B N THAKKAR & BROS, MUMBAI V. ITO W 25(3)(1), MUMBAI

ITA 3417/MUM/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3368 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-12-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 15-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIMATI BHARTI SINGH
• Keywords: Reasonable cause
• Section: 143(3); 142(1)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH , JM AND SHRI RAJESH KUMAR, AM ./ I.T.A. NO. 3417 /MUM/20 1 2 ( / ASSESSMENT YEAR : 20 0 6 - 07 ) B N TH AKKAR AND BROS, 101 SHARDDHA TOWERS, ASHA NAGAR, KANDIVALI EAST, MUMBAI - 400101 / VS. INCOME TAX OFFICER, WARD 25(3)(1), BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI - 400051 ./ PAN : AAGEB6210R / ASSESSEE BY NONE / / REVENUE BY SHRIMATI BHARTI SINGH / DATE OF HEARING : 2 6 . 5.2016 / DATE OF PRONOUNCEMENT : 9. 6 .2016 / O R D E R PER RAJESH KUMAR, A. M: THIS APP EAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 27.02.2012 OF COMMISSIONER OF INCOME TAX (APPEALS) - 35 , MUMBAI (HEREINAFTER CALLED AS THE CIT(A) FOR ASSESSMENT YEAR 200 6 - 07 . 2. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE THR OUGH RPAD. HENCE, WE PROCEED TO DECIDE THE APPEAL EX - PARTE ON MERIT OF THE CASE AFTER HEARING THE LD DR. 2 3417 /MUM/ 201 2 3 . THE SOLE ISSUE ARISING OUT OF THE GROUNDS OF APPEAL RELATES TO THE CONFIRMATION OF FOUR ADDITION S BY THE LD.CIT(A) AS MADE BY THE AO NAMELY ONE OF RS. 21,97,272/ - ON ACCOUNT OF DIFFERENCE IN RECEIPTS AS PER TDS CERTIFICATES AND AS PER INCOME AND EXPENDITURE ACCOUNT, TWO RS.3,92,238/ - BEING 25% OF SUNDRY CREDITORS, THREE RS.94,200/ - ON ACCOUNT OF INTEREST @12% ON FDR AND LAST ONE OF RS. 1,12,3 52/ - BEING 30% OF TOTAL EXPENSES WITHOUT CONSIDERING THE STATEMENT OF THE APPELLANT DATED 5.9.2009. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 18.10.2006 DECLARING A TOTAL INCOME AT RS.20,176/ - . THE ASSESSEE WAS ENGAGE D IN THE BUSINESS OF CONTRACTUAL WORK. THE CASE WAS SELECTED FOR SCRUTINY AND THE STATUTORY NOTICES U/S 143(2) AND 142(1) WERE ISSUED AND SERVED UPON THE ASSESSEE. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THERE WAS A DIFF ERENCE OF RS.21,97,272/ - BETWEEN THE RECEIPT AS PER TDS CERTIFICATE VIS A VIS TH E BOOKS OF ACCOUNT OF THE ASSESSEE. THE ASSESSEE , DESPITE OF VARIOUS QUERIES RAISED BY THE AO, KEPT ON SEEKING ADJOURNMENTS ON VARIOUS GROUNDS AND THUS FAILED TO SUBMIT ANY EX PLANATION FOR THE QUERY BY THE ASSESSING OFFICER IN RESPECT OF THIS DIFFERENCE AND FINALLY THE AO ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. SIMILARLY, THE AO FOUND THAT THE ASSESSEE HAS 14 SUNDRY CREDITORS AGGREGATING TO RS.15,68,950/ - . THE AO DISALLOWED THE 25% OF THE SAID AMOUNT I.E. RS.3,92,238/ - FOR THE REASONS THAT THE ASSESSEE FAILED TO SUBMIT ANY DETAIL S OF THE CREDITORS/LIABILIT IES . THE AO ALSO FOUND THAT THE 3 3417 /MUM/ 201 2 ASSESSEE WAS HAVING FDR WITH VIJAYA BANK AMOUNTING TO RS.7,85,000/ - ON WHIC H NO INTEREST WAS ACCOUNTED FOR AND ACCORD INGLY ADDED @ 12 % OF THE DEPOS ITS TO THE INCOME OF THE ASSESSEE AMOUNTING TO RS.94,200/ - . A FURTHER DISALLOWANCE OF RS. 1,12,352/ - BEING 30% THE TOTAL EXPENSES IN THE PROFIT AND LOSS ACCOUNT OF RS.3,74,505/ - WA S MADE IN ABSENCE OF ANY DETAILS AND VOUCHERS PRODUCED BY THE ASSESSEE . THUS, THE ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT ON 12.12.2008 AT AN INCOME OF RS.28,16,240 / - BY MAKING DISALLOWANCE OF RS.27,96,062/ - IN AGGREGATE AS STATED ABOVE. AGGRIEVED B Y THE ORDER OF AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE REMANDED THE MATTER TO THE AO FOR VERIFICATION. THE AO SUBMITTED REMAND REPORT TO THE CIT(A) ON 19.1.2012 STATING THAT IN SPITE OF SUFFICIENT OPPORTUNITY NEITHER THE ASSESSEE NOR HIS AUTHORIZED REPRESENTATIVE ATTENDED THE PROCEEDINGS TILL DATE AND THEREFORE THE VERIFICATION WHICH WAS TO BE CONDUCTED WITH REGARD TO T HE MATTER REFERRED BACK BY THE LD. C IT(A) REMAINED AS IT WAS AND FURTHER SUBMITTING TH AT THE CASE MAY BE DECIDED ON MERITS. THE CIT(A) GAVE OPPORTUNITY TO THE AR OF THE ASSESSEE BY GIVING A COPY OF THE REMAND REPORT IN RESPONSE TO WHICH SHRI D L VORA FILED WRITTEN SUBMISSIONS WHEREIN HE SUBMITTED THAT THE PERSON LOOKING AFTER THE BUSINESS AND FINANCIAL MATTERS OF THE ASSESSEE IN MUMBAI SUFFERED FROM PARALYTIC STROKE SINCE JANUARY 2011 AND WAS UNDERGOING TREATMENT AT KOKILABEN D AMBANI HOSPITAL , MUMBAI AND HE WAS UNABLE TO SPEAK AND WALK AND REQUES TED 4 3417 /MUM/ 201 2 FOR ONE MORE OPPORTUNITY TO PRESENT THE CASE BEFORE THE AO. THE LD.AR ALSO PRODUCED CERTAIN ME DI CAL CERTIFICATES ISSUED BY KOKILABEN D AMBANI HOSPITAL . FINALLY, THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE WITHOUT PASSING A SPEAKING ORDER BY HOLDING AS UNDER : 8. I HAVE CONSIDERED THE SUBMISSION OF THE LD.A.R. OF THE APPELLANT AS WELL AS THE STAND OF THE A.O. I HAVE ALSO PERUSED THE COPY OF LETTER DATED 05.02.2010, CLAIMED TO HAVE BEEN FILED BY THE APPELLANT BEFORE THE A.O.. A CURSORY LOO K AT THE LETTER SHOWS THAT THERE IS NO STAMP OR OFFICIAL SEAL OF THE OFFICE OF THE A.O. WHICH CAN PROVE THAT THIS LETTER WAS FILED BEFORE THE A.O. THEREFORE, WHEN THE A.O. SUBMITS THAT THERE WAS NON - COMPLIANCE ON THE PART OF THE APPELLANT, IT WILL BE DIFFI CULT FOR ME TO ENTERTAIN SUCH CLAIM OF THE APPELLANT AT THIS STAGE WITHOUT ANY CONCRETE EVIDENCE. AS REGARDS MERIT OF THE CASE, THE LD.A.R. HAS NOT MAD E OUT ANY CASE AS TO WHY THE ADDITION MADE BY THE A.O. SHOULD BE DELETED OR MODIFIED. UNDER THE CIRCUMSTA NCES, I AM UNABLE TO MAKE ANY INTERVENTION IN THE ASSESSMENT ORDER. 5 . WE HAVE GONE THROUGH THE RELEVANT MATERIALS PLACED BEFORE US AND ALSO CONSIDERED THE SUBMISSIONS OF THE LD. DR. WE FIND THAT THE ASSESSEE COULD NOT ATTEND EITHER BEFORE THE AO IN THE ORIGINAL AS WELL AS IN THE REMAND PROCEEDINGS. IT WAS SUBMITTED BEFORE CIT(A) BY T HE LD.AR OF THE ASSESSEE THAT THE PERSON WHO WAS LOOKING AFTER THE AFFAIRS OF THE ASSESSEE IN MUMBAI SUFFERED A PARALYTIC ATTACK AND WAS HOSPITALIZED AND IT WAS DUE TO THI S REASON THE ASSESSEE COULD NOT BE REPRESENTED BEFORE THE AO AND FILED VARIOUS DOCUMENTS INCLUDING MEDICAL CERTIFICATE S ISSUED BY KOKILABEN D AMBANI HOSPITAL TO CORROB ORATE HIS AVERMENTS . WE FURTHER FIND THAT THE ORDER OF LD.CIT(A) IS A NON - SPEAKING ORD ER WHICH IS WRONG AND CAN BE SUSTAIN ED . IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, 5 3417 /MUM/ 201 2 WE ARE OF THE VIEW, ENDS OF JUSTICE WOULD BE MET AND NO PREJUDICE WOULD BE CAUSED TO THE REVENUE IF ONE MORE OPPORTUNITY IS GIVEN TO THE ASSESSEE TO REPRESENT IT S CASE BEFORE THE AO AS THERE WAS A REASONABLE CAUSE FOR NON ATTENDING THE CASE BEFORE THE AO. WE, THEREFORE, SET ASIDE THE ORDER OF LD. CIT(A) AND RESTORE THE SAME TO THE FILE OF THE AO FOR FRESH ADJUDICATION OF T HE ISSUE AS PER LAW AFTER ALLOWING THE ASSESSEE REASONABLE OPPORTUNITY . THE ASSESSEE IS ALSO DIRECTED TO CO - OPERATE WITH THE AO FOR SPEEDY DISPOSAL OF THE CASE. 6 . . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 9TH JUNE , 201 6 S D SD ( MAHAVIR SINGH ) (RAJESH KUMAR) / J UDICIAL MEMBER / A CCOUNTANT MEMBER MUMBAI ; DATED : 9 . 0 6 .2016 SR.PS:SRL: / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, T RUE COPY [ / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI