M/s U.P State Yarn Company Ltd., Kanpur V. Dy.Commissioner of Income Tax-6, Kanpur

ITA 359/LKW/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7876 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 01-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C K SINGH
• Assessee Lawyers: P K KAPOOR
• Keywords: Opportunity of being heard; Non compliance; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI. A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 359/LKW/2018 ASSESSMENT YEAR: 2007 - 08 U.P. STATE YARN COMPANY LTD. 14/72, SMITH SQUARE CIVIL LINES, KANPUR V. DY. CIT RANGE VI KANPUR T AN /PAN : AAACU1674K (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI P. K. KAPOOR, C.A. RESPONDENT BY: SHRI C. K. SINGH, D.R. DATE OF HEARING: 15 0 7 201 9 DATE OF PRONOUNCEMENT: 19 0 7 201 9 O R D E R PER A. D. J AIN, V.P . : THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE LD. CIT(A) - II, KANPUR DATED 20/3/2018 FOR ASSESSMENT YEAR 2007 - 08, TAKING THE FOLLOWING GROUNDS OF APPEAL: - 1 . BECAUSE THE PE NALTV ORDER DATED 29.03.2016 PASSED BY THE DY. COMMISSIONER OF INCOME T AX - 6, KANPUR WAS WHOLLY ILLEGAL, BEING WITHOUT JURISDICTION, AS THE SAID ORDER P ASSED WITHOUT OBTAINING PRIOR APPROVAL OF JT. COMMISSIONER OF INCOME - TAX AS PER PROVI SIONS OF SECTION 274(2)(B) OF THE 'ACT', CONSEQUENTLY, THE ID. 'CIT(A)' SHOULD HAVE QUAS HED THE PENALTY ORDER. WITHOUT PREJUDICE TO THE AFORESAID 2. BECAUSE ID. 'CIT(A)' WAS NOT JUSTIFIED IN DISMISSING THE APPEAL BY PASSING AN E - PARTE ORDER WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE 'APPELLANT' AND CONSEQUENTLY, THE IMPUGNED ORDE R DESERVES TO BE SET ASIDE AND PENALTY IMPOSED BY THE ASSESSING OFFICER DESERVES TO BE DELETED. ITA NO.359/LKW/2018 PAGE 2 OF 4 3. BECAUSE NOTICE OF HEARING DATED 19.05.2017 SAID TO HAVE BEEN ISSUED AND SERVED ON THE E - MAIL ADDRESS OF THE 'APPELLANT' HAS NOT BEEN SERVED ON THE E - MAIL ADD RESS PROVIDED IN FORM 35 AND NO MANUAL NOTICE OF HEARING HAS BEEN SERVED ON THE 'APPELLANT' OTHERWISE ALSO, DUE TO WHICH THE PROCEEDINGS COULD NOT BE ATTENDED BEFORE THE 'CIT(A)' ON THE DATE OF HEARING AND CONSEQUENTLY THE ORDER PASSED BY 'CIT(A)' IS LIABL E TO BE SET ASIDE AND PENALTY IMPOSED BY THE ASSESSING OFFICER DESERVES TO BE DELETED. 4. BECAUSE AS PER MANDATE IN FORM NO. 35, THE NOTICE OF HEARING WAS SUPPOSED TO BE ISSUED AND SERVED MANUALLY AND IN THE ABSENCE OF ANY SUCH NOTICE ISSUED AND SERVED BY THE 'CIT(A)' THE ORDER PASSED BY HIM IS LIABLE TO BE SET - ASIDE. 5. BECAUSE VARIOUS ADVERSE OBSERVATIONS ABOUT THE FAILURE OF THE 'APPELLANT' REGARDING NON COMPLIANCE OF NOTICES CONSISTENTLY SENT ARE CONTRARY TO THE MATERIAL AND INFORMATION ON RECORD AND CO NSEQUENTLY THE IMPUGNED ORDER DESERVES TO BE SET ASIDE. 6. BECAUSE IN ANY CASE AND WITHOUT PREJUDICE TO THE AFORESAID GROUNDS, NO SPECIFIC CHARGE, EITHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING IN ACCURATE PARTICULARS OF INCOME, WAS SPECI FIED IN THE SHOW CAUSE NOTICE DATED 11.03.2016, THE 'CIT(A)' SHOULD HAVE DELETED THE PENALTY IMPOSED BY THE ASSESSING OFFICER IN VIEW OF DECISION OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT V MANJUNATHA COTTON & GINNING FACTORY [20131359 ITR 565 AFF IRMED BY THE APEX COURT IN THE CASE OF CIT V. SSA'S EMERALD MEADOWS [2016173 TAXMANN.COM 241 (SC) . 7 . BECAUSE EVEN ON MERITS, THE ASSESSEE CANNOT BE SAID TO HAVE FURNISHED INACCURATE PARTICULARS OF ITS INCOME AND CONSEQUENTLY, 'CIT(A)' SHOULD HAVE DELETED THE PENALTY IMPOSED BY THE ASSESSING OFFICER. 8. BECAUSE AUTHORITIES BELOW FAILED TO APPRECIATE THAT NONE OF THE DETAILS OF IN COME FURNISHED BY THE 'APPELLANT' WERE FOUND TO BE INCORRECT OR FALSE AND CONSEQUENTLY, PROVISIONS OF SECTION 271 (1)(C) OF THE 'A CT' WERE NOT ATTRACTED IN THE 'APPELLANT'S' CASE. 9 BECAUSE MERE DIS ALLOWANCE OF A BONAFIDE CLAIM OF EXPENDITURE CANNOT BE EQUATED WITH FURNISHING OF IN - ACCURATE ITA NO.359/LKW/2018 PAGE 3 OF 4 PARTICULARS OF INCOME AND CONSEQUENTLY THE PENALTY IMPOSED BY THE ASSESSING OFFICER DESERVED T O BE DELETED 10 . BECAUSE COMPLETE DETAILS OF EXPENSES RELATING TO EARLIER YEARS AMOUNTING TO RS. 6,62,89 5/ - AND OF VRS AMOUNTING TO RS. 6,43,850/ - DEBITED IN THE PROFIT & LOSS ACCOUNT WERE FURNISHED IN THE TAX AUDIT REPORT AND ACCOUNT STATEMENTS AND ALSO FUR NISHED DURING THE ASSESSMENT PROCEEDINGS AND NO IN - ACCURACY HAVING BEEN FOUND THEREIN THE PENALTY WITH REFERENCE TO DIS - ALLOWANCE, OUT OF SAID EXPENSES WAS NOT LEVIABLE . 2 . BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) HAS DISMISSED THE ASSESSEES APPEAL F OR NON PROSECUTION, OBSERVING THAT THE ASSESSEE IS NOT SERIOUS IN PURSUING THE PRESENT APPEAL. WE TAKE NOTE THAT THE LD. CIT(A) HAD ISSUED ONLY ONE NOTICE, DATED 19 /5/201 7 THROUGH INCOME TAX BUSINESS APPLICATION (ITBA NETWORK), FOR COMPLIANCE ON 2/6/2017 , BUT NONE APPEARED ON BEHALF OF THE ASSESSEE. THEREFORE, THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE EX - PARTE QUA THE ASSESSEE. SUCH SERVICE OF NOTICE HAS, HOWEVER, BEEN DISPUTED BY THE ASSESSEE. 3 . HEARD. WE FIND THAT THE CIT(A) HAS DISMISSED THE APPEAL WITHOUT PROVIDING PROPER OPPORTUNITY TO THE ASSESSEE. MOREOVER, HE HAS NOT DECIDED THE APPEAL AFTER DISCUSSING IN DETAIL, HIS REASONS FOR AGREEI NG WITH THE ASSESSMENT ORDER. IN THIS VIEW OF THE MATTER, ANOTHER OPPORTUNITY OF HEARING REQUIRES TO BE GIVEN TO THE ASSESSEE TO REPRESENT H ER CASE FULLY BEFORE THE LD. CIT(A). EVEN OTHERWISE, IT IS TRITE [S. VELU PALANDAR VS. DCIT 83 ITR 683 (MAD.) AND MS. SWATI PAWA VS. DY. CIT, 175 ITD 622 (DEL)] AND INCUMBENT ON THE LD CIT(A) TO DECIDE AN APPEAL ON MERIT EVEN IN THE ABSENCE OF ANY REPRESENTATION BEFORE THEM. 4 . IN VIEW OF THE ABOVE, THE MATTER IS REMITTED TO THE FILE OF THE LD. CIT(A) TO BE DECIDED AFRESH ON MERIT, IN ACCORDANCE WITH LAW, ON AFFORDING DUE AND ADEQUATE OPPORTUNITY OF HEARING TO THE ASSES SEE. THE ASSESSEE, NO DOUBT, SHALL COOPERATE IN THE FRESH PROCEEDINGS BEFORE THE ITA NO.359/LKW/2018 PAGE 4 OF 4 LD. CIT(A). ALL PLEAS AVAILABLE UNDER THE LAW SHALL REMAIN SO AVAILABLE TO THE ASSESSEE. ORDERED ACCORDINGLY. 5 . IN THE RESULT, FOR STATISTICAL PURPOSES, THE APPEAL IS TREATED A S ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 / 0 7 /201 9 . SD/ - SD/ - [ T. S. KAPOOR ] [ A. D. JAIN ] ACCOUNTANT MEMBER VICE PRESIDENT DATED: 19 /0 7 / 201 9 JJ: 1507 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR BY ORDER ASSISTANT REGISTRAR