Liquidz India Pvt.Ltd Hyd, Mumbai V. DCIT, Cir-16(1), Hyderabad

ITA 559/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61895 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 05-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIVED
• Assessee Lawyers: A V RAGHURAM
• Keywords: Depreciation; Search and seizure; Principle of natural justice; Period of limitation; Reasonable cause; Right to appeal
• Section: 194C; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.559/HYD/2011 ASSESSMENT YEAR: 2007-08 M/S. LIQUIDZ INDIA PVT.LTD., - DCIT, CIR-16(1), HYDEDRABAD. HYDERABAD. PAN:AABCL 0387 K ( APPELLANT) (RESPONDENT) APPELLANT BY SRI A.V . RAGHURAM RESPONDENT BY SMT. NIVED ITA BISWAS DATE OF HEARING : 26-04-2012 DATE OF PRONOUNCEMENT : 18-05-2012. ORDER PER SAKTIJIT DEY, JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 24-12-2010 PASSED IN ITA NO.0056/DC-16(1)/CIT(A)-V/2010-11 PERTAINING TO THE ASSESSMENT YEAR 2007-08. THERE IS A DELAY OF 30 DAYS IN FILING THIS APPEAL. AFTER GOING THROUGH THE PETITIO N FOR CONDONATION OF DELAY, WE FIND SUFFICIENT CAUSE FO R NOT PRESENTING THE APPEAL WITHIN THE PRESCRIBED TIME. HENCE, THE DELAY IS CONDONED AND THE APPEAL IS ADMITTED. 2. THE APPEAL HAS BEEN FILED ON THE FOLLOWING GROUNDS:- ITA NO.559/HYD/2011 M/S LIQUIDZ INDIA PVT. LTD. =============================== 2 1. THE LD. CIT (A) OUGHT TO HAVE CONDONED THE DELAY IN FILING OF THE APPEAL BEFORE HIM. 2. THE LD. CIT (A) FAILED TO APPRECIATE THE FACT THAT THE DELAY WAS MAINLY ON ACCOUNT OF THE FACT THAT APPELLANT WAS PERUSING APPLICATION U/S 154 BEFORE THE AO WHICH WAS STILL PENDING. 3. LD. CIT (A) WAS FAILED TO APPRECIATE THE FACT THAT DELAY WAS CAUSED DUE TO ASSESSEE PURSUING APPLICATION U/S 154 AND WAS LATER ADVISED TO FILE APPEAL WHICH IN ITSELF WAS A REASONABLE CAUSE. 4. LD. CIT (A) OUGHT TO HAVE CONDONED THE DELAY AS APPELLANTS CASE WAS SQUARELY COVERED BY HE ORDER OF ITAT, HYDERABAD BENCH IN THE CASE OF TEJA CONSTRUCTIONS VS. ACIT (2010) 129 TTJ (UO) 57 AND ALSO ITAT AHMEDABAD DECISION IN THE CASE OF KANUBHAI RAMJIBHAI VS. INCOME-TAX OFFICER (2011) 49 DTR (AHD.) (TRIB.) 70. 5. LD. CIT (A) OUGHT TO HAVE DELETED ADDITION OF RS.65,89,810 MADE BY AO U/S 40(A)(IA) 6. LD. CIT (A) OUGHT TO HAVE FOLLOWED DECISION OF ITAT, HYDERABAD BENCH IN THE CASE OF TEJA CONSTRUCTIONS VS. ACIT (2010) 129 TTJ (UO) 57 AND ALSO OF ITAT, AHMEDABAD IN THE CASE OF KANUBHAI RAMJIBHAI VS. INCOME-TAX OFFICER (2011) 49 DTR (AHD.) (TRIB. 70) WHICH WERE BINDING ON HIM. ITA NO.559/HYD/2011 M/S LIQUIDZ INDIA PVT. LTD. =============================== 3 3. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAGED IN BUSINESS OF RUNNING RESTAURANTS. FOR THE ASSESSMENT YEAR 2007-08, THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING A LOSS OF RS.4,10,191/-. IN CONSEQUENCE TO A SEARCH AND SEIZURE OPERATION CARRIED OUT IN THE CASE OF M/S HAREN CHOKSEY GROUP ON 5-10- 2007, A NOTICE U/S 153C OF THE ACT WAS ISSUED TO THE ASSESSEE. IN RESPONSE TO THE NOTICE, THE ASSESSEE FILE D A RETURN OF INCOME DECLARING TOTAL INCOME AT NIL. AFTER CLAIMING BROUGHT FORWARD DEPRECIATION OF RS.1523042. IN COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THAT THERE WAS A DELAY IN MAKING PAYMENT OF TDS ON RENT, PROFESSIONAL FEES AND PAYMENT TO CONTRACTORS COVERED UNDER SECTIONS 194I, 194J AND 194C RESPECTIVELY. THE AO DISALLOWED THE EXPENSES CLAIMED UNDER THE AFORESAID HEADS AND ADDED BACK AN AMOUNT OF RS.65,89,810/- TO THE TOTAL INCOME U/S 40(A)(IA). BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A). THE CIT (A ) ISSUED A NOTICE FIXING THE DATE OF HEARING TO 21-12- 2010. SINCE NONE ON BEHALF OF THE ASSESSEE APPEARE D BEFORE THE CIT (A) ON THE DATE FIXED, HE PROCEEDED TO DISPOSE OF THE APPEAL EX PARTE. THE CIT (A) FOUND T HAT THE APPEAL HAS BEEN FILED WITH A DELAY OF 201 DAYS. THOUGH THE ASSESSEE THROUGH A PETITION HAD PRAYED FOR CONDONATION OF DELAY, THE CIT (A) BEING NOT SATISFIED WITH THE REASONS SOWN IN THE PETITION, DISMISSED THE APPEAL FILED BY THE ASSESSEE SOLELY ON THE GROUND OF ITA NO.559/HYD/2011 M/S LIQUIDZ INDIA PVT. LTD. =============================== 4 DELAY IN FILING THE APPEAL WITHOUT GOING INTO THE MERI TS OF THE CASE. 4. THE LEARNED AR FOR THE ASSESSEE AT THE VERY OUTSET SUBMITTED BEFORE US THAT SINCE THERE WAS A GENUINE CAUSE FOR DELAYED FILING OF THE APPEAL BEFORE THE C IT (A), THE DELAY MAY BE CONDONED AND THE CIT (A) BE DIRECTED TO HEAR THE APPEAL ON MERITS. 5. ON THE OTHER HAND, THE LEARNED DR HAS NO OBJECTION IF THE APPEAL IS RESTORED BACK TO THE CIT (A) TO BE HEARD ON MERIT. 6. WE HAVE HEARD RIVAL CONTENTIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD. RIGHT OF APPEAL UNDER INCOME-TAX ACT IS A STATUTORY RIGHT. U/S 249(3), THE CIT (A) IS VESTED WITH THE POWER TO ADMIT AN APPEAL EVEN AFTER EXPIRY OF THE PERIOD OF LIMITATION PRESCRI BED UNDER THE ACT IF HE IS SATISFIED THAT THE APPELLANT HAS SUFFICIENT CAUSE IN NOT FILING THE APPEAL WITHIN THE PRESCRIBED TIME. IT IS SEEN FROM THE CONDONATION PETITION FILED BY THE ASSESSEE BEFORE THE CIT (A) WHIC H HAS BEEN EXTENSIVELY QUOTED IN PARA-4 OF THE CIT (A) S ORDER, THE ASSESSEE AFTER RECEIVING THE ASSESSMENT ORDER HAS FILED AN APPLICATION U/S 154 BEFORE THE AO INSTEAD OF FILING AN APPEAL BEFORE THE CIT (A). THEREAFTER, ON GETTING PROPER ADVICE, AN APPEAL WAS FILED BEFORE THE CIT (A) CHALLENGING THE ORDER OF THE AO. ITA NO.559/HYD/2011 M/S LIQUIDZ INDIA PVT. LTD. =============================== 5 HENCE THERE WAS A DELAY OF 201 DAYS IN FILING THIS APPEAL. AFTER GOING THROUGH THE EXPLANATION FURNISHED IN THE PETITION FOR CONDONATION OF DELAY, WE FIND THE CAUSE SHOWN CANNOT BE HELD TO BE NOT GENUINE. THE HONBLE SUPREME COURT HAS CONSISTENTLY HELD THAT IN THE MATTER OF CONDONATION OF DELAY, A LIBERAL AND PRAGMATIC VIEW SHOULD BE TAKEN AND AS FAR AS POSSIBLE THE COURTS DISCRETION SHOULD BE EXERCISED IN FAVOUR OF HEARING ON MERITS AND NOT TO SHUT OUT HEARING UNLESS DELAY IS ATTRIBUTABLE TO MALAFIDE OR INTENTIONAL LAPSE ON THE PART OF THE APPELLANT. IN THE PRESENT CASE, THERE IS NO SUCH ALLEGATION OF MALAFIDE OR INTENTIONAL LAPSE ON THE PART OF THE ASSESSEE. CONSIDERING THE FACT THAT AN ADDITION OF RS.65,89,810/- HAS BEEN MADE RESULTING I N A TAX DEMAND OF RS.21,43,676/- ENTAILING A SERIOUS CIVIL CONSEQUENCE FOR THE ASSESSEE. NATURAL JUSTICE DEMANDS AN OPPORTUNITY TO BE EXTENDED TO THE ASSESSEE TO BE HEARD ON MERITS. IN THE AFORESAID VIEW OF THE MATTER AND CONSIDERING THE FACT THAT THE LEARNED DR DOES NOT HAVE ANY OBJECTION WITH REGARD TO THE HEARING OF THE APPEAL ON MERIT BY THE CIT (A), WE CONDONE THE DELAY IN FILING OF THE APPEAL AND RESTORE THE MATTER BA CK TO THE FILE OF THE CIT (A) WHO SHALL DISPOSE OF THE AP PEAL ON MERITS AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. SINCE WE HAVE RESTORED THE APPEAL BACK TO THE CIT (A) TO BE DECIDED ON MERIT, THE GROUNDS RAISED ON THE MERITS OF THE ADDITION MADE ARE NOT ADJUDICATED UPON HERE AS THEY HAVE BECOME INFRUCTUOUS AND ACCORDINGLY THEY ARE DISMISSED AS SUCH. ITA NO.559/HYD/2011 M/S LIQUIDZ INDIA PVT. LTD. =============================== 6 7. IN THE RESULT, THE APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER WAS PRONOUNCED IN THE COURT ON 18-5- 2012. SD/- SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER DATED THE 18 TH MAY, 2012 COPY FORWARDED TO: 1. C/O VIVEK CHAWLA, DIRECTOR LIQUIDZ INDIA PVT. LTD. , 10-B, 318 CENCED APARTMENTS, PALI HILL ROAD, MUMBAI-40005 0. 2. DCIT, CIR-16(1), HYDERABAD. 3. THE CIT(A)-V, HYDERABAD. 4. THE CIT, HYDERABAD 5. THE DR, ITAT, HYDERABAD JMR* ITA NO.559/HYD/2011 M/S LIQUIDZ INDIA PVT. LTD. =============================== 7 ITA NO.559/HYD/2011 M/S LIQUIDZ INDIA PVT. LTD. =============================== 8 ITA NO.559/HYD/2011 M/S LIQUIDZ INDIA PVT. LTD. =============================== 9 ITA NO.559/HYD/2011 M/S LIQUIDZ INDIA PVT. LTD. =============================== 10 ITA NO.559/HYD/2011 M/S LIQUIDZ INDIA PVT. LTD. =============================== 11