AJAI KUMAR GUPTA, ALLAHABAD V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, ALLAHABAD

ITA 251/ALLD/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8886 (ITAT-ALLAHABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 04-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K JAISWAL
• Keywords: Principle of natural justice; Set aside; Audi alteram partem
• Section: 234B; 250; 251

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD SMC BENCH, ALLAHABAD (THROUGH VIRTUAL COURT) BEFORE SHRI.VIJAY PAL RAO, JUDICIAL MEMBER ITA NO.251/ALLD/2018 ASSESSMENT YEAR: 2012-13 AJAI KUMAR GUPTA, 251, CHAK, ZERO ROAD, ALLAHABAD, U.P. PAN-ABXPG3115C V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-I, ALLAHABAD, U.P. (APPELLANT) (RESPONDENT) APPELLANT BY: MR. S.K. JAISWAL, C.A. RESPONDENT BY: MR. A.K. SINGH, SR. DR DATE OF HEARING: 20.07.2021 DATE OF PRONOUNCEMENT: 06.08.2021 O R D E R PER SHRI VIJAY PAL RAO, JUDICIAL MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 14.03.2018 OF CIT(A) FOR THE ASSESSMENT YEAR 2012-13. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS. 1. BECAUSE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED AND ON FACTS IN HOLDING THAT ASSESSEE IS NOT INTEREST IN PROSECUTING THE APPEAL AND DISMISSING APPEAL IN DEFAULT WITHOUT GIVING ANY FINDING ON MERIT. 2. BECAUSE THE APPELLANTS COUNSEL HAS ATTENDED THE APPELLATE PROCEEDING FROM TIME TO TIME AND EVERY TIME HEARING WAS ADJOURNED FOR ONE OR ANOTHER REASON THAT EITHER LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS BUSY OR IN SOME TIMES THE APPELLANT HAD TAKEN TIME ON CERTAIN GROUND. 3. BECAUSE THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AND ON FACTS IN MAKING SUSTAINING DISALLOWANCE OF RS. 84157/- OUT OF FREIGHT AND CARTAGE OF RS. 259706/- ON ACCOUNT OF SELF-MADE VOUCHERS. 4. BECAUSE THE LEARNED ASSESSING OFFICER FAILS TO APPRECIATE THE FACTS THAT EXPENSES INCURRED ON FREIGHT AND CARTAGES ARE FULLY VERIFIABLE FROM THE BOOKS OF ACCOUNT MAINTAINED REGULARLY AND SUPPORTED BY ACKNOWLEDGEMENT OF THE PAYEE. ITA NO.251/ALLD/2018 AJAI KUMAR GUPTA 2 5. BECAUSE THE DISALLOWANCES MADE OUT OF FREIGHT AND CARTAGE IS WITHOUT ANY BASIS AND POINTED OUT THE DETAILS OF EXPENSES WHICH ARE NOT VERIFIABLE. 6. BECAUSE THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW AND ON FACTS IN MAKING DISALLOWANCE OF RS. 167128/- OUT OF DELIVERY EXPENSES OF RS. 549148.53 ON ACCOUNT OF SELF-MADE VOUCHERS. 7. BECAUSE THE LEARNED ASSESSING OFFICER FAILS TO APPRECIATE THE FACTS THAT EXPENSES INCURRED ON DELIVERY EXPENSES ARE FULLY VERIFIABLE FROM THE BOOKS OF ACCOUNT MAINTAINED REGULARLY AND SUPPORTED BY ACKNOWLEDGEMENT OF THE PAYEE. 8. BECAUSE THE DISALLOWANCES MADE OUT OF DELIVERY EXPENSES IS WITHOUT ANY BASIS AND POINTING OUT THE DETAILS OF EXPENSES WHICH ARE NOT VERIFIABLE. 9. BECAUSE THE LD. ASSESSING OFFICER HAS ERRED IN LAW AND ON FACTS IN MAKING DISALLOWANCE OF RS. 28653/- OUT OF SHOP EXPENSES OF RS. 41263/- ON ACCOUNT OF SELF-MADE VOUCHERS. 10. BECAUSE THE LD. ASSESSING OFFICER FAILS TO APPRECIATE THE FACTS THAT EXPENSES INCURRED ON SHOP EXPENSES ARE FULLY VERIFIABLE FROM THE BOOKS OF ACCOUNT MAINTAINED REGULARLY AND SUPPORTED BY ACKNOWLEDGEMENT OF THE PAYEE. 11. BECAUSE THE DISALLOWANCES MADE OUT OF SHOP EXPENSES IS WITHOUT ANY BASIS POINTING OUT THE DETAILS OF EXPENSES WHICH ARE NOT VERIFIABLE. 12. BECAUSE THE LD. ASSESSING OFFICER HAS ERRED IN LAW AND ON FACTS IN MAKING DISALLOWANCE OF LABOUR AND WAGES OF RS. 250412/- ON ACCOUNT OF SELF-MADE VOUCHERS. 13. BECAUSE THE LD. ASSESSING OFFICER HAS FAILED TO APPRECIATE THE FACT WAGES PAID TO THE LABOURERS ON ACCOUNT OF LOADING AND UNLOADING CHARGES ARE FULLY VERIFIABLE FROM THE BOOKS OF ACCOUNT MAINTAINED REGULARLY AND ACKNOWLEDGEMENT OF THE PAYEES. 14. BECAUSE THE LD. ASSESSING OFFICER HAS ERRED IN LAW AND ON FACTS IN MAKING DISALLOWANCE OF MISCELLANEOUS EXPENSES OF RS. 47885/- ON THE GROUND THAT APPELLANT FAILS TO PRODUCE THE SUPPORTING BILLS AND VOUCHERS. 15. BECAUSE THE LD. ASSESSING OFFICER FAILS TO APPRECIATE THE FACT THAT EXPENSES INCURRED UNDER THE HEAD MISCELLANEOUS EXPENSES ARE FULLY VERIFIABLE FROM THE BOOKS OF ACCOUNT AND SUPPORTING DOCUMENTS PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDING. 16. BECAUSE THE LD. ASSESSING OFFICER HAS ERED IN LAW AN ON FACTS IN MAKING DISALLOWANCE OF RS. 5604/- OUT OF TRAVELLING AND CONVEYANCE OF RS. 11995/- ON THE GROUND THAT EXPENSES ARE NOT SUPPORTED BY VOUCHERS. 17. BECAUSE THE LD. ASSESSING OFFICER FAILS TO APPRECIATE THE FACT THAT EXPENSES INCURRED UNDER THE HEAD TRAVELLING AND CONVEYANCE ARE FULLY VERIFIABLE FROM THE BOOKS OF ACCOUNT AND SUPPORTING DOCUMENTS PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDING. 18. BECAUSE THE LD. ASSESSING OFFICER HAS ERRED IN LAW AND ON FACTS IN DISALLOWANCE THE GODOWN RENT OF RS. 360000/- PAID TO- I) SRI VIJAY KUMAR GUPTA RS. 120000/- II) SMT. RACHNA GUPTA RS. 120000/- III) SMT. RUPAM GUPTA RS. 120000/- ON THE GROUND THAT IN THE ORIGINAL COPY OF RENT LEASE AGREEMENT PRODUCED DURING THE COURSE OF ASSESSMENT PROCEEDING THE DATE OF STAMP PAPER IS NOT CLEAR AND IN THE AUDIT REPORT IT HAS WRONGLY MENTIONED AS RS. 80000/- TO EACH CO-OWNERS. ITA NO.251/ALLD/2018 AJAI KUMAR GUPTA 3 19. BECAUSE THE LD. ASSESSING OFFICER HAS FAILED TO APPRECIATE THE FACT THAT PAYMENT OF GODWON RENT IS FULLY VERIFIABLE FROM THE REGULAR BOOKS OF ACCOUNT AND AGREEMENT MADE WITH THE CO-OWNERS OF THE PROPERTY AND DULY PAID THROUGH ACCOUNT PAYEE CHEQUES. 20. BECAUSE THE LD. ASSESSING OFFICER HAS FAILED TO APPRECIATE THE FACT THAT DATE OF STAMP PAPERS IS VERY CLEAR AS 01.04.2011 AND DETAILS OF PAYMENTS TO THE PERSON SPECIFIED UNDER SECTION 409()(B) AS MENTIONED IN THE AUDIT REPORT IS THE TYPOGRAPHICAL ERROR. 21. BECAUSE THE DISALLOWANCES MADE IS BASED ON CONJECTURE AND SURMISES AND NOT ON THE BASIS OF ANY MATERIAL ON RECORD. 22. BECAUSE THE APPELLANT DENIES FOR LEVY OF INTEREST UNDER SECTION 234B OF THE INCOME TAX ACT, 1961. 23. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACT, LAW AND PRINCIPLE OF NATURAL JUSTICE. 2. THE ASSESSEE IS AN INDIVIDUAL AND A PROPRIETOR OF M/S ANKUR & COMPANY WHICH IS ENGAGED IN THE BUSINESS OF DISTRIBUTION OF CONSUMABLE GENERAL MERCHANDISE. THE ASSESSEE FILED HIS RETURN OF INCOME ON 26 TH SEPTEMBER, 2012 DECLARING TOTAL INCOME OF RS. 8,47,250/-. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND THE ASSESSING OFFICER ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS. 17,91,089/- AS AGAINST THE RETURN INCOME OF RS. 8,47,250/-. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSING OFFICER MAKING VARIOUS ADDITIONS ON ACCOUNT OF DISALLOWANCE OF EXPENSES BEFORE THE CIT(A) BUT THE APPEAL OF THE ASSESSEE WAS DISMISSED DUE TO NON- APPEARANCE / NON-PROSECUTION. 3. I HAVE HEARD THE LEARNED AR AS WELL AS THE LEARNED DR AT LENGTH AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, IT IS NOTED THAT DESPITE THE CASE OF THE ASSESSEE WAS FIXED FOR HEARING BY THE CIT(A) ON VARIOUS OCCASIONS NOBODY HAS ATTENDED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT APPLICATION WAS FILED. CONSEQUENTIALLY, THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE IN LIMINE FOR NON- PROSECUTION IN PARA 4 AS UNDER:- 4. IT HAS BEEN HELD IN THE CASE OF KASHMIR VASTRALAYA VS. CIT (PAT) 112 FIR 630 THAT THE PRINCIPLE OF AUDI ALTERAM PARTEM ONLY MEANS THAT THE PARTY AFFECTED SHOULD BE GIVEN SUFFICIENT OPPORTUNITY TO MEET THE CASE AGAINST HIM. IT IS ITA NO.251/ALLD/2018 AJAI KUMAR GUPTA 4 NOT NECESSARY THAT ASSESSEE SHOULD BE HEARD AT EACH AND EVERY STAGE OF PROCEEDINGS. HERE IN THE INSTANT CASE, AS PER THE PROVISIONS OF S. 250(1), A DAY AND PLACE FOR THE HEARING OF THE APPEAL WAS FIXED BUT THE APPELLANT NEITHER CAME UP WITH ANY ARGUMENTS/SUBMISSION AGAINST THE ORDER OF THE A.O. NOT ANY ADJOURNMENT APPLICATION WAS FILED. IT HAS ALSO BEEN HELD BY HONBLE ITAT ALLAHABAD IN THE CASE OF SMT. YOGITA SINGH VS. ACIT CIRCLE-3, VARANSI (IN ITA NO. 238/ALLD/2011& 63/ALLD/2012 FOR A.Y. 2008-09) AND ALSO IN THE CASE OF SHRI ASHOK KUMAR SINGH VS. ITO WARD 3(3), VARANSI (IN ITA NO. 151/ALLD/2011 FOR A.Y. 2008-09) THAT: IT, THEREFORE, APPEARS THAT THE ASSESSEE IS NO MORE INTERESTED IN PROSECUTING THE APPEAL. HONBLE SUPREME COURT IN THE CASE OF CIT VS. B.N. BHATTACHAARGEE AND ANOTHER, 118 ITR 461 (SC) OBSERVED THAT PREFERRING AN APPEAL MEANS EFFECTIVELY PURSUING IT. HONBLE M.P. HIGH COURT IN THE CASE OF ESTATE OF LATE TUKOJIRAO HOKAR VS. CWT. 38 ITD 320. CONSIDERING THE ABOVE, IT APPEARS THAT THE ASSESSEE IS NOT INTERESTED IN PROSECUTING THE APPEAL. THE APPEAL OF THE ASSESSEE IS, THEREFORE, DISMISSED IN THE LIMINE. SIMILAR VIEW HAS ALSO BEEN TAKEN BY HONBLE ITAT, ALLAHABAD IN THE CASE OF JAN SUCHNA TRUST VS. CIT (IN ITA NO. 491/ALLD/2012 FOR A.Y. 2011/12) AND ALSO IN MANY OTHER CASES, THAT THE LAWS AID THOSE WHO ARE VIGILANT, NOT THOSE WHO SLEEP UPON THEIR RIGHTS. THIS PRINCIPLE IS EMBODIED IN WELL-KNOWN DICTUM VIGILANTIBUS ET NON DORMIENTIBUS JURA SUBVERNIUN. UNDER THESE CIRCUMSTANCES, IN MY CONSIDERED OPINION, ASSESSEE IS NOT INTEREST IN PROSECUTING THE APPEAL. AS SUCH I HOLD THAT THIS APPEAL IS LIABLE TO BE DISMISSED FOR NON-PROSECUTION. IN THIS REGARD, WE PLACE RELIANCE UPON FOLLOWING CASE LAWS: 1. CIT VS. MULTIPLAN INDIA LTD. 38 ITD 320 (DEL) 2. ESTAE OF LATE TUKOJIRAO HOKAR VS. CWT 223 ITR 480 (M.P.) 3. NEW DIWAN OIL MILLS VS. CIT (2008) 296 ITR 495 P&H) 4. CIT VS B.N. BHATTACHARGEE AND ANOTHER 118 ITR 461 (SC). THEREFORE, CONSIDERING THE ABOVE FACTUAL AND LEGAL POSITION, THE APPEAL FILED BY THE APPELLANT IS DISMISSED FOR NON-PROSECUTION. IN VIEW OF THE ABOVE, THE APPEAL IS DISMISSED. ITA NO.251/ALLD/2018 AJAI KUMAR GUPTA 5 4. THUS, IT IS CLEAR THAT WHILE PASSING THE IMPUGNED ORDER, THE CIT(A) HAS NOT DECIDED THE APPEAL OF THE ASSESSEE ON MERITS BUT THE SAME WAS DISMISSED IN LIMINE FOR WANT OF PROSECUTION. IT IS SETTLED PROPOSITION OF LAW THAT CIT(A) IS REQUIRED TO ADJUDICATE THE APPEAL ON MERITS AS PER THE PROVISIONS OF SECTION 250 AND 251 OF THE INCOME TAX ACT. ACCORDINGLY, WITHOUT GOING INTO THE MERITS OF THE ISSUE RAISED BY THE ASSESSEE, THE IMPUGNED ORDER OF THE CIT(A) IS SET ASIDE AND THE MATTER IS REMANDED TO THE RECORD OF THE CIT(A) FOR DECIDING THE SAME ON MERITS BY SPEAKING ORDER AFTER GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06.08.2021 THROUGH VIDEO CONFERENCING. SD/- [VIJAY PAL RAO] JUDICIAL MEMBER DATED: 06/08/2021 ALLAHABAD SH COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) , ALLAHABAD 4. CIT 5. DR - BY ORDER ASSISTANT REGISTRAR