Kavita Enterprises, CHENNAI V. ITO, CHENNAI

ITA 2182/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7746 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 20-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Keywords: Depreciation; Assessment record

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.2182/MDS/2015 ( )( / ASSESSMENT YEAR : 2010-11 M/S KAVITA ENTERPRISES, C/O MR. S. NAGARAJAN, 4B, AMRUTHAJALI, 14, P.T. RAJAN SALAI, K.K. NAGAR, CHENNAI - 600 078. PAN : AAEFK 5886 G V. THE INCOME TAX OFFICER, NON-CORPORATE WARD 3(4), CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SH. PHILIP GEORGE, ADVOCATE -.+, / 0 / RESPONDENT BY : SH. A.B. KOLI, JCIT 1 / 2% / DATE OF HEARING : 08.02.2016 3') / 2% / DATE OF PRONOUNCEMENT : 18.03.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-4, CHENNAI , DATED 30.03.2015 AND PERTAINS TO ASSESSMENT YEAR 2010-11. 2. SH. PHILIP GEORGE, THE LD.COUNSEL FOR THE ASSESS EE, SUBMITTED THAT THE APPEAL OF THE ASSESSEE BEFORE TH E CIT(APPEALS) 2 I.T.A. NO.2182/MDS/15 WAS DISMISSED FOR NON-PROSECUTION. ACCORDING TO TH E LD. COUNSEL, THE CIT(APPEALS) OUGHT TO HAVE EXAMINED THE CASE ON MERIT. THE LD.COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE HAS RAISED TWO GROUNDS BEFORE THE CIT(APPEALS). THE FIRST GROUND IS WITH REGARD TO DEPRECIATION AND THE SECOND GROUND IS WITH REGARD T O SHORT TERM CAPITAL GAIN. THE CIT(APPEALS) FOUND THAT NEITHER THE ASSESSEE NOR ANY REPRESENTATIVE APPEARED BEFORE HIM. ACCORDING TO THE LD. COUNSEL, EVEN THOUGH THE ASSESSEE COULD NOT APPEAR, THE CIT(APPEALS) IS EMPOWERED TO DISPOSE THE APPEAL ON MERIT. THE APPEAL OUGHT TO HAVE BEEN DISPOSED OF ON MERIT AFTE R CALLING RECORD FROM THE ASSESSING OFFICER. 2. ON THE CONTRARY, SH. A.B. KOLI, THE LD. DEPARTME NTAL REPRESENTATIVE, SUBMITTED THAT THE CIT(APPEALS) GAV E SEVERAL OPPORTUNITIES. HOWEVER, NO ONE APPEARED ON BEHALF OF THE ASSESSEE . THEREFORE, THE CIT(APPEALS) FOUND THAT THE ASSESSEE IS NOT INTERESTED IN PROSECUTING THE APPEAL. ACCORDIN GLY THE SAME WAS DISMISSED. 3. WE HAVE HEARD THE LD.COUNSEL FOR THE ASSESSEE AN D THE LD. DEPARTMENTAL REPRESENTATIVE. WE HAVE CAREFULLY GON E THROUGH THE ORDER OF THE CIT(APPEALS). THE CIT(APPEALS) REJECT ED THE APPEAL OF 3 I.T.A. NO.2182/MDS/15 THE ASSESSEE FOR NON-PROSECUTION BY PLACING RELIANC E ON THE ORDER OF THIS TRIBUNAL IN I.T.A. NO.134/MDS/2011 DATED 05.07 .2011 IN HELIOS AND MATHESON INFORMATION TECHNOLOGY LTD. V. ITO. T HE CIT(APPEALS) ON PLACING RELIANCE ON THE ABOVE ORDER OF THIS TRIBUNAL, FAILED TO APPRECIATE THAT THIS TRIBUNAL I S A JUDICIAL BODY AND ADJUDICATING THE APPEAL ARISING OUT OF THE ORDER OF THE CIT(APPEALS), WHEREAS, THE CIT(APPEALS) IS A FIRST APPELLATE AUTH ORITY AND EMPOWERED TO ENHANCE THE ASSESSMENT WHICH WAS OMITT ED TO BE MADE BY THE ASSESSING OFFICER. THEREFORE, TO CERTA IN EXTENT, THE CIT(APPEALS) IS ALSO PERFORMING THE ROLE OF ORIGINA L ADJUDICATING AUTHORITY AS THAT OF THE ASSESSING OFFICER. 