M/s. Panchdeep Consultants, Ahmedabad V. The Income tax Officer,Ward-9(1), Ahmedabad

ITA 2540/AHD/2011

• Counselvise Citation: 254020514 RSA 2011
• Duration Of Justice: 1 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 12-08-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 12-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D S KALYAN
• Keywords: Opportunity of being heard; Condonation of delay

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD . , !' # $ $ $ $ % &', # BEFORE SHRI A.MOHAN ALANKAMONY,ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.2540/AHD/2011 ( ) $*) ) $*) ) $*) ) $*) / / / / ASSESSMENT YEAR : 2002-03) M/S.PANCHDEEP CONSULTANTS 2 ND FLOOR, MOONLIGHT COMPLEX GURUKUL, DRIVE-IN-ROAD AHMEDABAD / VS. THE ITO WARD-9(1) AHMEDABAD #+ !' ./,- ./ PAN/GIR NO. : AAOFS 2568 P ( +. / // / APPELLANT ) .. ( /0+. / RESPONDENT ) +. 1 ! / APPELLANT BY : MS. URVASHI SHODHAN, AR /0+. 2 1 ! / RESPONDENT BY : SHRI D.S. KALYAN, CIT-DR %$3 2 '' / / / / DATE OF HEARING : 12/8/2013 4* 2 '' / DATE OF PRONOUNCEMENT : 13/9/2013 !5 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-XV, AHMEDABA D (CIT(A) FOR SHORT) DATED 21/08/2010 PERTAINING TO ASSESSME NT YEAR (AY) 2002- 03. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. LD.CIT(A) ERRED IN LAW AND ON FACTS IN DISMISSING T HE APPEAL ON THE GROUND OF LATE FILING OF THE APPEAL AND NOT APPRECI ATING THE REASONS THAT PREVENTED THE APPELLANT FROM FILING THE APPEAL IN TIME. THIS DISMISSAL OF THE APPEAL AND NOT CONDONING THE DELAY IN FILING OF THE ITA NO.2540 /AH D/2011 M/S. PANCHDEEP CONSULTANTS VS. ITO ASST.YEAR 2002-03 - 2 - APPEAL IN TIME DUE TO REASONS BEYOND CONTROL OF THE APPELLANT BEING WITHOUT ANY MERITS OR JUSTIFICATION DESERVES TO BE QUASHED. 2. THE ORDER PASSED BY LD.CIT(A) IS WITHOUT PROPERLY A PPRECIATING THE FACTS OF THE CASE AND THAT SHE HAS FURTHER ERRED IN GROSSLY IGNORING VARIOUS SUBMISSIONS, EXPLANATIONS AND INFORMATION S UBMITTED BY THE APPELLANT FROM TIME TO TIME WHICH OUGHT TO HAVE BEE N CONSIDERED BEFORE PASSING THE IMPUGNED ORDER WITHOUT PROVIDING FAIR AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPELL ANT. 3. LEVY OF INTEREST UNDER SECTION 234A/B/C OF THE ACT IS NOT JUSTIFIED. 4. INITIATION OF PENALTY U/S.271(1((C) OF THE ACT IS N OT JUSTIFIED. 2. BRIEFLY STATED FACTS AS RECORDED IN THE ORDER O F LD.CIT(A) IN PARAGRAPH NO.1 ARE AS UNDER:- 1. RETURN OF LOSS OF RS.68,979/- WAS FILED ON 3 1.3.2004 AND AS THE ASSESSEE DID NOT RESPOND TO THE NOTICES ISSUED BY THE AO AND ALSO TO THE QUERIES OF THE SPECIAL AUDITORS (SPECIA L AUDIT WAS GOT CONDUCTED BY THE DEPARTMENT U/S.142(2A) CONSEQUENT TO SURVEY OPERATION DATED 22.3.2005 CONDUCTED) THE INCOME WAS ASSESSED BY ITO WARD-9(1) ON 26.9.2005 FOR AY 2002-03 AT RS.6,2 3,74,520 U/S.144 AGAINST WHICH APPEAL HAS BEEN FILED ON 21.9 .2010 REQUESTING FOR CONDONATION OF DELAY. 2.1. LD.CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DID NOT ACCEPT THE PRAYER OF THE ASSESSEE TO CONDONE TH E DELAY IN FILING THE APPEAL. LD.COUNSEL FOR THE ASSESSEE MS.URVASHI SHO DHAN SUBMITTED THAT THE LD.CIT(A) OUGHT TO HAVE CONDONE THE DELAY AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. SHE SUBMITT ED THAT THERE WERE COMPELLING CIRCUMSTANCES AND THAT IS WHY THE APPEAL COULD NOT BE FILED BEFORE LD.CIT(A) WITHIN THE PRESCRIBED PERIOD OF LI MITATION. SHE SUBMITTED THAT OUT OF FOUR PARTNERS OF THE ASSESSEE -FIRM; TWO WERE RETIRED AND THERE WERE CRIMINAL PROCEEDINGS AGAINST ONE OF THE PARTNERS WHO WAS ARRESTED AND REMAINED IN JAIL. SHE FURTHER SUBMITT ED THAT ONE OF THE PARTNERS, NAMELY SHRI MAHESH L.SHARMA WHO WAS SERIO USLY ILL AND ITA NO.2540 /AH D/2011 M/S. PANCHDEEP CONSULTANTS VS. ITO ASST.YEAR 2002-03 - 3 - SUBSEQUENTLY SUFFERED SERIOUS HEART-ATTACK. SHE SU BMITTED THAT DUE TO UNAVOIDABLE CIRCUMSTANCES, THE APPEAL COULD NOT BE FILED IN TIME. IN SUPPORT OF HER CONTENTION, SHE RELIED UPON THE DECI SION OF HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF M UKESH JESANGBHAI PATEL VS. ITO IN CIVIL APPLICATION NO.332 OF 2010 IN STAMP NUMBER NO.14 OF 2010 DATED 11/01/2011, WHEREIN THE HONBLE GUJARAT HIGH COURT AFTER CONSIDERING THE SUBMISSIONS CONDONED TH E DELAY OF 825 DAYS. SHE SUBMITTED THAT IN THE PRESENT CASE, THERE IS A DELAY IN FILING THE APPEAL. HOWEVER, THE DELAY WAS CAUSED DUE TO UNAVO IDABLE CIRCUMSTANCES. SHE SUBMITTED THAT LD.CIT(A) OUGHT TO HAVE DECIDED THIS ISSUE ON MERITS. SHE ALSO PLACED RELIANCE ON THE D ECISION(S) OF HONBLE COORDINATE BENCH RENDERED IN THE CASE OF ANAND N.DO SHI HUF VS. ITO IN ITA NO.516/AHD/2010, DATED 22/06/2012 AND OF GO PAL COLD STORAGE VS. ACIT IN IT(SS)A NO.843/AHD/2010 DATED 27/09/2 011. SHE SUBMITTED THAT LD.CIT(A) OUGHT TO HAVE DECIDED THE MATTER ON MERITS SINCE IN THE CASE IN HAND THE ASSESSMENT WAS MADE U /S.144 OF THE ACT AND FROM THE RETURNED LOSS OF RS.68,979/- THE INCOME WA S COMPUTED U/S.144 AT RS.6,23,74,520/-. SHE ALSO RELIED ON THE DECISI ON OF HONBLE APEX COURT RENDERED IN THE CASE OF CIT VS. WEST BENGAL I NFRASTRUCTURE DEVELOPMENT FINANCE CORPORATION LTD. REPORTED AT (2 011) 334 ITR 269(SC). ON THE CONTRARY, LD.CIT-DR SHRI D.S.KALYA N STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND S UBMITTED THAT THE ASSESSEE GROSSLY FAILED TO APPEAR BEFORE THE AO AS ALSO FAILED TO APPEAR BEFORE THE SPECIAL AUDITORS. HE SUBMITTED THAT THE REASONING GIVEN FOR NOT FILING THE APPEAL IN TIME IS NOT A SUFFICIENT R EASON TO CONDONE THE DELAY. HE SUBMITTED THAT DECISIONS RELIED UPON BY THE LD.COUNSEL FOR THE ITA NO.2540 /AH D/2011 M/S. PANCHDEEP CONSULTANTS VS. ITO ASST.YEAR 2002-03 - 4 - ASSESSEE WOULD NOT HELP THE ASSESSEE AS THE ASSESSE E ITSELF CHOSE NOT TO APPEAR BEFORE THE AO AND DID NOT FILE THE APPEAL IN TIME. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ONLY ISSUE TO BE DECIDED IS WHETHER THE LD.CIT( A) OUGHT TO HAVE CONDONED THE DELAY AND DECIDED THE ISSUE ON MERITS. IN THIS CASE, THE ASSESSEE FILED A RETURN OF INCOME ON 31.03.2004 DEC LARING TOTAL INCOME AT RS.68,979/-. THE CASE WAS PICKED UP FOR SCRUTINY A SSESSMENT. SUBSEQUENTLY, A SURVEY U/S.133A OF THE ACT WAS COND UCTED AT THE BUSINESS PREMISES OF THE ASSESSEE AND THE AO FRAME D ASSESSMENT U/S.144 OF THE ACT VIDE ORDER DATED 26/09/2005. AGAINST TH IS ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A) ON 21/09/2010. THEREFORE, THERE WAS DELAY OF ALMOST FIVE YEARS IN FILING THE APPEAL. T HE CONTENTION OF LD.COUNSEL FOR THE ASSESSEE IS THAT DUE TO MEDICAL PROBLEMS AND THE CRIMINAL PROCEEDINGS OF THE PARTNERS THE APPEAL COU LD NOT BE FILED IN TIME. LD.COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF MUKESH JE SANGBHAI PATEL(SUPRA), WHEREIN THE HONBLE HIGH COURT HAS CO NDONED THE DELAY OF 825 DAYS, I.E. MORE THAN TWO YEARS. RELIANCE IS A LSO PLACED ON THE DECISION OF HONBLE APEX COURT RENDERED IN THE CASE OF WEST BENGAL INFRASTRUCTURE DEVELOPMENT FINANCE CORPORATION LTD. (SUPRA), WHEREIN THE HONBLE APEX COURT HAS HELD LOOKING TO THE AMOUNT OF TAX INVOLVED IN THIS CASE, THAT THE HIGH COURT OUGHT TO HAVE DECIDE D THE APPEAL BEFORE IT ON THE MERITS. IN ALL CASES WHERE THERE IS DELAY O N THE PART OF THE DEPARTMENT, THE HIGH COURT OUGHT TO CONSIDER IMPOSI NG COSTS. BUT, CERTAINLY, THE HIGH COURT SHOULD EXAMINE THE CASES ON THE MERITS AND ITA NO.2540 /AH D/2011 M/S. PANCHDEEP CONSULTANTS VS. ITO ASST.YEAR 2002-03 - 5 - SHOULD NOT DISPOSE OF THE CASES MERELY ON THE GROUN D OF DELAY, PARTICULARLY WHERE HUGE STAKES ARE INVOLVED . IN THIS CASE, THE UNDISPUTED FACT REMAINS THAT THE ASSESSMENT WAS COMPLETED U/S. 144 OF THE ACT AND THE AO MADE ADDITION OF RS.6,24,43,502/- AGAINST TH E RETURNED LOSS OF RS.68,979/-. WE FIND THAT LD.CIT(A) HAS OBSERVED T HAT DESPITE OPPORTUNITIES GIVEN BY THE AO, THE APPELLANT NEITHE R FURNISHED ANY DETAILS OF BOOKS OF ACCOUNT AND DOCUMENTS REQUIRED BY THE S PECIAL AUDITORS APPOINTED U/S.142(2A) NOR ATTENDED THIS OFFICE, THE N HOW ASSESSEE CAN MAKE REQUEST FOR CONDONATION OF DELAY JUST FOR FILI NG THE APPEAL OR TO MAKE CLAIM SUCH TAX DUES. THE DELAY IN FILING TH E APPEAL IS THEREFORE NOT TO BE CONDONED. IT IS ALSO OBSERVED BY THE LD. CIT(A) THAT IF THE ISSUE IS DECIDED ON MERITS, IT WOULD RESULT INTO ENHANCEM ENT OF INCOME. 3.1. SO FAR AS THE CONTENTION OF LD.COUNSEL FOR TH E ASSESSEE THAT DUE TO MEDICAL PROBLEMS AND CRIMINAL PROCEEDINGS OF THE PA RTNERS THE APPEAL COULD NOT BE FILED IS CONCERNED, THE SAME IS DEVOID OF ANY MERIT AS THE ASSESSEE HAD SUFFICIENT TIME EVEN DURING THAT PERIO D FOR FILING OF THE APPEAL. THIS CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE IS THEREFORE REJECTED. BUT IN VIEW OF THE FACT THAT THE ASSESSM ENT WAS MADE U/S.144 OF THE ACT AND THEREBY THE AO MADE HUGE ADDITION, THER EFORE IN THE LIGHT OF THE DECISION OF THE HONBLE APEX COURT RENDERED IN THE CASE OF WEST BENGAL INFRASTRUCTURE DEVELOPMENT FINANCE CORPORATI ON LTD.(SUPRA), WE ARE OF THE CONSIDERED VIEW THAT THE LD.CIT(A) OUGH T TO HAVE CONDONED THE DELAY AND DECIDED THE ISSUE ON MERITS AS WELL. IN VIEW OF THIS, WE DIRECT THE LD.CIT(A) TO CONDONE THE DELAY AND DECID E THE CASE ON MERITS IN THE INTEREST OF JUSTICE AFTER AFFORDING REASONAB LE OPPORTUNITY OF HEARING ITA NO.2540 /AH D/2011 M/S. PANCHDEEP CONSULTANTS VS. ITO ASST.YEAR 2002-03 - 6 - TO THE ASSESSEE. THIS GROUND OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. 4. REMAINING GROUNDS OF APPEAL ARE CONSEQUENTIAL IN NATURE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE SD/- SD/- (. ) (% &') !' # # ( A. MOHAN ALANKAMONY ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 13/ 09 /2013 8.., $.../ T.C. NAIR, SR. PS !5 2 /'9 :!9*' !5 2 /'9 :!9*' !5 2 /'9 :!9*' !5 2 /'9 :!9*'/ COPY OF THE ORDER FORWARDED TO : 1. +. / THE APPELLANT 2. /0+. / THE RESPONDENT. 3. ' %; / CONCERNED CIT 4. %;() / THE CIT(A)-XV, AHMEDABAD 5. 9$&< /' , , / DR, ITAT, AHMEDABAD 6. <) =3 / GUARD FILE. !5% !5% !5% !5% / BY ORDER, 09' /' //TRUE COPY// > >> >/ // / , , , , ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 4.9.13 (DICTATION-PAD 16 PA GES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 4.9.13 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.13.9.13 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 13.9.13 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