M/s. Neelima Estates P. Ltd, Hyderabad, Hyderabad V. The ITO Ward - 16(2), Hyderabad

ITA 67/HYD/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7153 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-06-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 13-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S RAMA RAO SHRI K J RAO
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER I.T.A. NO. 62/HYD/2011 : A.Y. 2004-05 I.T.A. NO. 63/HYD/2011 : A.Y. 2004-05 I.T.A. NO. 64/HYD/2011 : A.Y. 2004-05 I.T.A. NO. 67/HYD/2011 : A.Y. 2005-06 I.T.A. NO. 68/HYD/2011 : A.Y. 2005-06 I.T.A. NO. 69/HYD/2011 : A.Y. 2005-06 M/S. NEELIMA ESTATES PVT. LTD., HYDERABAD PAN: AABCN5962A V S. INCOME - TAX OFFICER WARD-16(2), HYDERABAD APPELLANT RESPONDENT I.T.A. NO. 65/HYD/2011 : A.Y. 2004-05 I.T.A. NO. 66/HYD/2011 : A.Y. 2004-05 LATE A. RAMAKRISHNA PRASAD REP. BY A. SESHARATHNAM (L/R), HYDERABAD PAN: AFAPA6136N V S. INCOME - TAX OFFICER WARD-16(2), HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SHRI S. RAMA RAO RESPONDENT BY: SHRI K.J. RAO DATE OF HEARING: 15.11.2011 DATE OF PRONOUNCEMENT: 14.12.2011 O R D E R PER CHANDRA POOJARI, AM: THE ABOVE APPEALS BY DIFFERENT ASSESSEES ARE DIRECT ED AGAINST THE DIFFERENT ORDERS OF THE CIT(A)-V, HYDERABAD. SINCE COMMON ISSUES ARE INVOLVED IN ALL THE ABOVE APPEALS THE SAME WERE HEA RD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ISSUE IN ALL THESE APPEALS IS WITH REGARD TO NO N-ADMISSION OF APPEALS BY THE CIT(A) DUE TO DELAY IN FILLING THE A PPEALS. FURTHER THERE WAS ALSO DELAY IN FILING THESE APPEALS BEFORE THIS TRIBUNAL WHICH IS AS FOLLOWS: I.T.A. NOS. 62 TO 69/HYD/2011 M/S. NEELIMA ESTATES PVT. LTD. & ANR. ============================ 2 ITA NO. BEFORE THE CIT(A) (NO. OF DAYS) BEFORE THE TRIBUNAL (NO. OF DAYS) 62/HYD/2011 122 912 63/HYD/2011 189* 912 64/HYD/2011 189* 953 67/HYD/2011 122 912 68/HYD/2011 189* 953 69/HYD/2011 189 953 65/HYD/2011 122 912 66/HYD/2011 189 953 3. THE LEARNED COUNSEL FOR THE ASSESSEE EXPLAINED THE REASON FOR DELAY IN FILING THE APPEALS BEFORE THE CIT(A) AS WE LL AS BEFORE US WHICH IS COMMON IN NATURE. HE SUBMITTED THAT M/S. NEELIMA ESTATES PVT. LTD. IS A COMPANY INCORPORATED UNDER C OMPANIES ACT WHEREIN THE FOLLOWING WERE DIRECTORS: I) A. RAMAKRISHNA PRASAD II) SMT. A. SESHARATNAM, W/O. A. RAMAKRISHNA PRASAD III) KODURI VENKATESWARA RAO IV) SMT. K. SITARATNAM, W/O. K. VENKATESWARA RAO 3.1 HE SUBMITTED THAT OUT OF THE ABOVE SAID FOUR DIRECT ORS, SHRI A. RAMAKRISHNA PRASAD WAS MANAGING DIRECTOR OF THE ASS ESSEE COMPANY AND HE WAS LOOKING AFTER THE AFFAIRS OF THE COMPANY AND HE WAS AUTHORISED TO DEAL WITH INCOME-TAX MATTERS O F THE COMPANY. IN THE COURSE OF BUSINESS ACTIVITY, THE COMPANY ACQ UIRED LANDS. THE LANDS BELONGING TO THE COMPANY WERE SITUATED AT NAN AKRAMGUDA VILLAGE, SERILINGAMPALLY MANDAL OF RR DISTRICT AND MALLAMPET VILLAGE OF QUTUBULLAPUR MANDAL WERE ACQUIRED BY THE GOVERNM ENT IN THE YEAR 2003-04 AND 2004-05 DUE TO WHICH THE ACTIVITY OF THE COMPANY WAS PARALYSED. THESE UNFORESEEN DEVELOPMENTS LED T O DISLOCATION IN THE BUSINESS ACTIVITY OF THE ASSESSEE COMPANY AND H EALTH PROBLEMS OF THE MANAGING DIRECTOR AND CAUSED IRREPARABLE DAM AGE TO THE COMPANY. ONE OF THE DIRECTORS SRI KODURI VENKTESWA RA RAO WAS BEDRIDDEN WITH SERIOUS HEALTH PROBLEMS AND DIED ON 23.7.2009. AFTER HIS DEATH, THE MANAGING DIRECTOR SRI A. RAMAK RISHNA PRASAD I.T.A. NOS. 62 TO 69/HYD/2011 M/S. NEELIMA ESTATES PVT. LTD. & ANR. ============================ 3 WAS LEFT ALONE IN THE MATTERS OF THE ASSESSEE COMPA NY AND WAS NOT ABLE TO CARRY ON ANY ACTIVITY NOR WAS ABLE TO ATTEN D TO THE PENDING MATTERS OF THE COMPANY AS HE WAS VERY SICK. EVEN TH E IMPORTANT MATTERS LIKE PROCLAMATION OF SALE ISSUED BY THE TRO , RANGE-16, HYDERABAD DURING NOVEMBER 2009 COULD NOT BE ATTENDE D TO OR REPRESENTED PROPERLY. SRI A. RAMAKRISHNA PRASAD WA S ADMITTED TO APEX HOSPITALS, RAJAHMUNDRY FOR HEART AILMENT AND H E PASSED AWAY ON 15.6.2010 AT HIS NATIVE PLACE. HE LEFT BEHIND H IS WIFE AND TWO UNMARRIED DAUGHTERS. AFTER THE DEATH OF SRI RAMA KRISHNA PRASAD THERE WAS VIRTUALLY NO ONE TO LOOK AFTER THE AFFAIR S/PENDING MATTERS OF THE PETITIONER COMPANY AND THE WHOLE OF THE AFFA IRS OF THE ASSESSEE COMPANY REMAINED UNATTENDED AS ALSO THE IN COME-TAX MATTERS. 3.2 AS THE BUSINESS ACTIVITY OF THE COMPANY WAS CLOSED DUE TO PROLONGED ILLNESS AND DEATH OF THE TWO DIRECTORS, T HE EMPLOYEES OF THE ASSESSEE COMPANY ALSO LEFT THE COMPANY AND THEIR WH EREABOUTS WERE NOT KNOWN TO THE OTHER TWO DIRECTORS. THEY WERE HELPLE SS BECAUSE OF LACK OF FINANCES AND LACK OF ANY ASSISTANCE. DURING NOVEMB ER 2010 THE TRO SERVED A NOTICE. SMT. A. SESHARATNAM, WIFE OF LATE A. RAMAKRISHNA PRASAD APPROACHED HER CLOSE RELATIVE SRI A. BAPINEE DU. MR BAPINEEDU AFTER EXTENSIVE ENQUIRIES LOCATED THE ADDRESS OF TH E ASSESSEE'S COUNSEL SRI S. ARUN KUMAR, ADVOCATE AND COLLECTED THE FILES FRO M HIM AND LATER ON APPROACHED M/S. S.V. RAO ASSOCIATES, CHARTERED ACCO UNTANTS WITH A REQUEST TO DEAL WITH THE PENDING MATERS OF INCOME-T AX. AS PER THEIR ADVICE AND WITH THE ASSISTANCE OF OTHER PROFESSIONA LS THE ASSESSEE COMPANY GOT THE APPEALS PREPARED BY THE ADVOCATE AN D FILED THE SAME BEFORE ITAT. THE LEARNED COUNSEL SUBMITTED THAT UN DER THESE FACTS AND CIRCUMSTANCES WHICH WERE BEYOND THE CONTROL OF THE ASSESSEE COMPANY THE TRIBUNAL MAY CONDONE THE DELAY AND PASS APPROPR IATE ORDERS IN THE MATTER. THE SAME REASONS WERE EXPLAINED WITH REGARD TO THE APPEALS FILED IN RESPECT OF LATE A. RAMAKRISHNA PRASAD BY THE LEG AL REPRESENTATIVE SMT. A. SESHARATNAM. I.T.A. NOS. 62 TO 69/HYD/2011 M/S. NEELIMA ESTATES PVT. LTD. & ANR. ============================ 4 4. THE LEARNED DR STRONGLY OPPOSED THE ADMISSION OF TH E ABOVE APPEALS BY THE TRIBUNAL. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. THE ASSESSMENT ORDERS OR PENALTY ORDERS PASSED BY THE ASSESSING OFFICER U/S 271(1)(C)/271B ARE EX-PARTE B Y INVOKING THE PROVISIONS OF SECTION 144 OF THE INCOME-TAX ACT, 19 61. THERE WAS NO PARTICIPATION OF THE ASSESSEE BEFORE THE ASSESSING OFFICER. THE ASSESSEE EXPLAINED BEFORE THAT THERE WAS DEATH OF TWO DIRECT ORS' VIZ., SRI KODURI VENKATESWARA RAO ON 23.7.200 AND SRI A. RAMAKRISHNA PRASAD ON 15.6.2010 AFTER PROLONGED ILLNESS. THE COMPANY IS LEFT WITH ONLY TWO FEMALE DIRECTORS WHO ARE NOT CONVERSANT WITH THE AN Y PROCEEDINGS OF INCOME-TAX OR BUSINESS. THEY ARE BASICALLY HOUSEWI VES NOT OPEN TO ANY COMMERCIAL ACTIVITIES. AS SUCH BEING HOUSEWIVES AN D HAVING LOST THEIR HUSBANDS THEY WERE IN GREAT SHOCK. THEY ARE NOT AB LE TO PURSUE THE MATTERS BEFORE THE INCOME-TAX AUTHORITIES AS WELL A S THE TRIBUNAL. ONLY AFTER THE INTERVENTION OF THEIR CLOSE RELATIVE ONE MR. A. BAPINEEDU THEY CAME TO KNOW THAT THEY HAVE TO FILE APPEALS AGAINST THE ORDERS OF THE LOWER AUTHORITIES AND ACCORDINGLY THEY APPROACHED THE CHA RTERED ACCOUNTANTS M/S. S.V. RAO ASSOCIATES AND ON THEIR ADVICE THEY F ILED THE APPEALS BEFORE THIS TRIBUNAL. BEFORE THAT WHATEVER THE APPEALS FI LED BEFORE THE CIT(A) WERE DISMISSED AND WERE PENDING TO FILE THE SAME BE FORE THE TRIBUNAL. THE DELAY IN FILING THE APPEALS EITHER BEFORE THE C IT(A) OR BEFORE THE TRIBUNAL WAS BEYOND THEIR CONTROL. 5.1 IN THE CIRCUMSTANCES OF DEATH OF TWO MALE DIRECTORS OF THE COMPANY, WE HAVE TO SYMPATHETICALLY VIEW THE CIRCUM STANCES OF THE CASE. FURTHER, THE ORDERS PASSED BY THE LOWER AUTHORITIES BEING EX-PARTE, IN OUR OPINION, THESE CASES HAVE TO GO BACK TO THE ASSESSI NG OFFICER TO ADJUDICATE THE SAME ON MERIT AFTER HEARING THE RESPECTIVE ASSE SSEES. IN VIEW OF THIS, WE ARE INCLINED TO CONDONE THE DELAY IN THE LARGER INTEREST OF JUSTICE AND REMIT ALL THE CASES BACK TO THE FILE OF THE ASSESSI NG OFFICER FOR FRESH ADJUDICATION. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND ALL THE ABOVE CASES ARE REMITTED BACK TO THE AS SESSING OFFICER TO DECIDE THE ENTIRE MATTER DE NOVO AFTER GIVING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEES. I.T.A. NOS. 62 TO 69/HYD/2011 M/S. NEELIMA ESTATES PVT. LTD. & ANR. ============================ 5 6. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEES ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH DECEMBER, 2011. SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 14 TH DECEMBER, 2011 COPY FORWARDED TO: 1. M/S. NEELIMA ESTATES PVT. LTD., C/O. SRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYA'S ELEGANCE, 3-6-643, ST. NO. 9, HIMAYATHNAGAR, HYDERABAD-500 029. 2. LATE A. RAMAKRISHNA PRASAD, REP. BY A . SESHARATHNAM (L/R), C/O. SRI S. RAMA RAO, ADVOCATE, FLAT NO. 102 , SHRIYA'S ELEGANCE, 3-6-643, ST. NO. 9, HIMAYATHNAGAR, HYDERA BAD- 500 029. 3 . THE INCOME - TAX OFFICER, WARD - 16(2), HYDERABAD. 4 . THE CIT(A) - V, HYDERABAD. 5 . THE CIT - IV, HYDERABAD. 6 . THE DR B BENCH, ITAT, HYDERABAD TPRAO