M/s IKEA Constructions, Tanuku V. The ITO, Ward-1, Tanuku

ITA 447/VIZ/2009

• Counselvise Citation: 44725314 RSA 2009
• Duration Of Justice: 4 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-02-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 07-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SINGH
• Keywords: Recovery proceedings; Opportunity of being heard; Period of limitation; Reasonable cause; Condonation of delay
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI J.SUDHAKAR REDDY, AM AND SHRI SAKTIJIT DEY, JM ITA NO.443/VIZAG/2009: ASST.YEAR 2006-2007 SRI CH.RAVI VARMA C/O.I.S.B.SANKAR (AUDITOR) NEAR HEAD POST OFFICE RAILWAY STATION ROAD, TANUKU 534 211. PAN : AEXPC4947D. VS. THE INCOME TAX OFFICER WARD 1 TANUKU. (APPELLANT) (RESPONDENT) ITA NO.444/VIZAG/2009: ASST.YEAR 2006-2007 SMT.CHEKURI BHUVANESWARI C/O.I.S.B.SANKAR (AUDITOR) TANUKU 534 211. PAN : ADZPC8107A. VS. THE INCOME TAX OFFICER WARD 1 TANUKU. (APPELLANT) (RESPONDENT) ITA NO.445/VIZAG/2009: ASST.YEAR 2006-2007 M/S.IKEA BUILDING MATERIAL WORLD C/O.I.S.B.SANKAR (AUDITOR) TANUKU 534 211. PAN : AABF19573P. VS. THE INCOME TAX OFFICER WARD 1 TANUKU. (APPELLANT) (RESPONDENT) ITA NO.446/VIZAG/2009: ASST.YEAR 2006-2007 M/S.IKEA CONSTRUCTION (P) LTD. C/O.I.S.B.SANKAR (AUDITOR) TANUKU 534 211. PAN : AABCI5747E. VS. THE INCOME TAX OFFICER WARD 1 TANUKU. (APPELLANT) (RESPONDENT) ITA NO.447/VIZAG/2009: ASST.YEAR 2006-2007 M/S.IKEA CONSTRUCTION C/O.I.S.B.SANKAR (AUDITOR) TANUKU 534 211. PAN : AABFI9688K. VS. THE INCOME TAX OFFICER WARD 1 TANUKU. (APPELLANT) (RESPONDENT) ITA NO.448/VIZAG/2009: ASST.YEAR 2006-2007 M/S.HARITHA CONSTRUCTIONS C/O.I.S.B.SANKAR (AUDITOR) TANUKU 534 211. PAN : AAEFH5244B. VS. THE INCOME TAX OFFICER WARD 1 TANUKU. (APPELLANT) (RESPONDENT) ITA NO.449/VIZAG/2009: ASST.YEAR 2006-2007 M/S.ISWARYA CONSTRUCTION C/O.I.S.B.SANKAR (AUDITOR) TANUKU 534 211. PAN : AACFI2170H. VS. THE INCOME TAX OFFICER WARD 1 TANUKU. (APPELLANT) (RESPONDENT) ITA NO.443/VIZAG/2009 & ORS. SRI CH RAVI VARMA & ORS. 2 ITA NO.450/VIZAG/2009: ASST.YEAR 2006-2007 M/S.MAA BUILDERS C/O.I.S.B.SANKAR (AUDITOR) TANUKU 534 211. PAN : AACFI2170H. VS. THE INCOME TAX OFFICER WARD 1 TANUKU. (APPELLANT) (RESPONDENT) ITA NO.451/VIZAG/2009: ASST.YEAR 2006-2007 M/S.IKEA - VI CONSTRUCTIONS C/O.I.S.B.SANKAR (AUDITOR) TANUKU 534 211. PAN : AACFI2105G. VS. THE INCOME TAX OFFICER WARD 1 TANUKU. (APPELLANT) (RESPONDENT) ITA NO.452/VIZAG/2009: ASST.YEAR 2006-2007 M/S.IKEA - II CONSTRUCTIONS C/O.I.S.B.SANKAR (AUDITOR) TANUKU 534 211. PAN : AABFI9687G. VS. THE INCOME TAX OFFICER WARD 1 TANUKU. (APPELLANT) (RESPONDENT) APPELLANTS BY : SHRI C.SUBRAHMANYAM RESPONDENT BY : SHRI R.K.SINGH, ADDL.CIT DATE OF HEARING : 2 8 .02.2014 DATE OF PRONOUNCEMENT : 05 .0 3 .2014 O R D E R PER J.SUDHAKAR REDDY (AM) : ALL THESE APPEALS ARE FILED BY SEPARATE ASSESSEES D IRECTED AGAINST SEPARATE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS), RAJAHMUNDRY. 2. AS THESE ARE GROUP CASES AND INVOLVE COMMON PLEA DINGS ON THE ISSUE OF CONDONATION OF DELAY, ISSUE OF EX PARTE ORDERS BY THE ASSESSING OFFICER AS WELL AS BY THE LEARNED CIT(A), WE DISPOSE OFF ALL THESE APP EALS BY WAY OF THIS COMMON ORDER. 3. ALL THESE APPEALS ARE FILED BEYOND THE PERIOD OF LIMITATION. THERE IS A DELAY OF 211 DAYS IN EACH OF THE APPEALS. 3.1 THE LEARNED COUNSEL FOR THE ASSESSEE, SHRI C.SU BRAHMANYAM, FILED A PETITION FOR CONDONATION OF DELAY. HE ALSO FILED AN AFFIDAVIT OF THE ASSESSEE IN SUPPORT OF THE PETITION SEEKING CONDONATION OF DELA Y. ITA NO.443/VIZAG/2009 & ORS. SRI CH RAVI VARMA & ORS. 3 3.2 THE REASONS THAT CAUSED DELAY IN FILING OF THE APPEALS AS EXPLAINED BY THE ASSESSEE ARE AS UNDER:- (A) THE COMMISSIONER OF INCOME TAX (A) RAJAHMUNDRY HAS PASSED THE ORDERS U/S 250 OF THE I.T.ACT WHICH WERE RECEIVED BY ME ON 10 TH DECEMBER, 2008. (B) AFTER RECEIPT OF THE ORDERS, BEING AGGRIEVED, I WAS LOOKING FOR A COUNSEL TO REPRESENT THE MATTERS AND IN THIS REGARD I REQUESTED MY REGULAR AUDITOR TO SUGGEST A COUNSEL F OR PURSUING THE APPEALS BEFORE THE HONBLE ITAT VIZAG. AT THIS POINT OF TIME, WHEN THERE WAS TIME TO FILE THE APPEALS, IN THE LAS T WEEK OF JANUARY 2009 I HAVE BECOME ILL DUE TO SEVERE DIABET IC & HYPERTENSION BESIDES OTHER HEALTH PROBLEMS WHEREBY MY FAMILY DOCTOR ADVISED FOR REGULAR TREATMENT AND BED REST. IN THIS SCENARIO PURSUING THE INCOME TAX APPEALS SOMEHOW LOST SIGHT. ADDED TO THIS PROBLEM A CRIMINAL CASE WAS FILED AGAINST ME B Y A GROUP OF LOCAL PEOPLE FROM THE VILLAGE BY IMPOSING FALSE CAS ES RELATING TO LAND DISPUTED MATTER. FOR SOME TIME THE MATTER WAS REVOLVING IN THE POLICE STATION ULTIMATELY RESULTED IN A CIVIL C ASE. (C) BESIDES THE PROBLEMS STATED HEREIN ABOVE BECAU SE OF THE OPERATION CARRIED OUT U/S 132 OF THE I.T.ACT THE EN TIRE BUSINESS SCENARIO HAS COME TO STAND STILL AND MY PARTNERS AS THEY DID NOT WANT TO TAKE RESPONSIBILITY DESERTED ME RESULTING I N LOT OF MENTAL AGONY BESIDES FINANCIAL PRESSURES. (D) ALL THE FACTORS STATED HEREIN ABOVE HAVE DISTU RBED MY HEALTH MY FINANCIAL STATUS AND CAUSED LOT OF AGONY IN THE FAMILY AS I HAVE TWO SMALL CHILDREN. (E) ULTIMATELY EVERYTHING AS ABOVE UNSETTLED ME RE SULTING IN NOT LOOKING INTO THE INCOME TAX MATTERS WHICH OTHER WISE I WAS SUPPOSED TO ATTEND. AS THINGS STAND THUS I HAVE BEEN RECEIVING PRESSU RE FROM THE DEPT. FOR RECOVERY OF TAXES AND MY AUDITOR INFO RMED THAT IF APPEALS ARE NOT FILED I WILL NOT HAVE ANY LEGAL COU RSE TO FIGHT FOR JUSTICE, IF OTHERWISE, ALL THE CHANNELS WILL BE CLO SED TO PURSUE THE INCOME TAX MATTERS. (F) HAVING REALIZED THIS AND ALSO REALIZING MY RES PONSIBILITIES AS A GOOD CITIZEN AND ALSO ON THE ADVICE OF MY FAMI LY AFTER GIVING ITA NO.443/VIZAG/2009 & ORS. SRI CH RAVI VARMA & ORS. 4 DEEP THOUGHT IN A COMPOSED MANNER I IMMEDIATELY TOO K POSITIVE STEPS IN FILING THE APPEALS BEFORE THE HONBLE ITAT . (G) WHEREAS, THE SUBJECT APPEALS WERE FILED ON 7 TH SEPTEMBER, 2009 AS AGAINST THE DUE DATE OF 8 TH FEBRUARY, 2009, I MAY ALSO STATE HERE THAT ALL THESE SET-BACKS BE IT HEALTH, F INANCE OR DISTURBANCES IN FAMILY HAVE INFACT DEPRESSED ME TO AN EXTENT THAT I COULD NOT EVEN PURSUE THE APPEALS BEFORE THE HONBL E ITAT ALL THIS WHILE. I MAY ALSO ADD HERE MY WIFE HAS GIVEN ME LOT OF STRENGTH BY EXPRESSING THAT UNLESS THE MATTERS ARE PURSUED WE M AY NOT BE COME CLEAN OUT OF ALL THE ACTIONS THAT THE DEPT. HA S CARRIED OUT TILL FAR. (H) CONSIDERING THE ABOVE I APPROACHED AND REQUEST ED SHRI C.SUBRAHMANYAM CHARTERED ACCOUNTANT VISAKHAPATNAM T O TAKE UP MY CASES AND GIVE THE BEST ADVICE TO RESOLVE THE ISSUES. ACCORDINGLY, A POWER OF ATTORNEY HAS BEEN GIVEN IN HIS FAVOUR. (I) I HUMBLY STATE BEFORE THE HONBLE BENCH THAT I DO NOT HAVE ANY MALAFIDE INTENTION IN NOT PURSUING THE APPEALS NOR FILING THE SAME WITHIN THE DUE DATE EXCEPT FOR THE FACTS AND C IRCUMSTANCES STATED HEREIN ABOVE. IN VIEW OF ALL THIS, I FURTHER REQUEST THE HONBLE BENCH TO CONDONE THE DELAY OF 211 DAYS AND ADMIT THE APPEAL FOR ITS DISPOSAL. PRAYER : `THAT CONSIDERING THE FACTS AND CIRCUMSTANCES AND SUBMISSIONS MADE HEREINABOVE THE HONBLE BENCH IS REQUESTED TO CONDONE THE DELAY OF 211 DAYS IN THE CAUSE OF JUSTICE AND ADMIT THE APPEAL FOR ITS DISPOSAL. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE, SHRI R. K.SINGH, ADDL.CIT, ON THE OTHER HAND STRONGLY OBJECTED TO THE CONDONATION OF DELAY AND SUBMITTED THAT THE ASSESSEE HAS BEEN NEGLIGENT AND HAS NOT APPEARED BE FORE THE ASSESSING OFFICER, HE SUBMITTED THAT BEFORE THE CIT(A)S ALSO, THE ASS ESSEE HAS NOT AVAILED OF THE OPPORTUNITIES GIVEN. THUS, HE SUBMITS THAT THE DELA Y SHOULD NOT BE CONDONED. 5. AFTER HEARING RIVAL CONTENTIONS, WE ARE OF THE C ONSIDERED VIEW THAT THE ASSESSEES HAVE DEMONSTRATED THAT THEY HAVE PREVENTE D BY REASONABLE CAUSE FOR FILING THE APPEALS WITHIN TIME. ITA NO.443/VIZAG/2009 & ORS. SRI CH RAVI VARMA & ORS. 5 5.1 THE HONBLE SUPREME COURT IN THE CASE OF IMPROVEMENT TRUST, LUDHIANA V. UJAGAR SINGH & ORS. CIVIL APPEAL NO.2395 OF 2008 AN D 2397 OF 2008, JUDGMENT DATED 9 TH JUNE, 2010, HELD AS FOLLOWS:- 1. WHILE CONSIDERING THE APPLICATION FOR CONDONATI ON OF DELAY NO STRAIGHT JACKET FORMULA IS PRESCRIBED TO COME TO THE CONCLUSION IF SUFFICIENT AND GOOD GROUNDS HAVE BEEN MADE OUT O R NOT. EACH CASE HAS TO BE WEIGHED FROM ITS FACTS AND THE CIRC UMSTANCES IN WHICH THE PARTY ACTS AND BEHAVES. FROM THE CONDUCT BEHAVIOUR AND ATTITUDE OF THE APPELLANT IT CANNOT BE SAID THA T IT HAD BEEN ABSOLUTELY CALLOUS AND NEGLIGENT IN PROSECUTING THE MATTER. 2. JUSTICE CAN BE DONE ONLY WHEN THE MATTER IS FO UGHT ON MERITS AND IN ACCORDANCE WITH LAW RATHER THAN TO DI SPOSE IT OF ON SUCH TECHNICALITIES AND THAT TOO AT THE THRESHOLD. 3. UNLESS MALAFIDES ARE WRIT LARGE ON THE CONDUCT O F THE PARTY, GENERALLY AS A NORMAL RULE, DELAY SHOULD BE CONDONE D. IN THE LEGAL ARENA, AN ATTEMPT SHOULD ALWAYS BE MADE TO ALLOW TH E MATTER TO BE CONTESTED ON MERITS RATHER THAN TO THROW IT ON S UCH TECHNICALITIES. APART FROM THE ABOVE, APPELLANT WO ULD NOT HAVE GAINED IN ANY MANNER WHATSOEVER, BY NOT FILING THE APPEAL WITHIN THE PERIOD OF LIMITATION. IT IS ALSO WORTH NOTICING THAT DELAY WAS ALSO NOT THAT HUGE, WHICH COULD NOT HAVE BEEN CONDONED, WITHOUT PUTTING THE RESPONDENTS TO HARM OR PREJUDICE. IT IS THE DUTY OF THE COURT TO SEE TO IT THAT JUSTICE SHOULD BE DONE BETW EEN THE PARTIES. 5.2 APPLYING THE PROPOSITIONS TO THE FACTS OF THE C ASE AND CONSIDERING THE PLEADING AND EVIDENCES FILED BY THE ASSESSEE, WE CO NDONE THE DELAY OF 211 DAYS IN ALL THESE APPEALS AND ADMIT THEM FOR HEARING. IN TH E RESULT, THE PETITION FOR CONDONATION OF DELAY IS HEREBY ALLOWED. 6. ON MERITS, THE LEARNED COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE FACT THAT THE ASSESSING OFFICER HAS PA SSED ORDER EX PARTE U/S 144. HE SUBMITTED THAT THE ASSESSEE COULD NOT APPEAR BEFORE THE ASSESSING OFFICER OR ITA NO.443/VIZAG/2009 & ORS. SRI CH RAVI VARMA & ORS. 6 FURNISH NECESSARY APPEALS BEFORE THE LEARNED CIT(A) DUE TO THE REASONS OF BAD HEALTH, CRIMINAL PROCEEDINGS, FINANCIAL DIFFICULTIE S, WHICH RESULTED IN AGONY IN FAMILY AND LEADING AN ISOLATED LIFE. HE PRODUCED BEFORE TH E BENCH PAPERS IN SUPPORT OF HIS PLEADING THAT HE WAS SUFFERING FROM SERIOUS HEALTH PROBLEMS AND THAT THERE WERE CERTAIN COURT CASES INITIATED AGAINST HIM DUE TO HI S FINANCIAL DIFFICULTIES. WIFE OF THE ASSESSEE APPEARED IN PERSON AND PLEADED THAT SHE BE GIVEN AN OPPORTUNITY TO PRESENT THE EVIDENCES BEFORE THE ASSESSING OFFICER, SO THAT THE CORRECT TAX LIABILITY CAN BE ARRIVED AT. 6.1 THE LEARNED COUNSEL FOR THE ASSESSEE ALSO POINT ED OUT THAT THE BEST JUDGMENT ASSESSMENT IS NOT BASED ON SOUND REASONING NOR WAS A FAIR ESTIMATE. HE ALSO POINTED OUT THAT NO SHOW CAUSE NOTICE AS CONTE MPLATED ON THE ACT WAS ISSUED TO THE ASSESSEE AND HENCE THE ASSESSMENT ITSELF IS BAD IN LAW. HE PLEADED THAT FAIR OPPORTUNITY BE GIVEN TO THE ASSESSEE TO PRESENT THE IR CASE. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY OPPOSED THE PLEADINGS OF THE ASSESSEE AND SUBMITTED THAT EVEN BEFORE THE CIT(A), DESPITE SUFFICIENT OPPORTUNITIES GRANTED, THE ASSESSEE HAD NOT GIVEN A NY EVIDENCES. ON A QUESTION FROM THE BENCH, THOUGH NOT LEAVING HIS GROUND, HE S UBMITTED THAT THE EVIDENCES SUBMITTED BY THE ASSESSEE POINTED OUT TO ILL HEALTH AND FINANCIAL DIFFICULTIES LEADING TO CRIMINAL CASES. 8. ON HEARING THE RIVAL CONTENTIONS, WE ARE OF THE CONSIDERED OPINION THAT ON THE FACTS AND CIRCUMSTANCES, ALL THESE APPEALS HAVE TO BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION, DE NOVO , IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE SUFFICIENT OPPORTUNITY OF BEING HEARD. THE ASSESSEE SHALL CO-OPERATE IN THE ASSESSMENT PROCEEDINGS AND FURNIS H ALL NECESSARY DETAILS TO ENABLE THE ASSESSING OFFICER TO ARRIVE AT THE CORRE CT INCOME. ITA NO.443/VIZAG/2009 & ORS. SRI CH RAVI VARMA & ORS. 7 9. IN THE RESULT, ALL THESE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 5 TH DAY OF MARCH, 2014. SD/- SD/- ( SAKTIJIT DEY ) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER VISAKHAPATNAM; DATED : 5 TH MARCH, 2014. DEVDAS* COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT, RAJAHMUNDRY . 4. CIT(A) RAJAHMUNDRY . 5. DR, ITAT, VISAKHAPATNAM. 6. GUARD FILE. BY ORDER, //TRUE COPY// (SENIOR PRIVATE SECRETARY) ITAT, VISAKHAPATNAM