SMT. BRAMHADEVI S MISHRA, Mumbai V. ITO-17(1)(3), Mumbai

ITA 254/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8335 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 18-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SMITA VERMA
• Keywords: Opportunity of being heard; Set aside
• Section: 143(3); 143(1); 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC MUMBAI BEFORE SHRI PAVAN KUMAR GADALE (JUDICIAL MEMBER) AN D SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 254/MUM/2019 ASSESSMENT YEAR: 2011-12 SMT. BRAMHADEVI S. MISHRA, 13, PREM JIVAN BUILDING, 87, KAZI SAYED STREET, MUMBAI - 400003 VS. ITO-17(1)(3), ROOM NO. 116, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 PAN NO. AABPM 2874 R APPELLANT RESPONDENT ASSESSEE BY : MR. PRATEEK JHA , AR REVENUE BY : MS. SMITA VERMA, DR DATE OF HEARING : 1 3 /01/2021 DATE OF PRONOUNCEMENT : 14/01/2021 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVA NT ASSESSMENT YEAR IS 2011-12. THE APPEAL IS DIRECTED AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS)-55, MUMBAI [IN SHORT CIT(A)] AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) R.W.S. 147 OF THE I NCOME TAX ACT 1961, (THE ACT). 2. THE GROUNDS OF APPEAL FILED BY THE ASSESSEE READ AS UNDER : 1. THE LD. CIT(A) ERRED IN PASSING THE ORDER EX-PARTE WITHOUT GRANTING THE APPELLANT REASONABLE OPPORTUNITY OF BEING HEARD. ITA NO. 254/M/2019 SMT. BRAMHADEVI S. MISHRA 2 2. THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,36,718/- WITHOUT APPRECIATING THAT THE ITO HAD NOT CONSIDERED THE FA CTS AND MATERIALS FURNISHED BY APPELLANT. 3. THE LD. CIT(A) ERRED IN UPHOLDING ADDITION OF RS.16 ,41,997/- MADE UNDER SECTION 41(1) WITHOUT APPRECIATING THAT THE ITO HAD MADE TH IS ADDITION WITHOUT PROVING THAT THE LIABILITY HAD CEASED AND ALSO WITHOUT MAKI NG ANY INQUIRIES. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2011-12 ON 28.0 9.2010 DECLARING TOTAL INCOME OF RS.14,04,660/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT. ON RECEIPT OF INFORMATION FROM THE SALES TAX DEPARTMEN T, GOVERNMENT OF MAHARASHTRA THAT THE ASSESSEE HAD OBTAINED BOGUS PU RCHASE BILLS FROM M/S NAVODAY TRADING IMPEX LTD., ( NAVODAY ) THE AO RE-OPENED THE ASSESSMENT BY ISSUING NOTICE U/S 148 DATED 26.03.2014. DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED BEFORE THE AO THE L EDGER ACCOUNTS OF NAVODAY AS APPEARING IN HIS BOOKS OF ACCOUNTS FOR THE PERIOD R ELEVANT TO AYS 2010-11, 2011-12, 2013-14 AND 2014-15. THE ASSESSEE ALSO FIL ED BEFORE THE AO, STATEMENT SHOWING PURCHASES FROM NAVODAY AND CORRESPONDING SALES MADE TO RAJ OIL MILLS ALONG WITH RELATED DETAILS. HOWEVER, THE AO WAS NOT CONVINCED WITH THE ABOVE EXPLANATION ON THE GROUND THAT THE A SSESSEE FAILED TO PRODUCE THE NAVODAY ALONG WITH TRANSPORTATION BILLS, CHALLANS ETC. TO SUBSTANTIATE THE PURCHASE. THEREFORE, THE AO ESTIMATED THE PROFIT @ 5% ON THE DISPUTED PURCHASES OF RS.27,34,362/- WHICH COMES TO RS.1,36, 718/-. ACCORDINGLY, HE MADE AN ADDITION OF