Neeladri Industries, Tumkur V. ITO, Tumkur

ITA 250/BANG/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51342 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 09-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUSANTHOMAS
• Assessee Lawyers: S RAMASUBRAMANIANCA
• Keywords: Tax effect
• Section: 143(3)

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL BANGALORE BENCH B, BANGALORE BEFORE SHRI N.K.SAINI, ACCOUNTANT MEMBER AND SMT. P MADHAVI DEVI, JUDICIAL MEMBER I.T.A. NO.250(BANG.)/2011 (ASSESSMENT YEAR : 2006-07) M/S NEELADRI INDUSTRIES, CHALLAKERE ROAD, PAVAGADA, TUMKUR DISTRICT PAN NO.AACFN9550G APPELLANT VS THE INCOME-TAX OFFICER, WARD-2, TUMKUR. RESPONDENT ASSESSEE BY : SHRI S. RAMASUBRAMANIAN,CA REVENUE BY : SMT SUSANTHOMAS, JCIT DATE OF HEARING : 31-10-2011 DATE OF PRONOUNCEMENT : 04-1 1-2011 O R D E R PER SMT P. MADHAVI DEVI, JM ; THIS APPEAL BY THE ASSESSEE RELATES TO ASSESSMENT YEAR : 2006-07. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS I N ITS APPEAL: 1. THAT THE ORDER OF THE LEARNED LOWER AUTHORITIES IN SO FAR IT IS PREJUDICIAL TO THE ITA.NO.250(B)/11 2 INTERESTS OF THE APPELLANT IS BAD AND ERRONEOUS IN LAW AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN DISMISSING THE APPEAL FOR NON- PROSECUTION EVEN THOUGH HE IS BOUND TO PASS ORDER ON MERITS EX-PARTE. 3. THAT THE LEARNED LOWER AUTHORITIES ERRED IN LAW AND ON FACTS IN ADOPTING THE GROSS PROFIT AT 12.78% IGNORING THE FACT THAT THE AC COUNTS OF THE APPELLANT HAVE BEEN AUDITED U/S 44AB OF THE ACT. 4. THAT THE LEARNED LOWER AUTHORITIES ERRED IN LAW AND ON FACTS IN ADOPTING GROSS PROFIT AT 12.78% WITHOUT BRINGING ON RECORD ANY EVIDENCE TO PROVE THAT THE SALES OR PURCHASES HAVE BEEN UNACCOUNTED OR APPELLANT HAS EARNED SUCH GROSS PROFIT. 5. THAT THE LEARNED LOWER AUTHORITIES ERRED IN LAW AND ON FACTS IN SIMPLY ADOPTING THE GROSS PROFIT OF ASSESSMENT YEAR 2005-06. 6. THAT THE FINDING OF THE LEARNED LOWER AUTHORITIES THAT THE GROSS PROFIT HAS BEEN REDUCED TO OVERCOME THE TAX EFFECT OF INTEREST WAIVER IS PERVERSE BEING NOT SUPPORTED BY ANY EVIDENCE ON RECORD AND HENCE IS LIABLE TO BE QUASHED. ITA.NO.250(B)/11 3 7. THAT THE LEARNED LOWER AUTHORITIES ERRED IN LAW AND ION FACTS IN NOT ALLOWING THE REMUNERATION TO PARTNER U/S 40(B) OF THE ACT ON THE ENHANCED TOTAL INCOME. 8. THAT THE LEARNED LOWER AUTHORITIES ERRED IN LAW AND ON FACTS IN NOT EXCLUDING THE INTEREST WAIVER AMOUNT FROM THE INCOME THROUGH THE INTEREST DISALLOWED IN THE EARLIER YEARS HAS BECOME FINAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM WHICH IS RUNNING A TAMARIND SEED I NDUSTRY AT PAVAGADA. THE ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED MAKING CERTAIN DISALLOWANCES AND THE CONSEQUENTIALA DDITIONS TO THE RETURNED INCOME. 3.1 AGGRIEVED BY THE SAME, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO ISSUED A FORMAL NOTIC E OF HEARING U/S 250 OF THE IT ACT ON 05-06-2009. SINCE THERE W AS NO COMPLIANCE FROM THE ASSESSEE, FURTHER NOTICES WERE ISSUED ON 02- 09-2009, 09-03-2010 AND ON 07-07-2010. THE AUTHORI ZED REPRESENTATIVE OF THE ASSESSEE APPEARED ON 20-07-20 10 AND REQUESTED FOR ADJOURNMENT AND ACCORDINGLY, THE CASE WAS ADJOURNED TO 27-07-2010. HOWEVER, ON 27-07-2010, T HE AR OF THE ASSESSEE APPEARED AND FURNISHED A LETTER DATED 27-07-2010 ITA.NO.250(B)/11 4 STATING THAT THEY ARE RETIRING FROM THE CASE AND HE NCE, THEY WILL NOT BE REPRESENTING THE CASE IN FUTURE. TAKING THE SAME INTO CONSIDERATION, THE CIT(A) ISSUED A FRESH NOTICE OF HEARING TO THE ASSESSEE ON 28-10-2010 AND ALSO ON 08-11-2010. SINC E THERE WAS NO COMPLIANCE FROM THE ASSESSEES SIDE AGAIN TH E CIT(A) CAME TO A CONCLUSION THAT THE ASSESSEEE IS NOT INTE RESTED IN PROSECUTING ITS APPEAL AND DISMISSED THE SAME FOLLO WING THE DECISIONS OF THE HONBLE ITAT DELHI IN THE CASE OF CIT VS MULTIPLAN INDIA PVT.LTD.,(1991) 38 ITD 320 AND ALSO OF THE HONBLE HIGH COURT OF MADHYA PRADESH IN THE CASE OF TUKAJI RAO HOLKAR VS CWT REPORTED IN 225 ITR 480. 3.2 AGGRIEVED BY THE SAME, THE PRESENT APPEAL IS F ILED BEFORE THE TRIBUNAL. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT WAS HE, WHO HAD APPEARED BEFORE THE CIT(A) DURING T HE APPELLATE PROCEEDINGS AND SINCE HE DID NOT GET INSTRUCTIONS F ROM HIS CLIENT, HE HAD TO RETIRE FROM THE CASE. HE FILED A COPY OF THE LETTER BEFORE US. HE SUBMITTED THAT EVEN IF THE AUTHORIZED REPRES ENTATIVE WITHDRAWS FROM THE CASE FROM REPRESENTING THE CASE, THE CIT(A) IS BOUND TO GIVE AN OPPORTUNITY OF HEARING TO THE ASSE SSEE AND DISPOSE OF THE APPEAL ON MERITS, EVEN IF THE ASSESS EE DOES NOT ITA.NO.250(B)/11 5 APPEAR. HE ALSO SUBMITTED THAT THE CIT(A) HAS NO P OWER TO DISMISS THE APPEAL FOR NON-APPEARANCE, IN VIEW OF S UB-SECTION-6 OF SEC.250 OF THE IT ACT 5. THE LEARNED DR HOWEVER, SUBMITTED THAT THE CIT(A ) HAD GIVEN AMPLE OPPORTUNITY OF HEARING TO THE ASSESSEE, BUT INSPITE OF THE SAME, THE ASSESSEE DID NOT APPEAR AND THEREFORE , THE CIT(A) HAS RIGHTLY DISMISSED THE ASSESSEES APPEAL. 6. HAVING HEARD BOTH THE PARTIES AND HAVING CONSIDE RED THE MATERIAL ON RECORD, WE FIND THAT SUB-SECTION-6 OF S EC.250 OF THE IT ACT STIPULATES THAT THE CIT(A) SHALL DISPOSE OF THE APPEAL IN WRITING AND SHALL STATE THE POINTS FOR DETERMINATIO N, THE DECISION THEREON AND THE REASON FOR THE DECISION. 6.1 AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL F OR THE ASSESSEE VIDE LETTER DATED 27-07-2010, IT WAS ONLY THE AR WHO HAD WITHDRAWN HIS APPEARANCE ON BEHALF OF THE ASSES SEE AND NOT THE ASSESSEE WHO HAD WITHDRAWN HIS APPEARANCE IN IT S APPEAL AND ALSO IT IS NOTED THAT THE ASSESSEE HAS NOT APPE ARED BEFORE THE CIT(A), EVEN AFTER ISSUING OF NOTICES ON VARIOUS OC CASIONS. IN SUCH A SITUATION, AS STIPULATED UNDER SUB-SEC.6 OF SEC.250 OF THE IT ACT, THE CIT(A) HAS TO DISPOSE OF THE APPEAL ON MERITS, INSTEAD OF DISMISSING THE SAME IN LIMINE FOR NON-PROSECUTIO N. IN VIEW OF ITA.NO.250(B)/11 6 THE SAME, WE DEEM IT FIT AND PROPER TO SET ASIDE TH E ORDER OF THE CIT(A) AND REMAND THE ISSUE TO THE FILE OF THE AO F OR RE- CONSIDERATION OF THE SAME ON MERITS. HOWEVER, THE CIT(A) IS DIRECTED TO GIVE ANOTHER OPPORTUNITY OF HEARING TO THE ASSESSEE, BEFORE DISPOSING OF THE APPEAL. 7. IN THE RESULT, GROUND NOS. 1 & 2 ARE ALLOWED THE OTHER GROUNDS ARE ON THE MERITS OF THE ADDITIONS. WE DO NOT SEE ANY REASON TO ADJUDICATE THE SAME, AS THE ISSUES ARE AL SO REMANDED TO THE FILE OF THE CIT(A) FOR RE-CONSIDERATION. 8. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE4TH NOVEMB ER, 2011. SD/- SD/- ( N.K.SAINI) (SM T. P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDI CIAL MEMBER PLACE: BANGALORE DATED: 04-11-2011 AM* COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3. CIT(A) 4. CIT 5. DR 6. GF(BLORE) BY ORDER AR, ITAT,BANGALORE