEREIN IT IS CLEARLY STATED THAT IN ABSENCE OF COMPLETE D ETAILS BEFORE THE LD. CIT(APPEALS), HE WAS UNABLE TO ADJUDICATE THE MATTER PROP ERLY IN COMPLIANCE WITH THE RULES OF JUSTICE. THE LD. AR HAS PRAYED FOR ONE FINAL OPPORTUNITY TO REPRESENT THEIR CASE BEFORE THE LD. CIT(APPEALS) ON MER ITS AND REQUESTED THE MATTER MAY BE REMANDED TO THE FILE OF THE FIRST APPELLATE AUTHORITY. 3. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDERS O F THE SUB-ORDINATE AUTHORITIES AND CONTESTED THE PRAYER OF THE ASSESSEE FOR REMANDIN G THE MATTER BACK TO THE FILE OF LD. CIT(APPEALS) STATING THAT SUFFICIENT OPP ORTUNITIES WERE PROVIDED TO THE ASSESSEE STILL THERE WAS NO COMPLIANCE BY HIM AND THEREFORE, ANY FURTHER OPPORTUNITY SHOULD NOT BE GIVEN. 4. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE R IVAL CONTENTIONS. WE FIND THAT THE ORDER PASSED BY THE LD. CIT(APPEALS) IS AN EX-PARTE ORDER WHEREIN RIGHTS AND LIABILITIES OF THE ASSESSEE WERE NOT ADJU DICATED UPON. ON PERUSAL OF PARA 4.2 OF THE CIT(APPEALS)S ORDER, IT IS AMPLY CLEAR THAT IN ABSENCE OF RELEVANT EVIDENCES AND DETAILS, THE LD. CIT(APP EALS) WAS UNABLE TO ADJUDICATE THE MATTER TO THE FULLEST EXTENT IN CONSONANC E WITH THE RULES OF 3 ITA NO. 1637/PUN/2018 A.Y.2012-13 JUSTICE. WE ALSO APPRECIATE THAT THOUGH NUMBER OF OPPOR TUNITIES WERE PROVIDED TO THE ASSESSEE BY LD. CIT(APPEALS) BUT KEEPING IN VIEW THE FACT THAT INCOME TAX ACT IS A WELFARE LEGISLATION AND ALSO WHEN FROM RECORD NOTHING COMES OUT THAT THE ASSESSEE DELIBERATELY DID NOT ATTEN D THE HEARING THEN FROM WELFARE LEGISLATION PERSPECTIVE, BENEFIT OF DOUBT GOES IN FAVOU R OF THE ASSESSEE THAT HE WAS PREVENTED FROM SUFFICIENT CAUSE WHICH WAS BEY OND HIS CONTROL BECAUSE OF WHICH THERE WAS NON-COMPLIANCE. 5. THE LD. DR DID NOT BRING FORTH ANY EVIDENCES WHICH CA N POINT OUT MALA-FIDE INTENTION ON THE PART OF THE ASSESSEE APART FRO M THE ONLY FACT THAT ASSESSEE HAS NOT COMPLIED TO THE VARIOUS NOTICES OF HEAR ING BEFORE THE LD. CIT(APPEALS). 6. CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) AND RESTORE THE MATTER B ACK TO HIS FILE FOR ADJUDICATION OF THE MATTER ON MERITS IN CONFORMITY WITH THE RULES OF NATURAL JUSTICE. AT THE SAME TIME, WE DIRECT THE ASSESSEE TO PRE SENT HIMSELF BEFORE THE LD. CIT(APPEALS) WITH ALL RELEVANT EVIDENCES AND MATERIALS IM MEDIATELY ON RECEIPT OF THIS ORDER AND PRESENT THIS CASE ON MERITS. AN Y SERVICE OF NOTICE IS DISPENSABLE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURP OSES. ORDER PRONOUNCED ON 06 TH DAY OF FEBRUARY, 2019. SD/- SD/- D. KARUNAKARA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 06 TH FEBRUARY, 2019. SB 4 ITA NO. 1637/PUN/2018 A.Y.2012-13 '#$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-6, PUNE. 4. THE PR. CIT-5, PUNE. 5. '#$ %%&' , ( &' , - )*+ , / DR, ITAT, SMC BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 5 ITA NO. 1637/PUN/2018 A.Y.2012-13 DATE 1 DRAFT DICTATED ON 0 5 .0 2 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 05 .0 2 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER