M/s Shivshakti Organizers, Bardoli V. The Income Tax Office, Ward-1, Bardoli

ITA 635/SRT/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5354 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 18-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: ASHWIN PAREKH
• Keywords: Reasonable cause
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA NO.635/SRT/2018 (AY 2010-11) (H EARING IN VIRTUAL COURT) M/S. SHIV SHAKTI ORGANIZERS, MUDIT PALACE, STATION ROAD, BARDOLI. E-MAIL: [e-mail] PAN: AATFS 5964 Q VS. THE INCOME TAX OFFICER, WARD-1, BARDOLI. APPLICANT RESPONDENT ASSESSEE BY SHRI ASHWIN PAREKH CA REVENUE BY MS. ANUPAMA SINGLA SR.DR DATE OF HEARING 08.09.2021 DATE OF PRONOUNCEMENT 09.09.2021 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER : 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-1, SURAT DATED 21.08.2018, WHICH IN TURN ARISE FROM THE ORDER OF ASSESSING OFFICER IN LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE IT ACT, FOR THE ASSESSMENT YEAR (AY) 2010-11.THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE PENALTY OF RS.1,43,407/- U/S. 271(1)(C) OF THE ACT WITHOUT APPRECIATING THE DETAILED EXPLANATION WITH EVIDENCES SUBMITTED BY APPELLANT. THE PENALTY OF RS. 1,43,407/- SHOULD THEREFORE, BE DELETED. THE APPELLANT RESERVES THE RIGHT TO ADD, ALTER, MODIFY, AMEND OR WITHDRAW ANY OF THE GROUNDS OF APPEAL BEFORE HEARING. ITA NO.635/SRT/2018 SHIV SHAKTI ORGANIZERS (AY 2010-11) 2 2. BRIEF FACTS OF THE ASSESSEE THAT ASSESSEE IS A PARTNERSHIP FIRM, ENGAGED IN THE BUSINESS OF CONSTRUCTION. THE ASSESSEE FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR (AY) 2010-11 ON 23.08.2010 DECLARING TOTAL INCOME AT RS.3,570/-. THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMPLETED ON 12.03.2013 DETERMINING TOTAL INCOME AT RS.4,67,670/- BY MAKING ADDITION OF CONTRACT EXPENSES OF RS. 224,042/- AND SALARY EXPENSES OF RS. 240,100/-, THEREBY MAKING TOTAL ADDITIONS OF RS.4,64,100/-. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT ON 12.03.2013 FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE ASSESSING OFFICER LEVIED PENALTY OF RS. 1,43,407/- UNDER SECTION 271(1)(C) VIDE ORDER DATED 29.01.2016, BEING 100% OF TAX SOUGHT TO BE EVADED ON THE DISALLOWANCE MADE IN THE ASSESSMENT ORDER. ON APPEAL BEFORE LD. CIT(A), THE ACTION OF THE ASSESSING OFFICER WAS AFFIRMED. THE LD CIT(A) CONFIRMED THE ORDER OF ASSESSING OFFICER IN EX-PARTE ORDER BY TAKING VIEW THAT DESPITE GRANTING A NUMBER OF OPPORTUNITIES TO THE ASSESSEE FAILED TO COMPLY THE NOTICES. FURTHER AGGRIEVED, THE ASSESSEE HAS FILED PRESENT APPEAL BEFORE THIS TRIBUNAL. 3. WE HAVE HEARD THE SUBMISSION OF LD. AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE AND LD.SENIOR DEPARTMENTAL REPRESENTATIVE (SR.DR) FOR THE REVENUE. THE LD AR FOR THE ASSESSEE SUBMITS THAT THE LD.CIT(A) PASSED THE ORDER EX-PARTE , WITHOUT PROVIDING FAIR AND PROPER OPPORTUNITY TO THE ASSESSEE. THE LD.AR FOR THE ASSESSEE SUBMITS THATTHE ASSESSEE HAS GOOD ITA NO.635/SRT/2018 SHIV SHAKTI ORGANIZERS (AY 2010-11) 3 CASE ON MERIT AND IS LIKELY TO SUCCEED IF ONE MORE OPPORTUNITY OF HEARING IS GRANTED TO HIM TO EXPLAIN THE FACTS BEFORE LD.CIT(A). THE LD.AR FOR THE ASSESSEE PRAYED THAT THE ASSESSEE MAY BE GIVEN ONE MORE OPPORTUNITY TO REPRESENT HIS CASE BEFORE THE LD.CIT(A).THE LD.AR FURTHER SUBMITS THAT THE LD.CIT(A) PASSED THE EX-PARTE ORDER WITHOUT DISCUSSING THE MERITS OF THE CASE. THE LD.AR FOR THE ASSESSEE UNDERTOOK TO BE VIGILANT IN ATTENDING THE HEARING BEFORE FIRST APPELLATE AUTHORITY. 