M/s NK Parida & Partners, Cuttack V. ITO, Cuttack

ITA 311/CTK/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7601 (ITAT-CUTTACK)
• Duration Of Justice: 4 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-10-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 04-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: S K JENA
• Keywords: Opportunity of being heard
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 311/CTK/2012 ASSESSMENT YEAR : 2001 - 2002 M/S N.K.PARIDA AND PARTNERS, AT: BISWANATH LANE, CUTTACK VS. ITO, WARD 2(4), CUTTACK PAN/GIR NO. AAEFN 6182 R (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.K.JENA, AR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 18 /10/ 2016 DATE OF PRONOUNCEMENT : 21 /10/ 2016 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - CUTTACK, DATED 20.1.2012, FOR THE ASSESSMENT YEAR 2001 - 2002.. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ORDER OF THE AO DISALLOWING OUTSTANDING LIABILITIES OF RS.3,20,425/ - IN THE NA ME OF GOBARDHAN GOMANGO, SUNDRY CREDITORS TOWARDS TRANSPORTATION EXPENSES OF RS.3,33,450/ - , PAYMENT TO SCCPL OF RS.3,69,000/ - AND UNEXPLAINED OUTSTANDING LIABILITIES OF RS.3,45,000/ - . 2 ITA NO. 311/CTK/2012 ASSESSMENT YEAR : 2001 - 2002 \ 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABL E ON RECORD. IN THE INSTANT CASE, THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 2.5.2003 DETERMINING THE TOTAL INCOME AT RS.3,72,070/ - . THEREAFTER, AN ORDER UNDER SECTION 263 WAS PASSED BY THE COMMISSIONER OF INCOME TAX , CUTTACK SETTING ASIDE THE ORIGINAL ASSESSMENT WITH CERTAIN DIRECTIONS TO THE FILE OF THE ASSESSING OFFICER FOR MAKING A FRESH ASSESSMENT. 4. ON APPEAL AGAINST THE ORDER PASSED UNDER SECTION 263 OF THE ACT, THE TRIBUNAL VIDE ITS ORDER DATED 25.6.2004 PASSED IN ITA NO.179/CTK/2004 MODIFIED THE ORDER OF THE COMMISSIONER OF INCOME TAX AND DIRECTED THE ASSESSING OFFICER TO MAKE A FRESH ASSESSMENT WITHOUT BEING INFLUENCED BY THE OBSERVATIONS MADE BY THE COMMISSIONER OF INCOME TAX. 5. THEREAFTER, THE ASSESSMENT WA S COMPLETED AFRESH BY THE ASSESSING OFFICER UNDER SECTION 143 (3) R.W.S 263 OF THE ACT. THERE AGAINST , AN APP EAL WAS FILED BEFORE THE LD CIT (A) AND BEING AGGRIEVED BY THE ORDER OF THE LD CIT(A), THE ASSESSEE FILED SECOND APPEAL BEFORE THE TRIBUNAL. THEREA FTER, THE ORDER WAS SET ASIDE BACK TO THE FILE OF THE AO AND THEREAFTER THE MATTER AGAIN TRAVELLED TO THE TRIBUNAL MORE THAN ONCE. 6. ON THE LAST OCCASION, THE TRIBUNAL VIDE ITS ORDER DATED 4.12.2009 PASSED IN ITA NO.86/CTK/2009 HAS HELD AS UNDER: 3 ITA NO. 311/CTK/2012 ASSESSMENT YEAR : 2001 - 2002 \ AFTER C AREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS AND FACTS OF THE CASE, WE ARE OF THE OPINION THAT THE REVENUE HAS NOT DISPUTED THE ASSESSEES SUBMISSION THAT THE ASSESSEE WAS NOT GIVEN AN OPPORTUNITY TO COMMENT UPON THE REMAND REPORT PROCURED BY THE LD CIT(A ) FROM THE ASSESSING OFFICER AND REPRODUCED IN PARA 6 OF THE APPELLATE ORDER AND ALSO THE FACT THAT BEFORE DISPOSING OF ASSESSEES APPEAL FINALLY THE ASSESSEE WAS NOT ALLOWED, PRACTICALLY EVEN ONE DAY, WE ARE UNABLE TO SUSTAIN THE ORDER OF THE LD CIT(A) AN D, THEREFORE, IN THE INTEREST OF JUSTICE, SET ASIDE THE SAME AND RESTORE THE APPEAL BACK TO THE FILE OF THE LD CIT(A) FOR DISPOSAL AFRESH IN ACCORDANCE WITH LAW AFTER ALLOWING BOTH THE PARTIES PROPER OPPORTUNITY OF BEING HEARD. 7. IN PURSUANCE TO ABOVE OR DER OF THE TRIBUNAL, THE LD CIT(A) VIDE IMPUGNED ORDER CONFIRMED THE FOLLOWING ADDITIONS: 1) UNPROVED LIABILITIES AGAINST GOBARDHAN GOMANGO: RS.3,20,425/ - 2) UNEXPLAINED LIABILITIES TOWARDS SUNDRY CREDITORS : RS.3,33,450/ - (TRANSPORTATION CHARGES) 3) OUTSTANDING LIABILITY PERTAINING TO F.Y. 1999 - 2000 (M/S. SAMANTRAY CONST..P.LTD. : RS3,69,000 / - 4) UNEXPLAINED LIABILITIES IN RESPECT OF RANJIT PANIGRAHI (RS.2,30,000) & MAJHI BASINI (RS.1,15,000) : RS.3,45,000/ - TOTAL : RS.13,67,87 5 / - 8. BEING STILL AGGRIEVED BY THE ABOVE ADDITIONS, THE ASSESSEE IS IN FU RTHER APPEAL BEFORE ME . 9. THE TRIBUNAL VIDE ABOVE QUOTED PREVIOUS ORDER DIRECTED THE LD CIT(A) TO SUPPLY A COPY OF THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER AND ALLOW REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE IN RESPECT OF THE SAME. 4 ITA NO. 311/CTK/2012 ASSESSMENT YEAR : 2001 - 2002 \ 10. IT IS NOT IN DISPUTE THAT A COPY OF THE REMAND REPORT WAS SUPPLIED TO THE ASSESSEE, ASSESSEE WAS ALLOWED TO MAKE HIS COMMENTS ON THE REMAND REPORT AND WAS HEARD BY THE LD CIT(A) IN RESPECT OF THE REMAND REPORT. A COPY OF THE REMAND REPORT WAS ALSO FILED BEFORE ME BY THE ASSE SSEE. THE SAID REMAND REPORT READS AS UNDER: GOVERNMENT OF INDIA OFFICE OF THE INCOME TAX OFFICER, WARD 2(4), CUTTACK NO - LTO/W - 2(4)/CTC/08 - 09/ DATED, CUTTACK THE 17 TH NOV., 2008 TO SIR, THE COMMISSIONER OF INCOME TAX (APPEALS) CUTTACK, SUB : REMAND REPORT IN THE CASE OF M/S. N. K. PARIDA & PARTNERS IN ITA NO.0031/08 - 09 - ASST. YEAR 2001 - 02 - MATTER REGARDING . KINDLY REFER TO YOUR LETTER NO.994 DT.17.01.08 ON THE ABOVE SUBJECT. AS PER YOUR DIRECTION, SUMMONS WERE ISSUED TO SRI GOB ARDHAN GOMANGO, SRI A.S. NAIDU, SRI T.N. RAO AND SRI G.S PADHI, CREDITORS FOR EXAMINATION AND ASCERTAINING THEIR CREDITWORTHINESS, FIXING THE DATE OF COMPLIANCE ON 27 +RI AND 30 TH OF OCTOBER, 2008 BUT NONE OF THEM ATTEND ED THE OFF ICE. IT IS PERTINENT TO MEN TION HERE THAT SEVERAL OPPORTUNITIES WERE GIVEN TO THE ASSESSEE TO PRODUCE SRI GOBARDHAN GOMANGO AND SUNDRY CREDITORS FOR EXAMINATION BY ME AS WELL AS BY MY PREDECESSOR ASSESSING OFFICERS AS EVIDENCED FROM THE ASSESSMENT O RDER. FROM THE ASSESSMENT ORDER, IT IS SEEN THAT THE ASSESSEE WAS ASKED TO PRODUCE THE CREDITORS FOR EXAMINATION ON 27.02.07 VIDE LETTER DT.06.02.07 . ON THIS DALE THE AR OF TH E AS SSESSEE APPEARED AND SOUGHT ADJOURNMENT AND THE CASE WAS ADJOURNED TO 20.03.0 7. ON THIS DATE ALSO THERE WAS NO COMPLIANCE. AGAIN THE CASE WAS FI XED FOR HEARING ON 14.12.07' VID E LETTER DT, 13.11.07 REQUIRING THE ASSESSEE E TO PRODUCE THE CREDITORS FOR EXAMINATION BUT NO CREDITORS APPEAR ED. AGAIN CASE WAS ADJOURNED TO 26.12.07, O N TH IS DATE THE AR OF THE ASSESSEE APPEARED AND FILED A WRITTEN SUBMISSION NARRATING THE SAME FACT AND SITUATION WHAT HAD BEEN STATED AT THE TIME OF ORIGINAL ASSESS MENT END ALSO BEFORE THE LD.CTT( A).. FURTHER, IT WAS STATED IN HIS WRITTEN SUBMISSION THAT THE ASSESSE E HAS LEFT THAT PLACE ALMOST SIX YEARS BACK AND HAS NO COMMUNICAT ION WITH THE PERSONS WHO WERE ASSOCIATED WITH HIM. IN VIEW OF TH E ABOVE , I AM OF THE OPINION THAT THE ASSESSEE IS TRYING TO MAKE DELAY IN PAYMENT OF TAX BY PREFERRING APPEALS ON THE GROUNDS THAT SUFFICIENT 5 ITA NO. 311/CTK/2012 ASSESSMENT YEAR : 2001 - 2002 \ OPPORTUNITIES/TIME HAVE NOT BEEN GIVEN ALTHOUGH ONUS LIES WITH THE ASSESSEE TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE SUNDRY CREDITORS/) YOURS FAITHFULLY, SD/ - (P. LENKA) INCOME TAX OFFICER, WARD - 2(4), CUTTACK 11. I FIND THAT THE ADVERSE COMMENTS WAS DRAWN AGAINST THE ASSESSEE MERELY ON THE GROUND THAT THE CREDITORS DID NOT COMPLY WITH THE SUMMONS ISSUED BY THE ASSESSING OFFICER AND THE ASSESSEE WAS NOT ABLE TO PRODUCE THE CREDITORS BEFORE THE ASSESSING OFFICER FOR EXAMINATION. 12. I FIND THAT IT IS NOT IN DISPUTE THAT THE SUMMONS WERE DULY SERVED UPON THE CREDITORS AT THE ADDRESSES PROVIDED BY THE ASSESSEE. IN MY CONSIDERED VIEW, MERELY BECAUSE THE CREDITORS DID NOT COMPLY WITH SUCH SUMMONS, ADVERSE VIEW CANNOT BE DRAWN AGAINST THE ASSESSEE. 13. FURTHER, THE ADVERSE INFERENCE AGAINST THE ASSESSEE CANNOT BE DRAWN BY THE ASSESSING OFFICER MERELY FROM THE FACT THAT THE ASSESSEE COULD NOT PRODUCE THE CREDITORS BEFORE THE ASSESSING OFFICER FOR EXAMINATION. UNDER THE INCOME TAX ACT, THE POWER HAS BEEN CONFERRED ON THE ASSESSING OFFICER TO S ECURE THE PRESENCE OF A PERSON AND NO POWER HAS BEEN CONFERRED UPON THE ASSESSEE BY EXERCISE OF WHICH HE CAN COMPEL THE CREDITORS TO APPEAR BEFORE THE ASSESSING OFFICER. 6 ITA NO. 311/CTK/2012 ASSESSMENT YEAR : 2001 - 2002 \ 14. FROM THE MATERIALS AVAILABLE ON RECORD, I DO NOT FIND ANY FURTHER ACTION TAKEN BY THE ASSESSING OFFICER TO SECURE THE APPEARANCE OF THE CREDITORS BEFORE HIM. IN MY CONSIDERED VIEW, IN THE ABOVE CIRCUMSTANCES, THE LD CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITIONS OF RS .13,67,875 / - MERELY ON THE BASIS OF ABOVE STATED FACTS . I, TH EREFORE, DELETE THE ADDITION OF RS.13,67,87 5 / - AND ALLOW GROUNDS OF APPEAL TAKEN BY THE ASSESSEE 15. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOU NCED IN THE OPEN COURT ON 21 /10 /2016. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 21 /10 /2016 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASST.REGISTRAR, ITAT, CUTTACK 1. THE APPELLANT : M/S N.K.PARIDA AND PARTNERS, AT: BISWANATH LANE, CUTTACK 2. THE RESPONDENT. ITO, WARD 2(4), CUTTACK 3. THE CIT(A), CUTTACK 4. CIT , CUTTACK 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//