LAKSHMANS PLASTICS P. LTD, MUMBAI V. DCIT 3(2), MUMBAI

ITA 256/MUM/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1595 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 12-01-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANAND BAIWAL
• Keywords: Principle of natural justice; Set aside
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A,MUMBAI BEFORE SHRI G.C.GUPTA (J.M) & SHRI S.V.MEHROTRA(A .M) ITA NO.256/MUM/2009(A.Y. 2005-06) M/S. LAKSHMANS PLASTICS PVT. LTD. 1412, DALAMAL TOWER, 14 TH FLOOR, 211, NARIMAN POINT, MUMBAI 21. PAN:AAACL 0751G (APPELLANT) VS. THE DCIT 3(2), AAYKAR BHAVAN, MK ROAD, MUMBAI 20. (RESPONDENT) APPELLANT BY : SHRI. DEEPAK TRALSHAWALA RESPONDENT BY : SHRI ANAND BAIWAL ORDER PER G.C.GUPTA,J.M THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 IS DIRECTED AGAINST THE ORDER OF THE CIT(A). THE GROU NDS OF APPEAL OF THE ASSESSEE ARE AS UNDER:- 1. THE ORDER PASSED BY THE LEARNED CIT(A) IS BAD I N LAW. 2. THE CIT(A) FAILED TO APPRECIATE THAT THE VARIOUS D ETAILS INCLUDING LOAN CONFIRMATION LETTERS CALLED FOR VIDE A.OS LETTER DT. 2.11.2007 COULD NOT BE FILED DUE TO HOSPITALIZATION OF THE ACCOUN TANT AND BUSINESS BEING AFFECTED BY SUDDEN AND STEEP RISE IN PRICE OF RA W MATERIALS. 3.THE LEARNED CIT(A) ERRED IN HOLDING THAT THE AO I S JUSTIFIED IN PASSING THE ASSESSMENT ORDER U/S. 144 OF THE IT ACT AND FUR THER ERRED IN SUSTAINING ALL THE ADDITIONAL INCLUDING ADDITION OF RS.1,18,00,000/- ON ACCOUNT OF LOANS MADE BY THE A.O. 4. CIT(A) FAILED TO GIVE OPPORTUNITY TO THE APPELLA NT TO PROVIDE THE ABOVE DETAILS AS HIS POWERS ARE COTERMINOUS WITH THOSE OF A.O. ITA NO. 278/M/09(A.Y 2005-06) 2 5. IT IS PRAYED THAT THE HONOURABLE TRIBUNAL MAY KIND LY PERMIT THE APPELLANT TO PRODUCE THE DETAILS EITHER BEFORE A.O O R BEFORE CIT(A) AND FOR THAT PURPOSE REMIT THE MATER BEFORE THE APPROPRI ATE LOWER AUTHORITY. 2. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ACCO UNTANT OF THE ASSESSEE COMPANY WAS ILL AND WAS HOSPITALIZED FOR A CONTINUO US PERIOD OF SEVEN MONTHS AND, THEREFORE, THE ASSESSEE COULD NOT REPRE SENT ITS CASE BEFORE THE A.O. HE SUBMITTED THAT IT SHALL BE IN TH E INTEREST OF PRINCIPLES OF NATURAL JUSTICE THAT THE ASSESSEE BE ALLOWED OPPORTUNI TY TO REPRESENT ITS CASE BEFORE THE A.O. HE SUBMITTED AN AFFIDAVIT OF TH E MANAGING DIRECTOR OF THE ASSESSEE COMPANY IN SUPPORT OF HIS SUBMISSIONS. THE LD. D.R HAS RELIED ON THE ORDERS OF A.O AND CIT(A). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PE RUSED THE ORDERS OF THE A.O AND CIT(A). WE FIND THAT THE A.O HAS PASSED THE ASSESSMENT ORDER EX-PARTE UNDER SECTION 144 OF THE ACT. T HE ASSESSEE HAS EXPLAINED BEFORE US THAT ITS ACCOUNTANT WHO WAS IN SERVICE WITH THE ASSESSEE FIRM FOR THE LAST 15 YEARS FELL SERIOUSLY ILL AND WAS H OSPITALIZED FOR A PERIOD OF SEVEN MONTHS DURING THE RELEVANT PERIOD. THE MANAGIN G DIRECTOR OF THE ASSESSEE COMPANY HAS FILED AN AFFIDAVIT TO THIS EFFECT BEFO RE US. IN THESE FACTS OF THE CASE WE HOLD THAT NO SUFFICIENT OPPORTUNIT Y OF HEARING WAS ALLOWED TO THE ASSESSEE WHILE FRAMING THE ASSESSMENT IN TH IS CASE. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE REVENUE AUTH ORITIES TO THE FILE OF A.O WITH DIRECTION TO PASS THE DENOVO ASSESSMENT ORDER IN ACCORDANCE WITH LAW AFTER ALLOWING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ITA NO. 278/M/09(A.Y 2005-06) 3 ASSESSEE IS DIRECTED TO CO-OPERATE WITH THE DEPARTMENT IN THE MATTER OF FINALIZING ITS ASSESSMENT. WE DIRECT ACCORDINGLY. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 17 TH DAY OF NOV., 2009. SD/- SD/- (S.V.MEHROTRA) (G.C.GUPTA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT. 17 TH NOV. 2009 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)III 4. THE CIT.III,MUMBAI 5. THE D.RA BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, ITAT , MUMBAI BENCHES MUMBAI. VM. ITA NO. 278/M/09(A.Y 2005-06) 4 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 16.11.09 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER ITA NO. 278/M/09(A.Y 2005-06) 5 ITA NO. 278/M/09(A.Y 2005-06) 6