Mr. syed Azmathulla, Ramanagaram V. Income Tax Officer, Ward - 3, Mandya

ITA 188/BANG/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4700 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 25-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R RAMESH JT BENGALURU
• Assessee Lawyers: VENKATESH KUMAR
• Keywords: Additional evidence; Reasonable cause
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO. 188/BANG/2017 ASSESSMENT YEAR : 2008 - 09 MR. SYED AZMATHULLA, HAYFAH COMMUNICATIONS, NEAR HAYFAH IMRAN ENGLISH SCHOOLS, TIPPUNAGAR MOHALLA, RAMANAGARAM. PAN: AYDPS 8887L VS. THE INCOME TAX OFFICER, WARD 3, MANDYA. APP ELLANT RESPONDENT A PPELLANT BY : SHRI VENKATESH KUMAR, ADVOCATE RE SPONDENT BY : SHRI B.R. RAMESH, JT.CIT(DR)(ITAT), BENG ALURU. DATE OF HEARING : 16 . 0 5 .201 8 DATE OF PRONOUNCEMENT : 01 . 0 6 .201 8 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER DATED 24.11.2016 OF THE CIT(APPEALS)-III, BANGALORE RELATING TO ASSE SSMENT YEAR 2008-09. 2. THE ASSESSEE IS AN INDIVIDUAL. FOR THE AY 2008-0 9 HE FILED THE RETURN OF INCOME DECLARING A TOTAL INCOME OF RS.2,38,459. THE ASSESSEE DID NOT PARTICIPATE IN THE ASSESSMENT PROCEEDINGS AND THERE FORE THE ASSESSMENT WAS COMPLETED U/S. 144 OF THE ACT I.E., BEST JUDGME NT ASSESSMENT WAS MADE BY THE AO. THE ASSESSEE WAS IN THE BUSINESS O F ACTING AS COMMISSION AND BROKERAGE AGENT. THE AO DISALLOWED 50% OF THE SALARY, ITA NO.188/BANG/2017 PAGE 2 OF 4 TRAVELLING AND CONVEYANCE EXPENSES RESULTING IN AN ADDITION OF RS.7,53,536 TO THE TOTAL INCOME DECLARED BY THE ASSESSEE. 3. THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(APPE ALS). BEFORE THE CIT(APPEALS), THE ASSESSEE SOUGHT FILE ADDITIONAL E VIDENCE IN THE FORM OF LEDGER EXTRACTS OF THE VARIOUS EXPENSES WHICH ARE D ISALLOWED BY THE AO. IN SUPPORT OF THE APPLICATION FOR ADMISSION OF THE ADD ITIONAL EVIDENCE, THE ASSESSEE PLEADED THAT HIS AUDITOR HAD FALLEN ILL ON ACCOUNT OF DENGUE AND VIRAL FEVER ON 10.12.2000 WHICH WAS THE LAST DATE F IXED BY THE AO FOR COMPLIANCE IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSEE FILED A MEDICAL CERTIFICATE IN SUPPORT OF THE ILLNESS OF HI S AUDITOR AND PLEADED THAT THERE IS SUFFICIENT CAUSE FOR NOT PRODUCING THE EVI DENCE BEFORE THE AO AND THAT THE SAME SHOULD BE ADMITTED AS ADDITIONAL EVID ENCE BY THE CIT(APPEALS). THE CIT(APPEALS), HOWEVER, REFUSED T O ADMIT THE ADDITIONAL EVIDENCE FOR THE FOLLOWING REASONS:- 5. THE FACTS OF THE CASE AND THE SUBMISSIONS MADE BY THE LEARNED AR HAVE BEEN EXAMINED. FROM THE ASSESSMENT ORDER IT IS CLEARLY EVIDENT THAT THE CASE WAS POSTED FOR HEARING ON DIFFERENT DATES STARTING WITH 11/09/2009 AND WAS FI NALLY POSTED FOR HEARING ON 10/12/2010. AS PER THE SUBMIS SIONS MADE BY LD. AR, THE AUDITOR FOR THE APPELLANT HAD F ALLEN ILL ON 10/12/2010 AND WAS ADVISED COMPLETE BED REST FOR ONE MONTH BY THE CONSULTING DOCTOR. EVEN IF