M/s Shivam Marketing, Gondal, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-1(2), RAJKOT-GUJARAT

ITA 316/RJT/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6817 (ITAT-RAJKOT)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 28-05-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 08-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: DR ADHIA
• Keywords: Principle of natural justice; Bonafide belief; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL, SMC BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM ITA NOS.314 & 316/RJT/2014 ASSESSMENT YEAR : 2008-09 M/S. SHIVAM MARKETING, GUNDALA ROAD, GONDAL PAN : ABBFS 8088 E ( / APPELLANT) THE I.T.O. WARD-1(2), RAJKOT / RESPONDENT / ASSESSEE BY SHRI D.R. ADHIA, AR / REVENUE BY SHRI M.K. SINGH, DR / DATE OF HEARING 28.05.2014 !'# / DATE OF PRONOUNCEMENT 16.06.2014 / ORDER BOTH THESE APPEALS BY THE ASSESSEE WERE HEARD ON TH E SAME DATE, ARGUED BY COMMON REPRESENTATIVE; THEREFORE, THESE ARE BEING D ISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.314/RJT/2014 2. THIS APPEAL IS AGAINST THE ORDER DATED 11.03.201 4 OF CIT(A)-I, RAJKOT DISMISSING THE APPEAL OF THE ASSESSEE IN LIMINE FOR THE ASSESSMENT YEAR 2008-09. THE REASONING GIVEN BY THE LD. CIT(A) FOR DISMISSIN G THE APPEAL IS THAT THE ASSESSEE HAS NOT FILED AN APPLICATION FOR CONDONATION OF DEL AY OF 166 DAYS IN FILING THE APPEAL. AGGRIEVED WITH THE ORDER OF LD. CIT(A), THE ASSESSE E IS IN APPEAL BEFORE THIS TRIBUNAL, ON THE FOLLOWING GROUNDS:- 1.1. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT CONSIDERING THE MERITS OF THE CASE IN SPITE OF SPECIFIC DECISIONS AND GUIDELI NES FROM THE HON. GUJARAT HIGH COURT. THE ORDER DESERVES CANCELLATION WITH A DIRECTION TO FOLLOW THE DECISIONS OF THE HON. GUJARAT HIGH COURT TO CONSIDE R THE MERITS OF THE CASE. 1.2. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN N OT CONSIDERING THE MERITS OF THE CASE IN SPITE OF SPECIFIC DECISIONS AND GUIDELI NES FROM THE HON. GUJARAT HIGH COURT. THE ORDER DESERVES CANCELLATION WITH A DIRECTION TO REFUND THE AMOUNT OF APPEAL FEES PAID BY THE APPELLATE FROM FI LING APPEAL BEFORE THE HON. ITA T SINCE THE LD. CIT(A) HAS NOT FOLLOWED THE DEC ISIONS OF THE HON. GUJARAT HIGH COURT TO CONSIDER THE MERITS OF THE CASE. 2. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN NOT CONDONING THE DELAY WITHOUT PROVIDING ANY OPPORTUNITY TO THE APPELLANT TO EXPLAIN THE DELAY AND STRAIGHT WAY DISMISSED THE APPEAL WITHOUT CONSIDERI NG MERITS OF THE CASE. THE APPELLATE ORDER DESERVES CANCELLATION. 3. THE APPELLANT ALSO PRAYS THE HON. ITAT TO BE KIN D ENOUGH TO CONSIDER THE CASE OF THE APPELLANT ON MERITS ALSO ON THE FOLLOWI NG GROUNDS TAKEN BEFORE THE LD. CIT(A). 2 314 & 316-RJT-2014 - SHIVAM MARKETING 143(3)&PENALTY (SMC) 1.1. THE LD. LT.O. HAS ERRED IN LAW AND FACTS IN MA KING ADDITION OF RS. 2,64,502/-, TREATING THE SAME AS UN-ACCOUNTE D COMMISSION INCOME. THE ADDITION NEEDS DELETION. 1.2. WITHOUT PREJUDICE, THE LD. LT.O. HAS ERRED IN LAW AND FACTS IN MAKING ADDITION OF RS.2,64,502/-, TREATING THE S AME AS UN- ACCOUNTED COMMISSION INCOME. WITHOUT ALLOWING DEDUC TION OF EXPENDITURE THERE FROM. THE ADDITION NEEDS SUITABL E REDUCTION. 2. THE LD. LT.O. HAS ERRED IN LAW AND FACTS IN MAKI NG ADDITION OF RS. 6,811/-, TREATING THE SAME AS UN-ACCOUNTED I NTEREST INCOME. THE ADDITION NEEDS DELETION. 3.1. THE LD. LT.O. HAS ERRED IN LAW AND FACTS IN MA KING ADDITION OF RS. 25,000/-, AS LUMP SUM ADDITION OUT OF OFFICE EXPENSES. THE ADDITION NEEDS DELETION. 3.2. THE LD. LT.O. HAS ERRED IN LAW AND FACTS IN MA KING ADDITION OF RS. 25,0001-, AS LUMP SUM ADDITION OUT OF OFFICE EXPENSES. THE ADDITION NEEDS SUITABLE REDUCTION BEING VERY EXCESS IVE. 4.1. TAKING INTO CONSIDERATION THE LEGAL, STATUTORY , FACTUAL, ACCOUNTING AND ADMINISTRATIVE ASPECTS, NO ADDITION AMOUNTING TO RS. 2,64,502/-, RS. 6,811/- AND RS. 25,000/- OUGHT TO H AVE BEEN MADE. THE ADDITIONS NEED DELETION. 4.2. TAKING INTO CONSIDERATION THE LEGAL, STATUTORY , FACTUAL, ACCOUNTING AND ADMINISTRATIVE ASPECTS, NO ADDITION AMOUNTING TO RS.2,64,502/- AND RS. 25,000/- OUGHT TO HAVE BEEN M ADE. THE ADDITIONS NEED SUITABLE REDUCTION. 5. WITHOUT PREJUDICE, THE ASSESSMENT MADE IS BAD I N LAW AND DESERVES ANNULMENT. 6. WITHOUT PREJUDICE, NO ADEQUATE, SUFFICIENT AND REASONABLE OPPORTUNITY HAS BEEN PROVIDED. THE ASSESSMENT NEEDS ANNULMENT. 7. THE APPELLANT CRAVES LEAVE TO ADD/ALTER/AMEND AN D/OR SUBSTITUTE ANY OR ALL GROUND OF APPEAL BEFORE THE A CTUAL HEARING TAKES PLACE. 3. AT THE TIME OF HEARING BEFORE THE TRIBUNAL, ON B EHALF OF THE ASSESSEE, SHRI D.R. ADHIA, AR, APPEARED AND POINTED OUT THAT THOUGH THE RE WAS DELAY OF 166 DAYS, BUT THROUGH OVERSIGHT THE ASSESSEE HAS NOT FILED AN APP LICATION FOR CONDONATION OF DELAY. HE FURTHER POINTED OUT THAT THE ASSESSEE HAS GIVEN ASSESSMENT ORDER TO ITS INCOME- TAX PRACTITIONER AND HE WAS OF THE BONAFIDE BELIEF THAT THE APPEAL HAS BEEN FILED. IT IS ONLY WHEN THE ASSESSEE RECEIVED A PENALTY ORDER U/S 271(1)(C), HE CAME TO KNOW THAT THROUGH OVERSIGHT THE APPEAL HAS NOT BEEN FILED. I MMEDIATELY KNOWING THE SAME, HE FILED THE APPEAL. THE AR OF THE ASSESSEE ALSO POIN TED OUT THAT THE ASSESSEE IS ALSO LOCATED AT A SMALL PLACE, THEREFORE THE LD. CIT(A) OUGHT TO HAVE CONDONE THE DELAY OF 3 314 & 316-RJT-2014 - SHIVAM MARKETING 143(3)&PENALTY (SMC) 166 DAYS. FOR CONDONATION OF DELAY, THE LD. COUNSE L OF THE ASSESSEE RELIED UPON FOLLOWING DECISIONS OF THE HONBLE GUJARAT HIGH COU RT:- 1. 54 TAXMAN 33 (GUJ) VARELY TAXTILE INDUSTRY VS . CIT ONE OF THE PROPOSITION OF SETTLED LEGAL POSITION IS TO ENSURE THAT MERITORIOUS CASE IS NOT THROWN ON THE GROUND OF LIMITATION. 2. 115 ITR 27 (GUJ) SAURASHTRA CEMENT & CHEMICAL INDUSTRY VS. CIT THE HONBLE GUJARAT HIGH COURT HAS BEEN KIND ENOUGH TO HOLD THAT NO MERITORIOUS CASE SHOULD SUFFER ON THE GROUND OF LIM ITATION AND THE DELAY TO BE CONDONED TAKEN VERY LIBERAL VIEW. 4. ON THE BASIS OF THE AFORESAID SUBMISSION, LD. CO UNSEL OF THE ASSESSEE POINTED OUT THAT THE ASSESSEE HAS FURNISHED DETAILED SUBMIS SIONS BEFORE THE LD. CIT(A) AND DURING THE COURSE OF HEARING LD. CIT(A) NEVER POINT ED OUT THAT THE APPEAL FILED BY THE ASSESSEE IS DEFECTIVE IN AS MUCH AS HE HAS NOT FILE D AN APPLICATION FOR CONDONATION OF DELAY. HAD THE LD. CIT(A) POINTED OUT THE DEFECT, THE ASSESSEE COULD HAVE FILED AN APPLICATION FOR CONDONATION OF DELAY. HE ACCORDING LY SUBMITTED THAT THE DELAY OF 166 DAYS BE CONDONED AND THE APPEAL OF THE ASSESSEE BE DECIDED ON MERITS. 5. ON THE OTHER HAND, LD. DR APPEARED ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF LD. CIT(A). HE POINTED OUT T HAT IT WAS DUTY OF THE ASSESSEE TO FILE AN APPLICATION FOR CONDONATION OF DELAY. SINCE THIS WAS NEITHER FILED ALONGWITH MEMORANDUM OF APPEAL NOR FILED AT THE TIME OF HEARI NG, THE ORDER OF LD. CIT(A) BE UPHELD. 6. HAVING HEARD BOTH THE SIDES, I HAVE CAREFULLY GO NE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND THE DECISIONS OF THE HONBLE GUJARAT HIGH COURT RELIED UPON BY THE LD. COUNSEL OF THE ASSESSEE. WHEN AN APPLICATI ON FOR CONDONATION OF DELAY IS NOT FILED ALONGWITH MEMORANDUM OF APPEAL, IT WAS THE DU TY OF THE LD. CIT(A) TO POINT OUT THE DEFECT. IT, PRIMA-FACIE, APPEARS THAT NEITHER A T THE TIME OF FILING THE APPEAL NOR AT THE TIME OF HEARING THE APPEAL, THIS DEFECT WAS POI NTED OUT TO THE ASSESSEE OR ITS COUNSEL. THE PRINCIPLE OF NATURAL JUSTICE DEMANDS THAT LD. CIT(A) OUGHT TO HAVE POINTED OUT THIS DEFECT. I, THEREFORE, IN THE INTER EST OF JUSTICE, SET ASIDE THE IMPUGNED ORDER OF LD. CIT(A) AND DIRECT HIM TO DECIDE THE AP PEAL OF THE ASSESSEE AFRESH. THE ASSESSEE SHALL ALSO FURNISH AN APPLICATION FOR COND ONATION OF DELAY. THE LD. CIT(A) 4 314 & 316-RJT-2014 - SHIVAM MARKETING 143(3)&PENALTY (SMC) WILL CONSIDER THE SAID APPLICATION FOR CONDONATION OF DELAY KEEPING IN VIEW THE PRINCIPLE LAID DOWN BY THE HONBLE GUJARAT HIGH COU RT IN ITS TWO DECISIONS (SUPRA) AS CITED BY THE LD. COUNSEL OF THE ASSESSEE BEFORE THE TRIBUNAL. 7. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL OF THE ASSESSEE IS TREATED AS ALLOWED. ITA NO.316/RJT/2014 8. THIS APPEAL IS AGAINST THE ORDER DATED 10.03.201 4 OF CIT(A), JAMNAGAR CONFIRMING THE PENALTY OF RS.83,836/- LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME-TAX ACT. 9. I HAVE HEARD BOTH THE SIDES. THIS PENALTY IS LEV IED ON THE BASIS OF ADDITIONS MADE WHICH WERE DISPUTED BY THE ASSESSEE IN ITA NO. 314/RJT/2014(SUPRA). SINCE IN QUANTUM APPEAL, THE ORDER OF LD. CIT(A) IS SET ASID E, I SET ASIDE THE IMPUGNED ORDER OF LD. CIT(A) ALSO, WITH THE DIRECTION THAT HE WILL DECIDE THIS APPEAL AFRESH AFTER TAKING INTO ACCOUNT THE DECISION IN ITA NO.314/RJT/2014. 10. IN THE RESULT, FOR STATISTICAL PURPOSES, BOTH T HE APPEALS OF THE ASSESSEE ARE TREATED AS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- ( $.. &' / T. K. SHARMA) ( ) /JUDICIAL MEMBER *)& +) ,/ ORDER DATE: 16.06.2014 !$ /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- M/S. SHIVAM MARKETING, GUNDALA ROAD, GONDAL 2. / RESPONDENT- THE I.T.O., WARD-1(2),RAJKOT 3. ,0,1 * * 2 / CONCERNED CIT-I, RAJKOT 4. * * 2- / CIT(A)-I, RAJKOT/JAMNAGAR 5 . 567 1, * 1#, !$ / DR, ITAT, RAJKOT 6 . 79 :; / GUARD FILE *)& / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT