RAVINDRA S. RANE, MUMBAI V. ITO WD 24(1)(2), MUMBAI

ITA 6260/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 101240 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 07-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 11-10-2012
• Court: TRIBUNAL
• Department Lawyers: PRAMOD NIKANE
• Keywords: Opportunity of being heard; Principle of natural justice; Reasonable cause
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI LALIT KUMAR, JUDICIAL MEMBER ITA NO. 6260/M/2012 (AY 2008 - 2009 ) ITA NO. 6261/M/2012 (AY 2008 - 2009 ) RAVINDRA S. RANE, 17/327, INCOME TAX COLONY, MEGHWADI, JOGESHWARI (E), MUMBAI 400 051. / VS. ITO - WARD 24(1)(2), 6 TH FLOOR, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI - 400 051. ./ PAN : ANIPR 9110 K ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY : SHRI PRAMOD NIKANE, DR / DATE OF HEARING : 25.08.2015 / DATE OF PRONOUNCEMENT : 05.10 .2015 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS UNDER CONSIDERATION. BOTH THE APPEALS ARE FILED BY THE ASSESSEE INVOLVING THE AY 2008 - 2009. APPEAL ITA NO.6260/M/2012 RELATES TO THE PENALTY LEVIED U/S 271(1)(B) OF THE ACT AND THE OTHER APPEAL ITA NO.6261/M/2012 RELATES TO T HE MERITS OF THE ADDITION. SINCE, THE PROCEEDINGS INVOLVED IN BOTH THE APPEALS ARE INTER - CONNECTED, THEREFORE, FOR THE SAKE OF CONVENIENCE, THEY ARE CLUBBED, HEARD COMBINEDLY AND DISPOSED OF IN THIS CONSOLIDATED ORDER. APPEAL WISE ADJUDICATION IS GIVEN IN THE FOLLOWI NG PARAGRAPHS OF THIS ORDER. ITA NO.6260/M/2012 2. THIS APPEAL FILED BY THE ASSESSEE ON 11.10.2012 IS AGAINST THE ORDER OF THE CIT (A) - 34, MUMBAI DATED 31.8.2012 FOR THE ASSESSMENT YEAR 2008 - 09. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DISMISSING THE APPEAL. 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DISMISSING THE APPEAL WITHOUT APPRECIATING FULLY AND PROPERLY THE FACTS OF THE CASE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN UPHOLDING THE LEVY OF PENALTY U/S 271(1)(B) OF RS. 10,000/ - FOR NON - COMPLIANCE OF THE NOTICE ISSUED U/S 143(2) / 142(1) OF THE ACT. 3. BRIEFLY STATED RELEVANT FACTS EMANATE FROM THE ORDERS OF THE REVENUE AUTHORITIE S ARE THAT THE AO ISSUED NOTICE U/S 143(2) OF THE ACT ON 24.9.2009 AND SERVED THE SAME ON THE ASSESSEE ON 25.9.2009 FIXING THE DATE OF HEARING ON 13.10. 2009. THERE IS NO COMPLIANCE TO THE SAID NOTICE. FURTHER, AO ISSUED NOTICE U/S 142(1) OF THE ACT DATED 25.6.2010 WITH A QUESTIONNAIRE. THERE IS NO COMPLIANCE TO THIS NOTICE TOO. FURTHER, THERE IS NO COMPLIANCE FROM ASSESSEES SIDE TO THE SUBSEQUENT REM INDERS DATED 12.8.2010. SUBSEQUENTLY, AO ISSUED SHOW CAUSE NOTICE DATED 2.11.2010 PROPOSING TO LEVY PENALTY U/S 271(1)(B) OF THE ACT. THE SAID NOTICE WAS SERVED ON THE ASSESSEE ON 3.11.2010. THERE IS NO RESPONSE BY THE ASSESSEE TO THESE LETTERS TOO. CO NSIDERING THE ASSESSEES NON - COMPLIANCE TO THE NOTICES AS MENTIONED ABOVE , AO LEVIED PENALTY OF RS. 10,000/ - VIDE ORDER DATED 22.11.2010 U/S 271(1)(B) OF THE ACT. MATTER TRAVELLED TO THE FIRST APPELLATE AUTHORITY. 4. DURING THE PROCEEDINGS BEFORE THE FIRS T APPELLATE AUTHORITY, ASSESSEE WAS REPRESENTED BY THE CHARTERED ACCOUNTANT. AFTER CONSIDERING THE SUBMISSIONS OF THE LD REPRESENTATIVE OF THE ASSESSEE, CIT (A) DISMISSED THE APPEAL OF THE ASSESSEE. PARA 3 OF THE IMPUGNED ORDER NARRATES THE ABOVE FACTS L EADING TO THE LEVY OF PENALTY OF RS. 10,000/ - U/S 271(1)(B) OF THE ACT. RELEVANT DISCUSSION GIVEN IN THE SAID PARA 3 OF THE IMPUGNED ORDER READS AS UNDER: 3.........THE NON - COMPLIANCE TO THE NOTICES ISSUED BY THE ASSESSING OFFICER IS EVIDENT FROM THE REC ORD. DURING THE COURSE OF APPELLATE PROCEEDINGS ALSO, THE APPELLANT DID NOT BRING ANY MATERIAL ON RECORD TO SHOW THAT THE DEFAULT TO THE ABOVE NOTICES WERE NOT WILFUL AND THERE EXISTS A REASONABLE CAUSE. IN THE ABSENCE OF REASONABLE CAUSE, THE RIGOURS OF PENALTY U/S 271(1)(B) IS ATTRACTED AND HENCE, THE PENALTY LEVIED BY THE ASSESSING OFFICER IS HEREBY DELETED. 5. BEFORE US, NONE APPEARED ON BEHALF OF THE ASSESSEE TO REPRESENT ITS CASE DESPITE THE FACT THAT IN THE EARLIER DATE OF HEARING ON 7.7.2015, T HE CASE WAS ADJOURNED AT THE REQUEST OF THE ASSESSEE. THE SAME IS EVIDENT FROM THE FACT THAT THE LD REPRESENTATIVE OF THE ASSESSEE HAS ACKNOWLEDGED THAT THE CASE IS ADJOURNED TO 25.8.2015, IE TODAY THE DATE OF HEARING OF THIS APPEAL. 3 6. ON HEARING THE LD DR FOR THE REVENUE, WE FIND THE NON - COMPLIANCE TO THE SAID NOTICES ARE EVIDENT FROM THE RECORD AND THERE IS NO PLEA THAT THE NOTICES WERE NOT RECEIVED BY THE ASSESSEE. IT IS SURPRISING THE ASSESSEE IGNORED ALL THE NOTICES AS WELL AS THE SHOW CAUSE NOTI CE ISSUED BY THE AO BEFORE THE SAID PENALTY WAS LEVIED. THEREFORE, CONSIDERING THE ABOVE FACTS OF THE CASE, WE ARE OF THE OPINION THE DECISION OF THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE GROUNDS RAIS ED BY THE ASSESSEE ARE DISMISSED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED . ITA NO.6261/M/2012 8. THIS APPEAL FILED BY THE ASSESSEE ON 11.10.2012 IS AGAINST THE ORDER OF THE CIT (A) - 34, MUMBAI DATED 31.8.2012 FOR THE ASSESSMENT YEAR 2008 - 09. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DISMISSING THE APPEAL. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN DISMISSING THE APPEAL WITHOUT APPRECIATING FULLY AND PROPERLY THE FACTS OF THE CASE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) ERRED IN MAKING DISALLOWANCE OF EXPENSES AMOUNTING TO RS. 1 2,51,700/ - . 9. ASSESSEE RAISED THE ABOVE GROUNDS, WHICH REVOLVES AROUND THE MERITS OF THE ADDITION OF RS. 12,51,700/ - MADE BY THE AO IN THE ASSESSMENT. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE, WHO IS ENGAGED IN THE BUSINESS OF S TONE CARVING, FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS.2,75,612/ - . AFTER ISSUING NOTICES ON VARIOUS DATES IE NOTICE U/S 143(2) OF THE ACT ON 24.9.2009 AND SERVED THE SAME ON THE ASSESSEE ON 25.9.2009 FIXING THE DATE OF HEARING ON 13.10 .2009. THERE IS NO COMPLIANCE TO THE SAID NOTICE. FURTHER, AO ISSUED NOTICE U/S 142(1) OF THE ACT DATED 25.6.2010 WITH A QUESTIONNAIRE. THERE IS NO COMPLIANCE TO THIS NOTICE TOO. FURTHER, THERE IS NO COMPLIANCE FROM ASSESSEES SIDE TO THE SUBSEQUENT RE MINDERS DATED 12.8.2010. AFTER CONSIDERING THE ASSESSEES NON - COMPLIANCE TO THE ABOVE SAID NOTICED, AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(B) OF THE ACT AS WELL AS AO ALSO ISSUED SHOW CAUSE NOTICE DATED 8.12.2010 PROPOSING TO MAKE DISALLOWANCE OUT OF THE EXPENSES CLAIMED IN THE RETURN. AO PROPOSED TO DISALLOW 25% OF THE SUM OF THE EXPENSES AMOUNTING TO RS. 36,98,030/ - DEBITED TO THE P & L ACCOUNT AND PAGE 2 OF THE ASSESSMENT ORDER IS RELEVANT IN THIS REGARD. 4 AFTER HEARING THE ASSESSEE IN THIS REGARD, AO COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT RESTRICTING THE DISALLOWANCE TO 1 0 % O F C L A I M . EVENTUALLY, AO MADE ADDITION OF RS. 12,51,700/ - ON THIS ACCOUNT. AGGRIEVED, ASSESSMENT CARRIED THE MATTER IN APPEAL TO THE FIRST APPELLATE AUTHORITY. 10. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, LD REPRESENTATIVE OF THE ASSESSEE SUB MITTED THAT THE RETURN ITSELF WAS FRAUDULENTLY FILED BY OBTAINING THE SIGNATURE ON THE BLANK RETURN OF INCOME. OTHERWISE, THERE IS NO DISCUSSION ON THE M ERITS OF THE ADDITION. ASSESSEE ALSO FILED AN AFFIDAVIT IN SUPPORT OF THE ABOVE. CIT (A) CONSIDERED THE SAME AND DISMISSED THE APPEAL OF THE ASSESSEE CONSIDERING THE FACT THAT THE ASSESSEE IS NOT FILED ANY COMPLIANT BEFORE THE POLICE. EVENTUALLY, CIT (A ) CONFIRMED THE ADDITION MADE BY THE AO AND DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 11. DURING THE PROCEEDINGS BEFORE US, THERE NONE TO REPRESENT THE CASE OF THE ASSESSEE DESPITE THE ISSUE OF NOTI CES AS MENTIONED IN THE ABOVE PARAS OF THIS ORDER. WITH THE HELP OF THE LD DR, WE PROCEED TO ADJUDICATE THE SAME. AS MENTIONED ALREADY IN THE ORDER OF THE CIT (A), NEITHER THE ASSESSEE MADE ANY SPECIFIC REPRESENTATION AGAINST THE SAID ADDITION OF RS. 12, 51,700/ - NOR THE CIT (A) GAVE ANY FINDING JUSTIFYING THE ADDITION MADE BY THE AO BY PASSING A SPEAKING ORDER. CIT (A) RESTRICTED THE ORDER ONLY TO THE ALLEGED SIGNATURE, FRAUDULENTLY OBTAINED FROM THE ASSESSEE ON THE BLANK RETURN OF INCOME. CONSIDERING T HE DEFICIENCY IN THE ORDER OF THE CIT (A), WE ARE OF THE OPINION, THE MATTER SHOULD BE REMANDED TO THE FILE OF THE CIT (A) FOR ADJUDICATION OF THE ISSUE ON MERITS AND PASSING A SPEAKING ORDER AS PER T H E PROVISIONS OF SECTION 250(6) OF THE ACT. IT IS NEEDL ESS TO MENTION THAT THE CIT (A) SHALL GRANT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER THE PRINCIPLES OF NATURAL JUSTICE. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 12. IN THE RESULT, APPEAL OF TH E ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 5 T H O C T O B E R , 2015. S D / - S D / - ( LALIT KUMAR ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 5 . 1 0 .2015 5 . . ./ 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