KUMAR JAYANTILAL MEHTA, MUMBAI V. ITO 24(2)(1), MUMBAI

ITA 3686/MUM/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9410 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 16-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 09-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN
• Assessee Lawyers: JAPEN P SHAH
• Keywords: Unexplained cash credit; Principle of natural justice; Bonafide belief; Non compliance
• Section: 142(1); 148; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI . . , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO. 3686/MUM/2013 (A.Y.2009-10) SHRI KUMAR JAYANTILAL MEHTA C/O., JAPEN P. SHAH & CO. CHARTERED ACCOUNTANTS, 2, LAXMI VILLA, 1 ST FLOOR, NEAR HDFC BANK, AKURLI ROAD, ASHOK NAGAR, KANDIVALI (E) MUMBAI-400 101. GIR NO./PAN : AAVPM 5570 C (APPELLANT ) VS. THE INCOME TAX OFFICER WARD 24(2)(1), C-13, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI-400 050. (RESPONDENT) APPELLANT BY : SHRI KIRAN MEHTA AND SHRI JAPEN P. SHAH RESPONDENT BY : SHRI ASGHAR ZAIN DATE OF HEARING : 16 /02/2015 DATE OF PRONOUNCEMENT : 25 /02/2015 ORDER PER CHANDRA POOJARI, A.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 4/03/2013 PASSED BY CIT(A) FOR THE ASSESSMENT YEAR 2009-10. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1.THE LEARNED CIT (A) GRAVELY ERRED IN 'DISMISSIN G' THE APPEAL. 2. THE LEARNED CIT (A) ERRED IN DISMISSING T HE APPEAL WITHOUT CONSIDERING THE WRITTEN SUBMISSIONS FILED BY THE APPELLANT. 3. IT IS RESPECTFULLY SUBMITTED THAT THE DATE OF AP PEAL ORDER AS '4/3/2013' IS APPARENTLY ERRONEOUS IN THAT IN THE ORDER ITSELF, T HE LEARNED CIT (A) HAS REFERRED TO A LETTER DATED 11 /3/2013. IT IS RESPECTFULLY SUBMITT ED THAT THE APPELLANT HAD ALREADY FILED DETAILED WRITTEN SUBMISSIONS WITH EXHAUSTIVE EVIDENCE IN SUPPORT ON 4/3/2013 AND ON 8/3/2013 AND THE ASSUMING THAT THE APPEAL OR DER WAS PASSED ON OR AFTER 2 ITA NO.3686/M UM/13 11/3/2013, THE LEARNED CIT (A) GRAVELY ERRED IN NOT CONSIDERING THE WRITTEN SUBMISSIONS AND IN SIMPLY DISMISSING' THE APPEAL, MORE SO, AS THE WRITTEN SUBMISSIONS WERE FILED AS INSTRUCTED AND DISCUSSED. 4.THE LEARNED CIT (A) ERRED IN SUSTAINING MASSI VE ADDITION OF RS. 1,07,06,725/- IN RESPECT OF THE ALLEGED 'UNEXPLAINED CREDITORS'. 5.THE LEARNED CIT (A) ERRED IN SUSTAINING ADDI TION OF RS. 705,590/- IN RESPECT OF ALLEGED UNEXPLAINED CASH CREDIT MADE U/S 68. 6. THE LEARNED C1T (A) ERRED IN SUSTAINING DISALLOWANC E OF EXPENSES OF RS. 77,848/- MADE ON AD- HOC BASIS. 7. THE LEARNED CIT (A) ERRED IN NOT APPRECIATING THAT EVEN IN AN EX-PARTE ASSESSMENT MADE U/S 144 SUCH MASSIVE ADDITIONS WERE NOT JUSTIF IED HAVING REGARD TO THE MATERIAL ON RECORD. 8. WITHOUT PREJUDICE TO THE ABOVE THE ASSESSMENT MADE AND SUSTAINED IS VERY MUCH ON THE HIGHER SIDE AND NOT AT ALL TENABLE HAVING REGAR D TO THE MATERIAL ON RECORD. 2. THE FACTS OF THE ISSUE ARE THAT ASSESSMENT IN TH IS CASE WAS COMPLETED UNDER SECTION 144 OF THE ACT ON 5/12/2011. THE CASE WAS S ELECTED FOR SCRUTINY AND THE ASSESSEE WAS ISSUED NOTICE UNDER SECTION 143(2)/142 (1) ON SEVERAL OCCASIONS. THE AO HAD TABULATED THE DETAILS OF OPPORTUNITIES GIVEN TO THE ASSESSEE IN PARA-1 OF THE ASSESSMENT ORDER. THE AO LEVIED PENALTY OF RS.10,00 0/- EACH ON TWO OCCASIONS I.E. ON 23/8/2011 AND 2/11/2011 UNDER SECTION 271(1)(B) OF THE INCOME TAX ACT, 1961 FOR THE NON COMPLIANCE OF THE NOTICE ISSUED. THE CONDUCT OF THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS BY NOT COMPLYING TO THE NOTI CES ISSUED UNDER SECTION 142(1) ON FOUR OCCASIONS HAS BEEN TABULATED IN PARA-2 OF THE IMPUGNED ASSESSMENT ORDER. IN THE LAST OPPORTUNITY GIVEN ON 11/11/2011, THE AO HAD MA DE KNOWN HIS INTENTION CLEAR THAT IN CASE OF NON-COMPLIANCE, THE ASSESSMENT WOULD BE COMPLETED EX-PARTE UNDER SECTION 44 OF THE INCOME TAX ACT AND FAILURE TO COMPLY EVEN TO THIS HAS RESULTED IN COMPLETION OF THE SAME UNDER SECTION 44 OF THE INCOME TAX ACT. 2.1 IN THE ASSESSMENT ORDER THE AO MADE THE FOLLOWI NG ADDITIONS. I) SUNDRY CREDITORS RS.1,07,06,725/- II) UNSECURED LOAN RS. 7,05,590/- III) DISALLOWANCE OF EXPENDITURE RS. 77,848/ - TOTAL RS.1,14,90,163/- 3 ITA NO.3686/M UM/13 AGAINST THIS THE ASSESSEE IS IN APPEAL BEFORE US. 3. AT THE OUTSET THE LD. AR OBJECTED TO THE EXPARTE ORDER PASSED BY THE LD. CIT(A) AND HE PLEADED THAT ONE MORE OPPORTUNITY OF HEARING MAY BE GIVEN TO THE ASSESSEE IN THE INTEREST OF NATURAL JUSTICE. ON THE OTHER HAND THE LD. DR SUBMITTED THAT FOLLOWING OPPORTUNITIES HAVE BEEN GIVEN TO THE ASSESSEE AND N O FURTHER OPPORTUNITIES TO BE GIVEN TO THE ASSESSEE. S.NO. DATE OF ISSUE OF NOTICE DATE OF HEARING REMARKS 1. 04/10/2012 12/10/2012 NOTICE WAS SERVED ON THE APPELLANT 2. 26/12/2012 09/01/2012 IN RESPONSE TO THE NOTICE APPELLANT FILED LETTER DATED 08/01/2013 RECEIVED IN THIS OFFICE ON 10/01/2013 SEEKING ADJOURNMENT. ADJOURNMENT GRANTED. THE CASE WAS POSTED ON 14/01/2013. 3. 24/01/2013 24/01/2013 NONE APPEARED 4. 04/02/2013 14/02/2013 ADJOURNMENT LETTER DATED 13/12/2013 WAS FILED BY A/R OF THE APPELLANT J.M. MEHTA & CO. CAS . REQUEST CONSIDERED. THE CASE WAS ADJOURNED TO 25/02/2013 5. --- 25/02/2013 SHRI JAYSUKH MEHTA, CA WAS PRESENT AND REQUESTED SOMETIME FOR MAKING FINAL SUBMISSION. HE WAS ALSO INFORMED THAT BEING HIGH DEMAND CASE FINAL ADJOURNMENT IS GRANTED AND THE CASE WAS POSTED ON 01/03/2013. 6. . 01/02/2013 NONE APPEARED. A LETTER DATED 11/03/2013 WAS FILED SEEKING FURTHER ADJOURNMENT. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. IN THIS CASE THE ASSESSEE FILED RETURN OF INCOME FOR T HE ASSESSMENT YEAR 2009-10 ON 4 ITA NO.3686/M UM/13 30/09/2009 DECLARING INCOME OF RS.3,86,930/-. THE A SSESSMENT WAS COMPLETED UNDER SECTION 144 OF THE INCOME TAX ACT DETERMINING THE I NCOME AT RS.1,19,84,960/-. THE ASSESSEE FILED APPEAL AGAINST THIS ORDER BEFORE CIT (A) ON 2/1/2012. THE ASSESSEE HAD HIRED ONE CA, MR. JAYSUKH MEHTA TO REPRESENT HIS CA SE BEFORE CIT(A). 4.1 THE DATE OF FIRST HEARING WAS FIXED ON 09/01/2 003. ON THIS DATE, ADJOURNMENT WAS SOUGHT VIDE LETTER DATED 08/1/2003 BY THE LD. C OUNSEL FOR THE ASSESSEE AND THE MATTER WAS ADJOURNED TO 24/01/2013. THIS DATE WAS C OMMUNICATED TO SHRI JAYSUKH MEHTA, BUT DUE TO SOME PERSONAL FAMILY ISSUES HE CO ULD NOT ATTEND THE HEARING ON THE SAID DATE. AGAIN A FRESH HEARING WAS FIXED ON 14/2/ 2013. ON THIS DATE ALSO WHEN THE MATTER WAS CALLED UP FOR HEARING SHRI JAYSUKH MEHTA FILED A LETTER DATED 13/2/2013 SEEKING ANOTHER DATE OF ADJOURNMENT. ON 14/2/2013 T HE LD. COUNSELS REQUEST FOR ADJOURNMENT WAS CONSIDERED AND THE MATTER WAS ADJOU RNED TO 25/2/2013. ON 25/2/2013 SHRI JAYSUKH MEHTA ATTENDED THE PROCEEDIN GS BUT AGAIN REQUESTED SOME TIME FOR MAKING FINAL SUBMISSIONS AND THE MATTER WA S ADJOURNED TO 1/3/2013 AS A FINAL CHANCE TO THE ASSESSEE. ON 1/3/2013 WHEN THE MATTER CAME UP FOR HEARING THE LD. COUNSEL FOR THE ASSESSEE SOUGHT ADJOURNMENT OF THE CASE ON THE PLEA THAT HE WAS NOT KEEPING WELL. HOWEVER, CIT(A) DID NOT GRANT ANY FUR THER ADJOURNMENT AND PASSED EXPARTE ORDER . AT THAT TIME SHRI JAYSUKH MEHTA ASS URED THE ASSESSEE THAT HE HAD A TELEPHONIC TALK WITH THE CIT AND THE LD. CIT HAD AS KED SHRI JAYSUKH MEHTA TO FILE SUBMISSIONS AND ALL THE RELEVANT DETAILS IN THE NEX T WEEK I.E. AFTER 01/3/2013. ACCORDINGLY, THE SUBMISSIONS WERE FILED ON 04/3/201 3. HOWEVER, TO THE ASSESSEES SURPRISE HE RECEIVED APPELLATE ORDER DATED 4/3/2013 ON 6/4/2013. 4.2 IT IS ALSO SUBMITTED BEFORE US THAT ASSESSEES COUNSEL SHRI JAYSUKH MEHTA FILED SUBMISSIONS BEFORE CIT(A) ON 4/3/2013 AND 5/3/2013. THESE SUBMISSIONS OF THE ASSESSEE WERE NOT DEALT WITH BY THE LD. CIT(A) AS H E HAD ALREADY PASSED THE APPELLATE ORDER ON 4/3/2013. IN THE MEANWHILE THE ASSESSEE BR OUGHT TO OUR NOTICE THAT THERE WAS A RE-OPENING OF THE VERY SAME ASSESSMENT UNDER SECT ION 148 OF THE ACT VIDE NOTICE DATED 24/3/2014 AND THE REASSESSMENT IS PENDING BEF ORE THE AO. AS SEEN FROM THE 5 ITA NO.3686/M UM/13 FACTS OF THE CASE IT IS OBSERVED THAT THE ASSESSEE HAS MADE ALL NECESSARY ARRANGEMENTS TO REPRESENT HIS CASE BEFORE CIT(A). THE CAS WHO HA D TAKEN THE ASSIGNMENT OF THE ASSESSEE FAILED TO REPRESENT THE CASE PROPERLY BEFO RE CIT(A).WHATEVER THE ASSESSEE COULD DO WAS DONE BY THIS ASSESSEE. THE NON-REPRESE NTATION OF THE CASE BEFORE THE LD. CIT(A) BY THE ASSESSEES COUNSEL/CAS CANNOT BE ATTR IBUTABLE TO THE ASSESSEE. ADMITTEDLY THIS IS A MISTAKE OF THE ASSESSEES COUN SEL AND THE ASSESSEE IS HAVING BONAFIDE BELIEF THAT THE ASSESSEES CASE IS BEING P ROPERLY REPRESENTED BY HIS CA BEFORE CIT(A). THUS, ASSESSEE SHOWED SUFFICIENT CAUSE FOR NON APPEARANCE ON HIS PART WHICH IS BEYOND THE CONTROL OF THE ASSESSEE . IN OUR CONSIDE RED VIEW THE ASSESSEE EXPLAINED THE REASONS FOR NOT APPEARING BEFORE THE CIT(A) AND IT WAS FOUND TO BE BONAFIDE, ACCORDINGLY, IN THE INTEREST OF JUSTICE WE REMIT TH E ENTIRE ISSUE TO THE FILE OF CIT(A) WITH THE DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE A SSESSEE TO PRESENT ITS CASE. AT THE PRESENT STAGE, WE REFRAIN FROM GOING INTO THE ADJUD ICATION OF THE ISSUE ON MERIT. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH FEB.2015 !' # $%& 25TH FEB.2015 ! ' SD/- SD/- ( . . / I.P. BANSAL) ( /CHANDRA POOJARI ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; $% DATED 25/ 02/ 2015 . % . ./JV, SR. PS 6 ITA NO.3686/M UM/13 ()* ()* ()* ()* +*') +*') +*') +*') / COPY OF THE ORDER FORWARDED TO : 1. ,- / THE APPELLANT 2. (.,- / THE RESPONDENT. 3. / ( ) / THE CIT(A)- 4. / / CIT 5. *0' ()% , , / DR, ITAT, MUMBAI 6. '1 2 / GUARD FILE. % % % % / BY ORDER, .*) () //TRUE COPY// 3 33 3 / 4 4 4 4 5 5 5 5 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI