Hans Road Carriers Pvt.Ltd., Ahmedabad V. The ITO, Ward-2(1)(3), Ahmedabad

ITA 242/AHD/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3404 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 18-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice; Set aside; Audi alteram partem
• Section: 20

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./I.T.A. NO.242/AHD/2019 ( / ASSESSMENT YEAR : 2015-16) HANS ROAD CARRIERS PVT.LTD. PLOT NO.228, TRANSPORT NAGAR ASLALI ROAD BASHKOL AHMEDABAD-382 443 / VS. THE INCOME TAX OFFICER WARD-2(1)(3) AHMEDABAD ./ ./PAN/GIR NO. : AAACH 7584 D ( /APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI AJIT P. SANDESARA, AR / RESPONDENT BY : SHRI VIDHYUT TRIVEDI, SR.DR /DATE OF HEARING 03/03/2020 / DATE OF PRONOUNCEMENT 04 / 0 3 /20 20 / O R D E R PER SHRI SANDEEP GOSAIN, JUDICIAL MEMBER : THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANC E OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TA X (APPEALS)2, AHMEDABAD [CIT(A) IN SHORT] VIDE APPEAL NO.CIT(A)-2 /10370/ITO, WD.2(1)(3)/2017-18 DATED 20/08/2018 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961(H EREINAFTER REFERRED TO AS 'THE ACT') DATED 15/12/2017 RELEVANT TO ASSESSMENT YEAR (AY) 2015-16. ITA NO.242/AHD/2019 HANS ROAD CARRIERS PVT.LTD. VS. ITO ASST.YEAR 2015-16 - 2 - 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- GROUND NO. 1 1.1 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND AS PER LAW LEARNED CIT (A) GROSSLY ERRED BY DISMISSING THE APPEAL OF T HE APPELLANT AND DECIDING THE ISSUES RAISED IN THE GROUNDS OF APPEAL WITHOUT TAKI NG INTO CONSIDERATION THE SUBMISSIONS, THROUGH ONLINE COMPLIANCE PORTAL, BY T HE APPELLANT. 1.2 THAT THE LEARNED CIT (A) FAILED TO CONSID ER THE SUBMISSIONS MADE BY THE APPELLANT, ALONG WITH EVIDENCES, AGAINST THE ADDITI ONS MADE BY THE AO AS PER THE ASSESSMENT ORDER. LEARNED CIT(A) FAILED TO. VERIFY THE E-SUBMISSION ON THE INCOME TAX DEPARTMENT'S PORTAL BY THE APPELLANT ON 13/08/2 018. HENCE, THE ORDER OF THE CIT (A) IS LIABLE TO BE SET ASIDE FOR FRESH ADJUDICATIO N. GROUND NO. 2 2.1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS PER LAW THE LEARNED CIT (A) ERRED IN SUSTAINING ADDITIONS OF RS.8,433,0 25 BY WAY OF DISALLOWANCE OUT OF THE EXPENSES INCURRED BY THE APPELLANT COMPANY TO E ARN THE INCOME. 1.2 THAT THE LEARNED CIT (A) WAS OUGHT TO HAVE CONSIDERED THE FACT THAT BOOKS OF ACCOUNTS OF THE APPELLANT COMPANY WERE AUDITED AS P ER THE PROVISIONS OF INCOME TAX ACT, 1961 AND ALSO AS PER THE PROVISIONS OF THE COM PANIES ACT, 1956. HENCE, SUCH A HUGE ADDITIONS BY WAY OF DISALLOWING EXPENSES TO TH E EXTENT OF RS.8,433,025 IS NOT SUSTAINABLE AND IT SHOULD HAVE BEEN DELETED BY THE LEARNED CIT (A). GROUND NO. 3 3.1 THAT ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE AND AS PER LAW THE LEARNED CIT (A) ERRED IN SUSTAINING THE DISALLOWANC E OF RS.L,187,940 OUT OF THE DEPRECIATION CLAIM. 