M/s Solitaire Build Tech Private Limited , Bangalore V. Assistant Commissioner of Income Tax (OSD), O/o Additional CIT Range-6 , Bangalore

ITA 3185/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8612 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 28-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYADARSHINI MISHRA
• Assessee Lawyers: RAMASUBRAMANYAM
• Keywords: Opportunity of being heard; Reasonable cause; Corroborative evidences; Assessment record; Condonation of delay; Revised return
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - C BENCH : BANGALORE BEFORE SHRI JASON P BOAZ , ACCOUNTANT MEMBER ITA NO. 3 18 5 /BANG/201 8 ASSESSMENT YEAR : 20 14 - 15 M/S. SOLITAIRE BUILD TECH PRIVATE LIMITED, NO.349, 25 TH CROSS, 9 TH MAIN, BSK II STAGE, BANGALORE 560 070. PAN : AAGCS 0048 H VS. ASSISTANT COMMISSIONER OF INCOME TAX (OSD), O/O ADDITIONAL CIT, R-6, BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI. RAMA SUBRAMANYAM, CA REVENUE BY : MS. PRIYADARSHINI MISHRA, JCIT DATE OF HEARING : 1 2 . 0 2 .201 9 DATE OF PRONOUNCEMENT : 10 . 04 .201 9 O R D E R PER SHRI JASON P BOAZ, A.M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-6, BANGALORE, DATED 23.10.2018 FOR ASSESSMENT YEAR 2014-15. 2. BRIEFLY STATED, THE FACTS RELEVANT FOR DISPOSAL OF THIS APPEAL ARE AS UNDER: 2.1 THE ASSESSEE, A COMPANY, ENGAGED IN REAL ESTATE BUSINESS AS BUILDERS AND DEVELOPERS, FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2014-15 ON 01.10.2014 DECLARING INCOME OF RS.27,94,350/-. THE ASSESSEE SUBSEQUENTLY FILED A REVISED RETURN OF INCOME ON 29.09.2015 WHEREIN THE INCOME DECLARED WAS RS.15,73,400/-. THE CASE ITA NO. 3185/BANG/2018 PAGE 2 OF 8 WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS CONCLUDED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) VIDE ORDER DATED 26.07.2016 WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.27,94,345/-; I.E., AT THE INCOME DECLARED AS PER THE ORIGINAL RETURN OF INCOME. THE ASSESSEES APPEAL WAS DISMISSED BY THE CIT(A) VIDE THE IMPUGNED ORDER DATED 23.10.2018. ORDER ON PETITION FOR CONDONATION OF DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL 3.1.1 THE ASSESSEES APPEAL BEFORE THE TRIBUNAL FOR ASSESSMENT YEAR 2014- 15 ON 28.11.2018 WAS ADMITTEDLY FILED BELATEDLY BY 248 DAYS. IN THE PETITION FILED FOR CONDONATION OF DELAY AND AFFIDAVIT SWORN TO IN THIS REGARD, THE ASSESSEE HAS SUBMITTED AS UNDER AT PARAS 2 TO 5 OF THE AFFIDAVIT:- ITA NO. 3185/BANG/2018 PAGE 3 OF 8 3.1.2 THE LEARNED AR FOR THE ASSESSEE WAS HEARD IN SUPPORT OF THE SUBMISSIONS PUT FORTH BY THE ASSESSEE IN THE AFFIDAVIT (SUPRA) AND REITERATED THE SAME. IN SUPPORT OF THE ASSESSEES PETITION FOR CONDONATION OF THE DELAY OF 248 DAYS IN FILING THE APPEAL, RELIANCE WAS PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: - (I) COLLECTOR, LAND ACQUISITION VS. MST KATIJI AND OTHERS (167 ITR 471) (SC); (II) RADHAKRISHNA RAI VS. ALLAHABAD BANK AND OTHERS (2009) 9 SCC 733; (III) RAGHAVENDRA CONSTRUCTIONS IN ITA NO.425/BANG/2012 DATED 14.12.2012; AND (IV) SHAKUNTALA HEGDE (L/R OF R. K. HEGDE) VS. ACIT IN ITA NO.2785/BANG/2004. 3.2 PER CONTRA, THE LEARNED DR FOR REVENUE OPPOSED THE ASSESSEES PLEA FOR CONDONATION OF DELAY. 3.3.1 I HAVE CONSIDERED THE RIVAL CONTENTIONS / SUBMISSIONS AND CAREFULLY PERUSED THE MATERIAL ON RECORD; INCLUDING THE JUDICIAL PRONOUNCEMENTS CITED. THE HONBLE APEX COURT IN THE CASE OF MST KATIJI AND OTHERS (SUPRA), WHILE EXPLAINING AND LAYING DOWN THE PRINCIPLES THAT NEED TO BE KEPT IN MIND WHILE CONSIDERING AN ITA NO. 3185/BANG/2018 PAGE 4 OF 8 APPLICATION FOR CONDONATION OF DELAY, HAS EMPHASIZED THAT SUBSTANTIAL JUSTICE SHOULD PREVAIL OVER TECHNICAL CONSIDERATIONS. THE HONBLE COURT ALSO EXPLAINED THAT A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING THE APPEAL LATE AND THAT THE EXPRESSION EVERYDAYS DELAY MUST BE EXPLAINED DOES NOT MEAN THAT A PEDANTIC APPROACH SHOULD BE TAKEN. THE DOCTRINE SHOULD BE APPLIED IN A RATIONAL, COMMON SENSE AND PRAGMATIC MANNER. TAKING INTO ACCOUNT THE AFORESAID PRINCIPLES LAID DOWN BY THE HONBLE APEX COURT AND AFTER CAREFUL CONSIDERATION OF THE REASONS / SUBMISSIONS PUT FORTH IN THE AFFIDAVIT, I AM OF THE OPINION THAT THERE WAS SUFFICIENT AND REASONABLE CAUSE FOR DELAY OF 248 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL AND THAT IT IS A FIT CASE FOR CONDONATION OF THE AFORESAID DELAY AND DO SO. THE APPEAL BEFORE THE TRIBUNAL IS ACCORDINGLY ADMITTED FOR CONSIDERATION AND ADJUDICATION. IT IS ACCORDINGLY ORDERED. O R D E R 4.1 IN THIS APPEAL, DIRECTED AGAINST ORDER OF CIT(A)-6, BANGALORE, DATED 23.01.2018 FOR ASSESSMENT YEAR 2014-15, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN SO FAR IS PREJUDICIAL TO THE INTERESTS OF THE APPELLANT IN SO FAR IS BAD AND ERRONEOUS TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS IN ASSESSING THE TOTAL INCOME AT RS. 27,94,345/- WITHOUT CONSIDERING THE EXPENDITURE OF RS. 12,48,246/-CLAIMED IN THE REVISED RETURN FILED. 3. THAT THE LEARNED LOWER AUTHORITIES ERRED IN LAW AND ON FACTS IN HOLDING THAT THE APPELLANT HAS NOT PRODUCED ANY PROOF FOR EXPENSES CLAIMED IN THE REVISED RETURN OF INCOME AND SUCH FINDING IS PERVERSE AND CONTRARY TO THE MATERIALS AVAILABLE ON RECORD. ITA NO. 3185/BANG/2018 PAGE 5 OF 8 4.2.1 THE LEARNED AR OF THE ASSESSEE WAS HEARD IN SUPPORT OF THE GROUNDS RAISED. IN WRITTEN SUBMISSIONS FILED BEFORE THE BENCH, THE LEARNED AR HAS SUBMITTED AS UNDER:- 1. THE APPELLANT IS A COMPANY ASSESSED TO INCOME TAX BY THE LEARNED ASSISTANT COMMISSIONER OF INCOME TAX (OSD). FOR THE AY 2014-15 THE APPELLANT FILED A RETURN OF INCOME DECLARING A TOTAL INCOME OF RS. 27,94,350. THE RETURNED INCOME WAS BASED ON UNAUDITED PROVISIONAL FINANCIAL STATEMENTS. LATER, THE APPELLANT FILED A REVISED RETURN WHEREIN THE TOTAL INCOME WAS DECLARED AT RS. 15.73.400/-. THE REVISED RETURN WAS BASED ON THE AUDITED FINANCIAL STATEMENTS. 2. IN THE ASSESSMENT PROCEEDINGS THE LEARNED ASSESSING OFFICER HELD THAT THE DIFFERENCE BETWEEN ORIGINAL RETURN AND THE REVISED RETURN WAS RS. 12,48,246 AND THE APPELLANT HAD NOT FURNISHED ANTI SUPPORTING DOCUMENTS FOR CLAIMING THE EXTRA EXPENDITURE INCURRED TOWARDS LABOUR CHARGES, RENT AND AUDIT FEE. THE APPELLANT SUBMITTED THAT THESE EXPENSES WERE OUTSTANDING AS ON 31ST MARCH 2014 AND IN THE PROVISIONAL FINANCIAL STATEMENTS NO PROVISION WAS MADE TOWARDS SUCH EXPENSES. THE LEARNED ASSESSING OFFICER ASSESSED THE INCOME ON THE BASIS OF THE ORIGINAL RETURN. ON APPEAL, THE LEARNED CIT (A)HELD THAT THE APPELLANT HAD NOT PAID THE SELF-ASSESSMENT TAX DUE ON THE ORIGINAL RETURN AND THE REVISED RETURN WAS FILED ONLY TO COVER UP THIS DEFECT. THE APPEAL WAS DISMISSED. 3. IT IS SUBMITTED THAT THE APPELLANT DID NOT BRING THE FACT THAT THE ORIGINAL RETURN WAS FILED BASED ON UNAUDITED PROVISIONAL FINANCIAL STATEMENT AND THE REVISED RETURN WAS FILED ON THE BASIS OF AUDITED FINANCIAL STATEMENT. IT IS A FACT THAT THE REVISED RETURN IS AVAILABLE ON RECORD AS BOTH THE LEARNED ASSESSING OFFICER AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAVE REFERRED TO THIS FACT IN THE RESPECTIVE ORDERS. DURING THE HEARING, LEARNED DR CONFIRMED THAT AUDITED FINANCIAL STATEMENTS ARE AVAILABLE IN ASSESSMENT RECORDS HENCE, IT IS PRAYED THAT THE HON'BLE BENCH BE PLEASED TO REMAND THE CASE BACK TO THE FILES OF THE ASSESSING OFFICER SO THAT A PROPER ASSESSMENT CAN BE MADE TAKING INTO ACCOUNT ALL THE EVIDENCES. 4.3 PER CONTRA, THE LEARNED DR FOR REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. ITA NO. 3185/BANG/2018 PAGE 6 OF 8 4.4.1 I HAVE CONSIDERED THE RIVAL CONTENTIONS / SUBMISSIONS AND CAREFULLY PERUSED THE MATERIAL ON RECORD. THE FACTS OF THE MATTER, AS EMERGE FROM THE RECORD ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2014-15 ON 01.10.2014 DECLARING INCOME OF RS.27,94,350/-. SUBSEQUENTLY, THE ASSESSEE FILED A REVISED RETURN OF INCOME ON 29.09.2015, WHEREIN THE INCOME DECLARED WAS REVISED TO RS.15,73,400/-. THE AO, ON EXAMINATION THEREOF, NOTED THAT THE ASSESSEE HAD NEITHER FURNISHED DETAILS NOR SUPPORTING DOCUMENTS TO RECONCILE THE DIFFERENCE OF INCOME OF RS.12,48,246/- IN THE REVISED RETURN VIS--VIS THE INCOME DECLARED IN THE ORIGINAL RETURN OF INCOME. THE AO CONCLUDED THE ASSESSMENT TAKING THE ASSESSEES INCOME AT RS.27,94,345/- AS DECLARED IN THE ORIGINAL RETURN OF INCOME AFTER EXAMINING THE PROFIT AND LOSS ACCOUNT AND THE 26AS. ON APPEAL, THE CIT(A) UPHELD THE AOS ORDER HOLDING THAT THE ASSESSEE HAD NOT PAID SELF-ASSESSMENT TAX DUE ON THE INCOME DECLARED IN THE ORIGINAL RETURN AND THAT THE REVISED RETURN OF INCOME SHOWING REDUCED INCOME WAS FILED ONLY TO OVERCOME THIS DEFECT. 4.4.2 IT IS SEEN THAT ON THE ONE HAND, THE AO HAS HELD AGAINST THE ASSESSEE STATING THAT DETAILS / SUPPORTING EVIDENCE WERE NOT FILED TO RECONCILE THE DIFFERENCE IN INCOME BETWEEN RS.27,94,350/- DECLARED IN THE ORIGINAL RETURN OF INCOME AND THE INCOME OF RS.15,73,400/- IN THE REVISED RETURN. THE CIT(A), WITHOUT ADDRESSING THE GROUNDS RAISED BY ASSESSEE IN THE SINGLE HEARING HELD ON 22.01.2018, HAS UPHELD THE AOS ORDER ON THE GROUND THAT THE REVISED RETURN FILED SHOWING REDUCED INCOME OF RS.15,73,400/- WAS ONLY WITH THE PURPOSE OF COVERING UP THE ASSESSEES FAILURE TO PAY SELF ASSESSMENT TAX ON THE ORIGINALLY DECLARED INCOME. ON THE OTHER HAND, THE AR IN SUBMISSIONS BEFORE THE BENCH (SUPRA), STATES THAT THE ORIGINAL RETURN WAS FILED BASED ON UNAUDITED PROVISIONAL FINANCIAL STATEMENT, WHEREAS THE REVISED RETURN WAS FILED ON THE BASIS OF AUDITED FINANCIAL STATEMENTS AND THAT THE SAME IS AVAILABLE ON THE RECORD. THIS FACT WAS NOT CONTROVERTED BY THE LEARNED DR FOR REVENUE. TAKING INTO ACCOUNT THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE ORDERS OF THE AUTHORITIES BELOW, IT APPEARS THAT THERE HAS NOT BEEN PROPER EXAMINATION / VERIFICATION OF THE MATTER AS ITA NO. 3185/BANG/2018 PAGE 7 OF 8 THOUGH THE AO STATES THAT NO DETAILS / CORROBORATING EVIDENCES WERE FIELD, THE LEARNED AR SUBMITS THAT CORROBORATING DETAILS / RECONCILIATION ETC., FOR REVISED INCOME OF RS.15,73,400/- ARE AVAILABLE ON THE RECORDS OF THE DEPARTMENT, FILED AS PART OF THE AUDITED FINANCIAL STATEMENTS ALONG WITH THE REVISED RETURNS. IN THIS FACTUAL MATRIX OF THE CASE, I AM OF THE OPINION THAT IN THE LIGHT OF DISCUSSION ON THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND THE AVERMENTS OF THE LEARNED AR OF THE ASSESSEE, THE INTEREST OF SUBSTANTIAL JUSTICE WOULD BE SERVED BY SETTING ASIDE THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND THEREFORE RESTORE THE MATTER TO THE FILE OF THE AO FOR EXAMINATION, VERIFICATION AND DETERMINATION OF THE CORRECT INCOME OF THE ASSESSEE VIZ., WHETHER AT RS.27,94,350/- AS PER ORIGINAL RETURN OF INCOME FOR ASSESSMENT YEAR 2014- 15 OR AT RS.15,73,400/- AS PER THE REVISED RETURN OF INCOME FILED FOR THIS YEAR TAKING INTO ACCOUNT AND ADDRESSING ALL THE CLAIMS OF THE ASSESSEE. NEEDLESS TO ADD, THE AO SHALL AFFORD THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND TO FILE DETAILS / SUBMISSIONS REQUIRED, THAT SHALL BE CONSIDERED BEFORE DECIDING THE ISSUE. 6. IN THE RESULT, THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2014-15 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF APRIL, 2019. SD/- SD/ - SD/ - (N. V. VASUDEVAN) VICE PRESIDENT (JASON P BOAZ) ACCOUNTANT MEMBER BANGALORE. DATED: 10 TH APRIL, 2019. /NS/* ITA NO. 3185/BANG/2018 PAGE 8 OF 8 COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.