Anand Kumar, Muzaffarnagar V. ITO, Muzaffarnagar

ITA 4025/DEL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81899 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-10-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 05-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause
• Section: 44AD; 147; 131; 148; 144; 10

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A : NEW DELHI BEFORE SHRI R.S.SYAL , ACCOUNTANT MEMBER AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 4025 /DEL/ 2011 (ASSESSMENT YEAR: 2005 - 06 ) ANAND KUMAR, C/0. ANIL GUPTA, ADVOCATE, 148/3A, CIVIL LINES, MUZZAFFFARNAGAR PAN:ANDPK0740K VS. ITO WARD - 1 MUZAFFARNAGAR (APPELLANT) (RESPONDENT) O R D E R PER A. T. VARKEY, JUDICIAL MEMBER THIS APPEAL ARISING FROM AN ORDER DATED 04.05.2011 OF THE LD CIT(A), MUZZAFFARNAGAR AND RELATES TO ASSESSMENT YEAR 2005 - 06 . 2. THE GROUNDS OF APPEALS IS AS UNDER: - 1. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT ACTION U/S 148 WAS RIGHTLY INITIATED AND NOTICE PROPERLY SERVED UPON THE APPELLANT AND CONSEQUENTLY THE ASSET MADE U/S 144/ 147 WAS VALID IN LAW. 2. THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE ADDITION OF RS.12,00,000/ - MADE BY THE AO AND ADDING THE SAME TOWARDS APPELLANTS INCOME OFFERED U/S 44AD OF THE INCOME - TAX ACT. 3. THAT THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THE MATERIAL ON RECORD AND ALSO BEFORE THE AO NOT JUSTIFYING ANY ADDITION TOWARDS THE APPELLANT S INCOME. 3. FOR THE INSTANT YEAR, THE ASSESSE E FURNISHED A RETURN OF INCOME ON 05 TH DECEMBER, 2005, DECLARING AN INCOME OF RS.63,020/ - WHICH WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT , 1961 (HEREIN AFTER THE ACT) VIDE INTIMATION DATED 13 TH FEBRUARY 2006. LATER NOTICE U/S 148 OF THE ACT DATED 22 ND OCTOBER APPELLANT BY : K. C. ANEJA , CA RESPONDENT BY : Y. KAKAR, DR PAGE 2 OF 4 2009 WAS ISSUED ON THE GROUND THAT THE ASSESSEE HAD CASH DEPOSIT OF RS.12 LAKHS IN HIS SAVING BANK ACCOUNT WITH VIJAYA BANK. IN PURSUANCE TO THE SAID NOTICE, THE AR FOR THE ASSESSEE SUBMITTED ON 17 TH AUGUST 2010 THAT THE ORIGINAL RETURN BE TREAT ED AS RETURN FILED IN RESPONSE TO THE SAID NOTICE DATED 22 ND OCTOBER 2009. SINCE SUBSEQUENT NOTICES REMAINED UNCOMPLIED WITH , THE ITO FRAMED AN ORDER U/S 144 OF THE ACT AT AN INCOME OF RS.12,63,020/ - . DURING THE APPEAL PROCEEDING THE AR SUBMITTED THAT AFTE R THE HEARING ON 17 TH AUGUST 2010 THE AO HAD ISSUED SUMMON U/S 131 OF THE ACT, WHICH HAD NOT BEEN SERVED ON THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE HAD LEFT MUZZAFFARNAGAR FROM THE TENANTED PREMISES IN THE YEAR 2007 AND WAS CONFINED TO BED AS A RESULT OF AN ACCIDENT UNTIL NOV EMBER 2010. HE ALSO SUBMITTED THAT ON 16 TH DECEMBER 2010, THE ASSESSEE HAD ATTENDED BEFORE THE AO AND FURNISHED AN AFFIDAVIT STATING THE AFORESAID FACTS, WHICH WAS SUPPORTED BY MEDICAL DOCUMENTS. THE MAIN GRIEVANCE OF THE LD AR WAS THAT THE ORDER OF ASSESSMENT DATED 20TH DECEMBER 2010 WAS PASSED WITHOUT GIVING SUFFICIENT TIME TO THE ASSESSEE TO FURNISH RELEVANT DOCUMENTS/ NECESSARY INFORMATION TO THE AO. HE ALSO REFERRED TO HIS APPLICATION U/RULE 29 OF THE APPELLATE TRIBUNAL RULES PLACED AT P AGE 62 OF THE PB WHEREIN IT WAS SUBMITTED AS UNDER: - 1. THAT THE APPELLANT SUBMITTED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005 - 06 ON 05.12.2005 WHEREIN THE INCOME FROM THE BUSINESS WAS COMPUTED AS PER PROVISIONS OF SECTION 44AD OF THE ACT. THERE WAS NO OBLIGATION TO MAINTAIN ACCOUNTS U/S 44AA OR 44AB, AND A S SUCH THE SAME WERE NOT FILED. THE FACTUM OF PAYMENT RECEIPT WAS WITH THE RETURN, WHICH IS NOT DISPUTED. 2. THAT THE APPELLANT HAD MET WITH SEVERE ACCIDENT IN HIS VILLAGE JHABRERA (UTTRAK H AND) ON 07.112009 RESULTING IN DAMAGE OF HIS LEFT HAND AND LEG FOR WHICH HE WAS OPERATED AND PLASTERED WHICH WERE REMOVED IN APRIL, 2011, BUT WAS CONFINED TO BED - REST AND STATED LITTLE BIT FROM THE MONTH OF NOV, 2010. PAGE 3 OF 4 3. THAT HE CAME TO KNOW FROM DEPARTMENT THAT A NOTICE U/S 148 WAS ISSUED ON 16.12.2009 AND THEREAFTER HE CAME FORWARD FOR COMPLIANCE OF THE REQUIREMENT AND EXPLAINED THE ABOVE FACTS IN AN AFFIDAVIT DATED 16.12.2010, PLACED BEFORE THE AUTHORITIES BELOW. 4. TH AT THE HUGE DETAILS AND DOCUMENTS WERE REQUIRED FOR MAKING COMPLIANCE OF THE NOTICES FROM THE DEPARTMENT AND ALSO FOR ARRANGING BANK DOCUMENTS AND OTHER DOCUMENTS, HE WAS NOT IN A PHYSICAL/ MENTAL CONDITION SO AS TO PREPARE RE - CASTED STATEMENT OF AFFAIRS A ND SUBMIT THE SAME BEFORE THE ASSESSING OFFICER, WHO COMPLETED THE ASSESSMENT ON 21.12.2010, WITHOUT APPRECIATING THE DOCUMENTS ALREADY ON RECORD. 5. THAT FOR THE APPELLANT IN THE COURSE OF APPELLATE PROCEEDINGS BEFORE CIT(A) IN APPEAL AGAINST AOS ORDER ON 04.02.2011, PLACED BEFORE HIM, AS THE SAME WAS NOT IN THE FORMAT, WHICH IS NOW BEING SOUGHT TO BE FILED IN PAPERBOOK, NOW BEFORE THE HONBLE APPELLATE TRIBUNAL AS PLACED AT PAGES 15, 62 TO 66, WITH THE PRAYER FOR ADMITTANCE THEREOF AND ADJUDICATION ON M ERITS. THE APPELLATE WAS PREVENTED BY REASONABLE CAUSE IN FILING BEFORE THE AUTHORITIES IN THE FORMAT. 6. THE APPELLANTS INABILITY IN NOT FILED WAS ON ACCOUNTS, NAMELY: - I) THE APPELLANT HAD MET WITH SERIOUS ACCOUNTING RESULTING IN LOSS/ INCAPABLE OF MOM ENTS BECAUSE OF PLASTERS, WHICH WAS REMOVED AFTER APRIL, 2011 AND START WALKING ONLY AROUND NOVEMBER, 2010 AND STARTING MAKING COMPLIANCE OF NOTICES FROM DEPARTMENT. II) THE ASSESSMENT WAS ITSELF COMPLETED ON 21.12.2010; III) THE 1 ST APPEAL PREFERRED ON 04.02.2011 WAS DECIDED ON 04.05.2011 AILING NO REASONABLE TIME TO THE APPELLANT. 4. ON THE AFORESAID FACTS AND CIRCUMSTANCES STATED ABOVE, THE LD AR PLEADED THAT THE MATTER MAY BE RESTORED TO THE FILE OF AO , SO THAT ASSESSEE WOULD BE ABLE TO PRESENT HIS VERSION OF THE CASE ALONG WITH DOCUMENTS IN SUPPORT OF HIS CLAIM . ON THE OTHER HAN D, THE LD DR SUPPORTED THE ORDERS OF AUTHORITIES BELOW AND DOES NOT WANT US TO INTERFERE WITH IT. 5. HAVING NOTED THE ABOVE FACTS STATED BY THE ASSESSEE, WE ARE OF THE CONSIDERED OPINION THAT THE INABILITY OF THE ASSESSEE TO REPRESENT H IS CASE BEFORE THE AO WAS NOT DELIBERATE; AND IT WAS DUE TO THE ACCIDENT OCC UR RED TO HIM , SO HE WAS DISABLED TO APPEAR BEFORE THE AO, WHICH FACT HAS BEEN SUBSTANTIATED BY THE PRODUCTION OF SUPPORTING MEDICAL DOCUMENTS. PAGE 4 OF 4 ACCORDINGLY , WE ARE INCLINED TO SET ASIDE THE IMPUGNED ORDER OF THE LD CIT(A) AND THE AO AND RESTORE THE MATTER BACK TO THE FILE OF AO FOR DE - NOVO EXAMINATION AND ADJUDICATION OF THE MATTER. NEEDLESS TO SAY THAT SUFFICIENT OPPORTUNITY SHALL BE GRANTED TO THE ASSESSEE. THE ASSESSEE WILL BE ENTI TLED TO RAISE ALL LEGAL PLEAS RAISED BEFORE US DURING THE DE - NOVO PROCEEDINGS. 5. IN THE RESULT THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. O RDER PRONOUNCED IN THE OPEN COURT ON 3 0 . 10 .2014. - S D / - - S D / - ( R.S.SYAL ) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 3 0 / 10 / 2014 A K KEO T / A.K. VERMA COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI