VARAD FASHIIONS P. LTD, MUMBAI V. ADDL CIT (TDS) RG 3, MUMBAI

ITA 7755/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2650 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 30-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RADHA KATYAL NARAN G
• Assessee Lawyers: NITIN JOSHI; C S ANANTHAN
• Keywords: Opportunity of being heard; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN , JUDICIAL MEMBER ITA NOS. 7754 & 7755/MUM/2014 (ASSESSMENT YEARS: 2009-10 & 2010-11) M/S. VARAD FASHIONS P. LTD. VS. ADDL. CIT (TDS), RANGE - 3 ARYSTON CENTRE, JUHU ROAD NEAR J-49 CLUB, JUHU MUMBAI 400049 10 TH FLOOR, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BLDG. CHARNI ROAD, MUMBAI - 002 PAN AABCV2850P APPELLANT RESPONDENT APPELLANT BY: SHRI NITIN JOSHI & SHRI C.S. ANANTHAN RESPONDENT BY: MS. RADHA KATYAL NARANG DATE OF HEARING: 04.10.2016 DATE OF PRONOUNCEMENT: 07.10.2016 O R D E R PER JASON P. BOAZ, A.M. THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS OF THE CIT(A)-14, MUMBAI DATED 08.10.2014 UPHOLDING THE LE VY OF PENALTY OF ` 1,20,300/- AND ` 83,530/- UNDER SECTION 272A(2)(K) OF THE INCOME TAX ACT, 1961 (IN SHORT, 'THE ACT') BY THE ASSESSING OFFICER (AO) FOR ASSESSMENT YEARS 2009-10 AND 2010-11 RESPECTIVELY. THESE APPEALS HAV ING COMMON ISSUES, WERE HEARD TOGETHER AND BEING DISPOSED OFF BY WAY O F THIS COMBINED ORDER. 2. IN THESE APPEALS, THE ASSESSEE HAS RAISED SIMILAR G ROUNDS CHALLENGING THE LEVY OF THE AFORESAID PENALTIES UND ER SECTION 272A(2)(K) OF THE ACT FOR BOTH ASSESSMENT YEARS 2009-10 AND 2010- 11 AND THEREFORE THE GROUNDS RAISED FOR A.Y. 2009-10 ONLY ARE EXTRACTED HEREUNDER: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT G IVING THE APPELLANT OPPORTUNITY OF BEING HEARD BEFORE CONFIRM ING PENALTY OF RS.1,20,300 UNDER SECTION 272A(2)(K) OF THE INCOME TAX ACT, 1961 (THE ACT). ITA NOS. 7754&7755/MUM/2014 M/S. VARAD FASHIONS P. LTD. 2 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFI RMING PENALTY OF RS.1,20,300 UNDER SECTION 272A(2)(K) OF THE ACT. 3. GROUND NO. 1 (FOR BOTH ASSESSMENT YEARS 2009-10 & 2010-11) 3.1 IN THIS GROUND, THE ASSESSEE CONTENDS THAT THE LEARNED CIT(A) ERRED IN NOT AFFORDING THE ASSESSEE OPPORTUNITY OF BEING HEARD BEFORE CONFIRMING THE LEVY OF PENALTY UNDER SECTION 272A(2)(K) OF THE ACT BY WAY OF THE IMPUGNED ORDERS. ACCORDING TO THE LEARNED COUNSEL F OR THE ASSESSEE, THE AO AFTER ISSUING SHOW CAUSE NOTICES DATED 04.10.201 1 CALLED UPON THE ASSESSEE TO SHOW CAUSE AS TO WHY PENALTY UNDER SECT ION 272A(2)(K) OF THE ACT SHOULD NOT BE LEVIED IN ITS CASE FOR ASSESSMENT YEARS 2009-10 AND 2010-11 FOR NON FILING OF QUARTERLY TDS STATEMENT I N FORM NO. 24Q & 26Q FOR THREE YEARS WITHIN THE STIPULATED PERIOD; PROCE EDED TO LEVY PENALTIES THEREUNDER VIDE SEPARATE ORDERS DATED 31.10.2011, B EFORE THE ASSESSEE COULD FURNISH ITS REPLY IN THE MATTER, STATING THAT SINCE NO REPLY WAS FILED, THE ASSESSEE HAS NOT ESTABLISHED REASONABLE CAUSE F OR THE DEFAULT. 3.2 AGGRIEVED BY THE ORDERS OF THE AO DATED 31.10.2 011 LEVYING PENALTY OF ` 1,20,300/- AND ` 83,530/- FOR ASSESSMENT YEARS 2009-10 AND 2010-11, THE ASSESSEE PREFERRED APPEALS BEFORE THE CIT(A)-14 , MUMBAI. THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT THE LEARNED CIT(A) VIRTUALLY DISMISSED THE ASSESSEES APPEALS FOR BOTH THE CONCE RNED YEARS EXPARTE, WITHOUT AFFORDING THE ASSESSEE ANY OPPORTUNITY WHAT SOEVER OF BEING HEARD IN THE MATTER. ACCORDING TO THE LEARNED A.R., A PER USAL OF THE ORDERS OF THE AUTHORITIES BELOW WOULD EVIDENCE THAT, NEITHER THE AO NOR THE LEARNED CIT(A) HAS AFFORDED THE ASSESSEE REASONABLE OPPORTU NITY OF BEING HEARD. THE AO MERELY MENTIONED THAT THE ASSESSEE HAD NOT F ILED ANY REPLY/SUBMISSION TO ESTABLISH REASONABLE CAUSE FOR FAILURE TO FULFIL ITS OBLIGATIONS UNDER THE ACT. THE LEARNED CIT(A) ALSO, AFTER ISSUING ONE NOTICE FOR HEARING ON 30.09.2014, DISMISSED THE