Shri Maheshkimar M. Shah., Surendranagar V. The Deputy Commissioner of Income Tax, Surendranagar Circle, Surendranagar

ITA 320/RJT/2013

• Counselvise Citation: 32024914 RSA 2013
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 03-01-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 16-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR J B JHAVERI DR
• Assessee Lawyers: TEJ SHAH
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM AND SHRI B. R. JAIN, A M ITA NO. 319/RJT/2013 / ASSESSMENT YEAR : 2004-05 M/S NAGINDAS KASTURCHAND & BROS., NKB HOUSE, MEHTA MARKET SURENDRANAGAR PAN : AADFN 6309 Q ( / APPELLANT) ITO, WARD-2, SURENDRANAGAR / RESPONDENT ITA NO. 320/RJT/2013 / ASSESSMENT YEAR : 2006-07 SHRI MAHESHKUMAR M. SHAH, C/O. NAGINDAS KASTURCHAND & BROS. PAN : ADRPS 4909 G ( / APPELLANT) DCIT, SURENDRANAGAR CIRCLE SURENDRANAGAR / RESPONDENT ITA NO. 321/RJT/2013 / ASSESSMENT YEAR : 2006-07 SMT. SAROJBEN DINKARRAI SHAH C/O. M/S. NEWAGE HOSE MFG. CO., AMBAWADI INDL. ESTATE, WADHWANCITY, SURENDRANAGAR PAN : ADRPS 4917 L ( / APPELLANT) DCIT, SURENDRANAGAR CIRCLE SURENDRANAGAR / RESPONDENT ! ' #$ / ASSESSEE BY SHRI TEJ SHAH, ADVOCATE % ! ' #$ / REVENUE BY DR. J. B. JHAVERI, DR # & ' ! ( / DATE OF HEARING 03.01.2014 ) ! ( / DATE OF PRONOUNCEMENT 09.01.2014 / ORDER .. , / T. K. SHARMA, J. M.: THESE THREE APPEALS BY THE ASSESSEE ARE AGAINST THREE SEPARATE ORDERS OF LD. C IT(A)-XVI, AHMEDABAD, ALL DATED 03.06.2013. ALL THESE APPEALS WERE HEARD ON THE SAM E DATE, ARGUED BY COMMON REPRESENTATIVE; THEREFORE, THESE ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.319/RJT/2013 FOR AY 2004-05 2. THIS APPEAL BY THE ASSESSEE IS AGAINST ORDER OF LD. CIT(A)-XVI, AHMEDABAD IN APPEAL NO.CIT(A)-XVI/ITO/WD.2/SNR/315/11-2 DATED 03 .06.2013 FOR ASSESSMENT YEAR 2004-05, ON THE FOLLOWING GROUNDS:- 319 TO 321-RJT-2013 SH MAHESHKUMAR M SHAH+2 2 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) , HAS ERRED IN LAW AND ON FACTS CONFIRMED, THE DISALLOWANCE OF WEIGHT LOSS EXPENSES OF RS.12,42,850/- IS NOT CORRECT. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL), HAS ERRED IN LAW AND ON FACTS CONFIRMED, THE DISALLOWANCE OF CAR EXPENSE S OF RS.22,589/- IS NOT CORRECT. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL), HAS ERRED IN LAW AND ON FACTS CONFIRMED, THE DISALLOWANCE OF CAR DEPRECI ATION OF RS.20,651/- IS NOT CORRECT. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL), HAS ERRED IN LAW AND ON FACTS CONFIRMED, THE DISALLOWANCE OF TELEPHONE E XPENSES OF RS.23,500/- IS NOT CORRECT. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN LAW AND ON FACTS CONFIRMED, THE DISALLOWANCE OF TRAVELLING EXPENSES OF RS.25,200/- IS NOT CORRECT. ITA NO.320/RJT/2013 FOR AY 2006-07 3. THIS APPEAL BY THE ASSESSEE IS AGAINST ORDER OF LD. CIT(A)-XVI, AHMEDABAD IN APPEAL NO.CIT(A)-XVI/DCIT/SNR CIR./421/11-12 DATED 03.06.2013 FOR ASSESSMENT YEAR 2006-07, ON THE FOLLOWING GROUNDS:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN LAW DO NOT CONSIDER THE REPLY OF THE ASSESSEE DTD. 13.04.2 010 AND DTD. 01.11.2011 IS NOT CORRECT. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN LAW AND ON FACTS CONFIRMED, ADDITION ON ACCOUNT OF INTEREST ON CAPITAL RS.2,49,107/- IS NOT CORRECT. 3. THE APPELLANT CRAVES LIBERTY TO ADD, ALTER, AMEN D OR MODIFY OF OR ANY OF THE GROUND EITHER BEFORE OR AT THE TIME OF THE HEARING. ITA NO.321/RJT/2013 FOR AY 2006-07 4. THIS APPEAL BY THE ASSESSEE IS AGAINST ORDER OF LD. CIT(A)-XVI, AHMEDABAD IN APPEAL NO.CIT(A)-XVI/DCIT/SNR CIR./423/11-12 DATED 03.06.2013 FOR ASSESSMENT YEAR 2006-07, ON THE FOLLOWING GROUNDS:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN LAW DO NOT CONSIDER THE REPLY OF THE ASSESSEE DTD. 13.04.2 010 AND DTD. 04.11.2011 IS NOT CORRECT. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN LAW AND FACTS CONFIRMED THE ADDITION ON ACCOUNT OF DISCREPA NCY IN CAPITAL A/C RS.25,000/- IS NOT CORRECT. 319 TO 321-RJT-2013 SH MAHESHKUMAR M SHAH+2 3 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HAS ERRED IN LAW AND ON FACTS CONFIRMED, ADDITION ON ACCOUNT OF INTEREST ON CAPITAL RS.2,34,826/- IS NOT CORRECT. 4. THE APPELLANT CRAVES LIBERTY TO ADD, ALTER, AMEN D OR MODIFY OF OR ANY OF THE GROUND EITHER BEFORE OR AT THE TIME OF THE HEARING. 5. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF T HE ASSESSEE, SHRI TEJ SHAH, ADVOCATE, APPEARED AND POINTED OUT THAT THE LD. CIT (A) DISPOSED OFF THE APPEALS NO. CIT(A)-XVI/DCIT/SNR CIR./421/11-12 & CIT(A)-XVI/DCI T/SNR CIR./423/11-12 (I.E. CASES OF ITA NO.320 & 321/RJT/2013) WITHOUT CONSIDE RING THE REPLY FILED BY THE ASSESSEE AS MENTIONED IN THE GROUNDS OF RESPECTIVE APPEALS H EREIN ABOVE. FURTHER, THE LD. CIT(A) PASSED THE IMPUGNED ORDER ON THE DATE OF HEARING IT SELF WHICH IS CONTRARY TO THE RATIO OF DECISION DELIVERED BY HONBLE MADRAS HIGH COURT IN THE CASE OF S. VELU PALANDAR V. CIT, REPORTED IN (1972) 83 ITR 683 (MAD). THE LD. COUNSE L OF THE ASSESSEE VEHEMENTLY SUBMITTED THAT ALL THESE THREE APPEALS BE REMANDED TO THE FILE OF THE ASSESSING OFFICER WITH THE REQUEST THAT HE SHOULD PASS A FRESH ORDER AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. 6. AS AGAINST THE AFORESAID SUBMISSION MADE BY THE LD. AR OF THE ASSESSEE; DR.J.B. JHAVERI, LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT FROM THE PERUSAL OF THE IMPUGNED ORDER IT IS EVIDENT THAT THE LD. CIT(A) HA S ALLOWED MORE THAN ONE OPPORTUNITY; THEREFORE, NO USEFUL PURPOSE WOULD BE SERVED BY GIV ING ONE MORE OPPORTUNITY TO THE ASSESSEE. IN REJOINDER, THE LD. COUNSEL OF THE AS SESSEE SUBMITTED THAT BY ISSUING LAST NOTICE, THE DEFAULT FOR NON-APPEARANCE ON EARLIER D ATES OF HEARING ARE DEEMED TO BE CONDONED; AND THE ORDER PASSED BY THE LD. CIT(A) IN ALL THE THREE CASES ON THE DATE OF HEARING ITSELF IS BAD IN LAW; THEREFORE THE SAME AR E LIABLE TO BE SET ASIDE. THE LD. COUNSEL OF THE ASSESSEE FURTHER POINTED OUT THAT TH E CONTROVERSY INVOLVED IN ALL THE THREE APPEALS BE REMANDED TO THE FILE OF THE ASSESSING OF FICER BECAUSE THE ASSESSING OFFICER HAS ALSO VIOLATED THE PRINCIPLE OF NATURAL JUSTICE IN AS MUCH AS, THE ASSESSING OFFICER WITHOUT FURTHER PINPOINTING OUT THE QUERY IN HIS MI ND TO THE ASSESSEE AND STRAIGHT AWAY REJECTED THE EXPLANATION FILED BY THE ASSESSEE. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT NOW THE ASSESSEE INTENDED TO FILE AD DITIONAL EVIDENCES; THEREFORE, IT WILL MEET THE ENDS OF JUSTICE IF THE CONTROVERSIES INVOL VED IN ALL THE THREE APPEALS ARE REMANDED TO THE FILE OF THE ASSESSING OFFICER. 319 TO 321-RJT-2013 SH MAHESHKUMAR M SHAH+2 4 7. RIVAL SUBMISSIONS WERE CONSIDERED. THE HONBLE M ADRAS HIGH COURT IN THE CASE OF S. VELU PALANDAR V. CIT, REPORTED IN (1972) 83 I TR 683 (MAD) HELD AS UNDER:- I AM NOT INCLINED TO GO INTO THE MERITS, AS I AM F AIRLY SATISFIED THAT THE PETITIONER DID NOT HAVE AN EFFECTIVE OPPORTUNITY TO STATE HIS OBJECTIONS AND SUSTAIN HIS CASE THAT THE GOODS IN QUESTION CANNOT ON OVER BE SUBJEC TED TO TAX, AS, IN LAW, THEY ARE LIABLE TO SALES TAX AT ONE SINGLE POINT. THE MAIN C ONTENTION OF THE LEARNED COUNSEL FOR THE PETITIONER IS THAT THE FIXATION OF TIME-LIM IT DURING THE WORKING HOURS OF A NOTIFIED DATE IS BY ITSELF A METHOD WHICH MILITATES AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND FAIR HEARING. IF ANY QUASI-JUDICIAL TRI BUNAL GIVES A PARTY BEFORE IT AN OPPORTUNITY TO EXPLAIN HIMSELF OR HERSELF TO A PART ICULAR ACTION PROPOSED BY THE SAID AUTHORITY, THEN, IT WOULD BE FUTILE TO TAKE A PARTICULAR HOUR OF A DAY AS THE OUTER LIMIT FOR MAKING SUCH SUBMISSIONS. IT WOULD B E NORMALLY DIFFICULT EVEN FOR SUCH AN AUTHORITY WHO FIXES SUCH AN OUTER LIMIT, TO OBEY IT ITSELF FOR ALL PURPOSES. THERE MAY BE INSTANCES WHERE THE AUTHORITY MAY NOT BE IN A POSITION TO TAKE UP THE CASE ON THAT DATE DUE TO OFFICIAL PRESSURE OR O THERWISE. IF AN OPPORTUNITY IS GIVEN TO A PARTY TO EXPLAIN ITSELF OR SUBMIT ITS OB JECTIONS, SUCH AN OPPORTUNITY MUST BE REALISTIC AND NOT NOTIONAL. IF ANY TIME, SUCH AS THE ONE GIVEN IN THIS CASE, IS GIVEN, THE NORMAL PRESUMPTION IS THAT THE PERSON WH O IS TO STATE HIS OBJECTIONS CAN FILE THE SAME BEFORE THE EXPIRY OF THE WORKING HOURS OF THAT DATE. SUCH OUTER LIMIT MAY BE FIXED FOR ADMINISTRATIVE CONVENIENCE; BUT, IF IT COMES TO THE QUESTION OF APPRECIATION OF RIGHTS AND OBLIGATIONS OF PARTIE S, EQUITY AND JUSTICE INTERFERE AND COMPEL COURTS TO AFFORD A REASONABLE AND EFFECTIVE OPPORTUNITY TO PERSONS AGGRIEVED AND AFFECTED TO STATE THEIR OBJECTIONS BY THE END OF THE WORKING DAY IN QUESTION NOTWITHSTANDING THE FACT THAT AN HOUR, A M INUTE OR A SECOND OF THE DAY IS NOTED IN THAT ORDER. IN THE INSTANT CASE, THEREFORE, THE NORMAL PRESUMPT ION IS THAT THE PETITIONER WOULD BE ENTITLED TO FILE HIS OBJECTIONS ON OR BEFORE 25T H MARCH, 1967, ITSELF AND THEREFORE THERE IS A VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE, IN THAT THE PETITIONER DID NOT HAVE A REAL OPPORTUNITY TO STATE HIS CASE, AS THE ASSESSMENT ORDER WAS MADE ON THAT DAY ITSELF. ON THIS ONLY GRO UND, THE RULE NISI IS MADE ABSOLUTE AND THE WRIT PETITION IS ALLOWED. IT IS PERTINENT TO NOTE THAT WHILE PASSING THE ORD ERS IN TWO CASES I.E. IN ITA NO.320 AND 321/RJT/2013, THE LD. CIT(A) HAS NOT CONSIDERED THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE. FURTHER IN RESPECT OF ALL THE THREE APPEA LS, THE LD. CIT(A) PASSED THE IMPUGNED ORDER ON THE DATE OF HEARING ITSELF WHICH IS CONTRARY TO THE RATIO OF DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF S. VELU PA LANDAR V. CIT (SUPRA). WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER OF LD. CIT( A) AND DIRECT THE LD. CIT(A) TO DECIDE ALL THE THREE APPEALS AFRESH AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. 8. WITH REGARD TO THE PLEA OF LD. COUNSEL OF THE AS SESSEE THAT THE CONTROVERSY INVOLVED ABOUT THE ADDITION/DISALLOWANCE DISPUTED I N ALL THESE THREE APPEALS BE REMANDED TO THE FILE OF THE ASSESSING OFFICER, WE M AY ADD THAT THE LD. CIT(A) WILL KEEP IN 319 TO 321-RJT-2013 SH MAHESHKUMAR M SHAH+2 5 MIND THIS PLEA OF THE ASSESSEE AND SHALL ADMIT THE ADDITIONAL EVIDENCES KEEPING IN VIEW THE FACT THAT THE ASSESSING OFFICER HAS NOT PINPOIN TED THE FURTHER QUERY AND STRAIGHT AWAY MADE THE ADDITION/DISALLOWANCES. 8. IN THE RESULT, ALL THE THREE APPEALS OF THE ASSE SSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- SD/- (B. R. JAIN) (T. K. SHARMA) $( #*% / ACCOUNTANT MEMBER #*% /JUDICIAL MEMBER *$+ ,*-/ ORDER DATE 09.01.2014 /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT- 1) M/S NAGINDAS KASTURCHAND & BROS.,SU RENDRANAGAR 2) SHRI MAHESHKUMAR M. SHAH, SURENDRANAGAR 3) SMT. SAROJBEN DINKARRAI SHAH, SURENDRANA GAR 2. /RESPONDENT- 1) ITO, WARD-2,SURENDRANAGAR 2) DCIT, SURENDRANAGAR CIRCLE, SURENDRANAGAR 3. #-2- & 3 / CIT-V, AHMEDABAD, 4. & 3 - / CIT (A)-XVI, AHMEDABAD 5 . 678 , , / DR, ITAT, RAJKOT 6 . 89 :; / GUARD FILE. *$+ #$ / BY ORDER , TRUE COPY PRIVATE SECRETARY, , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.