M/S. WORLDWIDE SOFTWARE (EXPORTS), MUMBAI V. INCOME TAX OFFICER WARD 18(2)(3), MUMBAI

ITA 6643/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1890 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 22-04-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 17-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K ESHKAMAT
• Assessee Lawyers: M B AGARWAL
• Keywords: Opportunity of being heard; Additional evidence; Reasonable cause
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G ,MUMBAI BEFORE SHRI R.S. SYAL(AM) & SHRI VIJAY PAL RAO (JM) I.T.A.NOS. 6643, 6644 & 6645//MUM/2008 (A.Y. 2004-05)) M/S.WORLDWIDE SOFTWARE (EXPORTS), 4 TH FLOOR, 4A, MOHATTA BHAVAN, 10, DR.E. MOSES ROAD, WORLI, MUMBAI-400 018. PAN: AAAFW2773L VS. INCOME-TAX OFFICER, WARD 18(2)(3), PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-400 012. APPELLANT RESPONDENT APPELLANT BY SHR I M.B. AGARWAL. RESPONDENT BY SHRI K ESHKAMAT. O R D E R PER R.S. SYAL, AM : THESE THREE APPEALS BY THE ASSESSEE RELATE TO THE ASSTT. YEAR 2004-05. SINCE THESE APPEALS ARE BASED ON COMMON FACTS, WE A RE, THEREFORE, PROCEEDING TO DISPOSE THEM OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.6644/MUM/08 : 2. THE FIRST GROUND IS AGAINST THE CONFIRMATION OF THE ASSESSMENT MADE BY THE AO U/S.144 OF THE ACT. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN DECLARING TOTAL INCOME OF RS.55,569/-. THE AO ISSUE D NOTICE U/S.143(2) DATED 22- 02-2005 WHICH WAS NOT COMPLIED WITH. ANOTHER NOTICE U/S.142(1) DATED 12-08- 2005 WAS ISSUED. THEREAFTER, THE ASSESSEE FILED A R EVISED RETURN ON 08-12-2005 OFFERING INCOME AT RS. NIL BY CLAIMING DEDUCTION U/ S.10A. TWO MORE NOTICES DATED 04-10-2006 AND 15-12-2006 WERE ALSO ISSUED BY THE A .O. AS THE ASSESSMENT WAS GETTING TIME BARRED AND THERE WAS NO PROPER COM PLIANCE FROM THE END OF THE ASSESSEE, THE AO COMPLETED THE ASSESSMENT U/S.144 D ETERMINING THE INCOME AT RS.5,66,400/-. IN THE FIRST APPEAL, THE ASSESSEE CH ALLENGED THE PASSING OF ORDER ITA 6645/M/08 WORLDWIDE SAFTWARE (EXPORTS) 2 U/S.144 AND ALSO PROPOSED TO FILE ADDITIONAL EVIDEN CE. THE LD. CIT(A) REFUSED TO ENTERTAIN ADDITIONAL EVIDENCE AS, IN HIS OPINION, T HERE WAS NO SUFFICIENT CAUSE WHICH PREVENTED THE ASSESSEE FROM SUBMITTING THE SA ME IN THE COURSE OF ASSESSMENT PROCEEDINGS. FURTHER, HE DID NOT FIND AN Y REASON TO REMAND THE MATTER BACK TO THE FILE OF AO. WITHOUT MAKING ANY D ISCUSSION ON THE MERITS OF THE ADDITION, THE LD. CIT(A) UPHELD THE ACTION OF THE A O AND DISMISSED THE ASSESSEES APPEAL. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOTED THAT WHEN THE FIRST TWO NOTICES DATED 22-02-2005 AND 12-08- 2005 WERE ISSUED, THE ASSESSEES SCRUTINY ASSESSMEN T FOR ASST. YEAR 2003-04 WAS GOING ON. IT HAS BEEN STATED IN THE SYNOPSIS FILED BEFORE US THAT THE ASSESSMENT ORDER U/S. 143(3) FOR ASST. YEAR 2003-04 WAS PASSED ON 30-03-2006. THIS FACTUAL POSITION HAS NOT BEEN CONTROVERTED ON BEHALF OF THE REVENUE. THEREAFTER, ONE NOTICE WAS ISSUED DATED 04-10-2006 AND ANOTHER NOT ICE WAS ISSUED WHICH WAS RECEIVED BY THE ASSESSEE ON 15-12-2006. IT HAS BEEN STATED THAT THE LAST NOTICE WAS RECEIVED BY SHRI SALVI, THE THEN CLERK, WHO EVE NTUALLY DIED. IN THE BACKDROP OF THIS FACTUAL SCENARIO, IT IS, PALPABLE THAT THER E WAS REASONABLE CAUSE WITH THE ASSESSEE IN NOT APPEARING BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. AS SUCH, WE SET ASIDE THE IMPUGNED ORD ER AND REMIT THE MATTER BACK TO THE FILE OF AO FOR FRAMING THE ASSESSMENT A FRESH AS PER LAW AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE. NEEDLESS TO SAY, THE ASSESSEE WILL BE AT LIBERTY TO LEAD ANY NEW EVIDENC E IN THE FRESH PROCEEDINGS IN SUPPORT OF THE PARTICULARS OF ITS RETURN. 5. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ITA 6645/M/08 WORLDWIDE SAFTWARE (EXPORTS) 3 ITA NO.6643/MUM/08: 6. THIS APPEAL IS AGAINST THE ORDER PASSED BY THE C IT(A) ON 05-08-2008 UPHOLDING THE IMPOSITION OF PENALTY OF RS.40,000/- IMPOSED BY THE ASSESSING OFFICER U/S. 271(1)(B) OF THE ACT. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, WE FIND THAT THE AO IMPOSED PENALTY U/S. 271(1)(B) FOR NON-COMPLIANCE BY THE ASSESSEE OF THE NOTICES ISSUED BY THE AO AS REFERRED TO IN ITA NO.6644/M/08. THE SAID APPEAL HAS BEEN DISPOSED OF BY US SUPRA ACCEPTING THE REASONABLE CAUSE FOR NOT ATTENDING THE ASSESSMENT PROCEEDINGS. RESULTANTLY, THE PENALTY IMPOSED ON ACCOUNT OF NON-COMPLIANCE O F THE NOTICES DESERVES TO BE SET ASIDE IN VIEW OF THE PROVISIONS OF SEC. 273B, W HICH HAVE AN OVERRIDING EFFECT OVER THE PROVISIONS OF SECTION 271(1)(B) OF THE ACT . WE, THEREFORE, ORDER FOR THE DELETION OF THIS PENALTY. 8. IN THE RESULT, THIS APPEAL IS ALLOWED. ITA NO.6645/MUM/08 : 9. THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE OR DER PASSED BY THE CIT(A) ON 05-08-2008 UPHOLDING THE PENALTY LEVIED BY THE A O U/S. 271(1)(C) AMOUNTING TO RS.2,03,196/- IN RESPECT OF THE ASST. YEAR 2004- 05. 10. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT IN VIEW OF THE ORDER PASSED BY THE AO U/S.144, HE IMPOSED PENALTY U/S. 271(1)(C) I N RESPECT OF THE ADDITIONS MADE BY HIM. THE LD. CIT ALSO UPHELD THE PENALTY. 11. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PE RUSING THE RELEVANT MATERIAL ON RECORD, IT IS FOUND THAT THE ORDER PASSED BY THE AO IN THE QUANTUM PROCEEDINGS HAS BEEN SET ASIDE FOR MAKING A DE NOVO ASSESSMENT. CONSEQUENTLY, ITA 6645/M/08 WORLDWIDE SAFTWARE (EXPORTS) 4 THE PENALTY IMPOSED PURSUANT TO SUCH ASSESSMENT CAN NOT STAND. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER AND RESTORE THE MATTER TO THE FILE OF AO FOR CONSIDERING THE IMPOSITION OF PENALTY PURSUANT TO T HE FRESH ASSESSMENT. OUR VIEW IS FORTIFIED BY THE JUDGMENT OF THE HONBLE SUPREME COURT IN MOHD. MOHATRAM FAROOQUI VS. CIT (SC) 2010 -TIOL -23- SC- IT. 11. IN THE RESULT, THIS APPEAL IS ALLOWED FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED ON THE 30TH DAY OF APRIL, 2 010. SD/- SD/- (VIJAY PAL RAO) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER * MUMBAI:30TH APRIL , 2010. NG: COPY TO : 1. ASSESSEE. 2.DEPARTMENT. 3 CIT(A)-XVIII,,MUMBAI. 4 CIT-XVIII,MUMBAI. 5.DR,G BENCH,MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST.REGISTRAR, ITAT, MUMBAI. ITA 6645/M/08 WORLDWIDE SAFTWARE (EXPORTS) 5 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 22-4-2010 SR.PS/ 2 DRAFT PLACED BEFORE AUTHOR 23-4-2010 SR.PS/ 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER