AI-RAKYAN APPARELS & EXPORTS PVT. LTD., MUMBAI V. INCOME TAX OFFICER-12(1)(1), MUMBAI

ITA 7317/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4150 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 21-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MICHAEL JERALD
• Keywords: Principle of natural justice; Set aside; FORM 26AS
• Section: 271(1)(c); 143(3); 115JB; 274; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A, BENCH MUM BAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBE R ITA NO.7317/MUM/2018 ( ASSESSMENT YEAR: 2010-11 ) AL-RAKYAN APPARELS & EXPORTS PVT.LTD. PLOT NO.16, WALBHAT ROAD CAMA IND.ESTATE GOREGAON EAST MUMBAI-400 063 VS. ITO-12(1)(1) ROOM NO.129A AAYKAR BHAWAN M.K.ROAD MUMBAI-400 020 PAN/GIR NO. AA ECA0525F APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI PRATEEK JAIN, AR REVENUE BY SHRI MICHAEL JERALD, DR DATE OF HEARING 12/02/2020 DATE OF PRONOUNCEME NT 21 /0 2 /2020 / O R D E R PER G.MANJUNATHA (A.M) : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)20, MUMBAI, DATED 04/07/2018 AND IT PERTAINS TO ASSESSMENT YEAR 2010-11. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN PASSING THE IMPUGNED ORDER WITHOUT AFFORDING ADEQUATE OPPORTUNI TY OF BEING HEARD, AS PER THE GROUND STATED IN THE ORDER OR OTH ERWISE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLANT 'S CASE AND IN LAW, THE NOTICE ISSUED UNDER SECTION 274 READ WITH SECTI ON 271(1)(C) BY THE LD. ASSESSING OFFICER WITHOUT RECORDING ANY SATISFACTIO N IS BAD IN LAW AND THE CONSEQUENTIAL PENALTY ORDER PASSED UNDER SECTION 27 1(1 ) OF THE ACT IS BAD IN LAW AND NOT SUSTAINABLE IN THE EYES OF LAW. ITA NO.7317/MUM/2018 AL-RAKYAN APPARELS & EXPORTS PVT.LTD. 2 3. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLANT 'S CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN C ONFIRMING THE ACTION OF LD ASSESSING OFFICER'S IN IMPOSING PENALTY OF R S. 4,02,490/-BY INVOKING PROVISIONS OF SECTION 271(1)(C) OF THE INC OME TAX ACT, 1961. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE HAS FILED ITS RETURN OF INCOME FOR AY 2010-11 ON 01/10/2010, DECLARING TOTAL INCOME AT RS. 21,41,920/- UNDER NORMAL PROVISIONS O F THE ACT, AND BOOK PROFIT OF RS. 84,73,560/- U/S 115JB OF THE I.T .ACT, 1961. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE I.T.ACT, 1961 ON 07/02/2013, DETERMINING THE TOTAL INCOME AT RS.43,5 4,373/- AFTER MAKING DISALLOWANCES OUT OF DIWALI EXPENSES OF RS. 2,02,758/- AND ADDITIONS OF RS. 20,09,695/- TOWARDS DIFFERENCE BET WEEN LABOUR CHARGES RECEIVED, AS PER BOOKS OF ACCOUNTS OF THE A SSESEE AND RECEIPTS, AS PER FORM 26AS REPORTED IN INCOME TAX DATA BASE. THE ASSESSEE HAS FILED AN APPEAL AGAINST ASSESSMENT OR DER AND CHALLENGED ADDITIONS MADE BY THE LD. AO TOWARDS DIS ALLOWANCES OF DIWALI EXPENSES AND ADDITIONS TOWARDS LABOUR CHARGE S. THE LD.CIT(A), VIDE ITS ORDER DATED 14/03/2014 HAS ALLO WED PARTIAL RELIEF TOWARDS ADDITION ON ACCOUNT OF LABOUR CHARGES. THER EAFTER, THE LD. AO HAS INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE I.T.ACT, 1961 AND AFTER CONSIDERING RELEVANT SUBMISSIONS OF THE ASSESSE HAS LEVIED PENALTY OF RS. 4,02,490/-, WHICH IS EQUAL TO 100% OF TAX SOUGHT TO BE EVADED. 4. AGGRIEVED BY THE PENALTY ORDER, THE ASSESEE PREF ERRED AN APPEAL BEFORE THE LD.CIT(A). BEFORE THE LD.CIT(A), THE ASSESSE, NEITHER APPEARED, NOR FILED ANY DETAILS TO SUPPORT ITS CASE, WHICH IS EVIDENT FROM THE FACT THAT INSPITE OF GIVING FIVE D ATES OF HEARING, THE ASSESEE DID NOT APPEARED BEFORE THE LD. AO TO FILE NECESSARY EVIDENCES TO SUPPORT ITS CASE. THEREFORE, THE LD.CI T(A) HAS DECIDED ITA NO.7317/MUM/2018 AL-RAKYAN APPARELS & EXPORTS PVT.LTD. 3 THE APPEAL EX-PARTE ON THE BASIS OF INFORMATION AVAILABLE ON RECORD AND CONFIRMED PENALTY LEVIED BY THE LD. AO U/S 271( 1)(C) OF THE ACT, IN RESPECT OF ADDITIONS MADE TOWARDS DIFFERENCE IN LABOUR CHARGES, AS PER BOOKS OF ACCOUNT AND AS PER FORM 26AS. AGGR IEVED BY THE LD.CIT(A) ORDER, THE ASSESSEE IS IN APPEAL BEFORE U S. 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW. THE FIRST AND FOREMOST ARGUMENTS OF THE LD. COUNSEL FOR THE A SSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN PASSING THE ORDER IN VIO LATION OF PRINCIPLES OF NATURAL JUSTICE. THE LD. AR FOR THE ASSESSEE FUR THER SUBMITTED THAT ALTHOUGH, THE LD.CIT(A) HAD GIVEN FIVE DATES OF HEA RING, THE ASSESSEE COULD NOT APPEARED BEFORE THE LD.CIT(A), B UT THE REASONS FOR NON APPEARANCE BEFORE THE LD.CIT(A) ARE BEYOND CONTROL OF THE ASSESSEE, WHICH PREVENTED THE ASSESSEE FROM APPEARI NG FOR HEARING AS ON THE DATES FIXED FOR DISPOSAL OF APPEAL. THERE FORE, HE SUBMITTED THAT ONE MORE OPPORTUNITY MAY BE GIVEN TO GO BACK T O THE LD.CIT(A) TO EXPLAIN ITS CASE. THE LD. DR, ON THE OTHER HAND STRONGLY OPPOSING THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESEE SU BMITTED THAT THE ASSESSEE IS NEITHER APPEARED, NOR FILED ANY DETAIL S DESPITE GIVING FIVE DATES OF HEARING, WHICH IS EVIDENT FROM THE FA CT THAT THE LD.CIT(A) HAS NARRATED DATES OF HEARING IN PARA 4,1 OF HIS ORDER. THEREFORE, THERE IS NO MERIT IN ARGUMENTS OF THE LD . COUNSEL FOR THE ASSESSEE THAT NO ADEQUATE OPPORTUNITY OF HEARING WA S GIVEN TO THE ASSESSE AND ACCORDINGLY, THERE IS NO REASON TO SET ASIDE THE ISSUE TO THE FILE OF THE LD.CIT(A). 6. HAVING CONSIDERED ARGUMENTS OF BOTH THE SIDES, W E ARE OF THE CONSIDERED VIEW, IT IS THE RESPONSIBILITY OF THE P ERSON, WHO FILED AN ITA NO.7317/MUM/2018 AL-RAKYAN APPARELS & EXPORTS PVT.LTD. 4 APPEAL BEFORE THE AUTHORITIES IS TO PROSECUTE ITS A PPEAL WITH NECESSARY EVIDENCES FOR SPEEDY DISPOSAL OF APPEALS. OTHERWISE, THE AUTHORITIES LEFT WITH NO OPTION TO DISPOSE OF APPEA LS IN ACCORDANCE WITH MATERIALS AVAILABLE ON RECORD. BUT, FACT REMAI NS THAT WHEN, THE ASSESEE EXPLAINS THE REASONS FOR NOT APPEARING BEFO RE THE AUTHORITIES AND SUCH REASONS ARE BONAFIDE, THEN IT IS THE DUTY OF THE APPELLATE AUTHORITIES TO DECIDE THE ISSUES ON MERIT S IN ACCORDANCE WITH LAW INSTEAD OF DISPOSING APPEAL ON TECHNICAL GROUNDS. IN THIS CASE, ON PERUSAL OF ORDER PASSED BY THE LD.CIT(A), WE FIND THAT ALTHOUGH, THE LD.CIT(A) HAS DISPOSED-OFF APPEAL FIL ED BY THE ASSESSEE, BUT SAID APPEAL HAS BEEN DISPOSED-OFF FOR NON PROSECUTION WITHOUT DISCUSSING THE ISSUES ON MERITS . THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THIS CAS E, WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE NEEDS TO GO BACK TO THE FILE OF THE LD.CIT(A) TO GIVE ONE MORE OPPORTUNITY OF HEARING T O THE ASSESSE TO FILE NECESSARY EVIDENCES TO SUPPORT ITS CASE. HENCE , WE SET ASIDE THE APPEAL TO THE FILE OF THE LD.CIT(A) TO DECIDE I N ACCORDANCE WITH LAW. NEEDLESS TO SAY, THE ASSESSEE SHALL NOT SEEK A NY ADJOURNMENT WITHOUT ANY VALID REASONS. IN CASE, ASSESSEE SEEKS ADJOURNMENTS WITHOUT VALID REASON, THEN THE LD.CIT(A) IS FREE TO DISPOSE OF THE APPEAL IN ACCORDANCE WITH LAW ON THE BASIS OF MATER IAL AVAILABLE ON RECORD. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 /02/ 2020 ITA NO.7317/MUM/2018 AL-RAKYAN APPARELS & EXPORTS PVT.LTD. 5 SD/- (SAKTIJIT DEY) SD/- (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 21/02/2020 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//