M/s R.C Singh, Sitapur V. Income Tax Officer, Sitapur

ITA 376/LKW/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92295 (ITAT-LUCKNOW)
• Duration Of Justice: 1 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 08-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PINKI MAHAVAR
• Assessee Lawyers: M T RIZVI
• Keywords: Opportunity of being heard
• Section: 142(1)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO.376/LKW/2015 ASSESSMENT YEAR:2010-11 M/S R. C. SINGH SITAPUR V. INCOME TAX OFFICER SITAPUR TAN/PAN:AAEFM2636 (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. M. T. RIZVI, ADVOCATE RESPONDENT BY: SMT. PINKI MAHAVAR, D.R. DATE OF HEARING: 27 07 2015 DATE OF PRONOUNCEMENT: 30 07 2015 O R D E R PER SUNIL KUMAR YADAV: THIS IS ASSESSEE'S APPEAL DIRECTED AGAINST THE ORDER OF LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX (OSD) (APPEALS), BAREILLY, DATED 18.03.2015 FOR A.Y. 2010 2011. 2. THE ASSESSEE IS A FIRM HAVING FIVE PARTNERS AND DERIVES INCOME FROM CONTRACT WORK. INCOME TAX OFFICER, SITAPUR (THE AO) HAS MENTIONED IN HIS ASSESSMENT ORDER DATED 12/03/2013 PASSED U/S 143(3)OF THE ACT THAT PROFIT/LOSS ACCOUNT, BALANCE SHEET AND AUDIT REPORT WERE FILED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. HOWEVER, NO BOOKS OF ACCOUNTS WERE PRODUCED. THE AO HAS ALSO MENTIONED THAT A COMMUNICATION DATED 28/01/2013 HAS BEEN RECEIVED IN WRITING FROM THE ASSESSEE, WHEREIN IT HAS BEEN HAS PRAYED THAT SINCE THE ASSESSEE IS SUFFERING FROM COLD, THE ASSESSMENT MAY BE COMPLETED ON MERITS WITHOUT FIXING 2 FURTHER DATES FOR HEARING. ACCORDINGLY, THE AO PROCEEDED TO COMPLETE THE ASSESSMENT AND IN ABSENCE OF BOOKS OF ACCOUNTS AND BILLS/VOUCHERS ETC. MADE AN AD HOC DISALLOWANCE OF RS. 11,77,504/- CALCULATED @ 10% OF TOTAL EXPENSES OF RS. 1,17,75,403/- DEBITED TO THE PROFIT/LOSS ACCOUNT. 3. ON APPEAL BEFORE THE PRINCIPAL COMMISSIONER OF INCOME TAX (OSD) (APPEALS), BAREILLY THE AD HOC DISALLOWANCE WAS SCALED DOWN TO RS. 1,50,000/-. 4. DURING THE COURSE OF HEARING, THE LD. COUNSEL OF THE ASSESSEE HAS PLEADED FOR DELETING THE ENTIRE DISALLOWANCE. THE LEARNED DR ON THE OTHER HAND HAS PLACED RELIANCE UPON THE ORDER OF LEARNED CIT(OSD) (A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IN THE ASSESSMENT ORDER, AN ADDITION OF RS. 11,77,504/- HAS BEEN MADE ON ACCOUNT OF THE NON- PRODUCTION OF BOOKS OF ACCOUNTS AND VOUCHERS ON AN ADHOC BASIS CALCULATED @ 10% OF THE TOTAL EXPENSES. THE LAST COMMUNICATION BETWEEN THE AO AND THE ASSESSEE WAS ON 22/02/2013 WHEREAS THE ASSESSMENT ORDER WAS PASSED ON 28/03/2013. IT IS ALSO ON RECORD THAT AS MANY AS SEVEN NOTICES U/S 142(1) WERE SERVED ON THE ASSESSEE WHICH WERE DULY COMPLIED WITH BY THE ASSESSEE. HOWEVER, NO SHOW CAUSE NOTICE FOR THE PROPOSED DISALLOWANCE WAS AVAILABLE ON RECORD. EVIDENTLY, THE ASSESSMENT ORDER HAS BEEN PASSED IN HASTE WITHOUT AFFORDING ONE LAST OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNT. THE AO ALSO DID NOT TAKE RECOURSE TO REJECTION OF BOOKS OF ACCOUNT IF NO CO-OPERATION WAS FORTHCOMING FROM THE ASSESSEE. SIMILARLY, THE RELIEF GRANTED BY THE LD. CIT(A) HAS ALSO BEEN GRANTED WITHOUT CONSIDERING ALL THESE ASPECTS. 6. IN VIEW OF THE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THE ENTIRE ADDITION HAS BEEN MADE WITHOUT AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE ACCORDINGLY, SET ASIDE THE ORDER OF THE LD CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE AO WITH A DIRECTION TO FRAME THE ASSESSMENT DE NOVO AFTER AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE ALSO DIRECT THAT THE ASSESSEE WILL FULLY CO-OPERATE WITH ASSESSING OFFICER IN PRODUCING THE REQUIRED 3 DOCUMENTS AND BOOKS OF ACCOUNTS DURING THE COURSE OF FRESH ASSESSMENT PROCEEDINGS. 6. IN THE RESULT, THE APPEAL THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 TH JULY, 2015 SS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR