M/s. Thakkar Ramji Virji & Sons, Bharuch V. The Income tax Officer,Ward-1, Bharuch

ITA 2598/AHD/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9355 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-11-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 01-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P M MEHTA
• Keywords: Opportunity of being heard
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD C BENCH (BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND T.K. SHARMA, JUDICIAL MEMBER) ITA NO.2598/AHD/2010 [ASSTT. YEAR : 2003-2004] M/S.THAKKAR RAMJI VIRJI & SONS OPP: POLYTECHNIC COLLEGE NR. REST HOUSE, BHARUCH. VS. ITO, WARD-1 BHARUCH. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.M. MEHTA REVENUE BY : SHRI SANJEEV KASHYAP O R D E R PER G.D. AGARWAL, VICE-PRESIDENT : THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VI, BARODA DATED 29.04.2010 ARISING OUT OF THE ORDER OF THE AS SESSING OFFICER PASSED UNDER SECTION 143(3) OF THE I.T. ACT, 1961. THE GROUNDS RAISED IN THE ASSESSEES APPEAL READ AS UNDER: 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF TH E APPELLANT'S CASE THE ORDER PASSED BY CIT(A) IS BAD IN LAW AND DESERVES TO BE CANCELLED AS HE HAS PASSED THE O RDER WITHOUT PROVIDING THE APPELLANT ADEQUATE OPPORTUNIT Y OF BEING HEARD. 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LEARNED CIT(A) HAS GROSSLY ER RED IN NOT ADMITTING THE ADDITIONAL GROUND FILED BEFORE HIM. 3. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LEARNED CIT(A) HAS GROSSLY ER RED IN UPHOLDING THE ADDITION OF RS.5,00,000/- ON ACCOUNT OF DISCREPANCIES IN CLOSING STOCK NOTICED AT THE TIME OF SURVEY, WITHOUT APPRECIATING THE FACT THAT THE APPELLANT HA S ALREADY OFFERED THE GROSS PROFIT ON THE SAME AMOUNTING TO RS.33,192/- IN THE RETURN OF INCOME. 4. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. THE LEARNED CIT(A) HAS ERRED IN N OT GIVING CREDIT FOR PURCHASES OF RS.1,58,540/- WHILE COMPUTING THE BOOK STOCK DESPITE THE FACT THAT THE APPELLANT HAD PRODUCED PAGE NO. 2 ITA NO.2598/AHD/2010 VARIOUS EVIDENCES BEFORE THE ASSESSING OFFICER TO P ROVE THAT THE GOODS WERE INTACT PURCHASED. 5. IN LAW AND IN FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LEARNED CIT(A) HAS ERRED IN U PHOLDING THE DISALLOWANCE OF RS.3,462/- BEING INTEREST PAYMENT T O PARTNERS ON THE GROUND THAT INTEREST ON CAPITAL WAS NOT PROV IDED ON DAILY BASIS CALCULATION, IN SPITE OF THE FACT THAT THE APPELLANT WAS CONSISTENTLY FOLLOWING THE METHOD OF INTEREST C ALCULATION ON OPENING BALANCE OF PARTNERS CAPITAL ACCOUNTS 6. IN THE LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE APPELLANT DENIES HIS LIABILITY TO PAY INTE REST U/S 234B AND 234C OF THE ACT. 7. IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT SINCE, IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THERE WAS NO BASIS, WARRANT OR JUSTIFICATION FOR INITIATING THE PENALTY PROCEEDINGS U/S. 271(1)(C), THE LEARNED ASSESSING OFFICER MAY BE DIR ECTED TO DROP THE SAME. 2. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE LEARNED CIT(A) PASSED THE IMPUGNED EX PARTE ORDER WITHOUT CONSIDERING THE MATERIAL ON RECORD. THAT EVEN IN EX PARTE ORDER, THE CIT(A) IS BOUND TO DISPOSE OF VARIOUS GROUNDS OF APPEAL RAISED BEFORE HIM ON M ERIT. HE THEREFORE SUBMITTED THAT THE ORDER OF THE CIT(A) SHOULD BE SE T ASIDE AND THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE CIT(A) F OR RE-ADJUDICATION OF THE ASSESSEES APPEAL IN ACCORDANCE WITH THE LAW. THE LEARNED DR, RELIED UPON THE ORDER OF THE CIT(A) AND STATED THAT THE WHEN THE AS SESSEE DID NOT APPEAR BEFORE HIM, HE IS FULLY JUSTIFIED IN UPHOLDING THE ORDER O F THE AO. 3. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THA T BEFORE THE CIT(A) THE ASSESSEE HAS RAISED AS MANY AS SIX GROUNDS WHICH WE RE REPRODUCED BY THE LEARNED CIT(A) IN PARA 2.1 OF HIS ORDER. HOWEVER, THEREAFTER, HE DISMISSED THE ASSESSEES APPEAL SUMMARILY FOR WANT OF ASSESSEES APPEARANCE. HIS FINDING WHICH IS CONTAINED IN PARA-3 OF HIS ORDER READS AS UNDER: PAGE NO. 3 ITA NO.2598/AHD/2010 3. AS MENTIONED IN PRECEDING PARAGRAPHS, THOUGH SE VERAL OPPORTUNITIES WERE GIVEN TO THE APPELLANT, TIME AND AGAIN TO ATTEND THE HEARINGS, HE FAILED TO DO SO LEADING ONE TO THE IMP RESSION THAT THE APPELLANT HAS NO OBJECTION TO THE ADDITIONS MADE BY THE AO, AS HE HAS NOT COME FORWARD EITHER BY HIMSELF OR THROUGH AN AU THORIZED REPRESENTATIVE. SINCE THERE IS NOTHING ON RECORD T O SHED LIGHT ON THE GROUNDS OF APPEAL, I SEE NO REASON TO INTERFERE WIT H THE ORDER OF THE AO AND CONFIRM THE SAME. 5. FROM THE ABOVE, IT IS EVIDENT THAT THE CIT(A) DI D NOT ADJUDICATE VARIOUS GROUNDS RAISED BEFORE HIM. ON OTHER HAND, BECAUSE OF THE ASSESSEES NON- APPEARANCE, HE PRESUMED THAT THE ASSESSEE HAS NO OB JECTION TO THE ADDITION MADE BY THE AO. THIS PRESUMPTION OF THE CIT(A) IS FACTUALLY INCORRECT BECAUSE THE ASSESSEE HAS NOT ONLY FILED THE APPEAL AGAINST THE ORDER OF THE CIT(A), BUT THE ASSESSEES COUNSEL APPEARED BEFORE US AND HAVE CHALLENGED THE ABOVE FINDING OF THE CIT(A). BE THAT AS IT MAY, THE FACT REMAINS THAT THE CIT(A) HAS NOT ADJUDICATED ON MERIT VARIOUS GROUNDS RAISED BEFORE HIM. WE THEREFORE SE T ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER BACK TO HIS FILE. WE DIRECT HIM TO RE-ADJUDICATE THE MATTER ON MERIT IN ACCORDANCE WITH LAW. HOWEVE R, AS THE MATTER IS SET ASIDE TO HIS FILE FOR RE-ADJUDICATION, IT WOULD BE IN THE INTEREST OF JUSTICE, IF THE ASSESSEE IS GIVEN OPPORTUNITY OF BEING HEARD. WE T HEREFORE DIRECT TO HIM TO ALLOW ADEQUATE OPPORTUNITY OF BEING HEARD TO THE AS SESSEE AND THEREAFTER RE- ADJUDICATE THE GROUNDS RAISED BEFORE HIM IN ACCORDA NCE WITH LAW. 6. IN RESULT, THE ASSESSEES APPEAL IS ALLOWED BUT FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT THIS 30 TH NOVEMBER, 2010. SD/- SD/- (T.K. SHARMA) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PAGE NO. 4 ITA NO.2598/AHD/2010 PLACE : AHMEDABAD DATE : 30-11-2010 COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD