Shri Shaileshbhai Somabhai Patel, Ahmedabad V. The Income Tax Officer, Ward-5(2)(3), Ahmedabad

ITA 537/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8502 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 03-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER SHRI SHAILESHBHAI SOMABHAI PATEL, A - 14, SNEHADRI APARTMENT, SHREYAS TEKRA, AMBAWADI, AHMEDABAD PAN: ABCPP2114M (APPELLANT) VS THE ITO, WARD - 5(2)(3), AHMEDABAD (RESPONDENT) REVENUE BY : S H RI PRASOON KABRA , SR. D . R. ASSESSEE BY: NONE DATE OF HEARING : 15 - 03 - 2 018 DATE OF PRONOUNCEMENT : 12 - 04 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THESE TWO APPEALS FI LED BY ASSESSEE FOR A.Y. 2009 - 10 & 2010 - 11 , AR ISE FROM ORDER OF THE CIT(A) - 5 , AHM EDABAD DATED 16 - 12 - 2016 , IN PROCEEDINGS UNDER SECTION 144 R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2 . THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL : - ITA NO. 537/AHD/2017 IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE IMPUGNED ASSESSMENT ORDER IS BAD IN LAW AND THE ADDITIONS AS STATED HEREIN AND AS STATED IN THE ASSESSMENT ORDER AND ALSO AS STATED IN THE STATEMENT OF THE FACT S AS TO: 1. THE ASSESSEE HAS FILED RETURN DECLARING TOTAL INCOME OF RS 139140/ - ON 18/05/2009. THE SAID RETURN WAS PROCESSED U/S 143(1) ON 09/03/2011. LATER BASED ON SAID CREDITABLE I T A NO S . 537 & 538 / A HD/20 17 A . Y. 200 9 - 10 & 2010 - 11 I.T.A NO. 537 & 538 /AHD/20 17 A. Y. 2009 - 10 PAGE NO SHAILESHBHAI SOMABHAI PATEL VS. ITO 2 INFORMATION RECEIVED AS RECEIVED BY THE DEPARTMENT THE CASE WAS REOPENED U /S 147 AFTER TAKING NECESSARY STEPS AS REQUIRED UNDER THE SAID ACT OF INCOME TAX 1961. 2. DUE TO LACK OF KNOWLEDGE OF IMPORTANCE OF VARIOUS NOTICES ISSUED UNDER THE ACT AS MENTIONED IN THE ORDER AS REFERRED BY THE ASSEESSMENT ORDER. BUT AT THE FAG END AS T HE ASSESSEE REALISED HIS FAULT AND APPEARED BEFORE THE ASSESSING OFFICER - AND REQUESTING THE SAID RESPECTED OFFICER TO GIVE TIME AND ALSO GIVE INFORMATION ON RECORD WITH THE DEPARTMENT BASED ON WHICH THE CASE WAS REOPENED - BUT THE RNED OFFICER DID NOT EV EN TAKE ON RECORD THE LETTERS GIVEN AND WAS NOT PREPARED LISTEN TO THE ASSESSEE. THE LEARNED OFFICER HAVING MADE UP HIS MIND TO PASS AN ORDER U/S 144 AND HAVING BEEN ACCORDED PERMISSION FROM HIS HIGHER UPS DID NOT GIVE A HEARING TO THE ASSESSEE - IT IS ACC EPTED THOUGH LATE IT WAS NOT SO LATE THAT A HEARING COULD NOT HAVE BEEN MADE NOR ANY PAPERS ON WHICH THE CASE WAS REOPENED WAS GIVEN TO THE ASSESSEE. WE ACKNOWLEDGE OUR CONSISTENT LAPSE IN APPEARING BEFORE THE DEPARTMENT NOR DID WE TAKE HELP OF ANY PROFESS IONAL BUT AT FAG END BEFORE THE ORDER WAS PASSED BY THE ASSESSING OFFICER PASSED THE ORDER (LONG TIME TO GO BEFORE THE MATTER WOULD HAVE BECOME TIME BARRING) WE SOUGHT FOR TIME AND ALSO PROPOSED TO BRING IN EXPERT ADVICE TO CHALLENGE THE PROPOSED SHOW CAUS E NOTICE ISSUED TO US. BUT THE LEANED OFFICER DID NOT GIVE US A HEARING NOR DID HE SHARE THE INFORMATION SHORT BY US NOR ACKNOWLEDGE OUR LETTER WHICH WE PROPOSED TO PUT ON RECORD. 3. THE FOLLOWING ADDITIONS MADE ARE BEING APPEALED AND REQUEST TO RECONSIDER THE SAME IS BEING MADE A) ADDITION OF RS 17,46,66 6/ - REGARDING OPENING STOCK - CONTEMPLATED TO HAVE NOT BEEN SHOWN IN EARLIER YEARS AS CLOSING STOCK - IE RS 16,43,123/ - PLUS RS 103543/ - BEING 50% OF OTHER EXPENSES + TRAVELLING EXPENSES CLAIMED IN THE RETU RN FILED AS OTHER EXPENSES + TRAVELLING EXPENSE - THE SAID ADDITION IS BAD IN LAW IN OUR VEIW AND NEEDS TO BE DROPPED. THE CIT (A) V ALSO ALLOWED THE SAID ADDITION AND DID NOT WAIVE THE SAME. B) ADDITION OF RS 3101200/ - MADE ON ACCOUNT OF CASH DEPOSITS MA DE IN DESIGNATED AND LISTED BANK ACCOUNTS OF THE ASSESSEE AS LISTED IN THE ORDER - EVEN SMALL AMOUNTS LIKE RS 8000 - RS 10000 ALSO INCLUDED - THE SAID ADDITION IS BAD IN LAW IN OUR VEIW AND NEEDS TO BE DROPPED. THE CIT (A) V ALSO ALLOWED THE SAID ADDITION AND DID NOT WAIVE THE SAME. C) ADDITION OF RS 8124561/ - BEING THE SUNDRY CREDITORS AS SHOWN IN THE ORIGINAL RETURN OF INCOME FILED WITH THE DEPARTMENT AS MENTION EARLIER. THE ORDER MENTIONS THAT SINCE NO BASIS OR EVIDENCE WAS PRODUCED THE WHOLE OF THE SUN DRY CREDITORS SO SHOWN HAVE BEEN ADDED WHICH IS BAD IN LAW IN OUR VEIW AND NEEDS TO BE DROPPED. THE CIT (A) V ALSO ALLOWED THE SAID ADDITION AND DID NOT WAIVE THE SAME. 3. IN THIS CASE, ASSESSMENT U/S. 144 R.W.S. 147 OF THE ACT WAS COMPLETE D ON 18 TH FEB, 2016. THE TOTAL INCOME WAS DETERMINED AT RS. 1 , 31 , 12 , 236/ - AS AGAINST TOTAL INCOME AS PER RETURN OF INCOME AT RS. 1 , 39 , 140/ - . 4. AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISPOSED OF THE APPEAL EX - PARTE DUE TO NON - ATTE NDANCE. DURING THE COURSE OF PENALTY PROCEEDINGS BEFORE US, NOBODY HAS ATTENDED FROM THE SIDE OF THE ASSESSEE. LD. DEPARTMENTAL REPRESENTATIVE HAS INDICATED THAT LD. CIT(A) HAS ISSUED NOTICES DATED 22 ND AUGUST, 2016, 15 TH SEP, 2016 AND 24 TH OCTOBER, 2016 I.T.A NO. 537 & 538 /AHD/20 17 A. Y. 2009 - 10 PAGE NO SHAILESHBHAI SOMABHAI PATEL VS. ITO 3 RESPECTIVELY BUT ASSESSEE HAS NOT MADE ANY COMPLIANCE DURING THE COURSE OF APPELLATE PROCEEDINGS. 5. WE HA VE GONE THROUGH THE ORDER OF THE LD. CIT(A). WE FIND THAT IN RESPONSE TO NOTICE DATED 24 TH OCTOBER, 2016, THE ASSESSEE HAS FILED ADJOURNMENT APPL ICATION BY WHICH THE CASE WAS ADJOURNED TO 15 TH DEC, 2016. THEREAFTER, THE ASSESSE HAS NOT MADE COMPLIANCE TO T H E APPELLATE PROCEEDINGS. WE HAVE ALSO NOTICED THAT ASSESSING OFFICER HAS ALSO FINALIZED THE ASSESSMENT EX - PARTE U/S. 144 OF THE ACT BECAUSE OF THE NON - COMPLIANCE BY THE A SSESSEE. AFTER C ONSIDERING THE ABOVE FACTS AND THE NATURE O F ADDI TI ON MADE, WE ARE OF THE CONSIDERED ONION THAT IT WILL BE APPROPRIATE TO PROVIDE ONE MORE OPPORTUNITY T O T HE ASSESSE FOR DECIDING THE CAS E ON MERIT . ACCORDINGLY , WE RESTORE THIS CASE TO THE FILE OF LD. CIT(A) FOR DECIDING AFRESH ON MERIT AFTER AFFORDING THREE MORE OPPORTUNITIES TO THE ASSESSEE FAILING WHICH OUR INSTANT ORDER WOULD BE DEEMED TO HAVE BEEN VACATED . IN THE RESULT , THE APPEAL OF THE ASSESS IS ALLOWE D FOR STATISTICAL PURPOSES . 6. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - ITA 5 3 8/AHD/2017 IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE, THE IMPUGNED ASSESSMENT ORDER IS BAD IN LAW AND THE ADDITIONS AS STATED HEREIN AND A S STATED IN THE ASSESSMENT ORDER AND ALSO AS STATED IN THE STATEMENT OF THE FACTS AS TO: 1. THE ASSESSEE HAS FILED RETURN DECLARING TOTAL INCOME OF RS 157970/ - ON 09/06/2010. THE SAID RETURN WAS PROCESSED U/S 143(1) ON 12/05/2011. LATER BASED ON SAID CREDI TABLE INFORMATION RECEIVED AS RECEIVED B Y THE DEPARTMENT THE CASE WAS RE OPENED U/S 147 AFTER TAKING NECESSARY STEPS AS REQUIRED UNDER THE SAID ACT OF INCOME TAX 1961. 2. DUE TO LACK OF KNOWLEDGE OF IMPORTANCE OF VARIOUS NOTICES ISSUED UNDER THE ACT AS MENT IONED IN THE ORDER AS REFERRED BY THE ASSEESSMENT ORDER. BUT AT THE FAG END AS THE ASSESSEE REALISED HIS FAULT AND APPEARED BEFORE THE ASSESSING OFFICER - AND REQUESTING THE SAID RESPECTED OFFICER TO GIVE TIME AND ALSO GIVE INFORMATION ON RECORD WITH THE DE PARTMENT BASED ON WHICH THE CASE WAS REOPENED - BUT THE LEARNED OFFICER DID NOT EVEN TAKE ON RECORD THE LETTERS GIVEN AND WAS NOT PREPARED TO LISTEN TO THE ASSESSEE. THE LEARNED OFFICER HAVING MADE UP HIS MIND TO PASS AN ORDER U/S 144 AND HAVING BEEN ACCOR DED PERMISSION FROM HIS HIGHER UPS DID NOT GIVE A HEARING TO THE ASSESSEE - IT IS ACCEPTED THOUGH LATE IT WAS NOT SO LATE THAT A HEARING COULD NOT HAVE BEEN MADE NOR ANY PAPERS ON WHICH THE CASE WAS REOPENED WAS GIVEN TO THE ASSESSEE. WE ACKNOWLEDGE OUR CO NSISTENT LAPSE IN APPEARING BEFORE THE DEPARTMENT NOR DID WE TAKE HELP OF ANY PROFESSIONAL BUT AT FAG END BEFORE THE ORDER WAS PASSED BY THE ASSESSING OFFICER PASSED THE ORDER (LONG TIME TO GO BEFORE THE MATTER WOULD HAVE BECOME TIME BARRING) WE SOUGHT FOR TIME AND ALSO PROPOSED TO BRING IN EXPERT ADVICE TO CHALLENGE THE PROPOSED SHOW CAUSE NOTICE ISSUED TO US. BUT THE LEANED OFFICER DID NOT GIVE US A HEARING NOR DID HE I.T.A NO. 537 & 538 /AHD/20 17 A. Y. 2009 - 10 PAGE NO SHAILESHBHAI SOMABHAI PATEL VS. ITO 4 SHARE THE INFORMATION SHORT BY US NOR ACKNOWLEDGE OUR LETTER WHICH WE PROPOSED TO PUT ON RECORD. 3. THE FOLLOWING ADDITIONS MADE ARE BEING APPEALED AND REQUEST TO RECONSIDER THE SAME IS BEING MADE A) ADDITION OF RS 45,74,553/ - REGARDING PROFIT UNDERSTATED AND AS WORKED OUT BY THE LEARNED ITO BY DATA AVAILED FROM BSE AND NSE AS STATED IN THE O RDER - NOT CONSIDERING THE INFORMATION AS GIVEN IN THE RETURN OF INCOME OR TAX AUDIT REPORT SUBMITTED THEREUNDER - NOR THE EFFECT OF PREVIOUS YEARS ADDITIONS MADE ON ACCOUNT OF STOCK HAS BEEN CONSIDERED BY THE LEARNED ITO AND IN THE OPINION OF THE ASSESSEE THE SAID ADDITION IS BAD IN LAW IN OUR VEIW AND NEEDS TO BE DROPPED OR WAIVED. . THE CIT (A) V ALSO ALLOWED THE SAID ADDITION AND DID NOT WAIVE THE SAME. B) ADDITION OF RS 1,27,33,000/ - MADE ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS MADE IN DESIGNATED AND L ISTED BANK ACCOUNTS OF THE ASSESSEE AS LISTED IN THE ORDER - EVEN SMALL AMOUNTS LIKE RS 8000 - RS 10000 ALSO INCLUDED - THE SAID ADDITION IS BAD IN LAW IN OUR VEIW AND NEEDS TO BE DROPPED. THE CIT (A) V ALSO ALLOWED THE SAID ADDITION AND DID NOT WAIVE THE SAME. C) ADDITION OF RS 500000/ - BEING THE PROFESSIONAL FEES SAID TO HAVE BEEN RECEIVED FROM RAJPUTANA STEEL CASTING PVT LTD. AS PER FORM NO 26 AS - WHEREIN SAID DETAILS HAVE COME TO THE INFORMATION OF THE ASSESSING OFFICER AND ADDED TO THE INCOME HAVE BEE N ADDED WHICH IS BAD IN LAW IN OUR VEIW AND NEEDS TO BE DROPPED. THE CIT (A) V ALSO ALLOWED THE SAID ADDITION AND DID NOT WAIVE THE SAME. D) ADDITION OF RS 93,32,298/ - BEING THE 'UNEXPLAINED' ADVANCES FROM CLIENTS AS SHOWN IN THE ORIGINAL RETURN OF INCOME AND TAX AUDIT REPORT THERETO - FILED WITH THE DEPARTMENT' AS MENTION EARLIER. THE ORDER MENTIONS THAT SINCE NO BASIS OR EVIDENCE WAS PRODUCED THE WHOLE OF THE ADVANCES FROM CLIENTS SHOWN HAVE BEEN ADDED WHICH IS BAD IN LAW IN OUR VEIW AND NEEDS TO BE DROPP ED OR WAIVED. THE CIT V ALSO ALLOWED THE SAID ADDITION AND DID NOT WAIVE THE SAME. 7. T HE ASSESSING OFFICER HAS COMPLETED EX - PARTE ASSESSMENT U/S.144 R.W.S. 147 OF THE ACT ON 18 TH FEB, 2016. THE ASSESSING OFFICER HAS DETERMINED THE TOTAL INCOME AT RS. 2 , 72 , 97 , 760/ - AGAINST THE TOTAL INCOME AS PER RETURN OF INCOME. 8. AGGRIEVED ASSESSEE FILED APPEAL BEFORE EH LD. CIT(A). AS NOBODY HAS MADE COMPLIANCE BEFORE HE LD. CIT(A), THEREFORE, HE HAS DISPOSED OF THE APPEAL EX - PARTE. DURING THE COURSE OF PENALTY PROCEEDINGS BEFORE US, NOBODY HAS CONTENDED FROM THE SIDE OF THE ASSESSEE. THE LD. DEPARTMENTAL REPRESENTATIVE HAS INDICATED THAT LD. CIT(A) HAS ISSUED SHOW CAUSE NOTICE S DATED 22 ND AUGUST, 2016, 15 TH SEP, 2016 AND 24 TH OCT, 2016 AND THE ASSESSEE HAS NOT MADE ANY COMPLIANCE. WE HAVE GONE THROUGH THE ORDER OF THE LD. CIT(A) AND FIND THAT ASSESSEE HAS FILED ADJOURNMENT APPLICATION IN RESPONSE TO NOTICE DATED 24 TH OCT, 2016. THEREAFTER , THE CASE WAS ADJOURNED TO 15 TH DEC, 2016 BUT NOBODY HAS MADE COMPLIANC E ON THE DATE OF HEARING FIXED IN THIS CASE. THE ASSESSING OFFICER I.T.A NO. 537 & 538 /AHD/20 17 A. Y. 2009 - 10 PAGE NO SHAILESHBHAI SOMABHAI PATEL VS. ITO 5 HAS ALSO DECIDED THE CASE ON EX - PARTE BASIS ON ACCOUNT T OF NON - COMPLIANCE BY THE ASSESSEE. AFTER CONSIDERING THE ABOVE FACTS AND THE NATURE OF ADDITION , WE ARE OF HE CONSIDERED OPINION T HAT IT WILL BE APPROPRIATE TO PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSEE FOR DECIDING THIS CASE ON MERIT. ACCORDINGLY, THIS CASE IS RESTORED TO T H E FILE OF LD. CIT(A) FOR DECIDING AFRESH AFTER AFFORDING THREE OPPORTUNITIES TO THE ASSESSEE OTHERWISE OUT INSTANT ORDER WOULD BE DEEMED TO HAVE BEEN VACATED . IN THE RESULT , THE APPEAL OF THE ASSESS EE IS ALLOWED FOR STATISTICAL PURPOSES . 9. IN THE COMBINED RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDE R PR ONOUNCED IN THE OPEN C OURT ON 12 - 04 - 201 8 SD/ - SD/ - ( S.S. GODARA ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 12 /04 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,