Sh. Rajinder Kaul, New Delhi V. Income tax Officer, Srinagar

ITA 409/ASR/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5784 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SB
• Next Hearing Date: 15-12-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 16-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset converted into stock in trade; Opportunity of being heard; Principle of natural justice; Deemed to accrue or arise in india

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR. BEFORE SHRI H.L. KARWA, VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER. I.T.A. NO.409(ASR)/2009. (ASSESSMENT YEAR: 2005-06) SHRI RAJINDER KAUL, THE INCOME TAX OFFICER, CHITRA HOUSE, EXCHANGE LANE, WARD 4, SRINAGAR. INDIRA NAGAR, SRINAGAR. KASHMIR. KASHMIR. (APPELLANT) VS. (RESPONDENT) APPELLANT BY: NONE. RESPONDENT BY: SHRI TARSEM LAL, D.R. ORDER PER H.L. KARWA, VICE PRESIDENT. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE CIT(A), JAMMU DATED 8-7-2009 IN DISMISSING THE APPE AL IN LIMINE AND CONFIRMING THE PENALTY OF RS.8,900/- LEVIED UNDER S ECTION 271B OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT) FOR THE ASSESSMENT YEAR 2005-06. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS RUNNING A PROPRIETORSHIP CONCERN IN THE NAME OF M/S.CHITRA TR ADERS, GURU NANAK AUTO MARKET, KASHMIR GATE, DELHI-6 AND A TURNOVER OF RS .14,40,220/- WAS DECLARED BY THE ASSESSEE. A DEEMED INCOME U/S.44AF CAME TO RS.72,110/- AS AGAINST RETURNED INCOME OF RS.50,460/-. THE ASSE SSEE HAS ALREADY CLAIMED A LOSS FROM HEAD OFFICE AT RS.30,700/-, WHICH WAS A DJUSTED OUT OF THE PROFIT OF CHITRA MOTORS. ACCORDING TO THE A.O., NOWHERE T HE ASSESSEE HAS SHOWN 2 THE INCOME FROM HEAD OFFICE, THE NAME OF THAT CONCE RN, THE INCOME AND EXPENDITURE OF THAT HEAD OFFICE BUSINESS. THE A.O. ALSO OBSERVED THAT THE ASSESSEE IS INSURANCE COMMISSION AGENT WITH LIC UNI T-12C OF INDIA, MORI GATE, DELHI AND HAD RECEIVED INSURANCE COMMISSION O F RS.3,38,255/-. THE ASSESSEE HAD RETURNED AN INCOME OF RS.1,86,041/- OU T OF LIC COMMISSION BUSINESS AFTER DEDUCTING RS.1,52,214/-.THE A.O. NOT ED THAT THE ASSESSEE DID NOT FURNISH ANY PROFIT AND LOSS ACCOUNT OR ANY DETA IL IN RESPECT OF EXPENDITURE OF RS.1,52,214/-. ACCORDING TO THE A.O., THE ASSES SEE DID NOT MAINTAIN THE BOOKS OF ACCOUNTS AS REQUIRED UNDER SECTION 44AA OF THE ACT. THUS THE PROVISIONS OF SECTION 271B OF THE ACT WAS INVOKED A ND THE PENALTY OF RS.8,900/- WAS IMPOSED. 3. ON APPEAL, THE CIT(A) DISMISSED THE APPEAL OF TH E ASSESSEE IN LIMINE OBSERVING, AS UNDER:- 2. AS PER SECTION 249(1) OF THE I.T. ACT, 1961, EV ERY APPEAL BEFORE CIT(A) IS TO BE FILED IN THE PRESCRIBED FORM NO.35 AND IS TO BE VERIFIED IN THE MANNER PRESCRIBED IN RULE 45 OF THE I.T. RUL ES, 1962 AND AS PER RULE 45(2), THE FORM OF APPEAL, THE GROUNDS OF APPE AL AND THE FORM OF VERIFICATION APPENDED THERETO IS TO BE SIGNED AND V ERIFIED BY THE INDIVIDUAL. 3. AN APPEAL NOT VERIFIED IN THE MANNER PRESCRIBED BY LAW IS NO APPEAL AND CANNOT BE ADMITTED AND HAS TO BE REJECTE D IN LIMINE. SINCE IN THE PRESENT CASE THE FORM OF APPEAL, GROUNDS OF APPEAL AND FORM OF VERIFICATION ARE NOT SIGNED, IT IS HELD THAT THE AP PEAL FILED IS NOT A VALID ONE AND CANNOT BE TAKEN UP FOR ADJUDICATION. HENCE THIS APPEAL IS TREATED AS INVALID AND FOR STATISTICAL PURPOSES, I T IS TREATED AS DISMISSED. 4. IN THE RESULT, THE APPEAL IS DISMISSED. 4. THE ABOVE APPEAL WAS FIXED FOR HEARING ON 9-6-20 11 AND THE HEARING OF THE CASE WAS ADJOURNED TO 10-6-2011 AT THE REQUE ST OF THE ASSESSEES 3 COUNSEL. HOWEVER, ON 10-6-2011, NOBODY APPEARED ON BEHALF OF THE ASSESSEE. WE, THEREFORE, PROCEED TO DECIDE THE APP EAL ON MERITS, OF COURSE, AFTER HEARING THE LEARNED D.R. 5. WE HAVE HEARD THE LEARNED D.R. AT LENGTH AND HAV E ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS APPARENT FROM THE RECORD THAT THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) AGAINST THE ORDER OF THE ITO ON 30-4-2008 AND THE MEMORANDUM OF APPEAL WAS NOT SIGN ED BY THE ASSESSEE AT THE TIME OF FILING THE APPEAL. IT IS AFTER A LAPSE OF ONE YEAR THAT THE ASSESSEE RECEIVED AN ORDER OF THE CIT(A), WHICH INDICATED TH E DEFECT IN THE MEMORANDUM OF APPEAL PRESENTED BY THE ASSESSEE. A T THE SAME TIME TILL DATE, NEITHER ANY DEFECT MEMO WAS EITHER RECEIVED O R ISSUED BY THE OFFICE OF THE AUTHORITY BELOW INDICATING THEREIN THE DEFECT. THE ASSESSEES ACT OF FILING DEFECTIVE CANNOT BE CALLED DELIBERATE OR INTENTIONA L. IT IS ALSO APPARENT FROM THE RECORD THAT APPEAL OF THE ASSESSEE HAS BEE N DECIDED BY THE CIT(A) WITHOUT AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. FROM THE IMPUGNED ORDER, IT IS CLEAR THAT NO OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WAS GRANTED BY THE CIT(A) BEFORE DISMISSING THE APP EAL IN LIMINE. THE CIT(A) HAS PASSED THE IMPUGNED ORDER IN UTTER VIOLA TION OF PRINCIPLE OF NATURAL JUSTICE, WHICH IS NOT SUSTAINABLE IN LAW. FURTHERMORE, THERE WAS NO JUSTIFICATION IN DISMISSING THE APPEAL ON THE GROUN D OF TECHNICAL DEFECT IN THE MEMORANDUM OF APPEAL. IN OUR VIEW, THE CIT(A) SHOUL D HAVE GIVEN AN OPPORTUNITY TO THE ASSESSEE TO REMOVE THE DEFECT, I F ANY, IN THE MEMORANDUM OF APPEAL. IN THE CASE OF CIT VS. O.C.M. INDIA LTD. (2007) 291 ITR 96, HE HONBLE PUNJAB & HARYANA HIGH COURT HELD THAT THAT AN APPEAL CANNOT BE DISMISSED ON THE GROUND OF TECHNICAL DEFECT IN THE MEMORANDUM OF APPEAL. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE H ONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF OCM INDIA LTD. (SUPRA), W E SET-ASIDE THE ORDER OF 4 THE CIT(A) IN TOTO AND REMAND THE MATTER TO THE FIL E OF THE CIT(A) WITH A DIRECTION TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO REMOVE THE DEFECT, IF ANY, IN THE MEMORANDUM OF APPEAL AN THEREAFTER DECIDE TH E APPEAL ON MERITS IN ACCORDANCE WITH LAW AFTER AFFORDING DUE AND REASONA BLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. FOR STATISTICAL PURPOSES, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JUNE, 2011. SD/- SD/- (MEHAR SINGH) (H.L. KARWA) ACCOUNTANT MEMBER. VICE PRESIDENT. DATED: 10 TH JUNE, 2011. KC/- COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: SHRI RAJINDER KAUL, CHITRA HOUSE, EXC HANGE LANE, INDIRA NAGAR, SRINAGAR, KASHMIR. (2) THE ITO, WARD 4, SRINAGAR, KASHMIR. (3) THE CIT, JAMMU. (4) THE CIT(A), JAMMU. (5) THE SR.D.R., ITAT, ASR. TRUE COPY BY ORDER ASSTT. REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, AMRITSAR.