Sri. K.Nanda Kumar, Bangalore V. Income Tax Officer, Bangalore

ITA 26/BANG/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5275 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 22-05-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 03-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K BIJU
• Assessee Lawyers: PRATHIK P
• Keywords: Bonafide mistake
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-C BENCH : BANGALORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 26/BANG/2017 ASSESSMENT YEAR : 2007-08 SHRI K. NANDA KUMAR, PROP. M/S. BISMAC MANUFACTURERS, NO. 90, KRISHNA NAGAR, 4 TH CROSS, SHETTIHALLI, JALAHALLI WEST, BANGALORE 560 015. PAN: AAIPN 8495N VS. THE INCOME TAX OFFICER, WARD 6(3), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI PRATHIK P., CA RESPONDENT BY : SHRI M.K. BIJU, JCIT DATE OF HEARING : 22.05.2017 DATE OF PRONOUNCEMENT : 07.06.2017 O R D E R PER VIJAY PAL RAO, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 16.09.2016 OF CIT(A) FOR THE ASSESSMENT YEAR 2007-08. THE ASS ESSEE FILED HIS RETURN OF INCOME ON 26.02.2009 DECLARING TOTAL INCOME OF R S. 6,55,404/-. THE AO ISSUED NOTICE U/S. 143(2) ON 11.08.2009 WHICH WA S RECEIVED BACK UNSERVED AND SUBSEQUENTLY A SUBSTITUTED SERVICE WAS EFFECTED THROUGH THE ITA NO. 26/BANG/2017 PAGE 2 OF 4 INSPECTOR AFFIXING A NOTICE AT THE OFFICE ADDRESS O F THE ASSESSEE. THEREAFTER THE AO ALSO ISSUED NOTICE U/S. 142(1) TH ROUGH AFFIXING ON THE LAST KNOWN ADDRESS. SINCE THERE WAS NO RESPONSE F ROM THE ASSESSEE THE AO COMPLETED THE ASSESSMENT U/S. 144 WHEREBY THE AO MADE THE ADDITION ON ACCOUNT OF COMMISSION PAYMENT OF RS. 10 ,05,000/- U/S. 40(A)(IA) AND DISALLOWANCE OF EXPENDITURE TO THE EX TENT OF 15% AMOUNTING TO RS. 7,81,522/-. THE ASSESSEE CHALLENGED THE ORD ER OF THE AO BEFORE THE CIT(A). THE CIT(A) HAS RECORDED IN THE IMPUGNED OR DER THAT DESPITE THE NOTICES ISSUED ON VARIOUS OCCASIONS AT THE ADDRESS PROVIDED IN FORM NO. 35 ASSESSEE HAS NOT RESPONDED. ACCORDINGLY THE APPEAL OF THE ASSESSEE WAS DISMISSED IN LIMINE DUE TO NON-COMPLIANCE ON THE PA RT OF THE ASSESSEE. 2. BEFORE THE TRIBUNAL THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE CLOSED ITS BUSINESS ACTIVITY TEMPORARILY D URING THE PERIOD UNDER CONSIDERATION FOR COUPLE OF YEARS. THEREFORE THE A SSESSEE DID NOT RECEIVE THE NOTICE ISSUED BY THE AO AS WELL AS CIT(A). HE HAS FURTHER SUBMITTED THAT THOUGH THE ASSESSEE CHALLENGED THE ORDER OF TH E AO PASSED U/S. 144 HOWEVER, IN THE FORM NO. 35 INADVERTENTLY THE SAME ADDRESS WAS GIVEN WHICH WAS AVAILABLE WITH THE AO. THEREFORE THERE I S AN INADVERTENT AND BONAFIDE MISTAKE OF NOT GIVING THE CURRENT ADDRESS OF THE ASSESSEE IN THE FORM NO. 35 BEFORE THE CIT(A). HENCE THE LD. AR HA S SUBMITTED THAT THE ASSESSEE MAY BE GIVEN ONE MORE OPPORTUNITY TO PRESE NT ITS CASE BEFORE THE ITA NO. 26/BANG/2017 PAGE 3 OF 4 AUTHORITIES BELOW. ON THE OTHER HAND, THE LD. DR H AS SUBMITTED THAT DESPITE THE OPPORTUNITIES GIVEN BY THE AO AS WELL A S CIT(A) THE ASSESSEE DID NOT COMPLY WITH THE NOTICES AND EVEN NOT APPEAR ED BEFORE THE AUTHORITIES BELOW. THEREFORE THE CONDUCT OF THE AS SESSEE CLEARLY SHOWS THAT THE ASSESSEE WAS AVOIDING PROCEEDINGS EVEN AFT ER FILING THE APPEAL BEFORE THE CIT(A). 3. HAVING HEARD THE RIVAL SUBMISSIONS AS WELL AS CONSI DERED THE RELEVANT MATERIAL ON RECORD IT IS NOTED THAT THERE IS A GROS S NEGLIGENCE ON THE PART OF THE ASSESSEE IN NOT APPEARING BEFORE THE AO AS W ELL AS BEFORE THE CIT(A). THE ASSESSEES EXPLANATION BEFORE THE TRIB UNAL IS THAT IN THE YEAR 2009 THE ASSESSEE CEASE TO CARRY ON BUSINESS AT THE PREMISES IN QUESTION WHICH WAS TAKEN ON RENT AND AS IT WAS DEMOLISHED TH E ASSESSEE VACATED THE SAID PREMISES. CONSEQUENTLY THE ASSESSEE COULD NOT RECEIVE THE NOTICE OF HEARING ISSUED FROM TIME TO TIME BY THE AO AS WE LL AS CIT(A). THUS THE ASSESSEE IS SEEKING ONE MORE OPPORTUNITY TO REP RESENT ITS CASE AND FILE THE RELEVANT RECORD. IT IS PERTINENT TO NOTE THAT DESPITE THE ASSESSMENT ORDER FRAMED U/S. 144 AND AN APPEAL FILED BEFORE TH E CIT(A) THE ASSESSEE DID NOT FURNISH HIS THE CHANGED / NEW ADDRESS EVEN BEFORE THE CIT(A). IT SHOWS THAT THE ASSESSEE WAS NOT SINCERE ABOUT THE P ROCEEDINGS BEFORE THE CIT(A) AS WELL AS BEFORE THE ASSESSING OFFICER. IT IS A CLEAR CASE OF GROSS NEGLIGENCE ON THE PART OF THE ASSESSEE IN NOT FURNI SHING THE CORRECT ADDRESS ITA NO. 26/BANG/2017 PAGE 4 OF 4 BEFORE THE AO AS WELL AS CIT(A). HOWEVER SINCE THE CIT(A) HAS NOT EXAMINED THE APPEAL OF THE ASSESSEE ON MERITS AND F URTHER THE RELEVANT MATERIAL AND BOOKS OF ACCOUNTS WERE NOT AVAILABLE B EFORE THE AUTHORITIES BELOW THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE SUBJECT TO COST OF RS. 10,000/- THE ASSESSEE IS GRANTED ONE MORE OPPORTUNITY TO PRESENT HIS CASE BEFORE THE AO. ACCORDINGLY THIS MATTER IS SET ASIDE TO THE RECORD OF THE AO FOR FRE SH ADJUDICATION AFTER GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE SU BJECT TO PAYMENT OF COST OF RS. 10,000/-. 4. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. PRONOUNCED IN THE OPEN COURT ON THIS 07 TH DAY OF JUNE, 2017. SD/- (VIJAY PAL RAO) JUDICIAL MEMBER BANGALORE, DATED, THE 07 TH JUNE, 2017. / MS/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.