RAVINDRA PRATAPRAI DOSHI, MUMBAI V. INCOME TAX OFFICER 29(3)(1), MUMBAI

ITA 52/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8865 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 04-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G
• Keywords: Unexplained cash credit; Opportunity of being heard; Set aside
• Section: 250; 147; 68; 148; 144

Judgement Text

P A G E | 1 ITA NO.52/MUM/2018 AY. 2007 - 08 RAVINDRA PRATAPRAI DOSHI VS. THE INCOME TAX OFFICER, WARD 29(3)(1) IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.52/MUM/2018 (ASSESSMENT YEAR: 2007 - 08 ) RAVINDRA PRATAPRAI DOSHI ROOM NO. 6, A WING, PREMROSE, CHS, DADASAHEB GAIKWAD ROAD, TAMBE NAGAR, MULUND (E) MUMBAI - 400080 VS. THE INCOME TAX OFFICER, WARD 29(3)(1), 305, C - 10, PRATYAKSH KAR BHAVAN, BANDRA KURLA COMPLEX BANDRA (EAST), MUMBAI - 400051 PAN AASPD6694B (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SHRI D.G.PANSARI , SR. D.R DATE OF HEARING: 25 .06 .2019 DATE OF PRONOUNCEMENT: 2 8 .06 .2019 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 40, MUMBAI, DATED, 16.10.2017, WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC. 144 R.W.S 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 3 0.03.2015. THE ASSESSEE HAS ASSAILED THE ORDER OF THE CIT(A) BY RAISING THE FOLLOWING GROUNDS OF APPEAL BEFORE US : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX - APPEALS 40, MUMBAI, HEREINAFTER REFERRED TO AS THE LD. CIT (A) HAS ERRED IN LAW IN CONFIRMING THE ADDITION OF RS.1 04, 86,375/ - IN RESPECT OF UNEXPLAINED CASH CREDIT U/S.68 OF THE INCOME TAX ACT, 1961 . THE SAID ADDITION MAY PLEASE BE DELETED. 2. THE ASSESSEE CRAVES LEAVE TO ADD, ALTER, AMEND, MODIFY OR DROP THE GROUNDS OF APPEAL AT THE TIME OF HEARING. P A G E | 2 ITA NO.52/MUM/2018 AY. 2007 - 08 RAVINDRA PRATAPRAI DOSHI VS. THE INCOME TAX OFFICER, WARD 29(3)(1) 2. BRIEFLY STATED, SURVEY PROCEEDINGS WERE CONDUCTED UNDER SEC.133A AT THE PREMISES OF THE ASSESSEE ON 18.10.2013. THE ASSESSEE IN HIS STATEMENT RECORDED UNDER SEC.131 ADMITTED OF HAVING BANK ACCOUNTS WITH COSMOS COOPERATIVE BANK LTD. , JHAVERI BAZAR, MUMBAI, IN THE NAME O F HIS THREE PROPRIETARY CONCERNS VIZ. (I) M/S R.P. TRADING COMPANY; (II) M/S MONTEX REALTIES; AND (III) M/S DOSHI TRADING COMPANY. AS PER THE DETAILS COLLECTED F ROM THE BANK, IT WAS GATHERED BY THE A.O THAT AN AMOUNT AGGREGATING TO RS.1,04,86,375/ - WAS DEPOS ITED IN THE BANK ACCOUNTS OF THE AFORESAID PROPRIETARY CONCERN S OF THE ASSESSEE DURING THE YEAR, AS UNDER: SR. NO. NAME IN WHICH THE ACCOUNT WAS MAINTAINED A/C NO. AMOUNT CREDITED DURING THE YEAR (IN RS.) 1. R.P. TRADING CO. 021204301220165 4402850 2. MONTEX ENTERPRISES 021204301990166 3173875 3. M/S DOSHI TRADING CO. 021204301220049 2909650 10486375 3. THE CASE OF THE ASSESSEE WAS REOPENED UNDER SEC.147 OF THE ACT. HOWEVER, THE ASSESSEE FAILED TO COMPLY WITH THE NOTICE ISSUED UNDER SEC. 148 AND DID NOT FILE ANY RETURN OF INCOME IN RESPONSE TO THE SAME. IN THE ABSENCE OF ANY EXPLANATION FORTHCOMING AS REGARDS THE NATURE AND SOURCE OF THE AMOUNT CREDITED IN THE AFORESAID BANK ACCOUNTS, THE A.O ADDED THE ENTIRE AMOUNT OF RS.1,04,86,375/ - AS THE UNACCOUNTED CASH CREDIT UNDER SEC.68 OF THE ACT IN THE HANDS OF THE ASSESSEE . 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). HOWEVER, AS THE ASSESSEE FAILED TO PUT UP AN APPEARANCE IN THE COURSE OF HEARING OF THE APPEAL, THEREF ORE, THE CIT(A) DISMISSED THE APPEAL. P A G E | 3 ITA NO.52/MUM/2018 AY. 2007 - 08 RAVINDRA PRATAPRAI DOSHI VS. THE INCOME TAX OFFICER, WARD 29(3)(1) 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. WE FIND THAT ASSESSEE APPELLANT DESPITE HAVING BEEN PUT TO NOTICE AS REGARDS THE D ATE OF HEARING OF THE APPEAL HA S FAILED TO PUT UP APPEARANCE BEFORE US. ACCORDINGLY, IN THE BACKDROP OF THE AFORESAID FACT, WE ARE CONSTRAINED TO PROCEED WITH AND DISPOSE OFF THE APPEAL AS PER RULE 24 OF THE APPELLATE TRIBUNAL RULES, 1963 AFTER HEARING THE RESPONDENT REVENUE AND PERUSIN G THE ORDERS OF THE LOWER AUTHORITIES. 6. WE FIND THAT THE ASSESSEE HAD ASSAILED THE ADDITION OF RS.1,04,86,380/ - MADE BY THE A.O UNDER SEC. 68 IN RESPECT OF THE ALLEGED UNACCOUNTED CASH CREDITS IN HIS BANK ACCOUNTS. AS IS DISCERNIB LE FROM THE ORDER OF THE CIT(A), WE FIND, THAT THE LATTER AFTER CULLING OUT THE FACTS OF THE CASE, HAD DISMISSED THE APPEAL OF THE ASSESSEE FOR THE REASON THAT HE HAD FAILED TO PUT UP AN APPEARANCE BEFORE HIM. IN OUR CONSIDERED VIEW, THE AFORESAID MAN NER O F DISPOSING OFF THE APPEAL BY THE CIT(A) IS NOT AS PER THE MANDATE OF LAW. AS PER SUB - SECTION (6) OF SEC.250, IT IS INCUMBENT ON THE PART OF THE CIT(A) TO DISPOSE OFF THE APPEAL IN WRITING AFTER STATING THE POINTS FOR DETERMINATION, THE DECISION THEREON AN D THE REASON FOR ARRIVING AT THE SAID DECISION. INSOFAR THE POWERS OF THE CIT(A) ARE CONCERNED, THE SAME AS ENVISAGED IN SUBSECTION (1) OF SEC.251 TAKES WITHIN ITS SWEEP TH E POWER TO CONFIRM , REDUCE, ENHANCE OR ANNUL THE ASSESSMENT. HOWEVER, THE DISMISSAL OF AN APPEAL BY THE CIT(A) , WITHOUT ADVERTING TO AND ADJUDICATING THE GROUNDS RAISED BY THE ASSESSEE IS NOT PRESCRIBED UNDER THE AFORESAID STATUTORY PROVISION. OUR AFORESAID VIEW IS FORTIFIED BY THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT (CENTRAL) VS. PREMKUMAR ARJUNDAS LUTHRA (HUF) (2016) 240 ITR 133 (BOM) . IN THE AFOREMENTIONED CASE THE HONBLE HIGH COURT OBSERVING THAT IT IS OBLIGATORY ON THE PART OF THE CIT(A) TO DISPOSE OFF THE APPEAL ON MERITS HA S HELD AS UNDER : P A G E | 4 ITA NO.52/MUM/2018 AY. 2007 - 08 RAVINDRA PRATAPRAI DOSHI VS. THE INCOME TAX OFFICER, WARD 29(3)(1) 7. AN APPEAL IS FILED WITH THE CIT(A) FROM APPEALABLE ORDERS LISTED IN SECTION 246A OF THE ACT. WE FIND THAT THE PROCEDURE IN APPEAL BEFORE THE CIT(A) AND THE POWERS OF THE CIT(A) ARE GOVERNED BY SECTIONS 250 AND 251 OF THE ACT RESPECTIVELY. THE RELEVANT P ROVISIONS FOR CONSIDERATION ARE AS UNDER: PROCEDURE IN APPEAL 250 (1) .... (2) ... (3) .... (4) THE COMMISSIONER (APPEALS) MAY, BEFORE DISPOSING OF ANY APPEAL, MAKE SUCH FURTHER INQUIRY AS HE THINKS FIT, OR MAY DIRECT THE ASSESSING OFFICER TO MAKE FURTHER INQUIRY AND REPORT THE RESULT OF THE SAME TO THE COMMISSIONER (APPEALS). (5) .... (6) THE ORDER OF THE COMMISSIONER(APPEALS) DISPOSING OF THE APPEAL SHALL BE IN WRITING AND SHALL STATE THE POINTS FOR DETERMINATION, THE DECISION THEREON AND THE REASON FOR THE DECISION. (6A) ..... (7) ..... POWERS OF THE COMMISSIONER (APPEALS) SECTION 251(1) IN DISPOSING OF AN APPEAL, THE COMMISSIONER (APPEALS) SHALL HAVE THE FOLLOWING POWERS (A) IN AN APPEAL AGAINST AN ORDER OF ASSESSMENT , HE MAY CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT. (AA) .... (B) IN AN APPEAL AGAINST AN ORDER IMPOSING A PENALTY, HE MAY CONFIRM OR CANCEL SUCH ORDER OR VARY IT SO AS EITHER TO ENHANCE OR TO REDUCE THE PENALTY. (C) ..... (2) THE COMMISSIONER ( APPEALS) SHALL NOT ENHANCE AN ASSESSMENT OR A PENALTY OR REDUCE THE AMOUNT OF REFUND UNLESS THE APPELLANT HAS HAD A REASONABLE OPPORTUNITY OF SHOWING CAUSE AGAINST SUCH ENHANCEMENT OR REDUCTION. EXPLANATION. IN DISPOSING OF AN APPEAL, THE COMMISSIONER(A PPEALS) MAY CONSIDER AND DECIDE ANY MATTER ARISING OUT OF THE PROCEEDINGS IN WHICH THE ORDER APPEALED AGAINST WAS PASSED, NOTWITHSTANDING THAT SUCH MATTER WAS NOT RAISED BEFORE THE COMMISSIONER(APPEALS) BY THE APPELLANT. 8. FROM THE AFORESAID PROVISIONS, IT IS VERY CLEAR ONCE AN APPEAL IS PREFERRED BEFORE THE CIT(A), THEN IN DISPOSING OF THE APPEAL, HE IS OBLIGED TO MAKE SUCH FURTHER INQUIRY THAT HE THINKS FIT OR DIRECT THE ASSESSING OFFICER TO MAKE FURTHER INQUIRY AND REPORT 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 WITH RE ASONS IN SUPPORT. SECTION 251(1)(A) AND (B) OF THE ACT PROVIDE THAT WHILE DISPOSING OF APPEAL THE CIT(A) WOULD HAVE THE POWER TO CONFIRM, REDUCE, ENHANCE OR ANNUL AN ASSESSMENT AND/OR P A G E | 5 ITA NO.52/MUM/2018 AY. 2007 - 08 RAVINDRA PRATAPRAI DOSHI VS. THE INCOME TAX OFFICER, WARD 29(3)(1) PENALTY. BESIDES EXPLANATION TO SUB - SECTION (2) OF SECTION 251 OF THE AC T ALSO MAKES IT CLEAR THAT WHILE CONSIDERING THE APPEAL, THE CIT(A) WOULD BE ENTITLED TO CONSIDER AND DECIDE ANY ISSUE ARISING IN THE PROCEEDINGS BEFORE HIM IN APPEAL FILED FOR ITS CONSIDERATION, EVEN IF THE ISSUE IS NOT RAISED BY THE APPELLANT IN ITS APPE AL BEFORE THE CIT(A). THUS ONCE AN ASSESSEE FILES AN APPEAL UNDER SECTION 246A OF THE ACT, IT IS NOT OPEN TO HIM 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 EFFECT FROM 1ST JUNE, 2001 THE POWER OF THE CIT(A) TO SET ASIDE THE ORDER OF THE ASSESSING OFFICER 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 COTERMINOUS WITH THAT OF THE ASSESSING OFFICER I.E. HE CAN DO ALL THAT ASSESSING OFFICER COULD DO. THEREFORE JUST AS IT IS NOT OPEN TO THE ASSESSING OFFICER TO NOT COMPLETE THE ASSESSMENT BY ALLOWING THE ASSESSEE TO WITHDRAW ITS RETURN OF INCOME, IT IS NOT 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 ASSESSEE. 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 BEFORE HIM. ACCORDINGLY, THE LAW DOES NOT EMPOWER THE CIT(A) TO DISMISS THE APPEAL FOR NON - PROSECUTION AS IS EVIDENT FROM THE PROVISIONS OF THE ACT. 7. IN THE BACKDROP OF THE AFORESAID SETTLED POSITION OF LAW, WE ARE UNABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE MANNER IN WHICH THE PRESENT APPEAL HAD BEEN DISPOSED OFF BY THE CIT(A). ACCORDINGLY, WE RESTORE THE MATTER TO THE FILE OF THE CIT(A) WITH A DIRECTION TO DISPOSE OFF THE APPEAL ON MERITS BY PASSING A SPEAKING ORDER . WE THUS, RESTORE THE ORDER OF THE CIT(A) TO HIS FILE FOR PASSING A FRESH ORDER. NEEDLESS TO SAY, THE CIT(A) WHILE DISPOSING OFF THE APPEAL SHALL AFFORD A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES IN TERMS OF OUR AFORESAID OBSERVATIONS . ORDER PR ONOUNCED IN THE OPEN COURT ON 2 8 .06.2019 S D / - S D / - ( SHAMIM YAHYA ) (RAVISH SOOD) ACCOUNTA N T MEMBER JUDICIAL MEMBER MUMBAI ; 28. 06.2019 PS. ROHIT P A G E | 6 ITA NO.52/MUM/2018 AY. 2007 - 08 RAVINDRA PRATAPRAI DOSHI VS. THE INCOME TAX OFFICER, WARD 29(3)(1) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI