Shri Tarun S.Verma L/h of late Santramdas K. Verma, Ahmedabad V. The ACIT(OSD), Circle-9, Ahmedabad

ITA 3642/AHD/2015

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 7752 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 29-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALIT P JAIN
• Assessee Lawyers: S N SOPARKAR
• Keywords: Salary income; Opportunity of being heard; Initiation of penalty proceedings; Non compliance; Onus to prove
• Section: 143(3); 234B; 68

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO.3641 AND 3642/AHD/2015 / ASSTT. YEAR: 2008-2009 AND 2009-10 SHRI TARUN S. VARMA (IND.) 307-308, SARTHIK SQUARE OPP: NEW U.S.PIZZA S.G. HIGHWAY, AHMEDABAD. PAN : AAIPV 6427 C VS. ACIT (OSD) CIR.9, AHMEDABAD. ./ ITA NO.3643/AHD/2015 / ASSTT. YEAR: 2008-2009 SHRI GAURVA S. VARMA 307-308, SARTHIK SQUARE S.G. HIGHWAY, AHMEDABAD. PAN : ADEPV 3361 L VS. ACIT (OSD) CIR.9, AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI S.N. SOPARKAR, AR REVENUE BY : SHRI LALIT P. JAIN, SR.DR / DATE OF HEARING : 27/09/2018 / DATE OF PRONOUNCEMENT: 27/09/2018 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: IN THE PRESENT APPEALS, THE ASSESSEES ARE IMPUGNING SEPARATE ORDERS OF THE LD.CIT(A)-13, AHMEDABAD DATED 31.3.2015 IN T HEIR RESPECTIVE APPEALS PASSED FOR THE ASSESSMENT YEARS 2008-09 AND 2009-10. ITA NO.3641 AND 3642 /AHD/2015 AND ANR. 2 2. REGISTRY HAS POINTED OUT THAT ALL THESE APPEALS ARE TIME BARRED BY 203 DAYS. IN ORDER TO EXPLAIN THE DELAY, BOTH ASSE SSES HAVE FILED THEIR AFFIDAVITS WHICH ARE VERBATIM SAME. THEREFORE, FOR THE FACILITY OF REFERENCE WE TAKE NOTE OF AFFIDAVIT FILED BY SHRI T ARUN S. VARMA, WHICH READS AS UNDER: I, TARUN S VARMA L/H SANTRAMDAS K VARMA, ADULT AT PRESENT OPERATING FROM 307-308, SARTHIK SQUARE, OPP. NEW U S PIZZA, S.G. HIGHWAY, AHMEDABAD 380 054 STATE ON SOLEMN AFF IRMATION AS UNDER: THAT THE ORDER U/S 143 (3) R W S 263 FOR A.Y. 2008- 09 PASSED BY CIT (A) DISMISSING THE APPEAL OF THE APPELLANT WAS RECEIVED ON 10/04/2015. MR. SANJIV SHAH, ACCOUNTANT WAS ENTRUST ED WITH THE TASK TO FILE APPEAL BEFORE HON'BLE ITAT THAT REQUIR ED TO BE FILED WITHIN 60 DAYS OF RECEIPT OF APPELLATE ORDER. HOWE VER, THE ACCOUNTANT KEPT THE ORDER IN HIS DRAWER WITHOUT TAK ING ANY ACTION & EVENTUALLY RESIGNED FROM THE JOB IN THE MONTH OF DECEMBER 2015. ON CLEARING HIS DRAWER IT CAME TO THE NOTICE ABOUT NON FILING OF APPEAL BEFORE HONBLE ITAT & HENCE IT WAS IMMEDI ATELY FORWARDED TO THE OFFICE OF SHRI SAURABH SOPARKAR, S ENIOR ADVOCATE AND APPEAL WAS FILED ON 29/12/2015 AFTER DELAY OF 2 03 DAYS. THEREFORE I HEREBY REQUEST YOUR HONOUR TO TAKE TH IS REASON INTO CONSIDERATION AND TO CONDONE THE DELAY IN FILING OF THE CAPTIONED APPEAL DUE TO NEGLIGENCE OF THE ACCOUNTANT AND TO G RANT ME AN OPPORTUNITY OF BEING HEARD ON MERITS. THAT WHAT HAS BEEN STATED ABOVE IS THE FACT AND TRU E TO MY KNOWLEDGE. 3. THUS, THE STAND OF THE ASSESSEES IS THAT THEIR A CCOUNTANT RECEIVED ORDERS OF THE CIT(A) AND KEPT THE ORDERS IN HIS DRA WER WITHOUT TAKING ANY ACTION AND INFORMING THE ASSESSEES. THE LD.COU NSEL FOR THE ASSESSEE SUBMITTED THAT THE ACCOUNTANT IS WORKING WITH COMPA NY IN THEIR ITA NO.3641 AND 3642 /AHD/2015 AND ANR. 3 INDIVIDUAL CASES, THEY HAVE NOT EMPLOYED ACCOUNTANT , BUT HE WAS ASSISTING THE ASSESSEES IN INCOME-TAX ASSESSMENTS. IN SUPPORT OF THIS PLEA, HE FILED COPY OF REGISTER SHOWING PAYMENT OF SALARY TO SHRI SANJIV SHAH. HOWEVER ON THE LAST DATE OF HEARING I.E. ON 4.9.2018, WE HAVE ADJOURNED HEARING AND APPRAISED THE LD.COUNSEL FOR THE ASSESSEE TO SHOW US ATTENDANCE REGISTER. SHRI SOPARKAR HAS FILED FR ESH AFFIDAVIT OF SHRI TARUN SANTRAMDAS VARMA AS WELL AS MONTHLY ATTENDANC E REGISTER OF SWAGAT INFRASTRUCTURE P.LTD. ATTENDANCE BY THE EMP LOYEES WERE MARKED THROUGH BIO-METRIC MACHINE AND PRINT OUT OF ATTENDA NCE REGISTER HAS BEEN PLACED BEFORE US. THIS REGISTER SHOWS THAT ACCOUNT ANT SHRI SANJIV SHAH DID NOT ATTEND OFFICE FROM THE MONTH OF DECEMBER, 2 015. SIMILARLY, SALARY HAS NOT BEEN PAID TO HIM. ON THE STRENGTH O F THESE DETAILS, THE LD.COUNSEL FOR THE ASSESSEE CONTENDED THAT DELAY IN FILING ALL THESE APPEALS HAPPENED ON ACCOUNT OF NON-COMMUNICATION OF ORDERS OF THE LD.CIT(A) BY THE ACCOUNTANT TO THE ASSESSEE. HE P RAYED THAT DELAY IN FILING THE APPEALS BE CONDONED AND APPEALS BE DECID ED ON MERIT. 4. ON THE OTHER HAND, THE LD.DR CONTENDED THAT THE ASSESSEES DID NOT APPEAR BEFORE THE LD.CIT(A). THEY HAVE TENDENCY NO T TO COOPERATE WITH THE DEPARTMENT AND NOT PROSECUTE THEIR INCOME TAX P ROCEEDINGS ACCORDING TO THE LAW. NO SYMPATHY SHOULD BE SHOWN TO SUCH TYPE OF ASSESSEES. HE PRAYED THAT ALL THE APPEALS BE DISMI SSED ON ACCOUNT OF DELAY IN FILING THE APPEALS. 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. SUB-SECTION 5 OF SECTION 253 OF T HE ACT CONTEMPLATES THAT THE TRIBUNAL MAY ADMIT AN APPEAL OR PERMIT FIL ING OF MEMORANDUM ITA NO.3641 AND 3642 /AHD/2015 AND ANR. 4 OF CROSS-OBJECTIONS AFTER EXPIRY OF RELEVANT PERIOD , IF IT IS SATISFIED THAT THERE WAS A SUFFICIENT CAUSE FOR NOT PRESENTING IT WITHIN THAT PERIOD. THIS EXPRESSION SUFFICIENT CAUSE EMPLOYED IN THE SECTI ON HAS ALSO BEEN USED IDENTICALLY IN SUB-SECTION 3 OF SECTION 249 OF INCO ME TAX ACT, WHICH PROVIDES POWERS TO THE LD.COMMISSIONER TO CONDONE T HE DELAY IN FILING THE APPEAL BEFORE THE COMMISSIONER. SIMILARLY, IT HAS BEEN USED IN SECTION 5 OF INDIAN LIMITATION ACT, 1963. WHENEVER INTERPRETATION AND CONSTRUCTION OF THIS EXPRESSION HAS FALLEN FOR CONS IDERATION BEFORE HONBLE HIGH COURT AS WELL AS BEFORE THE HONBLE SU PREME COURT, THEN, HONBLE COURT WERE UNANIMOUS IN THEIR CONCLUSION TH AT THIS EXPRESSION IS TO BE USED LIBERALLY. WE MAY MAKE REFERENCE TO THE FOLLOWING OBSERVATIONS OF THE HONBLE SUPREME COURT FROM THE DECISION IN THE CASE OF COLLECTOR LAND ACQUISITION VS. MST. KATIJI & OTH ERS, 1987 AIR 1353: 1. ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITO RIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS WHEN DELAY IS CONDONED TH E HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERI TS AFTER HEARING THE PARTIES. 3. 'EVERY DAY'S DELAY MUST BE EXPLAINED' DOES NOT M EAN THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOU R'S DELAY, EVERY SECOND'S DELAY? THE DOCTRINE MUST BE APPLIED IN A RATIONAL COMMON SENSE PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS ARE PITTED AGAINST EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE DE SERVES TO BE PREFERRED FOR THE OTHER SIDE CANNOT CLAIM TO HAVE V ESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON-DELIBERATE DE LAY. ITA NO.3641 AND 3642 /AHD/2015 AND ANR. 5 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING T O DELAY. IN FACT HE RUNS A SERIOUS RISK. 6. IT MUST BE GRASPED THAT JUDICIARY IS RESPECTED N OT ON ACCOUNT OF ITS POWER TO LEGALIZE INJUSTICE ON TECHNICAL GROUND S BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 6. SIMILARLY, WE WOULD LIKE TO MAKE REFERENCE TO AU THORITATIVE PRONOUNCEMENT OF HONBLE SUPREME COURT IN THE CASE OF N.BALAKRISHNAN VS. M. KRISHNAMURTHY (SUPRA). IT READS AS UNDER: RULE OF LIMITATION ARE NOT MEANT TO DESTROY THE RI GHT OF PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTICS, BUT SEEK THEIR REMEDY PROMPTLY. THE OBJECT OF PROVI DING A LEGAL REMEDY IS TO REPAIR THE DAMAGE CAUSED BY REASON OF LEGAL INJURY. LAW OF LIMITATION FIXES A LIFE-SPAN FOR SUCH LEGAL REMEDY FOR THE REDRESS OF THE LEGAL INJURY SO SUFFERED. TIME IS PR ECIOUS AND THE WASTED TIME WOULD NEVER REVISIT. DURING EFFLUX OF T IME NEWER CAUSES WOULD SPROUT UP NECESSITATING NEWER PERSONS TO SEEK LEGAL REMEDY BY APPROACHING THE COURTS. SO A LIFE SPAN MU ST BE FIXED FOR EACH REMEDY. UNENDING PERIOD FOR LAUNCHING THE REME DY MAY LEAD TO UNENDING UNCERTAINTY AND CONSEQUENTIAL ANARCHY. LAW OF LIMITATION IS THUS FOUNDED ON PUBLIC POLICY. IT IS ENSHRINED IN THE MAXIM INTEREST REIPUBLICAE UP SIT FINIS LITIUM (IT IS FOR THE GENERAL WELFARE THAT A PERIOD BE PUTT TO LITIGATION). RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHT OF THE PARTIES. THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTICS BUT SEEK THEIR REMEDY PROMPTLY. THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT ALIVE FOR A LEGISLATIVELY FIXED PERIOD OF TIME. A COURT KNOWS THAT REFUSAL TO CONDONE DELAY WOULD R ESULT FORECLOSING A SUITOR FROM PUTTING FORTH HIS CAUSE. THERE IS NO PRESUMPTION THAT DELAY IN APPROACHING THE COURT IS ALWAYS DELIBERATE. THIS COURT HAS HELD THAT THE WORDS 'SUF FICIENT CAUSE' UNDER SECTION 5 OF THE LIMITATION ACT SHOULD RECEIV E A LIBERAL CONSTRUCTION SO AS TO ADVANCE SUBSTANTIAL JUSTICE V IDE SHAKUNTALA ITA NO.3641 AND 3642 /AHD/2015 AND ANR. 6 DEVI LAIN VS. KUNTAL KUMARI [AIR 1969 SC 575] AND S TATE OF WEST BENGAL VS. THE ADMINISTRATOR, HOWRAH MUNICIPALITY [ AIR 1972 SC 749]. IT MUST BE REMEMBERED THAT IN EVERY CASE O F DELAY THERE CAN BE SOME LAPSE ON THE PART OF THE LITIGANT CONCE RNED. THAT ALONE IS NOT ENOUGH TO TURN DOWN HIS PLEA AND TO SHUT THE DOOR AGAINST HIM. IF THE EXPLANATION DOES NOT SMACK OF MALA FIDE S OR IT IS NOT PUT FORTH AS PART OF A DILATORY STRATEGY THE COURT MUST SHOW UTMOST CONSIDERATION TO THE SUITOR. BUT WHEN THERE IS REAS ONABLE GROUND TO THINK THAT THE DELAY WAS OCCASIONED BY THE PARTY DELIBERATELY TO GAIN TIME THEN THE COURT SHOULD LEAN AGAINST ACCEPT ANCE OF THE EXPLANATION. WHILE CONDONING DELAY THE COULD SHOULD NOT FORGET THE OPPOSITE PARTY ALTOGETHER. IT MUST BE BORNE IN MIND THAT HE IS A LOOSER AND HE TOO WOULD HAVE INCURRED QUIET A LARGE LITIGATION EXPENSES. IT WOULD BE A SALUTARY GUIDELINE THAT WHE N COURTS CONDONE THE DELAY DUE TO LACHES ON THE PART OF THE APPLICANT THE COURT SHALL COMPENSATE THE OPPOSITE PARTY FOR HIS L OSS. WE DO NOT DEEM IT NECESSARY TO RE-CITE OR RECAPITUL ATE THE PROPOSITION LAID DOWN IN OTHER DECISIONS. IT IS SUFFICE TO SAY THAT THE HONBLE COURTS ARE UNANIMOUS IN THEIR APPROACH TO PROPOUND THAT WH ENEVER THE REASONS ASSIGNED BY AN APPLICANT FOR EXPLAINING THE CONDONA TION OF DELAY, THEN SUCH REASONS ARE TO BE CONSTRUED WITH A JUSTICE ORI ENTED APPROACH. 7. IN THE LIGHT OF THE ABOVE, LET US EXAMINE THE FA CTS OF THE PRESENT CASE. SHRI GAURAV SANTRAMDAS VARMA IS DIRECTOR IN SWAGAT INFRASTRUCTURE P.LTD., PARTNER IN SWAGAT DEVELOPERS ETC. SIMILARLY, SHRI TARUN S. VARMA IS ALSO A DIRECTOR IN SWAGAT INFRAST RUCTURE P.LTD. THUS, AN EMPLOYEE IN SWAGAT INFRASTRUCTURE CAN BE EXPECTE D TO RECEIVE ORDERS PASSED IN THEIR INDIVIDUAL CASES. THE CASE OF THE APPELLANTS IS THAT ACCOUNTANT OF SWAGAT INFRASTRUCTURE, SHRI SANJIV SH AH HAS RECEIVED ORDERS OF LD.CIT(A) AND KEPT IN HIS DRAWER. HE DID NOT COMMUNICATE THIS ORDER TO THE ASSESSEE AND LEFT THE JOB. LATER ON IN CONSEQUENCE OF ITA NO.3641 AND 3642 /AHD/2015 AND ANR. 7 NOTICE, IT CAME TO KNOWLEDGE ABOUT THE ORDERS AND I MMEDIATELY FILED APPEALS. TO OUR MIND, IF BOTH THE ASSESSEES HAVE A DOPTED ANY STRATEGY TO DELAY THEIR APPEALS, THEY WOULD NOT GET ANYTHING. IN OTHER WORDS, BY ADOPTING A STRATEGY TO DELAY FILING OF THE APPEAL I S CONCERNED, THAT WOULD ONLY HARM ASSESSEES. THUS, THEY WOULD NOT GET ANY BENEFIT BY ADOPTING A DELAY TACTIC WHILE FIGHTING LITIGATION WITH THE DEP ARTMENT. IT MIGHT HAVE BEEN HAPPENED ON ACCOUNT OF A BONAFIDE HUMAN ERROR. HONBLE SUPREME COURT IN THE CASE OF M.KRISHNAMURTHY (SUPRA) HAS OB SERVED THAT LENGTH OF DELAY IS IMMATERIAL. IT IS THE PLAUSIBILITY OF EXPLANATION FOR CONDONING THE DELAY. CONSIDERING THE ABOVE ASPECTS, WE ARE S ATISFIED THAT THE ASSESSEES HAVE BEEN PREVENTED BY SUFFICIENT REASONS FOR NOT FILING APPEALS IN TIME, THEREFORE, WE CONDONE THE DELAY IN FILING APPEALS AND PROCEED TO DECIDE THE APPEALS ON MERIT. 8. ASSESSES HAVE RAISED NUMBER OF GROUNDS IN THEIR APPEALS. BUT ONE OF THE PRELIMINARY GROUNDS RAISED BY THEM IS THAT L D.CIT(A) HAS ERRED IN DISMISSING THE APPEALS OF THE ASSESSEE WITHOUT PROV IDING SUFFICIENT OPPORTUNITY OF HEARING. FIRST OF ALL WE NOTE THAT FACTS ON ALL VITAL POINTS ARE COMMON. THEREFORE, FOR THE FACILITY OF REFEREN CE, WE TAKE UP THE FACTS FROM ITA NO.3642/AHD/2015 IN THE CASE OF TARU N S. VARMA. 9. AS OBSERVED EARLIER, BOTH THE ASSESSEE ARE DIREC TORS IN SWAGAT INFRASTRUCTURE P.LTD. AND PARTNERS IN SWAGAT DEVELO PERS AND MRUNAL BUILDERS AND TS CORPORATION. IT IS PERTINENT TO NO TE THAT ASSESSEES ASSESSMENTS UNDER SECTION 143(3) OF THE ACT WERE FR AMED IN THE CASE OF TARUN S. VARMA ON 22.12.2010 IN THE ASSTT.YEARS 200 8-09 AND 2009-10 DETERMINING TAXABLE INCOME OF RS.30,63,390/- AND RS .3750,280/- I.E. ITA NO.3641 AND 3642 /AHD/2015 AND ANR. 8 RETURNED INCOME IN BOTH YEARS. IN THE CASE OF SHRI GAURAV S. VARMA ASSESSMENT UNDER SECTION 143(3) WAS FINALIZED ON 22 .12.2010 DETERMINING TAXABLE INCOME AT RS.24,99,440/- I.E. R ETURNED INCOME. THE LD.COMMISSIONER TOOK COGNIZANCE UNDER SECTION 263 O F THE INCOME TAX ACT AND SET ASIDE THESE ASSESSMENT ORDERS. IN PURS UANCE OF 263-ORDER, THE AO HAS PASSED FRESH ASSESSMENT ORDER ON 21.1.20 14 IN THE CASE OF BOTH ASSESSEES IN ALL THESE YEARS. IN THE FRESH AS SESSMENT ORDER, HE DETERMINED TAXABLE INCOME OF THE ASSESSEE AS UNDER: SHRI TARUN S. VERMA, ASSTT: YEAR 2008-09 10. SUBJECT TO THE ABOVE REMARKS AND DATA MADE AVAILABLE, THE TOTAL INCOME OF THE ASSESSEE IS COMPUTED AS UNDER :- INCOME FROM SALARY AS PER COMPUTATION OF TOTAL INCO ME RS. 2,40,000/- INCOME FROM HOUSE PROPERTY AS PER COMPUTATION OF TO TAL INCOME RS. 19,589/- INCOME FROM OTHER SOURCES AS PER COMPUTATION OF TOT AL INCOME RS. 14,939/- GROSS TOTAL INCOME RS. 1,06,38,040/- LESS : DEDUCTION UNDER CHAPTER VIA RS. 1,10,500/- ASSESSED TOTAL INCOME RS. 1,05,27,540/- SHRI GAURAV S. VERMA, ASSTT: YEAR 2008-09 10. SUBJECT TO THE ABOVE REMARKS AND DATA MADE AVA ILABLE, THE TOTAL INCOME OF THE ASSESSEE IS COMPUTED AS UNDER:- INCOME FROM SALARY AS PER COMPUTATION OF TOTAL INCO ME RS. 1,20,000/- ITA NO.3641 AND 3642 /AHD/2015 AND ANR. 9 INCOME FROM BUSINESS OR PROFESSION I) AS PER COMPUTATION OF TOTAL INCOME - RS. 35,00 0/- ADD :- INCOME FROM BUSINESS AS WORKED - RS. 99,23,866 /- OUT IN PARA 9 ABOVE RS. 99,58,866/- INCOME FROM OTHER SOURCES AS PER COMPUTATION OF TOT AL INCOME RS. 22,833/- GROSS TOTAL INCOME RS. 1,01,01,699/- LESS : DEDUCTION UNDER CHAPTER VIA RS. 1,00,000/- ASSESSED TOTAL INCOME ROUNDED OFF RS. 1,00,01,699/- RS. 1,00,01,700/- 10. DISSATISFIED WITH THE ABOVE ORDERS, THE ASSESSE ES CARRIED THE MATTER IN APPEAL BEFORE THE LD.CIT(A). THE LD.CIT(A) ISSU ED NOTICE OF HEARING ON A NUMBER OF OCCASIONS AND ULTIMATELY DISMISSED T HE APPEALS OF THE ASSESSEES EX PARTE . THE AO HAS ISSUED NOTICE ON 13.12.2013 IN THE CA SE OF TARUN S. VARMA INVITING HIS EXPLANATION AS TO WH Y FRESH ASSESSMENT ORDER SHOULD NOT BE MADE ON FOLLOWING ISSUES: I) TO COMPUTE YOUR INCOME BY TREATING THE PROFIT O R SALE OF LAND AS INCOME FROM BUSINESS INSTEAD OF SHORT TERM OR LO NG TERM CAPITAL GAINS II) TO EXAMINE THE GENUINENESS OF CASH ADVANC E SHOWN FROM TWO CO-OP HOUSING SOCIETIES AS ADVANCE AGAINST LAND , ON ALL ASPECTS AS PER PROVISIONS OF SECTION 68 AND THE APP LICABILITY OF SECTION 269SS III) TO EXAMINE THE GENUINENESS OF THE EXPENSE S INCURRED ON IMPROVEMENT / DEVELOPMENT OF LAND BY CONDUCTING THR OUGH INQUIRY AND ITS SOURCE THEREOF. IV) TO EXAMINE THE GENUINENESS OF THE COOPERATIVE S OCIETIES AND ITS RELATION WITH THE ASSESSEE WITH RESPECT TO THE TRANSACTION OF LAND AND RECEIPT OF CASH. ITA NO.3641 AND 3642 /AHD/2015 AND ANR. 10 11. THUS, THE BASIC ISSUE INVOLVED IN THESE APPEALS RELATES TO WHETHER PROFIT ON SALE OF LAND IS TO BE ASSESSED FROM BUSIN ESS INCOME OR SHORT TERM CAPITAL GAIN. THIS IS THE MAJOR ISSUE. WHILE IMPUGNING THE ORDERS OF THE LD.CIT(A), THE LD.COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE LD.CIT(A) HAS NOT RECORDED ANY INDEPENDENT FINDING, RATHER CONCURRED WITH THE AO AND DISMISSED THE APPEALS OF THE ASSESS EES IN A WAY ON ACCOUNT OF NON-PROSECUTION. ON THE OTHER HAND, THE LD.DR SUBMITTED THAT THE LD.CIT(A) HAS TAKEN COGNIZANCE OF THE ASSESSMEN T ORDERS, AND THEREAFTER HE CONCURRED WITH THE AO BECAUSE THE ASS ESSEES HAVE NOT FILED ANY FRESH EVIDENCE OR ANY FRESH EXPLANATION. THUS, FINDING RECORDED BY THE AO WAS NOT REBUTTED. THEREFORE, HE HAS NO CHOI CE EXCEPT TO CONCUR WITH THE AO. 12. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. AT THIS STAGE, WE DEEM IT APPROP RIATE TO TAKE NOTE OF THE FINDING RECORDED BY THE LD.CIT(A) IN THE CASE OF TA RUN S. VARMA FOR THE ASSTT.YEAR 2009-10. IDENTICAL FINDING HAS BEEN REC ORDED IN OTHER TWO YEARS. THE FINDING RECORDED AS UNDER: 5. DECISION: THE ISSUE OF NON COMPLIANCE BY ASSESSEES AT APPELLA TE STAGE HAS BEEN CONSIDERED AND DECIDED BY THE HON'BLE SUPREME COURT AND VARIOUS HIGH COURTS AS DISCUSSED BELOW: 1. THE DECISION OF THE HON'BLE HIGH COURT OF MUMBAI IN THE CASE OF M/S CHEMIPOL V/S. UNION OF INDIA [CENTRAL EXCISE APPEAL NO.62 OF 2009] CLEARLY STATES, THAT EVERY COURT JUDICIAL BODY OR AUTHORITY, WHICH HAS A DUTY TO DECIDE A MATTER BETWEEN TWO PAR TIES, INHERENTLY POSSESSES THE POWER TO DISMISS THE CASE IN DEFAULT. FOR ITA NO.3641 AND 3642 /AHD/2015 AND ANR. 11 THE SAKE OF REFERENCE, THE RELEVANT EXTRACT OF THE JUDICIAL PRONOUNCEMENT RENDERED BY THE HON'BLE HIGH COURT OF MUMBAI QUOTING DECISION OF HON'BLE SUPREME COURT IN CASE O F NANDRAMDAS DWARKADAS, AIR 1958 MP 260, IS REPRODUCE D BELOW: 'NOW THE ACT DOES NOT GIVE ANY POWER OF DISMISSAL. BUT IT IS AXIOMATIC THAT NO COURT OR TRIBUNAL IS SUPPOSED TO CONTINUE A PROCEEDING BEFORE IT WHEN THE PARTY WHO HAS MOVED I T HAS NOT APPEARED NOR CARED TO REMAIN PRESENT. THE DISMI SSAL, THEREFORE, IS AN INHERENT POWER WHICH EVERY TRIBUNA L POSSESSES.' 2. THE PRINCIPLE THAT EVERY COURT THAT IS TO DECIDE ON A MATTER OF DISPUTE, INHERENTLY POSSESSES THE POWER TO DISMISS THE CASE FOR DEFAULT, HAS BEEN UPHELD BY THE HON'BLE SUPREME COU RT IN CASE OF DR. P. NALLA THAMPY VS. SHANKAR (1984 (SUPP) SCC 63 AND THE CASE OF NEW INDIA ASSURANCE VS. SRINIVASAN (2000) 3 SCC 242. IN THE LATTER CASE, THE APEX COURT HAS HELD AS UNDER:- 'THAT EVERY COURT OR JUDICIAL BODY OR AUTHORITY, WH ICH HAS A DUTY TO DECIDE A LIST BETWEEN TWO PARTIES, INHERENT LY POSSESSES THE POWER TO DISMISS A CASE IN DEFAULT. W HERE A CASE IS CALLED UP FOR HEARING AND THE PARTY IS NOT PRESENT, THE COURT OR THE JUDICIAL OR QUASI-JUDICIAL BODY IS UND ER NO OBLIGATION TO KEEP THE MATTER PENDING BEFORE IT OR TO PURSUE THE MATTER ON BEHALF OF THE COMPLAINANT WHO HAD INS TITUTED THE PROCEEDINGS. THAT IS NOT THE FUNCTION OF THE CO URT OR, FOR THAT MATTER OF A JUDICIAL OR QUASI JUDICIAL BODY. I N THE ABSENCE OF THE COMPLAINANT, THEREFORE, THE COURT WI LL BE WILL WITHOUT ITS JURISDICTION TO DISMISS THE COMPLAINT F OR NON PROSECUTION. SO ALSO, IT WOULD HAVE THE INHERENT PO WER AND JURISDICTION TO RESTORE THE COMPLAINT ON GOOD CAUSE BEING SHOWN FOR THE NON APPEARANCE OF THE COMPLAINANT.' 3. THE HON'BLE BOMBAY HIGH COURT HAS ALSO LAID DOWN THE PROPOSITION THAT WHERE THE APPELLANT IN SPITE OF NO TICE IS PERSISTENTLY ABSENT AND THE TRIBUNAL ON FACTS OF TH E CASE IS OF THE VIEW THAT THE APPELLANT IS NOT INTERESTED IN PROSEC UTING THE APPEAL, IT CAN IN EXERCISE ITS INHERENT POWER TO DISMISS TH E APPEAL FOR NON- ITA NO.3641 AND 3642 /AHD/2015 AND ANR. 12 PROSECUTION. IN THE CASE OF CIT VS. B. N. BHATTACHA RYA REPORTED AT 118 ITR 461, IT WAS HELD THAT APPEAL DOES NOT MEAN MERELY FILING OF APPEAL BUT EFFECTIVELY PURSUING IT. 4. THE HON'BLE ITAT DELHI (ITR NO.2006/DEL/2 011 DT.19.12.2001) IN THE CASE OF WHIRLPOOL F OF INDI A LTD. V. DOT HAD DISMISSED APPEAL FOR NON ATTENDANCE AT HEARINGS , INFERRING THAT F ASSESSEE WAS NOT INTERESTED IN PROSECUT ING OF APPEAL. 5. IN THE CASE OF CHADHO FINLEASE LTD. V. ACIT (ITA NO.3013/DEL/2011 DATE OF ORDER 20.12.2011) THE HOBB LE ITAT DELHI HAD DISMISSED THE APPEAL FOR NON-ATTENDANCE A T HEARINGS. 6. IN A RECENTLY DELIVERED DECISION IN THE CASE OF CIT V. GOLD LEAF CAPITAL CORPORATION LTD. ON 02.09.2011 (ITA NO.798 OF2009)F THE HON'BLE HIGH COURT OF DELHI HAD HELD THAT A NEGLIGE NT ASSESSEE SHOULD NOT BE GIVEN MANY OPPORTUNITIES JUST BECAUSE THAT QUANTUM OF AMOUNT INVOLVED IS HIGH. NECESSARY COURSE OF ACT ION IS TO DRAW ADVERSE INFERENCE; OTHERWISE IT WOULD AMOUNT TO GIV E PREMIUM TO THE ASSESSEE FOR HIS NEGLIGENCE. WHEN THE ASSESSEE IS NON- COOPERATIVE, IT CAN NATURALLY BE SAFELY CONCLUDED T HAT THE ASSESSEE DID NOT WANT TO ADDUCE EVIDENCE AS IT WOULD EXPOSE FALSITY AND NON GENUINENESS. IN VIEW OF THE FACTS AND LEGAL POSITION DISCUSSED A BOVE, IT IS PRESUMED THAT APPELLANT IS NOT INTERESTED IN PURSUI NG THE APPEAL AND NOT HAVING ANY DOCUMENTS, EXPLANATION AND EVIDE NCE IN SUPPORT OF GROUNDS OF APPEAL RAISED AND THUS HAS NO T DISCHARGED THE ONUS TO PROVE THE GENUINENESS OF THE TRANSACTIO NS / ADDITION MADE BY THE AO. THEREFORE THE GROUNDS OF APPEAL OF THE APPELLANT ARE DISCUSSED HEREUNDER ARE CONFIRMED. 1. THE FIRST GROUND OF APPEAL IS GENERAL IN NA TURE AND NEEDS NO ADJUDICATION. 2. THE SECOND GROUND OF APPEAL RELATES TO ADDI TION OF RS.95,94,949/- AS INCOME FROM BUSINESS, AS AGAINST GAIN ARISING ON SALE OF LAND OFFERED BY THE APPELLANT AS CAPITAL GAINS IS ITA NO.3641 AND 3642 /AHD/2015 AND ANR. 13 DISMISSED IN VIEW OF THE DETAILED DISCUSSION BY THE AO AND NO SUBMISSION FILED BY THE APPELLANT TO REBUT THIS ADD ITION MADE. 3. THE THIRD GROUND OF APPEAL RELATES TO DISAL LOWANCE OF APPELLANT'S CLAIM OF COST ON IMPROVEMENT OF LAND FO R RS. 61,63,144/- IS DISMISSED IN VIEW OF THE DETAILED DI SCUSSION BY THE AO AND NO SUBMISSION FILED BY THE APPELLANT TO REBU T THIS ADDITION MADE. 4. THE FOURTH GROUND RELATES TO REJECTION OF A PPELLANT CLAIM IN RESPECT OF SALE TRANSACTIONS CLAIMED BY THE APPELLA NT AGAINST LONG TERM CAPITAL GAIN BY AO WHICH IS DISMISSED IN VIEW OF THE DETAILED DISCUSSION BY THE AO AND NO SUBMISSION FIL ED BY THE APPELLANT TO REBUT THIS ADDITION MADE. 5. THE NEXT GROUND REGARDING INITIATION OF PEN ALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE I T ACT IS DISMISSED AS NO APPEAL LIES AGAINST MERE INITIATION OF PENALTY PROCEEDINGS . 6. THE LAST GROUND RELATES TO CHARGING OF INTE REST U/S. 234A, 234B AND 234C IS DISMISSED BEING CONSEQUENTIAL IN N ATURE. 13. ORDER OF THE LD.CIT(A) THOUGH IS RUNNING INTO 2 1 PAGES, BUT FROM PAGE NO.3 UPTO 18, HE HAS JUST REPRODUCED THE ASSES SMENT ORDER. THEREAFTER, HE HAS RECORDED FINDING EXTRACTED (SUPR A). A PERUSAL OF THIS FINDING WOULD INDICATE THAT THE LD.CIT(A) HAS NOT J USTIFIED HIS ACTION AS TO WHY HE SHOULD CONCUR WITH THE AO. IT IS PERTINE NT TO OBSERVE THAT SUB- SECTION (6) OF SECTION 250 CONTEMPLATES PROCEDURES REQUIRE TO BE FOLLOWED BY THE LD.CIT(A) WHILE DECIDING THE APPEAL . THIS SECTION PROVIDE THAT THE LD.CIT(A) WOULD STATE POINTS IN DI SPUTE, AND THEREAFTER RECORD REASONS IN SUPPORT OF HIS CONCLUSION. THE A SSESSEE HAS FILED PAPER BOOK RUNNING INTO 63 PAGES IN THE CASE OF GAURAV S. VARMA AND 68 PAGES IN THE CASE OF TARUN S. VARMA. HE PLACED ON RECORD COPY OF STATEMENT RECORDED ON 9.10.2013 AND OTHER DETAILS. ALL THESE DOCUMENTS WERE FILED ITA NO.3641 AND 3642 /AHD/2015 AND ANR. 14 BY THE AO. THUS, PERUSAL OF THE ORDER OF THE LD.CI T(A) WOULD INDICATE THAT NEITHER THE LD.CIT(A) CARVED OUT ANY POINTS OF DISPUTES NOR RECORDED REASONS FOR THE DECISION. AFTER LOOKING INTO THE R ECORD, HE SIMPLY CONCURRED WITH THE AO. THE LD.CIT(A) OUGHT TO HAVE APPLIED HIS INDEPENDENT MIND ON THE FACTS COLLECTED BY THE AO A ND THE EXPLANATION GIVEN BY THE ASSESSEE BEFORE THE AO. THE LD.CIT(A) FAILED TO ADHERE TO THE PROCEDURE CONTEMPLATED IN SECTION 250(6) OF THE ACT, THEREFORE, ORDERS OF LD.CIT(A) ARE NOT SUSTAINABLE. WE DEEM IT APPROPRIATE TO STATE HERE FOR THE ARGUMENTS SAKE THAT EVEN IF IT IS ASS UMED THAT THERE IS A CONTRIBUTORY NEGLIGENCE AT THE END OF THE ASSESSEE BY NOT APPEARING BEFORE THE LD.CIT(A), THEN ALSO, PUNISHMENT IN THE SHAPE OF TAX LIABILITY ON ADDITIONS EXTRACTED (SUPRA) IS DISPROPORTIONATE TO THE NEGLIGENCE. THEREFORE, WITHOUT GOING INTO THE MERITS OF DIFFERE NT ISSUES, WE DEEM IT APPROPRIATE TO SET ASIDE THESE ISSUES TO THE FILE O F THE LD.CIT(A) FOR FRESH HEARING. APPEALS OF THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSE AND ALL THE ISSUES ARE REMITTED TO THE FILE OF LD.CIT(A ) FOR FRESH ADJUDICATION. THE ASSESSEES ARE DIRECTED TO COOPERATE WITH LD.CIT (A) IN THE APPELLATE PROCEEDINGS. 14. IN THE RESULT, ALL APPEALS OF THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 27 TH SEPTEMBER, 2018 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 27/09/2018