Shri Sharadkumar Hasmukhlal Marwala, Surat V. The Income tax Officer,Ward-2(3), Surat

ITA 2744/AHD/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5946 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 27-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 25-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAILASH RATNOO
• Assessee Lawyers: MANALI JAIN
• Keywords: Depreciation
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CAMP AT SURAT BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO. 2744/AHD/2013 / ASSTT. YEAR: 2007-08 SHRI SHARADKUMAR HASMUKHLAL MARWALA, 3/148, RANA SHERI, INDERPURA, SURAT-355002 PAN : ADBPM 2831 M VS. THE INCOME-TAX OFFICER, WARD 2(3), SUAT / (APPELLANT) / (RESPONDENT) ASSESSEE BY : MS. MANALI JAIN REVENUE BY : MR. KAILASH RATNOO, SR. DR / DATE OF HEARING : 24/04/2017 / DATE OF PRONOUNCEMENT: 01/05/2017 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAIN ST THE ORDER OF LD. CIT(A)-II, SURAT DATED 30.09.2013 PASSED FOR AY 200 7-08. 2. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT T HE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE BY HOLDING THA T IT IS TIME BARRED AND THE ASSESSEE HAS FAILED TO EXPLAIN THE DELAY IN FIL ING THE APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED HIS RETURN OF INCOME ON 29.10.2008 DECLARING TOTAL INCOME AT RS. NIL. THE ASSESSMENT ORDER U/S 143(3) OF THE ACT WAS FRAMED ON 24.12.200 9 VIDE WHICH THE ADDITION OF RS. 2,97,770/- WAS MADE TO THE TOTAL IN COME OF THE ASSESSEE ON ITA NO. 2744/AHD/2013 SHARADKUMAR HASMUKHLAL MARWALA VS. ITO AY : 2007-08 2 THE GROUND THAT LIABILITY TO PAY TWO CONCERNS NAMEL Y M/S. UTKAL VIRAL & CO. AND M/S. NYLON YARN, AMOUNTING TO RS.1,27,981/- AND RS.1,69,784/- RESPECTIVELY, WAS CEASED AND THEREFORE, THE ASSESSE E SHOULD INCLUDE THESE AMOUNTS IN HIS TOTAL INCOME. AS THE ADDITION WITH THE HELP OF SECTION 41(1)(A) OF THE INCOME-TAX ACT WAS MADE, LD. ASSESS ING OFFICER INITIATED PENALTY UNDER SECTION 271(1)(C) OF THE ACT FOR FURN ISHING INACCURATE PARTICULARS OF INCOME AND ULTIMATELY IMPOSED A PENA LTY OF RS.40,118/- VIDE ORDER DATED 29.06.2010. THE ASSESSEE WENT IN APPEA L BEFORE THE OF LD. CIT(A) ON 20.05.2011. THIS APPEAL WAS TIME BARRED BY 320 DAYS. ACCORDING TO THE LD. CIT(A), TWO TO THREE OPPORTUNITIES WERE GIVEN T O THE ASSESSEE, BUT HE DID NOT APPEAR. THE COUNSEL SHRI YOGESH B. SHAH WAS NO T HAVING POWER OF ATTORNEY AND THE ASSESSEE FAILED TO SUBMIT ANY EXP LANATION FOR CONDONATION OF THIS DELAY. ACCORDINGLY THE APPEAL WAS DISMISSE D. 4. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED BEFOR E US THAT THE QUANTUM APPEAL OF THE ASSESSEE WAS ALSO TIME BARRED BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL, BUT THE TR IBUNAL CONDONED THE DELAY IN FILING THE APPEAL AND RESTORED THESE ISSUE S TO THE FILE OF THE LD. CIT(A) FOR RE-ADJUDICATION. IN THE QUANTUM APPEAL, THERE WAS A DELAY OF 158 DAYS. A COPY OF THE TRIBUNALS ORDER HAS BEEN PLAC ED ON RECORD. SHE FURTHER FILED AN AFFIDAVIT OF SHRI SHARADKUMAR HASMUKHLAL M ARWALA AND CONTENDED THAT THE ASSESSEES FATHER WAS NOT KEEPING GOOD HEA LTH DURING THAT PERIOD AND HE ALSO SUFFERED HUGE BUSINESS LOSSES AND DUE T O THESE REASONS, HE COULD NOT PROSECUTE HIS INCOME-TAX PROCEEDINGS PROPERLY. THE LD. COUNSEL, THEREFORE, PRAYED THAT THE DELAY IN FILING THE APPE AL BE CONDONED AND THE LD. CIT(A) BE DIRECTED TO DECIDE THE APPEAL ON MERIT. SHE FURTHER CONTENDED THAT THE ASSESSEE HAS BROUGHT FORWARD UNABSORBED DE PRECIATION. HE HAS FILED AN APPLICATION UNDER SECTION 154 OF THE INCOM E-TAX ACT BEFORE THE LD. ASSESSING OFFICER; ULTIMATELY, THAT APPLICATION WAS ALLOWED BY THE ASSESSING ITA NO. 2744/AHD/2013 SHARADKUMAR HASMUKHLAL MARWALA VS. ITO AY : 2007-08 3 OFFICER VIDE ORDER DATED 30.06.2014. WHATEVER ADDI TION HAS BEEN MADE BY THE ASSESSING OFFICER WAS SET OFF WITH THE UNABSORB ED DEPRECIATION AND HIS INCOME RESULTED INTO NIL. THUS, ASSESSEE HAS RETUR NED THE INCOME AT NIL, WHICH HAS ULTIMATELY BEEN DETERMINED AT NIL. 5. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE CONTENDED THAT THE PENDENCY OF APPLICATION UNDER SECTION 154 HAS N O EFFECT IN FILING OF THE APPEAL, BECAUSE THE APPLICATION WAS MOVED ON 25.02. 2014; BY THAT TIME, THE APPEAL BEFORE THE LD. CIT(A) WAS ALREADY FILED AND IT HAS ALREADY BECOME TIME BARRED. THERE IS NO EXPLANATION AT THE END OF THE ASSESSEE AND THEREFORE, THE ORDER OF THE LD. CIT(A) DESERVES TO BE UPHELD. 6. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT AGAINST THE ADDITIO N TO THE INCOME OF THE ASSESSEE AN APPEAL WAS FILED BEFORE THE LD. CIT(A) WHICH WAS TIME BARRED BY 158 DAYS. THE LD. CIT(A) DISMISSED THE APPEAL BEIN G TIME BARRED, BUT THE TRIBUNAL HAS CONDONED THE DELAY AND RESTORED THE IS SUES TO THE FILE OF THE LD. CIT(A) FOR ADJUDICATION ON MERIT. THE OBSERVATIONS OF THE TRIBUNAL READ AS UNDER:- 4. THE CIT(A) HAS NOT DISPOSED OF ABOVE APPEALS O N MERIT BUT DISMISSED THE APPEAL ON THE GROUND OF APPEAL FILED LATE BY 158 DA YS. THE APPELLANTS HAD SUFFICIENT REASONS THAT THEIR FATHER HAD IN DIFFERE NT HEALTH AND RECTIFICATION APPLICATIONS WERE ALSO PENDING BEFORE THE A.O. 5. WE HAVE PERUSED THE OTHER OF THE AUTHORITIES BEL OW, HEARD THE ARGUMENTS OF BOTH THE SIDES. WE FIND THAT THE CIT( A) HAD SUFFICIENT REASONS TO CONDONE THE DELAY AND APPEAL SHOULD HAVE HEARD O N MERIT. THEREFORE, WE DIRECT TO CIT(A) THAT THE ASSESSEES APPEALS ARE TO BE DECIDED ON MERIT AFTER CONDONING THE DELAY. ACCORDINGLY, THE ORDER OF CIT (A) IS SET ASIDE FOR DECIDING THE APPEALS ON MERIT FOR DE NOVO. 7. THE ASSESSMENT ORDER IS DATED 24.12.2009; WHEREA S THE PENALTY ORDER IS DATED 29.06.2010. THUS, THE ASSESSMENT ORDER AS WELL AS PENALTY ORDER WAS ITA NO. 2744/AHD/2013 SHARADKUMAR HASMUKHLAL MARWALA VS. ITO AY : 2007-08 4 ALMOST IN THE SAME PERIOD. THE TRIBUNAL HAS RECOGN IZED THE ILLNESS OF ASSESSEES FATHER AND THE BUSINESS LOSSES SUFFERED BY HIM AS SUFFICIENT REASONS FOR NOT PROSECUTING THE INCOME-TAX PROCEEDI NG IN A PROPER MANNER. THE SAME SET OF CIRCUMSTANCES IS AVAILABLE IN THE P RESENT PROCEEDINGS. THEREFORE, WE CONDONE THE DELAY IN FILING THE APPEA L BEFORE THE LD. CIT(A). WE THUS SET ASIDE THE ORDER OF THE LD. CIT(A) AND R ESTORE THIS ISSUE TO THE FILE OF THE LD. CIT(A) FOR FRESH ADJUDICATION ON MERIT. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 1 ST MAY, 2017 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 01/05/2017 *BT ! '! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. # / THE RESPONDENT. 3. & ( / CONCERNED CIT 4. ( ( ) / THE CIT(A) 5. ! & , & / DR, ITAT, 6. , / GUARD FILE. / BY ORDER, TRUE COPY / (DY./ASSTT.REGISTRAR) & , / ITAT, AHMEDABAD