Shri Mahadeva , Kollegal V. The Assistant Commissioner of Income tax Circle-1(1), Mysore

ITA 2420/BANG/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4636 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-02-2021
• Assessment Year: 2009-2010
• Appeal Filed On: 23-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KANNAN NARAYANAN J
• Assessee Lawyers: PRATHIBHA
• Keywords: Principle of natural justice; Reasonable cause; Set aside
• Section: 143(3); 234B; 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES A, BANGALORE BEFORE SHRI CHANDRA POOJARI, AM & SHRI GEORGE GEORGE K, JM ITA NO.2420/BANG/2018 : ASST.YEAR 2009-2010 SHRI MAHADEVA CONTRACTOR D.F.O. OFFICE ROAD KOLLEGAL 571 440. PAN : AHWPM0441N. V. THE ASST.COMMISSIONER OF INCOME-TAX, CIRCLE 1(1) MYSORE. (APPELLANT) (RESPONDENT) APPELLANT BY : SMT.PRATHIBHA, ADVOCATE RESPONDENT BY : SRI.KANNAN NARAYANAN, JCIT-DR DATE OF HEARING : 11.02.2021 DATE OF PRONOUNCEMENT : 11.02.2021 O R D E R PER GEORGE GEORGE K, JM: THIS APPEAL INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A), DATED 28.02.2018. THE RELEVANT ASSESSMENT YEAR IS 2009-2010. 2. THE GROUNDS RAISED READ AS FOLLOWS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (A) UPHOLDING THE ASSESSMENT IN AN EX-PARTE ORDER IS OPPOSED TO LAW AND TO THE PRINCIPLES OF NATURAL JUSTICE AND ACCORDINGLY LIABLE TO BE CANCELLED. 2. THE LEARNED COMMISSIONER (A) HAS OBSERVED THAT THE NOTICE OF HEARING WAS SERVED AND ON THE OTHER HAND THE APPELLANT DID NOT HAVE RECEIVED ANY NOTICE OF HEARING WHICH PREVENTED THE APPELLANT TO REPRESENT THE CASE AT THE APPROPRIATE TIME AND ACCORDINGLY THE NON-APPEARANCE WAS ON ACCOUNT OF REASONABLE CAUSE AND THE EX-PARTE AS MADE BY THE COMMISSIONER (A) WAS OPPOSED TO LAW AND TO THE PRINCIPLES OF NATURAL JUSTICE AND THEREFORE LIABLE TO BE CANCELLED. 3. IN THE INTEREST OF JUSTICE, THE LEARNED COMMISSIONER (A) OUGHT TO HAVE GIVEN ONE MORE OPPORTUNITY AT LEAST BY ISSUING THE ITA NO.2420/BANG/2018 SHRI MAHADEVA CONTRACTOR. 2 NOTICE OF HEARING TO THE REPRESENTATIVE OF THE APPELLANT WHOSE ADDRESS HAS ALSO BEEN PROVIDED IN THE APPEAL MEMO FOR THE SERVICE OF THE NOTICE AND HAVING FAILED DO SO, THE ORDER OF THE COMMISSIONER (A) IS OPPOSED TO LAW AND LIABLE TO BE SET ASIDE. 4. WITHOUT PREJUDICE, THE LEARNED COMMISSIONER (A)'S ORDER HAVING BEEN A NON-SPEAKING ORDER AND ACCORDINGLY WAS UNSUSTAINABLE. 5. THE LEARNED COMMISSIONER (A) DID NOT DISPOSE OF THE GROUNDS RAISED BY THE APPELLANT AND ACCORDINGLY HIS ORDER IS UNSUSTAINABLE AND LIABLE TO BE CANCELLED. 6. THE LEARNED COMMISSIONER (A) OUGHT TO HAVE APPRECIATED THAT THE REOPENING OF THE ASSESSMENT U/S.147 OF THE ACT WAS OPPOSED TO LAW AND ACCORDINGLY HE OUGHT TO HAVE HELD THAT THE ASSESSMENT AS MADE WAS UNSUSTAINABLE AND THUS LIABLE TO BE CANCELLED. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (APPEALS) ERRED IN UPHOLDING THE DISALLOWANCE OF RS.70,33,981/- MADE UNDER SECTION 40(A)(IA) THE ACT BY THE AO WITHOUT GIVING AN OPPORTUNITY TO EXPLAIN THE FACTS AND SUPPORTIVE DOCUMENTS. 