4. ON THE OTHER HAND, THE SR.DR FOR THE REVENUE SUBMITS THAT THE ASSESSEE WAS GIVEN AMPLE OPPORTUNITY AS RECORDED IN PAGE 2 OF PARA 5.1.1 OF THE ORDER PASSED BY THE LD.CIT(A). THE ASSESSEE FAILED TO COMPLY WITH THE NOTICE ISSUED BY THE LD.CIT(A). THE LD.CIT(A) LEFT WITH NO OPTION, EXCEPT TO PROCEED TO DECIDE THE APPEAL ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD. THE LD DR FOR THE REVENUE SUBMITS THAT THE ASSESSEE IS NOT ENTITLED FOR ANY RELIEF AS HE HAS NOR DISCLOSED REASONABLE CAUSE FOR NON-APPEARANCE BEFORE LD CIT(A). IN ALTERNATIVE SUBMISSION, THE LD.SR.DR FOR THE REVENUE SUBMITS THAT IN CASE THE HONBLE TRIBUNAL IS DEEM APPROPRIATE, THE ASSESSEE BE DIRECTED TO BE VIGILANT IN FUTURE AND NOT TO DEFAULT IN ATTENDING THE PROCEEDINGS AND TO WASTE THE TIME OF QUASI JUDICIAL AND PUBLIC AUTHORITIES/ FIRST APPELLATE AUTHORITY. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF BOTH THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF LOWER AUTHORITIES.WE FIND THAT THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER MADE ADDITIONS ON ACCOUNT OF ITA NO.635/SRT/2018 SHIV SHAKTI ORGANIZERS (AY 2010-11) 4 SALARY AND OTHER EXPENSES. THE ASSESSEE FILED APPEAL BEFORE LD CIT(A)IN THE QUANTUM ASSESSMENT. THE APPEAL OF THE ASSESSEE WAS DISMISSED VIDE ORDER DATED 04.02.2015. AFTER RECEIPT OF THE ORDER OF LD CIT(A) IN QUANTUM ASSESSMENT, THE ASSESSING OFFICER ISSUED FRESH SHOW CAUSE NOTICE FOR LEVYING PENALTY UNDER SECTION 271(1)(C). THE ASSESSEE FILED ITS REPLY AND ALSO FURNISHED FRESH EVIDENCE AND DETAILS OF THE EXPENSES. THE ASSESSING OFFICER AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE HELD THAT THE ORDER IN THE QUANTUM ASSESSMENT HAS BEEN CONFIRMED. THE ASSESSING OFFICER LEVIED THE PENALTY @100% OF TAX SOUGHT TO BE EVADED. THE ASSESSING OFFICER WORKED OUT THE PENALTY OF RS. 1,43,407/- THE LD. CIT(A) CONFIRMED THE ACTION OF AO BY TAKING VIEW THAT THERE IS NON- COMPLIANCE ON THE PART OF THE ASSESSEE. 6. BEFORE, US THE LD. AR FOR THE ASSESSEE UNDERTOOK TO BE VIGILANT AND TO APPEAL BEFORE THE LD. CIT(A). WE, INSTEAD OF GOING INTO CONTROVERSY, WHETHER THE ASSESSEE DEFAULTED IN ATTENDING THE PROCEEDINGS BEFORE THE LD.CIT(A). WE FIND THAT THE ORDER OF THE LD.CIT(A) IS NOT IN ACCORDANCE WITH MANDATE OF SECTION 250(6) OF THE INCOME TAX ACT. SECTION 250(6) OF THE ACT MANDATES THAT THE LD. CIT(A) WHILE DECIDING THE APPEAL IS REQUIRED TO PASS ORDER ON POINTS OF DETERMINATION (GROUNDS OF APPEALS), DECISION THEREIN ON AND REASONS FOR SUCH DECISION. THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPEAL OF THE ASSESSEE IS RESTORED BACK TO THE FILE OF THE LD.CIT(A) TO DECIDE ALL THE GROUNDS OF ITA NO.635/SRT/2018 SHIV SHAKTI ORGANIZERS (AY 2010-11) 5 APPEAL ON MERIT IN ACCORDANCE WITH LAW. THE ASSESSEE IS DIRECTED TO APPEAR BEFORE THE LD.CIT(A) AS AND WHEN THE DATE OF HEARING IS FIXED AND TO PROVIDE ALL NECESSARY EVIDENCE AND INFORMATION WITHOUT ANY FURTHER DELAY AND NOT TO SEEK THE ADJOURNMENT WITHOUT ANY VALID REASONS. ACCORDINGLY THE GROUND OF APPEAL BY ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER ANNOUNCED ON 9 TH SEPTEMBER, 2021 AT THE TIME OF HEARING IN VIRTUAL COURT HEARING. SD/- SD/- (DR ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER SURAT, DATED: 16/09/2021 / SGR* COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR 6. GUARD FILE BY ORDER / / TRUE COPY / / SR.PVT. SECRETARY, ITAT, SURAT