Essen Construction, Bhubaneswar V. DCIT, Circle-2(1), Bhubaneswar

ITA 65/CTK/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3141 (ITAT-CUTTACK)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 16-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Keywords: Principle of natural justice; Bonafide belief; Condonation of delay
• Section: 143(3); 142(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ITA NO. 65 /CTK/201 8 ( [ [ / ASSESSMENT YEAR : 20 07 - 20 08 ) M/S ESSEN CONSTRUCTION, PLOT NO.S - 2, A - 2, 42,43 & 44, MANCHESWAR INDUSTRIAL ESTATE, RASULGARH, BHUBANESWAR VS. DCIT, CIRCLE - 2(1), BHUBANESWAR ./ ./ PAN/TAN NO. : AACFE 0760 H ( / APPELLANT ) .. ( / RESPONDENT ) [ /AS SESSEE BY : SH RI BIBEKANANDA MOHANTY ,AR /REVENUE BY : SHRI D.K.PRADHAN , DR / DATE OF HEARING : 20 / 0 8 /201 8 / DATE OF PRONOUNCEMENT 23 / 0 8 /201 8 / O R D E R PER SHRI PAVAN KUMAR GADALE, J M : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), BERHAMPUR (CAMP : BHUBANESWAR ) , PASSED IN I.T.APPEAL NO.0153/09 - 10(BBS), DATED 28.08.2014 . 2. AS PER OFFICE NOTICE THERE IS A DELAY OF 1190 DAYS IN FILING THE PRESENT APPEAL. LD. AR FILED AN APPLICATI ON ALONG WITH AFFIDAVIT FOR CONDONATION OF DELAY. THE CONTENTS OF THE APPLICATION FOR DELAY IN FILING THE APPEAL ARE AS UNDER : - PETITION REQUESTING FOR CONDONATION OF DELAY IN FILING OF APPEAL BY 60 DAYS FOR UNAVAOIDABLE REASONS. SIR, THE ORDER ISSUED BY THE 1 ST APPELLATE AUTHORITY DTD.28.08.2014 WAS RECEIVED BY THE APPELLANT ON 15.09.2014 AND AS SUCH APPEAL BEFORE THE AUGUST FORUM WAS SUPPOSED TO BE FILED BY 13.11.2014 I.E. WITHIN 60 DAYS. BUT DUE TO SOME UNAVAOIDABLE CIRCUMSTANCES, THE SIAD FILING HAS B EEN ELAYED BY MORE THAN 1245 DAYS. ITA NO. 65 / 1 8 2 THIS IS TO INTIMATE THE HONOURABLE BENCH THAT DURING THE PENDENCY OF THE APPEAL AGAINST ORDER OF ASSESSMENT FOR THE REFERRED ASSESSMENT ORDER, THERE WAS A RE - OPENING U/S.147 BY THE LEARNED ASSESSING OFFICER FOR WHICH THE HO NOU RABLE 1 ST APPELLATE AUTHORITY DISPOSED OF THE APPEAL TERMING THE SAME AS INFRUCTUOUS. NO APPEAL WAS FILED AGAINST THE ABOVE ORDER BY THE APPELLANT WITH A BONAFIDE BELIEF THAT SINCE IT HAS BEEN TREATED AS INFRUCTUOUS AND IS, ACCORDINGLY DISMISSED DUE TO RE - OPENING OF ASSESSMENT THE SUBJECT MATTER OF DISALLOWANCE ARE TO BE FRESHLY ADJUDICATED BY THE HONOURABLE 1 ST APPELLATE AUTHORITY. BUT THE HONOURABLE 1 ST APPELLATE AUTHORITY DISMISSED THE APPEAL AGAINST ORDER PASSED U/S.147 TERMING GROUNDS THAT DO NO T EMANATE FROM THE ORDER APPEALED AGAINST. AS A RESULT, THE ISSUES THOSE ARE SUBJECT MATTER OF APPEAL COULD NOT BE ADJUDICATED. AGAIN ON A BONAFIDE BELIEF THAT THE HONOURABLE FACT FINDING AUTHORITY TO ISSUE DIRECTION TO THE INCOME TAX AUTHORITIES BELOW TO ADJUDICATE THE MATTER IN DETAILS APPEAL WAS FILED AND BOTH THE ORDERS ARISING OUT OF ORDER AGAINST U/S. 143(3) AND 147 WERE FURNISHED. IT IS NOW ONLY THE APPELLANT COULD BE AWARE AND KNOW THAT IT IS NEEDED TO FILE AN APPEAL AGAINST THE ORDER ISSUED U/S. 143(3), THE SAME IS BEING FILED HEREWITH. IN VIEW OF THE ABOVE, SINCE THE DELAY IN FILING OF APPEAL WAS BEYOND THE CONTROL OF APPELLANT WHICH WAS UNAVOIDABLE ARISING OUT OF BONAFIDE BELIEF, IT IS REQUESTED TO CONDONE THE DELAY IN FILING APPEAL BY MORE THA N 1245 DAYS. THE APPELLANT ONCE AGAIN REQUESTS THE HONOURABLE BENCH TO CONDONE THE DELAY AND ACCEPT THE APPEAL IN THE INTEREST OF NATURAL JUSTICE. LD. DR DID NOT SUPPORT TO CONDONE THE DELAY . THE HONBLE SUPREME COURT IN THE CASE OF COLLECTOR LAND ACQUIS ITION VS. MST. KATIJI & ORS., 1987 AIR 1353, WHEREIN THE HONBLE SUPREME COURT HAS LAID DOWN THAT IN SUCH MATTERS, A LIBERAL APPROACH IS ADOPTED AS ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. IT HAS BEEN FURTHER LAID DOWN THA T SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ARE PITTED AGAINST EACH OTHER, CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON - DELIBERATE DELAY. LOOKING TO THE FACTS AND ITA NO. 65 / 1 8 3 CIRCUMSTANCES OF THE CASE AND THE JUDICIAL DECISION OF HONBLE SUPREME COURT, WE CONDONE THE DELAY OF 1190 DAYS IN FILING THE APPEAL AND THE APPEAL IS HEARD ON MERITS. 3 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. THAT, THE ASSESSMENT ORDER U/S.143 (3) OF THE INCOME TAX ACT, 1961 IS AGAINST LAW, WEIGHT OF EVIDENCES AND PROBABILITIES OF THE CASE. 2. THAT, THE LEARNED ASSESSING OFFICER HAS ARBITRARILY DISALLOWED 20% OF THE PAYMENT MADE IN CASH I.E. RS.3,07,958.00 WITHOUT CONSIDERING THE BUSINESS COMPULSION. HOWEVER, THE FACT IS THAT, MOST OF THE PAYEES WERE MORE THAN ONE AND INSISTED FOR CASH PAYMENT AND FURTHER THAT ALL THE TRANSACTIONS WERE GENUINE AND BONAFIDE. THE LEARNED ASSESSING OFFICER HAS NOT APPRECIATED THE BUSINESS EXPEDIENCY AND ADDED BACK THE SAME TO THE TOTAL INCOME. 3. THAT, THE LEARNED ASSESSING OFFICER HAS ARBITRARILY DISALLOWED THE CONTRACT EXPENSES OF RS.70,46,095.00 ON THE GROUNDS THAT TDS HAS NOT BEEN DEPOSITED. THIS DISALLOWANCE HAS BEEN EFFECTED WHEN THE EXPENSES HAS NOT BEEN CLAIMED AS DEDUCTION AND THE LEARNED ASSESSING OFFICER COULD HAVE PROPORTIONATELY DISALLOWED THE SAME. 4. THAT, THE LEARNED ASSESSING OFFICER HAS ARBITRARILY DISALLOWED THE EXPENDITURE MADE TOWARDS 'DONATION & SU BSCRIPTION' RS.53,600.00 ON THE GROUND THAT THE SAME IS NOT RELATED TO ITS BUSINESS. 5. FOR THESE AND AMONG OTHER REASONS TO BE ARGUED AT THE TIME OF HEARING, THE ORDER OF ASSESSMENT BE QUASHED TO MEET THE END OF JUSTICE. 4 . BRIEF FACTS OF THE CASE A RE THAT THE ASSESSEE IS ENGAGED IN REAL ESTATE BUSINESS AND FILED RETURN OF INCOME ON 01.12.2008 FOR THE A.Y.2007 - 2008 DECLARING TOTAL INCOME /LOSS OF RS.( - )6,40,153/ - . THE ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT ON 30.12.2009 FOR A TOTAL INCOME OF R S. 67,67,500/ - . THEREAFTER THE CASE WAS REOPENED U/S.147 OF THE ACT ON 18.02.2014. SUBSEQUENTLY NOTICES U/S.143(2) & 142(1) OF THE ACT WERE ISSUED. IN COMPLIANCE OF THE SAME, LD. AR APPEARED BEFORE THE ITA NO. 65 / 1 8 4 AO AND CASE WAS DISCUSSED. THEREAFTER THE AO COMPLETED THE RE ASSESSMENT ASSESSING TOTAL INCOME AT RS. 67,67,500/ - AND PASSED ORDER U/S. 143(3)/147 OF THE ACT, DATED 03.07.2014 AND ACCEPTED THE ASSESSEE INCOME U/S.143(3) OF THE ACT. 5. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT( A). IN THE APPELLATE PROCEEDINGS, THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE AND FINDINGS OF THE AO, DISMISSED THE APPEAL OF THE ASSESSEE. 6. AGGRIEVED BY THE ORDER OF THE CIT(A) THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 7. LD. AR SUBMITTED THAT THE CIT(A) HAS PASSED THE IMPUGNED ORDER WITHOUT CONSIDERING THE VARIOUS FACTS AND RELIED ON THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007 - 2008 IN ITA NO.426/CTK/2016, ORDER DATED 12.02.2018 , AND, THEREFOR E PRAYED FOR ALLOWING THE APPEAL. 8. CONTRA, LD. DR SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 9. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FOUND THAT EARLIER IN THE CASE OF ASSESSEE THE TRIBUNAL HAS DISMISSED THE G ROUND OF APPEAL OF THE ASSESSEE AS THE GROUNDS RAISED BY THE ASSESSEE WERE ARISING OUT OF THE ORDER PASSED BY THE AO U/S.143(3) OF THE ACT AND NOT AGAINST THE ORDER PASSED U/S.147 OF THE ACT. THE OBSERVATIONS OF THE TRIBUNAL IN THIS REGARD ARE AS UNDER : - 5. THE DR, ON THE OTHER HAND, OBJECTING TO THE SUBMISSION OF AR OF THE ASSESSEE, SUBMITTED THAT THE ADDITIONS TO THE INCOME OF THE ASSESSEE WERE MADE BY THE AO IN AN ORDER PASSED U/S.143(3) OF THE ACT DATED 30.12.2009. IN THE ORDER PASSED U/S.147 OF THE A CT DATED 03.07.2014 NO ADDITION TO THE INCOME OF THE ASSESSEE WAS ITA NO. 65 / 1 8 5 MADE AND THE INCOME ASSESSED U/S.143(3) OF THE ACT WAS ACCEPTED AND, THEREFORE, THE GROUNDS OF APPEAL RAISED IN THIS APPEAL ARE ARISING OUT OF THE ORDER PASSED BY THE AO U/S.143(3) OF THE AC T DATED 30.12.2009 AND NOT AGAINST THE ORDER PASSED U/S.147 OF THE ACT DATED 03.04.2014. THE PRESENT APPEAL OF THE ASSESSEE FILED BEFORE THE TRIBUNAL IS AGAINST THE ORDER OF CIT(A) WHICH APPEAL WAS FILED BEFORE THE CIT(A) AGAINST THE ORDER OF AO PASSED U/S .147 OF THE ACT DATED 03.07.2014 AND, HENCE, THE ORDER OF THE CIT(A) SHOULD BE CONFIRMED. 6. AFTER HEARING BOTH THE PARTIES, WE FIND THAT IT IS NOT IN DISPUTE THAT THE APPEAL BEFORE US IS AGAINST THE ORDER OF AO PASSED U/S.147 OF THE ACT DATED 03.07.2014 . IT IS ALSO NOT IN DISPUTE THAT IN THE ORDER PASSED U/S.147 OF THE ACT, NO ADDITION HAS BEEN MADE BY THE AO. THUS, THE GROUNDS OF APPEAL OF THE ASSESSEE WERE RIGHTLY DISMISSED BY THE CIT(A) HOLDING THAT NONE OF THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE AROSE OUT OF THE ORDER PASSED BY THE AO U/S.147 OF THE ACT DATED 03.07.2014. HENCE, NO INTERFERENCE WITH THE ORDER OF CIT(A) IS CALLED FOR, THEREFORE, THE SAME IS CONFIRMED AND THE GROUNDS OF APPEAL OF THE ASSESSEE ARE DISMISSED. IN APPELLATE PROCEEDING S THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE GROUNDS IN THE APPEAL HAVE BEEN TAKEN BY THE ASSESSEE IN THE FRESH APPEAL AGAINST THE ASSESSMENT ORDER DATED 03.07.2014. ACCORDINGLY, THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE AS HAVING BEEN RENDE RED INFRUCTUOUS. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE , WE RESTORE THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE TO THE FILE OF CIT(A) TO DECIDE THE DISPUTED ISSUE ON MERITS AFTER PROVIDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE AND THE ASSESSEE SHALL COO PERATE IN EARLY DISPOSAL OF THE APPEAL. 10 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 23 / 08 /201 8 . SD/ - (N. S. SAINI) SD/ - ( PAVAN KUMAR GADALE ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 23 / 08 /2018 . . / PKM , SENIOR PRIVATE SECRETARY ITA NO. 65 / 1 8 6 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - M/S ESSEN CON STRUCTION, PLOT NO.S - 2,A - 2, 42,43 & 44, MANCHESWAR INDUSTRIAL ESTATE, RASULGARH, BHUBANESWAR 2. / THE RESPONDENT - DCIT, CIRCLE - 2(1), BHUBANESWAR 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. [ / GUARD FILE. //TRUE COPY//