M/s. Softtouch Cosmetic (Mktg.) Pvt.Ltd., Bhavnagar V. The Income tax Officer,Ward-1(2), Bhavnagar

ITA 2648/AHD/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5596 (ITAT-AHMEDABAD)
• Duration Of Justice: 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 15-07-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 25-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHELLEY JINDAL
• Keywords: Principle of natural justice; Condonation of delay
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI D.C. AGRAWAL, ACCOUNTANT MEMBER DATE OF HEARING : 15/07/2010 DRAFTED ON: 19/07 /2010 ITA NO.2648/AHD/2009 ASSESSMENT YEAR : 2005-06 M/S.SOFTTOUCH COSMETIC (MKTG.) PVT.LTD. 321, MADHAV HILL WAGHWADI ROAD BHAVNAGAR 364 002 VS. THE INCOME TAX OFFICER WARD-1(2) BHAVNAGAR PAN/GIR NO. : AAFCS 7461R (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI TUSHAR HEMANI RESPONDENT BY: SHRI SHELLEY JINDAL, CIT-DR O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE W HICH HAS EMANATED FROM THE ORDER OF THE LEARNED CIT(APPEALS) -XX, AHMEDABAD DATED 24/11/2008 PASSED FOR ASSESSMENT YEAR 2005-0 6. 2. THE PRIMARY GRIEVANCE OF THE APPELLANT IS IN RESPECT OF THE EX-PARTE DECISION BY THE LEARNED CIT(APPEALS). THE NEXT GR IEVANCE IS THAT THE APPEAL OF THE ASSESSEE WAS DISMISSED IN LIMINE ON THE GROUND OF LATE FILING OF APPEAL BY 34 DAYS WITHOUT CONDONING THE S AID DELAY. ON THE PRINCIPLE OF NATURAL JUSTICE, IT WAS OBJECTED THAT THE ACTION OF THE LEARNED CIT(APPEALS) WAS A GROSS VIOLATION OF THE SAID PRIN CIPLE, THEREFORE, DESERVES TO BE REVERSED. REST OF THE GROUNDS ARE IN RESPECT OF THE MERITS ITA NO.2648/AHD /2009 M/S.SOFTTOUCH COSMETIC (MKTG.)P.LTD. VS. ITO ASST.YEAR 2005-06 - 2 - OF THE CASE, I.E. AN ADDITION OF RS.1,78,66,925/- W HICH WAS ADDED BY INVOKING THE PROVISIONS OF SECTION 68 OF THE I.T. A CT, 1961. 3. AS FAR AS THE IMPUGNED ASSESSMENT ORDER PASSED U /S.143(3) OF THE I.T. ACT, 1961 DATED 31/12/2007 IS CONCERNED, AN AD DITION WAS MADE OF THE AFORESAID AMOUNT OF RS.1,78,66,925/- U/S.68 OF THE I.T. ACT, 1961 IN RESPECT OF A LOAN ALLEGED TO HAVE BEEN RECEIVED FR OM M/S. S.M.TRADERS, PROPRIETOR SHRI HARESHBHAI R.PARMAR, BHAVNAGAR IN THE ABSENCE OF PROPER SATISFACTION OF THE ASSESSING OFFICER WHICH WAS CHALLENGED. 4. WHILE DEALING WITH THE ISSUE, THE LEARNED CIT(AP PEALS) HAS GRANTED FEW OPPORTUNITIES TO THE AUTHORISED REPRESE NTATIVE, HOWEVER, IT HAS ALSO BEEN NOTED BY HIM THAT THERE WAS A DELAY O F 34 DAYS IN FILING OF THE APPEAL. IN HIS OPINION, THE ASSESSEE WAS TO E XPLAIN REASON OF EACH DAYS DEFAULT WITH COGENT EVIDENCE. IT HAS ALSO B EEN MENTIONED THAT FROM THE SIDE OF THE APPELLANT, NO ONE HAS ATTENDED THE PROCEEDINGS NOR APPLIED FOR ANY ADJOURNMENT OR EVEN NOT APPLIED FOR THE CONDONATION OF DELAY. THE ASSESSEES APPEAL WAS, THEREFORE, DISM ISSED. 5. BEFORE US, FROM THE SIDE OF THE ASSESSEE SHRI TU SHAR HEMANI LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE A PPEARED AND FROM THE SIDE OF THE REVENUE SHRI SHELLEY JINDAL LEARNED DEP ARTMENTAL REPRESENTATIVE APPEARED. THE REVENUE HAS ARGUED THAT THE CAUSE OF DELAY HAS NOT BEEN EXPLAINED, THEREFORE, LEARNED C IT(APPEALS) HAS RIGHTLY DISMISSED THE APPEAL. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE HAS PLEADED THAT IN THE ABSENCE OF A PROPE R AND REASONABLE ITA NO.2648/AHD /2009 M/S.SOFTTOUCH COSMETIC (MKTG.)P.LTD. VS. ITO ASST.YEAR 2005-06 - 3 - OPPORTUNITY OF HEARING, THE APPELLANT WAS DEPRIVED OF GIVING SATISFACTORY EXPLANATION ABOUT THE SAID DELAY. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. THOUGH UND ISPUTEDLY THE LAW OF LIMITATION IS ENSHRINED IN THE MAXIM INTEREST REPUBLICA UT SIT FINIS LITIUM ( IT IS FOR GENERAL WELFARE THAT A PERIOD BE PUT TO L ITIGATION), BUT WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDER ATION ARE PITTED AGAINST EACH OTHER; THE CAUSE OF SUBSTANTIAL JUSTICE DESERV ES TO BE PREFERRED. OTHERWISE ALSO THE PRIMARY FUNCTION OF A COURT IS T O ADJUDICATE THE DISPUTE BETWEEN PARTIES AND TO ADVANCE SUBSTANTIAL JUSTICE. THE QUESTION OF EXPLAINING THE REASONS OF EACH DAYS DELAY HAS ALSO BEEN ADDRESSED BY SEVERAL HON'BLE COURTS AND HELD THAT WHILE EXERCISI NG THE DISCRETION OF SEC.5 OF LIMITATION ACT A PRAGMATIC APPROACH SHOUL D BE MADE TO BE COUPLED WITH APPLICATION OF A RATIONAL COMMON SENSE , RATHER A PEDANTIC ONE. WE HAVE TAKEN THE GIST FROM THE CITATIONS VIZ . COLLECTOR, LAND ACQUISITION VS. MST. KATIJI & ORS. REPORTED AS 62 CTR 23 (S.C.), AUTO CENTRE VS. STATE OF UTTAR PRADESH REPORTED AS 204 C TR 142 (ALL.) AND STATE OF HARYANA VS. CHANDRA MANI REPORTED AS AIR 1 996 (SC) 1623. THOUGH WE ARE OF THE OPINION THAT THIS APPEAL SHOUL D ALSO NOT BE THROWN OUT OF THE LITIGATION AT THE VERY THRESHOLD AS HELD BY THE HON'BLE APEX COURT BUT SIMULTANEOUSLY WE HEREBY DIRECT THIS APPE LLANT TO APPEAR SUO MOTU WITHOUT WAITING FOR ANY NOTICE OF HEARING BEFORE L EARNED CIT(APPEALS) WITHIN 15 DAYS ON RECEIPT OF THIS JUDG EMENT OF THE TRIBUNAL. WE HAVE ALSO NOTICED THAT BEFORE US A COMPILATION OF 84 PAGES HAVE BEEN FILED WHICH NATURALLY WAS NOT BEFOR E THE LOWER AUTHORITIES, THEREFORE, THIS APPELLANT IS FURTHER D IRECTED TO FURNISH THE ITA NO.2648/AHD /2009 M/S.SOFTTOUCH COSMETIC (MKTG.)P.LTD. VS. ITO ASST.YEAR 2005-06 - 4 - NECESSARY DETAILS AND EVIDENCES IN RESPECT OF THE S AID CASH CREDITOR WITHIN THE MONTHS TIME ON RECEIPT OF THIS ORDER, SO THAT THERE SHOULD NOT BE ANY UNNECESSARY DELAY IN FINALIZATION OF THIS APPEAL. IN CASE OF THE DEFAULT ON THE PART OF THE APPELLANT, THE LEARNED CIT(APPEALS) IS FREE TO TAKE NECESSARY RECOURSE OR ACTION AS PER LAW. OTHERWIS E ALSO, THE LEARNED CIT(APPEALS) IS EMPOWERED TO PROCEED AS PER LAW ON RECEIPT OF THIS ORDER OF THE TRIBUNAL. WITH THESE DIRECTIONS, GROUND NOS .1 & 2 CAN BE SAID TO BE ALLOWED BUT FOR STATISTICAL PURPOSES. IN RESPEC T OF THE MERITS OF THE CASE AS RAISED IN REST OF THE GROUNDS, WE RECUSE OU RSELVES NOT TO ADJUDICATE UPON BECAUSE OF THE BASIC REASON THAT TH E FIRST APPELLATE AUTHORITY HAS NOT DECIDED THE SAME AND THERE WAS NO DISCUSSION IN RESPECT OF THE FACTUAL MATRIX OF THE SAID ADDITION. 7. WITH THESE REMARKS, THE APPEAL OF THE ASSESSEE M AY BE TREATED AS ALLOWED ONLY FOR STATISTICAL PURPOSES. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 23 / 07 /2010. SD/- SD/- ( D.C. AGRAWAL) ( MUKUL KR. SH RAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 23/ 07 /2010 T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPA RTMENT. 3. THE CIT CONCERNED. 4. THE LD. CIT(AP PEALS)-XX, AHMEDABAD 5. THE DR, AHMEDABAD BENCH.6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD