M/s S.S.Warehousing, Ludhiana V. ITO Ward, Sirhind

ITA 166/CHANDI/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3645 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-03-2021
• Assessment Year: 2016-2017
• Appeal Filed On: 13-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP DAHIYA
• Keywords: Business income; Opportunity of being heard; Reasonable cause; Set aside
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B, CHANDIGARH (VIRTUAL COURT) .., .. , BEFORE: SHRI. N.K.SAINI, VP & SHRI , R.L. NEGI, JM ./ ITA NO. 166/CHD/2020 [ [ / ASSESSMENT YEAR : 2016-17 M/S S.S. WAREHOUSING VILLAGE SHAMSHER, SIRHIND-140406 PUNJAB THE ITO WARD, SIRHIND-140406 PUNJAB ./ PAN NO: ACLFS3467Q / APPELLANT / RESPONDENT [ / ASSESSEE BY : SHRI ASHWANI KUMAR, C.A / REVENUE BY : SHRI SANDEEP DAHIYA, CIT / DATE OF HEARING : 03/03/2021 / DATE OF PRONOUNCEMENT : 28/05/2021 / ORDER PER R.L. NEGI, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE APPELLANT/ASSESSEE M/S S.S. WAREHOUSING, AGAINST THE ORDER DATED 13/12/2019, PASSED BY THE LD. CIT(A), PATIALA PERTAINING TO THE ASSESSMENT YEAR 2016-17, WHEREBY THE LD. CIT(A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED BY THE AO U/S 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) 2. THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) ON THE FOLLOWING EFFECTIVE GROUNDS: 1. THAT ON THE FACTS, CIRCUMSTANCES AND LEGAL POSITION OF THE CASE, THE WORTHY CIT(A) IN APPEAL NO. 1024/IT/CIT(A)/PTA/2018-19 HAS ERRED IN PASSING THE ORDER IN CONTRAVENTION OF THE PROVISIONS OF S. 250(6) OF THE INCOME TAX ACT, 1961. M/S S.S. WAREHOUSING ITA NO. 166/CHD/2020 2 2. THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CASE, THE WORTHY CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LD. AO IN MAKING AN ADDITION OF RS. 6,83,239/- BY TREATING THE INCOME ON ACCOUNT OF RENT RECEIVED AS INCOME FROM HOUSE PROPERTY INSTEAD OF THE BUSINESS INCOME AS DECLARED BY THE ASSESSEE FIRM IN ITS ITR. FURTHERMORE, THE WORTHY CIT(A) HAS ALSO ERRED IN DISALLOWING THE DEDUCTION AS CLAIMED UNDER SECTION 35AD OF THE ACT. 3. THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CASE, THE IMPUGNED APPELLATE ORDER PASSED BY WORTHY CIT(A) DESERVES TO BE QUASHED AND MATTER DESERVES TO BE REMANDED BACK SINCE REASONABLE OPPORTUNITY HAD NOT BEEN GRANTED BY WORTHY C1T(A) AND ALSO THAT THERE EXISTED REASONABLE CAUSE FOR NON- APPEARANCE/ NON-PRODUCTION OF RELEVANT RECORDS BEFORE WORTHY CIT(A) IN AS MUCH AS THE COUNSEL OF THE ASSESSEE WAS ENGAGED IN THE TIME BARRING ASSESSMENTS AT THAT TIME AND HAD ALSO REQUESTED FOR ADJOURNMENT WHICH WAS REJECTED AND HENCE THE PROCEEDINGS DESERVE TO REMANDED BACK./ 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE LD. CIT(A) HAS PASSED THE EX -PARTE ORDER, AFTER WRONGLY REJECTING THE GENUINE REQUEST FOR ADJOURNMENT MADE BY THE ASSESSEE. THE LD. COUNSEL FURTHER SUBMITTED THAT SINCE THE LD. CIT(A) HAS PASSED THE IMPUGNED ORDER WITHOUT AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE THE SAME IS LIABLE TO BE SET ASIDE. THE LD. COUNSEL FURTHER SUBMITTED THAT SINCE THE LD. CIT(A) HAS PASSED THE IMPUGNED ORDER IN CONTRAVENTION OF THE PROVISIONS OF SECTION 250(6) OF THE ACT AND CONFIRMED THE ADDITION OF RS. 6,83,239/- WITHOUT HEARING THE ASSESSEE, THE SAME MAY BE SET ASIDE AND THE ASSESSEE MAY BE GIVEN OPPORTUNITY TO PRESENT ITS CASE BEFORE THE LD. CIT(A). 4. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT SINCE THE APPELLANT/ASSESSEE FAILED TO PRODUCE THE RELEVANT RECORD BEFORE THE LD. CIT(A) DESPITE SEVERAL OPPORTUNITIES GIVEN FOR THIS PURPOSE, THE LD. CIT(A) HAS RIGHTLY UPHELD THE ASSESSMENT ORDER AND CONFIRMED THE ADDITION OF RS. 6,83,239/- BY TREATING THE INCOME ON ACCOUNT OF RENT RECEIVED AS INCOME FROM HOUSE PROPERTY INSTEAD OF M/S S.S. WAREHOUSING ITA NO. 166/CHD/2020 3 BUSINESS INCOME AS DECLARED BY THE ASSESSEE AND DIS ALLOWED THE CLAIM UNDER SECTION 35AD OF THE ACT. 5. WE HAVE PERUSED THE MATERIAL ON RECORD IN THE LIGHT OF THE RIVAL SUBMISSIONS OF THE PARTIES. THE LD. CIT(A) HAS MENTIONED THE DATES ON WHICH NOTICES WERE ISSUED TO THE ASSESSEE AND THE DATES ON WHICH THE ASSESSEE MADE REQUESTS FOR ADJOURNMENT. HOWEVER, THE LD. CIT(A) HAS NOT MENTIONED IN THE IMPUGNED ORDER THAT THE NOTICES ISSUED THROUGH ITBA MODULE WERE DELIVERED SUCCESSFULLY AND SERVED UPON THE ASSESSEE. WE NOTICE THAT THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS FAILED TO APPEAR AND PRODUCE RELEVANT RECORD DESPITE SEVERAL OPPORTUNITIES GIVEN FOR THIS PURPOSE. UNDER THESE CIRCUMSTANCES, IT CANNOT BE CONCLUDED THAT THE ASSESSEE HAS FAILED TO PRODUCE THE RELEVANT RECORD DESPITE SEVERAL OPPORTUNITIES GIVEN FOR THIS PURPOSE. FURTHER, AS POINTED OUT BY THE LD. COUNSEL, THE LD. CIT(A) HAS PASSED THE EX -PARTE ORDER AND DISMISSED THE APPEAL HOLDING THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING ITS APPEAL. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX (CENTRAL) NAGPUR VS. PREM KUMAR ARJUNDASS LUTHRA (HUF) 297 CTR 614(BOM.) HAS INTER ALIA HELD THAT THE LAW DOES NOT PERMIT THE CIT(A) TO DISMISS THE APPEAL FOR NON-PROSECUTION BY THE APPELLANT/ASSESSEE. 6. THE HONBLE SUPREME COURT IN THE CASE OF S. CHENNAPPA MUDALIAR(1969) 74 ITR HAS HELD THAT DISMISSAL OF APPEAL FOR FAILURE OF APPELLANT TO APPEAR IS ULTRA VIRES . IN THE PRESENT CASE, APART FROM PROCEEDING EX-PARTE , THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE APPELLANT FOR NON-PROSECUTION IN CONTRAVENTION OF THE LAW LAID DOWN BY THE HONBLE SUPREME COURT AND THE HONBLE BOMBAY HIGH COURT IN THE CASES DISCUSSED ABOVE. WE, THEREFORE, SET ASIDE THE EX-PARTE ORDER PASSED BY THE LD. CIT(A) AND SEND M/S S.S. WAREHOUSING ITA NO. 166/CHD/2020 4 THE APPEAL BACK TO THE LD. CIT(A) FOR DECIDING THE SAME AFRESH ON MERITS AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPELLANT ASSESSEE. HOWEVER, WE DIRECT THE APPELLANT/ASSESSEE TO APPEAR BEFORE THE LD. CIT(A) AS AND WHEN DIRECTED AND NOT TO SEEK ADJOURNMENTS ON FRIVOLOUS GROUNDS. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 28 TH MAY, 2021. SD/- SD/- .., .. ( N.K. SAINI) (R.L. NEGI ) / VICE PRESIDENT / JUDICIAL MEMBER AG DATE: 28/05/2021 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / CIT 4. ()/ THE CIT(A) 5. , , / DR, ITAT, CHANDIGARH 6. [ / GUARD FILE