Shri Mehdihusen A. Mukhi, Palanpur V. The ACIT, B.K.Circle, Palanpur

ITA 506/AHD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5977 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-09-2017
• Assessment Year: 2000-2001
• Appeal Filed On: 17-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MAURYA
• Assessee Lawyers: P M MEHTA; GULAB THAKOR
• Keywords: Condonation of delay
• Section: 143(3)

Judgement Text

SMC-ITA NOS. 506 & 507/AHD/2014 - MEHDIHUSEN A MUKHI VS. ACIT ASSESSMENT YEAR: 2000-01 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD [ BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ] ITA NOS. 506 & 507/AHD/2014 ASSESSMENT YEAR : 2000-01 MEHDIHUSEN A. MUKHI ............APPEL LANT PROP. OF VIJAY AGRO INDUSTRIES, OPP. SWASTIK SCHOOL, ABU HIGHWAY, PALANPUR-385001 [PAN : ACHPM 2825 J] VS. ASSTT. COMMISSIONER OF INCOME-TAX .......................RESPONDENT BK CIRCLE, PALANPUR APPEARANCES BY: PM MEHTA & GULAB THAKOR FOR THE APPELLANT RP MAURYA FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 31.01.2018 DATE OF PRONOUNCING THE ORDER : 27.02.2018 O R D E R 1. THESE TWO APPEALS ARE DIRECTED AGAINST TWO SEPAR ATE BUT MATERIALLY SIMILAR ORDERS PASSED BY THE CIT(A), BOTH DATED 23.12.2013, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) AND PENALTY UNDER SECTION 271( 1)(C) OF THE INCOME-TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2000-01. 2. GRIEVANCES RAISED IN THESE APPEALS ARE AS FOLLOW S:- ITA NO.506/AHD/2014 1. ON FACTS AND IN LAW AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE, THE LD.CIT(A) HAS ERRED BY REJECTING THE APPELLANTS PL EA TO CONDONE THE DELAY IN FILING THE APPEAL AND THEREBY DISMISSING IT WITHOUT APPRECIATING THE REASONS FOR DELAY IN FILING THE APPEAL. 2. ON FACTS AND IN LAW AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE, THE LD. CIT(A) HAS NOT DEALT WITH THE MERITS OF THE CAS E AND HAS ERRED BY SUSTAINING ADDITION MADE BY THE LD. AO. 3. ON FACTS AND IN LAW AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE, THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT A DDITION OF RS.5,27,490/- HAS BEEN MADE BY THE LD. AO OF EXPENDITURE WHICH IS INC URRED BONAFIDE IN PURSUIT OF BUSINESS AND HENCE, SUCH ADDITION IS UNCALLED FO R AND DESERVES TO BE OBLITERATED. SMC-ITA NOS. 506 & 507/AHD/2014 - MEHDIHUSEN A MUKHI VS. ACIT ASSESSMENT YEAR: 2000-01 PAGE 2 OF 4 ITA NO.507/AHD/2014 1. ON FACTS AND IN LAW AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE, THE LD.CIT(A) HAS ERRED BY REJECTING THE APPELLANTS PL EA TO CONDONE THE DELAY IN FILING THE APPEAL AND THEREBY DISMISSING IT WITHOUT APPRECIATING THE REASONS FOR DELAY IN FILING THE APPEAL. 2. ON FACTS AND IN LAW AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE, THE LD. CIT(A) HAS NOT DEALT WITH THE MERITS OF THE CAS E AND HAS ERRED BY SUSTAINING THE PENALTY LEVIED BY THE LD. AO. 3. ON FACTS AND IN LAW AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE, THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT A DDITION HAS BEEN MADE BY THE LD. AO OF EXPENDITURE WHICH IS INCURRED BONAFID E IN PURSUIT OF BUSINESS AND HENCE, IT CANNOT BE SAID THAT THE APPELLANT HAS FUR NISHED INACCURATE PARTICULARS OF INCOME. THEREFORE, PENALTY LEVIED U/S 271(1)(C) OF RS.1,58,040/- FOR FURNISHING INACCURATE PARTICULARS OF INCOME DESERVE S TO BE OBLITERATED. 3. THE ASSESSEE BEFORE ME IS A NON-RESIDENT INDIAN. THE ASSESSEE LEFT INDIA ON 10 TH OCTOBER 2002, AND AFTER A BRIEF STAY IN IRAN, ON 1 2 TH APRIL 2003, HE MOVED TO THE USA WHERE HE IS LIVING AT PRESENT. IN THE MEANTIME , HOWEVER, AN ASSESSMENT ORDER ON HIM WAS FINALIZED ON 28.02.2003 AND IT WAS AFFIX ED, AT THE RENTED PREMISES AT WHICH THE ASSESSEE WAS CARRYING ON HIS BUSINESS EAR LIER, ON 05.08.2003. THEREAFTER, A PENALTY ORDER WAS ALSO PASSED AGAINST ASSESSEE AN D IT WAS ALSO SERVED, THROUGH AFFIXTURE, AT THE SAME ADDRESS. IT IS CLAIMED THAT IT WAS ONLY IN JUNE 2011 THAT THE ASSESSEE LEARNT ABOUT THE PENDING TAX ISSUES, FROM A LOCAL RESIDENT, AND ON 17 TH FEBRUARY 2012, HE EXECUTED A POWER OF ATTORNEY, IN FAVOUR OF MR. A MUSA, TO PURSUE HIS TAX MATTERS. ON 27.03.2012 THE ASSESSEE FILED APPEALS BEFORE THE CIT(A) AND HE ALSO APPLIED FOR CONDONATION OF DELAY IN FILING OF THE APPEAL. LEARNED CIT(A), HOWEVER, DECLINED TO CONDONE THE DELAY. WHILE DOIN G SO, HE, INTER ALIA, OBSERVED AS FOLLOWS: 4.5 I HAVE CONSIDERED THE FACTS OF THE CASE AND S UBMISSION MADE BY THE 'APPELLANT THE MAIN CONTENTION OF THE APPELLANT FOR DELAY WAS THAT HE HAD CLOSED HIS BUSINESS IN NOV. 2002 AND LEFT INDIA ON 10.12.2002 AND SINCE THEN ON 12.4.2003 HE MOVED TO USA WITH HIS FAMILY FOR LI VELIHOOD. FURTHER MENTIONED THAT IN JUNE 2011 ONE OF HIS WELL WISHER INFORMED ABOUT THE AFFIXTURE OF THE ASSESSMENT ORDER WHO INFORMED TO T HE RELATIVE OF APPELLANT NAMELY MR. MUSA WHO IN TURN INFORMED THE APPELLANT ABOUT THE ORDER AND IT WAS ONLY ON 17.2.2012 THE APPELLANT EXECUTED THE PO WER OF ATTORNEY IN FAVOUR OF M/S ALIASGARBHAI MUSA TO LOOK AFTER THE L.T. MAT TERS OF THE APPELLANT. SO AS PER THE APPELLANT, DELAY IN FILING OF APPEAL WAS WI TH A GOOD AND SUFFICIENT REASONS TO CONDONE THE DELAY. 4.6. FROM THE FACTS OF THE CASE IT IS NOTICED THAT ASSESSMENT ORDER WAS PASSED ON 28.02.2003 AND THE SAME WAS AFFIXED TO APPELLANT 'S BUSINESS PREMISES ON 05.08.2003. HOWEVER THE APPEAL HAS BEEN FILED ONLY ON 27.03.2012 WITH THE DELAY OF 8 YEARS 6 MONTH AND 22 DAYS. IT HAS BEEN C LAIMED THAT THE APPELLANT WENT ABROAD SINCE 10.12.2002 AND THE APPELLANT CAME TO KNOW THROUGH HIS SMC-ITA NOS. 506 & 507/AHD/2014 - MEHDIHUSEN A MUKHI VS. ACIT ASSESSMENT YEAR: 2000-01 PAGE 3 OF 4 RELATIVE NAMELY MR. MUSA ABOUT THE ASSESSMENT ORDER AFFIXED AND ACCORDINGLY A POA (POWER OF AUTHORITY) IN FAVOUR OF MR. MUSA WA S EXECUTED.' DURING THE APPELLATE PROCEEDINGS THE APPELLANT HAS NOT GIVEN A NY EVIDENCES SHOWING THE MIGRATION OF APPELLANT FROM INDIA TO USA. IT IS ALS O UNBELIEVABLE THAT THE ADVOCATE STATIONED AT PALANPUR I.E. PLACE OF APPELL ANT CAME TO KNOW ABOUT AFFIXTURE OF THE ASSESSMENT ORDER AFTER A GAP OF 8 YEARS 3 MONTH I.E. IN JUNE 2011 ONLY. THERE IS NO RECORD / EVIDENCE TO SAY THA T THE ADVOCATE CAME TO KNOW ONLY IN THE MONTH OF JUNE 2011 AND NOT EARLIER TO THAT AND THERE AFTER ONLY MR.MUSA CAME TO KNOW ABOUT THE ASSESSMENT ORDE R AFFIXED. STILL AFTER KNOWING THE SAID AFFIXTURE THE APPELLANT TOOK 10 MO NTHS TIME TO FILE THE APPEAL AGAINST THE ASSESSMENT ORDER. FURTHER IT IS NOTICED THAT THE COPY OF AFFIDAVIT OF THE APPELLANT FILED ALONG WITH THE APPEAL MEMO WAS ON PLAIN PAPER WITH SOME STAMP OF 'IFTIKAR AHMEDKHAN' AND HENCE AUTHENTICITY OF THE AFFIDAVIT WITHOUT STAMP OR STAMP PAPER IS ALSO NOT VERIFIABLE AND HEN CE FOUND NOT IN ORDER AND DOES NOT CARRY THE LEGAL FAVOUR. FARTHER A COPY OF THE SPECIFIC POA OF THE APPELLANT IN FAVOUR OF SHRI ALIASGARBHAI MUSA HAS B EEN EXECUTED ON 07.03.2012 WHICH HAS BEEN ATTESTED BY HEMA A. JOSHI NOTARY AT AHMDABAD. AGAIN THIS POA IS NOT ON STAMP PAPER/STAMP AFFIXED AND DID NOT SHOW WHETHER THE APPELLANT WAS PERSONALLY PRESENT AT THE TIME OF EXECUTION OF THE POA IN INDIA WHICH WAS BOUND TO BE SO. HENCE, AUTHENTICITY OF THE POA ITSELF IS NOT VERIFIABLE. FURTHER THE DETAILS AND COPY OF PASSPOR T ETC. HAVE NOT BEEN PROVIDED IN SUPPORT OF HIS VISITS TO INDIA. IT IS A LSO UN BELIEVABLE THAT ON HIS MIGRATION FROM INDIA SINCE DECEMBER 2002 HE HAS NOT VISITED TO INDIA AND HE CAME TO KNOW ABOUT THE ASSESSMENT ORDER AFFIXED THR OUGH HIS RELATIVE ONLY AFTER A LONG GAP MORE SO WHEN THE SCRUTINY ASSTT. P ROCEEDING IN HIS CASE WERE PROGRESS AND SAME CAME TO BE COMPLETED ON 28.2.2003 . IN VIEW OF THAT THE APPELLANT OUGHT TO HAVE KEPT WATCH OVER THE SAME AN D A PERSON COULD HAVE BEEN AUTHORIZED TO LOOK AFTER THE PENDING WORK OF T HE ASSTT. PROCEEDINGS AND APPELLANT PROCEEDINGS WHICH IS NOT APPEARING AT ALL FROM THE CONDUCT OF THE APPELLANT. ALL THE ABOVE SEQUENCE OF EVENTS CLEARLY ESTABLISHES THAT THE APPELLANT WAS NOT SERIOUS IN FULFILLING HIS LEGAL O BLIGATIONS AS REQUIRED UNDER THE IT ACT. AT EVERY STAGE HE WAS NON-COMPLYING THE LEGAL REQUIREMENTS WHICH IS NOTHING BUT THE NON-SERIOUS ACT OF THE APPELLANT AT HIS PART. THE APPELLANT MADE THE SELF SERVING CONTENTIONS OF WHICH NO DETAI LS OR EVIDENCES IN SUPPORT HAVE BEEN SUBMITTED. SO THE BONAFIDES FOR MAKING TH E INORDINATE DELAY IN FILING THE APPEAL FOR THE STATED REASONS ARE NOT VE RIFIABLE MORE SO IN THE BACKGROUND OF THE ABOVE DISCUSSION. THE APPELLANT W AS VERY MUCH AWARE ABOUT ASSESSMENT PROCEEDINGS, SO HE WOULD HAVE BEEN MORE CAREFUL IN COMPLETION OF THE LEGAL REQUIREMENTS BUT HE WAS NOT SERIOUS AND PARTICULAR. SIMPLY MADE THE REASONS FOR THE DELAY WHICH ARE NOT ACCEPTABLE. 4. AGGRIEVED BY THE STAND SO TAKEN BY THE LEARNED C IT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE ME. 5. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLIC ABLE LEGAL POSITION. 6. THE ISSUES IN APPEAL, ON MERITS, INVOLVE SMALL A MOUNTS OF DISALLOWANCES AND PENALTY. THERE IS NO DISPUTE THAT THE ASSESSEE HAD ACTUALLY LEFT INDIA AT THE POINT OF SMC-ITA NOS. 506 & 507/AHD/2014 - MEHDIHUSEN A MUKHI VS. ACIT ASSESSMENT YEAR: 2000-01 PAGE 4 OF 4 TIME WHEN ORDERS WERE SERVED THROUGH AFFIXTURE. I H AVE ALSO PERUSED COPIES OF ALL THE PASSPORT PAGES, AND I FIND THAT THE ASSESSEE LANDED UP IN USA ON A B1/B2 VISA WHICH IS A NON-IMMIGRANT VISA. APPARENTLY, HE HAS OVERSTAYED IN USA AND MAY ALSO BE WITHOUT LEGAL STATUS WHICH EXPLAINS HIS NOT VISI TING INDIA IN THIS LONG DURATION. NO MATTER HOW INAPPROPRIATE IT MAY BE, EVEN IF THAT BE SO, I AM ONLY CONCERNED ABOUT WHETHER IT WAS A SUFFICIENT CAUSE FOR DELAY IN FILI NG OF APPEAL. VIEWED IN THIS PERSPECTIVE, I AM INCLINED TO BELIEVE THAT THE DELA Y IS REASONABLY EXPLAINED. IT MAY INDEED HAVE BEEN ONLY ON SUBSEQUENT DEVELOPMENTS TH AT THE ASSESSEE WAS INFORMED ABOUT THESE ORDERS. WHILE EXAMINING THE REASONS FOR DELAY ONE SHOULD ONLY BE CONCERNED WHETHER THE CAUSE OF DELAY MEETS THE TEST OF PREPONDERANCE OF PROBABILITIES, WITHOUT REALLY BOTHERING ABOUT WHAT SHOULD HAVE BEEN DONE IN AN IDEAL SITUATION. IN ANY CASE, THE ASSESSEE IS A SMALL BU SINESSMAN OF LIMITED MEANS AND THE ISSUES ON MERITS ARE OF VERY SMALL AMOUNTS. IN THE LIGHT OF THESE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, I DEEM I T FIT AND PROPER TO HOLD THAT THE CIT(A) OUGHT TO HAVE CONDONED THE DELAY IN FILING O F THE APPEALS BEFORE HIM. I, THEREFORE, REMIT THE MATTER TO THE FILE OF THE CIT( A) FOR ADJUDICATION ON MERITS, IN ACCORDANCE WITH THE LAW, BY WAY OF A SPEAKING ORDER AND AFTER AFFORDING AN OPPORTUNITY OF HEARING. 7. IN THE RESULT, THE APPEALS ARE ALLOWED FOR STATI STICAL PURPOSES IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODA Y ON THE 27 TH FEBRUARY, 2018. SD/- PRAMOD KUMAR (ACCOUNTANT M EMBER) AHMEDABAD, THE 27 TH DAY OF FEBRUARY, 2018 **BT COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD 1. DATE OF DICTATION:....ORDER PREPARED AS PER FIVE PAGES MANUSCRIPTS OF HONBLE AM, WHICH IS ATTACHED ......27.02.2018.... 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: .. 27.02.2018.... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . P.S./P.S.: ... 27.02.2018... . 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 27.02.2018 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK : ... 27.02.2018.. 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK : . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER: