M/S. Sai Builders, Kanpur V. Assistant Commissioner of Income Tax- II, Kanpur

ITA 543/LKW/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9082 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 02-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANIL KESARWANI
• Keywords: Principle of natural justice; Set aside
• Section: 143(3); 201; 246

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI. A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 543/LKW/2018 ASSESSMENT YEAR: 2009 - 10 SAI BUILDERS PLOT NO.77 RATAN LAL NAGAR NEAR SHREE RAM PARK KANPUR V. ADDL. CIT - 2 KANPUR T AN /PAN : AAWFS6566P (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI ANIL KESARWANI, FCA RESPONDENT BY: SHRI AJAY KUMAR, D.R. DATE OF HEARING: 16 0 9 201 9 DATE OF PRONOUNCEMENT: 20 0 9 201 9 O R D E R PER A. D. JAIN, V.P.: THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-I, KANPUR, DATED 11/2/2016, FOR THE ASSESSMENT YEAR 2009-10, TAKING THE FOLLOWING GROUNDS: 1. THAT THE ORDER PASSED BY THE LD. CIT(A) IS AGAINST THE FACTS OF THE CASE AND IS IN UTTER CONTRAST TO THE PRINCIPALS OF NATURAL JUSTICE. 2. THAT THE LD. CIT(A) IS UNJUSTIFIED IN MAKING ADDITION OF LABOUR EXPENDITURE EX PARTE. WRONGLY DECLARING THE SAME AS HIGHER THAN LAST YEAR, EXCESSIVE AND UNVOUCHED, WHICH IS NOT TRUE. 3. THAT THE LD. CIT(A) IS WRONG IN NOT ALLOWING ANY RELIEF TO .THE ASSESSEE AS SOUGHT IN ORIGINAL APPEAL, AS I. THE INTEREST PAID WAS FULLY ALLOWABLE; AND II. ADDITION MADE TOWARDS THE PURCHASES DUE TO BEING MADE IN CASH WAS EXCESSIVE; AND III. ADDITION MADE IN REPAIRS BEING AGAIN MADE IN CASH WAS EXCESSIVE. ITA NO.543/LKW/2018 PAGE 2 OF 5 4. THAT THE LD. CIT(A) WAS WRONG IN PASSING AN EX PARTE ENHANCEMENT ORDER OF SUCH QUANTUM WITHOUT APPRECIATING THAT THIS WOULD CAUSE AN IRREPARABLE LOSS TO THE ASSESSEE, IF SUSTAINED AS SUCH. 5. THAT THE APPELLATE ORDER PASSED BY THE LD. CIT(A) IS ANY WAY AGAINST THE CIRCUMSTANCES OF THE CASE AND BAD IN LAW AND IS LIABLE TO BE SET ASIDE. 2. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) HAS DISMISSED THE ASSESSEE'S APPEAL AND ENHANCED THE INCOME OF THE ASSESSEE BY RS.75 LAKHS, OBSERVING AS UNDER: IT IS SEEN THAT THE ASSESSEE IS NOT KEEN ON GETTING THE ISSUE RESOLVED AND IS NOT ATTENDING PROCEEDINGS OVER PAST SEVERAL MONTHS. THIS IS MERELY WASTING THE TIME OF THIS OFFICE, AS WELL AS DISRUPTING THE APPEALS OF GENUINE TAX PAYERS. THIS TENDENCY HAS TO BE SEVERELY DISCOURAGED OF NEEDLESSLY DEFERRING THE APPEALS. AS NO FRESH EVIDENCE HAS BEEN BROUGHT ON RECORD FOR PAYMENT OF INTEREST OF 1,11,000/- UNACCOUNTED PURCHASES 3,00,000/- AND REPAIR MAINTENANCE DISALLOWANCES 1,00,000/- TO ENABLE ME TO TAKE AN OPINION DIFFERENT FROM AND NOR THERE ANY POSSIBILITY OF SUCH EVIDENCE BEING BROUGHT FORTH BY THE ASSESSE. APPEAL IS DISMISSED ON THESE THREE GROUNDS. INCOME ENHANCED: THE ASSESSEE HAS ALSO BEEN ISSUED SHOW CAUSE ON THE TREATING RS.75,00,000/- LABOR CHARGES AS EXCESSIVE AND UNVOUCHED, ON WHICH INCOME WAS SOUGHT TO BE ENHANCED. NO FRESH EVIDENCE HAS BEEN BROUGHT ON RECORD NOR IS THERE ANY POSSIBILITY OF SUCH EVIDENCE BEING BROUGHT FORTH BY THE ASSESSE. IN THE LIGHT OF ABOVE, APPEAL MADE BY ASSESSE IS DISMISSED AND THIS INCOME ENHANCED BY RS.75,00,000/- ON ACCOUNT OF LABOR CHARGES AS EXCESSIVE AN UNVOUCHED. ITA NO.543/LKW/2018 PAGE 3 OF 5 INCOME ENHANCED AS ABOVE. RESULT: APPEAL IS DISMISSED AND INCOME ENHANCED AS ABOVE. 3. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD FILED AN APPEAL U/S 246 OF THE ACT BEFORE THE LD. CIT(A) AGAINST THE ASSESSMENT ORDER U/S 143(3) OF THE ACT, PASSED BY THE LD. ADDL. COMMISSIONER OF INCOME TAX; THAT THE ASSESSEE FIRM SUBSEQUENT TO FILLING OF THE APPEAL, CHANGED ITS ADDRESS TWICE AND INFORMED THE DEPARTMENT ABOUT ITS NEW ADDRESS AND HAS STARTED RECEIVING COMMUNICATION FROM THE DEPARTMENT ON ITS NEW ADDRESS; THAT HOWEVER, AS THE APPEAL MEMO WAS ON OLD ADDRESS, IT COULD NOT RECEIVE NOTICES, SUMMONS, ETC. AND CONSEQUENTLY COULD NOT FILE ITS DEFENSE SUBMISSIONS; THAT MEANWHILE THE CIT (A) SENT THE NOTICES FOR FIXING OF THE APPEAL ON THE OLD MENTIONED ADDRESS, WHICH WERE NEVER RECEIVED BY THE ASSESSEE, BECAUSE THE ASSESSEE FIRM HAD ALREADY CHANGED ITS ADDRESS; THAT THE ENHANCEMENT NOTICE DATED 27.12.2013 AND SUMMONS DATED 17.12.2013, ISSUED BY THE LD. CIT(A) WERE NOT RECEIVED BY THE ASSESSEE; THAT ON 11.02.2016, THE CIT (A) FRAMED AN EX PARTE ORDER ENHANCING THE INCOME BY RS.75,00,000/- OUT OF LABOUR PAYMENTS, CITING THEM AS 'MUCH HIGHER THAN LAST YEAR' AND 'EXCESSIVE & UNVOUCHED OR WITHOUT SUPPORTING', WHICH WAS MADE WITHOUT ANY REASON AND THE ORDER WAS PASSED WITHOUT AFFORDING ANY OPPORTUNITY OF EXPLANATION, TO THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE PRAYED THAT THEREFORE, IN THE INTEREST OF JUSTICE, THE ORDER OF THE LD. CIT(A) MAY BE RECALLED AND HE MAY BE DIRECTED TO DECIDE THE APPEAL AFTER AFFORDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 4. THE LD. D.R., ON THE OTHER HAND, PLACED RELIANCE ON THE ORDER OF THE LD. CIT(A). ITA NO.543/LKW/2018 PAGE 4 OF 5 5. HEARD. WE FIND THAT THE CIT(A) HAD DISMISSED THE APPEAL WITHOUT PROVIDING PROPER OPPORTUNITY TO THE ASSESSEE. MOREOVER, THE LD. CIT(A) HAD ENHANCED THE INCOME BY RS.75 LAKHS ON ACCOUNT OF LABOUR CHARGES, AS EXCESSIVE AND UNVOUCHED. THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE BEFORE US WAS THAT THE NOTICE OF ENHANCEMENT AND SUMMONS ISSUED BY THE LD. CIT(A) WERE NOT RECEIVED BY THE ASSESSEE, AS THEY WERE SENT AT THE OLD ADDRESS OF THE ASSESSEE, ALTHOUGH THE NEW ADDRESS FOR CORRESPONDENCE STOOD COMMUNICATED TO THE DEPARTMENT. THE ASSESSEE HAS ALSO FILED BEFORE US A CHART DEPICTING THE GROSS WORK DONE, LABOUR & WAGES AND PERCENTAGE FOR THE FINANCIAL YEARS 2007-08 AND 2008-09 AND HAS SUBMITTED THAT THERE IS NO INCREASE IN THE RATIO OF LABOUR EXPENSES IN COMPARISON TO THE LAST YEAR, AS OBSERVED BY THE LD. CIT(A). THE ASSESSEE HAS ALSO FILED BEFORE US DOCUMENTS, SUCH AS COPIES OF CPWD PUBLISHED RATES AND UP VAT RULES, WITH THE SUBMISSION THAT THE LABOUR EXPENSES INCURRED BY THE ASSESSEE ARE ON THE LOWER SIDE AND THUS, BY ANY STRETCH OF IMAGINATION, THE AMOUNT SPENT BY THE ASSESSEE CANNOT BE TERMED AS EXCESSIVE. 6. IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED OPINION THAT ANOTHER OPPORTUNITY OF HEARING SHOULD BE GIVEN TO THE ASSESSEE, SO THAT THE ASSESSEE CAN FURNISH THE DETAILS, SUCH AS GROSS WORK DONE, LABOUR & WAGES AND PERCENTAGE, FOR THE FINANCIAL YEARS 2007-08 AND 2008-09, WHICH COULD NOT BE FURNISHED BEFORE THE LD. CIT(A), AS, AS SUBMITTED BY THE ASSESSEE, NO NOTICE OF ENHANCEMENT AND SUMMONS ISSUED BY THE LD. CIT(A) WERE RECEIVED BY THE ASSESSEE. WE, THEREFORE, IN THE INTEREST OF JUSTICE TO THE PARTIES, SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE LD. CIT(A) WITH DIRECTION TO DECIDE THE SAME ON MERIT, IN ACCORDANCE WITH LAW, AFTER AFFORDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE, NO DOUBT, SHALL COOPERATE IN THE FRESH PROCEEDINGS BEFORE THE LD. CIT(A). ALL PLEAS AVAILABLE UNDER THE LAW SHALL REMAIN SO AVAILABLE TO THE ASSESSEE. ORDERED ACCORDINGLY. ITA NO.543/LKW/2018 PAGE 5 OF 5 7. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APPEAL IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/09/2019. SD/ - SD/ - [ T. S. KAPOOR ] [ A. D. JAIN ] ACCOUNTANT MEMBER VICE PRESIDENT DATED:20/09/2019 JJ:1609 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSISTANT REGISTRAR