GARWARE WALL ROPES LTD, MUMBAI V. ADDL. CIT, RG.5(1), MUMBAI

ITA 4701/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3861 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 03-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAUDHARY ARUN KUMAR SINGH
• Keywords: Unexplained expenditure; Principle of natural justice; TDS
• Section: 143(3); 14A

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL G BENCH MUMB AI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI MANOJ KUAMR AGGARWAL , ACCOUNTANT MEMBER ITA NO. 4701/MUM/2017 (ASSESSMENT YEAR 2011-12 ) ITA NO. 4702/MUM/2017 (ASSESSMENT YEAR 2012-13 ) GARWARE WALL ROPES LTD. CHOWPATTY CHAMBERS, SANDHURST BRIDGE, MUMBAI-400007. PAN: AAACG1377P VS. ADD CIT-5(1) AAYAKAR BHAVAN, MUMBAI-400020. APPELLANT RESPONDE NT APPELLANT BY : SHRI DALPAT SHAH RESPONDENT BY : SHRI CHAUDHARY ARUN KUMAR SINGH (DR) DATE OF HEARING : 30.01.2019 DATE OF PRONOUNCEMEN T : 30.01.2019 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS SET OF TWO APPEALS BY ASSESSEE ARE DIRECTED AG AINST THE ORDERS OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-10, MU MBAI, BOTH DATED 24 TH MARCH 2017 FOR ASSESSMENT YEAR 2011-12 AND 2012-13 . IN BOTH THE APPEALS THE ASSESSEE HAS RAISED CERTAIN CO MMON GROUNDS OF APPEAL. THUS, BOTH THE APPEALS WERE CLUBBED, HEARD TOGETHER AND ARE DECIDED BY COMMON ORDER. FOR APPRECIATION OF FACT T HE APPEAL FOR ASSESSMENT YEAR 2011-12 IS TREATED AS LEAD CASE. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE-COMPANY I S ENGAGED IN THE BUSINESS OF MANUFACTURING OF ROPES, TWINES, FISHNET S & GEO SYNTHETIC, ITA NO. 4701 & 4702 MUM 2017-GARWARE W ALL ROPES LTD. 2 FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2011 -12 ON 28 TH SEPTEMBER 2011 DECLARING TOTAL INCOME AT RS.18,77,9 4647/-. THE RETURN OF INCOME WAS SELECTED FOR SCRUTINY. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON 03.03.2014. THE ASSESSING O FFICER WHILE MAKING ASSESSMENT MADE VARIOUS ADDITIONS/ DISALLOWA NCE INCLUDING ADDITION OF RS. 24,79,282/- BEING DIFFERENCE IN DEP RECIATION, DISALLOWANCE UNDER SECTION 14A OF RS. 6,30,728/-, D ISALLOWANCE OF COMMISSION OF RS. 1,42,45,314/-, ADDITION ON ACCOUN T OF UNEXPLAINED EXPENDITURE OF RS. 11,30,199/- AND ADDITION ON ACCO UNT OF SHORT CREDIT OF TDS OF RS. 16,70,530/-. 3. ON APPEAL BEFORE LEARNED COMMISSIONER (APPEALS) ALL THE ADDITION/DISALLOWANCE WERE CONFIRMED BY DISMISSING THE APPEAL OF ASSESSEE EX-PARTE. THUS, FURTHER AGGRIEVED BY THE O RDER OF COMMISSIONER (APPEALS) THE ASSESSEE HAS FILED PRESENT APPEAL BEF ORE US. 4. WE HAVE HEARD THE SUBMISSION OF LEARNED AR OF THE A SSESSEE AND LD. DR FOR THE REVENUE. THE LD. AR OF THE ASSESSEE SUBMITS THAT THE FIRST APPELLATE AUTHORITY DISMISSED THE APPEAL OF ASSESSE E WITHOUT GIVING FAIR AND SUFFICIENT OPPORTUNITY TO THE ASSESSEE. THE LD. CIT(A) DISMISSED THE APPEAL BY FOLLOWING THE DECISION OF DELHI TRIBUNAL IN MULTIPLAN INDIA PVT. LTD. 38 ITD 320) AND DECISION OF HONBLE MADHY A PRADESH HIGH COURT IN ESTATE OF LATE TUKOJIRAO HOLKAR (223 ITR 4 80 (MP). THE LD. AR FURTHER SUBMITS THAT THE DECISION OF LD. CIT(A) IS NOT IN ACCORDANCE WITH ITA NO. 4701 & 4702 MUM 2017-GARWARE W ALL ROPES LTD. 3 THE MANDATE OF SECTION 250(6) OF THE ACT. THE LD. A R FURTHER SUBMITS THAT THE ASSESSEE SOUGHT THE ADJOURNMENT FOR VALID REASONS. THE APPLICATION FOR ADJOURNMENT OF ASSESSEE WAS ACCEPTE D BY LD. CIT(A) ON 23.03.2017 WHEREIN THE ASSESSEE SOUGHT ADJOURNMENT FOR SECOND WEEK OF APRIL 2017, HOWEVER, THE APPEAL OF REVENUE WAS DISM ISSED BY EX-PARTE ORDER DATED 24.03.2017. THE LD. AR SUBMITS THAT TH E ASSESSEE HAS GOOD CASE ON MERIT AND IS LIKELY TO SUCCEED IN CASE, THE GROUNDS OF APPEAL ARE DECIDED ON MERIT. 5. ON THE OTHER HAND, THE LEARNED DR FOR THE REVENUE S UPPORTED THE ORDER OF LD. CIT(A). THE LEARNED DR FURTHER SUBMITS THAT ASS ESSEE IS HABITUAL DEFAULTER IN NOT MAKING AN APPEARANCE AND WAS SEEKI NG ADJOURNMENT INSTEAD OF PROPERLY PROSECUTING AND FURNISHING NECE SSARY DETAIL AND SUBMISSION. THE ASSESSEE WAS SERVED A NUMBER OF NOT ICES AS SUMMARIZED BY LD. CIT(A) IN PARA-4 OF ITS ORDER. THE LD. DR PR AYED FOR DISMISSAL OF THE APPEAL. 6. WE HAVE CONSIDERED THE SUBMISSION OF LD. AR OF THE ASSESSEE AND LD. DR FOR REVENUE AND PERUSED THE MATERIAL AVAILABLE ON R ECORD. FIRST GROUND OF APPEAL RELATES TO DISMISSING THE APPEAL WITHOUT DIS CUSSING GROUNDS ON MERIT AND PASSING THE IMPUGNED ORDER WITHOUT FOLLOW ING THE PRINCIPLE OF NATURAL JUSTICE. WE HAVE NOTED THAT THE ASSESSEE FI LED APPEAL BEFORE THE CIT(A) ON 11 TH OF APRIL 2014. THE LD. CIT(A) DISMISSED THE APPEAL OF ASSESSEE WAS DISMISSED ON 24 TH MARCH 2017. THE LD. CIT(A) IN PARA-4 OF ITA NO. 4701 & 4702 MUM 2017-GARWARE W ALL ROPES LTD. 4 THE IMPUGNED ORDER HAS RECORDED THAT THE ASSESSEE H AS NOT APPEARED ON 18.01.2016, 17.05.2016, 14.06.2016, 28.07.2016, 09. 08.2016 DESPITE THE SERVICE OF NOTICE OF HEARING OF APPEAL BY SPEED POS T. THE ASSESSEE APPEARED ON 14.09.2016 AND ON REQUESTED ADJOURNMENT AND CASE WAS ADJOURNED FOR 18.10.2016. NONE APPEARED ON BEHALF O F ASSESSEE. THE ASSESSEE WAS AGAIN SERVED NOTICE ISSUED ON 23.12.20 16 FOR FIXING THE DATE OF HEARING ON 11.01.2017, THE NOTICE WAS SERVE D ON 31.12.2016. HOWEVER, NONE APPEARED ON BEHALF OF ASSESSEE. AGAIN NOTICE FOR HEARING FIXED ON 23.03.2017 WAS SENT VIDE NOTICE DATED 14.0 3.2017 THROUGH SPEED POST, SERVED ON ASSESSEE ON 15.03.2017. WHEN NONE APPEARED ON BEHALF OF ASSESSEE, THE LD. CIT(A) PASSED THE ORDER AGAINST THE ASSESSEE. WE HAVE SEEN THAT THE ASSESSEE HAS FILED APPLICATIO N FOR ADJOURNMENT VIDE APPLICATION DATED 23.03.2017 WHICH IS DULY ACK NOWLEDGED VIDE ACKNOWLEDGMENT/STAMP OF OFFICE OF LD. CIT(A)-10. TH E IMPUGNED ORDER WAS PASSED ON 24.03.2017. 7. WE HAVE NOTED THAT LEARNED COMMISSIONER (APPEALS) D ECIDED THE APPEAL BY PLACING RELIANCE ON THE DECISION OF MULTIPLAN IN DIA PRIVATE LTD (38 ITD 320) & DECISION OF HONBLE MADHYA PRADESH HIGH COURT IN ESTATE OF LATE TUKOJIRAO HOLKAR (SUPRA). THE LD. CIT(A) HA S NOT DECIDED THE APPEAL ON MERIT. ALL THE ADDITION/DISALLOWANCES WER E CONFIRMED WITHOUT DISCUSSING THE MATERIAL AVAILABLE ON RECORD. IN OUR VIEW, THE ORDER PASSED BY LD. CIT(A) IS NOT IN ACCORDANCE WITH THE MANDATE OF SECTION 250(6) OF ITA NO. 4701 & 4702 MUM 2017-GARWARE W ALL ROPES LTD. 5 THE ACT. KEEPING IN VIEW THE FACT AND PECULIAR CIRC UMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE ASSESSEE WAS NOT GRANTE D SUFFICIENT AND FAIR OPPORTUNITY OF HEARING DURING THE FIRST APPELLATE S TAGE. THEREFORE, WE DEEM IT APPROPRIATE TO RESTORE THE APPEAL TO THE FI LE OF LEARNED COMMISSIONER (APPEALS), WITH THE DIRECTION TO DECID E ALL THE ISSUES RAISED BY ASSESSEE ON MERIT IN ACCORDANCE WITH LAW. NEEDLESS TO SAY THAT LEARNED COMMISSIONER (APPEALS) SHALL PROVIDE SUFFIC IENT OPPORTUNITY OF HEARING BEFORE DECIDING THE APPEAL ON MERIT. THE AS SESSEE IS ALSO DIRECTED TO APPEAR AS AND WHEN THE APPEAL IS FIXED BY LEARNED COMMISSIONER (APPEALS) AND TO PROVIDE ALL NECESSARY INFORMATION, DETAILS AND EVIDENCES ON FIRST DATE OF HEARING IN R ESTORATION PROCEEDING TO SUBSTANTIATE HIS CONTENTION IN SUPPORT OF VARIOUS G ROUNDS OF APPEAL RAISED BY HIM. THE ASSESSEE IS FURTHER DIRECTED NOT TO SEEK ANY ADJOURNMENT WITHOUT ANY VALID REASONS. 8. IN THE RESULT, GROUND NO.1 OF THE APPEAL IS ALLOWED . 9. AS WE HAVE ALLOWED THE GROUND NO.1 RAISED BY THE AS SESSEE AND RESTORED ALL THE GROUNDS OF APPEAL TO THE FILE OF LD. CIT(A) TO DECIDE ALL THE ISSUES/GROUNDS OF APPEAL ON MERIT AND THEREFORE THE DISCUSSION ON OTHER GROUNDS OF APPEAL HAVE BECOME ACADEMIC. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSE. ITA NO. 4702/MUM/2017 APPEAL FOR AY 2012-13 ITA NO. 4701 & 4702 MUM 2017-GARWARE W ALL ROPES LTD. 6 11. WE HAVE NOTED THAT THE FACTS FOR THE YEAR UNDER CO NSIDERATION ARE SIMILAR AS OF EARLIER YEAR; THE ASSESSEE HAS RAISED CERTAIN COMMON GROUNDS OF APPEALS. THE ASSESSEE HAS RAISED GROUND NO.1 THAT T HE LEARNED COMMISSIONER (APPEALS) NOT GRANTED SUFFICIENT OPPOR TUNITY OF HEARING WHILE DECIDING THE APPEAL, WHICH IS IDENTICAL GROUN D OF APPEAL RAISED BY ASSESSEE IN APPEAL FOR AY 2011-12, WHICH WE HAVE AL READY RESTORED TO THE FILE OF LD. CIT(A), THEREFORE FOLLOWING THE PRI NCIPLE OF CONSISTENCY, THE APPEAL FOR THE YEAR UNDER CONSIDERATION IS ALSO RESTORED TO THE FILE OF LD. CIT(A) WITH SIMILAR DIRECTION. 12. IN THE RESULT, THIS APPEAL OF ASSESSEE IS ALSO ALLO WED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 30 TH JANUARY 2019. SD/ SD/- MANOJ KUAMR AGGARWAL PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 30.01.2019 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR G BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI