NILOUFER MUSTAFA NALAWALA, MUMBAI V. ITO 21(3)(4), MUMBAI

ITA 5769/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8045 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 26-09-2016
• Court: TRIBUNAL
• Assessee Lawyers: NITESH JOSHI MS BEENA SANTOSH
• Keywords: Opportunity of being heard; Principle of natural justice; Bonafide belief; Reasonable cause; Right to appeal

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 5769/M/2016 (AY 2011 - 2012 ) MRS. NILOFER MUSTAFA NALAWALA (PROPRIETRESS OF LIBERTY GRAPHICS), R.NO. 2104, SUMMER PARK, 4, SETH MOTISHA LANE CROSS, BYCULLA, MUMBAI - 400027. / VS. INCOME TAX OFFICER - 21(3)(4), MUMBAI. ./ PAN : ABMPN8288Q ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI NITESH JOSHI / RESPONDENT BY : MS. BEENA SANTOSH, DR / DATE OF HEARING : 09.02.2017 / DATE OF PRONOUNCEMENT : 03 .03.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 26.9.2016 IS AGAINST THE ORDER OF THE CIT (A)38, MUMBAI DATED 28.6.2016 FOR THE ASSESSMENT YEAR 2011 - 12. IN THIS APPEAL, ASSESSEE RAISED FIVE GROUNDS IN TOTO. 2. IN THE GROUNDS, ASSESSEE RAISED THE ISSUES RELATING TO (I) THE CIT (A)S DECISION IN NON - CONDONING THE DELAY IN FILING THE APPEAL BEFORE THE FAA; (II) CIT (A)S DECISION IN CONFIRMING THE AOS DECISION OF ESTIMATING THE PURCHASES FROM ALLEGED HAWALA DEALER S APPLYING THE RATE OF 25% OF THE PURCHASES MADE FROM 8 PARTIES TOTALLING TO RS.27,50,505/ - . ON THIS ACCOUNT, AO MADE ADDITION OF RS. 6,87,626/ - WHICH IS THE SUBJECT MATTER OF GROUNDS NO.3 AND 4. 3. IN CONNECTION WITH THE ISSUE RELATING TO CONDONATION O F DELAY OF 227 DAYS, ASSESSEE SUBMITTED THAT SHE IS TIED UP WITH HER CHILDRENS EDUCATION AND SERIOUS ISSUES OF HER DEPENDENTS FROM IN - LAWS SIDE. BUT THE SAID REASONS WERE REJECTED BY THE CIT (A) AS THEY DO NOT CONSTITUTE SUFFICIENT REASON / REASONABLE CA USE FOR CONDONING THE DELAY. FAA FURTHER HELD THAT IT IS A CASE OF NEGLIGENCE AND THE EXPLANATION GIVEN BY THE ASSESSEE IS NOT ACCEPTABLE. ON THIS ISSUE, BEFORE ME, LD 2 COUNSEL FOR THE ASSESSEE DEMONSTRATED THAT ON THE BASIS OF THE AFFIDAVIT OF THE ASSESS EE PLACED AT PAGE 5 OF THE PAPER BOOK, THE ASSESSING OFFICER HAS NO CONTRARY EVIDENCE TO CONCLUDE THAT THE REASONS GIVEN IN THE SAID PARA 4 OF THE AFFIDAVIT ARE NOT BONAFIDE. CONSIDERING SIGNIFICANCE AND FOR THE SAKE OF COMPLETENESS OF THIS ORDER, THE SA ID PARA 4 OF THE AFFIDAVIT FILED BY THE ASSESSEE IS EXTRACTED AS UNDER: - 4. I SAY THAT NO APPEAL COULD BE FILED EARLIER AGAINST THE ORDER OF THE AO BEFORE YOUR GOODSELF ON ACCOUNT OF THE FOLLOWING: A. PREOCCUPATION WITH MY OWN BUSINESS; B. I WAS PRE - OCCUPIED WITH MY FAMILYS HEALTH ISSUES AND CHILDS EDUCATION. (I) I HAVE TO TRAVEL FOR MY SONS ADMISSION FOR THE M.TECH COURSE AND WAS TRAVELLING DURING MAY 25 - 27, 2014 AND HAD GONE TO VELLORE BETWEEN JULY 6 - 9, 2014 FOR ADMISSION AT THE VIT (VELLORE INSTITUTE OF TECHN OLOGY. (II) MY FATHER IN LAW WAS ALSO SUFFERING FROM SEVERE PNEUMONIA AND HAD TO BE ADMITTED TO HOSPITAL IN HIS HOMETOWN, DOHAD, DURING THE PERIOD FROM JULY 29 TO AUGUST 5, 2014. (III) MY FATHER HAS BEEN UNWELL AND SUSPICIOUS OF MALIGNANT TUMOUR IN RIGHT PALM SINCE FEBRUARY 2014 TILL DATE AND WAS ALSO OPERATED AT LILAVATI HOSPITAL, MUMBAI. HE HAD BEEN TAKEN TO PRINCE ALY KHAN HOSPITAL, MUMBAI COUPLE OF TIMES. THUS, APART FROM THE BUSINESS I HAD TO ALSO TAKE CARE OF MY FATHER IN LAW AS WELL AS MY FATHER AND THUS I W AS BUSY AND MENTALLY WORRIED AND DISTURBED ABOUT MY FAMILY. OVER AND ABOVE I WAS ALSO TIED UP WITH MY SONS EDUCATION AND CAREER. C. FURTHER, I SAY THAT I WAS UNDER IMPRESSION THAT AS THE TRANSPORTATION / DELIVERY CHALLANS AS WELL AS THE QUANTITY USAGE STATEM ENT WAS PROVIDED NO PENALTY WOULD BE LEVIED AND HENCE TO PUT AN END TO THE LITIGATION AND BUSY PEACE OF MIND I DID NOT PREFER AN APPEAL. D. HOWEVER, THAT WAS NOT THE CASE AND THE AO LEVIED PENALTY AND THE ORDER WAS RECEIVED ON SEPTMBER 1, 2014 BOTH ME AND MY CHARTERED ACCOUNTANT WERE BUSY WITH THE AUDIT AND TAX FILING SEASON IN THE MONTH OF SEPTEMBER. E. ADDITIONALLY, I WAS ALSO ENGAGED DURING THE FIRST 10 DAYS OF THE HOLY MONTH OF MUHARRAM WITH PRAYERS AND GOING TO THE MOSQUE FROM OCTOBER 24, 2014 TO NOVEMBER 2, 2014. HENCE, YOUR HONOUR WOULD APPRECIATE THAT I WAS GENUINELY PRE - OCCUPIED WITH MY PERSONAL PROBLEMS AS WELL AS BEING UNDER BONAFIDE BELIEF THAT THERE WOULD NOT BE ANY PENALTY ON ACCOUNT OF VARIOUS DOCUMENTARY PROOF SUBMITTED AT THE TIME OF HEARING. 4. FROM THE ABOVE, IT IS A FACT THAT THE ASSESSING OFFICER HAS NOT DEMONSTRATED THAT THE ABOVE SUBMISSIONS OF THE ASSESSEE ARE NOT BONAFIDE. AS SUCH, RIGHT OF APPEAL IS A PRECIOUS ONE WHICH IS GRANTED TO THE ASSESSEE BY THE STATUTE AND IT IS EXPECTED THAT EV ERY ASSESSEE SHALL EXERCISE THE SAID RIGHT BUT FOR THE REASONABLE CAUSE. 3 5. ON HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE ABOVE EXTRACTED CONTENTS OF THE AFFIDAVIT FILED BY THE ASSESSEE EXPLAINING THE RE ASONS FOR NOT FILING THE APPEAL BEFORE THE FAA WITHIN THE PRESCRIBED TIME LIMIT , I AM OF THE OPINION, THE DECISION OF THE CIT (A) ON THIS ISSUE IS REQUIRED TO BE REVERSED WITH A DIRECTION TO THE CIT (A) TO ADMIT THE APPEAL AND ADJUDICATE THE ISSUE S ON ME RITS. ACCORDINGLY I ORDER. WHILE ADJUDICATING THE QUANTUM APPEAL ON MERITS, I DIRECT THE CIT (A) TO APPLY THE CORRECT LAW WITH REGARD TO THE PERCENTAGE OF ADDITION THAT IS REQUIRED TO BE CONFIRMED IN THE LIGHT OF THE JUDGMENTS IN FORCE IE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT JUDGMENT IN THE CASE OF CIT VS. NIKUNJ EXIMP ENTERPRISES PVT LTD (216 TAXMAN.COM 171) (BOM.) AND JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. SIMIT P. SETH (356 ITR 451) (GUJ.) . ASSESSEE SHALL BE GRANTED REASONABLE OPPORTUNITY OF BEING HEARD AS PER THE SET PRINCIPLES OF NATURAL JUSTICE. ACCORDINGLY, ISSUES RAISED IN THIS APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDE R PRONO UNCED IN THE OPEN COURT ON 0 3 R D MARCH, 2017. S D / - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER MUMBAI ; 03.03.2017 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI