S.S. FORGING & ENGINEERING LTD, MUMBAI V. ITO WD 5(3)(2), MUMBAI

ITA 5590/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1470 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Assessment Year: 2001-2002
• Appeal Filed On: 12-10-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MOHANTY
• Assessee Lawyers: ADJOURNMENT REJECTED
• Keywords: Opportunity of being heard; Non compliance; Set aside
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I : MUMBAI BEFORE SHRI D.K. AGARWAL, (JM) AND SHRI A.L. GEHLO T ,(AM) ITA NO.5590/MUM/2009 ASSESSMENT YEAR : 2001-02 M/S. S.S. FORGING & ENGINEERING LTD. C/O. SHRI G.G. AGARWAL, ADVOCATE 5, JOLLY BHAVAN NO.2 7, NEW MARINE LINES, CHURCHGATE MUMBAI-400 020. ..( APPELLANT ) P.A. NO. (AABCS 2068 J) VS. INCOME TAX OFFICER-5(3)(2) AAYAKAR BHAVAN MUMBAI-400 020. ..( RESPONDENT ) APPELLANT BY : ADJO URNMENT REJECTED RESPONDENT BY : SHRI S .K. MOHANTY O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 12.8.2009 PASSED BY THE LD. CIT(A) FOR TH E ASSESSMENT YEAR 2001-02. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE COM PANY IS A TRADING COMPANY. IT FILED RETURN DECLARING TOTAL LO SS OF RS.1,05,755/-. HOWEVER, THE ASSESSMENT WAS COMPLETED AT AN INCOME OF RS.1,34,46,840/- (UNEXPLAINED PURCHASES RS.13169835/- + INTEREST INCOME RS.377000/-), VIDE ORDER DATED 27.2.2004 PASSED U/S.144 OF ITA NO.5590/M/09 A.Y:01-02 2 INCOME TAX ACT 1961, (THE ACT). WHILE PASSING THE ASSESSMEN T ORDER THE ASSESSING OFFICER ALSO INITIATED PENALTY PROCEEDING U/ S.271(1)(C) OF THE ACT AND ACCORDINGLY THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY PENALTY U/S.271(1)(C) SHOULD NOT BE IMPOSED. IN RE PLY, IT WAS SUBMITTED BY THE ASSESSEE THAT THE ASSESSEE HAS MAINTAINED FU LL DETAILS OF PURCHASES AND SALES WHICH ARE SUBJECT TO AUDIT, THE SAME ARE VERIFIABLE AND WITH REGARD TO THE INTEREST INCOME IT WAS SUBMITTED THAT THE SAME HAS BEEN INCLUDED IN THE SALE AND INCOME FROM O PERATION. THERE IS NO WILLFUL OR GROSS NEGLIGENCE ON THE PART OF THE ASSESSEE TO CONCEAL THE INCOME OR TO FILE INACCURATE PARTICULARS OF SUCH INCOME, THEREFORE, THE PENALTY PROCEEDING MAY BE DROPPED. HO WEVER, THE ASSESSING OFFICER AFTER CONSIDERING THE ASSESSEE'S REPLY AND TH E ORDER OF THE LD. CIT(A) IN QUANTUM PROCEEDING WAS OF THE VI EW THAT THE ASSESSEE HAS NOT CONCLUSIVELY PROVED HIS CASE AND HENCE, LIAB LE TO PENALTY AND ACCORDINGLY HE IMPOSED PENALTY OF RS.6,60,7 05/- VIDE ORDER DATED 28.6.2005 PASSED U/S. 271(1)(C) OF THE ACT. ON APPEAL, THE LD. CIT(A) OBSERVED THAT THERE WAS A DELAY OF SEVE N DAYS FOR FILING OF APPEAL WHICH HE DID NOT CONDONE AND HENCE, DISMISSED T HE APPEAL. ON FURTHER APPEAL BEFORE THE TRIBUNAL, THE TRIBUNAL VIDE ORDER DATED 5.8.2008 HOWEVER, DIRECTED THE LD. CIT(A) TO CONDONE THE DELAY AND DECIDE THE APPEAL AFRESH ON MERITS. PURSUANT TO THE OR DER OF THE TRIBUNAL THE LD. CIT(A) FIXED THE DATE OF HEARING. INSPITE OF THREE ITA NO.5590/M/09 A.Y:01-02 3 NOTICES FOR HEARING THE ASSESSEE DID NOT ATTEND NOR SOUGHT ANY ADJOURNMENT AND HENCE, THE LD. CIT(A) UPHELD THE LE VY OF PENALTY AND DISMISSED THE APPEAL. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS SUSTENAN CE OF PENALTY IMPOSED BY THE ASSESSING OFFICER WITHOUT GRANTING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4. THE LD. REPRESENTATIVE OF THE ASSESSEE VIDE APPLICATIO N DATED 3.6.2010 HAD SOUGHT ADJOURNMENT WHICH AT THE TIME OF HEARING WAS NOT PRESSED BY HIM ON THE GROUND THAT HE HAS NO OBJECTI ON IF THE MATTER IS RESTORED BACK TO THE FILE OF THE LD. CIT(A). 5. ON THE OTHER HAND THE LD. DR WHILE RELYING ON TH E ORDER OF THE ASSESSING OFFICER AND THE LD. CIT(A) SUBMITS THAT HE HAS NO OBJECTION IF THE MATTER IS SENT BACK TO THE FILE OF THE LD. CIT(A). 6. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RIVAL P ARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND THA T IT WAS CONTENDED BY THE ASSESSEE THAT THE NON COMPLIANCE OF THE NOTICE OF D ATE OF HEARING OF APPEAL BEFORE THE LD. CIT(A) WAS DUE TO T HE FACT THAT THE ASSESSEE HAS NOT RECEIVED ANY SUCH NOTICE AT HIS NEW ADDRESS. THIS PLEA OF THE ASSESSEE WAS NOT CONTROVERTED BY THE REVENUE EVEN AT THIS ITA NO.5590/M/09 A.Y:01-02 4 STAGE. THIS BEING SO, KEEPING IN VIEW THE INTEREST OF JUSTICE WE CONSIDER IT FAIR AND REASONABLE THAT ONE MORE OPPORTUN ITY BE PROVIDED TO THE ASSESSEE TO PRESENT HIS CASE BEFORE THE LD. CIT(A ) AND ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY THE LD. CIT( A) AND SEND BACK THE MATTER TO HIS FILE WHO SHALL DECIDE THE SAME A FRESH AND ACCORDING TO LAW AFTER PROVIDING REASONABLE OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE. THE GROUNDS TAKEN BY THE ASSESSEE ARE, T HEREFORE, PARTLY ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT ASSESSEE'S APPEAL STANDS PARTLY ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18.6.2010 SD/- SD/- (A.L. GEHLOT) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 18.6.2010. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.