Shri Tulsibhai Bhagwanbhai Patel, Surat V. Deputy Commissioner of Income Tax, Circle -3(3), Surat

ITA 179/SRT/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2743 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 1996-1997
• Appeal Filed On: 18-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: ASWIN K PAREKH
• Keywords: Principle of natural justice
• Section: 143(3); 144; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA NO.179/SRT/2017 (AY 1996-97) (H EARING IN VIRTUAL COURT) SHRI TULSIBHAI BHAGWANBHAI PATEL, 9-10, KASTURBA NAGAR SOCIETY, NR. BARODA PRISTAGE, VARACHHA ROAD, SURAT. ALSO AT C/O SH. ASHWIN PAREKH & CO 401-404, RAJHANS BANISTA, BEHIND RAM CHOWK TEMPLE , GDOD DHOD ROAD, SUART E-MAIL: [e-mail] PAN : ABRPP 1239 Q VS. THE DCIT, CIRCLE-3(3), MAJURA GATE, SURAT. APPELLANT RESPONDENT ASSESSEE BY SHRI ASWIN K PAREKH - C.A REVENUE BY MS. ANUPAMA SINGLA SR.DR DATE OF HEARING 07.10.2021 DATE OF PRONOUNCEMENT 07.10.2021 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER : 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-3, SURAT DATED 23.08.2017 FOR THE ASSESSMENT YEAR (AY) 1996-97.THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: I. T HE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.11,24,900/- ON ACCOUNT OF DISALLOWANCE OF LABOUR CHARGES AT 20% U/S 40A(2)(B) OF THE ACT WITHOUT APPRECIATION THE EVIDENCES IN THE FORM OF DETAILED CHART OF WAGES PAID TO FAMILY MEMBERS AND OTHER AND ACCOMPANIED BY THE EVIDENCES IN THE FORM OF COMPARATIVE BILLS OF LABOUR, JOB CHARGES RECEIVED FROM THE PRINCIPAL. NUMBER OF DIAMONDS AND ITA NO.179/SRT/2017 SHRI TULSIBHAI B PATEL (A.Y 96-97) 2 WAGES PER CARAT. THE ADDITION OF RS.11,24,900/- SHOULD THEREFORE BE DELETED. II. THE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.1,70,000/- U/S 68 OF THE ACT WITHOUT APPRECIATING THE EVIDENCES OF AGRICULTURE INCOME OF (HUF) OF APPELLANT COPY OF 7/12 OF AGRICULTURE LAND, BILLS OF AGRICULTURE INCOME, COPY OF INCOME-TAX RETURN, BALANCE SHEET, CAPITAL ACCOUNT AND CONFIRMATION OF (HUF). THE ADDITION OF RS.1,70,000/- SHOULD THEREFORE BE DELETED. 2. BRIEF FACTS OF THE CASE ARE THAT ORIGINAL ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) WAS COMPLETED ON 26.03.1999 DETERMINING TOTAL INCOME AT RS.13,8,130/- BY MAKING MAJOR ADDITION UNDER SECTION 40A(2)(B) OF RS.11,24,900/- AND UNDER SECTION 68 OF THE ACT OF RS.1,70,000/-. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A). THE LD.CIT(A) ON THE ISSUE OF ADDITION UNDER SECTION 40(2)(B) OF THE ACT, RESTRICTED THE DISALLOWANCE TO 10% OF LABOUR CHARGES PAYMENT TO RELATED PARTIES ON ACCOUNT OF DIAMOND CUTTING AND POLISHING AGAINST 20% DISALLOWANCE MADE BY THE AO AND REGARDING TWISTING AND WARPING CHARGES, THE LD.CIT(A) UPHELD THE DISALLOWANCE MADE BY THE AO AT THE RATE OF 20% OF THE SAID CHARGES. THUS, THE LD .CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE VIDE ORDER DATED 23.02.2001. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESSEE FILED APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL RESTORED BOTH THE ADDITIONS BACK TO THE FILE OF THE AO, CONSEQUENTLY, THE ASSESSMENT PROCEEDINGS UNDER SECTION 144 R.W.S 254 OF THE ACT WAS COMPLETED ON 29.01.2016 DETERMINING THE TOTAL INCOME AT RS.13,10,730/- BY MAKING ADDITION UNDER SECTION 40A(2)(B) OF THE ACT OF RS.11,24,900/- AND UNDER SECTION 68 OF THE ACT OF RS.1,70,000/-. ITA NO.179/SRT/2017 SHRI TULSIBHAI B PATEL (A.Y 96-97) 3 3. ON FURTHER APPEAL BEFORE THE LD. CIT(A), THE ADDITION WAS UPHELD. THE LD. CIT(A) UPHELD THE ADDITION IN AN EX PARTE ORDER. THUS, FURTHER AGGRIEVED, THE ASSESSEE HAS FILED PRESENT APPEAL BEFORE THIS TRIBUNAL. 4. WE HAVE HEARD THE SUBMISSION OF LD. AUTHORIZED REPRESENTATIVE (AR) FOR THE ASSESSEE AND LD. SENIOR DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. AR OF THE ASSESSEE SUBMITS THAT HE HAS RAISED SPECIFIC GROUNDS OF APPEAL THAT THE LD. CIT(A) ERRED IN PASSING EX PARTE ORDER AND NOT ADJUDICATED THE GROUNDS OF APPEAL ON MERIT. THE LD. AR FOR THE ASSESSEE FURTHER SUBMITS THAT WITHOUT GOING INTO THE CONTROVERSY WHETHER THE LD. CIT(A) VIOLATED THE PRINCIPLE OF NATURAL JUSTICE IN NOT GRANTING ADEQUATE OPPORTUNITY, THE ASSESSEE SEEKS ONE MORE OPPORTUNITY FOR FILING ALL EVIDENCES AND EXPLANATION AGAINST THE GROUNDS RAISED BY THE ASSESSEE BEFORE LD. CIT(A). THE LD. AR SUBMITS THAT HE HAS A GOOD CASE ON MERIT AND WILL SUCCEEDS IF ONE MORE OPPORTUNITY IS GIVEN AND THE APPEAL IS DECIDED ON MERIT BY THE LD. CIT(A).THE LD. AR FURTHER SUBMITS THAT HE UNDERTAKES ON BEHALF OF THE ASSESSEE TO CO-OPERATE AND NOT TO DEFAULT AND ATTENDING PROCEEDINGS BEFORE THE LD. CIT(A). THOUGH, THE LD. AR FOR THE ASSESSEE FILED VARIOUS DOCUMENTS, HOWEVER, NO OTHER SUBMISSIONS WAS MADE ON SUCH DOCUMENTS. 5. THE LD. SR. DR FOR THE REVENUE SUBMITS THAT THE ASSESSEE WAS GIVEN THREE OPPORTUNITIES AS RECORDED IN PAGE 3 OF THE ORDER PASSED BY THE LD.CIT(A). THE ASSESSEE FAILED TO COMPLY WITH THE NOTICE ISSUED BY THE LD.CIT(A). THE LD.CIT(A) LEFT WITH NO OPTION, EXCEPT TO PROCEED TO DECIDE THE ISSUE AND IN ABSENCE OF ANY EVIDENCE OR EXPLANATION AFFIRM THE ACTION OF AO. ITA NO.179/SRT/2017 SHRI TULSIBHAI B PATEL (A.Y 96-97) 4 IN ALTERNATIVE SUBMISSION, THE LD. SR. DR FOR THE REVENUE SUBMITS THAT IN CASE THE HONBLE TRIBUNAL IS DEEM APPROPRIATE, THE ASSESSEE BE DIRECTED TO BE VIGILANT AND NOT TO DEFAULT IN ATTENDING THE PROCEEDINGS AND TO WASTE THE TIME OF PUBLIC AUTHORITIES/LD.CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF BOTH THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF LOWER AUTHORITIES. WE FIND THAT THE LD. CIT(A) FIXED THE HEARING ON 10.07.2017 AND IT IS RECORDED BY LD. CIT(A) THAT LD. AR OF THE ASSESSEE SOUGHT ADJOURNMENT. THE ASSESSEE WAS ALLOWED ADJOURNMENT AND THE HEARING WAS AGAIN FIXED ON 25.07.2017. ON 25.07.2017 THE ASSESSEE AGAIN SOUGHT ADJOURNMENT, NO ADJOURNMENT WAS ALLOWED AND THE LD CIT(A) PASSED THE ORDER ON 23.08.2018. THE LD CIT(A) WHILE REJECTING THE PLEA OF ADJOURNMENT HAS NOT RECORDED IF THE ASSESSEE HAS SHOWN VALID GROUND OR NOT FOR SEEKING FURTHER TIME. WE INSTEAD OF GOING INTO CONTROVERSY, IF THE ASSESSEE HAS SHOWN VALID GROUND OR NOT. WE FIND THAT THE ORDER OF THE LD.CIT(A) IS NOT IN ACCORDANCE WITH MANDATE OF SECTION 250(6) OF THE INCOME TAX ACT. SECTION 250(6) OF THE ACT MANDATES THAT THE LD. CIT(A) WHILE DECIDING THE APPEAL IS REQUIRED TO PASS ORDER ON POINTS OF DETERMINATION (GROUNDS OF APPEALS), DECISION THEREIN ON AND REASONS FOR SUCH DECISION. THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPEAL OF THE ASSESSEE IS RESTORED BACK TO THE FILE OF THE LD.CIT(A) TO DECIDE ALL THE GROUNDS OF APPEAL ON MERIT IN ACCORDANCE WITH LAW. NEEDLESS TO ORDER THAT BEFORE PASSING THE ORDER THE LD. CIT(A) SHALL GRANT FAIR OPPORTUNITY OF HEARING TO THE ASSESSEE. THE LD. ASSESSEE IS ALSO DIRECTED TO APPEAR BEFORE THE LD.CIT(A) AS AND WHEN THE ITA NO.179/SRT/2017 SHRI TULSIBHAI B PATEL (A.Y 96-97) 5 DATE OF HEARING AND TO PROVIDE ALL NECESSARY EVIDENCE AND INFORMATION WITHOUT ANY FURTHER DELAY AND NOT TO SEEK THE ADJOURNMENT WITHOUT ANY VALID REASONS. THIS MATTER RELATES TO AY 1996-97, THEREFORE, THE LD CIT(A) IS FURTHER DIRECTED TO TAKE ALL POSSIBLE STEP TO DECIDE THE APPEAL WITHIN SIX MONTHS FROM THE DATE OF RECEIPT OF THIS ORDER. THE ASSESSEE IS ALSO DIRECTED TO APPROACH THE OFFICE OF LD CIT(A) WITHIN WEEK AFTER RECEIPT OF COPY OF THIS ORDER FOR FIXING THE DATE OF HEARING. ACCORDINGLY THE GROUNDS OF APPEAL BY ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER ANNOUNCED ON 07/10/2021 AT THE TIME OF HEARING THE APPEAL IN VIRTUAL HEARING. AS S/-S SD/- SD/- (DR ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER SURAT, DATED: 07/10/2021 DKP OUTSOURCING SR.P.S COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR 6. GUARD FILE BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, ITAT, SURAT