3.2 THAT THE LEARNED CIT (A) WAS OUGHT TO HAV E CONSIDERED THE FACT THAT IN THE AUDIT REPORT, IN FORM 3 CD, AUDITOR HAD CERTIFIED T HE ALLOWABLE APPRECIATION AS PER THE PROVISIONS OF INCOME TAX ACT, 1961. HENCE, HE S HOULD NOT HAVE SUSTAINED THE DISALLOWANCE OUT OF THE DEPRECIATION CLAIM. 3. AS PER THE FACTS OF THE PRESENT CASE, ASSESSEE-C OMPANY FILED ITS RETURN OF INCOME ON 31/10/2015 DECLARING TOTAL INCOME AT R S.7,71,570/-. THE ITA NO.242/AHD/2019 HANS ROAD CARRIERS PVT.LTD. VS. ITO ASST.YEAR 2015-16 - 3 - RETURN WAS PROCESSED U/S.143(1) OF THE ACT. LATER ON, THE CASE WAS SELECTED FOR SCRUTINY AND AFTER SERVING STATUTORY NOTICE, OR DER OF THE ASSESSMENT WAS PASSED U/S.143(3) OF THE ACT THEREBY MAKING ADDITIO NS. 4. AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE PRE FERRED AN APPEAL BEFORE LD.CIT(A), WHO AFTER CONSIDERING THE CASE OF BOTH THE PARTIES, DISMISSED THE APPEAL FILED BY THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), NOW THE ASSESSEE IS FURTHER IN APPEAL BEFORE US. 6. AT THE VERY OUTSET, WE NOTICE FROM THE RECORDS T HAT ADDITIONS WERE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF FAILURE ON THE PART OF ASSESSEE TO SUBMIT THE DETAILS, INFORMATION AND EXPLANATIONS DESPITE SEVERAL OPPORTUNITIES PROVIDED DURING THE ASSESSMENT PROCEE DINGS. AND SIMILARLY, NONE APPEARED ON BEHALF OF THE ASSESSEE BEFORE THE LD.CIT(A). THEREFORE, THE LD.CIT(A) ALSO UPHELD THE ORDER PASSED BY THE A SSESSING OFFICER. 7. THE LD.AR SUBMITTED BEFORE US THAT THE ASSESSEE COULD NOT FURNISH THE DETAILS AS CALLED FOR BY THE ASSESSING OFFICER BECA USE OF THE REASON THAT FATHER OF ONE OF THE DIRECTORS WAS SERIOUSLY ILL AN D SUBSEQUENTLY EXPIRED ON 08/11/2017, AT THE TIME OF ASSESSMENT PROCEEDINGS. THE DIRECTORS WERE AT NATIVE PLACE BEFORE AND AFTER HIS DEMISE. THEREFOR E, ASSESSEE COULD NOT LOOK AFTER THE ASSESSMENT PROCEEDINGS. ITA NO.242/AHD/2019 HANS ROAD CARRIERS PVT.LTD. VS. ITO ASST.YEAR 2015-16 - 4 - 7.1. THE LD.AR ALSO DRAWN OUR ATTENTION TOWARDS THE AFFIDAVIT DATED 02/03/2020 FILED BY THE ASSESSEE WHEREIN ONE SHRI D AYAKISHAN R.SHARMAAGED BEING THE DIRECTOR OF THE ASSESSEE-COM PANY HAD UNDERTAKEN TO SUBMIT ALL THE DETAILS, INFORMATION AND EXPLANAT IONS AS WELL AS EVIDENCES IN SUPPORT OF RETURNED INCOME BEFORE THE ASSESSING OFF ICER AND SEEKS AN OPPORTUNITY TO BE PRESENT BEFORE THE ASSESSING OFFI CER. 8. THE LD.DR RELIED UPON THE ORDERS OF THE AUTHORIT IES BELOW. 9. BE THAT AS IT MAY, AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT MATTER REQUIRES RECONSIDERATION. SIN CE ACCORDING TO ASSESSEE, THE ASSESSEE HAD ALREADY SUBMITTED THE REQUIRED DOC UMENTS BEFORE LD.CIT(A), BUT THE SAME DO NOT FIND MENTION IN THE ORDER. THEREFORE, IT CAN BE INFERRED THAT THOSE DOCUMENTS FILED BY THE ASSES SEE WERE NOT CONSIDERED. THE PRINCIPLE OF AUDI ALTERAM PARTEM IS THE BASIC CONCEPT OF NATURAL JUSTICE. THE EXPRESSION AUDI ALTERAM PARTEM IMPLIES THAT A PERSON MUST BE GIVEN AN OPPORTUNITY TO DEFEND HIMSELF. THIS PRINCIPLE IS SINE QUA NON OF EVERY CIVILIZED SOCIETY. THE RIGHT TO NOTICE, RIGHT TO PRESENT CASE AND EVIDENCE, RIGHT TO REBUT ADVERSE EVIDENCE, RIGHT TO CROSS EXAMINATION, RIGHT TO LEGAL REPRESENTATION, DISCLOSURE OF EVIDENCE TO PARTY, REPORT OF ENQUIRY TO BE SHOWN TO THE OTHER PARTY AND REASONED DECISIONS OR SPEAKING ORDERS. WE TOOK THIS GUIDANCE FOR RIGHT OF HEARING, FROM THE RATIO AS IS LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF MANEKA GANDHI VS. UNION OF INDIA, WH EREIN HON'BLE SUPREME ITA NO.242/AHD/2019 HANS ROAD CARRIERS PVT.LTD. VS. ITO ASST.YEAR 2015-16 - 5 - COURT HAS LAID DOWN THAT RULE OF FAIR HEARING IS NE CESSARY BEFORE PASSING ANY ORDER. WE FIND THAT IT IS PRE-DECISION HEARING STAN DARD OF NORM OF RULE OF AUDI ALTERAM PARTEM. WE ARE, THEREFORE, OF THE VIEW THAT MATTER REQUIR ES RECONSIDERATION AT THE LEVEL OF AO. THUS, WHILE SE TTING ASIDE THE ORDER OF LD.CIT(A), WE RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER AND DIRECT THAT ASSESSEE BE GIVEN ONE MORE OPPORTUNITY OF BEING HEARD AND TO FILE DOCUMENTS BEFORE THE AO, AS CALLED FOR, AND T HE AO IS ALSO DIRECTED TO DECIDE THE ISSUE AFRESH IN THE LIGHT OF OUR AFORES AID DISCUSSION AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW. NEEDLESS TO STATE TH AT THE LD.AO SHALL GRANT OPPORTUNITY OF HEARING TO BOTH THE PARTIES. THE AS SESSEE IS ALSO DIRECTED TO CO-OPERATE BY PROMPTLY FURNISHING ALL THE REQUIRED DETAILS CALLED FOR BY THE AO. THUS, THE APPEAL OF ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSES. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 04 - 03 - 2020 AT AHMEDABAD SD/- SD/- ( AMARJIT SINGH) ( SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 04 / 03 /2020 # . . , . $ . ./ T.C. NAIR, SR. PS ITA NO.242/AHD/2019 HANS ROAD CARRIERS PVT.LTD. VS. ITO ASST.YEAR 2015-16 - 6 - ! '! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. %&' ( / CONCERNED CIT 4. ( ( ) / THE CIT(A)-2, AHMEDABAD 5. )* + $$&' , &' , % / DR, ITAT, AHMEDABAD 6. + ./ / GUARD FILE. / BY ORDER, ) $ //TRUE COPY// / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 3.3.20 (DICTATION-PAD 6-PA GES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..3.3.20 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.4.3.20 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 4.3.20 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER