M/S GONDWANA CONSTN. PVT. LTD, Nagpur V. I.T.O. Ward 1(5), Nagpur

ITA 341/NAG/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1306 (ITAT-NAGPUR)
• Duration Of Justice: 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 11-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Keywords: Opportunity of being heard; Corroborative evidences
• Section: 142(1); 133A; 147; 148; 144

Judgement Text

1 ITA NOS. 341 & 342/NAG/2015. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER.. I.T.A.NOS. 341 & 342/NAG/2015 ASSESSMENT YEAR : 2009 - 10 & 2010 - 11. M/S GONDWANA CONSTRUCTIONS PVT. LTD., THE INCOME - TAX OFFICER, NAGPUR. VS. WARD - 1(5), NAGPUR. PAN AABCG0743Q. APPELLANT. RESPONDENT. APPELLANT BY : NONE. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 21 - 11 - 2016 DATE OF PRONOUNCEMENT : 24 TH NOV.., 2016 O R D E R. PER RAM LAL NEGI, J.M. T HESE APPEALS HAVE BEEN PREFERRED BY THE ASSESSEE AGAINST TWO SEPARATE ORDERS PASSED ON 13 - 10 - 2015 BY THE LEARNED CIT(APPEALS) - I, NAGPUR FOR THE ASSESSMENT YEARS 2009 - 10 AND 2010 - 11 RESPECTIVELY, WHEREBY THE LEARNED CIT(APPEALS) DISMISSED BOTH THE APPEALS FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDERS PASSED BY THE AO. SINCE BOTH THE APPEALS PERTAIN TO THE SAME ASSESSEE AND THE ISSUES INVOLVED IN BOTH THE APPEALS ARE IDENTICAL, B OTH ARE CLUBBED, HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO. 341/NAG/2015: BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009 - 10 AS NIL. THE RETURN WAS PROCESSED U/S 143 (1) OF THE INCOME - TAX ACT, 1961 (IN SHORT THE ACT). ON THE BASIS OF AIR INFORMATION AN ENQUIRY WAS CONDUCTED AND IT WAS FOUND THAT THE ASSESSEE COMPANY EARNED CAPITAL GAIN OF RS.2,04,04,897/ - AND THE ASSESSEE SHOWING BUSINESS LOSS OF RS.2,04,51,646/ - , SET 2 ITA NOS. 341 & 342/NAG/2015. OFF THE CAPITAL GAIN AGAINST THE SAID LOSS. TO VERIFY THE GENUINENESS OF LOSS, AUDIT REPORT WAS CALLED FOR. ON PERUSAL OF THE SAME, IT REVEALED THAT THE COMPANY PURCHASED GOODS I.E. COAL, SWITCH SHEET AND SCRAP AND SOLD IT TO ITS SISTER CONCERN AT ALMO ST HALF OF PURCHASE PRICE AND THEREBY CREATED ARTIFICIAL LOSS WHICH WAS SET OFF AGAINST THE CAPITAL GAIN. ACCORDINGLY, SURVEY U/S 133A OF THE ACT WAS CONDUCTED IN ORDER TO ASCERTAIN THE FACTUAL TRANSACTIONS OF SALES AND PURCHASES AND THE CASE OF THE ASSESS EE WAS REOPENED. NOTICE U/S 148 OF THE ACT WAS ISSUED AND SERVED ON THE ASSESSEE ON 02 - 09 - 2013. SINCE NO RESPONSE WAS RECEIVED FROM THE ASSESSEE, NOTICE U/S 142(1) OF THE ACT WAS ISSUED ON 27 TH OF SEPT., 2013 AND SERVED ON 28 TH OF SEPT., 2013. IN RESPONSE THEREOF, THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED BEFORE THE AO AND SOUGHT ADJOURNMENTS ON SEVERAL DATES WITHOUT FILING ANY INFORMATION AND WRITTEN SUBMISSIONS. ULTIMATELY, THE AO COMPLETED THE ASSESSMENT U/S 144 READ WITH SECTION 147 OF THE ACT ON THE BASIS OF RECORD AVAILABLE WITH THE DEPARTMENT AND DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.2,04,39,479/ - AFTER MAKING ADDITION OF RS.2,04,04,897/ - AS INCOME FROM CAPITAL GAIN AND RS.34,582/ - AS INCOME FROM OTHER SOURCES. 2. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LEARNED CIT(APPEALS). DURING APPELLATE PROCEEDINGS THE ASSESSEE DID NOT APPEAR ON 25.2.2015, 13.4.2015 AND 20.5.2015 WHEN THE CASE WAS POSTED FOR HEARING. ON 24.8.2015 THE AUTHORISED REPRESENTATIVE OF THE ASSESSE E APPEARED AND REQUESTED FOR ADJOURNMENT. THE CASE WAS ACCORDINGLY ADJOURNED TO 21.9.2015. ON 21.9.2015 AGAIN NONE APPEARED ON BEHALF OF THE ASSESSEE. THE LEARNED CIT(APPEALS) DISMISSED THE APPEAL RELYING ON THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN CIT VS S. CHENIAPPA MUDALIAR, AIR 1969 SC 1068, HONBLE JURISDICTIONAL HIGH COURT IN M/S CHEMIPOL VS. UNION OF INDIA AND OTHERS IN CENTRAL EXCISE APPEAL NO. 62 OF 2009 VIDE JUDGEMENT DATED 17 TH SEPT., 2009 AND THE DECISION RENDERED BY THE DELHI TRIBUN AL IN THE CASE OF CIT VS. M/S MULTIPLAN INDIA PVT. LTD. (1991) 38 ITD 320 (DEL.), HOLDING THAT THE ASSESSEE IS NOT INTERESTED IN PROSECUTING ITS APPEAL. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL: - 1. THE LD. CIT(A) WAS NOT JUSTIFIED IN PASSING THE APPELLATE ORDER WITHOUT GIVING PROPER, REASONABLE AND SUFFICIENT OPPORTUNITY TO THE APPELLANT. 3 ITA NOS. 341 & 342/NAG/2015. 2. THE LD. CIT(A) AND THE LD. A.O. OUGHT TO HAVE APPRECIATED THE FACT THAT THERE WERE CIRCUMSTANCES BEYOND CONTROL IN THE MATTER OF NON - ATTENDANCE AND THAT THERE WAS NO DELIBERATE ATTEMPT TO AVOID ATTENDANCE. 3. THE LD. CIT(A) AND THE LD. A.O. OUGHT TO HAVE APPRECIATED THE FACT THAT THE APPELLANT COMPANY COULD NOT ATTEND AND FILE THE REQUIRED DETAILS AS MAJORITY OF ITS EARLIER STAFF HAD LEFT THE JOB DUE TO WHICH COMPILATION OF THE OLD DETAILS REQUIRED SUFFICIENT TIME AS REQUESTED. 4. THE LD. A.O. OUG HT TO HAVE APPRECIATED THE FACT THAT THE OLD AND AGED DIRECTOR HAD ADMITTED THE AMOUNT IN SURVEY IN THE CONFUSED STATE OF MIND WITHOUT REQUIRED REFERENCE TO BOOKS OF ACCOUNTS AND RECORDS AND IN ABSENCE OF SUPPORTING EVIDENCES THAT WERE NOT AVAILABLE WITH T HEM AT THAT POINT OF TIME. 5. THE LD. A.O. WAS NOT JUSTIFIED IN RELYING ON THE OFFHAND OPINION OF THE AUTHOR ABOUT THE PREVAILING MARKET RATES WITHOUT VERIFICATION. 6. THE LD. A.O. WAS NOT JUSTIFIED IN DISALLOWING THE GENUINE BUSINESS LOSS AGAINST THE I NCOME FROM SHORT TERM CAPITAL GAIN OF RS. 2,04,04,897/ - AND INCOME FROM OTHER SOURCES OF RS.34,582/ - . 3. CASE WAS CALLED BUT NEITHER THE ASSESSEE HIMSELF NOR ANY REPRESENTATIVE ON HIS BEHALF APPEARED. PERUSAL OF RECORD REVEALS THAT NOTICE TO THE ASSESSEE WAS ISSUED BY THE REGISTRY ON 28.10.2018 AND SENT BY REGISTERED POST AND THE SAME HAS NOT RECEIVED BACK TILL DATE. FROM THE SAID FACTS IT CAN SAFELY BE PRESUMED THAT THE ASSESSEE HAS RECEIVED THE SAME AND DESPITE SERVICE OF NOTICE THE ASSESSEE FAILED TO AP PEAR. ACCORDINGLY, WE DECIDED TO PROCEED EX PARTE AGAINST THE APPELLANT/ASSESSEE AND DECIDE THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AFTER HEARING THE DEPARTMENTAL REPRESENTATIVE. 4. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMI TTED THAT SINCE THE ASSESSEE DID NOT APPEAR BEFORE THE LD. CIT(A) DESPITE SUFFICIENT OPPORTUNITY GRANTED TO HIM, THE LD. CIT(A) HAS RIGHTLY DISMISSED THE APPEAL FILED AGAINST THE ASSESSMENT ORDER. THEREFORE, THE PRESENT HAS NO MERIT AND THEREFORE LIABLE TO BE DISMISSED. 5. WE HAVE PERUSED THE RECORD IN THE LIGHT OF THE SUBMISSIONS OF THE LD. DR. THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER ON THE GROUND THAT THE LEARNED CIT(APPEALS) HAS PASSED THE IMPUGNED ORDER WITHOUT GIVING PROPER AND REASONABLE OPPOR TUNITY TO THE APPELLANT/ASSESSEE. THE LD. CIT(APPEALS) OUGHT TO HAVE APPRECIATED 4 ITA NOS. 341 & 342/NAG/2015. THAT NON APPEARANCE OF THE ASSESSEE ON THE DATE OF HEARING WAS NOT A DELIBERATE ATTEMPT TO AVOID ATTENDANCE. THE ASSESSEE HAS FURTHER MENTIONED THAT IT COULD NOT ATTEND AND FI LE THE REQUIRED DETAILS AS MAJORITY OF ITS STAFF HAD LEFT THE JOB DUE TO WHICH COMPILATION OF RELEVANT DOCUMENTS REQUIRED CONSIDERABLE TIME. 6. THE LD CIT(A) RELYING ON THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN CIT VS. S. CHENIAPPA MUDALIAR, AIR 1969 SC 1068, HONBLE JURISDICTIONAL HIGH COURT IN M/S CHEMIPOL VS. UNION OF INDIA & OTHERS (CENTRAL EXCISE APPEAL NO 62 OF 2009), THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE ON THE GROUND THAT SINCE NONE APPEARED ON 13.4.2015 ,23.4.2015, 11.6 .2015 AND 21.9.2015 WHEN THE CASE WAS CALLED FOR HEARING, THE ASSESSEE IS NO MORE INTERESTED IN PROSECUTING ITS APPEAL. THE RELEVANT PARA OF THE OPERATIVE PART OF THE IMPUGNED ORDER READS AS UNDER: - APPLYING THE AFORESAID PROPOSITIONS LAID DOWN BY THE HON BLE JURISDICTIONAL HIGH COURT AS WELL AS THE DECISION OF THE TRIBUNAL CITED SUPRA, THE APPEAL DESERVES TO BE DISMISSED FOR WANT OF PROSECUTION AND ON MERITS. 7. WE FIND THAT THE CASE HAS NOT BEEN DECIDED ON MERITS. THE LD. CIT(A) HAS ENDORSED THE FINDIN GS OF THE AO AND UPHELD ASSESSMENT ORDER PASSED UNDER SECTION 144 OF THE ACT. SINCE, THE ASSESSMENT ORDER DOES NOT REFLECT PROPER APPLICATION OF MIND OF THE AO, THE SAID ORDER DESERVES TO BE SET ASIDE. THE AUTHORITIES UNDER THE ACT ARE REQUIRED TO ACT JUDI CIOUSLY AND ONE OF THE REQUIREMENTS OF JUDICIAL ACTION IS TO GIVE A FAIR HEARING TO A PERSON BEFORE PASSING AN ORDER ADVERSE TO HIM. HENCE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE SHOULD GET AN OPPORTUNITY TO PRESENT HIS CASE BEFORE THE AO IN THE I NTEREST OF JUSTICE. IN VIEW OF THE PECULIAR FACTS AND THE CIRCUMSTANCES OF THE CASE WE TAKE A LENIENT VIEW AND SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) WITHOUT GOING INTO THE MERITS OF THE CASE AND REMAND THE APPEAL TO AO WITH THE DIRECTION T O PASS ASSESSMENT ORDER AFRESH AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE ALSO DIRECT THE ASSESSEE TO APPEAR BEFORE THE AO AS AND WHEN ASKED TO DO SO AND NOT TO TAKE ADJOURNMENTS ON FRIVOLOUS GROUNDS. 5 ITA NOS. 341 & 342/NAG/2015. ITA NO. 342/NAG/2015: 8. THE FACTS AND THE ISSUE INVOLVED IN THE PRESENT CASE ARE IDENTICAL TO THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009 - 10 DISCUSSED ABOVE AND SINCE WE HAVE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(APPEALS) AND SENT THE ISSUE TO THE AO TO PASS THE ASSESSMENT ORDER AFRESH, WE ALSO SET ASIDE THE IMPUGNED ORDER PASSED THE LD. CIT(A) IN THIS CASE AND SEND THE FILE BACK TO THE AO FOR THE SAME REASONS WITH THE DIRECTION TO PASS ASSESSMENT ORDER AFRESH AFTER GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE CASE IS DECIDED ACCORDINGLY. 9. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF NOV., 2016. SD/ - SD/ - ( SHAMIM YAHYA) (RAM LAL NEGI) ACOUNTANT MEMBER. JUDICIAL MEMBER. NAGPUR, DATED: 24 TH NOV. , 2016. COPY FORWARDED TO : 1. M/S GONDWANA CONSTRUCTIONS PVT. LTD. 101, EAST HIGH COURT ROAD, NEW RAMDASPETH, NAGPUR - 440010. 2. I.T.O., WARD - 1(5), NAGPUR. 3. C.I.T. - I, NAGPUR. 4. CIT(APPEALS), - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.