GOLDEN SEAMS TEXTILES P. LTD, MUMBAI V. DCIT CEN CIR 5, MUMBAI

ITA 302/MUM/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0047 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 13-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Assessee Lawyers: A K GHOSH
• Keywords: Depreciation; Opportunity of being heard
• Section: 133A; 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH H, MU MBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.302/MUM/2017 (ASSESSMENT YEAR- 2011-12) M/S GOLDEN SEAMS TEXTILES PVT. LTD. 205-214, PENINSULA CENTRE, DR. S.S. RAO ROAD, PAREL, MUMBAI-400012 PAN: AACCG1114E VS. DCIT CENTRAL CIRCLE-5 (NOW, DCIT, CC-1(4)), OLD CGO BUILDING, ROOM NO. 901, ANNEXE, 9 TH FLOOR, M.K. ROAD, MUMBAI-400020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.K. GHOSH (AR) REVENUE BY : SHRI RAM TIWARI (SR. DR) DATE OF HEARING : 22.08.2017 DATE OF PRONOUNCEMENT : 22 .08.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY ASSESSEE UNDER SECTION 253 OF THE IN COME-TAX ACT (ACT) IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF I NCOME TAX (APPEALS)-47 [CIT(A)], MUMBAI DATED 26.10.2016 FOR THE ASSESSMEN T YEAR (AY) 2011-12. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN PASSING EX-PARTE ORDER WITHOUT AFFORDING R EASONABLE OPPORTUNITY OF BEING HEARD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CTT(A) ERRED IN CONFIRMING THE PENALTY OF RS. 1,99,001/- L EVIED BY THE AO U/S. 271(1)(C) DESPITE THE FACT THAT THE LD. AO NEITHER IN THE SHOW CAUSE NOTICE NOR IN THE ASSESSMENT ORDER SPECIFIED UNDER WHICH CHARG E HE IS CONTEMPLATING TO LEVY PENALTY. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SUBSIDIARY OF MANDHANA INDUSTRIES LTD. A SEARCH OPERATION U/S 132 WAS COND UCTED IN ASSESSEES AND ITS ITA NO. 302/MUM/2017- M/S GOLDEN SEAMS TEXTILES PVT. LTD. 2 GROUP CONCERN ON 11.01.2012. SUBSEQUENTLY, THE SEAR CH OPERATION AND SURVEY U/S 133A WAS CARRIED OUT AT THE BUSINESS PREMISES O N 31.07.2013. DURING THE SURVEY, THE STATEMENT OF CHAIRMAN OF ASSESSEE-COMPA NY WAS RECORDED WHEREIN A BOGUS CAPITAL PURCHASE OF RS. 81,93,142/- WAS ADM ITTED FOR FINANCIAL YEAR (FY) 2007-08 AND OFFERED TO ROLL BACK THE CLAIM OF EXCESS DEPRECIATION ON BOGUS MACHINERY. THUS, THE ASSESSMENT ORDER U/S 143 (3) R.W.S. 153A WAS PASSED ON 27.03.2014 AFTER DISALLOWING THE DEPRECIA TION OF RS. 5,99,086/- . SIMULTANEOUSLY, THE AO AND INITIATED THE PENALTY. THE AO LEVIED THE PENALTY OF RS. 1,99,001/- BEING 100% OF THE TAX SOUGHT TO B E EVADED. ON APPEAL BEFORE THE LD. CIT(A), THE PENALTY WAS SUSTAINED. THUS, FU RTHER AGGRIEVED, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD THE SUBMISSIONS OF THE LD AR FOR THE ASSESSEE AND THE LD DR FOR THE REVENUE. THE LD. AR OF THE ASSESSEE ARGUED THAT THE CIT(A) PASSED EX-PARTE ORDER WITHOUT GIVING OPPORTUNITY OF HEARING TO THE ASSESSEE. GROUND NO.1 RELATES TO THE DENIAL OF OPPORTUNITY OF HEARING DUR ING FIRST APPELLATE STAGE. THE LD. AR OF THE ASSESSEE ARGUED THAT THE ASSESSEE HAS GOOD CASE ON MERIT AND WOULD HAVE SUCCEEDED BEFORE THE LD. CIT(A). ON THE OTHER HAND, LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF AUTHORITIES BELOW. T HE LD. DR FOR THE REVENUE ARGUED THAT NONE-APPEARED ON BEHALF OF ASSESSEE DES PITE THE NUMBER OF OPPORTUNITY GRANTED BY LD. CIT(A). THE LD. CIT(A) D ECIDED THE CASE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE LD. DR F OR THE REVENUE ARGUED THAT THE ASSESSEE HAS NO CASE ON MERIT. ITA NO. 302/MUM/2017- M/S GOLDEN SEAMS TEXTILES PVT. LTD. 3 4. WE HAVE PERUSED THE ORDER OF LD. CIT(A), THE LD CIT (A) IN PARAGRAPH NO. 2.4 OF HIS ORDER RECORDED THAT THE APPELLANT HAS NOT MADE ANY WRITTEN SUBMISSION ON THE GROUNDS OF APPEAL, DESPITE NUMBER OF OPPORTUNITY GR ANTED TO IT IN THIS BEHALF. WE HAVE NOTED THAT THE LD. CIT(A) HAS NOT RECORDED THE DATE OF HEARING, ISSUANCE OF NOTICE, MEANS OF TRANSMISSION OF NOTICE AND THE SAT ISFACTION REGARDING THE SERVICE OF NOTICE BEFORE THE DUE DATE FIXED FOR HEARING. T HE OBSERVATION OF LD. CIT(A) THAT DESPITE NUMBER OF OPPORTUNITY GRANTED ASSESSEE HAS NOT MADE ANY WRITTEN SUBMISSION IS VAGUE. THE PERUSAL OF ORDER SHOWS THA T THE ORDER WAS PASSED IN ABSENCE OF ASSESSEE, WITHOUT AFFORDING THE OPPORTUN ITY OF HEARING. THUS, WE DEEM IT APPROPRIATE TO RESTORE THE APPEAL TO THE FI LE OF CIT(A) TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. NEEDLES TO SAY THAT THE LD. CIT(A) SHALL GRANT THE SUFFICIENT AND ADEQUATE OPPORTUNITY TO THE ASSESSEE BEFORE PASSING THE ORDER. THE ASSESSEE IS ALSO DIRECTED TO FULLY CO-OPERATE AND T O PROVIDE ALL NECESSARY INFORMATION AND EVIDENCES WHICH MAY BE REQUIRED BY LD. CIT(A) WHILE DECIDING THE ISSUE AFRESH. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 22ND DAY OF AUGUST 2017. SD/- SD/- (G.S. PANNU) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 22/8/2017 S.K.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. ITA NO. 302/MUM/2017- M/S GOLDEN SEAMS TEXTILES PVT. LTD. 4 BY ORDER, (ASSTT.REGI STRAR) ITAT, MUMB AI 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COP