Narmada FAbrics Pvt.Ltd., Bharuch V. The ACIT., Bharuch Circle, Bharuch

ITA 405/AHD/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9065 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-12-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-12-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 04-02-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K DHANESTA
• Assessee Lawyers: M K PATEL
• Keywords: Opportunity of being heard
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD A BENCH (BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND MAHAVIR SINGH, JUDICIAL MEMBER) ITA.NO.405/AHD/2008 [ASSTT. YEAR : 2004-2005] M/S.NARMADA FABRICS P. LTD. A/1/419-420, GIDC ANKLESHWAR. VS. DCIT, BHARUCH CIRCLE BHARUCH. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M.K. PATEL REVENUE BY : SHRI R.K.DHANESTA O R D E R G.D. AGARWAL, VICE-PRESIDENT : THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEAL S)-VI, BARODA DATED 30.10.2007 ARISING OUT OF THE ORDER OF THE ASSESSIN G OFFICER PASSED UNDER SECTION 144 OF THE INCOME TAX ACT, 1961. 2. FIRST GROUND RAISED IN THE ASSESSEES APPEAL REA DS AS UNDER: 1. THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN CONFIRMIN G THE ASSESSMENT ORDER PASSED UNDER SECTION 144 OF THE AC T DETERMINING THE TOTAL INCOME AT RS.45,45,100/- WITHOUT GIVING A DEQUATE OPPORTUNITY TO APPELLANT. 3. AT THE TIME OF HEARING BEFORE US, IT IS SUBMITTE D BY THE LEARNED COUNSEL THAT THERE WAS SEARCH AT THE BUSINESS PREMISES OF T HE ASSESSEE BY CENTRAL EXCISE AND CUSTOMS DEPARTMENT. THAT THEY HAD SEIZED THE A SSESSEES BOOKS OF ACCOUNTS AND PHOTO COPIES OF THE SAID BOOKS OF ACCO UNTS WAS NOT ALLOWED TO THE ASSESSEE DESPITE VARIOUS REMINDERS. IN THE ABSENCE OF BOOKS OF ACCOUNTS ETC. THE ASSESSEE COULD NOT FILE RETURN OF INCOME. THAT THE AO ALSO WROTE LETTERS TO THE CENTRAL EXCISE AND CUSTOMS DEPARTMENT ASKING FO R VARIOUS DETAILS WHICH WERE NOT SUBMITTED BY THEM EVEN TO THE AO. THAT FI NALLY, THE AO ON THE BASIS ITA.NO.405/AHD/2008 -2- OF PANCH NAMA AS WELL AS THE ORDER PASSED BY THE CENTRAL EXCISE AND CUSTOMS DEPARTMENT, DETERMINED THE INCOME AT HUGE SUM OF RS .49,45,100/-. HE HAS SUBMITTED THAT THE AO RELIED UPON THE FINDINGS OF T HE EXCISE DEPARTMENT WITHOUT ALLOWING ANY OPPORTUNITY TO THE ASSESSEE TO EXPLAIN SUCH FINDING. MOREOVER, THE FINDING OF THE AO WAS UNDER CHALLENGE BEFORE THE APPELLATE AUTHORITIES. HE THEREFORE SUBMITTED THAT THE INCOM E HAS BEEN DETERMINED BY THE AO WITHOUT ALLOWING ADEQUATE OPPORTUNITIES TO THE A SSESSEE AND WITHOUT CONFRONTING THE MATERIAL RECEIVED BY THE AO FROM TH E OFFICE OF THE CENTRAL EXCISE. HE THEREFORE SUBMITTED THAT THE ORDER OF T HE AUTHORITIES BELOW SHOULD BE SET ASIDE AND THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE AO. HE ALSO STATED THAT SUBSEQUENT TO THE COMPLETION OF AS SESSMENT PROCEEDINGS, EXCISE DEPARTMENT HAS SUPPLIED PHOTO COPIES OF BOOKS OF AC COUNTS AND OTHER DOCUMENTS, WHICH THE ASSESSEE WILL PRODUCE BEFORE T HE AO. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE AU THORITIES BELOW. HOWEVER, HE HAS NO SERIOUS OBJECTION FOR SETTING ASIDE OF THE M ATTER BACK TO THE FILE OF THE AO. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. THE FINDINGS OF THE AO IN THIS REGARD READS AS UNDER: 2. THE BRIEF OF ABOVE INFORMATION IS THAT THE CENT RAL EXCISE AND CUSTOM DEPARTMENT HAD CONDUCTED SEARCH AT THE BUSIN ESS CUM FACTORY PREMISES OF THE COMPANY ON 30/09/2003 / 01/10/2003 AND PRELIMINARILY REPORTED THAT THE COMPANY HAD SHOWN BOGUS PROCUREME NT OF GREY FABRICS VALUED AT RS.9.04 CRORES AND FRAUDULENTLY C LAIMED CENVAT CREDIT OF RS.76.37 LACS THEREON. 3. IN VIEW OF ABOVE INFORMATION, THE ASSESSEE HAS B EEN SERVED WITH THE NOTICE U/S.142(1) DATED 27/01/2005 ON 25/02/200 5, REQUIRING IT TO SUBMIT ITS RETURN OF INCOME FOR A.Y. 2004-2005 IN T HE PRESCRIBED MANNER AND IN PRESCRIBED FORM, ON OR BEFORE 28/02/2005. 4. THE ASSESSEE HAS INFORMED VIDE ITS SUBMISSION D ATED 01/11/2004 THAT THE BOOKS OF ACCOUNTS AND DOCUMENTS RELEVANT T O A.Y. 2004-2005 HAVE BEEN SEIZED BY THE EXCISE DEPARTMENT AND REQUE STED TO GRANT EXTENSION FOR FILING OF RETURN OF INCOME. ACCORDING LY, THE CENTRAL EXCISE ITA.NO.405/AHD/2008 -3- AND CUSTOMS DEPARTMENT (PREVENTIVE), SURAT WAS REQU ESTED TO FURNISH THE FINAL OUTCOME OF THIS CASE VIDE THIS OFFICE LET TERS DATED 19/01/2005, 21/02/2005, 22/03/2005, 14/11/2005, 15/09/2006 AND 17/11/2006. HOWEVER, NO COMPLIANCE TO THE ABOVE STATED LETTERS RECEIVED TILL DATE . IN VIEW OF THE ABOVE, THE ASSESSEE HAS BEEN SERVED WIT H ANOTHER NOTICE U/S.142(1) CUM QUESTIONNAIRE REQUIRING TO FURNISH D ETAILS CALLED FOR ON 05/12/2006. SHRI G.N. SHAH, C.A. ATTENDED IN THE CO MPANY OF SHRI GYAN PRASAD GUPTA, ONE OF THE DIRECTORS OF THE COMPANY A ND DETAILS CALLED FOR PARTLY SUBMITTED. THE CASE WAS DISCUSSED WITH T HEM. THEY FURTHER STATED THAT THE BOOKS OF ACCOUNTS AND OTHER DOCUMEN TS RELEVANT TO A.Y. 2004-05 HAVE BEEN SEIZED BY THE CENTRAL EXCISE AND CUSTOMS DEPARTMENT (PREVENTIVE), SURAT AND IN SPITE OF SEVE RAL REQUESTS THEY DID NOT RECEIVE COPIES THEREOF FROM THE SAID DEPARTMENT . THEY FURTHER ASSURED TO SUBMIT THE RETURN OF INCOME FOR A.Y.2004 -2005 IF THE SEIZED MATERIAL IS AVAILABLE FROM THE CENTRAL EXCISE AND C USTOMS DEPARTMENT. THEY SUBMITTED TENTATIVE P&L A/C., BALANCE SHEET AS ON 31/03/2004 ON THE BASIS OF MATERIAL AVAILABLE WITH THE COMPANY. T HE CASE WAS ADJOURNED ON 28/12/2006. ON THAT DATE THEY SUBMITTE D THE PHOTOCOPIES OF PUNCHNAMA, SHOW CAUSE NOTICE DATED 23/03/2004 AN D FINAL ORDER DATED 06 02 2006 OBTAINED FROM THE CENTRAL EXCISE A ND CUSTOMS DEPARTMENT. HOWEVER, NO RETURN OF INCOME AS WELL AS REPORT OF AUDITED ACCOUNTS, HAVE BEEN FILED. FROM THE ABOVE, IT IS EVIDENT THAT IN THE SEARCH BY CENTRAL EXCISE DEPARTMENT, THE BOOKS OF ACCOUNTS OF THE ASSESSEE RELATED TO TH E ASSESSMENT YEAR UNDER APPEAL WERE SEIZED BY THE CENTRAL EXCISE AND CUSTOM S DEPARTMENT. IT WAS ALSO SUBMITTED BY THE ASSESSEE THAT THE CENTRAL EXCISE D EPARTMENT HAS NOT SUPPLIED PHOTO COPIES OF SUCH BOOKS OF ACCOUNTS DESPITE REPE ATED REQUEST. THE AO HIMSELF HAVE WRITTEN VARIOUS LETTERS TO THE EXCISE DEPARTMENT, WHICH WERE NOT COMPLIED WITH. FINALLY, THE AO MADE ASSESSMENT ON THE BASIS OF PANCH NAMA AND THE ORDER PASSED BY THE CENTRAL EXCISE AUTHORIT IES. HOWEVER, THE FACT REMAINS THAT AT THE RELEVANT TIME THE ASSESSEE WAS NOT HAVING THE COPY OF THE BOOKS OF ACCOUNTS SEIZED BY THE EXCISE DEPARTMENT. IN THE ABSENCE OF THE BOOKS OF ACCOUNTS, IT COULD NOT BE POSSIBLE FOR THE ASSESSEE TO PREPARE AND FURNISH HIS RETURN OF INCOME. MOREOVER, THE AO COM PLETED THE ASSESSMENT ON THE BASIS OF THE FINDING OF THE EXCISE AND CUSTOMS DEPARTMENT, WHICH IS DISPUTED IN APPEAL. CONSIDERING TOTALITY OF THE FA CTS, IN OUR OPINION, IT WOULD MEET ENDS OF JUSTICE, IF THE ORDER OF THE AUTHORITI ES BELOW ARE SET ASIDE AND THE ITA.NO.405/AHD/2008 -4- MATER IS RESTORED BACK TO THE FILE OF THE AO. WE O RDER ACCORDINGLY AND DIRECT THE AO TO ALLOW ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THEREAFTER, HE WILL RE-ADJUDICATE THE MATTER IN ACC ORDANCE WITH LAW. 5. SINCE WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW FOR FRESH ADJUDICATION, OTHER ISSUES REGARDING CONFIRMATION O F ADDITIONS RAISED IN GROUND NO.2 AND 3, DO NOT SURVIVE FOR ADJUDICATION 6. IN RESULT, ASSESSEES APPEAL IS DEEMED TO BE ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 24 TH DECEMBER, 2010. SD/- SD/- (MAHAVIR SINGH ) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 24-12-2010 COPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD