Pradeep Kumar Mohanty, Jajpur V. Pr.CIT, , Cuttack

ITA 279/CTK/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7017 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 09-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K GAUTAM
• Keywords: Revision of order; Principle of natural justice; Reasonable cause; Set aside; Audi alteram partem
• Section: 143(1); 263

Judgement Text

P A G E 1 | 7 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER AND LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO . 279 /CTK/201 9 ASSESSMENT YEAR : 2014 - 15 PRADEEP KUMAR MOHANTY, KERUNA, CHHATRAPADA, PRITIPUR, JAJIPUR VS. PR. CIT, CUTTACK PAN/GIR NO. BBTPM 1572 N (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SHRI M.K.GAUTAM , CIT DR DATE OF HEARING : 25 / 0 8 / 20 20 DATE OF PRONOUNCEMENT : 09 / 0 9 /20 20 O R D E R PER C.M.GARG,JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE PR. CIT DATED 29.3.2019 UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2014 - 15. 2. THE APPEAL FILED BY THE ASSESSEE IS BARRED BY 16 DAYS. THE ASSESSEE HAS FILED CONDONATION PETITION SUPPORTED BY AFFIDAVIT, EXPLAINING THE CAUSE OF DELAY AND REQUESTED TO CONDONE THE DELAY. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE WHEN THE MATTER WAS CALLED FOR HEARING. HO WEVER, ON PERUSAL OF THE APPEAL RECORD, WE FIND THAT THE APPEAL CAN BE DECIDED IN THE ABSENCE OF THE ASSESSEE. HENCE, WE ITA NO. 279/CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 2 | 7 PROCEED TO DISPOSE THE APPEAL EXPARTE AFTER HEARING LD D.R. AND ON THE BASIS OF MATERIALS AVAILABLE ON RECORD. 4. AFTER CONSIDERING TH E SUBMISSION OF LD D.R, AND CONDONATION PETITION, WE ARE SATISFIED THAT THE ASSESSEE HAS REASONABLE CAUSE IN FILING THE APPEAL LATE TO THE TRIBUNAL. HENCE, WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. 5 . THE ASSESSEE HAS RAISED THE FOLLOWING GRO UNDS: 2.A) THAT, THE ADDITION AND DISALLOWANCE MADE IN THE ASSESSMENT ORDER UNDER THE HEAD 'FUEL & LUBRICANTS' GROSSLY VIOLATES THE PRINCIPLES OF NATURAL JUSTICE THOUGH A.0 SCRUTINISED ALL THE ACCOUNTS WITH SATISFIED MANNER DURING THE COURSE OF PROCEEDING. FURTHER TO THIS AFTER QUESTIONNAIRES MADE BY THE LD.PR. COMMISSIONER RELATING TO SAME EXPENDITURE, THE ASSESSEE ALSO SUBMITTED IN HIS WRITTEN COMPLIANCE THAT SUCH EXPENDITURE MADE FOR VARIOUS MACHINERY / VEHICLES WHICH WARE BRINGS TO SITE WORK NOT OWNED BY THE ASSESSEE. AS PER THE TERMS AND CONDITIONS MADE BY THE ASSESSEE WITH DIFFERENT VEHICLE OWNERS, HE PROVIDES FUEL AND LUBRICANTS TO SUCH VARIOUS MACHINERY/VEHICLE TO CARRY OUT THE S ITE WORK AND SHOWN THE SUCH EXPENDITURE UNDER THE HEAD OF 'FUEL & LUBRICANTS'. HENCE IT IS NO NEED TO MENTION VEHICLE COST IN ASSET PARTICULARS OF THE BALANCE SHEET. HENCE, THE ADDITION IS LIABLE TO BE DELETED. B) THE ASSESSEE COULD NOT GET BETTER OPPORTUNITY BEING HEARD TO CLARIFY THE DETAILS RELATING TO SUCH EXPENDITURE MADE BY THE ASSESSEE DURING THE SAID PERIOD AND THE LD.PR. COMMISSIONER PASSED THE ORDER ACCORDINGLY. AS SUCH THE APPELLANT HAD SUSTAINED WITH MEN TAL AGONY RELATING TO THIS FACT. AND ON SUCH SCENARIO THE ASSESSEE CLEARLY STATES THAT, HE IS NOT OWNED ANY MACHINERY/ VEHICLE DURING THE SAID PERIOD BUT EXPENDITURE MADE IN HEAD OF FUEL & LUBRICANTS PURELY TRUE AND CORRECT. HENCE , THE ADDITION AMOUNT RS. 2,14,584/ - IS LIABLE TO BE DELETED FOR THE INTEREST OF NATURAL JUSTICE. C) IT IS PURELY HARASSMENT TO THE ASSESSEE WHICH HAS