M/s Ladakh Roadlines, Srinagar V. The Joint Commissioner Of Income Tax, Srinagar

ITA 568/ASR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7749 (ITAT-AMRITSAR)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 17-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAHUL DHAWANLD
• Assessee Lawyers: SUNIL K BHAT LD
• Keywords: Invalid notice; Revised return
• Section: 145; 144

Judgement Text

IN THE INCOME TAX APPELLATE TR IBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH.T.S. KAPOOR, ACCOUNTANT MEMBER AND SH.N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A. NO.568(ASR)/2016 ASSESSMENT YEAR: 2011-12 M/S LADAKH ROADLINES, 136/B, FRUIT MANDI COMPLEX, SRINAGAR, KASHMIR. PAN:AACFL-5721H VS. JT. CIT, SRINAGAR, KASHMIR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. SUNIL K. BHAT (LD. CA.) RESPONDENT BY: SH. RAHUL DHAWAN (LD. DR) DATE OF HEARING: 16.08.2017 DATE OF PRONOU NCEMENT:25.10.2017 ORDER PER N. K. CHOUDHRY: THE INSTANT APPEAL HAS BEEN FILED BY THE ASSESSEE, ON FEE LING AGGRIEVED AGAINST THE ORDER DATED 15.05.2016 PASSED BY THE LD. CIT(A)-, JAMMU, IN APPEAL NO.87/14-15 FOR ASST. YEAR: 2011-12. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED :- 1. IN SUSTAINING THE IMPUGNED ASSESSMENT ORDER PAS SED BY THE LD. ASSESSING OFFICER U/S 144 IN ABSENCE OF VALID NOTICES U/S 143(2) ISSUED OR SERVED ON THE APPELLANT IN THE MANNER AS PRESCRIBED U/S 282 OF THE INCOME TAX ACT, 1961. 2. IN PLACING UNDUE RELIANCE ON ASSUMPTIONS & PRESUMP TIONS ON THE BASIS OF WHICH THE INVALID NOTICES ISSUED HAVE BEEN HELD AS SERVED PROPERLY & CONFIRMING THE IMPUGNED ORDER PASSED U/S 144 OF THE ACT WITHOUT PROPER SCRUTINY OF APPELLANT'S SUBMISSIONS. 3. IN NOT ALLOWING THE GROUND THAT THE ASSESSMENT O RDER U/S 144 DT.28/03/2014 IS ILLEGAL IN VIEW OF INADEQUATE OPPO RTUNITY PROVIDED TO THE APPELLANT & NON-SERVICE OF DRAFT ASSESSMENT ORDER U PON THE APPELLANT BEFORE ITS PASSING. I TA NO.568(ASR)/2016 ASST. YEAR: 2011-12 2 4. IN UPHOLDING THE REASONABLENESS OF PROFIT RAT E OF 6% OF GROSS RECEIPTS APPLIED IN ARBITRARY MANNER CONTRARY TO 3. 12% RETURNED BY THE APPELLANT. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE ASSESSMENT WAS MADE U/S 144 OF THE INCOME TAX ACT ON THE GROUND THAT THE ASSESSEE DID NOT COMPLY WITH THE SEVERAL NOTICES ISSUED FROM TIME TO TIME BY THE AO TO FILE NECESSA RY DETAILS REQUIRED FOR THE PURPOSE OF FRAMING ASSESSMENT OR DER. SINCE, THE ASSESSEE IS TRANSPORTER IS HAVING TRANSPORT BUSINE SS APPLIED A NET PROFIT RATE OF 6% IN VIEW OF THE JURI SDICTIONAL ITAT AMRITSARS ORDER IN ITA NO.380(ASR)/2012 FOR ASST. YEAR: 2009-10 IN THE CASE OF ACIT, CIRCLE-1, JAMMU VS. SH. SOHAN LAL SHARMA. NO FURTHER DEDUCTION WAS ALLOWED IN THAT CASE AS THE NET PROFIT RATE APPLIED @ 6% COVERED THE EXPENSES INCURRED BY THE ASSESSEE. 4. ON FEELING AGGRIEVED AGAINST THE ASSESSMENT ORDER, TH E ASSESSEE PREFERRED THE FIRST APPEAL BEFORE THE LD. CIT(A), WH O DISMISSED THE APPEAL OF THE ASSESSEE BY SUSTAINING THE ORDER OF THE ASSE SSING OFFICER FOR APPLYING N.P. RATE OF 6% WITHOUT ALLOWING FURTH ER DEDUCTION. THE CONCLUDING PART OF THE ORDER PASSED BY THE LD. CIT(A) I S REPRODUCED HEREIN BELOW. DETERMINATION : GROUND OF APPEAL NO. 1 & 7 ARE GENERAL IN NATURE. GROUND OF APPEAL NO. 2, 3 & 6: I HAVE CONSIDERED TH E SUBMISSIONS MADE BY THE APPELLANT STATED AS ABOVE. THE APPELLANT HAS TA KEN THE PLEA THAT NOTICES ISSUED BY THE AO ON THE WRONG ADDRESS AND I S INCONSISTENCE WITH THE ACTUAL ADDRESS GIVEN BY THE APPELLANT IN THE OR IGINAL AND REVISED RETURN OF INCOME FILED BY THE APPELLANT ON 20/12/2011 AND 23/02/2012. THE APPELLANT THEREAFTER HAS REFERRED TO VARIOUS CASE L AWS IN SUPPORT OF ITS CLAIM THAT THE ASSESSMENT SHOULD NOT MADE U/S. 144 WHEN THE NOTICE ISSUED BY THE AO WERE NOT SERVED ON THE CORRECT AND PROPER ADDRESS. I HAVE CONSIDERED THE EXPLANATION GIVEN BY THE APPELL ANT HOWEVER, IT IS FOUND FROM THE ASST. ORDER THAT SOME OF THE NOTICE WERE DULY ACKNOWLEDGE BY ONE SH. R.L. PEER, C.A. WHO WAS STATED TO BE THE ASSESSEE'S COUNSEL WHO HAD ACKNOWLEDGE THAT HE HAD RECEIVED THE NOTICE S ISSUED BY THIS I TA NO.568(ASR)/2016 ASST. YEAR: 2011-12 3 OFFICE ALONG WITH ITS ANNEXURES AND REQUESTED 15 DA YS TIME TO COMPLY WITH THAT. SO IT IS WRONG TO SAY ON THE PART OF THE APPE LLANT THAT IT HAD NOT RECEIVED ANY NOTICE FROM THE AO. MUST THE RETURN IS FILED BY THE ASSESSEE HE IS DUTY BOUND TO COOPERATE IN FRAMING THE ASSESS MENT ORDER BY WAY OF PRODUCING DETAILS AS AND WHEN CALLED FOR BY THE AO IN THE PRESENT CASE IT IS FOUND FROM THE FACTS OF THE CASE THAT ASSESSEE H AS NOT COOPERATED WITH THE AO IN COMPLETING ASSESSMENT PROCEEDINGS AND IN THE ABSENCE OF THAT HE AO HAS RIGHTLY MADE THE ASSESSMENT U/S 144 AS TH E ASSESSEE DID NOT SUBMIT BOOKS OF ACCOUNTS AN OTHER RELEVANT DOCUMENT S. SINCE, THIS IS A TRANSPORT BUSINESS THUS FOLLOWING THE ITAT, AMRITSA R ORDER (SUPRA). THE AO HAS RIGHTLY APPLIED A NET PROFIT RATE OF 6% WITHOUT ALLOWING FURTHER DEDUCTION. THE ADDITION MADE BY THE AO IS THEREFORE CONFIRMED . 5. ON FEELING AGGRIEVED AGAINST THE ORDER PASSED BY THE LD. CIT(A), THE ASSESSEE PREFERRED THE INSTANT APPEAL. 6. IN THE OPENING ARGUMENT OF THE CASE ITSELF, THE ASSESSEE CONCEDED THAT HE DO NOT WANT TO PRESS THE LEGAL GROUNDS IN RESPECT OF NOTICE SERVED U/S 145 OF THE ACT, HOWEVER, EMPHASIZED TH AT ON MERIT THE PROFIT RATE APPLIED BY THE ASSESSING OFFICER AND CONF IRMED BY THE LD. CIT(A) NOT BASED ON ANY REASONING AS TO WHY THEY HAVE APPLIED N.P RATE OF 6%. THE LD. AR SUBMITTED THAT THE AUTHO RITIES BELOW WITHOUT ANY REASON PROCEEDED TO APPLY N.P. @ 6% OF TH E GROSS RECEIPTS ON MERE SUSPICIONS WITHOUT HOLDING OR CONCLUSIVEL Y PROVING THAT THE FIGURES RETURNED BY THE APPELLANT WERE NOT CORRECT/GENUINE, THEREFORE, THE INFERENCE DRAWN BY THE AUTHORITIES BE LOW IS UNWARRANTED. FURTHER, THE LD. ASSESSING OFFICER WRONGLY RELIED UPON THE DECISION IN THE CASE OF ACIT, CIRCLE-1, JAMMU VS. SH . SOHAN LAL SHARMA, DECIDED BY ITAT BENCH AT AMRITSAR WITHOUT COMPA RING ACTIVITIES OF THE APPELLANT WITH THAT OF THE SAID REL IED CASE AND ARBITRARILY LEVY OF 6% OF GROSS RECEIPT FOR THE FINANCI AL YEAR:2010-11 AS TAXABLE PROFITS, BASELESS AND UNCALLED FOR. FURTHER THE APPELLANT BUSINESS IS SIMILAR TO THE BUSINESS CARRIED ON BY THE M/S. ASSOCIATED CONTRACTORS CASE REPORTED IN 44 DTR 101, IN WHICH MAXIM UM RATE OF 4% HAS BEEN APPLIED, THEREFORE, IN THE INTEREST OF JU STICE, EQUITY AND I TA NO.568(ASR)/2016 ASST. YEAR: 2011-12 4 FOR THE JUST DECISION OF CASE, THE LD. AR PRAYED FOR TH E APPLYING THE N.P @ 4%. 7. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDER PASSED BY THE AUTHORITIES BELOW AND SUBMITTED THAT THE SAME HAVE BEEN PASSED A REASONABLE, LOGICAL AND BASED ON THE FACTS AND CIRCUMSTAN CES OF THE CASE. 8. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTANCES OF THE CASE, AS WE REALIZE IN THE INSTANT CASE THAT THE ASSESSING OFFICER WITHOUT COMPARING THE CASE OF THE ASSESSEE WITH THAT CASE OF ACIT, CIRCLE-1, JAMMU VS. SOHAN LAL SHARMA (SUPRA) APPLIED 6% N.P RATE AND FURTHER THE LD. CIT(A) WITHOUT ANALAYZING THE F ACTS AND CIRCUMSTANCES OF THE CASE AND ALSO COMPARING THE CASE OF THE A SSESSEE WITH THAT OF THE CASE AS RELIED UPON BY THE LD. ASSESSI NG OFFICER CONFERRED N.P RATE @ 6% WITHOUT ALLOWING FURTHER DE DUCTION. CONSIDERING THE PREVIOUS AND SUBSEQUENT RECORDS OF THE ASSE SSEE, WE FEEL IT APPROPRIATE TO APPLY N.P RATE @ 5% WHICH WOU LD BE REASONABLE AS THE ASSESSEE HIMSELF OFFERED 3.52 PROFIT RATE IN THE A SST. YEAR:2013- 14 AND 4% IN THE RELEVANT ASST. YEAR. IN OVER ALL CONSIDERATION AND IN THE PECULIAR FACTS A ND CIRCUMSTANCES OF THE CASE, WE DIRECT THE REVENUE DEPARTMENT TO APPLY N.P. RATE @5%. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25.10.2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY ) ACCOUNTANT MEMBER JUDICIA L MEMBER DATED:25.10.2017. /PK/ PS. I TA NO.568(ASR)/2016 ASST. YEAR: 2011-12 5 COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER