RAINBOW POLYPLAST, MUMBAI V. I.T.O. WD. 23(3)(2), MUMBAI

ITA 7288/MUM/2012

• Counselvise Citation: 728819914 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 07-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B P K
• Assessee Lawyers: VIRAG SHAH
• Keywords: Opportunity of being heard; Principle of natural justice; Reasonable cause
• Section: 142(1)

Judgement Text

, MH MHMH MH INCOME TAX APPELLATE TRIBUNAL,MUMBAI - D BENCH. , LAT; XXZ LAT; XXZ LAT; XXZ LAT; XXZ BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & SANJAY GA RG,JUDICIAL MEMBER /. ITA NO.7288/MUM/2012, ! ! ! ! / ASSESSMENT YEAR-2007-08 RAINBOW POLYPLAST C/O. SHIRISH H. SHAH & CO. , MANGROL MANSION, 6, RUSTOM SIDHWA MARG, FORT, MUMBAI-400001 VS I.T.O. WARD 23(3)(2) MUMBAI. PAN:AADFR9584M ( '# / APPELLANT) ( $%'# / RESPONDENT) &' &' &' &' ( ( ( ( / ASSESSEE BY : SHRI VIRAG SHA H ) ( / REVENUE BY : SHRI B.P.K.PANDA ) )) ) '* '* '* '* / DATE OF HEARING : 24-02-2014 +,! ) '* / DATE OF PRONOUNCEMENT : 26-02-2014 , 1961 ) )) ) 254 )1( '-' '-' '-' '-' . . . . ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM : CHALLENGING THE ORDER DT.28.09.2012 OF THE CIT(A)-3 4,MUMBAI, ASSESSEE HAS FILED FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT APPEALS ERRED M FACTS AND IN LAW IN JUS TIFYING AND UPHOLDING THE ORDER OF THE A.O. BY CONFIRMING PENALTY U/S.271(1)(B). 2. GROUNDS FOR NON-ATTENDANCE ON 14-07-2009 I.E. THE D ATE OF HEARING:- 2.1 THE LD. C.I.T. APPEALS ERRED IN NOT ACCEPTING THAT THE ASSESSEES REPRESENTATIVE (AR) HAD REASONABLE AND SUFFICIENT CAUSE FOR NOT APPEARING O N 14-07-2009 INSPITE OF HIS ACCEPTING THE FACT THAT THE AR WAS AT PALGHAR TO MEET THE ADVOCATE IN CONNECTION WITH THE SPL.CIVIL SUIT NO.75/1997 AND 76/1997 FILED BY THE COMPANY M/S. MAZDA PROPERT IES LTD., WHEREIN THE AR IS A DIRECTOR. 3. GROUNDS FOR NON-ATTENDANCE ON 07-08-2009 I.E. THE D ATE TO SHOW CAUSE TOWARDS LEVY OF PENALTY U/S.271(1)(B):- 3.1 THE LD. CIT. APPEALS ERRED IN NOT ACCEPTING T HE FACT THAT WHITE ANT PROBLEM WAS DETECTED IN THE OFFICE OF THE AR ON 13-07-2009 AND THE FILES CONTAI NING SCRUTINY RECORDS OF THE ASSESSEE WAS WRONGLY SHIFTED TO SOMEONE ELSES OFFICE. 3.2 THE LD.CIT APPEALS ERRED IN NOT ACCEPTING THE F ACT THAT THE FACT THAT THE AR WAS DOWN WITH HIGH TEMPERATURE AND B.P. SPITE OF SUBMISSION OF CERTIFI CATE OBTAINED FROM FAMILY PHYSICIAN DR.SHANTILAL V. MARU HOLDING THAT THE FAMILY PHYSICIAN DID NOT GIVE ANY OTHER EVIDENCE TO SHOW THAT ON THE DATES GIVEN IN THE CERTIFICATE, THE AR HAD GONE FOR CONSULTATIO N TO HIS CLINIC. 3.3 THE LD.CIT APPEALS ERRED IN NOT APPRECIATING TH E FACT THAT THE SHOW CAUSE NOTICE INITIATING PENALTY PROCEEDINGS WAS RECEIVED BY THE PARTNER ON 10-0.8-2009 WHEN HE RETURNED TO MUMBAI FROM HIS FACTORY AT HALOL, GUJARAT I.E. AFTER THE DATE OF HE ARING ON 07-08-2009. 4 GROUNDS FOR LEVYING PENALTY WITHOUT GIVING REASONAB LE OPPORTUNITY:-. 4.1 THE LD. CIT APPEALS ERRED IN NOT CONSIDERING TH E FACT THAT THE ASSESSEE HAS NOT BEEN GIVEN REASONABLE OPPORTUNITY OF BEING HEARD CONSIDERING T HE PRINCIPLES OF NATURAL JUSTICE. ONLY ONE OPPORTUNITY WAS GIVEN TO APPEAR ON 07-08-2009 TO SH OW CAUSE AS TO WHY PENALTY U/S.271(1)(B) SHOULD 2 ITA NOS. 7288/MUM/2012 RAINBOW POLYPLAST . NOT BE LEVIED AND THE ORDER WAS PASSED. 5. WITHOUT PREJUDICE TO THE ABOVE, THE APPELLANT HUMBL Y PRAYS THAT THE PENALTY LEVIED BY THE LEARNED I.T.O. AND CONFIRMED BY THE LEARNED C.I.T. (APPEALS )-34 BE DELETED. 6. THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE T O ONE ANOTHER AND THE APPELLANT CRAVES LEAVE TO ADD, ALTER AMEND, DELETE OR MODIFY ANY OF THE AB OVE GROUNDS OF APPEAL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSI NG OFFICER(AO) HAD ISSUED NOTICE U/S. 142(1) ON 07.07.2009 FIXING THE HEARING ON 14.07.2009. AS PER THE AO,NOTICE WAS SERVED ON 08.07.2009 BUT NOBODY APPEARED BEFORE HIM. HE ISSUED A NOTICE U/S. 274 OF THE ACT ALONG WITH A LETTER DATED 30.07.2009 FIXING THE HEARING ON 07.08.2009.AS,THER E WAS RESPONSE TO THE SHOW-CAUSE NOTICE ISSUED TOWARDS LEVY OF PENALTY U/S. 271(1)(B) OF TH E ACT,SO,AO LEVIED A PENALTY OF RS. 10,000/- VIDE HIS ORDER DATED 26.08.2009. 2. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY (FAA).DURING THE APPELLATE PROCEEDINGS,AUTHORISED REPRESENTATIVE (AR) OF THE A PPELLANT PRODUCED THE FOLLOWING DOCUMENTA - RY EVIDENCE:- (A).A CERTIFICATE OF DR. SHANTILAL V MARU DATED 04. 05.2012, (B).A LETTER OF ADVOCATE MR. P.V. KARANDIKAR DATED 10.08.2012. AFTER PERUSING THE DOCUMENT SUBMITTED BY THE AR OF THE ASSESSEE,FAA HELD THAT CONFIRMATION ISSUED BY THE ADVOCATE (SUPRA) SHOWED THAT ASSESSEE HAD MET THE ADVOCATE AT PALGHAR ON 14.07. 2009 FOR DISCUSSION IN CONNECTION WITH CIVIL SUIT N O. 75/1997 AND 76/1997, THAT IT WAS NOT CLEAR FROM THE ABOVE CONFIRMATION AS TO WHETHER THE CASE WAS POSTED SOMEWHERE IN JULY OR NOT, THAT IN ABSENCE OF ANY EVIDENCE TO SHOW THAT THE CASE HAD C OME UP IN JULY, 2009 IT WAS NOT POSSIBLE TO ACCEPT THE CONTENTION OF THE ASSESSEE,THAT THE ASSE SSEE HAD NOT PRODUCED ANY INDEPENDENT EVIDENCE TO SHOW HIS PRESENCE AT PALGHAR,THAT ASSESSEE HAD S UBMITTED THAT THERE WAS PROBLEM OF WHITE ANT IN THE OFFICE OF THE AR,THAT THERE WAS NO EVIDENCE TO SHOW THAT PEST CONTROL TREATMENT WAS GOING ON IN THE OFFICE OF AR ON 14.07.2009,THAT THE NOTICE F OR FURNISHING THE DETAILS SERVED ON THE ASSESSEE ON 08.07.2009, THAT ASSESSEE HAD SIX DAYS TIME AVAI LABLE WITH HIM FOR PRODUCING THE DETAILS, THAT ASSESSEE HAD NOT FILED ANY DETAILES,THAT THE CERTIF ICATE ISSUED BY THE FAMILY PHYSICIAN DID NOT GIVE ANY EVIDENCE TO SHOW THAT AR HAD GONE TO CONSULTATI ON TO HIS CLINIC,THAT ASSESSEE HAD COMMITTED DEFAULT TWICE,THAT NOTHING PREVENTED THE ASSESSEE F ROM SEEKING ADJOURNMENT BY FILING A LETTER ON THE DATE OF HEARING,THAT THERE WAS NO SUFFICIENT OR REASONABLE CAUSE FOR NON-APPEARANCE.HE CONFIR - MED THE PENALTY ORDER PASSED BY THE AO. 3. BEFORE US, AUTHORISED REPRESENTATIVE(AR)SUBMITTED T HAT ON 14.07.2009 HIRISH H. SHAH WAS AT PALGHAR WITH HIS ADVOCATE FOR DISCUSSION IN CONNECT ION WITH CIVIL SUIT,THAT BETWEEN 05.08. 2009 TO 13.08.2009 AR OF THE ASSESSEE WAS SUFFERING FROM HYPERTENSION AND HIGH TEMPERATURE,THAT THERE WAS A REASONABLE CAUSE FOR NON-APPEARANCE ON BOTH THE OCCASIONS.DEPARTMENTAL REPRESENTA TIVE (DR)SUBMITTED THAT THE CASE UNDER CONSIDERATI ON WAS FIT FOR LEVYING PENALTY, THAT ASSESSEE HAD NOT FURNISHED ANY REASONABLE CAUSE FOR NON-APPE ARANCE. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT AR OF THE ASSESSEE COULD NOT APPEAR BEFORE THE AO ON BOTH THE OCCASIONS DUE TO UNAVOIDABLE CIRCUMSTANCES, THAT ON 14 TH JULY,2009 HE WAS NOT IN MUMBAI AND HAD MET ONE ADV OCATE,THAT BETWEEN 5 TH AUG.TO 13 TH AUG,2009 HE WAS SICK.AFTER CONSIDERING THE DOCUMEN TS BY THE ASSESSEE AND CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE UNDER APPEAL,WE ARE OF THE OPINION THAT THERE WAS REASONABLE CAUSE FOR THE ASSESSEE FOR NOT APPEARING BEFORE THE AO.IT IS ALSO A FACT THAT BY NOT APPEARING BEFORE THE AUTHORITY HARM IS CAUSED TO THE ASSESSE.REVERSI NG THE ORDER OF THE FAA,WE DECIDE THE EFFECTIVE GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE. AS A RESUL T,APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. 0'1 &' 2 3 4 ) ' 56. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH FEBURARY,2014 . 3 ITA NOS. 7288/MUM/2012 RAINBOW POLYPLAST . . ) +,! 8 9 26 QJOJH QJOJH QJOJH QJOJH , 201 4 , ) - : SD/- SD/- ( LAT; XXZ LAT; XXZ LAT; XXZ LAT; XXZ / SANJAY GARD) ( / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, 9 /DATE: 26.02.2014. SK . . . . ) )) ) $'; $'; $'; $'; <;!' <;!' <;!' <;!' / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / '# 2. RESPONDENT / $%'# 3. THE CONCERNED CIT(A)/ = > , 4. THE CONCERNED CIT / = > 5. DR D BENCH, ITAT, MUMBAI / ;?- $' M MM MH HH H , . . . 6. GUARD FILE/ - 0 %;' %;' %;' %;' $' $'$' $' //TRUE COPY// . / BY ORDER, @ / 5 DY./ASST. REGISTRAR , /ITAT, MUMBAI