Rajammal L/R to Late Shri T.Elangovan, Karur V. ACIT, Trichy

ITA 497/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4845 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 26-04-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 27-02-2017
• Court: TRIBUNAL
• Assessee Lawyers: N QUADIR HOSEYN
• Keywords: Unexplained investment
• Section: 143(3); 133A; 132; 144

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI , . , # $ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NOS. 495, 496, 497, 498, 499 & 500/MDS/20 17 / ASSESSMENT YEAR : 2006-07 TO 2011-12 SMT. RAJAM MA L, L/R TO LATE SHRI T. ELANGOVAN, NO. 9, 454-5, PARI NAGAR, KARUR. [PAN: AAAPE 3599E] VS . THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -II, TRICHY. ( / APPELLANT) ( /RESPONDENT) & ' / APPELLANT BY : SHRI N. QUADIR HOSEYN, ADVOCATE *+& ' / RESPONDENT BY : SHRI GURUBASHYAM, JCIT ' /DATE OF HEARING : 26.04.2017 ' /DATE OF PRONOUNCEMENT : 27.04.2017 /O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER: THESE ARE THE APPEALS FILED BY THE ASSESSEE AS LEG AL HEIR OF LATE SHRI T. ELANGOVAN AGAINST THE COMMON ORDER OF CIT(A) IN ITA NO. 714, 715, 716, 717, 718/14-15 DATED 29.12.2016 PASSED U/S. 153A(A) R.W.S. 143(3) OF THE INCOME TAX ACT, 1961. SINCE, THE ISSUES ARE COMMON IN ALL THESE APPEALS, THE APPEALS ARE CLUBBED AND DISPOSED OFF BY COMMON ORDE R. FOR THE SAKE OF :-2-: I.T.A. NOS. 495 TO 500/MDS/2017 CONVENIENCE, WE TAKE UP THE ITA NO. 495/MDS/2017 AN D FACTS NARRATED IN THE APPEAL. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 2) THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DISMISSING THE APPEAL FOR NON-PROSECUTION WITHOUT GIVING ADEQU ATE AND EFFECTIVE OPPORTUNITY. 3) THE COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT SOME NOTICES WERE SERVED ON THE VER Y DATES OF HEARING, THAT ADJOURNMENTS WERE SOUGHT DUE TO CIRCUMSTANCES BEYOND THE CONTROL OF THE ASSESSEE AND SPECIALLY ON SUCH GROUN DS AS THE TROUBLES FACED BY THE LEGAL HEIR FROM THE CREDITORS, AFTER T HE SUICIDE OF THE HUSBAND, NON-AVAILABILITY OF PART-TIME ACCOUNTANT, THE AUDITOR'S INABILITY TO ATTEND THE HEARING, ETC. AND HENCE THERE WAS NO JURISDICTION FOR DISMISSING THE APPEAL FOR NON-PROSECUTION. 4) THE COMMISSIONER OF INCOME TAX (APPEALS) FURTHE R FAILED TO APPRECIATE THAT HIS DISPOSAL OF APPEAL IN 6 LINES O N MERITS INVOLVING 6 ASSESSMENT YEARS INVOLVING AROUND RS.15 CRORES WAS WITHOUT ADEQUATE AND EFFECTIVE OPPORTUNITY AND THE APPELLANT CRAVES LEAVE TO TREAT GROUNDS OF APPEAL FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AS PART OF GROUNDS OF THIS APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E WAS IN THE BUSINESS OF LORRY TRANSPORT AND PARTNER IN SEVERAL FINANCIAL CO MPANIES AND DUE TO SEARCH OPERATIONS U/S. 132 OF THE ACT AND SURVEY U/S. 133A OF THE ACT IN THE GROUP CONCERNS THE REVENUE HAS SEARCH THE PREMISES OF ASS ESSEE'S BROTHERS. :-3-: I.T.A. NOS. 495 TO 500/MDS/2017 WHEREAS, THE ASSESSEE DIED ON 01.03.2011 AND SMT. T . RAJAMMAL, WIFE OF ASSESSEE BECAME LEGAL HEIR. THE ASSESSING OFFICER ISSUED NOTICE U/S. 153A(A) OF THE ACT ON THE LEGAL HEIR TO FILE THE RETURN OF INCOME AND ALSO ISSUED NOTICE U/S. 144 OF THE ACT TO MAKE THE BEST JUDGEMENT ASSE SSMENT BASED ON THE AVAILABLE RECORDS AND DOCUMENTS. IN RESPONSE TO TH E NOTICE, LEGAL HEIR FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-0 7 ON 25.03.2013 DECLARING TOTAL INCOME OF RS 4,65,610/-. SUBSEQUEN TLY, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) OF THE ACT WAS ISSUED. IN COMPLIANCE TO NOTICE, LD. AR APPEARED FROM TIME TO TIME AND SUBMI TTED THE INFORMATION. THE ASSESSING OFFICER AFTER EXAMINING THE SALE DOCU MENTS AND EXPLANATIONS OFFERED BY THE LD. AR FINALISED THE ASSESSMENT. TH E LD. AO FOUND THAT THE ASSESSEE HAS PURCHASED A HOUSE PROPERTY AT COIMBATO RE IN THE YEAR 2008 FOR RS. 28 LAKHS AS PER THE STATEMENT RECORDED ON 11.11 .2010 AND NO EXPLANATIONS/EVIDENCE WERE FILED TO SUPPORT SOURCE OF INVESTMENTS AND THE LD. AO TREATED THE AMOUNT AS UNEXPLAINED INVESTMENT AND ALSO ESTIMATED THE HOUSEHOLD EXPENSES OF RS. 1 LAKH. THE LD. AR EXPLA INED THE PURPOSE OF UTILISATION OF LOAN AND FURTHER THE LD. AR COULD NO T PROVIDE FUND FLOW STATEMENT AND NET WORTH STATEMENT TO RECONCILE THE ASSETS AND LIABILITIES. THE ASSESSEE HAS DECLARED INCOME IN THE RETURN RS. 4,65 ,610/- ONLY AS AGAINST THE INVESTMENTS IN HOUSE PROPERTY AND HOUSEHOLD PERSONA L EXPENDITURE AGGREGATED TO RS. 29 LAKHS. WHEREAS, THE LD. AO HA S CONSIDERED THE DIFFERENCE AS UNEXPLAINED INVESTMENT IN THE IMMOVAB LE PROPERTY AND MADE :-4-: I.T.A. NOS. 495 TO 500/MDS/2017 ADDITION TO THE RETURNED INCOME AND ASSESSED THE TO TAL INCOME OF RS. 29 LAKHS AND PASSED ORDER U/S. 153A(A) OF THE ACT R.W. S. 143(3) OF THE INCOME TAX ACT, 1961. 4. AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED A N APPEAL WITH THE CIT(A). IN THE APPELLATE PROCEEDINGS, THE LD. CIT( A) DEALT ON THE ORDER OF ASSESSMENT YEARS 2006-07 TO 2011-12. THE LD. CIT(A ) OBSERVED THAT THE HEARING NOTICES WERE SENT ON VARIOUS DATES BUT NONE APPEARED EXCEPT ON 16.02.2016, WHERE THE LD. AR APPEARED AND SOUGHT AD JOURNMENT FOR SUBMITTING THE INFORMATION. SUBSEQUENTLY, THE LD. CIT(A) FOUND THAT THE ASSESSEE IS NOT INTERESTED IN PROSECUTING THE APPEA L AND THE MERE FILING OF APPEAL CANNOT BE CONSIDERED AS THE EFFECTIVE PURSUA NCE OF THE APPEAL. THE LD. CIT(A) FOUND THAT THE ASSESSING OFFICER PROVIDE D THE DETAILED REASONING IN ASSESSMENT PROCEEDINGS AND HAS ALL THE EVIDENCES AN D SUBMISSIONS OF THE ASSESSEE. FURTHER, THE ASSESSEE HAS NOT MADE ANY F RESH CLAIM IN APPELLATE PROCEEDINGS OTHER THAN IN ASSESSMENT AND OBSERVED A T PAGE 3 PARA 3 AS UNDER: FROM THE ABOVE, IT IS CLEAR THAT IN SPITE OF REPOS TING THE HEARINH ON VARIOUS DATES, NEITHER THE APPELLANT NOR THE AUT HORISED REPRESENTATIVE ATTENDED. THE ASSESSEE HAD BEEN REC ALCITRANT IN APPEARING BEFORE THE AO ALSO. ASSESSEE HAD TO BE T HREATENED WITH COMPLETION OF PROCEEDINGS UNDER SECTION 144 OF THE IT ACT. THIS IS A CLEAR CASE OF CALLOUS AND INDIFFERENT ATTITUDE OF T HE APPELLANT TOWARDS APPELLATE PROCEEDINGS. HENCE, IT IS OBVIOUS THAT T HE APPELLANT IS NOT :-5-: I.T.A. NOS. 495 TO 500/MDS/2017 INTERESTED IN PURSUING THE PRESENT APPEAL. IN SUCH A SITUATION, THE APPEAL IS LIABLE TO BE DISMISSED IN TERMS OF VERDIC TS OF THE HONBLE APEX COURT AND VARIOUS OTHER COURTS. THE HONBLE APEX C OURT, IN THE CASE OF CIT VS. B.N. BHATTACHARJEE AND ANOTHER (118 ITR 461 ) HELD THAT AN APPEAL MEANS AN EFFECTIVE APPEAL. IT HELD THAT PUR POSEFULLY INTERPRETED, PREFERRING AN APPEAL MEANS MORE THAN FORMALLY FILIN G IT BUT EFFECTIVELY PURSUING IT. IF A PARTY RETREATS HONBLE MP HIGH C OURT IN ESTATE OF LATE TUKOJIRAO HOLKAR V. CIT, 223 ITR 480 (MP) HAS HELD THAT IF A PARTY, AT WHOSE INSTANCE THE REFERENCE IS MADE, FAILS TO APPE AR AT THE HEARING, OR FAILS IN TAKING STEPS FOR PREPARATION OF PAPER BOOK S SO AS TO ENABLE HEARING OF THE REFERENCE, THE COURT IS NOT BOUND TO ANSWER THE REFERENCE. SIMILAR VIEW HAS ALSO BEEN TAKEN BY THE HONBLE ITAT IN THE CASE OF CIT VS MULTIPLAN (INDIA) PVT. LTD., 38 ITD 320 (DEL). UNDER SIMILAR CIRCUMSTANCES, FOLLOWING THE RATIO OF MULTI PLAN (INDIA) LTD (SUPRA), THE JURISDICTIONAL CHENNAI TRIBUNAL HAS AL SO DISMISSED APPEAL FOR NON-PROSECUTION IN THE CASE OF M/S. HELIOS AND MATHESON INFORMATION TECHNOLOGY LTD VS. ITO IN ITA NO. 134/M DS/2011 DATED 05.07.2011 FOR ASSESSMENT YEAR 2006-07. THERE IS N O REASON WHY THE RATIO OF THE ABOVE DECISIONS WILL NOT BE APPLICABLE TO THE APPELLANT. IN VIEW OF THE ABOVE, THE APPEAL IS HELD AS DISMISSED. FINALLY THE LD. CIT(A) DISMISSED THE APPEAL ON TECH NICAL GROUNDS FOR NON- APPEARANCE AND NON-PROSECUTION VIDE ORDER DATED 29. 12.2016 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE HAS FILED AN APPEAL WITH THE TRIBUNAL. BEFORE US, THE LD. AR SUBMITTED THAT THE LD. CIT(A) HAS DISMISSED THE APPEAL FOR NON-PROSECUTION WITHOUT PR OVIDING AN OPPORTUNITY. :-6-: I.T.A. NOS. 495 TO 500/MDS/2017 THE ASSESSEE SOUGHT ADJOURNMENT ON DATE OF HEARING BECAUSE OF CIRCUMSTANCES BEYOND THE CONTROL OF THE ASSESSEE AN D THE TROUBLE FACED BY LEGAL HEIR DUE TO NON-AVAILABILITY OF PROPER ADVICE , THEREFORE COULD NOT PROSECUTE THE APPEAL. THE LD. CIT(A) DISMISSED THE APPEAL ON TECHNICAL GROUNDS WITHOUT CONSIDERING THE MERITS AND PRAYED F OR AN OPPORTUNITY OF HEARING BEFORE APPELLATE AUTHORITY AND SUPPORTED TH E SUBMISSIONS WITH JUDICIAL DECISIONS. CONTRA, THE LD. DR RELIED ON THE ORDERS OF THE CIT(A) AND EXPLAINED THAT THE ADEQUATE OPPORTUNITY WAS PROVIDE D ASSESSEE HAS SOUGHT ADJOURNMENTS. THEREFORE, THE ASSESSEE APPEAL BE DI SMISSED. 6. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATE RIAL ON RECORD AND JUDICIAL DECISIONS. THE LD. AR CONTENTION THAT THE LD. CIT(A) HAS DISMISSED THE APPEAL FOR NON-PROSECUTION WITHOUT GIVING PROPE R OPPORTUNITY AND THE ASSESSEE'S LEGAL HEIR HAS CERTAIN DIFFICULTIES DUE TO NON-AVAILABILITY OF VITAL INFORMATION AFTER THE DEATH OF THE ASSESSEE. THE A DJOURNMENT WERE SOUGHT FOR COLLECTING AND SUBMITTING THE INFORMATION AND D UE TO CIRCUMSTANCES BEYOND THE CONTROL OF THE LEGAL HEIR. THE LD. AR U NDERTAKES TO REPRESENT THE CASE BEFORE THE CIT(A). WE ARE OF THE OPINION THAT CIT(A) CANNOT DECIDE THE EX-PARTE APPEAL FOR NON-PROSECUTION BUT HAS TO ADJU DICATE ON MERITS. WE SUPPORT OUR VIEW WITH THE DECISION OF JURISDICTIONA L HIGH COURT, WHERE IT WAS HELD THAT THE CIT(A) CANNOT REJECT APPEAL IN LIMINI WITHOUT GOING INTO THE :-7-: I.T.A. NOS. 495 TO 500/MDS/2017 MERITS IN THE CASE OF VENTURES METAL PRODUCTS PRIVA TE LIMITED VS DCIT 362 ITR 122 (MDS) HELD AS UNDER: 'ONCE THE OFFICER ACCEPTS THE CAUSE SHOWN BY THE AS SESSEE FOR THE PURPOSE OF ADJOURNMENT, AND ADJOURNS THE MATTER FOR A SUBSEQUENT DATE, THE COMMISSIONER CANNOT FALL BACK ON THE REAS ONS ASSIGNED, OR ON ACCOUNT OF THE FACT THAT THE CASE WAS ADJOURNED SEV EN TIMES, TO REJECT THE APPEAL IN LIMINI, WITHOUT GOING INTO THE MERITS .' WE FIND THE LD. CIT(A) HAS THE POWER TO ENHANCEMENT OF INCOME AND THE POWERS ARE CO-TERMINUS WITH THE ASSESSING OFFICER A ND WE RELY ON THE DECISION OF IN HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF C IT VS MR. SURESH KUMAR I/V. VIPUL BAJPAYEE IN ITA NO. 2336 OF 2013 HELD A T PARA 8 AS UNDER: 'FROM THE AFORESAID PROVISIONS, IT IS VERY CLEAR ON CE AN APPEAL IS PREFERRED BEFORE THE CIT(A), THEN IN DISPOSING OF T HE APPEAL, HE IS OBLIGED TO MAKE SUCH FURTHER INQUIRY THAT HE THINKS FIT OR DIRECT THE ASSESSING OFFICER TO MAKE FURTHER INQUIRY AND REPOR T THE RESULT OF THE SAME TO HIM AS FOUND IN SECTION 250(4) OF THE ACT. FURTHER, SECTION 250(6) OF THE ACT OBLIGES THE CIT(A) TO DISPOSE OF AN APPEAL IN WRITING AFTER STATING THE POINTS FOR DETERMINATION AND THEN RENDER A DECISION ON EACH OF THE POINTS WHICH ARISE FOR CONSIDERATION WI TH REASONS IN SUPPORT. SECTION 251(1)(A) AND (B) OF THE ACT PROVIDE THAT W HILE DISPOSING OF APPEAL THE CIT(A) WOULD HAVE THE POWER TO CONFIRM, REDUCE, ENHANCE OR ANNUL AN ASSESSMENT AND/ OR PENALTY. BESIDES EX PLANATION TO SUB- SECTION(2) OF SECTION 251 OF THE ACT ALSO MAKES IT CLEAR THAT WHILE CONSIDERING THE APPEAL, THE CIT(A) WOULD BE ENTITLE D TO CONSIDER AND DECIDE ANY ISSUE ARISING IN THE PROCEEDINGS BEFORE HIM IN APPEAL FILED FOR ITS CONSIDERATION, EVEN IF THE ISSUE IS NOT RAI SED BY THE APPELLANT IN ITS APPEAL BEFORE THE CIT(A). THUS ONCE AN ASSESSE E FILES AN APPEAL UNDER SECTION 246A OF THE ACT, IT IS NOT OPEN TO HI M AS OF RIGHT TO WITHDRAW OR NOT PRESS THE APPEAL. IN FACT THE CIT( A) IS OBLIGED TO DISPOSE OF THE APPEAL ON MERITS. IN FACT WITH EFFE CT FROM 1ST JUNE, 2001 THE POWER OF THE CIT(A) TO SET ASIDE THE ORDER OF T HE ASSESSING OFFICER :-8-: I.T.A. NOS. 495 TO 500/MDS/2017 AND RESTORE IT TO THE ASSESSING OFFICER FOR PASSING A FRESH ORDER STANDS WITHDRAWN. THEREFORE, IT WOULD BE NOTICED THAT THE POWERS OF THE CIT(A) IS CO-TERMINUS WITH THAT OF THE ASSESSING OF FICER I.E. HE CAN DO ALL THAT ASSESSING OFFICER COULD DO. THEREFORE JUS T AS IT IS NOT OPEN TO THE ASSESSING OFFICER TO NOT COMPLETE THE ASSESSMEN T BY ALLOWING THE ASSESSEE TO WITHDRAW ITS RETURN OF INCOME, IT IS NO T OPEN TO THE ASSESSEE IN APPEAL TO WITHDRAW AND/OR THE CIT(A) TO DISMISS THE APPEAL ON ACCOUNT OF NON-PROSECUTION OF THE APPEAL BY THE ASS ESSEE. THIS IS AMPLY CLEAR FROM THE SECTION 251(1)(A) AND (B) AND EXPLANATION TO SECTION 251(2) OF THE ACT WHICH REQUIRES THE CIT(A) TO APPLY HIS MIND TO ALL THE ISSUES WHICH ARISE FROM THE IMPUGNED ORDER BEFORE HIM WHETHER OR NOT THE SAME HAS BEEN RAISED BY THE APPELLANT BE FORE HIM. ACCORDINGLY, THE LAW DOES NOT EMPOWER THE CIT(A) TO DISMISS THE APPEAL FOR NON-PROSECUTION AS IS EVIDENT FROM THE P ROVISIONS OF THE ACT.' WE RESPECTFULLY FOLLOW THE JUDICIAL DECISIONS AND A RE OF THE OPINION THAT THE ASSESSEE SHOULD BE PROVIDED AN OPPORTUNITY TO PROSE CUTE THE APPEAL BEFORE THE CIT(A) AND THE LD. CIT(A) SHALL CONSIDER THE EV IDENCE AND DECIDE THE APPEAL ON MERITS WITH SPEAKING ORDER. ACCORDINGLY, IN THE INTEREST OF JUSTICE, WE REMIT THE DISPUTED ISSUES TO THE FILE OF THE CIT (A) FOR ADJUDICATION ON MERITS AND THE ASSESSEE SHALL BE PROVIDED WITH ADEQ UATE OPPORTUNITY OF HEARING BEFORE THE DISPOSAL OF APPEAL ON MERITS AND THE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED F OR STATISTICAL PURPOSE. 7. SIMILARLY, THE ASSESSEE FILED APPEALS IN ITA NO. 496, 497, 498,499 & 500/MDS/2017 FOR THE ASSESSMENT YEARS 2007-08, 2008 -09, 2009-10, 2010-11 :-9-: I.T.A. NOS. 495 TO 500/MDS/2017 & 2011-12, WHICH ARE IDENTICAL AND ARE ALSO REMITTE D TO THE FILE OF THE CIT(A) FOR ADJUDICATION ON MERITS AND WE ALLOW THE ASSESSE E APPEALS FOR STATISTICAL PURPOSE. 8. IN THE RESULT, ASSESSEE APPEALS IN ITA NOS. 495, 496, 497, 498, 499 & 500/MDS/2017 ARE ALLOWED STATISTICAL PURPOSE. ORDER PRONOUNCED ON THURSDAY, THE 27TH DAY OF APRI L, 2017 AT CHENNAI. SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER SD/- ( . ) (G. PAVAN KUMAR) /JUDICIAL MEMBER /CHENNAI, 0 /DATED: 27 TH APRIL, 2017. JPV ' *#23 43 /COPY TO: 1. &/ APPELLANT 2. *+& /RESPONDENT 3. 5 ( )/CIT(A) 4. 5 /CIT 5. 3 *## /DR 6. 8 /GF