THE CONTENT ION OF THE APPELLANT IS ACCEPTED, NO EXPLANATION HAS BEEN FURNISHED FOR EXPLAINING THE REPEATED NON-COMPLIANCE ON THE P ART OF THE ASSESSSEE TO THE MULTIPLE NOTICES ISSUED FROM 1 1/09/2009 TO 15/11/2010 OVER A PERIOD OF MORE THAN ONE YEAR. THEREFORE, CONSIDERING THE FACTS OF THE CASE, THE C ONTENTION OF THE LEARNED AR THAT THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVIDENCES CALLE D FOR BY THE AO AND FROM COMPLYING WITH THE STATUTORY NOTICE S IS NOT FOUND TO BE SATISFACTORY AND CONVINCING. NO EXPLANA TION HAS BEEN FURNISHED TO EXPLAIN THE NON-COMPLIANCE OF THE ASSESSEE WITH THE MULTIPLE NOTICES ISSUED BY THE A O OVER A PERIOD OF MORE THAN A YEAR. ITA NO.188/BANG/2017 PAGE 3 OF 4 4. THEREAFTER, THE CIT(APPEALS) PROCEEDED TO EXAMIN E THE EXPENSES DISALLOWED BY THE AO. HE SUSTAINED THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF 50% OF SALARY, TRAVELLING & CONVEYANCE E XPENSES AND COMMISSION & BROKERAGE. HE, HOWEVER, DELETED THE D ISALLOWANCE OF 50% OF SUNDRY EXPENSES OF RS.18,986. AGGRIEVED BY THE ORDER OF CIT(APPEALS), THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BEFOR E THE TRIBUNAL. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. IT IS CLEAR FROM THE SUBMISSIONS MADE BEFORE THE CIT(APPEALS) AND THE OR DER OF THE CIT(APPEALS) THAT THE LAST HEARING BEFORE THE AO WA S ON 10.12.2010 AND ON THIS DATE SINCE THERE WAS A FAILURE ON THE PART OF ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNT AND OTHER DETAILS, THE AO PROC EEDED TO FRAME THE ASSESSMENT U/S. 144 OF THE ACT TO THE BEST OF HIS J UDGMENT. IT IS NOT DISPUTED THAT THE AUDITOR OF THE ASSESSEE FELL ILL AND COULD NOT ATTEND THE PROCEEDINGS BEFORE THE AO. IN SUCH CIRCUMSTANCES, THERE WAS A REASONABLE CAUSE FOR THE ASSESSEE IN NOT PRODUCING THE EVIDENCE IN SUPPORT OF THE EXPENSES CLAIMED WHILE COMPUTING INC OME FROM BUSINESS. THE FACT THAT ON THE EARLIER OCCASIONS THERE WAS NO N-COMPLIANCE BY THE ASSESSEE BEFORE THE AO IS NOT VERY MATERIAL. WE A RE THEREFORE OF THE VIEW THAT THE CIT(APPEALS) FELL INTO AN ERROR IN NOT ADM ITTING THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE HIM. WE THER EFORE SET ASIDE THE ORDER OF THE CIT(APPEALS) AND DIRECT THE CIT(APPEAL S) TO ADMIT THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE HI M UNDER RULE 46A OF THE I.T. RULES. THE CIT(A) IS DIRECTED TO EXAMINE THE CLAIM OF THE ASSESSEE IN THE LIGHT OF ADDITIONAL EVIDENCE AND ADJUDICATE THE ISSUES AFRESH IN ACCORDANCE WITH THE LAW, AFTER AFFORDING OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE. ITA NO.188/BANG/2017 PAGE 4 OF 4 6. THE APPEAL OF THE ASSESSEE IS ACCORDINGLY TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 1 ST DAY OF JUNE, 2018. SD/- SD/- ( INTURI RAMA RAO ) ( N.V. VASUDEVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 1 ST JUNE, 2018. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.