NARANG INTERNATIONAL HOTELS P. LTD, MUMBAI V. DCIT CC-36, MUMBAI

ITA 3504/MUM/2009

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8272 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 30-10-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 29-05-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P K SHUKLA
• Assessee Lawyers: VIPUL B JOSHI
• Keywords: Opportunity of being heard; Additional evidence
• Section: 142(1); 147; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I, MUMBAI BEFORE SHRI DINESH KUMAR AGARWAL (J.M.) AND SHRI N.K. BILLAIYA (A.M.) ITA NO. 3504/MUM /2009 ASSESSMENT YEAR : 2004-05 ITA NO. 3840/MUM /2010 ASSESSMENT YEAR : 2005-06 NARANGS INTERNATIONAL HOTELS PVT. LTD., AMBASSADOR HOTEL, CHURCHGATE, , MUMBAI 400 020. PAN AAACN2084L VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE -36, AAYAKAR BHAVAN, MUMBAI 400 020. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIPUL B. JOSHI DEPARTMENT BY : SHRI P.K. SHUKLA DATE OF HEARING 30-10-2012 DATE OF PRONOUNCEMENT 07-11-2012 O R D E R PER DINESH KUMAR AGARWAL, J.M. THESE TWO APPEALS PREFERRED BY THE ASSESSEE ARE DI RECTED AGAINST THE SEPARATE ORDERS DTD. 6-3-2009 AND 10-2-2010 PAS SED BY THE LD. CIT(A), MUMBAI FOR THE ASSESSMENT YEARS 2004-05 AND 2005-06 RESPECTIVELY. SINCE FACTS ARE IDENTICAL AND COMMON ISSUES ARE INVOLVED, BOTH THESE APPEALS ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 3504/MUM/2009 & ITA NO. 3840/MUM/2010 2 2. BRIEFLY STATED FACTS OF THE CASE EXTRACTED FROM ITA NO. 3504/MUM/2009 FOR A.Y. 2004-05 ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN THE BUSINESS OF RUNNING HOTEL AND FLIGHT KITCHENS AND ALSO DERIVES INCOME FROM WIND MILL. THE ASSESSEE DID NO T FILE RETURN FOR THE A.Y. 2004-05, AS SUCH, NOTICE U/S 142(1) OF THE INC OME TAX ACT, 1961 (THE ACT) WAS ISSUED. IN RESPONSE, THE ASSESSEE FI LED LETTER INTER ALIA STATING THAT CERTAIN PROCEEDINGS ARE PENDING BEFORE THE HONBLE SUPREME COURT AND AS SUCH IT SHOULD BE ALLOWED TO FILE ITS RETURN OF INCOME AFTER CONCLUSION OF THE PENDING PROCEEDINGS. IT WAS OBSER VED BY THE A.O. THAT ON BEING GIVEN REPEATED REMINDERS, THE ASSESSEE DID NOT COME FORWARD TO FILE THE RETURN OF INCOME AND KEPT ON REPEATING THE SAME EXCUSE, HENCE, HE RECOMMENDED THE CASE OF THE ASSESSEE OF RELEVANT ASSESSMENT YEAR FOR SPECIAL AUDIT U/S 142(2A) OF THE ACT. THE LD. CIT HAS ACCEPTED THE RECOMMENDATION AND APPOINTED M/S KAILASH CHAND JAIN & CO. AS THE SPECIAL AUDITOR IN THIS CASE. THE AUDIT REPORT WAS FINALLY COMPLETED ON 29-5-2006 AND THE COMPLETED REPORT WAS SUBMITTED BY THE AUDITORS TO THE ASSESSEE ON 31-5-2007. THE A.O. FURTHER OBSERVE D THAT THE ASSESSEE DID NOT SUBMIT THE AUDIT REPORT TO THE A.O. AND THE SAME HAD TO BE COLLECTED FROM THE AUDITOR. THE A.O. AFTER CONSIDE RING THE SAID AUDIT REPORT ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE E NUMERATING THE OBJECTION OF THE AUDITOR AND CALLING FOR EXPLANATIO N AS TO WHY THE ASSESSEES CASE SHOULD NOT BE ASSESSED U/S 144 OF T HE ACT ON THE BASIS OF THE MATERIAL GATHERED DURING THE COURSE OF AUDIT. THE A.O. AFTER ITA NO. 3504/MUM/2009 & ITA NO. 3840/MUM/2010 3 CONSIDERING THE ASSESSEES SUBMISSION, HOWEVER, COM PLETED THE ASSESSMENT AT AN INCOME OF RS. 235,521,770/- VIDE O RDER DTD. 25-7-2007 PASSED U/S 144 R.W.S. 142(2A) OF THE ACT. 3. FOR THE SAME REASONS, THE ASSESSMENT FOR THE A.Y . 2005-06 WAS ALSO COMPLETED AT AN INCOME OF RS. 794,241,210/- VI DE ORDER DTD. 15-5- 2009 PASSED U/S 144 R.W.S. 147 R.W.S. 142(2A) OF TH E ACT. 4. ON APPEAL, THE LD. CIT(A) WHILE GIVING CERTAIN D IRECTIONS, PARTLY ALLOWED THE APPEAL FOR THE A.Y. 2004-05. 5. DURING THE COURSE OF HEARING OF THE APPEAL FOR T HE A.Y. 2005-06, THE ASSESSEE FILED AUDIT REPORT AS PER DIRECTION OF THE HONBLE SUPREME COURT VIDE ORDER DTD. 14-5-2009 APPOINTING BSR & CO . AS STATUTORY AUDITORS TO PREPARE AND AUDIT THE ACCOUNTS FOR THE FINANCIAL YEARS 2001 TO 2009. HOWEVER, THE LD. CIT(A) WHILE REJECTING T HE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE, PARTLY ALLOWED THE APPEAL. 6. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN BOTH THE APPEALS TH E SUSTENANCE OF VARIOUS ADDITIONS AND DISALLOWANCES SUSTAINED BY TH E LD. CIT(A). APART FROM THIS, THE ASSESSEE IN THE APPEAL FOR THE A.Y. 2005-06 HAS ALSO CHALLENGED THE ORDER OF THE LD. CIT(A) FOR NOT ADMI TTING THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE I.E. AUDIT REPORT AN D OTHER RELEVANT MATERIAL. ITA NO. 3504/MUM/2009 & ITA NO. 3840/MUM/2010 4 7. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE, AT THE OUTSET, SUBMITS THAT THE TRIBUNAL IN ASSESSEES OWN CASE ON AN APPEAL FILED BY THE ASSESSEE AND REVENUE, IN ITA NO. 6066 & 5868/MUM/2008 FOR THE A.Y. 2003-04 VIDE ORDER DTD. 27-5-2011 AFTE R ADMITTING THE ADDITIONAL EVIDENCE I.E. THE AUDITED ACCOUNTS AND T HE ORDER OF THE HONBLE SUPREME COURT (SUPRA) HAS SET ASIDE THE MATTER TO T HE FILE OF THE A.O. WITH THE DIRECTION TO DECIDE THE ISSUES AFTER VERIF ICATION WITH THE AUDIT REPORT AND WITH THE SUPPORT OF THE TRIBUNAL ORDER O F THE EARLIER YEAR AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, THEREFORE, IN THE INTEREST OF JUSTICE, ALL THE ISSUE MAY BE SE T ASIDE TO THE FILE OF THE A.O. WHICH WAS NOT OBJECTED TO BY THE LD. D.R. 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FI ND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUT E THAT AS PER THE ORDER OF THE HONBLE SUPREME COURT DTD. 14-5-2009 APPOINT ING BSR & CO. AS STATUTORY AUDITOR TO PREPARE AND AUDIT THE ACCOUNTS FOR THE FINANCIAL YEARS 2001 TO 2009, THE ASSESSEE GOT ITS ACCOUNTS A UDITED BY BSR & CO., COPY OF WHICH ARE APPEARING AT PAGE NO. 343 TO 382 OF THE ASSESSEES PAPER BOOK FOR A.Y. 2004-05 AND PAGE NO. 6 TO 43 OF THE ASSESSEES PAPER BOOK FOR THE A.Y. 2005-06 AS AN ADDITIONAL EVIDENCE . APART FROM THIS, THE ASSESSEE HAS ALSO FILED COPY OF THE ORDER FROM HON BLE SUPREME COURT DTD. 14-5-2009 APPOINTING BSR & CO. AS STATUTORY AU DITORS, CHART OF ITA NO. 3504/MUM/2009 & ITA NO. 3840/MUM/2010 5 COMPUTATION OF INCOME, VARIOUS LETTERS, ORDERS INCL UDING THE ORDER OF THE TRIBUNAL AS AN ADDITIONAL EVIDENCE FOR THE A.Y. 200 4-05 AND FOR THE A.Y. 2005-06 THE ASSESSEE HAS FILED AS AN ADDITIONAL EVI DENCE COPY OF THE ORDER OF THE TRIBUNAL FOR A.Y. 2003-04 AND ORDER OF THE HONBLE SUPREME COURT DTD. 14-5-2009 (SUPRA) APPEARING AT PAGE 1 TO 5 OF THE ASSESSEES PAPER BOOK. SINCE THE ABOVE ADDITIONAL EVIDENCE AN D MATERIAL GO TO THE ROOT OF THE MATTER AND KEEPING IN VIEW THAT THE TRI BUNAL IN THE APPEAL FOR THE A.Y. 2003-04 HAS ALSO ADMITTED ADDITIONAL EVIDE NCE I.E. AUDITED ACCOUNTS AND ORDER OF THE HONBLE SUPREME COURT (SU PRA), WE ARE OF THE VIEW THAT, IN THE INTEREST OF JUSTICE, THE ADDITION AL EVIDENCE FILED BY THE ASSESSEE SHOULD BE ADMITTED AND ACCORDINGLY WE ADMI T THE SAME TO ARRIVE AT THE PROPER ADJUDICATION OF THE ISSUES INVOLVED I N THE APPEAL. 9. UNDER THESE CIRCUMSTANCES AND KEEPING IN VIEW TH E ORDER OF THE TRIBUNAL FOR A.Y. 2003-04 WHEREIN THE TRIBUNAL ON SIMILAR CIRCUMSTANCES HAS RESTORED THE MATTER BACK TO THE F ILE OF THE A.O., WE RESPECTFULLY FOLLOWING THE SAME CONSIDER IT FAIR AN D REASONABLE THAT THE MATTER SHOULD GO BACK TO THE FILE OF THE A.O. AND A CCORDINGLY WE SET ASIDE THE ORDERS PASSED BY THE REVENUE AUTHORITIES ON THI S ACCOUNT AND SEND BACK THE MATTER TO THE FILE OF THE A.O. WHO SHALL D ECIDE THE SAME AFRESH AFTER ASKING THE ASSESSEE TO FILE THE RETURN OF INC OME FOR THE ABOVE ASSESSMENT YEARS, IF NOT ALREADY FILED, AND ACCORDI NG TO LAW INCLUDING THE ORDER PASSED BY THE TRIBUNAL IN THE EARLIER YEARS A FTER PROVIDING ITA NO. 3504/MUM/2009 & ITA NO. 3840/MUM/2010 6 REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE AND ACCORDINGLY ALL THE GROUNDS TAKEN BY THE ASSESSEE FOR BOTH THE ASSE SSMENT YEARS ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE. 10. IN THE RESULT, APPEALS FILED BY THE ASSESSEE FO R THE ASSESSMENT YEARS 2004-05 & 2005-06 ARE PARTLY ALLOWED FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED ON 7-11-2012. SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER SD/- (DINESH KUMAR AGARWAL) JUDICIAL MEMBER MUMBAI, DATED : 7-11-2012. RK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- CONCERNED , MUMBAI 4. COMMISSIONER OF INCOME TAX CONCERNED , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH I, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI