MANISHA N DARJEE, MUMBAI V. ITO 25(1)(3), MUMBAI

ITA 4049/MUM/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9829 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 26-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARJU GARODIA
• Assessee Lawyers: NARAYAN SWAMI
• Keywords: Opportunity of being heard; Non compliance; Condonation of delay
• Section: 144

Judgement Text

ITA NO. 4049/MUM/2015 MANISHA N DARJEE 1 IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , AM AND SHRI RAVISH SOOD, JM ./ I.T.A. NO. 404 9 /MUM/201 5 ( / ASSESSMENT YEAR: 200 7 - 0 8 ) SMT. MANISHA N DARJEE, A/02, SURYA KIRAN, AVDHOOT NAGAR, C.S. ROAD, DAHISAR EAST, MUMBAI - 400068 . / VS. INCOME TAX OFFICER - 25(1)(2), MUMBAI . ./ ./ PAN/GIR NO. AFVPD1444D ( / APPELLANT ) : ( / RESPONDENT ) / ASSESSEE BY : SH. NARAYAN SWAMI / REVENUE BY : MS. ARJU GARODIA , D.R. / DATE OF HEARING : 19/06/201 7 / DATE OF PRONOUNCEMENT : 23 /0 8 /2017 / O R D E R PER RAVISH SOOD, JUDICIAL MEMBER THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 11 , MUMBAI, DATED 21.05.2013 , FOR A.Y. 200 7 - 0 8 , WHICH IN ITSELF ARISES FROM THE ORDER PASSED BY THE A.O U/S 144 OF THE INCOME - TAX ACT 1961 (FOR SHORT ACT), DATED 24.12.2009 . THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAD RAISED THE FOLLOWING GROUNDS OF APPEAL BEFORE US: - ITA NO. 4049/MUM/2015 MANISHA N DARJEE 2 1. THE LEARNED COMMISSIONER OF INCOME TAX APPEALS PASSED THE ORDER WITHOUT GIVING OPPORTUNITY OF BEING HEARD TO ASSESSEE. DURING THE APPELLATE PROCEEDINGS ITP (INCOME TAX PRACTITIONER) WAS NOT APPEARED TO EXPLAIN THE GROUNDS OF APPEAL. CIT APPEALS PASSED THE ORDER AND DISMISSED THE APPEAL FILED BY THE ASSESSEE . 2. THE LEARNED ASSESSING OFFICER COMPLETED ASSESSMENT UNDER SECTION 144 OF THE ACT, ASSESSING OFFICER PASSED THE ORDER ASSESSING TOTAL INCOME 13,16,360/ - AS AGAINST RETURN INCOME 3,26,550/ - . ADDITION OF RS. 9,89,807/ - MADE BY THE A.O. ON PURELY UNJUSTIFIED ESTIMATED BASIS, ITS BAD IN LAW AND NOT THE BEST JUDGMENT ASSESSMENT . 3 . THE APPELLANT CRAVES, LEAVE TO ADD TO ALTER AMEND AND OR DELETE ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL . 2. THE PRESENT APPEAL FILED BY THE ASSESSEE INVOLVES A DELAY OF 706 DAYS. THE ASSESSEE EXPLAINING THE REASON FOR THE DELAY INVOLVED IN FILING OF THE APPEAL , HAD THEREIN FILED AN APPLICATION DATED 23.06.2015 SEEKING CONDONATION OF DELAY AND AN AFFIDAVIT DATE D 02.07.2015. THE ASSESSEE HAD DEPOSED THAT THOUGH SHE WAS SUPPOSED TO FILE AN APPEAL BEFORE THE TRIBUNAL ON OR BEFORE 20.07.2013, HOWEVER THE SAME COULD ONLY BE FILED ON 23.06.2015, THEREIN INVOLVING A DELAY OF 706 DAYS. THE ASSESSEE HAD STATED THAT A S AT THE RELEVANT POINT OF TIME SHE WAS LIVING IN A CHAWL WHICH WAS TAKEN ON RENT FOR A PERIOD OF 11 MONTHS AND WAS SUBJECT TO REDEVELOPMENT, THEREFORE, MOST OF THE TIMES THE NOTICES FROM THE INCOME TAX DEPARTMENT WERE NOT RECEIVED BY HER. IT WAS AVERRED BY TH E ASSESSEE THAT AS SHE WAS NOT HAVING SUFFICIENT KNOWLEDGE ABOUT TAX REGIME, THEREFORE, AS AN D WHEN ANY NOTICE WOULD BE RECEIVED FROM THE DEPARTMENT, SHE WOULD DELIVER THE SAME TO THE INCOME TAX PETITION ER (ITP) WHO WAS LOOKING AFTER HE R CASE. IT WAS STATED BY THE ASSESSEE THAT IN THE BACKDROP OF THE AFORESAID FACTS, A LONG DELAY WAS INVOLVED ON HER PART IN CONSULTING HER CHARTERED ACCOUNTAN T, WHO SUGGESTED THAT AN APPEAL AGAINST THE ORDER OF THE CIT(A) ITA NO. 4049/MUM/2015 MANISHA N DARJEE 3 SHOULD HAVE BEEN FILE D BEFORE THE TRIBUNA L FOR RELIEF, HOWEVER THE SAME BY THE SAID TIME INVOLVED A DELAY OF 706 DAYS . 3. THAT DURING THE COURSE OF HEARING OF THE APPEAL THE LD. A.R. FOR THE ASSESSEE AVERRED THAT THE ASSESSEE HAD NO KNOWLEDGE OF TAX REGIME, WHICH THUS HAD RESULTED INTO A LONG G AP ON HER PART TO FILE AN APPEAL BEFORE THE TRIBUNAL WITH THE ASSISTANCE OF A CHARTERED ACCOUNTANT. IT WAS SUBMITTED BY THE LD. A.R. THAT THE FAILURE ON THE PART OF THE ASSESSEE TO COMPLY WITH THE NOTICES AND FILE AN APPEAL BEFORE THE TRIBUNAL, WHICH WAS I N HER OWN INTEREST, WAS ABSOLUTELY BONAFIDE, AND THERE WAS NO REASON FOR HER TO AVOID THE SAME. IT WAS THUS SUBMITTED BY THE LD. A.R THAT THE INADVERTENT DELAY IN FILING OF THE APPEAL IN ALL FAIRNESS MAY BE CONDONED. 4. WE HAVE GIVEN A THOUGHTFUL CONSIDE RATION TO THE FACTS LEADING TO THE DELAY IN FILING OF THE PRESENT APPEAL BY THE ASSESSEE, AS WELL AS PERUSED THE APPLICATION SEEKING CONDONATION OF DELAY , AND ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE HAD BEEN FAIR ENOUGH TO STATE THE FACTS WHICH HAD LED TO A BONAFIDE DELAY IN FILING OF THE PRESENT APPEAL, WHICH TO OUR UNDERSTANDING C ANNOT BE ATTRIBUTED TO ANY MALAFIDE OR LAPSE S /LACHES ON THE PART OF THE ASSESSEE. WE THOUGH ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE SHOULD HAVE BEEN MORE CAUTIOUS AND VIGILANT AS REGARDS FILING OF THE APPEAL WITHIN THE STIPULATED TIME PERIOD, HOWEVER , KEEPING IN VIEW THE CIRCUMSTANCES IN WHICH THE PRESENT ASSESSEE WAS PLACED, ARE THUS OF THE VIEW THAT THE DELAY INVOLVED IN FILING OF THE APPEAL IN ALL F AIRNESS AND IN THE INTEREST OF JUSTICE SHOULD BE CONDONED . WE THUS IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS CONDONE THE DELAY INVOLVED IN FILING OF THE PRESENT APPEAL BY THE ASSESSEE. THE APPLICATION SEEKING ITA NO. 4049/MUM/2015 MANISHA N DARJEE 4 CONDONATION OF DELAY FILED BY THE ASSESSEE IS THUS ALLOWED. 5 . BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD FILED HER RETURN OF INCOME FOR A.Y 2007 - 08 ON 31.10.2007, DECLARING TOTAL INCOME OF RS. 3,26,550/ - . THE CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY ASSESSMENT AND A NOTICE U/S 143(2), DATED 26.02.2008 WAS ISSUED AND SERVED UPON THE ASSESSEE. THEREAFTER, A NOTICE U/S 142(1), DATED 05.02.2009 WAS ISSUED AND DULY SERVED UPON THE ASSESSEE, HOWEVER , THE SAME WAS NOT COMPLIED WITH BY HER . A FEW MORE NOTICES U/S 14 2(1) WER E ISSUED AND DULY SERVED UPON THE ASSESSEE , WHICH T O O MET THE SAME FATE AND REMAINED UNCOMPLIED WITH BY THE ASSESSEE. THE A.O VIDE A FINAL NOTICE U/S 142(1), DATED 03.12.2009 , AFTER REFERRING TO THE SERIES OF NON COMPLIANCE OF THE EARLIER NOTICES, THEREIN CALLED UPON THE ASSESSEE FOR NECESSARY COMPLIANCE, FAILING WHICH THE ASSESSMENT WAS TO BE FRAMED U/S 144 OF THE ACT. IN COMPLIANCE TO THE AFORESAID NOTICE DATED 03.12.2009 , THE REPRESENTATIVE OF THE ASSESSEE APPEARED AND PLACE D ON RECORD REPLY TO CERTAIN QUERIES. THE A.R OF THE ASSESSEE WAS DIRECTED BY THE A.O TO FURNISH CERTAIN ADDITIONAL DETAILS AND THE CASE WAS ADJOURNED TO 21.12.2009. THAT ON THE STIPULATED DATE AS NEITHER ANYBODY ATTENDED, NOR ANY ADJOURNMENT WAS SOUGHT BY THE ASSESSEE, THEREFORE , TH E A.O PROCEEDED WITH AND FRAMED BEST JUDGMENT ASSESSMENT U/S 144 OF THE ACT 6 . THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE A.O MADE THE FOLLOWING ADDITIONS IN THE HANDS OF THE ASSESSEE: - S.NO. PARTICULARS AMOUNT 1. CASH DEPOSITS IN BANK ACCOUNTS OF THE RS. 5,34,235/ - ITA NO. 4049/MUM/2015 MANISHA N DARJEE 5 ASSESSEE 2. OUT OF SUNDRY CREDITORS SHOWN IN THE BALANCE SHEET OF THE ASSESSEE RS. 2,44,240/ - 3. UNSECURED LOANS APPEARING IN THE BALANCE SHEET (AS HAD BEEN RAISED BY THE ASSESSEE DURING THE YEAR) RS. 1,82,000/ - 4. 20% OF SALES PROMOTION EXPENSES, STAFF WELFARE EXPENSES, TELEPHONE EXPENSES AND CONVEYANCE EXPENSES (ALL TOTALING TO RS. 1,46,660/ - ) RS. 29,332/ - THE A.O THUS MADE AN AGGREGATE ADDITION OF RS. 9,89,807/ - AND ASSESSED THE INCOME OF THE ASSESSEE AT RS. 13,16,360/ - . 7 . THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE A.O CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) OBSERV ED THAT DESPITE SEVERAL NOTICES ISSUED TO THE ASSESSEE, THE LATTER HAD HOWEVER FAILED TO RESPOND TO THE SAME AND PUT UP AN APPEARANCE BEFORE HIM. THE CIT(A) IN THE BACKDROP OF THE FACT THAT AS THE ASSESSEE HAD FAILED TO MAKE ANY REPRESENTATION BEFORE HIM DES PITE BEING PUT TO NOTICE SEVERAL TIMES, THUS OBSERVED THAT IT COULD SAFELY BE HELD THAT S HE WAS NOT INTERESTED IN PROSECUTING H ER APPEAL. THE CIT(A) THUS RELYING UPON A HOST OF JUDICIAL PRONOUNCEMENTS, PROCEEDED WITH AND HOLDING A CONVICTION THAT THE A.O H AD PASSED A SPEAKING ORDER, THUS UPHELD THE ORDER OF THE A.O AND DISMISSED THE APPEAL FILED BY THE ASSESSEE. 8 . THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAD CARRIED THE MATTER IN APPEAL BEFORE US. THE LEARNED AUTHORIZED REPRESENTATIVE (FO R SHORT A.R) FOR THE ITA NO. 4049/MUM/2015 MANISHA N DARJEE 6 ASSESSEE MR. NARAYAN SWAMI, SUBMITTED THAT SUFFICIENT OPPORTUNITY OF BEING HEARD WAS NOT AFFORDED TO THE ASSESSEE, AS A RESULT WHEREOF , THE LATTER HAD REMAINED DIVESTED OF PUTTING FORTH HER CASE BEFORE THE CIT(A). IT WAS SUBMITTED BY THE LD A.R. THAT THE FAILURE ON THE PART OF THE ASSESSEE TO PUT UP AN APPEARANCE BEFORE THE CIT(A) WAS ABSOLUTELY UNINTENTIONA L . IT WAS AVERRED BY THE LD. A.R. THAT THE ASSESSEE WHO AT THE RELEVANT POINT OF TIME WHEN THE APPEAL WAS FIXED FOR HEARING BEFORE THE CIT(A) (AS GATHERED FROM RECORDS) WAS LIVING ON RENT IN A CHAWL , WHICH HAD REMAINED SUBJECTED TO REDEVELOPMENT FOR A LONG TIME . IT WAS SUBMITTED BY THE LD. A.R THAT IN THE BACKDROP OF THE AFORESAID FACTS, NEITHER OF THE NOTICES WHICH WERE SENT TO THE ASSESSEE [AS GATHERED FROM THE ORDER OF THE CIT(A)] WERE EVER RECEIVED BY HER. IT WAS ONLY WHEN THE ASSESSEE RECEIVED A NOTICE FROM THE INCOME TAX DEPARTMENT, SHE HANDED OVER THE SAME TO HER INCOME TAX PRACTITIONER. IT WAS SUBMITTED BY THE LD. A.R T HAT THE ASSESSEE HAD NO KNOWLEDGE OF TAX REGIME, AND THIS HAD RESULTED INTO A LONG GAP ON HER PART TO FILE AN APPEAL BEFORE THE TRIBUNAL WITH THE ASS ISTANCE OF A CHARTERED ACCOUNTANT. IT WAS SUBMITTED BY THE LD. A.R. THAT THE FAILURE ON THE PART OF THE ASS ESSEE TO COMPLY WITH THE NOTICES AND PUT UP AN APPEARANCE BEFORE THE CIT(A), WHICH WAS IN HER OWN INTEREST, WAS ABSOLUTELY BONAFIDE, AND THERE WAS NO REASON FOR HER TO AVOID THE SAME. IT WAS SUBMITTED BY THE LD. A.R THAT IN ALL FAIRNESS AN OPPORTUNITY OF B EING HEARD MAY BE ALLOWED TO THE ASSESSEE AND THE MATTER BE RESTORE D TO THE FILE OF THE CIT(A). THE LD. A.R. SUBMITTED THAT GIVEN AN OPPORTUNITY THE ASSESSEE WILL DULY COOPERATE IN THE PROCEEDINGS BEFORE THE CIT(A) AND PROVIDE ALL INFORMATION AND DOCUMENTS WITH THE ITA NO. 4049/MUM/2015 MANISHA N DARJEE 7 SAID APPELLATE AUTHORITY. PER CONTRA , THE LEARNED DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R.) RELIED ON THE ORDER S OF THE LOWER AUTHORITIES. 9 . WE HAVE HEARD THE AUTHORIZED REPRESENTATIVE S FOR BOTH THE PARTIES, PERUSED THE ORDER S OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE AND FIND THAT IT REMAINS AS A MATTER OF FACT THAT THOUGH THE CIT(A) HAD ISSUED NOTICES , THEREIN CALLING UPON THE ASSESSEE TO P UT UP AN APPEARANCE ON SEVERAL DATES, HOWEVER , THE ASSESSEE FAILED TO COMPLY WITH THE SAME . WE HAVE PERUSED THE ORDERS OF THE CIT(A) AND FIND SUBSTANTIAL FORCE IN THE CONTENTION OF THE LD A.R. THAT THE FAILURE ON THE PART OF THE ASSESSEE TO PUT UP AN APPEA RANCE BEFORE THE CIT(A) WAS ABSOLUTELY UNINTENTIONAL . WE ARE PERSUADED TO ACCEPT THE CONTENTION OF THE LD. A.R. THAT THE ASSESSEE WHO AT THE RELEVANT POINT OF TIME WHEN THE HEARING OF THE APPEAL TOOK PLACE, WAS PUTTING UP IN A RENTED CHAWL WHICH WAS SUBJEC T TO REDEVELOPMENT FOR A LONG TIME, THEREFORE, THERE COULD BE JUSTIFIABLE REASONS AS TO WHY NO NOTICE ISSUED BY THE OFFICE OF THE CIT(A) WAS RECEIVED BY HER. WE ARE OF THE CONSIDERED VIEW THAT THERE WOULD HAVE BEEN NO REASON FOR THE ASSESSEE WHO HERSELF HAD PREFERR ED THE APPEAL BEFORE THE CIT(A) TO AVOID COMPLIANCE TO THE NOTICES RECEIVED FROM THE LATTERS OFFICE , THEREIN INTIMATING THE FIXATION OF HER APPEAL . THE FACT THAT THE ASSESSEE HAD NO KNOWLEDGE OF TAX REGIME, FURTHER GOES TO FORTIFY AND S UPPORT THE CONTENTION OF THE LD. A.R. WE ARE OF THE CONSIDERED VIEW THAT IN TOTALITY OF THE AFORESAID FACTS , IT CAN SAFELY BE HELD THAT THE ASSESSEE HAD REMAINED DIVESTED OF AN OPPORTUNITY TO PUT FORTH HER CASE BEFORE THE CIT(A). WE HAVE FURTHER PERUSED TH E WRITTEN ITA NO. 4049/MUM/2015 MANISHA N DARJEE 8 SUBMISSIONS FURNISHED BY THE ASSESSEE BEFORE US , W HEREIN THE LATTE R HAD DELIBERAT ED UPON THE VARIOUS ADDITION S MADE BY THE A.O. THAT WITHOUT COMMENT ING ON MERITS, WE FIND THAT THE ASSESSEE PRIMA FACIE HAS A GOOD CASE, WHICH ALL THE MORE SUPPORTS OUR CONVICTION THAT THE ASSESSEE WOULD NOT HAVE INTENTIONALLY AVOIDED COMPLIANCE OF THE NOTICES ISSUED BY THE OFFICE OF THE CIT(A). WE THUS IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS, IN ALL FAIRNESS AND IN THE INTEREST OF JUSTICE SET ASIDE THE MATTER TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION. THE CIT(A) IS DIRECTED TO DISPOSE OF THE APPEAL AFTER ALLOWING SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUND OF APPEAL NO. 1 RAISED BY THE ASSESS EE BEFORE US IS ALLOWED. THAT AS THE MATTER HAD BEEN RESTORE D TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION, THEREFORE, WE REFRA IN FROM ADJUDICATING THE APPEAL ON MERITS. 10 . THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES IN TERMS OF O UR AFORESAID OBSERVATIONS. ORDER PRONOUNCE D IN THE OPEN COURT ON 23 /08/2017 SD/ - SD/ - ( SHAMIM YAHYA ) (RAVISH SOOD ) ACCOUNTANT MEMBER JUDICIAL ME MBER DATED: 23 /08/2017 PS : ROHIT KUMAR ITA NO. 4049/MUM/2015 MANISHA N DARJEE 9 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI