PRAMOD RATILAL SHAH, MUMBAI V. ITO 24(3)(3), MUMBAI

ITA 2770/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3649 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 17-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABDUL HAKIM M
• Keywords: Opportunity of being heard; Principle of natural justice; Transactions in derivatives
• Section: 201; 147; 148; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C , MUMBAI BEFORE S HRI S. RIFAUR RAHMAN (AM ) AND SHRI RAM LAL NEGI (JM) ITA NO. 2770 /MUM/2017 ASSESSMENT Y EAR: 2010 - 11 PRAMOD RATILAL SHAH, G - 1, GARODIA NAGAR, GHATKOPAR (E), MUMBAI PAN: AACPS0090A VS. THE CIT (A) 36, 707B, C - 10, PRATYAKSHA KAR BHAVAN, B.K.C., MUMBAI - 54 (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI ABDUL HAKIM M. (DR) DATE OF HEARING: 18/09 /201 9 DATE OF PRONOUNCEMENT: 30 / 0 9 /201 9 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 24.01.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 3 (FOR SHORT THE CIT(A) , MUMBAI , FOR THE ASSESS MENT YEAR 2010 - 11 , WHEREBY THE LD. CIT(A) HAS DISMISSED T HE APPEAL FILED BY THE ASSESSEE AGAINST THE PENALTY ORDER PASSED U/S 271 (1) (B ) & 271 (F) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. IN THE PRESENT CASE, THE AO PASSED ASSESSMENT ORDER U/S 144 R.W.S. 147 OF THE ACT DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 10,45,000/ - AS THE ASSESSEE HAD NOT FILED THE RETURN OF INCOME FOR THE SAID ASSESSMENT YEAR . THE ASSESSEE FAILED TO COMPLY WITH THE NOTICES U/S142 (1) AND 143 (2) OF THE ACT. THE ASSESSEE FURTHER FAILED TO ATTEND OR OFFER ANY EXPLANATION IN RESPONSE TO THE NOTICE U/S 271(F) OF THE ACT. ACCORDINGLY, THE AO IMPOSED PENALTY OF RS. 10,000/ - U/S 271 (B) AND RS. 5,000/ - U/S 271 (F) OF THE ACT. IN THE FIRST APPEAL, 2 ITA NO. 2770 / MUM/2017 ASSESSMENT YEAR: 2010 - 1 1 THE LD. CIT (A) DI SMISSED THE APPEAL FILED BY THE ASSESSEE, AGAINST THE FINDINGS OF THE LD. CIT(A) THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3 . THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) ON THE FOLLOWING EFFECTIVE GROUNDS : - 1. ON THE FAC TS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER ERRED ON VARIOUS COUNTS, IN LEVYING THE PENALTY. 2. THE LEARNED ASSESSING OFFICER VIOLATED THE PRINCIPAL OF NATURAL JUSTICE BY NOT GIVING PROPER OPPORTUNITY OF BEING HEARD TO YO UR APPELLANT. 4. THIS APPEAL WAS F IXED FOR FINAL HEARING ON 18.09.2019 . HOWEVER, ON THE SAID DATE, WHEN THE CASE WAS CALLED OUT FOR HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE. FROM THE RECORD, WE OBSERVED THAT THE ASSESSEE SOUGHT ADJOURNMENT ON 16 .08.2018 AND THEREAFTER HE DID NOT APPEAR ON 2/3 DATES WHEN THE APPEAL WAS FIXED FOR HEARING. E VEN , THE ASSESSEE DID NOT MOVE ANY APPLICATION FOR ADJOURNMENT. THE LAST NOTICE SENT ON 03.04.2019 HAS RECEIVED BACK UN - SERVED WITH THE REMARKS LEFT. HENCE, WE DECIDED TO DISPOSE OF THE APPEAL ON THE BASIS OF MATERIAL ON RECORD AFTER HEARING THE DEPARTMENTAL REPRESENTATIVE (DR), HOLDING THAT NO PURPOSE WOULD BE SERVED IN CASE THE APP EAL IS ADJOURN AND FRESH NOTICE IS ISSUED. WE ACCORDINGLY ALLOWED THE LD. DR TO ARGUE THE APPEAL ON BEHALF OF THE REVENUE. 5. BEFORE US, THE LD. DR SUBMITTED THAT SINCE THE ASSESSEE FAILED TO COMPLY WITH THE NOTICE UNDER SECTION 142 (1) AND 143 (2) OF THE ACT, AND FURTHER FAILED TO FILE RETURN OF INCOME AS REQUIRED UNDER SECTION 13 9(1) OF THE ACT, THE LD. CIT (A) HAS RIGHTLY CONFIRMED THE PENALTY OF RS. 10,000/ - U/S 271 (B) AND PENALTY OF RS. 5,000/ - U/S 271 (F) OF THE ACT LEVIED BY THE AO. 6. WE HAVE PERUSED THE MATERIAL ON RECORD IN THE LIGHT OF THE SUBMISSIONS MADE BY THE LD. DR . WE NOTICE THAT THE ASSESSEE HAD NOT FILED THE RETURN OF INCOME FOR THE AY 2010 - 11. SINCE, IT CAME TO THE NOTICE OF THE AO THAT THE APPELLANT HAD MADE HUGE TURNOVER IN COMMODITIES, CONTRACT AMOUNTING TO RS. 7,86,87,185/ - AND DEPOSITED THE CASH AMOUNTING T O RS. 2, 06,969/ - IN SAVING 3 ITA NO. 2770 / MUM/2017 ASSESSMENT YEAR: 2010 - 1 1 BANK ACCOUNT , THE AO COMPLETED THE ASSESSMENT U/S 147 OF THE ACT DETERMINING THE TOTAL INCOME AT RS. 10,45,000/ - . WE F URTHER NOTICE THAT I N RESPONSE TO THE NOTICE U/S 148 OF THE ACT, THE ASSESSEE NEITHER FILED RETURN OF INCOME NO R FILED ANY REPLY . T HE ASSESSEE FURTHER FAILED TO APPEAR OR OFFER ANY EXPLANATION IN RESPONSE TO THE NOTICE U/S 271(F) OF THE ACT . THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE HOLDING AS UNDER: - 5.1 IN THE GROUND NO. 1 AND 2, THE APPELLANT HAS CHALLENGED LEVYING OF PENALTY U/S 271F OF THE ACT BY THE AO. THE APPELLANT HAS NOT FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010 - 11. SUBSEQUENTLY, ON VERIFICATION IT IS NOTICED BY THE AO THAT THE APPELLANT HAS MADE HUGE TURNOVER IN COMMODITIES CO NTRACT AMOUNTING TO RS. 7,86,87,185/ - AND DEPOSITED CASH OF RS. 2,06,969/ - IN SAVINGS BANK ACCOUNT AND HENCE, THE CASE WAS REOP ENED U/S 147 OF THE INCOME TAX ACT, 1961. THE ASSESSMENT WAS COMPLETED U/S 144 R.W.S. 147 OF THE I.T. ACT ON 19.03.2015 BY ASSESS ING THE TOTAL INCOME AT RS. 10,45,000/ - . THE APPELLANT NEITHER FILED THE RETURN OF INCOME U/S 139 OF THE ACT NOR FILED THE RETURN OF INCOME IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. AS THE APPELLANT FAILED TO FURNISH RETURN OF INCOME OF THE RELEVANT PE RIOD, PENALTY NOTICE U/S 271F OF THE ACT DATED 19.03.2015 WAS ISSUED TO THE APPELLANT. IN RESPONSE TO THE ABOVE PENALTY NOTICE ISSUED, THE APPELLANT NEITHER ATTENDED NOR OFFERED ANY EXPLANATION. AO PROCEEDED TO LEVY A PENALTY OF RS. 5,000/ - U/S 271F OF THE ACT. 5.2 PER CONTRA: THE APPELLANT HAS SUBMITTED THAT HE IS A SENIOR CITIZEN AND HE WAS TREATED BYPASS SURGERY DURING THE PERIOD WHEN HE RECEIVED THE NOTICES FROM THE ASSESSING OFFICER AND DUE TO LACK OF KNOWLEDGE THE LETTERS RECEIVED FROM DEPARTMENT WER E KEPT ASIDE BY THE FAMILY MEMBERS AND HENCE THEY WERE NOT ABLE TO COMPLY TO THE NOTICES RECEIVED BY THEM AND WHEN IT CAME TO THE NOTICE OF THE APPELLANT, HE APPROACHED THE ASSESSING OFFICER WHO INFORMED THE APPELLANT THAT THE ORDERS HAD BEEN PASSED UNDER SECTION 144 OF THE INCOME TAX ACT, 1961. THE APPELLANT PLEADS TO DROP THE PENALTIES LEVIED U/S 271 (1)(B) OF THE ACT AS THERE WAS NO MALAFIDE INTENTION OF APPELLANT NOT TO PROVIDE THE DETAILS TO THE DEPARTMENT. SECONDLY, HIS INCOME DURING THE SAID ASSESSME NT YEAR WAS NOT CROSSING THE TAXABLE LIMIT, APPELLANT HAS INCURRED LOSS IN THE COMMODITIES & 4 ITA NO. 2770 / MUM/2017 ASSESSMENT YEAR: 2010 - 1 1 DERIVATIVES TRANSACTIONS WHICH HE HAS DONE DURING THE RELEVANT YEARS WHICH IS ALSO STATED IN THE ORDERS AS ISSUED BY THE ASSESSING OFFICER. HENCE, AS THERE WAS O T AXABLE INCOME DURING THE RELEVANT YEAR APPELLANT DID NOT FILE HIS RETURN OF INCOME. HE PLEADS TO DROP THE PENALTY U/S 271F OF THE ACT AS THE INCOME WAS BELOW THE TAXABLE LIMITS WHICH IS ALSO CONFIRMED BY THE ASSESSING OFFICER WHILE PASSING THE ORDER U/S 14 4 OF THE ACT. 5.3 THE MATTER HAS BEEN CONSIDERED: I HAVE CAREFULLY CONSIDERED THE IMPUGNED PENALTY ORDER AND ONE PAGE WRITTEN SUBMISSION OF THE APPELLANT. APPELLANT HAS FAILED TO SUBSTANTIATE WITH DOCUMENTARY EVIDENCE THAT DUE TO HIS PERSONAL HEALTH PROB LEMS/ISSUES HE COULD ATTEND BEFORE THE AO. IT IS ALSO A FACT THAT SUBSEQUENTLY THE ASSESSMENT ORDER WAS ALSO PASSED U/S 144 OF THE ACT. IN VIEW OF THIS, APPELLANTS CONTENTION IS REJECTED. GROUNDS OF APPEAL ARE DISMISSED. 7. THE LD. CIT (A) HAS DISMISSED THE APPEAL OF THE ASSESSEE HOLDING THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE ITS CONTENTION THAT HE COULD NOT ATTEND THE PROCEEDINGS BEFORE AO DUE TO ILLNESS . WE DO NOT FIND ANY EVIDENCE ON RECORD TO CONTROVER T THE FINDINGS OF THE LD. CIT(A). HENCE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT (A). W E , THEREFORE, UPHOLD THE ORDER PASSED BY THE LD.CIT (A) DISMISSED THE ASSESSEES APPEAL. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2010 - 11 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER , 2019 . SD/ - SD/ - ( S. RIFAUR RAHMAN ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 30 / 0 9 / 201 9 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 5 ITA NO. 2770 / MUM/2017 ASSESSMENT YEAR: 2010 - 1 1 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE CO PY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI