VIVEK VINAYAK SANE, MUMBAI V. ITO 22(2)(2), NAVI MUMBAI

ITA 3914/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1027 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 12-07-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 18-06-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R M TIWARI
• Assessee Lawyers: AMEY SANE
• Keywords: Opportunity of being heard; Set aside
• Section: 271(1)(c); 142(1); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F BEFORE SHRI N.V. VASUDEVAN (JM) & B. RAMAKOTAIAH (A M) I.T.A.NO. 3914/MUM/2009 (ASSESSMENT YEAR : 2003-04 ) I.T.A.NO. 3915/MUM/2009 (ASSESSMENT YEAR : 2003-04 ) I.T.A.NO. 3916/MUM/2009 (ASSESSMENT YEAR : 2004-05 ) I.T.A.NO. 3917/MUM/2009 (ASSESSMENT YEAR : 2004-05 ) SHRI VIVEK VINAYAK SANE 302, MARYLAND APARTMENT D.K. SANDU, CHAMBUR MUMBAI-400 0071. VS. ITO-22(2)(2) VASHI RAILWAY STATION COMPLEX TOWER NO. 6, VASHI NAVI MUMBAI. APPELLANT RESPONDENT PAN/GIR NO. : AALPS7818R ASSESSEE BY : SHRI AMEY SANE DEPARTMENT BY : SHRI R.M. TIWARI ORDER PER BENCH :- ITA NO. 3914/MUM/09 & ITA NO. 3916/MUM/09 ARE APPE ALS BY THE ASSESSEE AGAINST TWO ORDERS BOTH DATED 22.1.200 9 OF LEARNED CIT(A)- XXII, MUMBAI RELATING TO A.Y. 2003-04 & 2004-05. I N THESE APPEALS THE ASSESSEE HAS CHALLENGED THE ORDER OF LEARNED CIT(A) , WHEREBY LEARNED CIT(A) CONFIRMED THE ORDER OF ASSESSING OFFICER IMP OSING PENALTY ON THE ASSESSEE U/S. 271(1)(B) OF THE ACT. ITA NO. 3915/MUM/09 & ITA NO. 3917/MUM/09 ARE APPE ALS BY THE ASSESSEE AGAINST TWO ORDERS BOTH DATED 23.1.200 9 OF LEARNED CIT(A)- XXII, MUMBAI RELATING TO A.Y. 2003-04 & 2004-05. I N THESE APPEALS THE ASSESSEE HAS CHALLENGED THE ORDER OF LEARNED CIT(A) , WHEREBY LEARNED CIT(A) CONFIRMED THE ORDER OF ASSESSING OFFICER IMP OSING PENALTY ON THE ASSESSEE U/S. 271(1)(C) OF THE ACT. 2. FIRST, WE SHALL TAKE UP FOR CONSIDERATION THE AP PEALS RELATING TO IMPOSITION OF PENALTY U/S. 271(1)(C) OF THE ACT. SHRI VIVEK VINAYAK SANE 2 3. THE ASSESSEE IS AN INDIVIDUAL. HE FILED RETURN O F INCOME FOR A.Y. 2003-04 DECLARING TOTAL INCOME OF RS. 97,650/-. IN THE RETURN OF INCOME, THE ASSESSEE HAD ALSO DECLARED AGRICULTURAL INCOME AT RS. 40,51,275/-. IN A.Y. 2004-05, THE ASSESSEE FILED RETURN OF INCOME D ECLARING TOTAL INCOME OF RS. 1,15,250/- APART FROM AGRICULTURAL INCOME OF RS. 41,01,625/-.IN COURSE OF ASSESSMENT PROCEEDINGS FOR BOTH THE AFORE SAID ASSESSMENT YEARS, THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE RE GARDING ITS AGRICULTURAL INCOME; AND THEREFORE, AGRICULTURAL IN COME DECLARED IN BOTH ASSESSMENT YEARS WAS TREATED AS INCOME FROM OTHER SOURCES. IN RESPECT OF THE AFORESAID ADDITIONS MADE BY THE ASSESSING OF FICER BY TREATING AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES TO THE TOTAL INCOME OF THE ASSESSEE, PENALTY WAS IMPOSED U/S. 271(1)(C) OF THE ACT. THE ORDER OF THE ASSESSING OFFICER WAS CONFIRMED BY LEARNED CIT( A). IN BOTH THE ASSESSMENT YEARS, THE ASSESSEE DID NOT APPEAR BEFOR E LEARNED CIT(A) AND ORDER WAS PASSED EX-PARTE. AGGRIEVED BY THE AFORES AID ORDER OF LEARNED CIT(A), THE ASSESSEE HAS PREFERRED THE AFORESAID AP PEALS BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING OF THESE APPEALS, IT WAS BROUGHT TO OUR NOTICE THAT THE TRIBUNAL IN ITA NO. 3291 & 3292/MUM /08, DECIDED THE APPEAL OF THE ASSESSEE AGAINST THE ADDITION MADE IN THE QUANTUM PROCEEDINGS. AS AGAINST THE ADDITIONS MADE BY THE A SSESSING OFFICER IN THE QUANTUM PROCEEDINGS, THE ASSESSEE HAD FILED APP EALS BEFORE THE LEARNED CIT(A). BOTH THE APPEALS WERE NOT FILED WIT HIN THE PERIOD CONTEMPLATED BY THE ACT. THE LEARNED CIT(A), THEREF ORE, DISMISSED BOTH THE APPEALS FILED BY THE ASSESSEE. THE ASSESSEE HAD FILED THE APPEALS BEFORE THE TRIBUNAL AGAINST THE AFORESAID ORDER OF LEARNED CIT(A) I.E. IN ITA NO. 3291 & 3292/MUM/08; AND IN THOSE APPEALS, T HE TRIBUNAL BY ITS ORDER DATED 6.10.2009 CONDONED THE DELAY ON THE PAR T OF THE ASSESSEE IN FILING THE APPEALS BEFORE THE LEARNED CIT(A). THE T RIBUNAL FURTHER DIRECTED LEARNED CIT(A) TO DECIDE THE APPEALS OF THE ASSESSE E AGAINST THE ORDER OF THE ASSESSING OFFICER IN THE QUANTUM PROCEEDINGS, A FRESH AFTER GIVING THE SHRI VIVEK VINAYAK SANE 3 ASSESSEE OPPORTUNITY OF BEING HEARD. IT CAN THUS BE SEEN THAT THE ADDITIONS IN RESPECT OF WHICH, PENALTY WAS IMPOSED BY THE ASSESSING OFFICER ARE YET TO BE ADJUDICATED BY THE LEARNED CI T(A). IN THE ABOVE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ORDER OF LEARNED CIT(A) CONFIRMING THE ORDER OF THE ASSESSING OFFICER IMPOS ING PENALTY HAS TO BE SET ASIDE AND THE QUESTION OF IMPOSITION OF PENALTY HAS TO BE DECIDED AFRESH BY LEARNED CIT(A) IN THE LIGHT OF THE FINING S THAT MAY BE ARRIVED AT IN QUANTUM PROCEEDINGS. WE ACCORDINGLY SET ASIDE TH E ORDER OF LEARNED CIT(A) AND RESTORE THE ISSUE OF IMPOSITION OF PENAL TY TO THE LEARNED CIT(A). 5. FOR STATISTICAL PURPOSES, THE APPEALS BY THE ASS ESSEE ARE TREATED AS ALLOWED. 6. ITA NO. 3914/MUM/09 & ITA NO. 3916/MUM/09 :- IN THESE APPEAL, THE ASSESSEE HAS CHALLENGED THE OR DER OF LEARNED CIT(A) CONFIRMING THE ORDER OF THE ASSESSING OFFICE R IMPOSING PENALTY ON THE ASSESSEE U/S. 271(1)(B) OF THE ACT. IN A.Y. 200 3-04, THE ASSESSING OFFICER HAD ISSUED NOTICE U/S. 143(2) OF THE ACT ON 29.10.2004 FIXING HEARING ON 30.11.2004. THE ASSESSEE FAILED TO COMPL Y WITH THE SAID NOTICE. ANOTHER NOTICE U/S. 142(1) DATED 19.1.2005 WAS SERVED ON THE ASSESSEE ON 4.2.2005 FIXING HEARING ON 9.2.2005. TH E ASSESSEE REQUESTED FOR ADJOURNMENT AND THE CASE WAS RE-FIXED ON 16.2.2 005. THE ASSESSEE DID NOT COMPLY WITH THE REQUIREMENT OF THE NOTICE S ERVED AND ULTIMATELY THE ASSESSMENT WAS FINALIZED ON 23.2.2006. IN A.Y. 2004-05, NOTICE U/S. 143(2) OF THE ACT WAS SERVED ON THE ASSESSEE ON 29. 10.2004 FIXING HEARING ON 30.11.2004 AT 4.30 P.M. THE ASSESSEE FAI LED TO COMPLY WITH THE SAME. A NOTICE U/S. 142(1) OF THE ACT DATED 19. 1.2005 WAS DULY SERVED ON THE ASSESSEE ON 4.2.2005 FIXING HEARING O N 9.2.2005 AT 11.30 A.M. THE ASSESSEE DID NOT COMPLY WITH THE REQUIREME NT. IN RESPECT OF THE FAILURE OF THE ASSESSEE TO COMPLY WITH THE AFORESAI D NOTICE, PENALTY WAS IMPOSED ON THE ASSESSEE U/S. 271(1)(B) OF THE ACT. SHRI VIVEK VINAYAK SANE 4 7. THE LEARNED CIT(A) CONFIRMED THE ORDER OF THE AS SESSING OFFICER. BEFORE LEARNED CIT(A), THERE WAS NO APPEARANCE ON B EHALF OF THE ASSESSEE AND THE APPEALS WERE DECIDED EX-PARTE. 8. IN THE PROCEEDINGS BEFORE US, LEARNED COUNSEL FO R THE ASSESSEE HAS EXPLAINED THAT NON-COMPLIANCE OF THE NOTICE ISSUED BY THE ASSESSING OFFICER WAS DUE TO ILL HEALTH AND HOSPITALIZATION O F THE ASSESSEES FATHER AGED ABOUT 82 YEARS, WHO WAS AFFECTED WITH PARKINSO N PROBLEM DECEASE. IT WAS FURTHER CONTENDED THAT THERE WAS DIVORCE PRO CEEDINGS BETWEEN THE ASSESSEE AND HIS WIFE AND BECAUSE OF SUCH PERSONAL DIFFICULTIES, THERE WAS NON-ATTENDANCE, NON-COMPLIANCE BEFORE THE ASSES SING OFFICER. THE LEARNED COUNSEL FOR THE ASSESSEE THUS SUBMITTED THAT THERE WAS SUFFICIENT CAUSE FOR NON-ATTENDANCE AND NON-COMPLIA NCE, THEREFORE PENALTY IMPOSED SHOULD BE CANCELLED. THE ASSESSEE ALSO FILED AN AFFIDAVIT IN THIS REGARD AFFIRMING THE FACTS STATED BY LEARNE D COUNSEL FOR THE ASSESSEE. A COPY OF THE DECREE FOR DIVORCE GRANTED BY THE 3 RD FAMILY COURT AT BANDRA DISSOLVING MARRIAGE OF THE ASSESSEE AND HIS WIFE, WAS ALSO FILED ALONG WITH THE AFFIDAVIT. THE DIVORCE PR OCEEDINGS HAD COMMENCED IN NOVEMBER, 2006. THE DECREE WAS GRANTED ON 3.5.2007. IT IS THE CONTENTION OF THE ASSESSEE THAT THERE WAS TR OUBLE MARITAL LIFE PRIOR TO THE FILING OF DIVORCE PETITION. 9. WE HAVE CONSIDERED THE SUBMISSION AND OTHER MATE RIAL FILED BEFORE US. WE ARE OF THE VIEW THAT THERE WAS REASONABLE CA USE FOR THE ASSESSEES FAILURE TO MAKE PROPER COMPLIANCE BEFORE THE ASSESS ING OFFICER AND FOR NON-ATTENDANCE. THE NON-COMPLIANCE IN OUR VIEW WAS DUE TO THE FACT AS SET OUT IN THE AFFIDAVIT OF THE ASSESSEE. SINCE, T HERE WAS SUFFICIENT CAUSE FOR NON-COMPLIANCE, WE ARE OF THE VIEW THAT THE PEN ALTY IMPOSED SHOULD BE CANCELLED. WE ALSO NOTICE THAT THE TRIBUNAL HAS ACCEPTED THE REASONS AS SUFFICIENT FOR CONDONING THE DELAY IN FILING THE APPEAL. WE ACCORDINGLY DIRECT THAT THE PENALTY IMPOSED ON THE ASSESSEE BE CANCELLED. THUS, ITA NO. 3914/MUM/09 AND 3916/MUM/09 ARE ALLOWED. SHRI VIVEK VINAYAK SANE 5 10. IN THE RESULT ITA NO. 3915/MUM/09 & 3917/MUM/09 ARE ALLOWED FOR STATISTICAL PURPOSES WHILE ITA NO. 3914/MUM/09 & 3916/MUM/09 ARE ALLOWED. ORDER WAS PRONOUNCED ON 23 RD DAY OF JULY, 2010. SD/- (B.RAMAKOTAIAH) ACCOUNTANT MEMBER SD/- (N.V. VASUDEVAN) JUDICIAL MEMBER DATED : 23 RD JULY, 2010 COPY TO : 1. THE ASSESSEE 2. THE RESPONDENT 3. THE CIT(A)-CONCERNED. 4. THE CIT, CONCERNED. 5. THE DR CONCERNED, MUMBAI 6. GUARD FILE BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI PS