NOT GIVEN AMPLE OPPORTUNITY TO THE ASSESSEE FOR BRIEF CONSIDERATION OF THE FACT OR ANY OTHER ACTION AS DEEMED FIT ON THE PART OF TH E ASSESSEE. HENCE, THE ITA NO. 279/CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 3 | 7 ABOVE ORDER U/S 263 OF IT ACT. IN RESPECT OF ADDITION OF RS.2,14,584/ - MAY KINDLY BE REVOKED/QUASHED. D) THAT, THE ASSESSEE IS READY TO APPEAR BEFORE YOU WITH ALL THE DOCUMENTS AND APPRAISE THE REAL FACT ABOUT THE STATUS OF THE CAS E FOR THE SAID PERIOD AND MAY PASS NECESSARY ORDER AS REGARDS TO DROP THE PROCEEDING AND DELETE THE ADDITION AND WAIVE OF INTEREST & PENALTY. E) THAT, IN THE FACTS AND CIRCUMSTANCES NARRATED ABOVE, THERE BEING NO OTHER ALTERNATIVE EFFICACIOUS REMEDY EQUAL LY SPEEDY AND EFFICACIOUS, THE ASSESSEE PREFERS TO MOVE THIS FORUM UNDER INCOME TAX LAW FOR APPROPRIATE RELIEF. 6. FACTS OF THE CASE ARE THAT THE ASSESSES IS AN INDIVIDUAL DERIVES INCOME AS WORKS CONTRACT BUSINESS AND FILED ITS RETURN OF INCOME ON 20/11 /2014 FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DISCLOSING TOTAL INCOME AT RS.4,91,940 / - . THE RETURN FILED BY THE ASSESSEE WAS PROCESSED U/S 143(1) OF THE I.T ACT BY ACCEPTING THE DISCLOSED INCOME . S UBSEQUENTLY , THE RETURN OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. PURSUANT TO THE NOTICES ISSUED BY THE ASSESSING OFFICER , THE ASSESSEE PRODUCED NECESSARY BOOKS OF ACCOUNTS AND F INALLY, THE A SSESSING O FFICER COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT ON 26.8.201 6 DETERMINED THE TOTAL INCOME AT RS. 4,91,940/ - . 7. THEREAFTER, THE LD PCIT, CUTTACK ON VERIFICATION OF PROFIT AND LOSS ACCOUNT NOTICED THAT THE ASSESSEE HAD CLAIMED AN AMOUNT OF RS.,2,14,584/ - TOWARDS 'FUEL AND LUBRICANT' HOWEVER , NO VEHICLES WERE MENTIO NED IN THE OF EXPENSES AND ONLY ASSET SHOWN UNDER THE HEAD FIXED ASSET WAS FURNITURE AS RS.2,14,584/ , WHICH OUGHT TO HAVE BEEN DISALLOWED , WHICH WAS NOT DONE. ITA NO. 279/CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 4 | 7 THEREFORE, LD PCIT HELD THAT THE ASSESSMENT ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICI AL TO INTEREST OF THE REVENUE WITHIN THE MEANING OF SECTION 263 OF THE I.T ACT AND ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE TO EXPLAIN AS TO WHY THE ASSESSMENT ORDER SHOULD NOT BE CANCELLED/MODIFIED FIXING THE HEARING ON 18.3.2019 AND ALSO TWO OTHER DATES WERE FIXED FOR COMPLIANCE. SINCE THE ASSESSEE FAILED TO COMPLY WITH THE NOTICES, PR. CIT SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE AO TO MODIFY THE ASSESSMENT ORDER DATED 26.8.2016 BY MAKING FURTHER ADDITION OF RS.2,14,584/ - . 8. IN THE GROUNDS OF APPEAL, IT IS STATED THAT THE ASSESSEE HAS SUBMITTED WRITTEN COMPLIANCE THAT SUCH EXPENDITURE MADE FOR VARIOUS MACHINERY/VEHICLES WHICH WERE USED BY THE ASSESSEE FOR TRANSPORTING THE MATERIALS TO THE SITE WORK AND SHOWN SUCH EXPENDITURE U NDER THE HEAD FUEL & LUBRICANTS. IT IS ALSO SUBMITTED THAT THE ASSESSEE WAS NOT ALLOWED DUE OPPORTUNITIES TO CLARIFY THE DETAILS RELATING TO SUCH EXPENDITURE MADE BY THE ASSESSEE AND THE ADDITION IS LIABLE TO BE DELETED AS NATURAL JUSTICE HAS NOT BEEN GIVEN TO THE ASSESSEE. 9. LD D.R. SUBMITTED THAT WHEN ON PERUSAL OF PROFIT AND LOSS ACCOUNT, LD PR. CIT NOTICED THAT AN AMOUNT OF RS.2,14,584/ - HAS BEEN INCURRED BY THE ASSESSEE TOWARDS FUEL AND LUBRICANTS WITHOUT HAVING ANY VEHICLE, AND THERE IS NO MENT ION IN THIS REGARD IN THE ASSESSMENT ORDER, THEREFORE, LD PR. CIT WAS CORRECT IN DIRECTING THE AO MODIFY THE ASSESSMENT BY EXERCISING HIS ITA NO. 279/CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 5 | 7 REVISIONAL POWER U/S.263 OF THE ACT BY ADDING RS.2,14,584/ - TO THE TOTAL INCOME OF THE ASSESSEE. 10. ON PERUSAL OF THE PARA 6 OF THE REVISIONAL ORDER U/S.263 OF THE ACT,. W E FIND THAT THE LD PR. CIT HAS ISSUED NOTICE U/S.263 OF THE ACT ON 7.3.2019 FIXING THE DATE ON 18.3.2019, THE NOTICE WAS SERVED ON THE ASSESSEE THROUGH E - MAIL ON 11.3.2019. SECOND TIME, THE LD PR. CIT ISSUED NOTICE ON 27.3.2019 FIXING THE DATE AFTER ONE DAY I.E. 29.3.2019 . UNDISPUTEDLY, THE ASSESSEE IS RESIDING AT JAJPUR APPROXIMATELY 80 KMS AWAY FROM CUTTACK. IN OUR OPINION, IT WAS NOT POSSIBLE TO ATTEND THE PROCEEDINGS COMING FROM JAJPUR TO CUTTACK AVAILING ONLY 7 DAYS AT FIRST TIME AND O NE DAY AT SECOND TIME. EVEN IT IS NOT CLEAR FROM THE ORDER U/S.263 PARA 6 THAT AS TO WHETHER THE SECOND NOTICE WAS SERVED ON THE ASSESSEE ON 27.3.2019. THUS, WE SAFELY PRESUME THAT ONLY THE NOTICE SENT TO THE ASSESSEE AND SEVEN DAYS WAS AVAILABLE TO HIM TO ATTEND THE PROCEEDINGS AND NO OTHER NOTICE WAS ISSUED . 11. IT IS ALSO THE CONTENTION OF THE ASSESSEE AS STATED IN THE GROUNDS OF APPEAL THAT WRITTEN COMPLIANCE WAS MADE IN REPLY TO THE SAID NOTICES. HOWEVER, LD PR CIT HAS NOT MENTIONED ANYTHING ABOU T THE WRITTEN COMPLIANCE AND SIMPLY DIRECTED THE AO TO MODIFY THE ASSESSMENT ORDER BY FURTHER ADDING RS. 2,14,584/ - TOWARDS THE EXPENDITURE INCURRED ON FUEL AND LUBRICANTS. IT IS A TRITE LAW THAT OPPORTUNITY OF HEARING IS A SIN QUA NON IN SECTION 263 OF THE ACT FOR UNSETTLING A STATUTORY ORDER. IT WAS THE DUTY OF ITA NO. 279/CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 6 | 7 THE PR. CIT TO PROVIDE THE ASSESSEE AN EFFECTIVE OPPORTUNITY TO ENABLE HIM TO SUBSTANTIATE ITS CLAIM. IN ANY CASE, IT IS ONE OF THE FUNDAMENTAL PRINCIPLES OF NA TURAL JUSTICE THAT NO PERSON CAN BE CONDEMNED UNHEARD I,E. AUDI ALTERAM PARTEM , AND THE IMPUGNED REVISION ORDER WAS THUS PASSED IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE IN ABSENCE OF ANY EFFECTIVE/REASONABLE OPPORTUNITY OF HEARING PROVIDED TO THE ASSESSEE. IT IS MANDATORY TO APPLY THE PRINCIPLES IRRESPECTIVE OF THE FACT AS TO WHETHER THERE IS ANY STATUTORY PROVISION OR NOT. IN THE PRESENT CASE, WE FIND THAT THE ASSESSEE WAS NOT AFFORDED OPPORTUNITY AS IS EVIDENT FROM THE IMPUGNED ORDER. EVEN, THERE IS NO MENTION ABOUT THE WRITTEN COMPLIANCE FURNISHED BY THE ASSESSEE, AS CLAIMED IN THE GROUNDS OF APPEAL. IN VIEW OF ABOVE FACTUAL POSITION , WE ARE OF THE OPINION THAT THE PR.CIT HAS COMMITTED A GROSS ERROR IN NOT PROVIDING ANY EFFECTIVE/REASONABLE OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE BEFORE PASSING THE ORDER . ACCORDINGLY, WE QUASH THE REVISIONAL PROCEEDINGS , NOTICE AND ORDER FRAMED U/S.263 OF THE ACT BY THE PR. CIT AND ALLOW GROUNDS OF APPEAL OF THE ASSESSEE. 1 2 . IN THE RESULT, APPEAL FILED BY TH E ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 9 / 0 9 /20 20 . S D/ - SD/ - (LAXMI PRASAD SAHU) ( CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER CUTTACK; DATED 9 / 9 /20 20 B.K.PARIDA, SPS ITA NO. 279/CTK/2019 ASSESSMENT YEAR : 2014 - 15 P A G E 7 | 7 COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : PRADEEP KUMAR MOHANTY, KERUNA, CHHATRAPADA, PRITIPUR, JAJIPUR 2. THE RESPONDENT. PR. CIT, CUTTACK 3. THE CIT(A) - , CUTTACK 4 . DR, ITAT, CUTTACK 5 . GUARD FILE. //TRUE COPY//