RAJESH INDUSTRIES, MUMBAI V. ITO-14(2)(2), MUMBAI

ITA 2614/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7347 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 12-03-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 23-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R J JHA
• Assessee Lawyers: K GOPALSHRI S PANDEY
• Keywords: Unexplained cash credit; Period of limitation; Reasonable cause; Time period of passing order; Condonation of delay; Set aside
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH, MUMBAI BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NOS. 2612, 2613 & 2614/MUM/2009 (ASSESSMENT YEAR: 2000-01, 2001-02 & 2002-03) M/S. RAJESH INDUSTRIES INCOME TAX OFFICER 14(2)(2) 6, LAL SINGH BUILDING MUMBAI LOHAR CHAWL, KALBADEVI ROAD VS. MUMBAI 400002 PAN - AADFR 5415 Q APPELLANT RESPONDENT APPELLANT BY: SHRI K. GOPAL/SHRI S. PANDEY RESPONDENT BY: SHRI R.J. JHA O R D E R PER B. RAMAKOTAIAH, A.M. THESE APPEALS BY THE ASSESSEE ARE AGAINST THE ORDER S OF THE CIT(A)-XIV, MUMBAI FOR THE RESPECTIVE ASSESSMENT YEARS. 2. IN THIS CASE THE ASSESSMENTS WERE COMPLETED UNDER S ECTION 144 R.W.S. 147 OF THE I.T. ACT AND THE ORDERS WERE PASSED ON 2 2.12.2006. IN VIEW OF THE NON-APPEARANCE OF THE ASSESSEE THE A.O. HAS COMPLET ED THE ASSESSMENT EXPARTE AND THE AMOUNTS DEPOSITED IN THE BANK ACCOU NTS HAVE BEEN CONSIDERED AS UNACCOUNTED CASH CREDITS AND REJECTIN G THE LOSS CLAIMED THE AMOUNTS WERE BROUGHT TO TAX. BEFORE THE CIT(A), IN SPITE OF TAKING MANY OPPORTUNITIES, DETAILS COULD NOT BE FURNISHED AS TH EY WERE NOT AVAILABLE WITH THE ASSESSEE AND STATED TO BE LYING WITH CBI, MUMBA I. THE ASSESSEES REQUEST FOR SET ASIDE HAS NOT BEEN CONSIDERED BY TH E CIT(A). 3. BEFORE US THE APPEALS WERE FILED BELATEDLY WITH A D ELAY OF MORE THAN 520 DAYS WITH A PRAYER OF CONDONATION. THE ASSESSEE SUBMITTED AS UNDER: - 1. THAT, MY HUSBAND LATE SHRI RAJESH NB. SHROFF WA S PARTNER OF RAJESH INDUSTRIES HAVING ITS OFFICE AT 6, LOHAR CHA WL, CRAWFORD MARKET, MUMBAI-400002 ALONG WITH HIS FATHER MR. B.C . SHROFF SINCE 1975. ITA NO. 2612, 13 & 14/MUM/2009 M/S. RAJESH INDUSTRIES 2 2. THAT, THE PARTNERSHIP FIRM M/S. RAJESH INDUSTRIE S WAS ENGAGED IN THE BUSINESS OF MANUFACTURE AND EXPORT OF TEXTILES. 3. THAT, MR. B.C. SHROFF, FATHER OF LATE SHRI RAJES H B. SHROFF EXPIRED IN 2006 AND THE BUSINESS OPERATION OF PARTNERSHIP F IRM WAS CARRIED ON BY THE REMAINING TWO PARTNERS I.E. MR. R AJESH B.SHROFF AND MRS. V.B. SHROFF. 4. THAT, MR. RAJESH B. SHROFF WAS NOT KEEPING WELL SINCE JANUARY, 2006 ONWARDS AND WAS NOT ABLE TO ATTEND TO THE WORK OF RAJESH INDUSTRIES ALSO. THE OTHER PARTNER MRS. V.B. SHROFF MOTHER OF RAJESH B. SHROFF WAS NOT CAPABLE TO ATTENDING TO TH E BUSINESS ARE IN ANY KIND OF M/S. RAJESH INDUSTRIES. 5. THAT, MR. RAJESH B. SHROFF WAS CONTINUOUSLY SUFF ERING WITH LOW FEVER, WEIGHT LOSS AND BREATHLESSNESS. VARIOUS KIND S OF TESTS AND INVESTIGATIONS WERE CARRIED ON MR. RAJESH B. SHROFF TO DIAGNOSE THE CAUSE OF PROBLEM. AFTER GRUELLING LONG PERIOD OF IN VESTIGATION A LARGE MALIGNANT TUMOUR WAS DETECTED IN THE KIDNEY O F MR. RAJESH B. SHROFF, WHICH WAS AT A QUITE ADVANCED STAGE IN J ANUARY, 2008. THE DIAGNOSIS FURTHER CAUSED DISRUPTION OF THE OPER ATION OF M/S. RAJESH INDUSTRIES AND ITS ADMINISTRATIVE ACTIVITY A S NO COMPETENT PERSON WAS AVAILABLE TO ATTEND THE WORK OF M/S. RAJ ESH INDUSTRIES. 6. THAT, THE PROBLEMS OF THE FAMILY WERE FURTHER AG GRAVATED AS MRS. DARSHNA R. SHROFF, WIFE OF RAJESH SHROFF DETECTED W ITH BREAST CANCER AND WAS SUBJECTED TO TREATMENT FOR THE SAME. 7. THAT MR. RAJESH B. SHROFF SUCCUMBED TO THE MALIG NANCY ON 5 TH APRIL, 2009. THUS, FROM JUNE, 2006 TO APRIL, 2009 T HE FAMILY OF MR. RAJESH B. SHROFF HAD UNDER GONE A GRUELLING PERIOD. DUE TO THE ABOVE CIRCUMSTANCES ASSESSMENT ORDER FOR THE ASSESS MENT YEAR 2001-02 DATED 30.11.2006 PASSED UNDER SECTION 144 R .W.S. 147. 8. THAT, THE APPEAL PREFERRED AGAINST THE SAME WAS ALSO DISPOSED OFF VIDE ORDER DATED 06.09.2007 CONFIRMING THE ADDITION S MADE IN THE EXPARTE ASSESSMENT ORDER. 9. THAT, DUE TO THE CIRCUMSTANCES MENTIONED IN THE EARLIER PARAS THE ASSESSEE WAS NOT IN A POSITION TO SEEK THE REMEDY A VAILABLE UNDER THE STATUTE IN TIME. 10. THAT, THE ASSESSEE HAD RECEIVED THE ORDER PASSE D BY THE LD. CIT(A) ON 21.09.2007. THUS, THE LIMITATION PERIOD FOR FILI NG THE APPEAL BEFORE THE HON'BLE ITAT WAS 20.11.2007. HOWEVER, TH E APPEAL WAS FILED ON 25.04.2009. THUS, THERE WAS A DELAY OF 520 DAYS IN FILING THE APPEAL BEFORE THE HON'BLE ITAT. 11. THAT, THE ASSESSEE WAS PREVENTED BY REASONABLE AND SUFFICIENT CAUSE IN FILING THE APPEAL IN TIME. 12. THAT, IN THE ABSENCE OF THE KNOWLEDGE OF THE DA TE OF SERVICE THE ASSESSEE SEEKS CONDONATOIN OF DELAY TREATING THE DA TE OR ORDER AS THE DATE OF SERVICE OF THE ORDER. THUS, THE APPEAL IS BARRED BY 520 DAYS. ITA NO. 2612, 13 & 14/MUM/2009 M/S. RAJESH INDUSTRIES 3 13. THAT, THE DELAY IN FILING, THE APPEAL NEITHER D ELIBERATE NOR DUE TO ANY NEGLIGENCE. THE DELAY HAS OCCURRED DUE TO CIRCU MSTANCES BEYOND THE CONTROL OF THE ASSESSEE HENCE, THE SAME HAS A REASONABLE AND SUFFICIENT CAUSE. 14. THAT, WE WERE STATED HEREINABOVE AND IN THE PET ITION OF CONDONATION OF DELAY IS TRUE TO THE BEST OF MY KNOW LEDGE AND I BELIEVE THE SAME TO BE TRUE. SIMILAR PLEA FOR ALL THE YEARS WERE MADE. 4. THE LEARNED COUNSEL, WHO APPEARED, FILED PAPER BOOK EVIDENCING THE AVERMENTS MADE IN THE AFFIDAVIT, MEDICAL BILLS, CER TIFICATION OF DOCTORS AND OTHER DETAIL SUPPORTING THE CONTENTIONS MADE THEREI N. IT WAS HIS PLEA THAT THE ASSESSEE COULD NOT APPEAR BEFORE THE A.O. OR B EFORE THE CIT(A) NOR CAN FILE IN SUPPORT OF ASSESSEES CLAIMS DUE TO REASON S STATED ABOVE AND IN THE INTEREST OF JUSTICE, HE PRAYED FOR CONDONATION OF D ELAY AND FURTHER RESTORING THE MATTER TO THE A.O. 5. THE LEARNED D.R., HOWEVER, SUBMITTED THAT THERE IS NO CASE FOR THE ASSESSEE ON MERITS AS ASSESSEE HAS FAILED TO AVAIL VARIOUS OPPORTUNITIES. HE SUPPORTED THE ORDERS OF THE A.O. AND THE CIT(A). 6. WE HAVE CONSIDERED THE ISSUE. AS SEEN FROM THE SEQU ENCE OF EVENTS STATED ABOVE IN THE AFFIDAVIT AND THE EVIDENCES FUR NISHED IN THIS REGARD AND FROM THE PROCEEDINGS BEFORE THE A.O. AND THE CIT(A) , WE ARE OF THE OPINION THAT THE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE IN NOT FILING THE APPEAL IN TIME. AFTER GOING THROUGH THESE CONTENTIONS, IT IS FOUND THAT THERE WAS A REASONABLE CAUSE IN FILING THE APPEAL LATE BEFORE T HE TRIBUNAL. FROM THE CONTENTIONS OF THE AFFIDAVIT REPRODUCED ABOVE PROVE D THAT THERE WAS A BONA FIDE INTENTION IN FILING THE APPEAL LATE BEFORE THE TRIBUNAL. THE HON'BLE SUPREME COURT IN THE CASE OF MST. KATIJI AND OTHERS VS. COLLECTOR, LAND ACQUISITION 167 ITR 471 HAS OBSERVED THAT: - WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATI ONS ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERV ES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE A VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON-DELIBERATE DELAY. IN THE PRESENT CASE AS STATED ABOVE THERE WAS REASO NABLE CAUSE IN FILING THE APPEALS LATE AND THAT CAN BE CONSIDERED AS A BONAFI DE INTENTION AND THERE WAS NO CASE OF DELIBERATE DELAY. IN VIEW OF THE ABO VE FACTS AND CIRCUMSTANCES ITA NO. 2612, 13 & 14/MUM/2009 M/S. RAJESH INDUSTRIES 4 AND IN VIEW OF THE OBSERVATIONS OF THE HON'BLE APEX COURT, WE HOLD THAT THE DELAY IN FILING THE APPEALS WAS NOT ON ACCOUNT OF D ELIBERATE DELAY BUT THERE WAS REASONABLE CAUSE IN NOT FILING OF APPEALS IN TI ME, ACCORDINGLY, THE DELAY IN FILING THE APPEALS IS CONDONED. 7. COMING TO THE MERITS, AS SEEN FROM THE ORDER OF THE A.O. THE ASSESSEE SUFFERED LOSSES AND THE A.O. HAS REJECTED THE LOSS CLAIMED AND BROUGHT TO TAX ALL THE CREDITS IN THE BANK ACCOUNT WHICH HAS COME TO THE KNOWLEDGE OF THE ADDL. CIT DURING THE INVESTIGATION IN THE COURSE OF SURVEY OPERATIONS. NO EXPLANATION OF THE ASSESSEE WAS ON RECORD AND ASSES SEE ALSO WAS PREVENTED BY SUFFICIENT CAUSE IN FURNISHING THE NECESSARY DET AILS AS THEY WERE NOT AVAILABLE WITH THE ASSESSEE AND WERE AVAILABLE WITH THE CBI MUMBAI. IN VIEW OF THIS, IN THE INTEREST OF JUSTICE, WE SET ASIDE T HE ORDERS OF THE A.O. AND CIT(A) AND RESTORE ALL THE ISSUES BACK TO THE FILE OF THE A.O. TO REDO THE ASSESSMENTS FOR RESPECTIVE YEARS ACCORDING TO THE P ROVISIONS OF LAW BY GIVING PROPER OPPORTUNITY TO THE ASSESSEE. THE ASSESSEE AL SO SHOULD FILE NECESSARY DETAILS /EVIDENCES IN SUPPORT OF VARIOUS CLAIMS. AS SESSEES GROUNDS ARE CONSIDERED ALLOWED. 8. IN THE RESULT, APPEALS ARE CONSIDERED ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH MARCH 2010. SD/- SD/- (R.K. GUPTA) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 26 TH MARCH 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XIV, MUMBAI 4. THE CIT XIV, MUMBAI CITY 5. THE DR, D BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.