M/s. Mansa Truck Operator Union, V. The Income Tax Officer,

ITA 296/ASR/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5815 (ITAT-AMRITSAR)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 28-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Reasonable cause
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.L. KARWA, VICE PRESIDENT AND SH. MEHAR SINGH, ACCOUNTANT MEMBER I.T.A. NO. 296(ASR)/2010 ASSESSMENT YEAR:2005-06 PAN :AAAAT9449H THE MANSA TRUCK OPERATOR UNION VS. THE INCOME-TAX O FFICER, MANSA. WARD 1(4), MANSA. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. P.N.ARORA, ADV. DEPARTMENT BY: SH. TARSEM LAL, DR ORDER PER MEHAR SINGH, AM, THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE CIT(A), BHATINDA, DATED 30.10.2009, PASSED U/S 250 (6) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO IN SHORT THE AC T) FOR THE ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A), WAS NOT CORRECT IN HOLDING THAT NOTICE U/S 143(2) HAS BEEN DULY SERVED WHEREAS AS PER EXPLANATION AND OTH ER MATERIAL PLACED ON RECORD NO NOTICE HAS BEEN PROPERLY SERVED UPON THE ASSESSEE APPELLANT. THEREFORE, ASSESSMENT MADE IS I LLEGAL AND VOID ABINITIO. (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A), WAS NOT CORRECT IN SUSTAINING ADDITION OF R S.2,47,390/- BY HOLDING THAT PAYMENT OF RS.82,46,354/- HAS BEEN RECEIVED BY THE ASSESSEE APPELLANT MERELY RELYING UPON THE FIND INGS OF THE 2 A.O. AND BOOKS OF THIRD PARTY WITHOUT ANY MATERIAL OR EVIDENCE THAT PAYMENT HAS BEEN RECEIVED BY THE ASSESSEE APPE LLANT. 3. THAT THE APPELLANT CRAVES TO ADD OR AMEND THE GR OUNDS OF APPEAL. 3. AT THE OUTSET, IT WAS FOUND THAT THE APPEAL WAS FILED LATE BY 162 DAYS. THE ASSESSEE SUBMITTED AN AFFIDAVIT DATED 21.10.201 0 REQUESTING FOR CONDONATION OF DELAY. THE CONTENTS OF THE AFFIDAVIT ARE AS UNDER: 1. THAT IN THIS CASE, AN APPEAL BEFORE THE INCOME- TAX APPELLATE TRIBUNAL, AMRITSAR BENCH, AMRITSAR WAS FILED ON 28. 06.2010. 2. THAT THERE WAS REASONABLE CAUSE FOR FILING THE BELA TED APPEAL. 3. THAT DURING THE COURSE OF PENALTY PROCEEDINGS U/S 2 71(1) INITIATED BY THE INCOME-TAX OFFICER, WARD 1(4), MAN SA, I CAME TO KNOW THAT THE QUANTUM APPEAL HAS BEEN DECIDED BY THE LD. CIT(APPEALS) AND THE ORDER OF THE CIT(APPEALS) WAS NEVER SERVED ON ME. IT WAS SERVED ON SHRI PARSHOTAM K. SI NGLA, MY COUNSEL WHO ARGUED THE APPEAL ON 27.10.2009, 28.10. 2009 AND 18.11.2009. 4. THAT SHRI PARSHOTAM K. SINGLA NEVER INFORMED ME ABO UT THE SERVICE OF THE APPELLATE ORDER. 5. THAT I APPROACHED MR. PARSHOTAM K. SINGLA, ADVOCATE ABOUT THE PENALTY PROCEEDINGS INITIATED UNDER SECTION 271 (1)(C) OF THE I.T.ACT, I WAS INFORMED THAT THE APPELLATE ORDER WA S SERVED ON HIM AND HE GAVE ME THE ORDER ON 11.05.2010. 6. THAT ONLY THEN I CAME TO KNOW ABOUT THE ORDER OF TH E LD. CIT(APPEALS), AND AFTERWARDS I GOT THE APPEAL PREP ARED FROM ANOTHER COUNSEL SHRI P.N.ARORA, ADVOCATE AND FILED THE SAME BEFORE THE TRIBUNAL ON 28.06.2010. 7. THAT THUS THERE WAS REASONABLE & SUFFICIENT CAUSE F OR FILING THE BELATED APPEAL AS THERE WAS COMMUNICATION GAP AND A CCORDINGLY I CHANGED MY COUNSEL IN THIS CASE. 8. THAT IT IS HUMBLY PRAYED THAT THE DELAY IN FILING T HE APPEAL MAY BE CONDONED AS THERE WAS REASONABLE & SUFFICIENT CA USE FOR FILING THE BELATED APPEAL. SD/_ (DEPONENT) VERIFICATION: 3 I, MALKIAT SINGH THE ABOVE NAME DEPONENT DO HEREBY AFFIRM AND DECLARE THAT THE ABOVE STATED FACTS ARE TRUE AND CO RRECT TO THE BEST OF MY KNOWLEDGE AND BELIEF. SD/- (DEPONENT) 4. IN VIEW OF THE ABOVE CONTENTIONS MADE BY THE AS SESSEE IN THE AFFIDAVIT, WE ACCEPT THE PLEA OF THE ASSESSEE FOR C ONDONATION OF DELAY, AS THE ASSESSEE HAS EXPLAINED REASONABLE AND SUFFICIENT CA USE FOR FILING THE APPEAL BELATEDLY. ACCORDINGLY, WE CONDONE THE DELAY AND PR OCEED TO DECIDE THE APPEAL ON MERITS. 5. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROUND NO.1, HENCE, WE DO NO T CONSIDER IT ESSENTIAL TO ADJUDICATE THE SAME. THEREFORE, GROUND NO. IS DISM ISSED AS NOT PRESSED. 6. IN GROUND NO.2, THE ASSESSEE CONTENDED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN SUSTAINING ADDITION OF RS.2,47,390/- BY HOLDING THAT PAYMENT OF RS.82,46,354/- HAS BEEN RECEIVED BY THE ASSESSEE ME RELY BY RELYING UPON THE FINDINGS OF THE A.O. AND BOOKS OF THIRD PARTY WITHOUT ANY MATERIAL OR EVIDENT THAT PAYMENT HAS BEEN RECEIVED BY THE ASSES SEE. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED I TS RETURN OF INCOME ON 22.06.2005 DECLARING INCOME OF RS.50.460/- WHICH WA S PROCESSED U/S 143(1) AT THE SAME FIGURE. IN THE COURSE OF ASSESSM ENT PROCEEDINGS FOR THE YEAR UNDER CONSIDERATION, IN THE CASE OF SHRI KESR SINGH, LABOUR CONTRACTOR, MANSA, IT WAS NOTICED THAT SH. KESAR HA S EBITED AN AMOUNT OF RS.82,46,354/- UNDER THE HEAD CARRIAGE EXPENSES B UT THE SAME HAS NOT BEEN DISCLOSED BY THE ASSESSEE IN ITS RETURN OF INC OME. ACCORDINGLY, THE AO ISSUING NOTICE UNDER SECTION 148 OF THE ACT ON 2 9.02.2007, MADE AN 4 ADDITION OF RS.8,24,640/-, BEING ESCAPED INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 BY APPLYING NET PROFIT RATE OF 10%. ON APPEAL, THE LD. CIT(A), DIRECTED THE A.O. TO APPLY THE NET PROFIT RATE OF 3% ON THE GROSS RECEIPTS OF RS.82,46,354/- BY HOLDING AS UNDER: 7. IN THIS RESPECT BY RELYING UPON THE JUDGMENT DATED 28.04.2006 OF THE HONBLE ITAT, AMRITSAR BENCH, AMRITSAR, IN ITA NO.3 80(ASR)/2003 IN THE CASE OF THE BATHINDA TRUCK OPERATOR UNION VS . THE ITO WARD 1(3), BATHINDA, THE A.O. IS DIRECTED TO APPLY THE N ET PROFIT RATE OF 3% ON THE SAID GROSS RECEIPTS OF RS.82,46,354/- AS AGA INST THE NET PROFIT RATE OF 10% APPLIED BY THE A.O. AND TO WORK OUT THE ADDITION ACCORDINGLY. NOW, AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LD. COUNSEL FOR THE ASSESSEE, SH. P.N. ARORA , SUBMITTED THAT THE ADDITION HAS BEEN MADE ON THE BASIS OF ALLEGED STAT EMENT OF PAYMENT OF CARRIAGE EXPENSES AT RS.82,46,354/-, WHICH WERE NEV ER RECEIVED BY THE ASSESSEE. HE FURTHER SUBMITTED THAT THE A.O. HAS N OT MADE ANY SUBSTANTIAL ENQUIRY REGARDING THE MODE OF PAYMENT AND THE EVI DENCE WHO RECEIVED THE PAYMENT AND AS TO WHY SH. KESAR SINGH HAS NOT DEDU CTED ANY TAX AT SOURCE ON THESE ALLEGED PAYMENTS. HE FURTHER POINTED OUT T HAT THE A.O. HAS NOT MADE ANY ENQUIRY FROM SH. KESAR SINGH AND THE ADDIT ION HAS BEEN MADE PURELY ON THE BASIS OF SURMISES, CONJECTURES AND SU RMISES. HE FURTHER POINTED OUT THAT THE DEPARTMENT DID NOT HAVE ANY MATERIAL F OR MAKING THE ADDITION AND THE ADDITION HAS BEEN MADE ON THE BASIS OF FOLL OWING REASONS: AS PER THE INFORMATION AVAILABLE WITH THIS OFFICE, SH. KESAR SINGH S/O SHRI SUKHDEV SINGH, LABOUR CONTRACTOR, MANSA (PAN-A UIP3400K) 5 HAS DEBITED AN AMOUNT OF 82,46,354/- UNDER THE HEAD CARRIAGE EXPENSES TO THE ASSESSEE DURING THE PERIOD RELEVAN T TO THE ASSESSMENT YEAR 2005-06, BUT PERUSAL OF THE RETURN FOR THE AS SESSMENT YEAR 2005- 06 ORIGINALLY FILED AS WELL AS IN RESPONSE TO NOTIC E U/S 148, THAT THE ASSESSEE HAS NOT DECLARED THE RECEIPTS OF RS.824635 4/- RECEIVED ON ACCOUNT OF CARRIAGE CHARGES FROM SH. KESAR SINGH, I N ITS BOOKS OF ACCOUNT. ACCORDINGLY, THE ASSESSEE HAS NOT DECLARE D THE PROFITS ON THESE RECEIPTS AND BY APPLYING NET PROFIT RATE @ 10 % ON GROSS RECEIPTS OF RS.8246354/-, NET PROFIT IS WORKED OUT AT RS.8,2 4,640/- AND THE SAME IS ADDED BACK TO THE RETURNED INCOME. IN VIEW OF HIS ABOVE SUBMISSIONS, HE SUBMITTED THAT THE ADDITION RESTRICTED TO 3% BY THE LD. CIT(A), IS UNJUSTIFIED AND UNCALLED F OR AND PRAYED THAT THE SAME MAY BE DELETED. 8. THE LD. DR, ON THE OTHER HAND, RELIED ON THE O RDERS OF THE AUTHORITIES BELOW. 9. WE HAVE HEARD BOTH THE PARTIES AND GIVEN OUR THO UGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS WITH REFERENCE TO FACTS, E VIDENCE AND MATERIAL PLACED ON RECORD, INCLUDING WRITTEN SUBMISSIONS FILED BY T HE ASSESSEE. FROM THE PERUSAL OF THE ORDER OF THE LD. CIT(A), IT IS OBVIO US THAT THE ASSESSEE HAS NOT DECLARED THE RECEIPTS OF RS.82,46,354/- RECEIVED ON ACCOUNT OF CARRIAGE CHARGES FROM SH. KESAR SINGH, IN ITS ORIGINAL RETU RN OF INCOME AS WELL AS IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT, FO R THE ASSESSMENT YEAR UNDER REFERENCE AND THE ADDITION OF RS.8,24,640/- W AS MADE BY THE AO BY APPLYING NET PROFIT RATE OF 10%. HOWEVER, THE LD. C IT(A), RESTRICTED THE ADDITION TO 3%. AFTER CONSIDERING ENTIRE FACT SITUA TION OF THE CASE , WE ARE OF THE CONSIDERED OPINION THAT THE ADDITION HAS BEEN M ADE AND RESTRICTED ON THE BASIS OF SURMISES AND CONJECTURES AND WITHOUT BRIN GING ANY COGENT AND 6 CORROBORATIVE MATERIAL ON RECORD. HOWEVER, IN THE INTEREST OF JUSTICE, WE CONSIDER IT FAIR AND REASONABLE TO RESTRICT THE AD DITION TO 1.5% OF THE SAID GROSS RECEIPTS. IN VIEW OF THE ABOVE, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 15T H JUNE, 2011. SD/- SD/- (H.L. KARWA) (MEHAR SINGH) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 15TH JUNE, 2011 /SKR/ COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE:M/S THE MANSA TRUCK OPERATOR UNION, MA NSA. 2. THE ITO, WARD 1(4), MANSA. 3. THE CIT(A), BATHINDA. 4. THE CIT, BATHINDA. 5. THE SR DR, ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH : AMRITSAR.