Platinum Synthetics Pvt.Ltd., Mumbai V. Assistant Commissioner of Income Tax,Circle-2(1), Surat

ITA 561/SRT/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1656 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-07-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 13-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRAGNESH M. JAGASHETH
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Condonation of delay; Set aside
• Section: 68; 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM आयकर अपील सं./ITA No.561/SRT/2018 Assessment Year: (2012-13) (Physical Court Hearing) Platinum Synthetics Pvt. Ltd., 203/204, Vyom Arcade, Subhash Road, Near Garware House, Vile Parle East, Mumbai-400 057. Vs. The ACIT, Circle-2(1)(1), Surat. èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AAECP2798R (Revenue)/(Appellant) (Assessee)/(Respondent) Assessee by Shri Pragnesh M. Jagasheth, CA Respondent by Shri Anurag Dubey, Sr. DR Date of Hearing 22/07/2022 Date of Pronouncement 23/09/2022 आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2012-13, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals)-2, Surat [in short “the ld. CIT(A)”] in Appeal No. CAS/2/230/2015-16, dated 22.09.2016, which in turn arises out of an assessment order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) dated 28.03.2015. 2. At the outset, Learned Counsel for the assessee informs the Bench that appeal filed by the assessee is barred by limitation by five hundred thirty three (533) days. The Ld. Counsel submitted an affidavit to explain the reasons of delay and requested the Bench to condone the delay. The contents of the affidavit are reproduced below: “I have filed an appeal under section 253(1) of the Income Tax Act, 1961 on 14.08.2018 vide ITA No.561/SRT/2018 against the order of the commissioner (Appeals) relating to A.Y.2012-13 made on 22.09.2016, which was communicated to us on the 29.12.2016. Though this appeal should have been filed in the office of Page | 2 561/SRT/2018/AY.2012-13 Platinum Synthetics Pvt. Ltd. the Tribunal on or before the 28.02.2017 counting the period of sixty days from the date of communication of the order but it could not be so filed because due to the tragic incidence of kidnapping of family member of promoter, we are frequently travelling to Patna, Bihar for court case. Further we are in mental trauma due to kidnapping case and has to maintain high security due to kidnapping event for safety purpose. Work office of the company also shifted from 203/204, Vyom Arcade, Subhash Road, Near Garware House, Ville Parle, East, Mumbai to Unit No. A*-301, 3 rd Floor, Oberoi Chambers Commercial Premises Co-operative Society Ltd., Plot no. C-34, Op. Kuber Commercial Complex, New link Road, Andheri (W), Mumbai on 04.04.2016. The assessee company has almost closed all the business activities and promoters family shifted to Mumbai. There was no accountant and responsible person to take care of our business affairs. Hence, we could not to provide appeal related documents to the ‘AR’ during the hearing before the CIT(A) and also not provide CIT(A)’s order to the ‘AR’ for filing of Appeal. Only after my consultation with CA for filling of Return of Income for AY 2018-19 and discussion about the CIT(A)’s Order for aY.2012- 13, I have filed appeal before the Hon'ble ITAT, Surat on 14.08.2018 and the delay in filling of Appeal. Hence, necessary arrangement could not be made for filling of appeal before Hon'ble ITAT, Surat in time. In view of the above facts it is clear that is the delay in submission of the appeal is due to good and sufficient reasons, therefore, pray that the delay in filling the appeal should be condoned and the appeal should be treated as filled within the allowed time.” 3. The Ld. Counsel also submitted the following evidences to substantiate the kidnapping events of family members of promoters of company and delay which are as follows: (i) FIR to Police Station for Kidnapping by Shri Mukesh Mohanlal Motwani. (vide paper book page nos. 1 to 3) (ii) Police Sub Inspector/I.O’s Application to Hon'ble. Judicial Magistrate First Class for permission to replace Sections. (vide paper book page no.4) (iii) News-paper cutting of various News Papers for Kidnapping of Sohil Hanif Hingora. (vide paper book page nos. 5 to 22) (iv) News from various news Web about the above Kidnapping case dated 05.10.2015, 31.03.2016, 15.02.2017, 09.11.2017 (vide paper book page nos. 23 to 33). (v) Agreement for leave and license dated 03 rd April, 2016 (vide paper book page nos. 34 to 43). Page | 3 561/SRT/2018/AY.2012-13 Platinum Synthetics Pvt. Ltd. 4. On the other hand, Ld. Departmental Representative (Ld. DR) for the Revenue contended that such huge delay in filing the appeal should not be condoned solely for the reasons of kidnapping incidence of family members of the Directors of the company. 