K.S. Zaveri Commodities & Derivatives Limited, Ahmedabad V. The Income Tax Officer, Ward-2(1)(2), Ahmedabad

ITA 48/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5118 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 05-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MAURYA
• Assessee Lawyers: M K PATEL
• Keywords: Principle of natural justice
• Section: 115JB; 148

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO. 48/AHD/2017 ( ASSESSMENT YEAR : 2012-13) K. S. ZAVERI COMMODITIES & DERIVATIVES PRIVATE LIMITED, 4-5, DEEP CHANDAN APARTMENTS, OPP. GOPAL TOWERS, MANINAGAR, AHMEDABAD-380008 / VS. THE INCOME-TAX OFFICER, WARD -2(1)(2), 1 ST FLOOR, NAVJIVAN TRUST BUILDING, ASHRAM ROAD, AHMEDABAD - 380009 ./ ./ PAN/GIR NO. : AACCK2203Q ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI M. K. PATEL, A.R. / RESPONDENT BY : SHRI R. P. MAURYA, SR. D.R. DATE OF HEARING 16/07/2018 !'# / DATE OF PRONOUNCEMENT 02/08/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-2, AHMEDAB AD (CIT(A) IN SHORT), DATED 16.08.2016 ARISING IN THE PENALTY ORD ER DATED 16.09.2015 ITA NO. 48/AHD/17 [K. S. ZAVERI COMMODITIES & DERIV ATIVES PVT. LTD. VS. ITO] A.Y. 2012-13 - 2 - PASSED BY THE ASSESSING OFFICER (AO) U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961; (THE ACT) CONCERNING ASSESSMENT YEAR 201 2-13. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE RE AD AS UNDER:- 1. THE LEARNED CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN PASSING AN EX-PARTE ORDER WITHOUT GRANTING PROPER A ND ADEQUATE OPPORTUNITY OF HEARING CONSIDERING THE FAC T THAT ON THE DATE OF LAST HEARING WHEN THE A.R. OF THE APPEL LANT ATTENDED, THE LD. CIT(A) HAD GONE OUT FOR SOME MEET ING AS INFORMED BY THE STAFF AND HENCE THE APPELLANT BONAF IDELY PRESUMED THAT A NEW NOTICE WOULD BE ISSUED OR ANOTH ER DATE WILL BE FIXED. THE APPELLANT HUMBLY STATES THAT THE APPEAL BE SET-ASIDE TO THE FILE OF THE LD. CIT(A) FOR DECISIO N AFRESH IN THE INTEREST OF NATURAL JUSTICE AND EQUITY. 2. THE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN L AW AND ON FACTS IN CONFIRMING THE PENALTY OF RS.1,48,727/- LEVIED B Y THE A.O. U/S.271(1)(C) OF THE ACT ON THE INCOME OF RS.4,70,9 70/- DECLARED BY THE APPELLANT COMPANY IN THE RETURN OF INCOME FILED U/S. 139(4) OF THE ACT AS WELL AS IN RESPONSE TO NOTICE ISSUED U/S 148 OF THE ACT. 3. THE LD. CIT(A) FURTHER ERRED IN LAW AND ON FA CTS IN CONFIRMING THE PENALTY LEVIED BY THE AO ON THE RETU RNED INCOME WITHOUT APPRECIATING THE FACT THAT WHEN COMP UTATION OF INCOME IS MADE UNDER SECTION 115JB AND TAX IS, T HUS, PAID ON THE INCOME ASSESSED UNDER SECTION 115JB, CONCEAL MENT OF INCOME UNDER NORMAL PROVISIONS HAS NO ROLE TO PLAY AND IS TOTALLY IRRELEVANT AS HELD BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. NALWA SONS INVESTMENTS LTD. [ 2010] 327 ITR 543 (DELHI) APART FROM VARIOUS OTHER COURTS OF LAW. IN VIEW OF THE SAID SETTLED LEGAL POSITION, NO PENA LTY CAN BE IMPOSED UNDER SECTION 271(1)(C) AND ACCORDINGLY THE PENALTY OF RS.1,48,727/- LEVIED BY THE AO OUGHT TO HAVE BEE N DELETED ON THIS GROUND ITSELF. 4. THE APPELLANT SUBMITS THAT THE AO AND THE LD . CIT(A) BOTH ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE G ENUINE AND BONAFIDE REASONS GIVEN BY THE APPELLANT FOR NON FILING OF RETURN OF INCOME WITHIN THE PRESCRIBED TIME U/S. 13 9(1) OF THE ACT AND DELAY THEREOF. ACCORDINGLY, THE PENALTY LEVIED BY THE AO ON THE RETURNED INCOME OF RS.4,70,970/- DECL ARED BY THE APPELLANT COMPANY IN ITS RETURN OF INCOME REQUI RES TO BE ITA NO. 48/AHD/17 [K. S. ZAVERI COMMODITIES & DERIV ATIVES PVT. LTD. VS. ITO] A.Y. 2012-13 - 3 - DELETED/CANCELLED MORE PARTICULARLY WHEN THE RETURN ED INCOME HAS BEEN DULY ACCEPTED BY THE AO. 5. THE LD. CIT(A) HAS FURTHER FAILED TO APPRECIAT E AND ADJUDICATE THE GROUND OF APPEAL DISPUTING THE LEGAL ITY OF THE PENALTY ORDER IN DISPUTE ON THE GROUND THAT THE SAI D ORDER DATED 16/09/2015 HAVING BEEN PASSED PRIOR TO THE AP PROVAL OBTAINED FROM JCIT, WHICH WAS ON 23/09/2015 AS STAT ED BY THE AO HIMSELF IN THE PENALTY ORDER, THE IMPUGNED P ENALTY ORDER DESERVED TO BE QUASHED AS INVALID AND BAD IN LAW. 3. WITH THE ASSISTANCE OF THE LD.AR FOR THE ASSESSE E, WE FIND THAT THE CIT(A) HAS DISMISSED THE APPEAL BEFORE IT FOR W ANT OF PROSECUTION AND NON-ATTENDANCE. IT WAS ALSO FOUND BY THE CIT(A ) THAT THE APPEAL HAS BEEN BELATEDLY FILED BY 96 DAYS FOR WHICH SUFF ICIENT CAUSE WAS NOT SHOWN. THE CIT(A) ACCORDINGLY REFUSED TO ADMIT THE APPEAL AND CONSEQUENTLY DISMISSED THE APPEAL OF THE ASSESSEE IN LIMINE . IN THIS REGARD, WE BEAR IN MIND THE PRINCIPLES LAID DOWN IN LOCUS CLASSICUS CASE OF COLLECTOR OF LAND ACQUISITION VS. MST. KATI JI & ORS. 167 ITR 471 (SC). NO SERIOUS PREJUDICE HAS CAUSED TO REVEN UE BY THE SMALL DELAY. THUS, THE DELAY DESERVES TO BE CONDONED. W E DIRECT THE CIT(A) TO DO SO. SIMILARLY, WE OBSERVE THAT THE AP PEAL OF THE ASSESSEE HAS NOT BEEN DISPOSED OF ON MERITS AND REJECTED AT THRESHOLD BY REFUSING TO CONDONE THE ALLEGED DELAY IN FILING THE APPEAL BEFORE THE CIT(A). 4. CONSIDERING THE TOTALITY OF THE CIRCUMSTANCES, W E FEEL THAT IT WOULD BE JUST AND REASONABLE TO GRANT ONE MORE OPPO RTUNITY TO THE ASSESSEE TO SEEK REDRESSAL BEFORE THE CIT(A) ON MER ITS OF THE CASE. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A) AN D RESTORE THE SAME TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION. IT SHALL BE OPEN TO THE CIT(A) TO EXAMINE THE CONTENTIONS OF THE ASSESS EE ON ALL FACETS OF THE APPEAL WITHOUT ANY FETTERS AND TAKE A VIEW IN A CCORDANCE WITH LAW. ITA NO. 48/AHD/17 [K. S. ZAVERI COMMODITIES & DERIV ATIVES PVT. LTD. VS. ITO] A.Y. 2012-13 - 4 - WITH THESE DIRECTIONS, THE MATTER IS REMANDED BACK TO THE FILE OF THE CIT(A). 5. HOWEVER, WHILE REMANDING THE MATTER BACK, WE ARE AT DISTRESS TO NOTE THAT THE ASSESSEE HAS NOT CARED TO ATTEND BEFO RE THE AO DILIGENTLY IN THE PENALTY PROCEEDINGS. IT IS ALSO NOTICED THA T THE ASSESSEE COMPANY DID NOT BOTHER TO FILE RETURN OF INCOME IN RESPONSE TO NOTICE UNDER S.148 OF THE ACT WITHIN THE TIMELINE STIPULAT ED. IT IS FURTHER NOTICED THAT AS MANY AS EIGHT OPPORTUNITIES WERE GI VEN BY THE FIRST APPELLATE AUTHORITY FOR COMPLIANCE OF THE NOTICES O F HEARING. HOWEVER, THE ASSESSEE HAS DODGED ALL SUCH NOTICES O N ONE PRETEXT OR THE OTHER. THE CIT(A) WAS THUS FORCED TO PASS THE ORDER EX PARTE OWING TO DISPLAY OF DISDAIN BY THE ASSESSEE. NEEDL ESS TO SAY, LAPSE OF TIME IN COMPLETING THE ASSESSMENT AND PROCEEDINGS B EFORE THE APPELLATE AUTHORITY HAS, AT TIMES, A SERIOUS IMPACT ON PRODUCTION OR COLLECTION OF EVIDENCE WHICH MAY BE CONSIDERED EXPE DIENT TO ADJUDICATE THE ISSUES IN A PROPER MANNER. SUCH NON -COMPLIANCES FRUSTRATE PROPER INVESTIGATION BY THE DEPARTMENT ON VARIOUS ASPECTS OF THE TRANSACTIONS INVOLVED AT A BELATED STAGE. THE INORDINATE DELAY CAUSED DUE TO INSIPID AND DEFIANT ATTITUDE OF THE A SSESSEE MAY SOMETIMES RESULT IN TOTAL LOSS OF EVIDENCE. THUS, WHILE IN THE LARGER INTEREST OF JUSTICE, ONE MORE OPPORTUNITY IS BEING GRANTED TO THE ASSESSEE TO REPRESENT ITS CASE BEFORE THE CIT(A), W E ARE OF THE VIEW THAT SUCH DIRECTIONS WOULD BE ILLUSORY WITHOUT FIXI NG COSTS ON THE RECALCITRANT ASSESSEE FOR SUCH NON-CHALANT AND NEGL IGENT ATTITUDE TOWARDS COMPLIANCE OF STATUTORY NOTICES. THE ADJOU RNMENT COST IS THUS QUANTIFIED AT RS.5000/- FOR INACTION ON THE PART OF THE ASSESSEE AND FOR CLOGGING THE LIMITED MACHINERY AVAILABLE WITH THE S TATE FOR ADJUDICATION OF DISPUTES. THE ASSESSEE IS THUS DIR ECTED TO PAY COSTS NOTED ABOVE AND DEPOSIT THE SAME TO THE PRIME MINI STER RELIEF FUND ITA NO. 48/AHD/17 [K. S. ZAVERI COMMODITIES & DERIV ATIVES PVT. LTD. VS. ITO] A.Y. 2012-13 - 5 - WITH A COPY THEREOF TO BE FURNISHED TO THE REGISTRY OF THE TRIBUNAL WITHIN ONE MONTH FROM SERVICE OF THIS ORDER. THE C IT(A) ON BEING SATISFIED TOWARDS PAYMENT OF COSTS MAY GIVE EFFECT TO THE DIRECTIONS NOTED HEREINABOVE FOR RE-COMMENCEMENT OF APPELLATE PROCEEDINGS RESTORED TO ITS FILE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (RAJPAL YADAV) (PRADI P KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 02/08/2018 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 02/08/ 2018