M/s. Bhai Lehna Ji Rice Mills, Distt. Muktsar (PB) V. The Income-tax Officer, Muktsar

ITA 169/ASR/2014

• Counselvise Citation: 16920914 RSA 2014
• Duration Of Justice: 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 13-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Assessment record
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 169(ASR)/2014 ASSESSMENT YEAR: 2008-09 PAN: AAIFB1684K BAHI LEHNA JI RICE MILLS, VS. INCOME TAX OFFICER, VILL. HARI KE KALAN, WARD-II(2), MUKTSAR MUKTSAR (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SH. TARSEM LAL, DR DATE OF HEARING: 24.04.2014 DATE OF PRONOUNCEMENT: 06.05.2014 ORDER 1) THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 20.12.2013 PASSED BY LEARNED CIT(A), BA THINDA, FOR THE ASSESSMENT YEAR 2008-09 ON THE FOLLOWING GROUNDS: 1) THAT ORDER PASSED U/S 250(6) OF THE INCOME TAX ACT, 1961 IS AGAINST LAW AND FACTS ON THE FILE INASMUCH AS THE L EARNED COMMISSIONER OF INCOME TAX(APPEALS), BATHINDA WAS N OT JUSTIFIED TO ARBITRARILY UPHOLD THAT THE LEARNED ASSESSING OF FICER HAD ASSUMED VALID JURISDICTION BY RECOURSE TO PROVISION S OF SECTION 148 OF THE INCOME TAX ACT, 1961. 2) THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS ), BATHINDA WAS NOT JUSTIFIED IN SUPPLYING A COPY OF THE REMAN D REPORT DATED 19.11.2013 FILED BY THE INCOME TAX OFFICER, MUKTSAR DURING THE APPELLATE PROCEEDINGS BEFORE HIM. 3) THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS ), BATHINDA WAS NOT JUSTIFIED IN UPHOLDING THE ACTION OF THE L EARNED ASSESSING OFFICER IN REJECTING THE BOOKS OF ACCOUNT OF THE AP PELLANT ARBITRARILY 2 I.T.A. NO. 169(ASR)/2014 ASSESSMENT YEAR: 2008-09 IGNORING THE FACT THAT THE APPELLANT HAS SHOWN THE STOCK OF PADDY AMOUNTING TO RS. 230160/- IN QUESTION IN THE PURCHA SE ACCOUNT AS ON 03.07.2007. 4) THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN NOT IS SUING DIRECTIONS TO THE ASSESSING OFFICER TO SUPPLY THE COPIES OF TH E PHYSICAL VERIFICATION REPORT PREPARED BY THE MARKET COMMITTE E STAFF WHICH HAS BEEN CONSIDERED THE BASIS FOR DETECTION OF UNAC COUNTED STOCK AMOUNTING RS. 230150/- AT THE BUSINESS PREMISES OF THE APPELLANT AND THE COPIES OF THE STATEMENT DELIVERED BY THEIR (MARKET COMMITTEE) STAFF BEFORE THE ASSESSING OFFICER. 5) THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED TO PASS A N ORDER WITHOUT ALLOWING THE APPELLANT AN OPPORTUNITY TO CROSS EXAM INE THE STAFF OF THE MARKET COMMITTEE, MUKTSAR WHO HAVE CONDUCTED IN SPECTION AT THE BUSINESS PREMISES OF THE APPELLANT AND ON THE B ASIS OF STATEMENT OF WHOM THE IMPUGNED ORDER OF ASSESSMENT HAS BEEN F RAMED. 6) THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN UPHOLD ING THE ACTION OF THE LEARNED ASSESSING OFFICER FOR REJECTION OF T HE LETTER ISSUED BY THE SECRETARY, MARKET COMMITTEE, MUKTSAR, WHEREIN I T HAS BEEN CLARIFIED BY THEM THAT THE PENALTY LEVIED TO THE AP PELLANT WAS NOT ACCOUNT OF EXCESS UNACCOUNTED STOCK DETECTED BY THE STAFF OF MARKET COMMITTEE AT THE PREMISES OF THE APPELLANT. 7) THAT THE ORDER PASSED U/S 250(6) OF THE INCOME TAX ACT, 1961 IS AGAINST LAW AND FACTS IN THE FILE INASMUCH AS THE L EARNED COMMISSIONER OF INCOME TAX(APPEALS), BATHINDA WAS N OT JUSTIFIED TO ARBITRARILY UPHOLD THE FOLLOWING ADDITIONS: (I) RS. 230150/- ON ACCOUNT OF ALLEGED UNACCOUNTED PURCHASES OF PADDY. (II) RS. 96916/- ON ACCOUNT OF ESTIMATION OF PROFIT ON S ALE OF ALLEGED UNACCOUNTED STOCK. (III) RS. 14206/- ON ACCOUNT OF PENALTY LEVIED BY THE MAR KET COMMITTEE, MUKTSAR. 2) FACTS NARRATED BY THE REVENUE AUTHORITY ARE NOT DISPUTED BY LEARNED DR, THEREFORE, THERE IS NO NEED TO REPEAT T HE SAME FOR THE SAKE OF CONVENIENCE. 3) NOTICE OF HEARING FOR 24.04.2014 WAS ISSUED TO T HE ASSESSEE BY RPAD IN SPITE OF THE SAME NEITHER THE ASSESSEE NOR HIS AUTHORIZED 3 I.T.A. NO. 169(ASR)/2014 ASSESSMENT YEAR: 2008-09 REPRESENTATIVE APPEARED TO PROSECUTE THE MATTER IN DISPUTE, NOR FILED ANY APPLICATION FOR ADJOURNMENT. 4) KEEPING IN VIEW THE ISSUE IN DISPUTE, I AM OF TH E VIEW THAT NO USEFUL PURPOSE WOULD BE SERVED TO ADJOURN THE PRESE NT APPEAL THEREFORE, I PROCEED TO DECIDE THE ISSUE IN DISPUTE EX-PARTE ASS ESSEE AFTER HEARING LEARNED DR. 5) AFTER HEARING LEARNED DR AND PERUSING THE ORDERS PASSED BY THE REVENUE AUTHORITY, I AM OF THE VIEW THAT THE MAIN C ONTENTION RAISED BY THE ASSESSEE IS THAT THE LEARNED FIRST APPELLATE AUTHOR ITY IS NOT JUSTIFIED TO PASS THE IMPUGNED ORDER WITHOUT ALLOWING AN OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE STAFF OF THE MARKET COMMITTEE, MU KTSAR, WHO HAVE CONDUCTED INSPECTION AT THE BUSINESS PREMISES OF TH E ASSESSEE AND ON THE BASIS OF STATEMENT OF WHOM THE IMPUGNED ORDER OF AS SESSMENT HAS BEEN FRAMED. THE ISSUE IN DISPUTE IN THE PRESENT APPEAL IS MAINLY ON THE ADDITION OF RS. 2,30,150/- MADE BY THE ASSESSING OF FICER ON ACCOUNT OF UNACCOUNTED PURCHASE OF PADDY. PARTNER OF THE ASSES SEE-FIRM SH. SURINDER SINGH, SIGNED THE PENALTY/SAMJHOTA FORM AT THE TIME OF 03.10.2007 WHICH IS PART OF THE ASSESSMENT RECORD. THE REASONS FOR C HARGING OF PENALTY/MARKET FEE/RDF AMOUNTING TO RS. 14,206/- HA S BEEN MENTIONED AT SR. NO. 5 ON THIS FORM WHICH SAYS THAT THERE WAS UNACCOUNTED DEAL. THE CONCERNED DEPARTMENT HAD INFORMED THE ASSESSING OFF ICER IN THE 4 I.T.A. NO. 169(ASR)/2014 ASSESSMENT YEAR: 2008-09 INFORMATION PROVIDED UNDER SECTION 133 OF THE INCOM E TAX ACT, 1961 THAT THE ASSESSEE MADE UNACCOUNTED PURCHASES OF RS. 2,30,150/- OF 295 QUINTALS OF PADDY. 6) THE PLEA OF THE ASSESSEE IS THAT THE ASSESSING O FFICER IS NOT ALLOWING AN OPPORTUNITY TO THE ASSESSEE TO CROSS EX AMINE THE CONCERNED MARKET COMMITTEE OFFICIAL WITH FULL RECORD REGARDIN G THE PHYSICAL VERIFICATION OF PADDY ON 03.10.2007 WHICH HAS RESUL TED IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. HOWEVER, THE REVENUE AUTHORITY STATED THAT THE ASSESSEE HAS ADMITTED THAT THE UNACCOUNTED DEAL OF PADDY WAS MADE ON THE BASIS OF WHICH PENALTY/RDF/ MARKET FEE HAS B EEN PAID AND THE ASSESSING OFFICER WAS NOT DUTY-BOUND TO SUMMON THE CONCERNED OFFICIAL AND ALLOW AN OPPORTUNITY TO THE ASSESSEE TO CROSS E XAMINE THEM AND THUS REJECTED THE REQUEST OF THE ASSESSEE. 7) IN MY CONSIDERED VIEW, THE FINDING OF THE REVENU E AUTHORITY IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE BECAUSE T HE ADDITION IN DISPUTE, AMOUNTING TO RS. 2,30,150/- MADE BY THE ASSESSING O FFICER ON ACCOUNT OF UNACCOUNTED PURCHASES OF 295 QUINTALS OF PADDY, HAS BEEN MADE ON THE BASIS OF STATEMENT OF OFFICIAL OF THE MARKET COMMIT TEE AS WELL AS THEIR RECORDS, WHICH HAS NOT BEEN CONFRONTED TO THE ASSES SEE, THEREFORE THE ORDER OF THE REVENUE AUTHORITY IS AGAINST THE PRINC IPLES OF NATURAL JUSTICE AND IS LIABLE TO CANCELLED. ACCORDINGLY, I CANCEL T HE IMPUGNED ORDER DATED 5 I.T.A. NO. 169(ASR)/2014 ASSESSMENT YEAR: 2008-09 20.12.2013 PASSED BY LEARNED CIT(A), BATHINDA, AS T HE LEARNED CIT(A) HAS PASSED THE IMPUGNED ORDER WITHOUT AFFORDING AN OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE OFFICIAL OF THE MARKE T COMMITTEE WHICH IS THE MAIN EVIDENCE FOR THE ADDITION IN DISPUTE. THER EFORE, I DIRECT THE ASSESSING OFFICER TO GIVE AN OPPORTUNITY TO THE ASS ESSEE TO CROSS EXAMINE THE OFFICIAL OF MARKET COMMITTEE ON THE ISSUE IN DI SPUTE AND CONFRONT THE MATERIALS FOR THE ADDITION IN DISPUTE TO THE ASSESS EE AND GIVE OPPORTUNITY TO THE ASSESSEE TO REBUT THE SAME AND DECIDE THE IS SUE IN DISPUTE AFRESH UNDER THE LAW. 8) WITH THESE OBSERVATIONS/DIRECTIONS, THE APPEAL F ILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH MAY, 2014 SD/./- (H.S. SIDHU) JUDICIAL MEMBER DATED: 6 TH MAY, 2014 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: BAHI LEHNA JI RICE MILLS, VILL. HARI KE KALAN, MUKTSAR 2. INCOME TAX OFFICER, WARD-II(2), MUKTSAR 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.