HAWA VALVES (INDIA) PVT. LTD., MUMBAI V. CIT(A)- 20 , MUMBAI

ITA 3636/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8995 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2010-2011
• Appeal Filed On: 25-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JAYESH KALA; JIGNA SHETH
• Keywords: Reopening of assessment; Principle of natural justice; Difference of opinion; Change of opinion; Set aside
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI G MANJUNATHA (ACCOUNTANT MEMBER) AND SHRI RAVISH SOOD (JUDICIAL MEMBER) ITA NO. 3636/MUM/2018 (ASSESSMENT YEAR : 2010-11) M/S HAWA VALVES (INDIA) PVT. LTD. A/32, 3RD FLOOR, NOOTAN NAGAR PREMISE, GURU NANAK ROAD, MUMBAI-400050 PAN:-AABCH0359M VS ACIT, RANGE-12(2)(2), MUMBAI APPELLANT RESPONDEDNT APPELLANT BY MS. JIGNA SHETH & MR. JAYESH KALA RESPONDENT BY SHRI MANOJKUMAR SINGH CIT-DR DATE OF HEARING 10-06-2019 DATE OF PRONOUNCEMENT 28-06-2019 O R D E R PER G MANJUNATHA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST ORDER OF THE CIT(A)-20, MUMBAI, DATED 29-03-2018 AND IT PERTAINS TO AY 2010 -11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE TH E LD. COMMISSIONER OF INCOME TAX (APPEALS) - 20) ERRED IN DISMISSING THE APPEAL ON STATISTICAL GROUND AND TREATING THE P APA-APPEAL FILED AS NON EST. THE LD CIT(A) -20 ERRONEOUSLY DISMISSED THE APPEAL ON THE GROUND THAT MANUAL APPEAL FILED IS INVALID O N THE BASIS OF NOTIFICATION NO. S.O.637(E), ALTHOUGH THE ASSESSEE HAD FILED THE REASONS VIDE LETTER DATED 27.03.2018. THE LEARNED C IT A -20 DID NOT APPRECIATE THE FACT THAT APPEAL FOR THE CAPTION ED ASSESSMENT 2 ITA 3636/MUM/2018 YEAR WAS ACCEPTED BY THE OFFICE OF THE CIT (A) THUS THE MANUAL APPEAL WAS DEEMED TO BE ACCEPTED. HOWEVER THE APPEL LANT IN ORDER TO COMPLY WITH THE NOTIFICATION RE-FILED THE SAME ONLINE ON 28.03.2018. SUCH FACTS WERE PROVIDED TO THE LEARNED CIT(A) 20. ON THE FACTS MENTIONED, THE LEARNED CIT(A) ERRED IN DISMISSING THE APPEAL WITHOUT APPRECIATING THE FACTS OF THE CASE S TATED BY THE APPELLANT AND THUS THE ORDER PASSED BY THE LD CIT A IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND AGAINST THE PROVI SIONS OF INCOME TAX ACT AND RULES MADE THEREUNDER AND THEREFORE SHO ULD BE QUASHED. 2) ON THE FACTS & IN THE CIRCUMSTANCES OF THE CAS E THE LD. AO ERRED IN ISSUING NOTICE U/S 148 BASED ON CHANGE OF OPINION SINCE THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) ON 07.12.2012 AND ACCORDINGLY THE REOPENING OF ASSESSMENT IS WITH OUT UNDERSTANDING THE FACTS & CIRCUMSTANCES OF THE CASE & THE REASONS ASSIGNED FOR DOING SO ARE WRONG & CONTRARY TO THE PROVISIONS OF THE INCOME TAX ACT & THE RULES MADE T HERE UNDER. 3) ON THE FACTS & IN THE CIRCUMSTANCES, THE LD AO ERRED IN PASSING THE REASSESSMENT ORDER WITHOUT FURNISHING E NCLOSURE PAGE FOR REASONS RECORDED BY THE ASSESSING OFFICER AND W ITHOUT PASSING ANY ORDER OF DISPOSAL OF OBJECTIONS RAISED AGAINST THE REASONS RECORDED FOR REOPENING AND ACCORDINGLY THE REOPENIN G OF ASSESSMENT IS AGAINST THE PROVISIONS OF THE INCOME TAX ACT & THE RULES MADE THERE UNDER. 4) ON THE FACTS & IN THE CIRCUMSTANCES OF THE CAS E THE LD. AO ERRED IN DISALLOWING RS 51,23,9747- OUT OF PURCHASE S BY ALLEGING IT AS BOGUS WITHOUT UNDERSTANDING THE FACTS & CIRCUMST ANCES OF THE CASE & THE REASONS ASSIGNED FOR DOING SO ARE WRONG & CONTRARY TO THE PROVISIONS OF THE INCOME TAX ACT & THE RULES MA DE THERE UNDER. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND EXPORTING OF INDUSTRIAL VALVES, F ILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2010-11 ON 10/10/2010, DECLARING TO TAL INCOME AT RS.2,32,70,300/-. THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSME NT HAS BEEN COMPLETED U/S 143(3) R.W.S. 147 OF THE ACT 29/01/2016, DETERMINING THE T OTAL INCOME AT RS.2,83,94,270/- BY MAKING ADDITION ON ACCOUNT OF PURCHASES. 3 ITA 3636/MUM/2018 3. AGGRIEVED BY THE ASSESSMENT ORDER, ASSESSEE PREF ERRED APPEAL BEFORE THE CIT(A) AND SUCH APPEAL HAS BEEN FILED IN MANUAL FOR M ON 04/03/2016 WHICH IS WITHIN THE DUE DATE PRESCRIBED UNDER THE PROVISIONS OF THE ACT . THE CIT(A) DISMISSED APPEAL FILED BY THE ASSESSEE EX-PARTE FOR NON FILING OF APPEAL I N ELECTRONIC FORMAT AS PER THE PROVISIONS OF RULE 45 OF I. T. RULES, 1962 WHICH CA ME INTO EFFECT FROM 01/03/2016 AND AS EXTENDED BY CIRCULAR NO.20 DATED 26/05/2016. TH E LD.CIT(A) OBSERVED THAT ALTHOUGH THE ASSESSEE WAS REQUIRED TO FILE APPEAL IN ELECTRO NIC FORMAT WITHIN THE DUE DATE PRESCRIBED BY THE CBDT, VIDE CIRCULAR NO.20 OF 2016 DATED 26/05/2016, BUT THE ASSESSEE FAILED TO AVAIL SUCH OPPORTUNITY TO FILE A PPEAL IN ELECTRONIC FORMAT. THEREFORE, HE OPINED THAT APPEAL FILED BY THE ASSESSEE IN MANU AL FORM IS NOT MAINTAINABLE AS PER PROVISIONS OF SECTION 249(1) OF I.T. ACT AND ACCORD INGLY DISMISSED APPEAL FILED BY THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A), TH E ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH PARTIES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. WE FIND THAT THE LD.CIT(A) HAS DISMISSED APPEAL FILED BY THE ASSESSEE ON TECHNICAL GROUND OF NOT FILING APPEAL MEMO IN FORM 35 IN ELECTRONIC FORMAT AS REQUIRED UNDER THE PROVISIONS OF RULE 45 OF I.T. RULES, 1962 WHICH CAM E INTO EFFECT FROM 01/03/2016. THE ASSESSEE HAS FILED APPEAL IN MANUAL FORM ON 04/03/2 016 AND SUCH APPEAL FILED BY THE ASSESSEE IS WITHIN THE TIME LIMIT PROVIDED AS PER P ROVISIONS OF SECTION 249(1) OF THE I.T. ACT, 1961. THE LD.CIT(A) NEVER DISPUTED THE ABOVE FACT. BUT, THE LD.CIT(A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE ON THE G ROUND OF NOT FILING APPEAL IN ELECTRONIC FORMAT ON OR BEFORE THE EXTENDED TIME BY THE CBDT, VIDE ITS CIRCULAR NO.20 OF 4 ITA 3636/MUM/2018 2016 DATED 26/05/2016 AS PER WHICH THE ASSESSEES AR E ALLOWED TO FILE ELECTRONIC FORMS. WE FIND THAT DURING TRANSITIONAL PERIOD MANY ASSESS EES WERE NOT AWARE OF THE PROVISIONS OF THE ACT, AND AMENDMENT BROUGHT TO THE STATUTE FO R FILING APPEALS IN ELECTRONIC FORMAT. CONSIDERING THE HARDSHIP FACED BY THE ASSESSES, THE TRIBUNALS AND COURTS HAVE ALLOWED OR DIRECTED THE APPELLATE AUTHORITIES TO CONSIDER T HE APPEALS FILED BY THE ASSESSEES IF SUCH APPEALS ARE FILED WITHIN THE DUE DATE PRESCRIB ED UNDER THE ACT IN MANUAL FORM AND NOT FILED THE APPEALS IN ELECTRONIC FORM AS REQUIRE D U/R 45 OF I.T. RULES, 1962. IN THIS CASE, ON PERUSAL OF FACTS AVAILABLE ON RECORD, WE F IND THAT THE ASSESSEE HAS FILED HIS APPEAL WITHIN THE DUE DATE PRESCRIBED UNDER THE ACT IN MANUAL FORM. THEREFORE, CONSIDERING THE FACT THAT THE ASSESSEE WOULD NOT HA VE BEEN AWARE OF THE FACT OF FILING THE APPEAL IN ELECTRONIC FORM ON OR AFTER 01/03/201 6 AND TO GIVE ANOTHER OPPORTUNITY OF HEARING TO THE ASSESSEE TO ARGUE HIS APPEAL ON MERI T, WE SET ASIDE THE ORDER PASSED BY THE LD.CIT(A) AND RESTORE THE APPEAL BACK TO THE FI LE OF THE LD.CIT(A). THE CIT(A) SHOULD DIRECT ASSESSEE TO FILE FORM 35 IN ELECTRONI C FORM IF NOT FILED SO FAR. THE ASSESSEE SHOULD FILE CONDONATION APPLICATION WITH PROPER REA SON ALONGWITH APPEAL MEMO, IF NECESSARY. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED, FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 28/06/2019 SD/- SD/- (RAVISH SOOD) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 28/06/2019 5 ITA 3636/MUM/2018 F{X~{T? FA P.S COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR,ITAT, MUMBAI