Ahmed A.Meghjani, Hyderabad V. ITO, Hyderabad

ITA 74/HYD/2006

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5879 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-03-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 25-01-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIVEDITA BISWAS
• Assessee Lawyers: TEJ PRAKASH TOSHNIWAL
• Keywords: Document seized; Principle of natural justice; Reasonable cause; Condonation of delay; Documents seized

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMEBR ITA NO. ASSESSMENT YEAR APPELLANT RESPONDENT 74/HYD/06 2002-03 SHRI AHMED A.MEGHJANI, PROP. M/S. LANDMARK (R) FURNITURE, HYDERABAD. (PAN AFUPM 4716 L) INCOME-TAX OFFICER, WARD-4(4), HYDERABAD 75/HYD/06 2002-03 SHRI AHMED A.MEGHJANI, PROP. M/S. LANDMARK (R) FURNITURE, HYDERABAD. (PAN AFUPM 4716 L) INCOME-TAX OFFICER, WARD-4(4), HYDERABAD 76/HYD/06 2003-04 SHRI AHMED A.MEGHJANI, PROP. M/S. LANDMARK (R) FURNITURE, HYDERABAD. (PAN AFUPM 4716 L) INCOME-TAX OFFICER, WARD-4(4), HYDERABAD 77/HYD/06 2003-04 SHRI AHMED A.MEGHJANI, PROP. M/S. LANDMARK (R) FURNITURE, HYDERABAD. (PAN AFUPM 4716 L) INCOME-TAX OFFICER, WARD-4(4), HYDERABAD 78/HYD/06 2002-03 SMT. SURAIYA A.MEGHJANI, PROP. M/S. LORD'S FURNITURE & INTERIORS, HYDERABAD. (PAN ACIPM 2055 K) INCOME-TAX OFFICER, WARD-4(4), HYDERABAD 79/HYD/06 2002-03 SMT. SURAIYA A.MEGHJANI, PROP. M/S. LORD'S FURNITURE & INTERIORS, HYDERABAD (PAN ACIPM 2055 K) INCOME-TAX OFFICER, WARD-4(4), HYDERABAD 80/HYD/06 2003-04 SMT. SURAIYA A.MEGHJANI, PROP. M/S. LORD'S FURNITURE & INTERIORS, INCOME-TAX OFFICER, WARD-4(4), ITA NOS. 74 TO 81/HYD/06 SHRI AHMED A.MEGHJANI & ANR. HYD 2 HYDERABAD (PAN ACIPM 2055 K) HYDERABAD 81/HYD/06 2003-04 SMT. SURAIYA A.MEGHJANI, PROP. M/S. LORD'S FURNITURE & INTERIORS, HYDERABAD (PAN ACIPM 2055 K) INCOME-TAX OFFICER, WARD-4(4), HYDERABAD APPELLANTS BY : SHRI TEJ PRAKASH TOSHNIWAL RESPONDENT BY : SMT. NIVEDITA BISWAS O R D E R PER G.C.GUPTA, VICE PRESIDENT: FOUR EACH OF THESE EIGHT APPEALS FILED BY TWO ASSESSEES F OR THE ASSESSMENT YEARS 2002-03 AND 2003-04 ARE DIRECTED AGA INST SEPARATE ORDERS OF THE CIT(A). SINCE COMMON ISSUES ARE I NVOLVED, THESE APPEALS ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS.75/HYD/06 : ASSESS MENT YEAR 2002-03 ITA NOS.77/HYD/06 : ASSESS MENT YEAR 2003-04 ITA NOS.79/HYD/06 : ASSESS MENT YEAR 2002-03 ITA NOS.81/HYD/06 : ASSESS MENT YEAR 2003-04 2. IDENTICAL ISSUE INVOLVED IN THESE FOUR APPEALS IS REG ARDING THE VALIDITY OF THE EX-PARTE ORDERS OF ASSESSMENT FRAM ED BY THE ASSESSING OFFICER UNDER S.144 OF THE INCOME-TAX ACT, 196 1. GROUNDS OF APPEAL OF THE ASSESSEES IN THESE APPEALS CENTER AROUND THIS SINGLE ISSUE. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT TH E CIT(A) HAS WRONGLY SUSTAINED AND CONFIRMED THE EX-PARTE ORDER S OF ASSESSMENT FRAMED IN THE CASES OF THESE TWO ASSESSEES FOR BOTH T HE ASSESSMENT YEARS. HE SUBMITTED THAT THERE WAS SURVEY ACTION UNDER ITA NOS. 74 TO 81/HYD/06 SHRI AHMED A.MEGHJANI & ANR. HYD 3 S133A OF THE ACT AT THE PREMISES OF THE ASSESSEE ON 6.11. 2003 AND THE ACCOUNT BOOKS OF THE ASSESSEES AND RELEVANT RECORDS WERE SEIZED BY THE DEPARTMENT. HE SUBMITTED THAT IN SPITE OF NUMB ER OF EFFORTS MADE, THE DEPARTMENT HAS NOT ISSUED THE PHOTO-STAT COPIE S OF THE SEIZED MATERIAL AS A WHOLE AND HAS ALLOWED ONLY PHOTO COPIES OF SOME OF THE SEIZED DOCUMENTS. LEARNED COUNSEL FOR THE ASSESSE E, IN THESE FACTS OF THE CASE SUBMITTED THAT THE ASSESSING OFFICER WAS PAT ENTLY WRONG IN FRAMING THE EX-PARTE ASSESSMENTS AGAINST THE ASSE SSEES. HE SUBMITTED THAT THE CIT(A) WAS NOT CORRECT IN OBSERVATION S THAT CONSIDERING THE INTERPOLATIONS IN THE VISITORS' BOOK, TH E CLAIM OF THE ASSESSEE THAT THE ENTRIES IN THE VISITORS' BOOK SHOULD B E REGARDED AS DUE COMPLIANCE TO THE STATUTORY NOTICES IS NOT ACCEPTABLE. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND, OPPOSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. SHE RELIED ON THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND SUBMITTED THAT THE ASSESSEES WERE NON-COOPERATI VE IN THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER, A ND THEREFORE, THE CIT(A) HAS CORRECTLY CONCLUDED THAT THE A SSESSEES COULD NOT PROVE THAT THERE WAS DUE COMPLIANCE WITH THE NOTI CES ISSUED TO THE ASSESSEES. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY AN D HAVE PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE C IT(A). WE FIND THAT THE EX-PARTE ORDERS OF ASSESSMENT WERE FRAMED IN THE CASES OF THESE ASSESSEES FOR THE ASSESSMENT YEARS 2002-03 AND 2003-0 4. IT IS AN ADMITTED FACT THAT DUE TO SURVEY OPERATIONS CARRIE D OUT AT THE PREMISES OF THE ASSESSEES ON 6.11.2003, ENTIRE BOOKS OF ACCO UNT WERE SEIZED BY THE DEPARTMENT, AND THEY CONTINUED TO BE LY ING WITH THE ITA NOS. 74 TO 81/HYD/06 SHRI AHMED A.MEGHJANI & ANR. HYD 4 DEPARTMENT, DURING THE RELEVANT PERIOD. ASSESSEE WAS G IVEN PHOTOSTAT COPIES OF SOME OF THE SEIZED MATERIAL, BUT IN SPITE OF T HE EFFORTS MADE BY THE ASSESSEES, THEY WERE NOT PROVIDED WITH COMPLETE SE T OF COPIES OF THE SEIZED MATERIAL. WE FIND THAT THE ENTRIES MAD E IN THE VISITORS' BOOK BY THE ASSESSEE'S REPRESENTATIVE, HAVE BEEN WRONGLY HELD BY THE CIT(A) AS INTERPOLATIONS IN THE VISITORS BOOK, WHICH HA S NO LEGAL BASIS. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CON SIDERED VIEW THAT THE EX-PARTE ASSESSMENT ORDERS IN THESE CASES HAV E TO BE SET ASIDE. WE ACCORDINGLY SET ASIDE THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE MATTERS TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO FRAME DE-NOVO ASSESSMENTS FOR THE RELEVANT ASSESSMENT YEARS IN ACCORDANCE WITH LAW AFTER PROVIDING REA SONABLE OPPORTUNITY OF HEARING TO THE ASSESSEES. ASSESSEES SHOULD ALSO BE PROVIDED WITH CERTIFIED COPIES OF THE SEIZED MATERIAL, SO THAT THE PRINCIPLES OF NATURAL JUSTICE CAN BE SAID TO HAVE BEEN COM PLIED WITH, IN THESE CASES. WE DIRECT ACCORDINGLY. 5. IN THE RESULT, THESE FOUR APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NO.74/HYD/06 : ASSESSM ENT YEAR 2002-03 ITA NO.76/HYD/06 : ASSESSM ENT YEAR 2003-04 ITA NO.78/HYD/06 : ASSESSM ENT YEAR 2002-03 ITA NO.80/HYD/06 : ASSESSM ENT YEAR 2003-04 6. THESE FOUR APPEALS ARE DIRECTED AGAINST THE ORDERS OF THE CIT(A) CONFIRMING THE PENALTIES IMPOSED BY THE ASSESSING O FFICER UNDER S.271(1)(B) OF THE INCOME-TAX ACT. ITA NOS. 74 TO 81/HYD/06 SHRI AHMED A.MEGHJANI & ANR. HYD 5 7. AT THE OUTSET, WE MAY NOTE THAT THERE IS A DELAY OF 132 DAYS IN THE FILING OF THESE APPEALS. ON CAREFUL CONSIDER ATION OF THE RIVAL SUBMISSIONS ON THE ISSUE OF DELAY, WE FIND THAT TH ERE IS REASONABLE CAUSE FOR THE DELAY IN THE FILING OF THESE A PPEALS, AND IT IS A FIT CASE FOR THE CONDONATION OF DELAY IN THE FILING O F THESE APPEALS. WE ACCORDINGLY CONDONE THE DELAY AND PROCEED TO DISPOSE OFF THESE APPEALS ON MERITS. 8. WE HAVE HEARD BOTH THE PARTIES. IN VIEW OF OUR FINDING IN PARA-4 HEREINABOVE, IN THE CONTEXT OF QUANTUM APPEA LS OF THE ASSESSEES FOR BOTH THESE YEARS, WHEREBY WE HAVE SET ASIDE TH E IMPUGNED ASSESSMENT ORDERS AND RESTORED THE MATTERS TO THE FILE OF THE ASSESSING OFFICER FOR FRAMING THE ASSESSMENTS FOR RELEVA NT YEARS DE NOVO, THE PRESENT PENALTIES IMPOSED UNDER S.271(1)( B) OF THE ACT ARE ALSO LIABLE TO BE CANCELLED. WE DO SO ACCORDINGLY. WE HOWEVER, MAKE IT CLEAR THAT THE ASSESSING OFFICER SHALL BE AT LIBE RTY TO RE-INITIATE THE PENALTY PROCEEDINGS, AT THE TIME OF FRAMING THE D E NOVO ASSESSMENTS, IF SO REQUIRED BY LAW. WE DIRECT ACCORDINGLY. 9. IN THE RESULT, THESE FOUR APPEALS ARE ALLOWED. 10. TO SUM UP, WHILE ITA NOS.75, 77, 79 AND 81/HYD/20 06 ARE ALLOWED FOR STATISTICAL PURPOSES, ITA NOS.74, 76, 78 A ND 80/HYD/2006 ARE ALLOWED ORDER PRONOUNCED IN THE COURT AT THE CONCLUSION OF THE HEARING ON 10.3.2010 SD/- SD/- (CHANDRA POOJARI) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 10TH MARCH, 2010. ITA NOS. 74 TO 81/HYD/06 SHRI AHMED A.MEGHJANI & ANR. HYD 6 COPY FORWARDED TO: 1. SHRI AHMED A.MEGHJANI, PROP. M/S. LANDMARK (R) FU RNITURE, C/O. SHRI TEJ PRAKASH TOSHNIWAL, 4-2-375, SULTAN BAZAR, HY DERABAD. 2. SMT. SURAIYA A.MEGHJANI, PROP. M/S. LORD'S FURNIT URE & INTERIORS, C/O. SHRI TEJ PRAKASH TOSHNIWAL, 4-2-375, SULTAN BAZ AR, HYDERABAD. 3. INCOME-TAX OFFICER, WARD 4(4), HYDERABAD. 3. COMMISSIONER OF INCOME-TAX (APPEALS) V, HYDERABAD 4. COMMISSIONER OF INCOME-TAX-4, HYDERABAD 5 THE DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.