The DCIT, Circle-2, Surat V. Shri Rupesh R.Zaveri,HUF, Surat

ITA 2397/AHD/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0313 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 10-10-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 22-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G C DAXINI
• Assessee Lawyers: M J SHAH
• Keywords: Retrospective amendment; Tax effect
• Section: 37(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.2397/AHD/2011 WITH CO NO.95/AHD/2015 / ASSTT. YEAR: 2008-2009 DCIT, CIR.2 SURAT. VS SHRI RUPESH R. ZAVERI (HUF) PROP. OF M/S.MITALI SILK 217, BHAVANI CHAMBERS SALABATPURA SURAT 395 002. PAN : AAAHZ 0411 Q ! / (APPELLANT) '# ! / (RESPONDENT) REVENUE BY : SHRI G.C. DAXINI, SR.DR. ASSESSEE BY : SHRI M.J. SHAH, AR / DATE OF HEARING : 10/10/2016 / DATE OF PRONOUNCEMENT: 13/10/2016 $%/ O R D E R THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINS T ORDER OF THE LD.CIT(A)-II, SURAT DATED 4.7.2011 PASSED FOR ASSTT .YEAR 2008-09. 2. IN THE APPEAL, REVENUE HAS RAISED FOLLOWING GROU NDS: [1] ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A)- II, SURAT HAS ERRED IN DELETING THE ADDITION ON ACC OUNT OF G.P. ADDITION OF RS.30,86,223/- IN SPITE OF THE VARIOUS INFIRMITIES IN THE BOOKS INCLUDING THE FAILURE TO SUBSTANTIATE THE EXPENDITURES. [2] ON THE FACTS AND CIRCUMSTANCE OF THE CASE A ND IN LAW, THE LD. CIT(A)- II, SURAT HAS ERRED IN DELETING THE ADDITION OF RS. 6,30,000/- ON ACCOUNT OF DISALLOWANCE OF TWISTING LABOUR DESPITE THE FACT TH AT THE EXPENSES CLAIMED BY THE ASSESSEE WERE NOT ALLOWABLE U/S. 37(1) OF THE I .T. ACT. ITA NO.2397/AHD/2011 WITH CO 2 [3] ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. [4] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) MAY BE SET-SIDE AND THAT OF ASSESSING OFFICER MAY BE RESTORED TO THE AB OVE EXTENT. 3. DURING THE COURSE OF HEARING, THE REVENUE HAS AM ENDED ITS GROUNDS OF APPEAL AND EXCLUDED GROUND NO.2. AFTER EXCLUSION O F GROUND NO.2, TAX EFFECT IN THE REVENUES APPEAL WOULD BE LESS THAN RS.10 LA KHS. SINCE TAX EFFECT IN THE REVENUES APPEAL IS LESS THAN RS.10 LAKHS, THER EFORE, BY VIRTUE OF RECENT CBDT INSTRUCTION NO. 21/2015 DATED 10.12.2015, WHIC H IS APPLICABLE WITH RETROSPECTIVE EFFECT, APPEAL OF THE REVENUE IS NOT MAINTAINABLE, AND ACCORDINGLY REJECTED. 4. NOW, WE ADJUDICATE CROSS OBJECTION OF THE ASSESS EE. 5. APPEAL OF THE REVENUE WAS RECEIVED IN THE TRIBUN AL ON 22.9.2011. NOTICE ALONG WITH MEMORANDUM OF APPEAL WAS SENT TO THE ASSESSEE, WHICH ACCORDING TO THE ASSESSEE WAS RECEIVED ON 20.10.201 1. THE ASSESSEE HAS FILED CO ON 10.6.2015, WHICH IS TIME BARRED BY 1299 DAYS. THE ASSESSEE HAS NOT FILED ANY FORMAL APPLICATION UNDER SECTION 253(5) O F THE INCOME TAX ACT, 1961. HE HAS FILED AFFIDAVIT OF KARTA , SHRI RAJESH R. ZAVERI DEPOSING THEREIN AS UNDER: 1. THERE HAS BEEN A DELAY OF APPROX. 1317 DAYS IN FILING THE CROSS OBJECTION BEFORE THE HON'BLE INCOME TAX APPELLATE T RIBUNAL FOR ASST. YEAR 2008-09. THIS DELAY HAS ARISEN BECAUSE WE WERE UNDER THE IMPRESSION ON SEEING THE GROUNDS OF APPEAL FILED BY THE DEPARTMENT, COPY OF WHICH IS RECEIVED BY US, THAT WE HAVE SUCCE EDED ON BOTH THE GROUNDS AGAINST WHICH THE DEPARTMENT HAD PREFERRED AN APPEAL TO THE HON'BLE INCOME TAX APPELLATE TRIBUNAL BEING ITA NO. 2397/AHD/2011. THE SAID APPEAL PAPERS ON THE MATTER BEING LISTED F OR HEARING WERE SENT TO OUR ADVOCATE, SHRI MANISH J. SHAH, WHO ON GOING THROUGH THE APPEAL PAPERS POINTED OUT TO US THAT THE DEPARTMENT HAS BY MISTAKE TAKEN GROUND NO.2 IN ITS APPEAL AS IF THE LEARNED C.I.T.( APPEALS) HAS DELETED ITA NO.2397/AHD/2011 WITH CO 3 THE ADDITION OF RS.6,30,000/- ON ACCOUNT OF DISALLO WANCE OF TWISTING LABOUR. WE LOOKED INTO THE SAID MATTER AND REALIZED THAT ACTUALLY THE C.I.T.(APPEALS) HAS DISALLOWED OUR GROUNDS OF APPEA L AND WE OUGHT TO HAVE TAKEN THE CROSS OBJECTION BEFORE THE HON'BLE I NCOME TAX APPELLATE TRIBUNAL. IT WAS BECAUSE OF THE GROUNDS T AKEN BY THE DEPARTMENT IN ITS APPEAL, WE GOT MISGUIDED AND WERE UNDER THE BONE; FIDE IMPRESSION THAT WE HAVE ACTUALLY SUCCEEDED ON THE SAID GROUND WHILE THE FACT WAS TO THE CONTRARY. 6. THE LD.COUNSEL FOR THE ASSESSEE TOOK ME THROUGH THE ABOVE EXPLANATION, AND RELIED UPON LARGE NUMBER OF DECISIONS. COPIES O F THESE JUDGMENTS HAVE BEEN PLACED ON RECORD. I DO NOT DEEM IT NECESSARY TO RECITE AND RECAPITULATE ALL THESE DECISIONS ON THIS POINT, BECAUSE, IT IS SUFFI CE TO SAY THAT CORE OF THESE DECISIONS IS TO THE EFFECT THAT WHENEVER EXPRESSION SUFFICIENT CAUSE EMPLOYED IN SUB-SECTION (5) OF SECTION 253 OF THE A CT FALLS FOR CONSIDERATION, THEN, ADJUDICATING AUTHORITY SHOULD ADOPT A LIBERAL APPROACH IN CONSTRUING THE EXPLANATION OF THE ASSESSEE INFERRED FROM THE MATER IAL. REFERENCE CAN BE MADE TO THE DECISIONS OF THE HONBLE SUPREME COURT IN THE CASE OF COLLECTOR LAND ACQUISITION VS. MST. KATIJI & OTHERS, 1987 AIR 1353. THE ASSESSEE HAS ALSO PLACED ON RECORD COPY OF ORDER PASSED IN ITA N O.3676 TO 3683/A/2004 DATED 21.6.2005 WHEREIN DELAY OF 13 YEARS IN FLING OF THE APPEAL WAS CONDONED. 7. ON DUE CONSIDERATION OF THE ABOVE, I AM OF THE V IEW THAT LENGTH OF DELAY IS IMMATERIAL. IT IS SUFFICIENCY OF REASONS THAT M ATTERS. IF THERE IS A PLAUSIBLE REASON, THEN, ANY AMOUNT OF DELAY CAN BE CONDONED. IN THE PRESENT CASE ALSO, I AM NOT SATISFIED WITH BONA FIDE OF THE ASSESSEE, BECAUSE, THE LD.CIT(A) HAS DECIDED THE APPEAL OF THE ASSESSEE ON 4.7.2011. TH IS ORDER MUST HAVE BEEN SERVED UPON THE ASSESSEE WITHIN REASONABLE TIME. F ROM THE STAMP OF DATE AVAILABLE ON THE ORDER OF THE LD.CIT(A) IT REVEALED THAT IT WAS RECEIVED BY TAX CONSULTANT OF THE ASSESSEE I.E. ITP. A PERUSAL OF THIS, THE ASSESSEE WOULD HAVE COME TO KNOW ABOUT ISSUE WHICH HAS BEEN DECIDED PAR TLY AGAINST HIM. WHEN ITA NO.2397/AHD/2011 WITH CO 4 ASSESSEE RECEIVED NOTICE FROM THE TRIBUNAL ON 20.10 .2011 AGAIN HE MUST HAVE APPRAISED HIMSELF ABOUT THE ISSUE INVOLVED IN THE A PPEAL AND HOW THE LD.CIT(A) HAD ADJUDICATED THEM. THERE MUST BE CONS CIOUS DECISION TO ACCEPT THE ORDER OF THE LD.CIT(A) WHEN IT WAS PASSED. SIM ILARLY, THE ASSESSEE WAS NOT IN A MOOD TO CHALLENGE THIS ORDER, WHEN SUMMONS WERE ISSUED TO THE ASSESSEE FOR DEFENDING APPELLATE PROCEEDINGS BEFORE THE TRIBUNAL. IF THE DEPARTMENT HAS TAKEN OUT ONE OF THE GROUNDS ERRONEO USLY THAT WOULD NOT PERSUADE THE ASSESSEE TO BELIEVE THAT THE LD.CIT(A) HAS DECIDED BOTH THE ISSUES IN FAVOUR OF IT. TO MY MIND, THE ASSESSEE HAS DECL ARED A LOSS OF RS.15,13,710/-. HE WAS NOT GOING TO BE EFFECTED BY A MARGINAL DISALLOWANCE OF RS.6,30,000/-, AND THEREFORE, CONSCIOUSLY, HE NE VER THOUGHT TO CHALLENGE THE ORDER OF THE LD.CIT(A). WHEN THE APPEAL BEFORE THE TRIBUNAL CAME UP FOR HEARING, THEN REALIZING THE FACT THAT THE ASSESSEE SHOULD BE VISITED WITH PENALTY ALSO, THIS CO MIGHT HAVE BEEN FILED. BUT, REALLY T HE ASSESSEE WAS NOT FULLY AGGRIEVED WITH THE IMPUGNED ORDER OF THE LD.CIT(A), BECAUSE, THERE WAS NO TAX LIABILITY BY VIRTUE OF SUCH DISALLOWANCE, AND T HEREFORE, HE NEVER THOUGHT TO CHALLENGE IT IN THE HIGHER APPELLATE FORUM. I DO N OT FIND ANY PLAUSIBLE EXPLANATION TO CONDONE THE DELAY OF MORE THAN THREE -AND-HALF YEARS. ACCORDINGLY, CO OF THE ASSESSEE IS DISMISSED, AS BE ING TIME BARRED. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D AND THE CO OF THE ASSESSEE IS ALSO DISMISSED. ORDER PRONOUNCED IN THE COURT ON 13 TH OCTOBER, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 13 /10/2016