GIGEO CONSTRUCTION CO. PVT. LTD, Nagpur V. ACIT-C(C)-1(3), Nagpur

ITA 398/NAG/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84675 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 18-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MAYANK PRIYADARSHI
• Assessee Lawyers: M MANI
• Keywords: Opportunity of being heard; Condonation of delay
• Section: 143(3); 153A; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER . /ITA NO. .397/NAG/2012 ( AY: 2007 - 2008 ) . /ITA NO. 398/NAG/2012 ( AY: 2008 - 2009 ) . /ITA NO. 399/NAG/2012 ( AY: 2009 - 2010 ) GIGEO CONSTRUCTION CO. P. LTD., AMAR PALACE, OPP. YASWANT STADIUM, DHANTOLI, NAGPUR. / VS. ACIT - C(C) - 1(3), AAYAKARBHAVAN, TELANKHEDI ROAD, NAGPUR 400 001. ./ PAN: AAACG5 861E ( / APPELLANT) .. ( / RESPONDENT ) . /IT(SS) NO.26/NAG/2012 ( AY: 2007 - 2008 ) . /IT(SS) NO.28/NAG/2012 ( AY: 2009 - 2010 ) CHHAGANLAL K. PATEL, 802, KAMAL PLACE, NEAR KALPANA BUILDING, RAMDASPETH, NAGPUR - 400010. / VS. ACIT - CENTRAL CIRCLE 1(3), AAYAKARBHAVAN, TELNKHEDI ROAD, NAGPUR - 400001. ./ PAN: ACRPP0924H ( / APPELLANT) .. ( / RESPONDENT ) / ASSESSEE BY : SHRI M. MANI / REVENUE BY : SHRI MAYANK PRIYADARSHI, CIT - DR / DATE OF HEARING : 0 5 .09.2014 / DATE OF PRONOUNCEMENT : 10 .09.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE 5 APPEALS UNDER CONSIDERATION. OUT OF FIVE APPEALS, 3 APPEALS ARE FILED BY THE ASSESSEE IN THE CASE OF GIGEO CONSTRUCTION CO. PVT. LTD AND 2 APPEALS ARE FILED BY ANOTHER ASSESSEE IN THE CASE OF SHRI CHHAGANLAL K PATEL. SINCE, THE ISSUES INVOLVED IN ALL THESE FIVE APPEALS ARE IDENTICAL, THEREFORE, FOR THE SAK E OF CONVENIENCE, THEY ARE CLUBBED HEARD COMBINEDLY AND DISPOSED OF IN THIS CONSOLIDATED ORDER. APPEAL WISE AND GROUND WISE ADJUDICATION IS GIVEN IN THE FOLLOWING PARAGRAPHS OF THIS ORDER. 2 FIRSTLY WE SHALL TAKE UP THE APPEALS IN THE CASE OF GIGEO CONSTRU CTION CO. PVT. LTD. I (GIGEO CONSTRUCTION CO. PVT) ITA NO.397/NAG/2012 (AY:2007 - 2008) ITA NO.398/NAG/2012 (AY:2008 - 2009) ITA NO.399/NAG/2012 (AY:2009 - 2010) 2 . THESE THREE APPEALS ARE FILED BY THE ASSESSEE ON 18.12.2012 AGAINST THE SEPARATE ORDERS OF THE CIT (A) - I, NAGPUR, COMMONLY DATED 29.2.2012 INVOLVING THE ASSESSMENT YEARS 2007 - 08, 2008 - 09 AND 2009 - 2010. SINCE, THE GROUNDS RAISED BY THE ASSESSEE IN ALL THESE THREE APPEALS ARE IDENTICAL, FOR THE SAKE O F REFERENCE, WE SHALL TAKE UP THE GROUNDS RAISED WITH REGARD TO AY 2007 - 08 FOR ADJUDICATION WHICH READ AS UNDER: 1. THE CIT (A) ERRED IN DISMISSING THE APPEAL ON ACCOUNT OF NON - PAYMENT OF TAXES OF RETURNED INCOME . 2. THE CIT (A) ERRED IN NOT CONSIDERING THE IMPOSSIBILITY OF THE ASSESSEE IN NOT PAYING THE AMOUNT OF TAXES. 3 . DURING THE PROCEEDINGS BEFORE US, AT THE OUTSET, SHRI M. MANI ,LD COUNSEL FOR THE ASSESSEE MENTIONED THERE IS A DELAY OF 197 DATES IN FILING THE T HREE APPEALS UNDER CONSIDERATION. IN THIS REGARD, HE BROUGHT OUT ATTENTION TO THE LETTER FILED BY THE ASSESSEE REQUESTING FOR CONDONATION OF DELAY OF 197 DAYS WHICH IS SUPPORTED BY AN AFFIDAVIT DATE 15.1.2013 . IN SUPPORT OF HIS REQUEST FOR CONDONATION OF DEL AY, LD COUNSEL READ OUT THE RELEVANT PORTIONS OF THE SAID AFFIDAVIT WHICH READ AS UNDER: AN APPEAL WAS FILED BEFORE CIT (A) AND THE HONBLE CIT (A) DISMISSED THE APPEAL FOR NON - PAYMENT OF TAXES ON RETURNED INCOME. THIS ORDER WAS RECEIVED ON 5.4.2012. THE MATTER RELATING TO INCOME TAX WAS BEING HANDLED BY SHRI RAMESH DHOOT, C.A., AS THE ASSESSEE HAD STUDIED ONLY UP TO VITH STANDARD . HE DID NOT KNOW ANYTHING ABOUT INCOME TAX AND ENTIRELY DEPENDS ON SHRI RAMESH DHOOT, C.A ., FOR ALL PURPOSES. THE INCOME TAX RETURNS FILED U/S 153A OF THE IT ACT WAS ALSO SHOWED AS PER HIS OWN ADVICE. WHEN THE ORDER OF APPEAL WAS RECEIVED ATULLOHIYA C.A., ADVISE D ME NOT TO FILE ANY APPEAL, THIS IS BECAUSE OF WHEN THE APPEAL WAS HEARD SHRI RAMESH DHOOT, C.A., WAS ALLIVED AND HE HAS SUGGESTED TO SHRI LOHIYA THAT IT IS NOT NECESSARY TO FILE ANY APPEAL. SHRI RAMESH DHOOT EXPIRED ON 29.03.2012 AND THE ORDER OF APPEAL WAS RECEIVED ON 5.4.2012. IT IS ONLY AN ADVOCATE AND CONSULTANT SUGGESTED THAT IT WAS NECESSARY TO FILE AN APPEAL BEFORE THE TRIBUNAL . ACCORDINGLY AN APPEAL WAS FILED ON 18.12.2012. THE DELAY WAS ENTIRELY DUE TO ADVICE RENDERED BY SHRI LOHIYA WHO IN TU RN ACCEPTED THE SUGGESTION OF SHRI RAMESH DHOOT . SINCE, THIS WAS S UFFICIENT CAUSE THE ASSESSEE PRAISES THE DELAY OF SOME DAYS MAY KINDLY BE CONDONED . 3 4 . LD COUNSEL PRAYED FOR CONDONATION OF THE DELAY IN VIEW OF THE REASONS MENTIONED ABOVE. LD DR OPPOSED THE SAME DUTIFULLY. CONSIDERING THE ABOVE , WE ARE OF THE OPINION THAT THE CONDONATION OF DELAY SHOULD BE GRANTED AS THERE IS A SUFFICIENT CAUSE IN NOT FILING THE APPEAL BEFORE THE TRIBUNAL WITHIN THE STIPULATED TIME . ACCORDINGLY, THE DELAY OF 197 DAYS IN FILING THE APPEAL BEFORE THE ITAT IS CONDONED . HAVING DECIDED THE PRELIMINARY ISSUE, WE SHALL TAKE UP THE GROUNDS ON MERITS . 5 . BRIEFLY STATED RELEVANT FACTS OF THE CASES ARE THAT THE ASSESSEE IS A BUILDER ENGAGED IN THE BUSINESS OF CONSTRUCTION OF BU ILDINGS. THE ASSESSEE FOLLOWS PROJECT COMPLETION METHOD OF ACCOUNTING FOR THE UNDER CONSTRUCTION PROJECTS. DURING THE AYS UNDER CONSIDERATION, ASSESSEE FILED THE RETURN OF INCOME AND THE ASSESSMENT WAS COMPLETE U/S 153A R.W.S 143(3) OF THE ACT. IN THE A SSESSMENT AO DISALLOWED CERTAIN EXPENSES BY HOLDING THAT SINCE THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME U/S 139 PRIOR TO THE DATE OF SEARCH AND THE ENTIRE INCOME OF THE ASSESSEE IS TREATED AS UNDISCLOSED INCOME. FURTHER, AO HELD THAT THE DISALLOWANC ES WERE MADE FOR BELATED REMITTANCES OF TDS TOWARDS PROJECT EXPENDITURE ON VARIOUS PAYMENTS. AGGRIEVED, WITH THE DECISION OF THE AO, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 6 . DURING THE PROCEEDINGS BEFORE THE FIRST APPE LLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, CIT (A) DISMISSED THE APPEALS BY HOLDING THAT THE PROVISIONS OF SECTION 249(4)(A) ARE MANDATORY AND NON - PAYMENT OF TAXES ON ADMITTED INCOME WOULD RESULT IN THE APPEALS BEING TREATED A S NOT MAINTAINABLE. PARA 4 AND 5 OF THE CIT (A)S ORDER ARE RELEVANT IN THIS REGARD WHICH READ AS UNDER: 4. THE PROVISIONS OF SECTION 249(4)(A) OF THE ACT UNEQUIVOCALLY STATES THAT WHEN A RETURN HAS BEEN FILED BY THE ASSESSEE THE TAXES DUE ON THE RETURNED INCOME ARE TO BE PAID BEFORE THE FILING OF THE APPEAL . THERE ARE NO EXCEPTIONS PROVIDED IN THE SECTION 249 OF THE ACT UNDER WHICH THIS CONDITIONS CAN BE WAIVED. I AM THEREFORE, OF THE OPINION THAT THE APPEALS ARE NOT MAINTA INABLE AND NEED NOT BE ADMITTED AS PER THE PROVISIONS OF SECTION 249(4)(A) OF THE ACT ARE MANDATORY IN NATURE IS AFFIRMED IN THE FOLLOWING DECISIONS OF VARIOUS HIGH COURTS. ALARGARSWAMY VS. ITO (MAD) 296 ITR 43 D. KOMALLAXMIVS. DCIT (KAR) 292 ITR 99 SUSHIL THOMAS IBRAHIM VS. ACIT (KER) 304 ITR 346 5. SINCE THE PROVISIONS OF SECTION 249(4) OF THE ACT ARE MANDATORY, THE NON - PAYMENT OF TAXES ON ADMITTED INCOME WOULD RESULT IN THE APPEALS BEING TREATED AS NOT MAINTAINABLE . I, THEREFORE, HOLD THAT THE APPEALS C ANNOT BE ADMITTED. THE APPEALS ARE THEREFORE, DISPOSED OF ACCORDINGLY AND TREATED AS DISMISSED FOR STATISTICAL PURPOSE. 4 7 . AGGRIEVED WITH THE ABOVE DECISION OF THE CIT (A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUND. 8 . BEFORE US, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT CIT (A) DID NOT ADJUDICATE THE ISSUES ON MERITS BUT ONLY DISMISSED THE APPEALS BY GIVING REASON THAT THAT THE SAME ARE NOT MAINTAINABLE AS THE ASSESSEE DID NOT MAKE PAYMENT OF TAX ON ADMITTED INCOME AS PER THE RETURN WHICH IS REQUIRED AS PER THE PROVISIONS OF SECTION 249(4)(A) OF THE ACT. HE FURTHER DEMONSTRATED THAT CONSIDERING THE FINANCIAL POSITION, THE ASSESSEE COULD PAY ONLY THE SELF - ASSESSMENT TAX REQUIRED U/S 140A OF THE ACT AND FILED THE COPIES OF THE TAX PAID CHALLANS. FURTHER, HE MENTIONED THAT THERE WAS NO MONEY TO MAKE PAYMENT OF TAX AS PER THE RETURN. LD COUNSEL MADE A PRAYED THE BENCH FOR ADMITTING THE APPEALS CONSIDERING THE PAYMENT BY T HE ASSESSEE AND REMANDING THE APPEALS TO THE FILE OF THE CIT (A) WITH A DIRECTION TO ADMIT AND ADJUDICATE THE APPEALS ON MERITS. IN SUPPORT OF HIS CONTENTION, LD COUNSEL RELIED ON THE ORDER OF THE ITAT IN THE CASE OF VIJAY DANGRE VS. ACIT CC - 1(1), NAGPUR VIDE ITA NO.6 & 7/NAG/2011 , DATED 19.10.2012 AND THE DECISION OF THE ITAT, HYDERABAD BENCH IN THE CASE OF SMT. BANU BEGUM VS. DCIT VIDE ITA NO.2075/HYD/2011 . 9 . ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES DUTIFULLY. 10 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. CONSIDERING THE FINANCIAL POSITION OF THE ASSESSEE AND IN THE ABSENCE OF FUNDS BEING NOT AVAILABLE WITH THE ASSESSEE, IT COULD NOT MAKE THE PAYMENT OF THE TAX ON RETURNED INCOME. AS PER THE CHALLANS, IT HAS PAID THE REQUIRED TAXES AS PER THE RETURNS . CONSIDERING THE SAME AND THE DECISIONS OF THE TRIBUNAL IN THE CASES OF VIJAY DANGRE (SUPRA) AND SMT. BANU BEGUM (SUPRA), WE ARE OF THE OPINION THAT THE PRAYER OF THE LD COUNSEL FOR REMANDING THE APPEALS TO THE FILE OF THE CIT (A) TO ADMIT AND ADJUDICATE THE SAME ON MERITS SHOULD BE APPROVED. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT (A) AND RESTORE THE APPEAL TO THE FILE OF THE CIT (A) WITH A DIRECTION TO READJUDICATETHE APPEALS ON MERITS AFTER AFFORDING AN REASONABLE OPPORTUNITY OF BEING 5 HEARD TO THE ASSESSEE. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 1 1 . IN THE RESULT, ALL THE THREE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. II (CHHAGANLAL K. PATEL) ./IT(SS) NO.26/NAG/2012 ( AY: 2007 - 2008) ./IT(SS) NO.28/NAG/2012 ( AY: 2009 - 2010) 12 . THESE TWO APPEALS ARE FILED BY THE ASSESSEE ON 27.12.2012 AGAINST THE SEPARATE ORDERS OF THE CIT (A) - I, NAGPUR COMMONLY DATED 27.9.2012 FOR THE ASSESSMENT YEARS 2007 - 08 AND 2009 - 2010. 13 . IN THESE TWO APPEALS, ASSESSEE RAISED THE SIMILAR GROUNDS WHICH READ AS UNDER: 1. THE CIT (A) ERRED IN DISMISSING THE APPEAL ON ACCOUNT OF NON - PAYMENT OF TAXES OF RETURNED INCOME . 2. THE CIT (A) ERRED IN NOT CONSIDERING THE IMPOSSIBILITY OF THE ASSESSEE IN NOT PAYING THE AMOUNT OF TAXES. 14 . THE ABOVE GROUNDS ARE EXACTLY IDENTICAL TO THAT OF THE GROUNDS RAISED IN THE CASE OF GIGEO CONSTRUCTION CO. P. LTD , WHICH IS ADJUDICATED BY US IN THE ABOVE PARAGRAPHS OF THIS ORDER. CONSIDERING THE SIMILARITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS RESEMBLANCE OF THE ISSUES RAISED IN THE INSTANT APPEALS WITH THAT OF THE APPEALS DECIDE BY US IN THE CASE OF GIGEO CONSTRUCTION CO P LTD., THE ADJUDICATION AND THE DECISION GIVEN BY US THEREIN APPLIES TO THE PRESENT APPEALS TOO. THEREFORE, THE TWO APPEALS FILED BY THE ASSESSEE ARE RESTORED TO THE FILE OF THE CIT (A) WITH A DIRECTION TO ADMIT AND RE - ADJUDICATE THE SAME AFTER PROVIDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, THE GROUNDS RAISED IN BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 15 . IN THE RESULT, TWO APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES . 6 ORDER PRONO UNCED IN THE OPEN COURT ON 10 TH SEPTEMBER, 2014 . SD/ - SD/ - (VIVEK VARMA) (D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER NAGPUR ; 10 /09/2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , / DR, ITAT, NAGPUR. 6. / GUARD FILE . //TRUE COPY// / BY ORDER, (SR. PRIVATE SECRETARY) / ITAT, NAGPUR