Metropolitan Engg. Co-opt Society Ltd., Nadia V. JCIT, RG.NADIA, Nadia

ITA 405/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9554 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 02-11-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 07-03-2014
• Court: TRIBUNAL
• Department Lawyers: MD G HYAS UDDIN
• Assessee Lawyers: P S GUPTA
• Keywords: Opportunity of being heard; Principle of natural justice; Corroborative evidences
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENC H KOLKATA BEFORE SHRI S.S.VISWANETHRA RAVI, JM & DR. A.L.SAI NI, AM ./ ITA NO.405/KOL/2014 ( / ASSESSMENT YEAR:2007-2008) M/S METROPOLITAN ENGG. CO-OPERATIVE SOCIETY LIMITED, C/O. P.S.GUPTA(ADVOCATE) 100, BANK LANE, HATAR PARA P.O. KRISHNAGAR, DIST-NADIA, PIN-741101 VS. JCIT, RANGE-NADIA ./ ./PAN/GIR NO.: AAEFM 4520 H ( /APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : SHRI P.S.GUPTA, ADVOCATE REVENUE BY : MD. GHYAS UDDIN, JCIT / DATE OF HEARING : 04/01/2017 /DATE OF PRONOUNCEMENT 13/01/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAIN ING TO THE ASSESSMENT YEAR 2007-08, IS DIRECTED AGAINST THE OR DER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXXVI, KOLKATA , IN APPEAL NO.995/CIT(A)-XXXVI/KOL/JCIT, RANGE, NADIA/09-10, D ATED 31.12.2013, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER (AO) UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961, (I N SHORT THE ACT), DATED, 18.12.2009. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.26,54 ,071/-. ASSESSEES CASE WAS SELECTED FOR SCRUTINY AND THE AO COMPLETED THE ASSESSMENT U/S.143(3) BY MAKING VARIOUS ADDITIONS. ITA NO.405/14 METROPOLITAN ENGG. CO.OP SOC. LTD. 2 3. AGGRIEVED FROM THE ORDER OF THE AO, ASSESSEE FIL ED AN APPEAL BEFORE THE CIT(A), WHO HAS ALSO CONFIRMED THE ADDIT IONS MADE BY THE AO BY OBSERVING THE FOLLOWINGS :- THUS, IT CAN BE SEEN THAT LABOUR WAS ENGAGED THROU GH LABOUR CONTRACTORS WHICH ATTRACTED TDS. SIMILARLY, THE REP AIR AND MAINTENANCE WAS THROUGH CONTRACT WORK. THE CARRIAGE ALSO INVOLVED PAYMENTS WHERE INDIVIDUAL TRANSACTIONS EXCEEDING 20 ,000/- ATTRACTING TDS U/S. 194C OF THE IT ACT. 7.2 ACCORDINGLY, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE AS UNDER: 'YOU HAVE INCURRED SUBSTANTIAL EXPENSE UNDER THE HE AD LABOUR, REPAIR OF MACHINE, DUMPER AND MACHINERY HIRE CHARGE S ETC. 1) PLEASE PRODUCE THE EVIDENCE OF TAX DEDUCTION AND DEPOSIT. PLEASE ALSO PRODUCE BOOKS OF ACCOUNTS, CHALLANS AND VOUCHERS RELATING TO IT. IF YOU ARE UNABLE TO PRODUCE THE ABOVE EVIDENCE, YO U ARE REQUIRED TO CLARIFY WHY THE EXPENSE CLAIMED SHOULD NOT BE DI SALLOWED ULS.40(A)(IA) OF THE IT ACT. SIMILARLY, YOU ARE REQUIRED TO CLARIFY YOUR DEALING S WITH OTHER SUNDRY CREDITORS WITH SUPPORTING EVIDENCE. 7.3 THERE HAS BEEN NO COMPLIANCE TO THE ENHANCEMENT NOTICE IN THE GIVEN DATE OR IN THE SUBSEQUENT DATES. THEREFORE, T HE FACTS AS AVAILABLE IN THE RECORD IS TAKEN INTO CONSIDERATION . ON VERIFICATION OF THE PROFIT AND LOSS ACCOUNT IN THE GENERAL SECTION, IT IS SEEN THAT THE EXPENSES INCURRED ON THE ABOVE HEADS IS AS UNDER: SL.N O HEAD AMOUNT(RS.) 1 CARRIAGE 1,14,855.00 2. LABOUR CHARGES 52,35,056.00 3. REPAIR & MAINTENANCE 2,31,190.00 TOTAL : 55,81,101.00 AS THE ABOVE EXPENDITURE HAS BEEN INCURRED WITHOUT TAX DEDUCTION AT SOURCE THE EXPENDITURE CLAIMED WAS REQUIRED TO BE D ISALLOWED U/S.40(A)(IA) OF THE IT.ACT. THEREFORE, THE EXPENDI TURE CLAIMED AS BEING DISALLOWED AND THE INCOME ENHANCED ACCORDINGL Y. ADD: RS.55,81,101/- 8. IN THE RESULT, THE APPEAL IS DISMISSED AND ENHAN CED. ITA NO.405/14 METROPOLITAN ENGG. CO.OP SOC. LTD. 3 4. NOT BEING SATISFIED WITH THE ORDER OF LD. CIT(A) , THE ASSESSEE IS IN FURTHER APPEAL BEFORE US, AND HAS TAKEN THE FOLLOWI NG GROUNDS OF APPEAL :- 1) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE APPEAL ORDER OF THE LD. CIT. (APPEALS)- XXXVI, KOLK ATA WAS NOT FAIR AND PROPER AND ON THE OTHER HAND IT WAS MADE CONTRA RY TO LAW, SOUND AND ADEQUATE PRINCIPLES. 2) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, LD. C.IT. (APPEALS) WAS NOT AT ALL JUSTIFIED IN COMPLET ING THE CASE AND PASSING THE ORDER EXPARTE WITHOUT GIVING THE REASON ABLE OPPORTUNITY OF BEING HEARD AND HE SHOULD HAVE CONSIDERED THAT T HE LAST DATE OF HEARING OF THE CASE AND THE SHOW CAUSE NOTICE WAS A HOLIDAY FOR MUHARRAM AND THE HUMBLE APPELLANT FOUND THE OFFICE WAS CLOSED ON THE DATE OF HEARING AND NO FURTHER NOTICE WAS ISSUE D FOR THE SAKE OF NATURAL JUSTICE. 3) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, LD. CIT. (APPEALS) WAS NOT AT ALL JUSTIFIED IN CONFIRMI NG THE DISALLOWANCE & ADDITION OF RS.8,30,757.00 U/S. 40(A)(IA) OF THE I.T. ACT, 1961 . 4) FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, LD. C.IT. (APPEALS) WAS NOT AT ALL JUSTIFIED IN ADDING BACK THE SUM OF RS. 55,81,101.00 WITHOUT ALLOWING A SINGLE OPPORTUNITY OF BEING HEARD BEFORE DECIDING THE CASE EXPARTE AND PRIOR TO MAKIN G SUCH HUGE ADDITION THE LD. CIT (APPEALS) SHOULD HAVE GIVEN TH E REASONABLE OPPORTUNITY TO THE APPELLANT TO REBUT THE CONTENTIO N OF THE LD. C.I.T. (APPEALS) WHEN THERE WERE NO SUCH ADDITIONS MADE BY THE LD. I.T.O.AT THE ASSESSMENT STAGE. 5) FOR THAT HAVING REGARDS TO THE FACTS OF THE CASE THE LD. CIT. (APPEALS) SHOULD HAVE CONSIDERED THE FACT THAT THER E WAS A DECLARED HOLIDAY ON THE DATE OF HEARING OF THE SHOW CAUSE NOTICE AND AS SUCH HE SHOULD HAVE ISSUED ANOTHER NOTICE OF HEARING OF THE SAID SHOW CAUSE NOTICE TO THE HUMBLE APPELLANT PRIO R TO MAKING THE FURTHER ADDITION OF RS. 55,81,101.00 WHICH WAS PREJ UDICIAL TO THE INTEREST OF THE HUMBLE APPELLANT. 6) FOR THAT HAVING REGARDS TO THE FACTS OF THE CASE THE LD. CIT (APPEALS) SHOULD HAVE ALLOWED DEDUCTION OF RS. 50,0 00.00 U/S. 80P(2)(C)(II) OF THE IT. ACT 1961. 7) FOR THAT BOTH THE LD. C.IT. (APPEALS) AND THE LD . I.T.O. ERRED BOTH IN POINTS OF LAW AND ON FACTS. 8) FOR THAT THE HUMBLE APPELLANT CRAVES LEAVE TO TA KE ADDITIONAL GROUNDS AND AMEND GROUNDS AT THE TIME OF HEARING. 5. IN THIS APPEAL, THE ASSESSEE HAS RAISED MULTIPLE GROUNDS OF APPEAL BUT THE MAIN GRIEVANCE OF THE ASSESSEE HAS BEEN CON FINED TO GROUND ITA NO.405/14 METROPOLITAN ENGG. CO.OP SOC. LTD. 4 NOS.3 & 4 ONLY AND OTHER GROUNDS WERE TREATED AS SU PPORTING GROUNDS ONLY. 5.1 AT THE TIME OF HEARING LD. AR FOR THE ASSESSEE HAS HIGHLIGHTED THAT THE ORDER PASSED BY LD. CIT(A) IS WITHOUT GIVING AN OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE. THE LD. AR HAS SUBMITTED THAT THE GIVEN DATE IN THE ENHANCEMENT-CUM-SHOW CAUSE NOTICE WAS 15.11.2013 AN D UNFORTUNATELY AS THE DATE OF HEARING FIXED ON 15.11.2013 WAS DEC LARED A SAD DAY I.E. MOURNING DAY, AND THE OFFICE OF THE LD. CIT(A) R EMAINED CLOSED AND AS SUCH THE ASSESSEE COULD NOT COMPLY WITH THE SHOW CA USE NOTICE ON 15.11.2013, FOR WHICH THE CASE WAS FINALLY DECIDED EX-PARTE AND THE ASSESSEE WAS NOT GIVEN ANY FURTHER OPPORTUNITY OF B EING HEARD BY THE LD. CIT(A). 5.2. ON THE OTHER HAND, LD. DR FOR THE REVENUE HAS PRIMARILY RELIED ON THE STAND TAKEN BY THE AO, WHICH WE HAVE ALREADY NO TED IN OUR EARLIER PARA AND THE SAME IS NOT BEING REPEATED FOR THE SAK E OF BREVITY. 5.3. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMI SSIONS OF THE ASSESSEE, AS THE PROPOSITION CANVASSED BY THE LD. AR FOR THE ASSESSEE ARE SUPPORTED BY THE FACTS NARRATED BY HIM ABOVE. THE D ATE OF HEARING FIXED BY THE LD. CIT(A), ON 15-11-2013, AND ON THAT DATE THE ASSESSEE WENT TO ATTEND THE OFFICE OF LD. CIT(A) TO FILE WRITTEN SUB MISSION BUT ON 15 TH NOVEMBER 2013 WAS DECLARED A HOLIDAY, THEREFORE, BE ING OFFICIAL HOLIDAY, THE OFFICE OF LD. CIT(A) WAS CLOSED AND THE ASSESSE E COULD NOT FILE THE WRITTEN SUBMISSION. HOWEVER, LD. CIT(A) PASSED THE ORDER WITHOUT GETTING ITA NO.405/14 METROPOLITAN ENGG. CO.OP SOC. LTD. 5 WRITTEN SUBMISSION FROM THE ASSESSEE, IN OUR VIEW, IT IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND WE ARE OF THE VIEW TO REMIT THE CASE BACK TO THE FILE OF LD. CIT(A) TO RE-ADJUDICATE THE ISSUE A FTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDI NGLY, WE REMIT THE CASE BACK TO THE FILE OF LD. CIT(A). 5.4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13/01 /2017. SD/ - (S.S.VISWANETHRA RAVI) SD/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; ! DATED 13/01/2017 ' $%& /PRAKASH MISHRA , 0 . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) % & , / ITAT, 1. / THE APPELLANT-METROPOLITAN ENGG. CO.OP SOC. LTD. 2. / THE RESPONDENT.-JCIT, RANGE-NADIA 3. 1 ( ) / THE CIT(A), KOLKATA. 4. 1 / CIT 5. 23 4 0056 , 56 , / DR, ITAT, KOLKATA 6. 4 78 / GUARD FILE. 2 0 //TRUE COPY//