5. We have heard both the parties on this preliminary issue. We note that assessee-company could not file the appeal before the Tribunal due to the tragic incidence of kidnapping of family member of Promoter/Directors. The Directors and the family members of Directors were frequently travelling to Patna, Bihar for court case and they were in mental trauma due to kidnapping case and they have to maintain high security due to kidnapping event for safety purpose. Besides, the Work office of the company also shifted from 203/204, Vyom Arcade, Subhash Road, Near Garware House, Ville Parle, East, Mumbai to Unit No. A-301, 3 rd Floor, Oberoi Chambers Commercial Premises Co-operative Society Ltd., Plot no. C-34, Op. Kuber Commercial Complex, New link Road, Andheri (W), Mumbai on 04.04.2016. The assessee- company has almost closed all the business activities and promoters family shifted to Mumbai. There was no accountant and responsible person to take care of their business affairs. Hence, delay has occurred and therefore appeal could not be filed on time.The Courts and the quasi-judicial bodies are empowered to condone the delay if a litigant satisfied the Court that there were sufficient reasons for availing the remedy after expiry of the limitation. Such reasoning should be to the satisfaction of the Court. The expression "sufficient cause or reason" as provided in sub-section (5) of section 253 of the Income Tax Act is used in identical position in the Limitation Act and the CPC. The expression "sufficient cause" within the meaning of section 5 of the Limitation Act as well as similar other provisions, the ambit of exercise of powers thereunder have been subject-matter of consideration before the Hon’ble Supreme Court on various occasions. In the case of State of West Bengal v. Administrator, Howrah Municipality AIR 1972 SC 749 the Hon’ble Supreme Court while considering the scope of expression "sufficient cause" for condonation of delay has held that the said expression should receive a liberal construction so as to Page | 4 561/SRT/2018/AY.2012-13 Platinum Synthetics Pvt. Ltd. advance the substantial justice when no negligence or inaction or want of bona fide is imputable to party. As noted by us above that assessee has explained the sufficient cause to condone the delay, hence we condone the delay and admit the appeal for hearing on merit. 6. In this appeal, there are two substantive grounds raised by the assessee,Viz: (i)The learned commissioner of the Income Tax (Appeals) has erred in confirming the action of the assessing officer in making addition of Rs.1,41,86,140/- as alleged unexplained cash credit u/s 68 of the Act, 1961 and (ii) The assessing officer has erred in making addition of Rs.1,83,585/- on account of disallowance of interest payment to Kotak Mahindra Prime Ltd due to non-deduction of IDS u/s 40(a)(ia) of the Act. 7. In ground No. 3, the assessee has raised the grievance that ld CIT(A) has wrongly confirmed the action of the assessing officer in initiating penalty under section 271(1) (C ) of the Act. 8. In ground No.4 the assessee has raised the grievance that ld CIT(A) has not provided sufficient of being heard therefore matter may be remitted back to the file of the ld CIT(A) for fresh adjudication. 9. At the outset, Shri Pragnesh M. Jagasheth, Learned Counsel for the assessee, begins by pointing out that the assessee could not represent his case before Ld. CIT(A) and the order being an ex-parte order, stood vitiated on account of violation of principle of natural justice. The Ld Counsel pointed out that due to the tragic incidence of kidnapping of family member of Directors, the Directors and the family members of Directors were frequently travelling to Patna, Bihar for Court case and they were in mental trauma due to kidnapping case and they have to maintain high security due to kidnapping event for safety purpose, hence in these difficult circumstances, the assessee could not appear before ld CIT(A). Therefore, ld. Counsel for the assessee contended that in the interest of justice, Page | 5 561/SRT/2018/AY.2012-13 Platinum Synthetics Pvt. Ltd. another opportunity to contest the appeal before the Ld. first appellate authority may be granted to the assessee. 10. The ld. DR for the Revenue debarred from objecting the stand of the ld. Counsel. 11. We have heard both the parties. We note that in the assessee’s case under consideration, the assessment was carried out u/s 143(3) of the Act and the impugned order passed by the ld. CIT(A), is an ex parte order, therefore, we do not wish to make any comments on the merits of the grounds raised by the assessee. Considering the above facts, we note that assessee could not plead his case successfully before the ld. CIT(A), therefore we are of the view that one more opportunity should be given to the assessee to plead his case before ld CIT(A).We note that it is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case. Therefore, without delving much deeper into the merits of the case, in the interest of justice, we restore the matter back to the file of Ld. CIT(A) for de novo adjudication and pass a speaking order after affording sufficient opportunity of being heard to the assessee, who in turn, is also directed to contest his stand forthwith. 12. Since we are remitting the issue back to the file of the ld CIT(A) therefore ground No.3 ‘relating to action of the assessing officer to initiate the penalty under section 271(1)(c) of the Act’ is premature in nature and hence does not require adjudication. 13. Therefore, we deem it fit and proper to set aside the order of the ld. CIT(A) and remit the matter back to the file of the ld. CIT(A) to adjudicate the issue afresh on merits. For statistical purposes, the appeal of the assessee is treated as allowed. 14. In the result, the appeal of the assessee is allowed for statistical purposes. Page | 6 561/SRT/2018/AY.2012-13 Platinum Synthetics Pvt. Ltd. Registry is directed to place one copy of this order in all appeals folder / case file(s). Order is pronounced in the open court on 23/09/2022 by placing the result on the Notice Board as per Rule 34(5) of the Income Tax (Appellate Tribunal) Rule 1963. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 23/09/2022 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat