ORIENTAL VENEER PRODUCTS LTD, MUMBAI V. ITO 7(1)(1), MUMBAI

ITA 5357/MUM/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3739 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 31-12-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 15-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Keywords: Principle of natural justice; Assessment record
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.5357/M/2011 ASSESSMENT YEAR: 2006-07 M/S. ORIENTAL VENEER PRODUCTS LTD., 25, MOHAMMEDI LAKDA BAZAR NO.1, MAULANA SHAUKAT ALI ROAD, GRANT ROAD, MUMBAI - 400 008 PAN: AAACO 0490M VS. ITO - 7(1)(1), AAYAKAR BHAVAN, M.K. MARG, MUMBAI (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI NISHIT GANDHI, A.R. REVENUE BY : SHRI S. PANDIAN, D.R. DATE OF HEARING : 08.03.2016 DATE OF PRONOUNCEMENT : 11.03.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE, AGAINST THE ORDER DATED 30.01.09 OF THE COMMISSIONER OF INCOME TAX (A PPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2006-07, AGITATING THE ADDITIONS MADE BY THE ASSESSING OFFICER (HEREINAFTE R REFERRED TO AS THE AO) WHICH HAS BEEN FURTHER CONFIRMED BY THE LD. CIT(A). 2. AT THE OUTSET, THE LD. A.R. OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS NOT BEEN GRANTED PROPER OPPORTUNITY BY THE AO TO REPRESENT HIS CASE. HE HAS PLACED ON RECORD AN AFFIDAVIT OF THE CONCERNED C.A. OF THE ASSESSEE NAMELY SHRI VINOD R. AGARWAL STATING AND N ARRATING THE SEQUENCE OF EVENTS TO STRESS THAT HE TIME AND AGAIN APPEARED BE FORE THE AO ON BEHALF OF THE ASSESSEE AND SUBMITTED THE REQUISITE DETAILS AND SU BMISSIONS. BUT THE AO FAILED TO RECORD HIS PRESENCE AND EVEN TO CONSIDER HIS SUBMISSIONS. THE SAID ITA NO.5357/M/2011 M/S. ORIENTAL VENEER PRODUCTS LTD. 2 AFFIDAVIT OF SHRI VINOD R. AGARWAL FOR THE SAKE OF CONVENIENCE IS PRODUCED AS UNDER: SHRI VINOD R. AGARWAL, SON OF SHRI RADHESHYAM AGARWAL, AGED ABOUT 50 YEARS AND PRESENTLY RESIDING AT A/603, 15 D KALPAK, S.M.ROAD, ANTOPHILL, MUMBAI 400 037, DO HEREBY STATE ON SOLEMN AFFIRMAT ION AS FOLLOWS: 1. I SAY THAT I AM PRACTICING AS CHARTERED ACCOUNTANT SINCE LAST 24 YEARS. 2. I SAY THAT IN COURSE OF MY PRACTICE I WAS HANDLING ASSESSMENT PROCEEDINGS OF MY CLIENT, M/S. ORIENTAL VENEER PROD UCTS LTD. I SAY THAT FOR A.Y. 2006 - 2007, I HAD PERSONALLY A TTENDED ASSESSMENT PROCEEDING BEFORE THE INCOME TAX OFFICER - 7 (1) (1), MUMBAI ['THE A.O.'] FROM TIME TO TIME. 3. I GIVE BELOW DETAILS OF THE HEARINGS BEFORE THE A.O . IN CHRONOLOGICAL ORDER: {(I) NOTICE DATED 11.08.2008 FROM ACIT 7(1)[A.O.] W HICH WAS RECEIVED ON 14.08.2008 FOR COMPLIANCE ON 2 1.08 .2008. I APPEARED BEFORE ACIT ON 21.08.2008 PERSONALLY WIT H SUBMISSION DATED 21.08.2008. UPON MEETING THE A.O., I WAS TOLD TO FILE THE AFORESAID SUBMISSION IN THE TAPAL AND THE SAME WAS DONE AS PER HIS INSTRUCTIONS. THERE WAS NO DISCUSSION OR INTERACTION, EXCEPT THAT I WAS ASKED TO REPLY TO THE QUESTIONNAI RE DATED 18.08.2008. (II)QUESTIONNAIRE DATED 18.08.2008, WAS RECEIVED ON 21.08.2008 (AFTER ATTENDING THE OFFICE OF A.O.) FOR COMPLIANCE ON 01.09.2008. ON 01.09.2008, I APPEARED BEFORE A.O. ALONGWITH THE REQUISITE DETAILS BUT I WAS INFORMED THAT THE CASE WAS LIKELY TO BE TRANSFERRED TO ITO 7(1) AND I WOULD RECEIVE A FRESH NOTICE FROM THE ITO FOR THE SAME. (III) NOTICE DATED 07.10.2008 U/S 142(1) FROM ITO 7 (1) WHICH WAS RECEIVED ON 10. 10.2008 FOR COMPLIANCE ON 15. 10.20 08 . THE NOTICE WAS COMPLIED WITH ON 10.10.2008 AND I AT TENDED PERSONALLY TO REQUEST AN ADJOURNMENT AS TIME WAS RE QUIRED TO PROVIDE THE FURTHER DETAILS SINCE THE ACCOUNTANT WAS NOT IN TOWN. THE ITO THEN ASKED ME TO ATTEND HIS OFFICE IN THE SECOND WEEK OF NOVEMBER. THE SAID REQUEST WAS MADE BY HIM ORALLY. ON 14.11.2008, IN COMPLIANCE WITH THE DIRECTION OF THE ITO, I APPEARED WITH ALL THE REQUISITE DETAILS BEFORE HIM. THE CASE WAS DISCUSSED WITH HIM AND A SUBMISSION DATED 14.11 .2008 WAS MADE IN COMPLIANCE WITH THE NOTICE DATED 07.10. 2008, FURTHER IT IS CLARIFIED THAT THE SUBMISSION DATED 1 4.11.2008, WAS FILED PERSONALLY WITH THE ITO, AND NOT IN THE T APAL AS ALLEGED BY THE ASSESSMENT ORDER DATED 24. 12.2008. (IV) LETTER DATED 10.12.2008, RECEIVED ON 16.12.200 8, FOR ITA NO.5357/M/2011 M/S. ORIENTAL VENEER PRODUCTS LTD. 3 COMPLIANCE ON 18.11.2008 (SIC) THEREFORE IT CAME AS A RUDE SHOCK, WHEN I RECEIVED THE REQUESTED STATEMENTS RECOREDE AT THE TIME OF SURVEY ALONG WITH A PENALTY NOTICE U/S 27(1)(B) FOR NON ATTENDANCE ON 03.12.2008 [THE COMPLIANCE DATE OF NOTICE DATED 25.11.2008] (VI) LETTER DATED 16.12.2008, RECEIVED ON 17.12.200 8, FOR COMPLIANCE ON 22.12.2008 THE SAID NOTICE WAS TO CORRECT THE ERROR IN THE LET TER DATED 10.12.2008 THAT MENTIONED THE DATE OF HEARING AS 18 .11.2008. I ATTENDED ON 22.12.2008 ALONG WITH A SUBMISSION DA TED 22.12.2008, WHICH FOR REASONS BEST KNOWN TO HIM HE REFUSED TO ACCEPT. THEREFORE, TO BE ON THE SAFE SIDE I FILED T HE LETTER IN OFFICE TAPAL ON 23.12.2008 IN THE MORNING. 4. 1 SAY THAT NEITHER MYSELF NOR THE SAID CLIENT WERE EGLIGENT OR CARELESS IN ATTENDING BEFORE THE A.0., EITHER IN TH IS YEAR OR ANY OTHER YEAR. 5. I SAY THAT IN VIEW OF THE HEARING OF THE APPEAL OF THE SAID CLIENT BEFORE THE HON'BLE TRIBUNAL, I HAD SOUGHT INSPECTIO N OF THE ASSESSMENT RECORDS OF MY CLIENT BEFORE THE A.0. HOW EVER, IN SPITE OF MY REPEATED REQUESTS, I HAVE NOT BEEN SUPP LIED WITH A COPY OF THE PROCEEDING SHEET. I SAY THAT ALL THAT HAS BEEN STATED ABOVE IS TRUE T O THE BEST OF MY KNOWLEDGE AND BELIEF. SOLEMNLY AFFIRMED THIS ON THE 4 TH DAY OF MARCH, 2016. 3. WE HAVE PERUSED THE ASSESSMENT RECORDS TO VERIFY THE CONTENTIONS OF SHRI VINOD R. AGARWAL AND FOUND THAT THERE IS NO ORDER S HEET MAINTAINED IN THE ASSESSMENT RECORDS. ONLY A SUMMARY OF THE DATES WH ICH SEEMS TO BE PREPARED AFTERWARDS AND NOT IN THE REGULAR COURSE OF HEARING OF THE CASE HAS BEEN FOUND. THE CONTENTS OF WHICH FOR THE SAKE OF CONVENIENCE A RE REPRODUCED AS UNDER: ITA NO.5357/M/2011 M/S. ORIENTAL VENEER PRODUCTS LTD. 4 4. A PERUSAL OF THE ABOVE REFERRED TO DOCUMENTS REP RODUCTION REVEALS THAT THERE IS A GROSS MISCARRIAGE OF JUSTICE DONE BY THE AO WITH THE ASSESSEE. NEITHER ANY ORDER SHEET HAS BEEN PREPARED/MAINTAINE D NOR THE AO HAS GIVEN PROPER OPPORTUNITY TO THE A.R. OF THE ASSESSEE TO R EPRESENT HIS CASE. FROM THE AFFIDAVIT OF THE A.R. OF THE ASSESSEE NAMELY SHRI V INOD R. AGARWAL, IT REVEALS THAT HE HAS BEEN VERY PERTINENT, NOT ONLY TO APPEAR BEFORE THE AO BUT TO FILE THE NECESSARY EXPLANATIONS AND SUBMISSIONS BEFORE THE A O, BUT, DESPITE THAT THE AO PROCEEDED TO PASS EX-PARTE ASSESSMENT ORDER UNDE R SECTION 144 OF THE ACT. DESPITE THE LAST LETTER FILED BY THE LD. A.R. OF TH E ASSESSEE ON 17.12.08, THE AO PASSED THE ASSESSMENT ORDER ON 24.12.08 EX-PARTE OF THE ASSESSEE. THE LD. A.R. HAS AFFIRMED IN THE AFFIDAVIT THAT HE HAD APPE ARED BEFORE THE AO ON 22.12.08 BUT THE AO REFUSED TO ACCEPT HIS SUBMISSIO NS AND HEAR HIM. WE FIND THAT THE ACT AND CONDUCT OF THE AO IN THIS CASE IS AGAINST THE PRINCIPLES OF JUSTICE AND FAIR PLAY. EVEN THE LD. CIT(A) HAS ALS O NOT CONSIDERED THE ABOVE FACTS OF NON GRANTING OF PROPER OPPORTUNITY TO THE ASSESSEE BY THE AO WHILE DECIDING THE APPEAL OF THE ASSESSEE. THERE IS A GR OSS VIOLATION OF NATURAL JUSTICE, EQUITY AND FAIR PLAY IN THIS CASE BY THE A O. EVEN THE AO HAS ALSO NOT MAINTAINED THE ORDER SHEET AND HAS FAILED TO PASS T HE DATE-WISE ORDERS DURING THE ASSESSMENT PROCEEDINGS WHICH SHOWS THE LACK SLI DE AND NEGLIGENT ATTITUDE OF THE AO WHILE FRAMING THE IMPUGNED ASSESSMENT ORD ER IN THIS CASE. SUCH AN ASSESSMENT ORDER, THUS, IS NOT SUSTAINABLE IN THE E YES OF LAW AND THE SAME IS HEREBY SET ASIDE. THE MATTER IS REMANDED BACK TO T HE FILE OF THE AO TO PASS A FRESH ASSESSMENT ORDER IN THIS CASE AFTER GIVING DU E AND PROPER OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS CASE. THE AO WILL MAIN TAIN A PROPER ORDER SHEET WITH DATE-WISE ORDERS MENTIONING THE DETAILS/EVENTS /PROCEEDINGS TAKEN ON EACH DATE. 5. IN THE RESULT, THE APPEAL OF THE ASSES SEE IS TREATED AS ALLOWED FOR ITA NO.5357/M/2011 M/S. ORIENTAL VENEER PRODUCTS LTD. 5 STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11.03.2016. SD/- SD/- (RAJESH KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 11.03.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.