ASSESSEES APPEALS ON 08.10.2014 ON THE GROUND THAT NONE APPEARED NOR ANY WRITTEN SUBMISSION WAS FILED; WHEN ACTUALLY, THE ASSESSEE HAD FILED A LETTER DATED 26.09.2014 IN THE OFFICE OF THE CIT(A)-14, MUMBAI, THE RECEIPT OF WHICH WAS DULY ACKNOWLEDGED/STAMPED, SEEKING ADJOURNMENT OF HEARIN G TILL THE LAST WEEK ITA NOS. 7754&7755/MUM/2014 M/S. VARAD FASHIONS P. LTD. 3 OF OCTOBER, 2014 SINCE THE A.R. WAS SCHEDULED TO TR AVEL. THE LEARNED A.R. CONTENDS THAT IN THE LIGHT OF THE ABOVE FACTS IT HA S BEEN CLEARLY DEMONSTRATED THAT THE LEARNED CIT(A) BY SUMMARILY D ISMISSING THE APPEALS, HAS VIOLATED THE PRINCIPLES OF NATURAL JUS TICE BY NOT AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD IN THE MATTER BEFORE ADJUDICATING THE APPEAL. IT IS PLEADED THAT IN THE ABOVE CIRCUMSTANCES, THE IMPUGNED ORDERS OF THE LEARNED CIT(A) FOR ASSESSMEN T YEARS 2009-10 AND 2010-11 BE SET ASIDE AND RESTORED TO THE FILE OF TH E LEARNED CIT(A) FOR ADJUDICATION OF THE ISSUE OF LEVY OF PENALTY AFRESH ON MERITS AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AN D TO FILE SUBMISSIONS/DETAILS REQUIRED. 3.3.1` WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. THE GRIEVANCES O F THE ASSESSEE, ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, WAS THAT THE LEARNED CIT(A) HAD DISMISSED THE ASSESSEES APPEALS FOR ASS ESSMENT YEARS 2009-10 AND 2010-11 SUMMARILY, WITHOUT AFFORDING THE ASSESS EE ANY OPPORTUNITY WHATSOEVER OF BEING HEARD IN THE MATTER OF LEVY OF PENALTY UNDER SECTION 271A(2)(K) OF THE ACT BY THE AO. IN THIS REGARD, WE HAVE PERUSED THE IMPUGNED ORDERS OF THE LEARNED CIT(A), BOTH DATED 0 8.10.2014, FOR THE CONCERNED ASSESSMENT YEARS AS WELL AS THE ASSESSEE S LETTERS DATED 26.09.2014 ACKNOWLEDGED TO HAVE BEEN FILED IN THE O FFICE OF THE LEARNED CIT(A) ON 30.09.2014 (COPIES PLACED ON RECORD) SEEK ING ADJOURNMENT OF HEARING OF APPEALS TO THE END OF OCTOBER, 2014 SINC E THE LEARNED COUNSEL FOR THE ASSESSEE WAS SCHEDULED FOR TRAVELLING. WE O BSERVE THAT IN THE IMPUGNED ORDERS THE LEARNED CIT(A), AFTER OBSERVING THAT NONE APPEARED NOR WRITTEN SUBMISSIONS WERE FILED, PROCEEDED TO DI SMISS THE ASSESSEES APPEALS ON 08.10.2014. THIS, INSPITE OF THE FACT TH AT THE ASSESSEE HAD FILED TWO SEPARATE LETTERS DATED 26.09.2014 SEEKING ADJOU RNMENT OF HEARINGS, WHICH WERE ACKNOWLEDGED TO HAVE BEEN RECEIVED AND W ERE AVAILABLE IN HER OFFICE ON 30.09.2014, AT LEAST A WEEK BEFORE SHE DI SMISSED BOTH THE ASSESSEES APPEALS SUMMARILY ON 08.10.2014. IN THIS FACTUAL MATRIX OF THE CASE, AS DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE LEARNED CIT(A) HAS GROSSLY VIOLATED THE PRINCIPLES OF NATUR AL JUSTICE BY NOT AFFORDING ITA NOS. 7754&7755/MUM/2014 M/S. VARAD FASHIONS P. LTD. 4 THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD IN THE MATTER OF LEVY OF PENALTY UNDER SECTION 272A(2)(K) OF THE ACT IN THE CASE ON HAND FOR BOTH ASSESSMENT YEARS 2009-10 AND 2010-11. IN THIS VIEW OF THE MATTER, WE, IN THE INTEREST OF EQUITY AND JUSTICE, SET ASIDE THE I MPUGNED ORDER OF THE LEARNED CIT(A) DATED 08.10.2014 CONFIRMING THE LEVY OF PENALTY UNDER SECTION 272A(2)(K) OF THE ACT FOR BOTH ASSESSMENT Y EARS 2009-10 AND 2010- 11 AND RESTORE THIS MATTER TO THE FILE OF THE LEARN ED CIT(A) FOR DISPOSAL/ ADJUDICATION ON MERITS AFTER AFFORDING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD AND TO FILE DETAILS/SUBMISSIONS REQUIRE D. IT IS ACCORDINGLY ORDERED. CONSEQUENTLY, GROUNDS OF ASSESSEES APPEAL S ARE ALLOWED FOR STATISTICAL PURPOSES. 4. IN THE RESULT, THE ASSESSEES APPEALS FOR ASSESSMEN T YEARS 2009-10 AND 2010-11 ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH OCTOBER, 2016. SD/ SD/ - (SANDEEP GOSAIN) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 7 TH OCTOBER, 2016 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -14, MUMBAI 4. THE CIT (TDS), MUMBAI 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.