Dieter Burger C/o Mercedes-Benz India P.Ltd, Pune V. Dy.CIT,Cir.10, Akurdi, Pune, Pune

ITA 513/PUN/2012

• Counselvise Citation: 51324514 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2000-2001
• Appeal Filed On: 13-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JM AND SHRI R.K. PANDA, AM I.T.A. NO. 513 & 514/PN/2012 A.Y. 2000-01 & 2001-02 DIETER BERGER C/O. MERCEDES BENZ INDIA PVT. LTD., E-3 MIDC CHAKAN, PHASE III CHAKAN INDUSTRIAL AREA, KURULI & NIGHOJE TAL. KHED, PUNE-410 501 PAN AEIPB 1666 D APPELLANT VS. DY. CIT CIR. 10, PUNE RESPONDENT APPELLANT BY : SHRI RAJENDRA AGIWAL RESPONDENT BY: SMT. ANN KAPTHUA MA DATE OF HEARING: 20-6-2013 DATE OF PRONOUNCEMENT: 26-6-2013 ORDER PER SHAILENDRA KUMAR YADAV JM BOTH THESE APPEALS PERTAIN TO THE SAME ASSESSEE ON SIMILAR ISSUE I.E. PENALTY U/S 271(1)(C) OF THE ACT . THEY ARE BEING DISPOSED OFF BY A COMMON ORDER FOR THE SAKE O F CONVENIENCE. 2. IN ITA NO. 513/PN/2012 FOR A.Y. 2000-01, THE ISS UE PERTAINS TO PENALTY OF RS. 15,09,740/- IMPOSED BY T HE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT ON THE G ROUND THAT ASSESSEE HAD FURNISHED CERTAIN INACCURATE PARTICULA RS OF INCOME FOR THE A.Y. 2000-01. THE CIT(A) HAS DISMIS SED THE APPEAL OF THE ASSESSEE FOR STATISTICAL PURPOSES, WI THOUT ADJUDICATING THE ISSUE ON MERITS. 3. IN THE PRESENT APPEAL, THE PRIMARY GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) HAS UNJUSTLY (I) REFUSE D TO CONDONE ITA 513 AND 514/PN/2012 DIETER BERGER MERCEDES A.Y. 2000-01 & 2001-02 2 THE DELAY IN FILING THE APPEAL; AND (II) HELD THAT THE ASSESSEE WAS NOT KEEN IN PROSECUTING THE APPEAL, THEREBY DIS MISSING THE APPEAL OF THE ASSESSEE WITHOUT EXAMINING THE ME RITS OF THE CASE OF THE ASSESSEE. 4. IN BRIEF, THE FACTS ARE THAT THE ASSESSING OFFIC ER VIDE ORDER DATED 23-5-2008 LEVIED PENALTY OF RS. 15,09,740/- U /S 271(1)(C) OF THE ACT. THE APPEAL WAS REQUIRED TO BE FILED BY 25- 6-2008 BUT THE SAME WAS FILED ON 7-5-2010 THEREBY C AUSING A DELAY OF 10 MONTHS AND 12 DAYS. IT WAS EXPLAINED T HAT THE ASSESSEE LEFT INDIA PERMANENTLY AND THE PROCESS OF OBTAINING HIS SIGNATURE CAUSED DELAY IN FILING THE APPEAL BEF ORE THE CIT(A). THE CIT(A) HAS NOT FOUND IT APPROPRIATE T O CONDONE THE DELAY FOR THE REASON THAT THERE WAS NO MATERIAL TO PROVE THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM FILING THE APPEAL IN TIME. THE CIT(A) THEREFORE, DID NOT A DMIT THE APPEAL FOR HEARING. THE CIT(A) ALSO NOTICED THAT SI NCE THE ASSESSEE HAD NOT RESPONDED TO THE NOTICES OF HEARIN G ISSUED BY HIM, THE ASSESSEE WAS NOT KEEN TO PROSECUTE ITS APP EAL AND FOR THIS REASON ALSO, HE TREATED THE APPEAL AS DISMISSE D FOR STATISTICAL PURPOSES. THE AFORESAID ACTION OF THE CIT(A) IS UNDER CHALLENGE BEFORE US. 5. SIMILAR ISSUE OF CONDONATION CAME UP FOR CONSIDE RATION BEFORE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CA SE OF DEMUG CRANES & COMPONENTS (INDIA) PVT. LTD. IN ITA NO. 1597/PN/2011 FOR A.Y. 2004-05 ORDER DATED 9-1-2013, WHEREIN THE TRIBUNAL HAS RESTORED THE MATTER BACK T O THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION ON MERITS IN A CCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL IN THE CASE OF DEMUG CRANES & COMPONENTS (INDIA) PVT. LTD. (SUPRA) ARE REPRODUCED HEREUNDER: 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. IN TERMS OF SECTION 249(3) OF THE ACT, THE CIT(A) H AS BEEN CONFERRED POWER TO CONDONE THE DELAY IN FILING OF A PPEAL ITA 513 AND 514/PN/2012 DIETER BERGER MERCEDES A.Y. 2000-01 & 2001-02 3 ON BEING SATISFIED THAT THE APPELLANT HAS SUFFICIEN T CAUSE FOR NOT PRESENTING THE APPEAL WITHIN THE STIPULATED PERIOD. OSTENSIBLY, SUCH POWER HAS BEEN CONFERRED BY THE LEGISLATURE TO ENABLE THE CIT(A) TO DO SUBSTANT IAL JUSTICE TO PARTIES BY DISPOSING OF THE CASES ON MER ITS. THE HONBLE SUPREME COURT IN THE CASE OF MST. KATIJ I & ORS (SUPRA) EXPLAINED IN THE CONTEXT OF EXPRESSION SUFFICIENT CAUSE THAT IT REFERS TO ENABLING THE C OURTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUBSERVE S THE ENDS OF JUSTICE. THE HONBLE SUPREME COURT FUR THER OBSERVED THAT IN MATTERS WHERE SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH OT HER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PRE FERRED AND FURTHER AS PER THE HONBLE SUPREME COURT, A LIB ERAL APPROACH IN SUCH MATTERS IS ALSO JUSTIFIED. IN THI S BACKGROUND, WE MAY NOW PROCEED TO EXAMINE THE REASO NS FOR THE DELAY IN FILING OF APPEAL BEFORE THE CIT(A ). 9. THE ASSESSEE HAS CONTENDED THAT THE ORDER OF THE ASSESSING OFFICER LEVYING PENALTY U/S 271(1)(C) OF THE ACT WAS RECEIVED ON 29-2-2009 AND IT WAS REQUIRED TO FI LE AN APPEAL BEFORE THE CIT(A) WITHIN 30 DAYS AS PER SECT ION 249(2) OF THE ACT. THE APPEAL WAS FILED BELATEDLY WITH A DELAY OF 280 DAYS. THE SUM AND SUBSTANCE OF THE REASONS FOR DELAY IS ON ACCOUNT OF THE THEN CONSULT ANT OF THE ASSESSEES C.A. R.R. PETHE. IN THIS CONTEXT, T HE SAID CONSULTANT HAS AVERRED BY WAY OF AN AFFIDAVIT THAT THE SAID APPEAL COULD NOT BE FILED IN TIME ON ACCOUNT O F THE FACT THAT HE COULD NOT FULLY CONCENTRATE ON HIS OFF ICE WORK AND WAS NOT ABLE TO WORK TO THE BEST OF HIS CAPACIT Y AS HIS FATHER WAS SERIOUSLY ILL AND REQUIRED CONSTANT ATTENTION BETWEEN JANUARY 2009 TO JUNE 2010. IT IS ALSO CONTENDED IN THE SAID AFFIDAVIT THAT ON ACCOUNT OF SUCH ILLNESS, HIS FATHER ULTIMATELY PASSED AWAY IN JUNE 2010. PERTINENTLY, THE CIT(A) HAS NOT FOUND THE AFORESAID REASONS TO BE SUFFICIENT ON THE GROUND THAT THERE W AS NO MATERIAL TO SHOW THAT ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE. PERTINENTLY, IT IS TO BE OBSERVE D HERE THAT AT NO STAGE, THE BONAFIDES OF THE REASONS POIN TED OUT BY THE ASSESSEE HAVE BEEN ASSAILED. IN FACT, THE R EASONS ADVANCED BY THE ASSESSEE, WHICH ARE SUPPORTED BY TH E AFFIDAVIT OF THE CONCERNED CONSULTANT, HAVE NOT BEE N ASSAILED BY THE REVENUE TO BE LACKING IN BONAFIDES EVEN IN THE COURSE OF HEARING BEFORE US. 10. FURTHER, WE MAY NOTICE THAT IN THE IMPUGNED PROCEEDINGS THE PENALTY HAS BEEN LEVIED FOR FURNISH ING OF INACCURATE PARTICULARS OF INCOME WITH REGARD TO A C LAIM FOR PROVISION FOR WARRANTY EXPENSES AMOUNTING TO RS . 38,67,820/- WHICH WAS DISALLOWED IN THE ASSESSMENT PROCEEDINGS. THE ASSESSEE IN THE QUANTUM PROCEEDIN GS HAS ASSAILED THE AFORESAID DISALLOWANCE IN THE YEA R ITA 513 AND 514/PN/2012 DIETER BERGER MERCEDES A.Y. 2000-01 & 2001-02 4 UNDER CONSIDERATION AS WELL AS IN THE PRECEDING AND SUBSEQUENT YEARS AS IS EVIDENT FROM THE ORDER OF TH E TRIBUNAL IN ASSESSEES OWN CASE VIDE ITA NO.68 AND 1082/PN/2007 AND 1481/PN/2008 DATED 31-8-2010 PERTAINING TO A.YS. 2003-04, 2004-05 AND 2005-06. NOTABLY, THE TRIBUNAL HAS SET ASIDE THE ISSUE OF DISALLOWANCE OF PROVISION FOR WARRANTY EXPENSES BAC K TO THE FILE OF THE CIT(A). BE THAT AS IT MAY, ONCE T HE ASSESSEE HAS CHALLENGED THE QUANTUM ADDITION OUT OF THE PROVISION FOR WARRANTY EXPENSES IN APPEAL, IT IS INCONCEIVABLE THAT THE ASSESSEE WOULD NOT BE INTERE STED IN PROSECUTING THE APPEAL IN THE CASE OF CORRESPOND ING PENALTY LEVIED U/S 271(1)(C) OF THE ACT ON THE SAM E ASPECT. THEREFORE, THE OBSERVATION OF THE CIT(A) TH AT THE ASSESSEE WAS NOT KEEN TO PROSECUTE ITS APPEAL IS UNJUSTIFIABLE MERELY BECAUSE OF NON-RESPONSE TO THE NOTICES OF HEARING ISSUED. AT THIS STAGE, WE MAY A LSO OBSERVE THAT THE ASSESSEE HAS EXPLAINED THE REASONS FOR NON-APPEARANCE, TO WHICH THERE IS NO CONTROVERSION FROM THE SIDE OF THE REVENUE. IN SUM AND SUBSTANCE, THE CONDUCT OF THE ASSESSEE INDICATES THAT IT NEVER INT ENDED TO GIVE UP ITS CHALLENGE TO THE PENALTY IMPOSED U/S 271(1)(C) OF THE ACT WITH RESPECT TO DISALLOWANCE O F PROVISION OF WARRANTY EXPENSES. 11. BEFORE CONCLUDING, WE MAY REFER TO THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF TAJ SA TS AIR CATERING LTD., (SUPRA) WHEREIN THE ASSESSEE HAD FILED AN APPEAL BEFORE THE HONBLE HIGH COURT WHICH WAS DELAYED BY 1195 DAYS. ALTHOUGH THE DELAY WAS SUBSTANTIAL, THE HONBLE BOMBAY HIGH COURT CONDONED THE DELAY BY OBSERVING THAT THE ISSUE RAISED IN APP EAL WAS BEING CONTESTED BY THE ASSESSEE IN THE ORDERS SUBSEQUENTLY PASSED AND THEREFORE, IT WAS CLEAR THA T THE ASSESSEE NEVER INTENDED TO GIVE UP A CHALLENGE IN R ESPECT OF THE IMPUGNED ISSUE THEREIN. UNDER THESE CIRCUMSTANCES, THE HONBLE BOMBAY HIGH COURT FOUND IT FIT TO CONDONE THE DELAY IN FILING OF APPEAL BY TH E ASSESSEE. 12. CONSIDERED IN THE LIGHT OF THE ABOVE REASONING LAID DOWN BY THE HONBLE BOMBAY HIGH COURT EVEN IN THE PRESENT CASE, WE FIND ON THE BASIS OF DISCUSSION IN THE EARLIER PARAGRAPHS THAT THE ASSESSEE HAD SUFFICIENT CAUSE FOR NOT PRESENTING ITS APPEAL BEFORE THE CIT(A) WIT HIN THE STIPULATED PERIOD AND THEREFORE, THE CIT(A) OUGHT T O HAVE CONDONED THE DELAY IN TERMS OF THE MANDATE OF SECTI ON 249(3) OF THE ACT. WE THEREFORE, SET ASIDE THE ORD ER OF THE CIT(A) AND RESTORE THE MATTER BACK TO HIS FILE TO B E ADJUDICATED ON MERITS IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE. ITA 513 AND 514/PN/2012 DIETER BERGER MERCEDES A.Y. 2000-01 & 2001-02 5 FACTS BEING SIMILAR, FOLLOWING THE AFORESAID ORDER OF THE TRIBUNAL, WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER BACK TO HIS FILE FOR FRESH ADJUDICATION ON M ERITS IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN APPEAL NO. 514/PN/2012 FOR A.Y. 2001-02, THE ASSESSEE HAS TAKEN SIMILAR GROUNDS, VIZ. NOT CONDON ING THE DELAY IN FILING THE APPEAL BEFORE THE CIT(A) AS WEL L AS THE PENALTY IMPOSED U/S 271(1)(C) OF THE ACT. THE FACT S FOR THIS YEAR ARE IN PARI MATERIA WITH THOSE OF FACTS PERTAI NING TO A.Y. 2000-01. SO FOLLOWING THE SAME REASONING, WE SET A SIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER BACK TO HIS FILE FOR FRESH ADJUDICATION ON MERITS IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO T HE ASSESSEE FOR THIS YEAR AS WELL. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 26 TH JUNE 2013. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED THE 26 TH JUNE 2013 ANKAM COPY FORWARDED TO: (1) ASSESSEE (2) DEPARTMENT (3) CIT(A) V PUNE (4) CIT- V PUNE (5) THE D.R. PUNE BENCH A PUNE BY ORDER ITA 513 AND 514/PN/2012 DIETER BERGER MERCEDES A.Y. 2000-01 & 2001-02 6 SENIOR PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, PUNE BENCHES, PUNE