M/s. Shree Dattakrupa Builders & Developers, Raigad V. Income-tax Officer,

ITA 2092/PUN/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0430 (ITAT-PUNE)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-12-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 09-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL CHAWARE
• Assessee Lawyers: SUBODH RATNAPARKHI
• Keywords: Principle of natural justice
• Section: 143(3)

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 2092 /PN/201 6 / ASSESS MENT YEAR : 20 09 - 1 0 M/S. SHREE DATTAKRUPA BUILDERS & DEVELOPERS AT POST KELAVANE, TAL PANVEL, DIST. RAIGAD 402101 . / APPELLANT PAN: A BRFS4792B VS. THE INCOME TAX OFFICER , WARD 1, PANVEL . / RESPONDENT WARD 1, PANVEL . / RESPONDENT / APPELLANT BY : SHRI SUBODH RATNAPARKHI / RESPONDENT BY : S HRI ANIL CHAWARE / DATE OF HEARING : 07 . 1 2 .201 6 / DATE OF PRONOUNCEMENT: 07 . 1 2 .201 6 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - 2 , THANE , DATED 23 . 0 5 .20 1 6 RELATING TO ASSESSMENT YEAR 20 09 - 1 0 AGAINST ORDER PASSED UNDER SECTION 1 4 3(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . ITA NO. 2092 /PN/20 1 6 M/S. SHREE DATTAKRUPA BUILDERS & DEVELOPERS 2 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUND S OF APPEAL : - 1 . ON FACTS AND IN LAW, THE LEARNED CIT(APPEALS) ERRED IN PASSING EX - PARTE ORDER, NOT APPRECIATING THAT THE NOTICES ISSUED FOR HEARING OF APPEAL WERE NEVER RECEIVED BY THE APPELLANT AND THEREFORE THE APPELLANT BEING UNAWARE OF THE APPEAL HEARING DATE WAS PREVENTED BY SUFFICIENT CAUSE FROM ATTENDING THE PROCEEDINGS AND THEREFORE THE EX - PARTE ORDER HAS RESULTED IN BREACH OF NATURAL JUSTICE. 2. ON FACTS AND IN LAW, THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.1 1,44,581/ - MADE BY THE AO BY ADOPTING THE PERCENTAGE COMPLETION METHOD OF ACCOUNTING TO DETERMINE PROFIT FROM THE APPELLANTS REAL ESTATE PROJECT AT ROHA, DIST. RAIGAD, IN PLACE OF AND BY REJECTING THE PROJECT COMPLETION METHOD OF ACCOUNTING FOLLOWED BY THE APPELLANT. 3. THE ISSUE RAISED VIDE GROUND OF APPEAL NO.1 IS AGAINST THE EX PARTE ORDER PASSED BY THE CIT(A). 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD FURNISHED THE RETURN OF INCOME DECLARING TOTAL INCOME AT NIL. THE ASSESSEE WAS ENGAGED IN BUILDING AND DEVELOPING OF LAND AND BUILDING S. THE CASE OF ASSESSEE WAS TAKEN UP FOR SCRUTINY AND THE ASSESSING OFFICER COMPUTED THE INCOME OF ASSESSEE AT RS.11,84,996/ - VIDE ORDER PASSED UNDER SECTION 143(3) OF THE ACT. THE ADDITION MADE IN THE HAND S OF ASSESSEE WAS ON ACCOUNT OF ADVANCES RECEIVED AGAINST BOOKING OF FLATS TO THE TUNE OF RS.86,46,130/ - . THE ASSESSING OFFICER WAS OF THE VIEW THAT REVENUE SHOULD BE RECOGNIZED ON THE BASIS OF PERCENTAGE COMPLETION METHOD AND THEREFORE, PROFIT @ 12% OF W IP WAS ESTIMATED AT RS.11,44,581/ - AS INCOME OF THE ASSESSEE. FURTHER, CERTAIN ADDITIONS WERE ALSO PROPOSED ON ACCOUNT OF EXPENSES AND 10% OF THE SAME WAS DISALLOWED AT RS.40,415/ - . 5. THE CIT(A) POINTS OUT THAT THE ASSESSEE HAD NOT FILED ANY REQUEST FOR ADJOURNMENT OR PUT IN ANY APPEARANCE ON THE APPOINTED DATES OF HEARING AND HENCE, THE MATTER WAS DECIDED EX PARTE THE ASSESSEE, IN VIEW OF THE RATIO LAID DOWN IN CIT VS. MULTIPLAN INDIA (P) LTD. REPORTED IN 38 ITD 320 (DEL) AND ESTATE OF LATE TUKOJIRAO HO LKAR VS. CET REPORTED IN 223 ITR 480 (MP). ITA NO. 2092 /PN/20 1 6 M/S. SHREE DATTAKRUPA BUILDERS & DEVELOPERS 3 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 7. THE FIRST ISSUE RAISED BY THE ASSESSEE IS AGAINST NON - ALLOWANCE OF REASONABLE OPPORTUNITY OF HEARING BY THE CIT(A). THE LEARNED AUTHORIZED REPRESENT ATIVE FOR THE ASSESSEE POINTED OUT THAT NONE OF NOTICES WERE RECEIVED BY THE ASSESSEE AND THEREFORE, THE ASSESSEE WAS UNAWARE OF HEARING OF THE APPEAL AND HENCE, NON - APPEARANCE BEFORE THE CIT(A). 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF CIT(A). 9. ON PERUSAL OF RECORD AND THE ORDER OF CIT(A) IN THE PRESENT SET OF FACTS, THE CIT(A) CLAIMS THAT THE NOTICE WAS ISSUED ON 19.02.2016 FOR COMPLIANCE ON 23.02.2016. THEREAFTER, ANOTHER NOTICE WAS ISSUED ON 11.04.2 016 FOR COMPLIANCE ON 10.05.2016. THE THIRD DATE ON WHICH THE APPEAL FIXED WAS COMPLIANCE ON 10.05.2016. THE THIRD DATE ON WHICH THE APPEAL FIXED WAS 23.05.2016 ON WHICH DATE, THE CIT(A) DECIDED THE APPEAL EX PARTE THE ASSESSEE. THE ASSESSEE HAD FAILED TO APPEAR BEFORE THE CIT(A) ON ANY OF THE DATES FIXED FOR HEARING. THE ASSESSEE POINTS OUT THAT NONE OF NOTICES OF HEARING WERE RECEIVED BY THE ASSESSEE AND HENCE, THERE WAS NON - APPEARANCE BEFORE THE CIT(A). THE CIT(A) HAS APPLIED THE RATIO LAID DOWN IN CIT VS. MULTIPLAN INDIA (P) LTD. (SUPRA) AND OTHERS FOR DECIDING THE APP EAL EX PARTE. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THERE IS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE IN NOT PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AND IN DECIDING THE APPEAL EX PARTE OR APPLYING THE RATIO LAID DOWN IN CIT VS. MULTIPLAN INDIA (P) LTD. (SUPRA). ACCORDINGLY, THE MATTER NEEDS TO BE RE - ADJUDICATED BY THE CIT(A) AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. ACCORDINGLY, THIS MATTER IS SENT BACK TO THE FILE OF CIT(A), WHO ITA NO. 2092 /PN/20 1 6 M/S. SHREE DATTAKRUPA BUILDERS & DEVELOPERS 4 SHALL DECIDE THE SAME DE NOVO. THE CIT(A) HAS DECIDED THE ISSUE ON MERITS ALSO, BUT IN THE ABSENCE OF ANY REPRESENTATION BY THE ASSESSEE, THE ORDER OF ASSESSING OFFICER HAS BEEN UPHELD. THE ENDS OF JUSTICE DEMAND THAT THE ASSESSEE BE ALLOWED AN OPPORTUNITY TO PUT ITS CASE. H ENCE, THE ASSESSEE IS DIRECTED TO APPEAR BEFORE THE CIT(A) AND FURNISH THE REQUISITE DOCUMENTS IN SUPPORT OF ITS CONTENTIONS. THE GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE IS THUS, ALLOWED FOR STATISTICAL PURPOSES. THE OTHER GROUND OF APPEAL BECOMES A CADEMIC SINCE THE MATTER BEING SET ASIDE TO THE FILE OF CIT(A). 1 0 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 7 TH DAY OF DECE MBER , 201 6 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 9 TH DECEM BER , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESP ONDENT; 3. ( ) / THE CIT(A) - 2 , THANE ; 4. / THE PR. CIT - 2 , THANE ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE