HOTEL SATELLITE, MUMBAI V. ITO 21(1)(3), MUMBAI

ITA 2025/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92758 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2015
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 25-03-2014
• Court: TRIBUNAL
• Department Lawyers: V K BORA SR
• Assessee Lawyers: ISHWER RATHI
• Keywords: Recovery proceedings; Right to appeal; Condonation of delay
• Section: 143(3)

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO. 2025/M/2014 ( AY: 2008 - 2009 ) M/S. HOTEL SATELLITE, 213/214 DIXIT ROAD, VILE PARLE (E), MUMBAI - 57. / VS. THE INCOME TAX OFFICER, 21(1)(3), PRATYAKSHA KAR BHAVAN, BKC, BANDRA (E), MUMBAI - 400 051. ./ PAN : AAAFH3747D ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : MR. ISHWER RATHI / RESPONDENT BY : SHRI V.K. BORA, SR. AR / DATE OF HEARING : 16 .6.2015 / DATE OF PRONOUNCEMENT :16 .6.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT (A) - 32, MUMBAI DATED 28.2.2014 FOR THE ASSESSMENT YEAR 2008 - 2009. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) HAS ERRED IN REJECTING THE APPEAL ON THE GROUND THAT THE APPELLANT DOES NOT HAVE JUSTIFIABLE CAUSE FOR NOT PRESENTING THE APPEAL WITHIN THE PERIOD PROVIDED U/S 249(2) OF THE ACT. THE LD CIT (A) OUGHT TO HAVE CONSIDER ED THE FACTS AND CIRCUMSTANCES FOR NOT PRESENTING TH E APPEAL WITHIN THE PERIOD PROVIDED IN SECTION 249(2) OF THE ACT. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF HOTEL AND GUEST HOUSE. ASSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 1,15,593/ - . ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 24.12.2010 AND THE ASSESSED INCOME WAS DETERMINED AT RS. 13,21,123/ - . THE AFORESAID ASSESSMENT ORDER DATED 24.12.2010 WAS SERVED ON THE ASSESSEE ON 29.12.2010 BY THE POS TAL AUTHORITIES. IT APPEARS, THE ASSESSMENT ORDER WAS NOT SERVED ON THE PARTNERS OF THE FIRM FOR ONE REASON OR OTHER. DURING THE 2 RECOVERY PROCEEDINGS OF THE DEMAND, PARTNERS OF THE ASSESSEE CAME TO KNOW ABOUT THE FINALIZATION OF THE ASSESSMENT ORDER AND REQUESTED THE AO FOR A COPY OF THE SAID ORDER VIDE ITS LETTER DATED 23.6.2011 AND SUBSEQUENTLY ALSO ON 17.2.2013. APPEAL WAS FILED BY THE ASSESSEE AGAINST THE SAID ASSESSMENT ORDER BEFORE THE CIT (A) BELATEDLY ON 21.3.2013. ASSESSEE REQUESTED THE CIT (A) FOR CONDONATION OF DELAY BY STATING THAT THE ASSESSMENT ORDER WAS NOT SERVED ON THE AUTHORIZED PERSON OF THE ASSESSEE AS THE SAME WAS RECEIVED BY SOME EMPLOYEES SITTING IN THE HOTEL S RECEPTION COUNTERS. HOWEVER, CIT (A) HELD THAT THE DELAY IN FILING TH E APPEAL IS PRIMARILY FOR THE REASON OF NON - COMPLIANT ATTITUDE AND NEGLIGENCE ON PART OF THE ASSESSEE. CIT (A) DID NOT FIND ADEQUATE JUSTIFIABLE REASON FOR NOT FILING THE APPEAL WITHIN THE TIME PROVIDED U/S 249(2) OF THE ACT. ACCORDINGLY, HE DID NOT ADMI T THE APPEAL FOR ADJUDICATION ON MERITS. ACCORDINGLY, ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 3. DURING THE PROCEEDINGS BEFORE THE TRIBUNAL, AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE RECEPTION CLERKS ARE NOT AUTHORIZED TO ACCEPT THE JUDICIAL ORDERS OF THE INCOME TAX DEPARTMENT OR ORDERS OF SIMILAR NATURE. HE FURTHER MENTIONED THAT THE POSTAL AUTHORITIES MECHANICALLY DELIVERED THE SEALED ENVELOPE CONTAINING THE ASSESSMENT ORDER IN THE HOTEL, WHI CH NEVER REACHED THE PARTNERS OF THE FIRM. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE SOUGHT FOR PROCURING THE COPY OF THE ASSESSMENT ORDER FROM THE CON CERNED AUTHORITY RIGHT FROM JULY 2011. SOON AFTER HE OBTAINED THE COPY OF THE SAME, AN APPEAL WAS FILED ON 21.3.2013. THEREFORE, SUFFICIENT REASON IS OBVIOUS, WHICH COULD NOT BE APPRECIATED BY THE CIT (A) AND INVOKED THE PROVISIONS OF SECTION 294(2) AGAINST THE ASSESSEE. 4. ON THE OTHER HAND, LD DR FOR THE REVENUE HEAVILY RELIED ON THE ORDERS OF THE AO AND THE CIT (A) AND SUBMITTED THAT THE ASSESSEE WAS SUSTAINING THE NON - COOPERATION, WHICH IS EVIDENT FROM THE FACT THAT THE AO INITIATED THE PENALTY U/S 271B AND 271(1)(B) OF THE ACT. DURING THE REBUTTAL TIME, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE P ROVISIONS OF SECTION 271B WAS WRONGLY INITIATED AND THE PENALTY WAS NOT FINALLY INVOKED AS THE ASSESSEES BOOKS OF ACCOUNT WERE DULY AUDITED BY THE STATUTORY AUDITORS AND THE AUDIT REPORT WAS MADE AVAILABLE TO HIM. 5. ON HEARING BOTH THE PARTIES AND ON P ERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES, I FIND, THERE IS NO DISPUTE ON THE SERVICE OF THE ASSESSMENT ORDER ON THE HOTEL EMPLOYEES. IT IS THE EXPLANATION OF THE ASSESSEE THAT THE SAID ORDER WAS NOT 3 RECEIVED BY THE AUTHORIZED PERSON . I HAVE CONSID ERED THE COMMONSENSICAL APPROACH AND FIND THAT NO ASSESSEE SHALL WILFULLY LOSE THE RIGHT OF APPEAL OFFERED BY THE STATUTE. IT IS A VERY PRECIOUS RIGHT. THEREFORE, THERE IS SOME GAP OF COMMUNICATION SOMEWHERE, WHICH LEAD TO THE NON - RECEIPT OF THE ASSE SSME NT ORDER BY THE AUTHORIZED PERSON, WHO IS EMPOWERED TO TAKE DECISION TO FILE THE APPEAL AGAINST THE ASSESSMENT ORDER DATED 24.12.2010. IT IS NOT THE CASE THAT THE ASSESSEE GOT THE COPY OF THE ASSESSMENT ORDER AND INTENTIONALLY DID NOT PREFER APPEAL ON TI ME, WHICH SHALL NOT FILE APPEAL WHEN THE ASSESSMENT INVOLVED A QUESTIONABLE ADDITIONS. THEREFORE, I AM OF THE OPINION THAT THE ASSESSEE HAS A SUFFICIENT REASON ADEQUATE ENOUGH FOR THE CIT (A) TO CONDONE THE DELAY AND ADMIT THE APPEAL. THEREFORE, I DIRECT THE CIT (A) TO ADMIT THE APPEAL AND ADJUDICATE THE ISSUE ON MERITS. ACCORDINGLY, GROUND RAISED BY THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH JUNE, 2015. SD/ - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER MUMBAI ; 16.6 .201 5 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT - 4. / 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI 4