4. IF THE ASSESSING OFFICER FAILS TO CONSIDER THE S OURCE OF INCOME OR INCOME OF THE ASSESSEE FROM A PARTICULAR SOURCE WAS NOT TAKEN INTO CONSIDERATION AND THE CIT(APPEALS) CAME TO KNO W THAT THE ASSESSING OFFICER COMMITTED ERROR IN COMPUTING THE TAXABLE INCOME, THEN IT IS OPEN TO THE CIT(APPEALS) TO ISSUE NOTICE TO THE ASSESSEE TO ENHANCE THE ASSESSMENT. THIS IS THE POWER CONFE RRED ON THE CIT(APPEALS) TO ASSESS THE TAXABLE INCOME IN ACCORD ANCE WITH THE PROVISIONS OF THE INCOME-TAX ACT. HOWEVER, SUCH A POWER TO ENHANCE THE ORDER OF THE ASSESSING OFFICER IS NOT C ONFERRED ON THIS 4 I.T.A. NO.2182/MDS/15 TRIBUNAL. THEREFORE, THE CIT(APPEALS) IS NOT CORRE CT IN EQUALIZING THE POWER WITH THAT OF THIS TRIBUNAL. 5. IF THE CIT(APPEALS) DISMISSES THE APPEAL FILED B Y THE ASSESSEE FOR NON-PROSECUTION, THEN THE INCOME OTHER WISE TAXABLE AND OMITTED TO BE CONSIDERED BY THE ASSESSING OFFIC ER WOULD ESCAPE FROM ASSESSMENT. SUCH A THING IS NOT ALLOWA BLE UNDER THE SCHEME OF THE INCOME-TAX ACT. THEREFORE, THE CIT(A PPEALS) IS EXPECTED TO ADJUDICATE THE MATTER ON MERIT AFTER CA LLING FOR RELEVANT RECORDS, EVEN IF THE ASSESSEE FAILS TO APPEAR BEFOR E HIM ON THE DAY ON WHICH THE APPEAL WAS POSTED FOR HEARING. THE CI T(APPEALS), BEING SENIOR MOST OFFICER OF THE INCOME-TAX DEPARTM ENT, IS EXPECTED TO GATHER THE MATERIAL AVAILABLE ON RECORD, INCLUDI NG THE ASSESSMENT RECORD, AND THEREAFTER ASSESS THE TAXABLE INCOME BY A SPEAKING ORDER ONE WAY OR OTHER. THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT NON-APPEARANCE OF THE ASSESSEE BEFORE THE CIT( APPEALS) WILL NOT EMPOWER THE CIT(APPEALS) TO DISMISS THE APPEAL FOR NON- PROSECUTION. BY DISMISSING THE APPEAL FOR NON-PROS ECUTION, THE CIT(APPEALS) CANNOT DISOWN HIS RESPONSIBILITY OF CO MPUTING THE TAXABLE INCOME UNDER THE SCHEME OF INCOME-TAX ACT. SINCE THE CIT(APPEALS) HAS NOT APPLIED HIS MIND TO THE MERIT OF THE CASE, 5 I.T.A. NO.2182/MDS/15 EXCEPT REFERRING TO THE CLAIM MADE BY THE ASSESSEE BEFORE THE ASSESSING OFFICER, THIS TRIBUNAL IS OF THE CONSIDER ED OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED BY THE CIT(APPEALS) . ACCORDINGLY, THE ORDER OF THE CIT(APPEALS) IS SET ASIDE AND THE ENTIRE ISSUE RAISED BY THE ASSESSEE IS REMITTED BACK TO THE FILE OF THE CIT(APPEALS). THE CIT(APPEALS) SHALL RECONSIDER TH E ISSUE AFRESH ON THE GROUNDS RAISED BEFORE HIM AND THEREAFTER DEC IDE IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTU NITY TO THE ASSESSEE. IT IS MADE CLEAR THAT IF THE ASSESSEE FA ILS TO APPEAR BEFORE HIM ON THE APPOINTED DAY, IT IS OPEN TO THE CIT(APPEALS) TO DISPOSE OF THE APPEAL ON MERIT ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD INCLUDING THE RECORDS AVAILABLE WITH THE ASSESSING OFFICER. 6. WITH THE ABOVE OBSERVATION, THE APPEAL OF THE AS SESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 18 TH MARCH, 2016 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 18 TH MARCH, 2016. KRI. 6 I.T.A. NO.2182/MDS/15 / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-4, CHENNAI 4. 1 92 /CIT-V, CHENNAI 5. 7: -2 /DR 6. ;( < /GF.