EDCO (India) P Ltd., Hyderabad V. DCIT., Circle-2(2), Hyderabad, Hyderabad

ITA 1800/HYD/2014

• Counselvise Citation: 180022514 RSA 2014
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 26-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 28-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Opportunity of being heard; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 1800/HYD/2014 ASSESSMENT YEAR: 2009-10 EDCO (INDIA) P. LTD., HYDERABAD. PAN AAACE 4487 E VS. DY. COMMISSIONER OF INCOME- TAX, CIRCLE 2(2), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P. MURALI MOHAN RAO REVENUE BY : SHRI RAJAT MITRA DATE OF HEARING 26-03-2015 DATE OF PRONOUNCEMENT 01-04-2015 O R D E R PER SAKTIJIT DEY, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST OR DER DATED 04/09/2014 PASSED BY LD. CIT(A)-III, HYDERABAD FOR A.Y. 2009-10. 2. BRIEFLY STATED, ASSESSEE A COMPANY IS ENGAGED IN THE BUSINESS OF EXECUTING CIVIL CONTRACT WORKS. FOR THE AY UNDER CONSIDERATION, ASSESSEE FILED ITS RETURN OF INCOME ON 30/09/2009 D ECLARING INCOME OF RS. 3,72,23,710. DURING THE SCRUTINY ASSESSMENT PRO CEEDING, AO CALLED FOR BOOKS OF ACCOUNT AND OTHER RELATED DOCUM ENTS LIKE BILLS, VOUCHERS, ETC. FOR VERIFICATION. HE ALSO CALLED UPO N ASSESSEE TO PRODUCE DETAILS OF WORKING OF CLOSING WORK-IN-PROGR ESS, SUNDRY CREDITORS AND THE METHOD OF VALUATION OF WORK COMPL ETED FOR WHICH BILLS ARE SUBMITTED. AFTER VERIFYING THE BOOKS OF A CCOUNT AND THE INFORMATIONS SUBMITTED BY ASSESSEE, AO WAS OF THE V IEW THAT THERE ARE DISCREPANCIES IN THE BOOKS OF ACCOUNT AND THE E XPENDITURES 2 ITA NO. 1800/HYD/2014 EDC O (INDIA) P. LTD. CLAIMED ARE NOT SUPPORTED BY AUTHENTIC BILLS/VOUCHE RS. HE, THEREFORE, PROPOSED TO REJECT THE BOOKS OF ACCOUNT AND ESTIMAT E THE PROFIT AT 8% ON GROSS BILLS. FURTHER, AO NOTED THAT IN CASE OF A SSESSEE FOR AY 2008-09, ITAT IN ITS ORDER IN ITA NO. `058/HYD/2011 DT. 14/10/2011 HAS DIRECTED FOR ESTIMATING THE PROFIT @ 8%. ACCORD INGLY, AO COMPLETED THE ASSESSMENT BY ESTIMATING THE PROFIT A T 8% ON THE GROSS BILLS, WHICH RESULTED IN DETERMINATION OF TOTAL INC OME AT RS. 5,57,78,240. BEING AGGRIEVED OF THE ASSESSMENT ORDE R, SO PASSED, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A). 3. AS CAN BE SEEN FROM THE ORDER OF LD. CIT(A), THO UGH, A NUMBER OF OPPORTUNITIES WERE GIVEN TO ASSESSEE TO REPRESEN T ITS CASE, BUT, NEITHER ASSESSEE APPEARED NOR ANY ONE ON BEHALF OF IT APPEARED TO REPRESENT THE CASE. FURTHER, LD. CIT(A) FOUND THAT AS PER THE MEMORANDUM OF APPEAL THERE IS A DELAY OF 659 DAYS I N FILING THE APPEAL. HE OBSERVED THAT THOUGH ASSESSEE HAD FILED A PETITION REQUESTING TO CONDONE THE DELAY, BUT, HE WAS NOT SA TISFIED WITH THE REASON SHOWN BY ASSESSEE FOR SUCH DELAY. ACCORDINGL Y, HE HELD THAT AS ASSESSEE HAS FAILED TO SHOW SUFFICIENT CAUSE FOR THE DELAY OF 659 DAYS, ASSESSEES REQUEST FOR CONDONING THE DELAY CA NNOT BE ACCEDED TO. FURTHER, LD. CIT(A) HELD THAT ASSESSEE ALSO FAI LED TO APPEAR BEFORE HIM IN SPITE OF A NUMBER OF OPPORTUNITIES BEING GIV EN. ACCORDINGLY, LD. CIT(A) DISMISSED THE APPEAL OF ASSESSEE WITHOUT GOI NG INTO THE MERITS OF THE ISSUES. 4. LD. AR SUBMITTED BEFORE US, BEFORE LD. CIT(A) AS SESSEE COULD NOT BE REPRESENTED AS ASSESSEE NEVER RECEIVED NOTIC ES. HE FURTHER SUBMITTED, THE DELAY IN FILING OF APPEAL BEFORE LD . CIT(A) WAS DUE TO REASONABLE CAUSE, HENCE, LD. CIT(A) SHOULD NOT HAVE DISMISSED APPEAL OF ASSESSEE EX-PARTE WITHOUT AFFORDING A REA SONABLE OPPORTUNITY OF BEING HEARD. LD. AR SUBMITTED, HAD A SSESSEE BEEN GIVEN OPPORTUNITY, IT WOULD HAVE BEEN ABLE TO CONVI NCE LD. CIT(A) THAT 3 ITA NO. 1800/HYD/2014 EDC O (INDIA) P. LTD. ESTIMATION OF PROFIT IS ON THE HIGHER SIDE AS DURIN G THE YEAR UNDER CONSIDERATION, ASSESSEE HAS EXECUTED WORK ONLY ON S UB-CONTRACT BASIS AND RATE OF PROFIT ON WHICH, AS PER THE DECIS IONS OF ITAT, IS 5%. THUS, LD. AR SUBMITTED, FAIR OPPORTUNITY MAY BE GIV EN TO ASSESSEE TO REPRESENT/EXPLAIN ITS CASE BEFORE THE DEPARTMENTAL AUTHORITIES. 5. LD. DR, ON THE OTHER HAND, SUBMITTED BEFORE US, ASSESSEE HAS BEEN VERY CASUAL IN ITS APPROACH, HENCE, LD. CIT(A) WAS JUSTIFIED IN DISMISSING APPEAL WITHOUT CONDONING DELAY. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIALS ON RECORD AS WELL AS THE ORDERS OF RE VENUE AUTHORITIES. UNDISPUTEDLY, ASSESSEES APPEAL BEFORE LD. CIT(A) W AS DELAYED BY 659 DAYS. THOUGH, ASSESSEE HAD FILED A PETITION SEE KING CONDONATION OF DELAY, BUT, LD. CIT(A) WAS NOT SATISFIED WITH TH E REASON SHOWN. ACCORDINGLY, HE REFUSED TO CONDONE THE DELAY AND DI SMISSED THE APPEAL EX-PARTE AS ASSESSEE DID NOT APPEAR BEFORE H IM. THE LIMITED PRAYER OF ASSESSEE BEFORE US, IS FOR GRANTING ONE M ORE OPPORTUNITY TO REPRESENT ITS CASE BEFORE DEPARTMENTAL AUTHORITIES. THEREFORE, WITHOUT ENTERING INTO THE DISPUTE, WHETHER HEARING NOTICES ISSUED BY LD. CIT(A) WAS AT ALL SERVED ON ASSESSEE AND WHETHER RE ASONS SHOWN FOR CONDONING THE DELAY ARE SUFFICIENT OR NOT, WE ARE O F THE VIEW THAT IN THE INTEREST OF JUSTICE ONE MORE OPPORTUNITY IS REQ UIRED TO BE GIVEN TO ASSESSEE FOR EXPLAINING ITS CASE. FURTHER, CONSIDER ING ASSESSEES CLAIM THAT DURING THE YEAR ASSESSEE HAS ONLY EXECUT ED SUB-CONTRACT WORK, RATE OF PROFIT ON WHICH CANNOT BE ADOPTED AT 8% IN VIEW OF CERTAIN DECISIONS OF ITAT, WE ARE INCLINED TO REMIT THE MATTER BACK TO THE FILE OF AO, AS ASSESSEE IS REQUIRED TO ESTABLIS H ON RECORD BY FURNISHING ADEQUATE EVIDENCE THAT DURING THE YEAR I T HAS EXECUTED THE WORKS BY ON SUB-CONTRACT BASIS. WE, ACCORDINGLY, SE T ASIDE THE ORDER OF LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF AO FOR DECIDING AFRESH AFTER AFFORDING REASONABLE OPPORTUNITY OF BE ING HEARD TO 4 ITA NO. 1800/HYD/2014 EDC O (INDIA) P. LTD. ASSESSEE. WE ALSO DIRECT ASSESSEE TO COOPERATE WITH AO IN FINALIZING THE PROCEEDING BY COMPLYING TO THE NOTICES TO BE IS SUED BY AO. 7. IN THE RESULT, APPEAL OF ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 1 ST APRIL, 2015. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 1 ST APRIL, 2015 KV COPY TO:- 1) EDCO (INDIA) PVT. LTD. C/O P. MURALI & CO., CAS. , 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 500 082 2)DCIT, CIRCLE 2(2), HYDERABAD 3) CIT(A)-III, HYDERABAD 4) CIT-II, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.