RS.1,36,718/-. FROM THE LEDGER ACCOUNTS, THE AO DISCERNED THAT TH E ASSESSEE HAS SHOWN PURCHASES FROM NAVODAY ONLY DURING TWO FINANCIAL YEARS RELEVANT TO AYS 20 10- 11 & 2012-13, BUT MADE PAYMENTS ONLY IN ONE YEAR. A S PER THE AO, THE ASSESSEE ITA NO. 254/M/2019 SMT. BRAMHADEVI S. MISHRA 3 DID NOT MAKE ANY PAYMENT FOR THE IMPUGNED ASSESSMEN T YEAR. IN RESPONSE TO A QUERY RAISED BY THE AO TO EXPLAIN WHY THE ABOVE CES SATION OF LIABILITY SHOULD NOT BE ADDED U/S 41(1) OF THE ACT, THE ASSESSEE SUB MITTED THAT HE WOULD MAKE THE PAYMENTS OF THE OUTSTANDING AMOUNT, SUBJECT TO DEDUCTIONS AND ADJUSTMENTS IF AT ALL. HOWEVER, THE AO WAS NOT CONV INCED WITH ABOVE REPLY ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE NAVODAY FOR ESTABLISHING GENUINENESS OF THE LIABILITY; FOR THE PURCHASES DUR ING THE IMPUGNED ASSESSMENT YEAR, THE ASSESSEE DID NOT MAKE ANY PAYMENT; THE AS SESSEE FAILED TO PRODUCE LORRY RECEIPTS THROUGH WHICH THE SAID GOODS WERE ST ATED TO HAVE BEEN TRANSPORTED. THEREFORE, THE AO MADE AN ADDITION OF RS.16,42,997/- U/S 41(1) OF THE ACT. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE F ILED AN APPEAL BEFORE THE LD. CIT(A). WE FIND THAT VIDE ORDER DATED 13.11.2018, THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO MAINLY ON THE GROUND THAT THER E WAS NON-COMPLIANCE. THE ASSESSMENT ORDER WAS FOLLOWED AT LENGTH BY THE LD. CIT(A). 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBM ITS THAT REASONABLE OPPORTUNITY OF BEING HEARD WAS NOT GIVING TO THE AS SESSEE BY THE LD. CIT(A). IT IS STATED THAT THE ASSESSEE COULD HAVE SUCCEEDED BE FORE THE LD. CIT(A), IF A REASONABLE OPPORTUNITY WOULD HAVE BEEN GIVEN. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTA TIVE (DR) SUPPORTS THE ORDER PASSED BY THE LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. IN THE INSTANT CASE, THE LD. CIT(A) HAS STATED THAT NOTICE OF HEARING ITA NO. 254/M/2019 SMT. BRAMHADEVI S. MISHRA 4 WAS SENT TO THE ASSESSEE ON 04.09.2018 AND AS THERE WAS NO COMPLIANCE BY THE ASSESSEE, SHE HAD TO DECIDE THE CASE ON MERITS. IT IS NOT EVIDENT FROM THE ORDER OF THE LD. CIT(A) WHETHER THE NOTICE SENT BY THE OFFICE ON 04.09.2018 WAS RECEIVED BY THE ASS ESSEE OR NOT. IN VIEW OF THE ABOVE FACTS, WE ARE OF THE CONSIDER ED VIEW THAT A REASONABLE OPPORTUNITY OF BEING HEARD SHOULD BE GIV EN TO THE ASSESSEE AS THE ADDITIONS MADE BY THE AO ARE ON ACCOUNT OF BOGUS PU RCHASES AND CESSATION OF LIABILITY. THEREFORE, WE SET ASIDE THE IMPUGNED ORD ER AND RESTORE THE MATTER TO THE FILE OF THE LD. CIT(A) TO PASS AN ORDER AFRESH AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE DIRE CT THE ASSESSEE TO FILE THE RELEVANT DOCUMENTS/EVIDENCE BEFORE THE LD. CIT(A). 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14/01/2021. SD/- SD/- ( PAVAN KUMAR GADALE ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 14/01/2021 RAHUL SHARMA, SR. P.S. ITA NO. 254/M/2019 SMT. BRAMHADEVI S. MISHRA 5 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSISTANT REGISTRAR) ITAT, MUMBAI