8. THE LEARNED CIT(APPEALS) OUGHT TO HAVE APPRECIATED THAT THERE WAS NO ORAL OR WRITTEN CONTRACT FOR TRANSPORTATION AND THE TRANSPORT WAS FIXED AT THE YARD ON THE BASIS OF AVAILABLE LORRIES BY NEGOTIATING WITH THE DRIVERS AND THERE BEING NO CONTRACT, THE PROVISIONS OF SEC.194C WERE INAPPLICABLE AND THERE WAS NO OBLIGATION ON THE PART OF THE APPELLANT TO DEDUCT TAX AT SOURCE WHEN THE PAYMENTS ARE MADE TO THE LORRY DRIVERS. 9. THE LEARNED ASSESSING OFFICER OUGHT TO HAVE APPRECIATED THAT UNDER ANY CIRCUMSTANCES THE PROVISIONS OF SEC. 40(A)(IA) WERE NOT APPLICABLE AND THUS THE DISALLOWANCE AS MADE BY THE LEARNED ASSESSING OFFICER IS OPPOSED TO LAW AND LIABLE TO BE DELETED IN FULL. 10. WITHOUT PREJUDICE, THE DISALLOWANCES AS UPHELD BY THE LEARNED CIT (APPEALS) ARE ARBITRARY, EXCESSIVE AND THUS THE SAME IS LIABLE TO BE DELETED IN TOTO. 11. THE LEARNED CIT (APPEALS) ERRED IN UPHOLDING THE INTEREST CHARGED UNDER SECTION 234A AND 234B OF THE ACT. 12. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED. ITA NO.2420/BANG/2018 SHRI MAHADEVA CONTRACTOR. 3 3. THE BRIEF FACTS OF THE CASE ARE AS FOLLOW: THE ASSESSEE IS AN INDIVIDUAL. HE IS A CIVIL CONTRACTOR. FOR THE ASSESSMENT YEAR 2009-2010, THE RETURN OF INCOME WAS FILED ON 12.10.2009 DECLARING TOTAL TAXABLE INCOME OF RS.25,36,766. THE ASSESSMENT U/S 143(3) R.W.S. 147 OF THE I.T.ACT WAS COMPLETED VIDE ORDER DATED 31.03.2015, ASSESSING THE TOTAL INCOME OF RS.1,10,84,626. 4. AGGRIEVED BY THE ASSESSMENT COMPLETED U/S 143(3) R.W.S. 147 OF THE I.T.ACT, THE ASSESSEE PREFERRED AN APPEAL TO THE FIRST APPELLATE AUTHORITY. BEFORE THE CIT(A) ONLY ONE HEARING NOTICE WAS ISSUED. SINCE THE ASSESSEE DID NOT APPEAR ON THE DATE OF HEARING, THE CIT(A) PASSED AN EX PARTE ORDER DECIDING THE ISSUE ON MERITS. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. THE LEARNED AR RELIED ON THE GROUNDS RAISED. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUPPORTED THE ASSESSMENT ORDER AND THE ORDER OF THE CIT(A). 7. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY IN THIS CASE, ONLY ONE HEARING NOTICE WAS ISSUED TO THE ASSESSEE. THE ASSESSEE CLAIMS THAT THE HEARING NOTICE ISSUED BY THE CIT(A) WAS NOT RECEIVED, AND HENCE, COULD NOT REPRESENT THE CASE BEFORE THE FIRST APPELLATE AUTHORITY. IT WAS SUBMITTED THAT NON-APPEARANCE WAS ON ITA NO.2420/BANG/2018 SHRI MAHADEVA CONTRACTOR. 4 ACCOUNT OF REASONABLE CAUSE AND EX PARTE ORDER PASSED BY THE CIT(A) WAS OPPOSED TO LAW AND THE PRINCIPLES OF NATURAL JUSTICE. WE ARE OF THE VIEW IN THE FACTS AND CIRCUMSTANCES OF THE CASE, ONE MORE OPPORTUNITY OF HEARING SHOULD HAVE BEEN GRANTED TO THE ASSESSEE. IN THE INTEREST OF JUSTICE AND EQUITY, THE ISSUES RAISED IN THIS APPEAL IS RESTORED TO THE FILES OF THE CIT(A) FOR DE NOVO CONSIDERATION. THE ASSESSEE SHALL COOPERATE WITH THE REVENUE AND SHALL NOT SEEK UNNECESSARY ADJOURNMENT. THE CIT(A) SHALL AFFORD A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AND PASS AN ORDER IN ACCORDANCE WITH LAW. IT IS ORDERED ACCORDINGLY. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 11 TH DAY OF FEBRUARY, 2021 . SD/- SD/- ( CHANDRA POOJARI ) ( GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE; DATED : 11 TH FEBRUARY, 2021. DEVADAS G* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(A), MYSORE. 4. THE PR.CIT, MYSORE. 5. THE DR, ITAT, BENGALURU. 6. GUARD FILE. ASST.REGISTRAR/ITAT, BANGALORE