M/S. IMPERIAL EXPORTS LTD., MUMBAI V. ACIT 9(2), MUMBAI

ITA 6462/MUM/2008

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55690 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 22-09-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 06-11-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K C KANKARIYA
• Keywords: Business income; Opportunity of being heard; Additional evidence; TDS; Set aside
• Section: 142(1); 234B; 144

Judgement Text

1 IMPERIAL EXPORTS LTD IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI I BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI J SUDHAKAR REDDY, AM & SHRI VIJAY PAL RAO, JM ITA NO. 6462/MUM/2008 (ASST YEAR 2003-04) IMPERIAL EXPORTS LTD 201-202 HEMLOK APTS KILACHAND PATH KANDHIWALI (W) MUMBAI VS THE ASST COMMR OF INCOME TAX 9(2), MUMBAI (APPELLANT) (RESPONDENT) PAN NO. AAACR6406N ASSESSEE BY SHRI K C KANKARIYA REVENUE BY SHRI SUNIL KUMAR SINGH DT.OF HEARING 22 ND SEPT 2011 DT OF PRONOUNCEMENT 21 ST OCT 2011 PER VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 14.8.2008 OF THE CIT(A) FOR THE AY 2003-04. 2 THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE G ROUNDS IN THIS APPEAL: I) ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE L D CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF LOSS OF RS.1,17,31,6 76/- MADE BY THE ASSESSING OFFICER TAKING THE BUSINESS INCOME OF NIL AND FURTHER ERRED IN CONFIRMING THE SEPARATE ADDITION OF THE INTEREST RECEIVED OF RS. 2,4 6,946/- AS INCOME FROM OTHER SOURCES MADE BY THE ASSESSING OFFICER WHILE PASS ING THE ORDER U/S 144. REASONS ASSIGNED FOR CONFIRMING THE SAME ARE WRONG A ND INSUFFICIENT. II) RETURN HAVING BEEN FILED ON 1.12.2003 AND NOTIC E U/S 143(2) HAVING BEEN ISSUED BEYOND THE PRESCRIBED TIME AND THUS THERE BEING NO PROPER COMPLIANCE WITH THE PROVISIONS OF THE ACT, THE ASSES SMENT FRAMED IS BAD IN LAW. 2 IMPERIAL EXPORTS LTD III)INTEREST U/S 234B IS WRONGLY LEVIED SINCE THE IN COME ASSESSED IS SUBJECT TO TDS AS ADMITTED BY THE ASSESSING OFFICER AND THUS, ASSESSING OFFICER HAS ERRED IN LEVYING INTEREST U/S 234B. IV) LEVY OF INTEREST U/S 234D IS APPLICABLE FROM THE AY 04-05 AND AS SUCH ITS LEVY FOR THE AY IN QUESTION IS BEYOND THE PROVISIONS OF THE ACT AND AS SUCH UNTENABLE (107 TTJ 289(SB) ITO VS EKTA) 3 THE ASSESSEE FILED ITS RETURN OF INCOME ON 1.12.2 003 DECLARING A LOSS OF RS. 1,17,31,676/-. THE RETURN WAS PROCESSED U/S 143 (1) AND THEREAFTER THE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSING OFFICER ISSUED NOTICES U/S 143(2) AND 142(1) ON VARIOUS DATES. HOWEVER, THE ASSESSEE DID NOT RESPO ND TO THE NOTICES ISSUED BY THE ASSESSING OFFICER AND NO DETAILS WERE FILED. THE A SSESSING OFFICER, ACCORDINGLY, FRAMED THE ASSESSMENT U/S 144 AND DISALLOWED THE CL AIM OF LOSS OF RS. 1,17,31,676/- AND THE INCOME OF THE ASSESSEE WAS TAKEN AS NIL. 3.1 ON APPEAL BEFORE THE CIT(A) AGAIN THE ASSESSEE DID NOT APPEAR WHEN THE APPEAL CAME FOR HEARING ON THREE OCCASIONS. AS SUCH , THE APPEAL OF THE ASSESSEE WAS DISMISSED. THE CIT(A) HAS HELD THAT THE ASSESS ING OFFICER HAS NO OTHER OPTION BUT TO PASS EX-PARTE ORDER. 4 WE HAVE HEARD THE LD AR OF THE ASSESSEE AND THE L D DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD AR OF THE ASSE SSEE HAS SUBMITTED THAT THE ASSESSING OFFICER HAS PASSED EX-PARTE ORDER BY IGNO RING THE ENTIRE FACTS INCLUDING THE GP RATES AS IN THE EARLIER YEARS. HE HAS FURTHER S UBMITTED THAT NON APPEARANCE OF THE ASSESSEE BEFORE THE LOWER AUTHORITIES IS NEITHE R INTENTIONAL NOR WILFUL BUT DUE TO UNAVOIDABLE CIRCUMSTANCES AS THE PERSON CONCERN, W HO IS LOOKING AFTER THE TAX MATTERS, WAS OVER BURDENED AND WAS NOT ABLE TO ATTE ND THE DATES OF HEARING BEFORE THE LOWER AUTHORITIES. THE LD AR HAS FILED A PAPER BOOK CONTAINING 48 PAGES AND SUBMITTED THAT IN VIEW OF THE ADDITIONAL EVIDENCES FILED IN THE PAPER BOOK, THE 3 IMPERIAL EXPORTS LTD ASSESSMENT IS REQUIRED TO BE PASSED AFRESH AND THE ASSESSEE MAY BE GIVEN ONE MORE OPPORTUNITY TO EXPLAIN ITS CLAIM BEFORE THE AS SESSING OFFICER. 4.1 ON THE OTHER HAND, THE LD DR HAS VEHEMENTLY OPP OSED THE CONTENTION OF THE LD AR OF THE ASSESSEE AND SUBMITTED THAT DESPITE SE VERAL OPPORTUNITIES, THE ASSESSEE DID NOT APPEAR EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A) AND THE CONDUCT OF THE ASSESSEE DOES NOT DESERVE FOR ANY MO RE OPPORTUNITY. 5 WE HAVE CONSIDERED THE RIVAL CONTENTION AND PERUS ED THE RELEVANT MATERIAL ON RECORD. THE ASSESSING OFFICER PASSED THE EX-PART E ORDER AND DISALLOWED THE CLAIM OF BUSINESS LOSS ON THE GROUND THAT IN THE ABSENCE OF ANY DETAIL, THE CLAIM OF THE ASSESSEE CANNOT BE VERIFIED AND HENCE, IT IS NOT AL LOWABLE. SIMILARLY, THE CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS NOT FILED THE NECESSARY DETAILS AND THE ASSESSING OFFICER HAD NO OTHER OPTION BUT TO PASS THE EX-PARTE ORDER. NO DOUBT, IN THE ABSENCE OF APPEAR ANCE ON BEHALF OF THE ASSESSEE AND NECESSARY DETAILS, THE ASSESSING OFFICER HAD NO OTHER OPTION BUT TO PASS THE EX- PARTE ORDER; BUT THE ORDER PASSED U/S 144 BEING SHO ULD BE THE BASED ON THE BEST JUDGMENT AS PER RECORDS AVAILABLE WITH THE ASSESSIN G OFFICER. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOT DISCUSSED AS T O HOW THE CLAIM OF THE ASSESSEE IS NOT SUSTAINABLE AND EVEN IF IT IS REJECTED THEN, TH E ORDER SHOULD BE PASSED ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD. SINCE T HE ASSESSEE HAS FILED ADDITIONAL EVIDENCE BEFORE US AND THE ORDER OF THE LOWER AUTHO RITIES ARE NOT ON MERIT BUT SIMPLICITOR REJECTION OF THE CLAIM OF THE ASSESSEE FOR WANT OF APPEARANCE; THEREFORE, MATTER IS REQUIRED TO BE EXAMINED BY THE ASSESSING OFFICER . 6 HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF T HE CASE AND IN THE INTEREST OF JUSTICE, WE GRANT ONE MORE OPPORTUNITY TO THE AS SESSEE TO FILE THE NECESSARY RECORDS AND DETAILS BEFORE THE ASSESSING OFFICER. ACCORDINGLY, THE MATTER IS SET ASIDE 4 IMPERIAL EXPORTS LTD TO THE RECORD OF THE ASSESSING OFFICER FOR FRESH AD JUDICATION AS PER LAW AFTER GIVING ONE MORE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . 7 WE MAY CLARIFY THAT IF THE ASSESSEE DOES NOT APPE AR BEFORE THE ASSESSING OFFICER THEN, THE OPPORTUNITY GRANTED BY US WOULD S TAND WITHDRAWN AND THE IMPUGNED ORDER OF THE LD CIT(A) WOULD REVIVE. 8 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THE 21 ST , DAY OF OCT 2011. SD/ SD/ ( J SUDHAKAR REDDY ) ACCOUNTANT MEMBER ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 21 ST , OCT2011 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI