Sh. Paras Ram Asgotra, Contractor, UDHAMPUR V. The Commissioner of Income-tax, Jammu ( J&k)

ITA 351/ASR/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1464 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 30-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V K SINGH
• Assessee Lawyers: P N ARORA
• Section: 143(3); 263

Judgement Text

ITA NO.351(ASR)/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR [JAMMU CAMP: JAMMU] BEFORE SHRI A.D.JAIN, JUDICIAL MEMBER, AND SHRI T.S. KAPOOR, ACCOUNTA NT MEMBER I.T.A. NO 351(ASR)/2014 ASSESSMENT YEAR:2009-10 M/S PARAS RAM ASGOTRA CONTRACTOR, KASHIRAH, UDHAMPUR PAN : AAHFP 6299 B VS. THE I.T.O KATHAU, (APPELLANT) (RESPONDENT) APPELLANT BY: SH. P.N. ARORA (ADV) RESPONDENT BY: SH. K.V.K. SINGH (DR.) DATE OF HEARING: 02.12.2015 DATE OF PRONOUNCEM ENT: 17.12 .2015 ORDER PER A.D. JAIN, JM: THE ASSESSEE HAS FILED THIS APPEAL AGAINST THE ORDE R OF THE CIT, JAMMU, DATED 27.03.2014, PASSED U/S 263 OF THE INC OME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT, FOR SHO RT], FOR THE ASSESSMENT YEAR 2009-10. 2. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE RELEVANT PREVIOUS YEAR, THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF E XECUTION OF CIVIL CONTRACTS ALLOTTED BY THE GOVERNMENT DEPARTMENTS. THE NET PROFIT AS PER THE PROFIT AND LOSS ACCOUNT CAME TO 5.48%. THE ASSESSEE FURNISHED COMPLETE DETAILS OF WAGES ACCOUNT, PURCHASE ACCOUNT , AND OTHER MAJOR EXPENSE ACCOUNTS. THE ASSESSEE WAS ASKED TO PRODUC E COMPLETE PURCHASE BILLS/VOUCHERS OF THE MATERIAL PURCHASED. THE ASSESSEE STATED THAT IN THE BUSINESS OF CIVIL CONTRACT, IT IS NOT P OSSIBLE TO PRODUCE SUCH ITA NO.351(ASR)/2014 2 BILLS/VOUCHERS. FINDING THE NET PROFIT TO BE NOT VERIFIABLE IN THE ABSENCE OF BILLS/VOUCHERS, THE AO MADE AN ADDITION OF RS. 1,50,000/- TO THE RETURNED INCOME, TO PLUG THE POSSIBLE LEAKAGE I N PROFIT AND ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS. 3,80,680/-. 3. AS PER THE IMPUGNED ORDER, THE LD. CIT, FINDING CERTAIN DISCREPANCIES, OBSERVED THE ASSESSMENT ORDER FRAMED BY THE AO TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. HE, THEREFORE, ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE TO EXPL AIN AS TO WHY THE ASSESSMENT MAY NOT BE CANCELLED, DIRECTING A FRESH ASSESSMENT TO BE MADE IN TERMS OF PROVISIONS OF SECTION 263 OF THE A CT. THE CASE WAS FIXED FOR HEARING ON 20.3.2014, ON WHICH DATE, NOBO DY APPEARED ON OR BEHALF OF THE ASSESSEE NOR ANY WRITTEN REPLY WAS RE CEIVED. ANOTHER NOTICE, ISSUED FOR 25.03.2014, ALSO MET THE SAME FA TE. THEREFORE, THE LD. CIT, TAKING INTO CONSIDERATION THE MATERIAL BROUGH T ON RECORD, CANCELLED THE ASSESSMENT ORDER, HOLDING THE SAME TO BE ERRO NEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE AO WAS DIRECTED TO DECIDE THE CASE AFRESH AFTER EXAMINING THE BOOKS OF ACCOUNT /DOCUMENTS OF THE ASSESSEE AND BRING TO TAX THE INC OME WHICH HAD ESCAPED ASSESSMENT ON ACCOUNT OF THE DISCREPANCIES POINTED OUT BY THE CIT. 4. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE HAS C ONTENDED THAT THE ASSESSEE WAS NEVER SERVED WITH ANY NOTICE, ELSE THE RE WAS NO REASON WHY HE WOULD NOT HAVE APPEARED BEFORE THE LD. CIT; AND THAT SO, THE LD. CIT ERRED IN DECIDING THE MATTER EXPARTE QUA THE AS SESSEE. 5. THE LD. DR, ON THE OTHER HAND, HAS STRONGLY SUPP ORTED THE IMPUGNED ORDER IN THIS REGARD, CONTENDING THAT AS P ER THE LD. CIT, THE NOTICES ISSUED FOR THE HEARINGS ON 20.3.2014 AND 25 .3.2014 WERE NOT ITA NO.351(ASR)/2014 3 RESPONDED TO AND NOBODY PUT IN APPEARANCE ON THESE DATES; AND THAT AS SUCH, THE LD. CIT CANNOT BE FAULTED FOR PROCEEDI NG WITH THE MATTER AND PASSING THE IMPUGNED ORDER IN THE ABSENCE OF TH E ASSESSEE. 6. HAVING CONSIDERED THE MATTER IN THE LIGHT OF THE RIVAL CONTENTIONS, WE FIND THAT THE LD. CIT, IN THE IMPUGNED ORDER, HA S OBSERVED AS FOLLOWS: 2. IN VIEW OF THE FACTS MENTIONED ABOVE, IT IS SE EN THAT TEH ASSESSMENT FRAMED BY THE AO U/S 143(3) OF TEH I.T.A CT, 1961, FOR A.Y. 2009-10 VIDE ORDER DATED 17.11.2011, REFERRED TO ABOVE, WAS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. TAKING INTO CONSIDERATION ALL THE ABOVE FACTS AS MENTIONE D ABOVE, A SHOW CAUSE NOTICE VIDE NO.7554 DATED 13.03.2014 WAS SENT TO THE ASSESSEE WITH A REQUEST TO EXPLAIN AS TO WHY THE AB OIVE REFERRED ASSESSMENT MAY NOT BE CANCELLED DIRECTING A FRESH A SSESSMENT TO BE MADE IN TERMS OF THE PROVISIONS OF SECTION 263 O F THE I.T.ACT, 1961 AND CASE WAS FIXED FOR HEARING ON 20.03,2014. IN RESPONSE TO ABOVE SAID SHOW CAUSE NOTICE NO BODY ATTENDED NOR A NY WRITTEN REPLY WAS RECEIVED FROM THE ASSESSEE. ANOTHER OPPOR TUNITY OF BEING HEARD WAS ALSO PROVIDED TO THE ASSESSEE FOR HEARING ON 25.03.2014, HOWEVER, ON THIS DATE ALSO NEITEHR ANYBODY ATTENED NOR ANY APPLICATION ETC. FOR ADJOURNMENT WAS RECEIVED NOR W AS ANY WRITTEN SUBMISSIONS EXPLAINNG ANY OF TEH ENTRIES AS ENUMER ATED ABOVE FILED. THE FAILURE ON THE PART OF THE ASSESSEE TO A TTEND THE PROCEEDINGS SHOWS THAT THE ASSESSEE HAS NOTHING TO SAY IN THE MATTER, THEREFORE, I AM LEFT WITH NO OTHER ALTERNAT IVE BUT TO DECIDE ON BEST JUDGMENT BASIS. IT IS WELL ESTABLISHED PRINCIP AL OF LAW THAT LAW ASSISTS THOSE WHO ARE VIGILANT AND NOT THOSE WHO SL EEP OVER THEIR RIGHTS. AFTER CONSDIERING ALL THE MATERIAL BROUGHT ON RECORD, I CANCEL THE ASSESSMENT SO FRAMED HOLDING THAT THE ASSESSM ENT FRAMED VIDE ORDER OF THE ITO DATED 17.11.2011 PASSED U/S 1 43(3) WAS TOTALLY ERRONEOUS AND HAS CAUSED LOSS OF REVENUE BE ING PREJUDICIAL TO THE INTEREST OF REVENUE. I, THEREFORE, DIRECT TH E AO TO DECIDE THE CASE AFRESH AFTER EXAMINATION OF THE BOOKS OF ACCOU NT/DOCUMENTS OF THE ASSESSEE AFTER AFFORDING REASONABLE OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE AND BRING TO TAX THE INCOME WHICH W AS ESCAPED ASSESSMENT ON ACCOUNT OF DISCREPANCIES POINTED OUT ABOVE. 3. ORDERED ACCORDINGLY. 7. FROM THE ABOVE EXTRACT OF THE ORDER, IT IS SEEN THAT THE LD. CIT HAS ITA NO.351(ASR)/2014 4 MADE MENTION OF THE TWO NOTICES HAVING BEEN ISSUED TO THE ASSESSEE. HOWEVER, THERE IS NO MENTION OF THESE NOTICES HAVIN G BEEN SERVED ON THE ASSESSEE. AS SUCH, THE ASSESSEE IS NOT SHOWN TO HAV E BEEN SERVED WITH ANY NOTICE ISSUED UNDER SECTION 263 OF THE I.T.ACT. NOW, IN THE ABSENCE OF SERVICE OF NOTICE ON HIM, THE ASSESSEE CANNOT BE SAID TO HAVE COME KNOW OF THE PROCEEDINGS PENDING BEFORE THE LD. CIT. ELSE, THERE WAS NO REASON FOR THE ASSESSEE NOT TO APPEAR BEFORE THE LD . CIT AND THUS INVITE AN ADVERSE ORDER. 8. FOR THE ABOVE DISCUSSION, IN THE INTEREST OF JUS TICE, THIS MATTER IS REMITTED TO THE FILE OF THE LD. CIT, TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW, ON AFFORDING DUE & ADEQUATE OPPORTUNITY O F HEARING TO THE ASSESSEE. THE ASSESSEE SHALL, NO DOUBT, CO-OPERATE IN THE FRESH PROCEEDIGNS BEFORE THE LD. CIT. ORDERED ACCORDINGLY . 9. IN THE RESULT, FOR STATISTIOCAL PURPOSES, THE AP PEAL IS TREATED AS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 17TH DECE MBER, 2015. SD/- SD/- (T.S.KAPOOR) (A .D.JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 17 TH DECEMBER, 2015 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. RAM ASGOTRA, CONTRACTOR, KASHIRAH , UDHAMPUR. 2. THE CIT, JAMMU. 3. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER