THE THAVAR ASDHIR & CO., MUMBAI V. M/S. ITO WD 23(1)(1), MUMBAI

ITA 4498/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7863 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 11-01-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 02-07-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HEMANT LAL
• Assessee Lawyers: MADAN DEDHIA
• Keywords: Depreciation; Opportunity of being heard; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E : MUMBAI BEFORE SHRI D.K. AGARWAL, (JM) AND SHRI RAJENDRA SINGH ,(AM) ITA NO.4498/MUM/2008 ASSESSMENT YEAR : 2004-05 M/S. THAVAR ASDHIR & CO. NOOR MOHMAD CHAWL, OFF LBS OPP. VIKHROLI FIRE BRIGADE VIKROLI (W) MUMBAI-400 079. ..( APPELLANT ) P.A. NO. (AAAFT 4090 K) VS. INCOME TAX OFFICER WARD-23(1)(1) MUMBAI. ..( RESPONDENT ) APPELLANT BY : SHRI MADAN DEDHIA RESPONDENT BY : SHR I HEMANT LAL O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 2 ND APRIL, 2008, PASSED BY THE LD. CIT(A) FOR THE ASSESSMENT YEAR 2004-05. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE F IRM IS ENGAGED IN THE BUSINESS AS WHOLESALE DEALER IN FOODGRAIN S. THE RETURN WAS FILED DECLARING TOTAL INCOME AT RS.8,547/-. ACCORDI NG TO THE ITA NO.4498/M/08 A.Y: 04-05 2 ASSESSING OFFICER THERE WAS NO COMPLIANCE BY THE ASSESSEE DESPI TE THE FACT THAT SUFFICIENT OPPORTUNITY WAS PROVIDED TO THE A SSESSEE INASMUCH AS FOR NON-COMPLIANCE A PENALTY OF RS.10,000/- U/S.271(1 )(B) OF THE I.T. ACT, 1961 (THE ACT)WAS ALSO IMPOSED, THEREFORE, HE COMPLETED EXPARTE ASSESSMENT U/S.144 OF THE ACT AT AN INCOME OF RS. 9,24,420/- VIDE ORDER DATED 30.11.2006 . ON APPEAL, THE LD. CIT(A) WHILE UPHOLDING THE ACTION OF THE AO IN COMPLETING THE EXPA RTE ASSESSMENT , CONFIRMED THE ADDITIONS MADE BY THE AO AND DELETED TH E DISALLOWANCE OUT OF CAR EXPENSES RS.10541/-, CAR DEPRECIATION-RS.5,017 /- AND OUT OF SUNDRY AND STAFF WELFARE EXPENSES RS.11,523/- AND ACCOR DINGLY PARTLY ALLOWED THE APPEAL. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS THE V ALIDITY OF THE EXPARTE ORDER PASSED BY THE AO U/S.144, SUSTENANCE OF A DDITION OF NET PROFIT RS.1.00 LACS, UNSECURED LOANS RS.2,64,000/-, CAPITAL INTRODUCED BY THE PARTNERS RS.4,75,000/- AND ESTIMATED RENT OF GO DOWN RS.2.00 LACS. 4. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE LD. CIT(A) HAS UPHELD THE COMPLETION OF EXPA RTE ASSESSMENT ORDER ON THE GROUND THAT THE AO FOR NON-COMPLIANCE HA D EVEN IMPOSED ITA NO.4498/M/08 A.Y: 04-05 3 A PENALTY OF RS.10,000/- U/S.271(1)(B). HOWEVER, THE SAID PENALTY HAS BEEN DELETED BY THE LD. CIT(A) VIDE ORDER DT.25 TH SEPT. 2008 ON THE GROUND OF REASONABLE CAUSE AS HIS MAIN PARTNER MR. THAVA R ASDHIR WAS SERIOUSLY ILL AND HE EXPIRED IN JANUARY 2007 AND THE OTHER TWO PARTNERS WHO HAPPENED TO BE HIS SONS WERE VERY BUSY LOOKING AFTE R THEIR FATHER. HE THEREFORE SUBMITS THAT IN THE INTEREST OF JUSTICE, TH E ASSESSEE MAY BE ALLOWED ONE MORE OPPORTUNITY TO REPRESENT HIS CASE B EFORE THE AO AND HENCE THE ORDER PASSED BY THE LD. CIT(A) MAY BE SE T ASIDE TO THE FILE OF THE AO. 5. ON THE OTHER HAND THE LD. DR. WHILE RELYING ON T HE ORDER OF THE LD. CIT(A) SUBMITS THAT HE HAS NO OBJECTION IF THE MATT ER IS RESTORED BACK TO THE FILE OF THE AO. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIN D THAT THERE IS NO DISPUTE THAT THE AO HAS ALLOWED VARIOUS OPPORTUNITIES T O THE ASSESSEE TO ATTEND DATE OF HEARING AND TO FURNISH VARIOUS DET AILS. SINCE THERE WAS NO COMPLIANCE THE CASE WAS FINALLY FIXED FOR 27.11.20 06. AGAIN THERE WAS NO COMPLIANCE. THE AO WHILE OBSERVING THAT EV EN AFTER IMPOSING PENALTY OF RS.10,000/- U/S. 271(1)(B) FOR NON -COMPLIANCE, THE ASSESSEE COULD NOT CARE TO CO-OPERATE WITH THE DEPARTM ENT AND IN ITA NO.4498/M/08 A.Y: 04-05 4 THE ABSENCE OF ANY OTHER ALTERNATIVE, COMPLETED EXPART E ASSESSMENT U/S.144 OF THE ACT AT AN INCOME OF RS.9,24,420/-. ON A PPEAL, THE LD. CIT(A) UPHELD THE ACTION OF THE AO IN PASSING EXPARTE ASSESSMENT ORDER. WE FURTHER FIND THAT ON AN APPEAL FILED AG AINST THE IMPOSITION OF PENALTY U/S.271(1)(B) IT WAS OBSERVED AND HELD BY T HE LD. CIT(A) VIDE ORDER DATED 25.9.08 AS UNDER : 3. THE APPELLANT SUBMITTED THAT THERE WAS NO INTENTION OF NOT ATTENDING DURING THE APPOINTED DAT ES. THE MAIN PARTNER MR. THAVAR ASDHIR WAS SERIOUSLY IL L AND HE HAD EXPIRED IN JANUARY, 2007. THE OTHER TWO PAR TNERS WHO HAPPENED TO BE HIS SONS WERE BUSY LOOKING AFTER THEIR FATHER. THEY ALSO HAD TO CALL FOR THE COMPUTE R EXPERTS TO VERIFY THE COMPUTER SYSTEM AFFECTED BY T HE VIRUS. IN THE CIRCUMSTANCES NON-ATTENDANCE WAS NOT WILLFUL AND HENCE, THE PENALTY IMPOSED OUGHT TO BE DELETED. 4. THE APPELLANTS SUBMISSION HAVE BEEN CONSIDERED. IN THE FACTS AND CIRCUMSTANCES, THE PE NALTY LEVIED IS DELETED. FROM THE READING OF THE ABOVE AND IN THE ABSENCE OF A NY CONTRARY MATERIAL PLACED ON RECORD BY THE REVENUE WE HOLD TH AT THERE WAS REASONABLE CAUSE WITH THE ASSESSEE FOR NOT ATTENDING THE L AST DATE OF HEARING BEFORE THE AO. THEREFORE, IN THE INTEREST O F JUSTICE WE ARE OF THE VIEW THAT THE MATTER SHOULD GO BACK TO THE FILE OF THE AO AND ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY THE REVENUE AUTHORITIES ON THIS ACCOUNT AND SEND BACK THE MATTER TO THE FILE OF THE AO WHO SHALL DECIDE THE SAME AFRESH AND ACCORDING TO LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GROUNDS ITA NO.4498/M/08 A.Y: 04-05 5 TAKEN BY THE ASSESSEE ARE THEREFORE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 01.02.2010. SD/- SD/- (RAJENDRA SINGH) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED:01.02.2010. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR E BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI. ITA NO.4498/M/08 A.Y: 04-05 6 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 11.1.10 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 11.1.10 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 01.02.10 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 03.02.10 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER