SUMGO ENGINEERING PVT. LTD., MUMBAI V. DCIT -15-(3)(2), MUMBAI

ITA 3756/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2441 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 29-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATISH CHANDRA RAJORE
• Assessee Lawyers: VALLABHADAS D PARMAR
• Keywords: Additional evidence
• Section: 144; 250

Judgement Text

1 IN THE INCOME-TAX APPELLATE TRIBUNAL G BENCH MUMB AI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NO. 3756/MUM/2018 (ASSESSMENT YEAR 2013-14 ) M/S SUMGO ENGINEERING PVT. LTD. (NOW KNOWN AS DRAV ENGINEERING SERVICES PVT. LTD.), PLOT NO. K3, ADDITIONAL MURBAD, MIDC, KUDVALI VILLAGE, MURBAD, THANE-421401. PAN: AABCS1127Q VS. DCIT-15(3)(2) ROOM NO. 451, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020. APPELLANT RESPONDE NT APPELLANT BY : SHRI VALLABHADAS D. PARMAR (ADVOCATE) RESPONDENT BY : SHRI SATISH CHANDRA RAJORE (SR. DR) DATE OF HEARING : 12.03.2019 DATE OF PRONOUNCEMEN T : 12.03.2019 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-24, MUMBAI [HEREINAFTER REF ERRED AS LD. CIT(A)] DATED 30.06.2017 WHICH IN TURN ARISES FROM THE ASSE SSMENT ORDER PASSED UNDER SECTION 144 DATED 16.03.2016 FOR ASSESSMENT Y EAR 2013-14. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : (I) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW LD. CIT (A) ERRED IN DISMISSING APPEAL. (II) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN DISMISSING APPEAL EX-PARTE ON THE GROUND THAT THREE TIMES ADJOURNMENTS WERE SOUGHT AND NOBODY ATTENDED ON LAST DAY OF HEAR ING ON 30-06-2017 WITHOUT APPRECIATING THE FACT THAT A REQUEST FOR AD JOURNMENT WAS FILED ON ITA NO. 3756 MUM 2018-M/S S UMGO ENGINEERING PVT. LTD. 2 30-06-2017 AS A/R OF ASSESSEE WAS NOT ABLE TO ATTEN D THE HEARING BECAUSE OF GST WORK PRESSURE WHICH WAS AT ALL NOT CONSIDERED B Y LD CIT(A). (III) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN DISMISSING APPEAL WITHOUT DISCUSSING MERITS OF ADDI TIONS MADE BY LD AO OF RS 1,38,50,500/-. (IV) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN DISMISSING THE APPEAL WITHOUT APPRECIATING THE FACT S THAT DECISIONS RELIED UPON BY HIM WERE DISTINGUISHABLE ON FACTS RATHER ON E DECISION I.E. BHARAT PETROLEUM CORPORATION ITD 359 ITR 371 (BORN) SUPPOR TS THE CONTENTION THAT APPELLATE AUTHORITY HAS TO DISPOSE OFF THE APPEAL O N MERIT AND NOT ON THE GROUND OF NON- ATTENDANCE OR FOR NON PROSECUTION OF THE CASE. (V) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW LD. CIT(A) ERRED IN NOT ADMITTING ADDITIONAL EVIDENCES FILED BY ASSESSE E DURING APPELLATE 'PROCEEDINGS BY OBSERVING THAT THE SAME ARE NOT SUB MITTED BEFORE AO AND NOT SUBMITTED UNDER RULE 46A OF THE I T RULES. (VI) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN NOT CONSIDERING AND NOT ADJUDICATING THE ADDITION M ADE BY LD AO OF RS 1,21,00,000 US 68 BEING SHARE APPLICATION MONEY REC EIVED BY ASSESSEE COMPANY. (VII) ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW LD. CIT(A) ERRED IN NOT CONSIDERING AND NOT ADJUDICATING THE ADDITION M ADE BY LD AO OF RS 12,00,000/-ON ACCOUNT OF BAD DEBT. (VIII) ON FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW LD. CIT(A) ERRED IN NOT CONSIDERING AND NOT ADJUDICATING THE ADDITION M ADE BY LD AO OF RS 5,50,5001,ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS I N BANK ACCOUNT OF BHARAT CO-OPERATIVE BANK US 68 OF THE I T ACT 1961. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS CO MPANY ENGAGED IN MANUFACTURING OF ENGINEERING GOODS. THE ASSESSEE FI LED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2013-14 ON 30.09.2013 DE CLARING TOTAL INCOME AT RS. 1,24,83,160/-. THE RETURN OF INCOME W AS SELECTED FOR SCRUTINY. THE ASSESSMENT WAS COMPLETED UNDER SECTIO N 144 OF THE ACT ON ITA NO. 3756 MUM 2018-M/S S UMGO ENGINEERING PVT. LTD. 3 16.03.2016. THE ASSESSING OFFICER IN PARA-2 OF THE ASSESSMENT ORDER HAS RECORDED CERTAIN DATES ABOUT THE NON-COMPLIANCE OF NOTICES ISSUED BY HIM, WHICH RESULTED IN PASSING THE ASSESSMENT ORDER UNDER SECTION 144 OF THE ACT. THE ASSESSING OFFICER MADE VARIOUS ADDITIO NS IN THE ASSESSMENT ORDER. ON APPEAL BEFORE THE LD. CIT(A), THE APPEAL OF THE ASSESSEE IS DISMISSED IN EX-PARTE ORDER DATED 30.06.2017. THE L D. CIT(A) WHILE DISMISSING THE APPEAL CONCLUDED THAT THE ASSESSEE W AS GIVEN THREE OPPORTUNITY OF HEARING AND THAT LAST DATE OF HEARIN G WAS FIXED ON 30.06.2017. ON 30.06.2017 NO RESPONSE WAS RECEIVED FROM ASSESSEE NOR ANYTHING IN SUPPORT OF GROUNDS OF APPEAL WAS FURNIS HED BEFORE THE LD. CIT(A). THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE IN EX-PARTY ORDER IN LIMINE WITHOUT DISCUSSING MERITS OF THE CA SE. THUS, FURTHER AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD THE SUBMISSION OF LD. AUTHORIZED REPR ESENTATIVE (AR) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (D R) FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HA VE ALSO DELIBERATED ON VARIOUS CASE LAWS RELIED BY THE LOWER AUTHORITIE S. GROUND NO.1 TO 2 RELATES TO PASSING THE EX-PARTE ORDER WITHOUT GIVIN G THE OPPORTUNITY TO THE ASSESSEE. THE LD. AR OF THE ASSESSEE SUBMITS THAT T HE LD. CIT(A) DISMISSED THE APPEAL IN EX-PARTE ORDER WITHOUT GIVI NG THE SUFFICIENT AND PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. THE APPEAL BEFORE THE LD. ITA NO. 3756 MUM 2018-M/S S UMGO ENGINEERING PVT. LTD. 4 CIT(A) WAS FIXED ON 30.06.2017. THE ASSESSEE FILED AN APPLICATION FOR SEEKING ADJOURNMENT VIDE APPLICATION DATED 30.06.20 17. THE APPLICATION WAS DULY ACCEPTED AND ACKNOWLEDGED BY THE OFFICIAL/ STAFF OF LD. CIT(A) AND THE ASSESSEE WAS INFORMED FOR FIXING THE DATE O F HEARING ON 11.07.2017. HOWEVER, IT WAS SURPRISES FOR THE ASSES SEE WHEN THE ASSESSEE RECEIVED THE ORDER DATED 30.06.2017 ON 10.04.2018, DISMISSING THE APPEAL OF ASSESSEE. THE LD. AR OF THE ASSESSEE FURN ISHED THE COPY OF APPLICATION FILED FOR SEEKING THE ADJOURNMENT ON 30 .06.2017 AND IVITED OUR ATTENTION THAT IT BEARS THE OFFICIAL STAMP OF C IT(A)-24, MUMBAI DATED 30.06.2017. THE LD. AR OF THE ASSESSEE FURTHER SUBM ITS THAT THERE WAS SUFFICIENT CAUSE FOR SEEKING DATE ON 30.06.2017, TH E REPRESENTATIVE OF ASSESSEE WAS BUSY IN GOODS AND SERVICE TAX MATTERS. THE ASSESSEE WAS INFORMED ABOUT THE ADJOURNMENT OF THE CASE FOR 11.0 7.2017, HOWEVER, THE LD. CIT(A) PASSED THE ORDER ON 30.06.2017 ITSELF. 4. THE LD. AR SUBMITS THAT ASSESSEE HAS GOOD CASE ON M ERIT AND IS LIKELY TO SUCCEED. THE LD. AR FURTHER SUBMITS THAT THE ASSESS MENT ORDER WAS ALSO PASSED UNDER SECTION 144 WITHOUT GIVING FAIR AND PR OPER OPPORTUNITY TO THE ASSESSEE. THE LD. AR OF THE ASSESSEE FURTHER SU BMITS THAT THE ASSESSEE BE GIVEN OPPORTUNITY TO CONTEST THE CASE ON MERIT A ND HE UNDERTAKE ON BEHALF OF ASSESSEE TO BE VIGILANT FOR ATTENDING THE CASE BEFORE THE LOWER AUTHORITIES. ITA NO. 3756 MUM 2018-M/S S UMGO ENGINEERING PVT. LTD. 5 5. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF LOWER AUTHORITIES. THE LD. DR SUBMITS THAT THE ASSESSING OFFICER DESPITE OFFERING SUFFICIENT AND REASONABLE OPPORTUNITY AS RECORDED I N PARA-2 OF THE ASSESSMENT ORDER, THE ASSESSEE FAILED TO MAKE THE C OMPLIANCES OF THE NOTICES ISSUED BY ASSESSING OFFICER. THUS, THE ASSE SSING OFFICER HAS NO OPTION EXCEPT TO MAKE THE BEST JUDGMENT ASSESSMENT ON THE BASIS OF MATERIAL AVAILABLE BEFORE HIM. BEFORE THE LD. CIT(A ), THE ASSESSEE AGAIN DEFAULTED IN ATTENDING AND SUBSTANTIATING VARIOUS G ROUNDS OF APPEAL. THE ASSESSEE IS IN HABIT OF NONE CO-OPERATION WITH THE LOWER AUTHORITIES. THEREFORE, THE ASSESSEE NEEDS NO LENIENCY AND THE O RDER OF LD. CIT(A) MAY BE CONFIRMED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PAR TIES AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAV E NOTED THAT THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER UNDER SECTION 144 ON 16.03.2016. WE HAVE FURTHER NOTED THAT FOR FIVE OCC ASIONS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE WAS SERVED WITH THE NOTICE THROUGH SPEED- POST BUT NO COMPLIANCE WAS MADE BY ASSESSEE. HOWEVE R, FOR THE DATE FIXED ON 22.02.2016, THE ASSESSING OFFICER RECORDED THAT LD. AR OF THE ASSESSEE APPEARED AND SOUGHT ADJOURNMENT. THE ASSESSING OFFI CER HAS RECORDED THAT THE DIRECTOR OF THE ASSESSEE-COMPANY APPEARED AND S OUGHT ADJOURNMENT ON 29.02.2016. ON 29.02.2016, THE ASSESSEE FURNISHED C ERTAIN INFORMATION AND SEEKS FURTHER DATE. THE ASSESSING OFFICER HAS NOT R ECORDED, IF FURTHER DATE ITA NO. 3756 MUM 2018-M/S S UMGO ENGINEERING PVT. LTD. 6 OF HEARING WAS FIXED OR NOT. THE ASSESSING OFFICER BY RECORDING THAT THE ASSESSMENT IS GETTING TIME BARRED OF LIMITATION ON 31.03.2016, PASSED THE ASSESSMENT ORDER ON 16.03.2016. THE LD. CIT(A) DISM ISSED THE APPEAL OF ASSESSEE IN LIMINE WITHOUT DISCUSSING THE FACTS AND MERITS OF THE CA SE. THE LD. AR OF THE ASSESSEE WHILE MAKING SUBMISSION SPEC IFICALLY RAISED THE ISSUE THAT ON 30.06.2017, THE ASSESSEE REQUESTED TH E DATE AND THE CASE WAS ADJOURNED FOR 11.07.2017, WHICH DATE IS WRITTEN ON THE ENDORSEMENT OF RECEIPT OF THE SAID APPLICATION. WE HAVE NOTED THAT LD. CIT(A) IN THE IMPUGNED ORDER RECORDED THAT THE APPEAL WAS FIXED O N 30.06.2017, HOWEVER, THERE WAS NO RESPONSE FROM ASSESSEE NOR AN Y MATERIAL WAS FILED IN SUPPORT OF THE APPEAL. THE APPEAL OF THE ASSESSEE W AS DISMISSED IN LIMINE BY REFERRING THE DECISION OF DELHI TRIBUNAL IN MULT IPLAN INDIA PVT. LTD. [138 ITD 320]. THE DECISION OF DELHI TRIBUNAL HAS BEEN OVERRULED BY DECISION OF THIRD MEMBER CASE OF KOLKATA TRIBUNAL I N PARTHA MITRA VS ITO [2016] 75 TAXMANN.COM 118 (KOLKATA - TRIB.) (TM). EVEN OTHERWISE THE CASE LAW DISCUSSED IN MULTIPLAN INDIA PVT LTD WAS R ELATED WITH THE POWER OF TRIBUNAL FOR DISPOSING THE APPEAL. 7. THE PROCEDURE IN APPEAL BEFORE THE LD CIT(A) IS PRO VIDED IN SECTION 250 OF INCOME TAX ACT. SUB-SECTION(6) OF SECTION 250 OF I NCOME-TAX ACT MANDATE THE LD. CIT(A) TO DISPOSE OF THE APPEAL BY SETTING THE POINT OF DETERMINATION, DECISION THEREON AND THE REASONS FOR SUCH DECISION. ALL THREE CONDITIONS STIPULATED IN SUB-SECTION (6) OF SECTION 250 OF THE ACT IS LACKING ITA NO. 3756 MUM 2018-M/S S UMGO ENGINEERING PVT. LTD. 7 IN THE IMPUGNED ORDER. THEREFORE, WE ARE OF THE VIE W THAT THE ORDER PASSED BY LD. CIT(A) IS NOT IN ACCORDANCE WITH THE MANDATE OF SECTION 250(6) OF THE INCOME TAX ACT. WE HAVE ALSO FOUND FORCE IN TH E CONTENTION OF LD. AR OF THE ASSESSEE THAT DESPITE RECEIVING THE APPLICAT ION FOR ADJOURNMENT ON 30.06.2017, THE LD. CIT(A) PASSED THE IMPUGNED ORDE R BY DISMISSING THE APPEAL IN LIMINE. NO CONTRARY FACT OR LAW IS BROUGHT TO OUR NOTICE B Y LD DR FOR THE REVENUE. 8. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE THAT THE ASSESSMENT ORDER WAS PASSED UNDER SECTION 144 AND FURTHER FIRS T APPEAL OF THE ASSESSEE WAS ALSO DISMISSED IN EX-PARTY ORDER, WE DEEM IS AP PROPRIATE TO RESTORE ALL THE GROUNDS OF THE APPEAL TO THE FILE OF ASSESSING OFFICER TO DECIDE ALL THE ISSUES (ADDITIONS/ DISALLOWANCE) AFRESH IN ACCORDAN CE WITH LAW. NEEDLESS TO SAY THAT BEFORE PASSING THE ORDER OF MERIT, THE ASS ESSING OFFICER SHALL GRANT SUFFICIENT OPPORTUNITY TO THE ASSESSEE. FURTHER, CO NSIDERING THE PECULIARITY OF THE FACTS OF THIS CASE, THE ASSESSEE IS DIRECTED TO OBTAIN THE COPY OF THIS ORDER WITHIN WEEK FROM THE REGISTRY OF THIS TRIBUNA L AND TO APPROACH THE ASSESSING OFFICER FOR FIXING THE DATE OF HEARING WI THIN 60 DAYS OF THIS ORDER. THE ASSESSEE IS FURTHER DIRECTED TO PROVIDE ALL NECESSARY DOCUMENTARY EVIDENCES AND THE INFORMATION TO THE ASSESSING OFFI CER WITHOUT ANY FURTHER DELAY AND WOULD NOT SEEK ADJOURNMENT WITHOUT A VALI D REASON IN WRITING. IN THE RESULT, GROUND NO. 1 & 2 OF THE APPEAL IS ALLOW ED. ITA NO. 3756 MUM 2018-M/S S UMGO ENGINEERING PVT. LTD. 8 9. SINCE WE HAVE ALLOWED THE GROUND NO. 1 & 2 OF THE A PPEAL AND RESTORED ALL THE ISSUES TO THE FILE OF ASSESSING OFFICER. THUS, THE DISCUSSIONS ON OTHER GROUNDS OF APPEAL ON VARIOUS ADDITIONS HAVE BECOME ACADEMIC. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 12/03/2019. SD/- SD /- N.K. PRADHAN, PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 12.03.2019 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR G BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI