AKSHAR AUTOMOBILES AGENCIES P.LTD, THANE V. ITO WD 3(2), MUMBAI

ITA 2261/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1427 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 03-04-2014
• Court: TRIBUNAL
• Department Lawyers: A RAMACHANDRAN
• Assessee Lawyers: NEELKANTH KANDELWAL
• Keywords: Principle of natural justice; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI RAVISH SOOD , JM ITA NO. 2261 / MUM/20 1 4 ( ASSESSMENT YEAR : 2002 - 03 ) M/S. AKSHAR AUTOMOBILES AGENCIES PVT. LTD., PLOT NO.1, MOHAN MILL COMPOUND, GHODBUNDER ROAD , THANE - 400067 VS. ITO, WARD 3(2), THANE PAN/GIR NO. AABCA5019K APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI NEELKANTH KANDELWAL REVENUE BY SHRI A. RAMACHANDRAN DATE OF HEARING 17/11 /2016 DATE OF PRONOUNCEME NT 14 / 12 /2016 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) FOR THE ASSESSMENT YEAR 2002 - 2003, IN THE MATTER OF IMPOSITION OF PENALTY U/S.271(1)(C) OF THE IT ACT. 2. THERE WAS DELAY IN FILING TH E APPEAL. 3. ASSESSEE HAS FILED APPLICATION FOR CONDONATION WHICH READS AS UNDER: - 1. THE PETITIONER COMPANY WAS CONSTITUTED AROUND 20 YEARS AGO. 2. THE AFFAIRS OF THE COMPANY AT THAT TIME W AS LOOKED AFTER BY THE FOLLOWING DIRECTORS: 1. LATE S ADHURAM PATEL 2. SHRI MARKAND PATEL 3. SHRI YOGESH PATEL ITA NO. 2261/MUM/2014 M/S. AKSHAR AUTOMOBILES AGENCIES PVT. LTD., 2 3. LATE SHRI SADHURAM PATEL FATHER OF SHRI M ARKAND PATEL & SHRI YOGESH PATEL WAS LOOKING AFTER THE ACCOUNTING AND TAX M ATTER OF THE COMPANY SINCE INCEPTION AND OTHER DIRECTORS WERE LOOKING AFTER THE DAY TO DAY BUSINESS OF THE COMPANY. 4. LATE SHRI SADHURAM PATEL WHO WAS HANDLING ALL ACCOUNTING & TAXATION MATTER , SUDDENLY FALLEN SICK IN THE MONTH OF AUGUST 2010 DUE TO OLD AGE. THEN AFTER GRADUALLY HIS HEALTH DETERI ORA TED AND WAS TOTALLY BED RIDDEN . HE WAS BEING TREATED AT HOME ONLY UNDER THE SUPERVISION OF DOCTORS AND NURSES. 5. DUE TO HIS ILLNESS THE OTHER DIRECTORS WHO WERE HANDLING DAY TO DAY BUSINESS DID NOT PAY ANY HEED TO THE INCOME TAX MATTER AND ALSO ABOUT THE IMPUGNED ORDER. 6. THEN IN THE MONTH OF SEPTEMBER 2012 THE CONDITION OF LATE SHRI SADHURAM PATEL BECAME VERY CRITICAL AND HE WAS ADMITTED IN HOSPITAL WHERE HE ULTIMATELY LEFT FOR HEAVEN ABODE ON 01 110/2012. COPY OF DEATH CERTIFICATE ENCLOSED. 7. AFTER THE DEATH OF LATE SHRI SADH URAM PATEL 3 - 4 MONTHS PASSED IN RITUALS ETC. 8. THEN AFTER IN THE MONTH OF MARCH 2013 WHEN WE RECEIVED A SHOW CAUSE NOTICE ASKING THE APPELLANT TO SHOW AS TO WHY PENALTY SHOULD NOT BE IMPOSED U/S. 271 (1 )(C) IT CAME TO PETITIONER'S NOTICE THAT AGAINST T HE ORDER HON'BLE CIT(A) WHEREIN QUANTUM ADDITION HAS BEEN CONFIRMED NO SECOND APPEAL HAS BEEN FILED. 9. THEN AFTER IN THE MONTH OF APRIL 2013 THE PETITIONER COMPILED ALL THE PAPERS AND APPROACHED M/S. MOHANLAL JAIN & CO CHARTERED ACCOUNTANTS TO GO THROUG H THESE PAPERS AND ASKED TO APPRISE THE PETITIONER THE NEXT COURSE OF ACTION. 10.THE CHARTERED ACCOUNTANT AFTER PERUSING THE PAPERS BROUGHT TO OUR NOTICE THAT INADVERTENTLY APPEAL AGAINST THE ORDER OF CIT(A) HAS NOT BEEN FILED WHI CH SHOULD HAVE BEEN FILE D BY 22/ 08 / 2010. ACCORDINGLY THE PETITIONER ASKED THE CHARTERED ACCOUNTANTS TO PREPARE AND FILE THE APPEAL. 11.LN THE MEAN TIME THE CHARTERED ACCOUNTANT SHRI MOHANLAL JAIN WHO WAS LOOKING AFTER THE IMPUGNED MATTER HAD TO GO OUT IN CONNECTION WITH SOME PR OFESSIONAL MATTERS, THEREFORE THEY COULD BE ABLE TO PREPARE THE MEMORANDUM OF APPEAL IN FORM NO. 36 IN THE SECOND WEEK OF MAY 2013. ACCORDINGLY THEY SENT THE PAPERS TO THE PETITIONER FOR SIGNING AND PAYMENT OF FILING FEES. ITA NO. 2261/MUM/2014 M/S. AKSHAR AUTOMOBILES AGENCIES PVT. LTD., 3 12. AFTER RECEIPT OF THESE PAP ERS THE PETITIONER PAID THE FILING FEES ON . 13.AS THERE HAS BEEN DELAY IN FILING OF THIS APPEAL THE PETITIONER ARE MAKING THIS APPLICATION FOR CONDONATION OF DELAY IN FILING OF THIS APPEAL. 14.THE PETITIONER SUBMIT AND REQUEST THAT THE DELAY IN FILING OF THIS APPEAL BE CONDONED. THE LAPSE ON THE PART OF THE PETITIONER IN NOT FILING THIS APPEAL WITHIN STIPULATED PERIOD WAS UNINTENTIONAL AND ENTIRELY DUE TO INADVERTENCE AND ALSO DUE TO UNAVOIDABLE CIRCUMSTANCES MENTIONED HEREINABOVE. IN VIEW OF THE ABO VE FACTS AND CIRCUMSTANCES YOUR HONOUR WILL APPRECIATE AND ADMIT THAT THE PETITIONER HAS BEEN PREVENTED FROM FILING THE IMPUGNED APPEAL WITHIN THE TIME STIPULATED UNDER THE BONAFIDE FACTS AND THEREFORE REQUEST THAT KEEPING THE PRINCIPLES OF NATURAL JUSTICE IN MIND THE SAME MAY KINDLY BE CONDONED. THE PETITIONER THEREFORE REQUEST YOUR HONOUR TO TAKE A LENIENT VIEW IN THE MATTER AND CONDONE THE DELAY IN FILING OF THE PRESENT APPEAL, ADMIT, DECIDE THE SAME ON MERIT AND OBLIGE. FOR THE SAID KIND ACT THE PETIT IONER SHALL ALWAYS BE GRATEFUL TO YOUR HONOUR. 4. WE HAVE GONE THROUGH THE REASONS FOR DELAY IN FILING THE APPEAL AND FOUND THAT THERE WAS SUFFICIENT CAUSE FOR DELAY, ACCORDINGLY, WE CONDONE THE DELAY AND APPEAL IS BEING HEARD ON MERIT IN THE SUBSTANTIAL INTEREST OF JUSTICE. 5 . RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 6 . IN THIS CASE, ADDITION OF RS.33,45,603/ - WAS MADE U/S.68. IN RESPECT OF THIS ADDITION, AO HAS LEVIED PENALTY U/S.271(1)(C) OF THE IT ACT. WE FOUND THAT IN THE QUANTUM APPEAL A DDITIONS SO MADE BY AO U/S.68 AMOUNTING TO RS.33,45,603/ - WAS DELETED BY TRIBUNAL AFTER H AVING THE FOLLOWING OBSERVATION VIDE ITS ORDER DATED 05/12/2016. ITA NO. 2261/MUM/2014 M/S. AKSHAR AUTOMOBILES AGENCIES PVT. LTD., 4 5. THE ONLY GRIEVANCE OF ASSESSEE RELATES TO ADDITION OF RS.33,45,603/ - U/S.68 IN RESPECT OF LOAN RECE IVED FROM DIRECTORS. 6. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 7. FACTS IN BRIEF ARE THAT ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS TRADING AND SERVICE OF MOTOR VEHICLES. DURING THE YEAR UNDER CONSIDERATION, IT RECEIVED LOAN OF RS.33,45,60 3/ - FROM ITS DIRECTORS. AO ADDED THE SAME U/S.68 WHICH WAS CONFIRMED BY CIT(A) AND ASSESSEE IS IN FURTHER APPEAL BEFORE US. 8 . WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. FROM THE RECORD WE FOUND THA T THE SAID LOAN WAS GIVEN BY THE DIRECTORS OF THE COMPANY WHO ARE FAMILY MEMBERS. IN THIS RESPECT, THE DIRECTORS OF THE COMPANY APPROACHED VARIOUS BANKS FOR TEMPORARY WORKING CAPITAL WHICH IN TERMS OF AUTOMOBILE TRADE IS KNOWN AS TRADE ADVANCE BY VIRTUE OF WHICH NBFC AND BANKS CAN HAVE THEIR OWN STOCK WITH THE DEALER AND DELIVERED THE VEHICLES TO THE CUSTOMERS ON IMMEDIATE BASIS AS SOON AS THE LOAN IS SANCTIONED. THIS TRADE ADVANCE IN THE ASSESSMENT YEAR UNDER CONSIDERATION HAS REFLECTED AS A DIRECTORS LOAN TO THE TUNE OF RS.33,45,603/ - . WE ALSO FOUND THAT DIRECTORS WERE OWING PREMISES AT THANE GORBUNDER ROAD FROM WHERE THEY WERE CONDUCTING THEIR BUSINESS FROM WHICH THEY WERE ALSO FETCHING RENT OF RS.4 LAKHS PER MONTH. 9 . WE FOUND THAT ASSESSEE HAS DISCHARGE D ITS PRIMARY ONUS NOT ONLY ON IDENTITY AND CREDITWORTHINESS OF LENDERS BUT ALSO GENUINENESS OF TRANSACTION. UNDER THESE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY MERIT FOR THE ADDITION MADE IN RESPECT OF LOAN OF RS.33,45,603/ - OBTAINED FROM THE DIRECTOR S OF THE COMPANY. 1 0 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . 7. AS THE ADDITION WITH RESPECT TO WHICH PENALTY HAS BEEN IMPOSED HAVE ALREADY BEEN DELETED BY THE TRIBUNAL, THE PENALTY SO LEVIED HAS NO LEGS TO STAND. 8. IN THE RESULT, APPEAL OF TH E ASSESSEE IS ALLOWED . O RDER PRONOUNCED IN THE OPEN COURT ON THIS 14 / 12 /2016 S D/ - ( RAVISH SOOD ) S D/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 14 / 12 /201 6 KARUNA SR. PS ITA NO. 2261/MUM/2014 M/S. AKSHAR AUTOMOBILES AGENCIES PVT. LTD., 5 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//