Kwality Overseas (P) Ltd., Ludhiana V. ACIT, Ludhiana

ITA 779/CHANDI/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77033 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-04-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 10-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JYOTI KUMARI
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.779/CHD/2013 ASSESSMENT YEAR : 2010-11 M/S KWALITY OVERSEAS (P) LTD., VS THE A .C.I.T., 863, INDUSTRIAL AREA-A, CIRCLE VII, LUDHIANA. LUDHIANA. PAN : AABCK6381J (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SMT. JYOTI KUMARI DATE OF HEARING : 21.04.2014 DATE OF PRONOUNCEMENT : 30.04.2014 O R D E R PER SUSHMA CHOWLA, JM THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), CHANDIGARH DA TED 22.05.2013 AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF TH E INCOME-TAX ACT, 1961 ( 'THE ACT' FOR SHORT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. WHETHER THE LD. CIT (A) WAS JUSTIFIED BY NOT A DMITTING THE APPEAL IN LIMINE, JUST ON TECHNICAL GROUNDS I.E. NO T PAYING THE ADMITTED TAXES BEFORE FILING OF APPEAL, WITHOUT AFF ORDING A REASONABLE OPPORTUNITY. 2. WHETHER THE LD. CIT(A) WAS JUSTIFIED BY NOT FO RWARDING A COPY OF THE LD.AO'S REPORT BEFORE DECIDING THE APPE AL ON TECHNICAL GROUND. 3. WHETHER THE LD.CIT(A) WAS JUSTIFIED BY NOT ADJU DICATING THE APPEAL ON MERITS I.E. THE VARIOUS GROUNDS TAKEN BEFORE HIM. 2 3. THE APPEAL OF THE ASSESSEE WAS FIXED FOR HEARING ON 19.09.2013 WHEN THE BENCH DID NOT FUNCTION. IT WAS THEN FIXED FOR HEARING ON 27.01.2014 AND WAS ADJOURNED AT THE REQUEST OF THE ASSESSEE TO 10.03.2014. THE CASE WAS FURTHER ADJOURNED TO 21.0 4.2014 AT THE REQUEST MADE BY THE COUNSEL BY AN ADJOURNMENT APPLICATION. LAST OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO REPRESENT ITS CASE AND THE MATTER WAS FIXED FOR HEARING ON 21.04.2014. ON THE APPOINTED DATE O F HEARING, NONE WAS PRESENT ON BEHALF OF THE ASSESSEE. HOWEVER, AN APP LICATION WAS MOVED FOR ADJOURNMENT WHICH WAS REFUSED AS ON THE LAST DA TE OF HEARING, LAST OPPORTUNITY WAS GIVEN TO THE ASSESSEE. WE PROCEED TO DECIDE THE PRESENT APPEAL AFTER HEARING LD. DR FOR THE REVENUE. 4. THE APPEAL OF THE ASSESSEE WAS DISMISSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) AS THE ASSESSEE HAD FAILED TO PAY THE TAXES ON THE DECLARED INCOME IN THE RETURN OF INCOME. THE COMMI SSIONER OF INCOME TAX (APPEALS), IN VIEW OF THE PROVISIONS OF SECTION 249(4)(A) OF THE ACT HELD THAT AFTER THE AMENDMENT, EFFECTIVE FROM 01.04 .1989, THE ASSESSEE WAS DUTY BOUND TO NOT ONLY PAY THE TAXES DUE ON THE BASIS OF RETURNED INCOME BUT ALSO THE INTEREST DUE, IF ANY, FOR ANY O F THE DEFAULTS. THE COMMISSIONER OF INCOME TAX (APPEALS) FURTHER OBSERV ED THAT UNDER THE NEW PROCEDURE, THERE WAS NO JUSTIFICATION FOR EXEMP TING THE ASSESSEE FROM PAYMENT OF ADMITTED TAXES BEFORE FILING OF TH E APPEAL AND THERE WAS NO POWER WITH THE COMMISSIONER OF INCOME TAX (A PPEALS) TO CONDONE THE DELAY IN PAYMENT OF TAXES. FURTHER REL IANCE WAS PLACED UPON THE RATIO LAID DOWN BY THE HON'BLE SUPREME COU RT IN VIJAY PARKASH D.MEHTA VS COLLECTOR OF CUSTOMS 175 ITR 540 (S.C) F OR THE PROPOSITION THAT WHILE CONSIDERING AN APPEAL UNDER CUSTOMS ACT, ONE OF THE CONDITIONS WAS THAT IF THE ASSESSEE DID NOT DEPOSIT THE DUTY DEMANDED OR PENALTY LEVIED DURING THE PENDENCY OF APPEAL, THE S AME WAS NOT 3 ADMISSIBLE. IN VIEW THEREOF, THE APPEAL OF THE ASS ESSEE WAS NOT ADMITTED AND FOR STATISTICAL PURPOSES, IT WAS DISMISSED. 5. THE ASSESSEE BEFORE US HAS RAISED THE GROUND OF APPEAL AGAINST NON-ADMISSION OF APPEAL BY THE COMMISSIONER OF INCO ME TAX (APPEALS) ON TECHNICAL GROUNDS I.E. NOT PAYING THE ADMITTED T AXES BEFORE FILING OF THE APPEAL, AFFORDING OF REASONABLE OPPORTUNITY. T HE ASSESSEE HAS ALSO RAISED THE ISSUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN NOT FORWARDING THE COPY OF THE ASSESSI NG OFFICERS REPORT BEFORE DECIDING THE APPEAL ON TECHNICAL GROUNDS. 6. THE LD. DR FOR THE REVENUE IN THIS REGARD PLACED RELIANCE ON SUSHIL THOMAS ABRAHAM VS ACIT & ANOTHER 308 ITR 346 (KER), .D.KOMALAKSHI & D.RAJKUMAR VS DCIT 292 ITR 99 (KAR). 7. ON THE PERUSAL OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), WE FIND THAT THE ASSESSEE HAD FILED APPE AL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AND IN FORM NO . 35 COLUMN NO. 10, WHICH IS WITH REGARD TO THE TAXES DUE ON THE IN COME RETURNED HAD BEEN PAID WAS LEFT BLANK BY THE ASSESSEE. THE SAID FACT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE BY THE COMMISSIONER OF I NCOME TAX (APPEALS) VIDE OFFICE LETTER DATED 02.05.2013 AND THE ASSESSE E WAS REQUESTED TO GIVE DETAILS OF TAXES PAID ON RETURNED INCOME INCLU DING THE DATE OF PAYMENT AND THE AMOUNT PAID BY 09.05.2013. THE ASS ESSEE WAS ALSO INFORMED THAT IN CASE OF NON-COMPLIANCE THE APPEAL WOULD NOT BE ADMITTED AS PER SECTION 249(4)(A) OF THE ACT. ON 0 9.05.2013, I.E. THE APPOINTED DATE OF HEARING, VIDE LETTER DATED 09.05. 2013, THE LD. AR FOR THE ASSESSEE SUBMITTED THAT THE DIRECTOR OF THE ASS ESSEE COMPANY SHRI R.K.GOYAL WAS OUT OF TOWN AND THE REQUISITE DETAILS WOULD BE FILED ON HIS RETURN. THE LETTER WAS FILED BY THE LD. AR FOR THE ASSESSEE AT THE 4 RECEIPT COUNTER AND AS THE ASSESSEE HAD REQUESTED F OR 10 DAYS TIME, THE COMMISSIONER OF INCOME TAX (APPEALS) KEPT THE MATTE R PENDING TILL 21.05.2013 BUT NO DETAILS OR REPLY WAS FILED BY THE ASSESSEE NOR ANY REQUEST WAS MADE FOR MORE TIME. THE COMMISSIONER O F INCOME TAX (APPEALS) DECIDED THE MATTER ON THE BASIS OF THE DO CUMENTS ON RECORD VIDE ORDER DATED 22.05.2013. IN THE MEANWHILE, THE COMMISSIONER OF INCOME TAX (APPEALS) ALSO RECEIVED THE REPORT FROM THE ASSESSING OFFICER VIDE OFFICE RECEIPT NO. 68 DATED 06.05.2013 THAT THE TAX DUE ON RETURNED INCOME HAD NOT BEEN PAID BY THE ASSESSEE. IN VIEW THEREOF, APPEAL OF THE ASSESSEE WAS DISMISSED IN-LIMINE. 7. UNDER THE AMENDED PROVISIONS OF SECTION 249(4)(A ) OF THE ACT, AMENDED BY DIRECT TAXES LAW (AMENDMENT) ACT, 1989 W .E.F. 01.04.1989, IT IS PROVIDED THAT THE TAXES DUE ON TH E RETURNED INCOME ALONGWITH THE INTEREST DUE, IF ANY, HAS TO BE PAID BEFORE FILING THE APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). I N VIEW OF THE EXACT PROVISIONS OF THE ACT, IN CASES WHERE THE ASSESSEE HAS DEFAULTED IN PAYMENT OF ADMITTED TAXES ON THE RETURNED INCOME AL ONGWITH INTEREST, SUCH APPEALS FILED BY THE ASSESSEE BEFORE THE COMMI SSIONER OF INCOME TAX (APPEALS) CANNOT BE ADMITTED AND MERITS TO BE D ISMISSED IN-LIMINE IN VIEW OF THE PROVISIONS OF SECTION 249(4)(A) OF T HE ACT. 8. THE HON'BLE KARNATAKA HIGH COURT IN D.KOMALAKSHI & D.RAJKUMAR VS DCIT 292 ITR 99 (KAR) HAVE LAID DOWN THAT THE CONDITION PRECEDENT FOR FILING APPEAL BEFORE THE CO MMISSIONER OF INCOME TAX (APPEALS) IS THAT THE TAXES ON RETURNED INCOME SHOULD BE PAID BEFORE FILING OF THE APPEAL. THE HON'BLE HIGH COURT HELD THE TRIBUNAL WAS JUSTIFIED IN REJECTING THE APPEAL, HOWEVER AT THE R EQUEST OF THE ASSESSEE, ABOUT FOUR WEEKS TIME WAS GIVEN TO THEM TO MAKE NE CESSARY PAYMENTS. IT MAY BE CLARIFIED HEREIN THAT THE RELEVANT ASSESS MENT YEAR IN 5 D.KOMALAKSHI & D.RAJKUMAR VS DCIT (SUPRA) WAS UNDER THE PROVISIONS OF SECTION 249(4) OF THE ACT AND NOT UNDER THE AMEN DED PROVISIONS OF SECTION 249(4)(A) OF THE ACT. 9. THE HON'BLE KERALA HIGH COURT IN SUSHIL THOMAS A BRAHAM VS ACIT & ANOTHER 308 ITR 346 (KER) HAVE HELD THAT THE CONDITION PRECEDENT FOR FILING APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) IS THAT PAYMENT OF TAXES DUE ON INCOME AD MITTED IN THE RETURN OF INCOME AND AGAINST SUCH DISMISSAL OF APPEAL BY T HE COMMISSIONER OF INCOME TAX (APPEALS) BECAUSE OF NON-PAYMENT OF ADMI TTED TAXES, APPEAL WAS NOT MAINTAINABLE BEFORE THE TRIBUNAL FROM SUCH YEAR. THE COURT HELD THAT NO APPEAL WAS PROVIDED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), DECLINING TO ENTERTAIN AN APPEAL BEING DEFECTIVE AND NOT MAINTAINABLE ON ACCOUNT OF NON-PA YMENT OF ADMITTED TAXES AND SUCH ORDER IS NOT AN ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) ON MERITS AFTER ENTERTAINING T HE APPEAL. 10. FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE KE RALA HIGH COURT IN SUSHIL THOMAS ABRAHAM VS ACIT & ANOTHER (SUPRA) WE HOLD THAT IN THE CASE OF ASSESSEE HAVING NOT PAID THE ADMITTED TAXES ON THE RETURNED INCOME, THE APPEAL BEFORE THE COMMISSIONER OF INCOM E TAX (APPEALS) BEING DISMISSED AS DEFECTIVE OR NOT MAINTAINABLE, C ANNOT BE APPEALED AGAINST BEFORE THE TRIBUNAL. ACCORDINGLY, WE DISMI SS THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL,2014. SD/ SD/- ( T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 TH APRIL,2014 POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR. ASSISTANT REGISTRAR,ITAT,CHD.