SUMEET N JAIN, MUMBAI V. ITO, 17(3)(4), MUMBAI

ITA 726/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9803 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 08-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR
• Keywords: Opportunity of being heard; Accommodation entries; Set aside
• Section: 143(1); 250; 251; 246A; 147

Judgement Text

ITA NO.726/MUM/2019 A.Y. 2010 - 11 SHRI SUMEET N. JAIN VS. ITO - 17(3)(4) 1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI G. MANJUNATHA, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.726MUM/2019 (ASSESSMENT YEAR: 2010 - 11) SHRI SUMEET N. JAIN, 59, SINGHI BHAWAN, DR. MEISHRI ROAD, MUMBAI 400009 VS. ITO - 17(3)(4) 1 ST FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 PAN AFZPJ7543P (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SHRI V. VINOD KUMAR , D.R DATE OF HEARING: 05.03.2020 DAT E OF PRONOUNCEMENT: 06 .0 3.2020 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 28, MUMBAI, DATED 13.11.2018, WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC. 271(1)(B) OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 01.10.2015 FOR A.Y. 2010 - 1 1. THE ASSESSEE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLOWING EFFECTIVE GROUND OF APPE AL BEFORE US: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE HONBLE CIT(A) ERRED IN UPHOLDING THE PENALTY LEVIED BY THE LD. A.O OF RS.10,000/ - U/S. 271(1)(B) OF THE I.T. ACT, AND THE REASONS ASSIGNED FOR DOING ARE WRONG AND CONTRARY TO THE PROVISION OF INCOME TAX AND RULES MADE THERE UNDER. 2. BRIEFLY STATED, THE ASSESSEE WHO IS ENGAGED IN THE BUSINESS OF TRADING IN FABRICS HAD E - FILED HIS RETURN OF INCOME FOR A.Y. 2010 - 11 ON 29.09.2010, DECLARING HIS TOTAL INCOME AT RS.2,94,450/ - . T HE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED AS SUCH UNDER SEC. 143(1) OF THE ACT. ON THE BASIS OF INFORMATION RECEIVED FROM THE OFFICE OF THE DGIT (INV.), MUMBAI, THAT THE ASSESSEE AS A BENEFICIARY HAD OBTAINED ACCOMMODATION ENTRIES, HIS CASE W AS ITA NO.726/MUM/2019 A.Y. 2010 - 11 SHRI SUMEET N. JAIN VS. ITO - 17(3)(4) 2 REOPENED UNDER SEC. 147 OF THE ACT. AS ON 01.04.2015, THE A.O ISSUED A NOTICE UNDER SEC.142(1) OF THE ACT TO THE ASSESSEE. HOWEVER, AS THE ASSESSEE NEITHER APPEARED AS ON THE AFORESAID DATE OF HEARING, NOR FURNISHED THE DETAILS AS WERE CALLED FOR BY THE A.O, THE LATTER INITIATED PENALTY PROCEEDINGS UNDER SEC. 271(1)(B) OF THE ACT. ACCORDINGLY, THE ASSESSEE WAS CALLED UPON TO SHOW CAUSE AS TO WHY PENALTY MAY NOT BE I MPOSED UPON HIM UNDER SEC. 271(1)(B) OF THE ACT. AS THE ASSESSEE FAILED TO COMPLY WITH THE AFORESAID NOTICE , THEREFORE, THE A.O IMPOSED PENALTY UNDER SEC.271(1)(B) OF RS.10,000/ - ON THE ASSESSEE. 3. AGGRIEVED, THE ASSESSEE ASSAILED THE PENALTY IMPOSED UNDE R SEC. 271(1)(B) BY THE A.O , VIDE HIS ORDER DATED 01.10.2015, BEFORE THE CIT(A). AS THE ASSESSEE DESPITE HAVING BEEN PUT TO NOTICE ABOUT THE HEARING OF THE APPEAL FAILED TO PUT UP AN APPEARANCE BEFORE THE CIT(A), THEREFORE, THE LATTER WITHOUT ADVERTING TO THE MERITS OF THE APPEAL DISMISS ED THE APPEAL, FOR THE REASON, THAT THE ASSESSEE WAS NOT INTERESTED IN PURSUING THE SAME . 4. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. WE FIND THAT THE ASSESSEE APP ELLANT DESPITE HAVING BEEN INTIMATED ABOUT THE HEARING OF THE APPEAL, HAD HOWEVER, FAILED TO PUT UP AN APPEARANCE BEFORE US. ACCORDINGLY, BEING LEFT WITH NO OTHER ALTERNATIVE , WE ARE CONSTRAINED TO DISPOSE OFF THE APPEAL AFTER HEARING THE RESPONDENT REVENU E. 5. THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDERS OF THE LOWER AUTHORI TIES. WE FIND THAT THE CIT(A) HAD DISPOSE D OFF THE APPEAL FOR NON - PROSECUTION , AND HAD FAILED TO APPLY HIS MIND TO THE ISSUE WHICH DID ARISE FROM THE IMPUGNED ORDER AND HAS BEEN ASSAILED BY THE ASSESSEE BEFORE HIM . WE ARE UNABLE TO PERSUADE OURSELVES TO ACCEPT THE MANNER IN WHICH THE APPEAL OF THE ASSESSEE HAS BEEN DISPOSED OFF BY THE CIT(A). IN OUR CONSIDERED VIEW, ONCE AN APPEAL IS PREFERRED BEFORE TH E CIT(A) , IT BECOMES OBLIGATORY ON HIS PART T O DISPOSE OFF THE SAME ON MERIT. W E ARE OF A STRONG CONVICTION THAT IT IS NOT OPEN FOR TH E CIT(A) TO SUMMARILY DISMISS AN APPEAL ON ACCOUNT OF NON - PROSECUTION OF THE SAME BY THE ASSESSEE. IN FACT, A PERUSAL OF S EC.251(1)(A) AND (B) , AS WELL AS THE EXPLANATION TO SEC.251(2) OF THE ACT, REVEALS THAT THE CIT(A) REMAINS UNDER A STATUTORY OBLIGATION TO APPLY HIS MIND TO ALL THE ISSUE S WHICH ARISES FROM THE IMPUGNED ORDER BEFORE HIM. AS PER MANDATE OF LAW, THE CIT(A) IS NOT VESTED WITH ANY POWER TO SUMMARILY DISMISS THE APPEAL FOR NON - PROSECUTION. OUR AFORESAID VIEW IS FORTIFIED BY THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF ITA NO.726/MUM/2019 A.Y. 2010 - 11 SHRI SUMEET N. JAIN VS. ITO - 17(3)(4) 3 CIT VS. PREMKUMAR ARJUNDAS ( HUF) (2017) 297 CTR 614 (BOM). IN THE AFOREMEN TIONED CASE THE HONBLE JURISDICTIONAL HIGH COURT HAD OBSERVED AS UNDER: 8. FROM THE AFORESAID PROVISIONS, IT IS VERY CLEAR ONCE AN APPEAL IS PREFERRED BEFORE THE CIT(A), THEN IN DISPOSING OF THE APPEAL, HE IS OBLIGED TO MAKE SUCH FURTHER INQUIRY THAT HE THINKS FIT OR DIRECT THE AO TO MAKE FURTHER INQUIRY AND REPORT THE RESULT OF THE SAME TO HIM AS FOUND IN SEC. 250 OF THE ACT. FURTHER, SEC. 250(6) OF THE ACT OBLIGES THE CIT(A) TO DISPOSE OF AN APPEAL IN WRITING AFTER STATING THE POINTS FOR DETERMINATION AND THEN RENDER A DECISION ON EACH OF THE POINTS WHICH ARISE FOR CONSIDERATION WITH REASONS IN SUPPORT. SEC. 251(1)(A) AND (H) OF THE ACT PROVIDE THAT WHILE DISPOSING OF APPEAL THE CIT(A) WOULD HAVE THE POWER TO CONFIRM , REDUCE, ENHANCE OR ANNUL AN ASSESSMENT AND/OR PENALTY. BESIDES EXPLANATION TO SUB - S. (2) OF S. 251 OF THE ACT ALSO MAKES IT CLEAR THAT WHILE CONSIDERING THE APPEAL, THE CIT(A) WOULD BE ENTITLED TO CONSIDER AND DECIDE ANY ISSUE ARISING IN THE PROCEEDINGS BEFORE HIM IN APPEAL FILED FOR ITS CONSIDERATION, EVEN IF THE ISSUE IS NOT RAISED BY THE APPELLANT IN ITS APPEAL BEFORE THE CIT(A). THUS ONCE AN ASSESSEE FILES AN APPEAL UNDER S. 246A OF THE ACT, IT IS NOT OPEN TO HIM AS OF RIGHT TO WITHDRAW OR NOT PRESS THE APPEAL. IN FACT THE CIT(A) IS OBLIGED TO DISPOSE OF THE APPEAL ON MERITS. IN FACT W.E.F. 1ST JUNE, 2001 THE POWER OF THE CIT(A) TO SET ASIDE THE ORDER OF THE AO AND RESTORE IT TO THE AO FOR PASSING A FRESH ORDER STA NDS WITHDRAWN. THEREFORE, IT WOULD BE NOTICED THAT THE POWERS OF THE CIT(A) ARE CO - TERMINUS WITH THAT OF THE AO I.E. HE CAN DO ALL THAT A.O COULD DO. THEREFORE, JUST AS IT IS NOT OPEN TO THE AO TO NOT COMPLETE THE ASSESSMENT BY ALLOWING THE ASSESSEE TO WIT HDRAW ITS RETURN OF INCOME, IT IS NOT OPEN TO THE ASSESSEE IN APPEAL TO WITHDRAW AND/OR THE CIT(A) TO DISMISS THE APPEAL ON ACCOUNT OF NON - PROSECUTION OF THE APPEAL BY THE ASSESSEE. THIS IS AMPLY CLEAR FROM THE S. 251(1)(A) AND (B) AND EXPLANATION TO SEC. 251(2) OF THE ACT WHICH REQUIRES THE CIT(A) TO APPLY HIS MIND TO ALL THE ISSUES WHICH ARISE FROM THE IMPUGNED ORDER BEFORE HIM WHETHER OR NOT THE SAME HAS BEEN RAISED BY THE APPELLANT BEFORE HIM. ACCORDINGLY, THE LAW DOES NOT EMPOWER THE CIT(A) TO DISMISS THE APPEAL FOR NON - PROSECUTION AS IS EVIDENT FROM THE PROVISIONS OF THE ACT. 6 . WE THUS NOT BEING PERSUADED TO SUBSCRIBE TO THE DISMISSAL OF THE APPEAL BY THE CIT( A) FOR NON - PROSECUTION, THEREFORE, SET ASIDE THE SAME TO HIS FILE WITH A DIRECTION TO DISPOSE OFF THE SAME ON MERITS. NEEDLESS TO SAY, THE CIT(A) SHALL AFFORD A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE COURSE OF THE DE NOVO APPELLATE PROCEEDINGS. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE DISPOSED OFF IN TERMS OF OUR AFORESAID OBSERVATIONS. 7 . THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06 .03 .2020 SD / - SD/ - ( G. MAN J UNATHA ) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 06 .03.2020 P.S ROHIT ITA NO.726/MUM/2019 A.Y. 2010 - 11 SHRI SUMEET N. JAIN VS. ITO - 17(3)(4) 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI