The ITO, Ward-2(4), Surat V. Shri Purushottam Somani, Surat

ITA 2169/AHD/2009

• Counselvise Citation: 216920514 RSA 2009
• Duration Of Justice: 4 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 01-08-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 09-07-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bad and doubtful debts
• Section: 143(3); 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI A. MOHAN ALANKAMONY, AM AND SHRI KUL B HARAT, JM) ITA NO.2221 AND 2169/AHD/2009 ( A. Y.2005-06) PURUSHOTTAM SOMANI, 303, EMPIRE ESTATE BUILDING, RING ROAD, SURAT P. A. NO. ADOPS 3003 J THE INCOME TAX OFFICER, WARD 2 (4), AAYAKAR BHAVAN, MAJURA GATE, SURAT VS VS THE INCOME TAX OFFICER, WARD 2 (4), AAYAKAR BHAVAN, MAJURA GATE, SURAT PURUSHOTTAM SOMANI, 303, EMPIRE ESTATE BUILDING, RING ROAD, SURAT P. A. NO. ADOPS 3003 J (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI TUSHAR P. HEMANI, AR DEPARTMENT BY SHRI SUBHASH BAINS, CIT DR DATE OF HEARING: 01-08-2013 DATE OF PRONOUNCEMENT: 02-08-2013 O R D E R PER A. MOHAN ALANKAMONY: THESE CROSS APPEALS ONE BY THE ASSESSEE AND THE OTHER BY THE REVENUE ARE FILED AGGRIEVED OF THE DIFFERENT ORDERS OF THE LEARNED CIT(A)-II, SURAT IN APPEAL (I) NO. CAS/II/192/08-09 DATED 30-03-2009 PASSED U/S 250 RE AD WITH SECTION 144 AND 143(3) OF THE INCOME TAX ACT AND (II) NO.CA S/II/193/08-09 DATED 31-03-2009 PASSED U/S 250 READ WITH SECTION 2 71(1)( C) OF THE ACT FOR ASSESSMENT YEAR 2005-06 RESPECTIVELY. BOTH THES E APPEALS WERE ITA NO.2221 & 2169/A/2009(AY-2005-06) PURUSHOTTAM SOMANI 2 HEARD TOGETHER AND THE SAME ARE DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.2221/AHD/2009 (ASSESSEES APPEAL FOR AY 2005-06) 2. THE ASSESSEE IN HIS APPEAL HAS RAISED FOUR GROUN DS WHEREIN GROUND NO.2 HAS NOT BEEN PRESSED BY THE ASSESSEE AT THE TIME OF HEARING. THE SAME IS DISMISSED AS SUCH. THE SURVIVI NG GROUNDS NO.1, 3 AND 4 ARE REPRODUCED HEREIN UNDER FOR REFERENCE:- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) HAS ERRED IN CONFIRMING THE ORDER U/S 143(3) WITHOUT APPRECIA TING THE FACTS THAT THE NOTICE U/S 143(2) WAS NOT SERVED UPON THE APPELLANT WITHIN THE PRESCRIBED TIME AND AS SUCH THE ORDER IS BAD IN LAW AND VOID AB-INITIO. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS FURTHER ERRED IN CONFIRMING THE DISALLOWANCE OF CLA IM OF BAD DEBTS. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED IN CONFIRMING THE ADDITIONS U/S 68 OF RS.2,42,98,00 0 AS INCOME FROM UN-DISCLOSED SOURCES. ITA NO.2169/AHD/2009 (REVENUES APPEAL FOR AY 2005-06) 3. THE REVENUE IN ITS APPEAL HAS RAISED THREE GROUN DS WHEREIN GROUNDS NO.2 AND 3 ARE GENERAL IN NATURE AND DO NOT SURVIVE FOR ADJUDICATION. THE SOLE SURVIVING GROUND NO.1 OF THE APPEAL IS REPRODUCED HEREIN UNDER FOR REFERENCE:- 1) ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS.76,6 2,583 LEVIED BY THE AO U/S 271 (1) ( C). I) ON THE FACTS AND CIRCUMSTANCE OF THE CASE, THE L D. CIT(A) OUGHT TO HAVE CONSIDERED THAT THE AFORESAID PENALTY WAS IMPOSED FOR CONSCIOUSLY FURNISHING INACCURATE PARTI CULARS IN THE RETURN OF INCOME AND THEREBY CONCEALMENT OF INC OME. ITA NO.2221 & 2169/A/2009(AY-2005-06) PURUSHOTTAM SOMANI 3 ITA NO.2221/AHD/2009 (ASSESSEES APPEAL FOR AY 2005-06) 4. AT THE OUTSET, THE LEARNED AR MENTIONED THAT WIT H RESPECT TO THE FIRST GROUND NOTICE U/S 143(2) OF THE ACT WAS NOT SERVED UPON THE ASSESSEE AS PER LAW AND, THEREFORE, THE ORDER PASSE D U/S 143(3) IS BAD IN LAW AND VOID AB-INITIO, THE ISSUE IS COVERED BY THE ORDER OF THE TRIBUNAL FOR THE EARLIER ASSESSMENT YEAR 2003-04 IN ITA NO.2220/AHD/2009 AND 2168/AHD/2009 DATED 31-10-2012 AGAINST THE ASSESSEE. THE LEARNED DR ACKNOWLEDGED TO THE SUBMIS SION OF THE LEARNED AR. THEREFORE, THIS GROUND OF THE ASSESSEE RAISED IN THE APPEAL IS HEREBY DISMISSED FOLLOWING THE EARLIER ORDER OF THE TRIBUNAL. 5. THE LEARNED AR FURTHER SUBMITTED THAT WITH RESPE CT TO THE DISALLOWANCE OF THE CLAIM OF BAD DEBTS AND ADDITION S U/S 68 OF THE ACT FOR RS.2,42,98,000/-, THE MATTER NEEDS TO BE HEARD ON M ERITS. IT WAS FURTHER SUBMITTED THAT THE LEARNED CIT(A) DID NOT HEAR THE ASSESSEE ON MERITS AND DECIDED THE MATTER EX-PARTE. THE LEARNED AR PLE ADED THAT ONE MORE OPPORTUNITY MAY BE PROVIDED TO THE ASSESSEE TO ARGU E THE MATTER ON MERITS. 6. THE LEARNED DR STOUTLY OPPOSED TO THE SUBMISSION OF THE LEARNED AR AND ARGUED STATING THAT SUFFICIENT OPPORTUNITY W AS PROVIDED TO THE ASSESSEE, HOWEVER, THE ASSESSEE PREFERRED TO REMAIN ABSENT STATING ONE REASON OR THE OTHER. THEREFORE, THE LEARNED CIT (A) PROCEEDED TO HEAR THE CASE EX-PARTE. THE LEARNED DR FURTHER SUBM ITTED THAT THE CASE MAY BE HEARD ON MERITS BY THE BENCH. 7. AFTER HEARING RIVAL SUBMISSIONS, IT IS APPARENT THAT THE ASSESSEE HAD BEEN SEEKING ADJOURNMENTS ON FRIVOLOUS GROUNDS. HOWEVER, IN THE INTEREST OF JUSTICE, WE HEREBY SET ASIDE THE ORDER OF THE LEARNED CIT(A) ITA NO.2221 & 2169/A/2009(AY-2005-06) PURUSHOTTAM SOMANI 4 AND REMIT THE CASE BACK TO THE FILE OF THE LEARNED CIT(A) TO DECIDE BOTH THE ISSUES MENTIONED HEREIN ABOVE AS PER MERITS AND LAW AFTER AFFORDING ONE MORE OPPORTUNITY TO THE ASSESSEE FOR BEING HEAR D. THE ASSESSEE IS ALSO HERBY DIRECTED TO CO-OPERATE WITH THE REVENUE DURING THE APPELLATE PROCEEDINGS WITHOUT SEEKING UNNECESSARY ADJOURNMENT . 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSE. ITA NO.2169/AHD/2009 (REVENUES APPEAL FOR AY 2005-06) 9. SINCE, THE QUANTUM APPEAL OF THE ASSESSEE HEREIN ABOVE, HAS BEEN SET ASIDE AND REMITTED BACK TO THE FILE OF THE LEAR NED CIT(A) FOR FRESH CONSIDERATION, ACCORDINGLY, THIS APPEAL OF THE REVE NUE WITH RESPECT TO LEVY OF PENALTY U/S 271 (1) (C ) OF THE ACT, AS AGREED BY THE LEARNED AR , IS ALSO HEREBY REMITTED BACK TO THE FILE OF THE LEA RNED CIT(A) TO DECIDE THE MATTER AFRESH CONSEQUENT TO THE FINDINGS IN THE QUANTUM APPEAL. IT IS ORDERED ACCORDINGLY. THUS, REVENUES APPEAL STANDS ALLOWED FOR STATISTICAL PURPOSE. 10. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED FOR STATISTICAL PURPOSE AND THE REVENUES APPEAL IS ALLOWED FOR STA TISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 02-8-2013 SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - ITA NO.2221 & 2169/A/2009(AY-2005-06) PURUSHOTTAM SOMANI 5 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: DIRECT ON COMPUTER 02-08-13 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER 02-08-13 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: