MOHAMED ASLAM RYAIN, MUMBAI V. ITO WARD 20(2)(2), MUMBAI

ITA 3400/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9446 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 12-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V D PARMAR
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Condonation of delay
• Section: 142(1); 68

Judgement Text

MOHAMED ASLAM RAYAIN 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI RAJENDRA , ACCOUNTANT MEMBER AND AMARJIT SINGH , JUDICIAL MEMBER ] / I .T.A. NO. 3400 / MUM/ 201 4 & 5062 / MUM/ 2014 ( / ASSESSMENT YEAR: 2007 - 0 8 MOHAMED ASLAM RYAIN 202, A.N. G. COMPLEX, MILITARY ROAD, ANDHERI(E) MUMBAI PIN:400059 / VS. ITO WD 20(2)(2) R.NO. 607, 6 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG, PAREL MUMBAI PIN: 400 0 1 2 ./ ./ PAN/GIR NO. : ADWPR 9944 H ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY: SHRI V.D. PARMAR (AR) DEPARTMENT BY: SHRI ABANI KANTA NAYAK (DR) / DATE OF HEARING : 15.09 .2017 / DATE OF PRONOUNCEMENT : 18 .09 .201 7 / O R D E R PER AMARJIT SINGH, J M: THE ASSESSEE HAS FILED THE ABOVE MENTIONED APPEALS AGAINST THE DIFFERENT ORDER PASSED BY COMMISSIONER OF INCOME TAX (APPEALS) - 31 MUMBAI RELEVANT TO THE ASSESSMENT YEAR 2007 - 08. ITA NO. 3400/MUM /2014: - 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING ADDITION OF RS.29,00,000/ - ON ACCOUNT OF CASH CREDITS. 2. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) PASSED AN EXPARTE APPEAL ORDER WITHOUT GIVING ADEQUATE OPPORTUNITY OF BEING HEARD AND AGAINST PRINCIPLE OF NATURAL JUSTICE. 3. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN HOLDING THAT IDENTITY OF CREDITORS IN RESPECT OF SHRI MOHD. MOBIN RAYEEN AND MRS. HINAL KUMARI REMAINED UNESTABLISHED IN MOHAMED ASLAM RAYAIN 2 SPITE OF THE FACT THAT THE AMOUNTS RECEIVED FROM THESE PARTIE4S ARE BY CHEQUES AND RECEIVED BY CLEARING THROUGH PROPER BANKING CHANNELS. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN HOLDING THAT THE AMOUNT RECEIVED FROM MR. ARVIND KUMAR REMAINED UNESTABLISHED IN SPITE OF THE FACTS THAT THE SAID AMOUNT IS RECEIVED BY CHEQUES AND THROUGH NORMAL BANKING CHANNELS AND CONFIRMATION LETTER GIVING PAN NO ETC OF THE PARTY WAS FILED IN COUR SE OF ASSESSMENT PROCEEDINGS ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD, CIT(A) ERRED IN PASSING EXPARTE APPEAL ORDER IN SPITE OF THE FATS THAT APPELLANT WAS TOTALLY IN DARK ABOUT NONE REPRESENTATION OF CASE BY HIS ADVOCATE BEFORE CIT(A). 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 31.10.2007 DECLARING TOTAL INCOME TO THE TUNE OF RS.3,84,090/ - RELEVANT TO THE A.Y. 2007 - 08. THE CASE OF THE ASSESSEE WAS COVERED UNDER TAX AUDIT U/S 44AB. RETURN WAS PROCESS ED U/S 143(1) OF THE I.T. ACT, 1961 ACCEPTING THE RETURNED INCOME. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) DATED 15.09.2008 WAS ISSUED AND SERVED UPON THE ASSESSEE ON 17.09.2008. NO TICE U/S 142(1) DATED 08.05.2008 WAS ISSUED AN D SERVED UPON THE ASSESSEE . THE ASSESSEE IS AN INDIVIDUAL AND DERIVE D HIS INCOME FROM THE BUSINESS . T HE ASSESSEE IS THE PROPRIETOR OF THE M/S AMIR TRADING COMPANY ENGAGED IN THE TRADING OF OLD AND USED PLANT AND MACHINERY, SPARES, METAL SCRAP ETC., THE AS SESSEE HAS SHOWN THE SUNDRY CREDITORS OF RS.48,77,564/ - AS ON 31.03.2007. T HE NOTICE S U/S133(6) OF THE I.T. ACT, 1961 WERE ISSUED TO MOHD. MOBIN RAYEEN, ARVIND KUMAR & HINAL KUMARI WHO DID NOT RECEIVE THE NOTICE THEREFORE, THE TRANSACTION COULD NOT BE CONF IRMED FROM THEM AND ACCORDINGLY AN AMOUNT OF RS.29.00,000/ - WAS BEING TREATED AS UNEXPLAINED CASH CREDIT S U/S 68 OF THE I.T. ACT AND WAS ADDED TO THE INCOME OF THE ASSESSEE. THE S OME EXPENSES WERE ALSO DISALLOWED AND THE INCOME OF THE ASSESSEE WAS ASSESSE D TO THE TUNE OF RS.33,43,010/ - . FEELING AGGR IEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO DISMISSED THE APPEAL BY VIRTUE OF ORDER DATED 30.11.2010, H ENCE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFO R E US. MOHAMED ASLAM RAYAIN 3 I SSUE. N O .1: 4 . THE ASSESSEE H AS MOVED AN APPLICATION FOR CONDONATION OF DELAY . WE HAVE HEARD TO ARGUMENTS ADVANCED BY THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORDS. THE ASSESSEE TOOK THE PLEA THAT HIS REGULAR A DVOCATE DID NOT ADVIS E HIM TO FILE AN APPEAL BUT SUBSE QUENTLY UPON THE ADVI C E OF MR. ASLAM RYAIN ADVOCATE HE FILED AN APPEAL BEFORE THE ITAT BENCH MUMBAI. THE ADVOCATE MR. MAYANK M. GANDHI DID NOT APPEAR BEFORE THE CIT(A) AND THE LD. CIT(A) PASSED THE ORDER EXPARTE AND THIS FACT WAS KNOWN TO HIM. THE DE LAY WA S NOT INTENTIONAL RATHER IT HAPPENS ON ACCOUNT OF FAILURE ADVISE AND ON ACCOUNT OF THE NON - PURSUING BY MR. MAYANK M GANDHI THEREFORE, THE DELAY IS LIABLE TO BE CONDONE D . HOWEVER, ON THE OTHER HAND THE LD. REPRESENTATIVE O F THE DEPARTMENT HAS REFUTED THE S AID CONTENTION. O RDER DATED 30.11.2010 PERUSED WHICH HAS BEEN PASSED IN THE ABSENCE OF THE REPRESENTATIVE OF THE ASSESSEE. IT SEEMS THAT THE ADVOCATE SHRI MAYANK M. GANDHI DID NOT APPEAR BEFORE THE CIT(A) . A FTER THE DECISION OF APPEAL , MR. MAYANK M. GANDHI FAILED TO APPEAR BEFORE ANY AUTHORITY . I T SEEMS THAT THE ADVOCATE WAS NOT HANDLING THE CASE PROPERLY AND IN THE SAID CIRCUMSTANCES IT MAY ALSO HAPPENED THAT THE ADVOCATE DID NOT ADVISE THE ASSESSEE PROPER LY S PECIFICALLY IN THE SAID CIRCUMSTANCES WHEN THE ASSESSEE HAS FILED THE AFFIDAVIT IN THIS REGARD. MOREOVER, WE OBSERVED THAT THE DECLINING THE APPLICATION OF CONDONATION OF DELAY WOULD TANTAMOUNT TO MISCARRIAGE OF JUSTICE TO THE ASSESSEE BEING THE ORDER IN QUESTION HA S BEEN PASSED AGAINST HIM AGAINST EXP ART E AND ASSESSEE DID NOT GET OPPORTUNITY TO REPRESENT HIS CASE BEFORE AUTHORITY . THE ASSESSEE FAILED TO REPRESENT HIS CASE BEFORE THE CIT(A) . T ECHNICALITIES SHOULD NOT BE HURDLE TO ACHIEVE THE GOAL OF THE JUSTICE. IN VIEW OF THE CASE CITED AS N. BALAKRIS HNAN VS. M. KRISHNAMURTHY 1998 7 SCC 123 & SHANKARRAO VS. CHANDRASENKUNWAR IN (1987) SUPP SCC 338, & SURYA GENERAL TRADERS VS. CTO (2003) 133 TC 388 , 389 , (AP) . WE ARE OF THE VIEW THAT THE DELAY IS LIABLE TO BE CONDONE D HENCE, WE ORDER ACCORDINGLY. HOWEVER , MOHAMED ASLAM RAYAIN 4 THE ASSESSEE DID NOT ARGUE THE CASE ON MERITS BUT TOOK THE PLEA THAT THE CIT(A) HAS PASSED THE ORDER DATED 30.11.2010 IN QUESTION EXPART E WRONGLY AND ILLEGAL Y THEREFORE, THE ASSESSEE SHOULD BE ALLOWED TO REPRESENT THE MATTER BEFORE THE CIT(A) IN THE INTE REST OF JUSTICE . HOWEVER, ON THE OTHER HAND, LD. REPRESENTATIVE OF THE DEPARTMENT HAS REFUTED THE SAID CONTENTIONS . O RDER DATED 30.11.2010 PERUSED AND THE SAID ORDER HAS BEEN PASSED AGAINST THE EXPART E . NO OPPORTUNITY OF BEING HEARD WAS GIVEN TO THE ASSESS EE BEING THE ORDER WAS EXPARTE. SINCE, THE ASSESSEE FAI LED TO REPRESENT THE MATTER BEFORE THE CIT(A) THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE SHOULD BE GRANTED AN OPPORTUNITY OF BEING HEARD B EFORE THE CIT(A) TO REPRESENT HIS MATTER IN THE INTEREST OF JUSTICE . IN VIEW OF THE SAID CIRCUMSTANCES, WE SET ASIDE THE ORDER DATED 30.11.2010 PASSED BY THE CIT(A) IN QUESTION AND RESTORED THE MATTER BEFORE THE CIT(A) TO DECIDE THE MATTER AFRESH BY GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ORDE R IN ACCORDANCE WITH LAW. ITA NO. 5062/MUM/2014 5. THIS IS AN APPEAL AGAINST THE ORDER DATED 23.06.2014 PASSED BY THE COMMISSIONER OF INCOME TAX APPEAL - 31, MUMBAI RELEVANT TO THE A.Y. 2007 - 08 WHEREIN THE PENALTY LEVIED BY THE ASSESSING OFFICER HAS BEEN CON FIRMED BY THE CIT(A). WHILE DECIDING THE APPEAL BEARING NO. 3400/MUM/ 2014 WE SET ASIDE THE QUANTUM THEREFORE IN THE SAID CIRCUM STANCES THE PENALTY HAS NO LE G TO STAND. ACCORDINGLY, WE DELETE THE PENALTY AND ALLOWED THE APPEAL OF THE ASSESSEE. MOHAMED ASLAM RAYAIN 5 6 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COUR T AT THE TIME OF HEARING ON 18 . 09 .2017. SD/ - SD/ - ( RAJENDRA ) (AM ARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED 18 .09 .2017 . . ./ VIJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ ASSTT. REGISTRAR) , / ITAT, MUMBAI