Mesers Bhilai Cement, Bhilai V. Assistant Commissioner of Income tax, Circle-1(1), Bhilai

ITA 8/RPR/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8573 (ITAT-RAIPUR)
• Duration Of Justice: 1 year(s) 6 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 13-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Principle of natural justice
• Section: 69C; 143(3); 201; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI PAWAN SINGH , JUDICIAL MEMBER I.T.A. NO. 08 /RPR/20 20 FOR ( A Y : 201 0 - 1 1 ) M/S. BHILAI CEMENT, PROP. SHRI SUDHIR KUMAR BANSAL, 8 CIVIC CENTRE, BHILAI (CG) V S. ACIT - 1 (1), BHILAI . PAN NO. ADBPB 3234 H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.R. RAO , ADVOCATE . DEPARTMENT BY : SHRI GITESH KUMAR , DR DATE OF HEARING : 12 /08/2021. DATE OF PRONOUNCEMENT : 1 2 /08/2021. ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH , J UDICIAL M EMBER : 1. TH IS APPEAL BY THE A SSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX ( APPEALS ) - II , HEREINAFTER CALLED AS LD . CIT(A) RAIPUR , DATED 10 . 1 2 .201 9 FOR THE A.Y. 20 1 0 - 1 1 . THE A SSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) HAS GROSSLY ERRED IN PASSING THE IMPUGNED ORDER WITHOUT GIVING S UFFICIENT AND PROPER OPPORTUNITY TO THE APPELLANT TO BE HEARD AND THE IMPUGNED ORDER IS PASSED IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE IMITATION OF PROCEEDINGS U/S 147 OF INCOME - TAX ACT, 1961 IS WITHOUT JURISDICTION, BAD IN LAW AND GROSSLY ERRONEOUS AND LD. COMMISSIONER OF INCOME - M/S. BHILAI CEMENT ITA NO. 08 /RPR/20 20 2 TAX (APPEALS) HAS ERRED IN NOT DECIDING THIS LEGAL GROUND OF APPEAL WHILE DECIDING THE APPEAL EX - PARTE. 3. THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) , HAS ERRED IN CONFIRMING THE ADDITION OF RS. 55,05,043/ - MADE U/S 69C OF THE INCOME - TAX ACT, 1961 ON THE BASIS OF INFERENCES AND INCORRECT FINDINGS ON FACTS AND WITHOUT FULFILLING CONDITIONS STIPULATED IN SAID SECTION 4. THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN CONFIRMING THE ENTIRE ADDITION OF RS. 55,05,043/ - WHILE IN SIMILARLY SITUATED CASE OF SHRI IMRAN CHARANIA, BHILAI, VIDE ORDER DATED 30/09/2019 IN APPEAL NOS. 177/16 - 17 TO 179/16 - 17 , HE DIRECTED THE ASSESSING OFFICER TO APPLY ONLY GROSS PROFIT R ATE ON THE SALE OF RELEVANT YEAR INSTEAD OF TOTAL AMOUNT OF PURCHASES ADDED IN ASSESSMENT ORDER. 5. T HE IMPUGNED ORDER IS BAD IN LAW AND IN FACTS. 6. THE APPELLANT RESERVES THE RIGHT TO ADD, ALTER, AMEND, OMIT OR WITHDRAW ALL OR ANY OF THE GROUNDS OF APPEA L IN THE INTEREST OF JUSTICE. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS PROPRIETARY FIRM OF SHRI SUDHIR KUMAR BANSAL . THE ASSESSEE IS ENGAGED IN MANUFACTURING AND TRADING OF COAL TAR PITCH ETC. FOR THE A.Y. 2010 - 11, THE ASSESSEE FILED ITS RETU RN OF INCOME DECLARING INCOME OF RS. 21,87,130/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED ON 30/03/2013 DETERMINING TOTAL INCOME OF RS. 24,36,030/ - . SUBSEQUENTLY, THE CASE WAS REOPENED UNDER SECTION 147 . N OTICE UND ER SECTION 148 WAS ISSUED ON 31/03/2017 WHICH WAS SERVED UPON THE ASSESSEE. THE ASSESSEE FILED ITS REPLY ON 06/06/2017 INFORMING THAT RETURN FILED ON 14/10/2010 MAY BE TREATED RETURN IN RESPONSE TO THE NOTICE UNDER SECTION 148 . THE ASSESSEE REQUESTED FOR SUPPLY OF REASONS RECORDED. THE AO RECORDED THAT REASONS RECORDED WERE PROVIDED TO THE ASSESSEE ALONG WITH HIS LETTER DATED 09/06/2017 . THE AO AFTER SERVING STATUTORY NOTICES COMPLETED THE M/S. BHILAI CEMENT ITA NO. 08 /RPR/20 20 3 REASSESSMENT UNDER SECTION 143(3) R.W.S 147 ON 08/12/2017 . THE AO IN THE RE - ASSESSMENT ORDER MADE ADDITION OF RS. 55, 05,043/ - ON ACCOUNT OF UNEXPLAINED EXPENDITURE, THEREBY DETERMINING TOTAL INCOME AT RS. 76,92,170 / - . ON APPEAL, LD.CIT(A) CONFIRMED THE ACTION OF AO IN EX - PARTE . FURTHER AGGRIEVED , THE ASSESSEE FILED THE PRESENT APPEAL BEFORE US. 3. W E HAVE HEARD THE SUBMIS S I ONS OF LD. AUTHORIZED REPRESENTATIVE (AR) FOR THE ASSESSEE AND THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE. GROUND NOS. 1 & 2 RELATES TO NOT PROVIDING SUFFICIENT AND PROPER OPPORTUNITY A ND PASSING EX - PARTE ORDER BY THE LD. CIT(A). THE LD.AR OF THE ASSESSEE SUBMITS THAT LD. CIT(A) PASSED EX - PAR T E ORDER WITHOUT GIVING FAIR AND REASONABLE OPPORTUNITY TO THE ASSESSEE. THE LD.AR FOR THE ASSESSEE SUBMITS THAT THE ASSESSEE HAS RAISED SPECIFIC G ROUND AGAINST THE VALIDITY OF REOPENING UNDER SECTION 147. THE LD. CIT(A) HAS NOT GIVEN ANY FINDING NOR CONSIDERED THE SAME WHILE DECIDING THE APPEAL . THE LD. CIT(A) CONFIRMED THE ORDER OF AO ON MERIT WITHOUT GIVING OPPORTUNITY TO THE ASSESSEE. 4. ON THE O THER HAND, LD. DR FOR THE REVENUE SUBMITS THAT LD. CIT(A) GRANTED THREE OPPORTUNIT I ES TO THE ASSESSEE AS RECORDED AT PAGE NO.1 OF THE IMPUGNED ORDER. THE LD. CIT(A) RECORDED THAT IN RESPONSE TO VARIOUS NOTICE S NEITHER THE ASSESSEE ATTENDED N OR FURNISHED ANY WRITTEN SUBMIS S I ONS AND THEREFORE THE LD. CIT(A) HAS NO OPTION EXCEPT TO DECIDE M/S. BHILAI CEMENT ITA NO. 08 /RPR/20 20 4 THE CASE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE LD.DR FOR THE REVENUE SUPPORTS THE ORDER OF LD. CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOTH THE PA RTIES AND PERUSED THE ORDER OF LD. CIT(A). WE FIND THAT B EFORE THE LD. CIT(A), ASSESSEE FILED APPEAL ON 11/01/2018. AS PER ORDER OF LD. CIT(A) NOTICE S DATED 22/04/2019 , 07/06/2019 AND 20/11/2019 WERE ISSUED. WE FIND THAT LD. CIT(A) HAS NOT RECORDED THE RESPECTIVE DATE OF HEARING UNDER THE DIFFERENT NOTICES. FURTHER , THE LD. CIT(A) HAS NOT RECORDED HIS SATISFACTION WHETHER NOTICES ISSUED BY HIM WERE DULY SERVED UPON THE ASSESSEE OR NOT. THE LD.CIT(A) RECORDED THAT NO RESPONSE WAS RECEIVED FROM THE ASSE SSEE HENCE, PROCEEDED TO DECIDE THE APPEAL BY PRESUMING THAT THE ASSESSEE HAS NOTHING TO SAY OTHER THAN THE MATERIAL ALREADY ON RECORD. THE LD. CIT(A) IN PARA 2.2 OF HIS ORDER CONCURRED WITH THE ADDITIONS MADE BY THE AO. THE LD CIT(A) HAS NOT CONSIDERED THE FACT PLEADED BY THE ASSESSEE IN FORM - 35( APPEAL FORM BEFORE LD. CIT(A). WE FIND THAT THE ASSESSEE RAISED A SPECIFIC GROUND OF APPEAL BEFORE THE LD.CIT(A) THAT INITIATION OF REASSESSMENT UNDER SECTION 147 IS BAD IN LAW AND ON FACTS. THE LD. CIT(A) HAS NOT GIVEN ANY FINDING NOR DISCUSSED THAT FACT IS LEADING TO REOPENING UNDER SECTION 147 AND VALIDITY OF NOTICE UNDER SECTION 148. WE FIND THAT NON - CONSIDERATION OF JURISDICTIONAL ISSUE IS FAT AL . THE PRINCIPLE OF AUDI ALTER A M PARTEM AND NATURAL JUSTICE HA S NOT BEEN ADHERED BY LD. CIT(A). M/S. BHILAI CEMENT ITA NO. 08 /RPR/20 20 5 6. CONSIDERING THE FACT THAT LD. CIT(A) PASSED EX - PARTE ORDER WITHOUT CONSIDERING AND DECID ING THE LEGAL ISSUE, WE DEEM IT APPROPRIATE TO REMIT THE APPEAL BACK TO THE LD. CIT(A) TO DECIDE DENOVO ON THE ISSUE OF VALIDITY OF REOPENING AS WELL AS ON MERIT AND TO DECIDE ALL THE ISSUES IN ACCORDANCE WITH LAW . NEEDLESS TO ORDER BEFORE PASSING LD. CIT(A) SHALL GRANT REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO BE VIGILA NT IN FUTURE AND TO PR OVIDE ALL NECESSARY SUBMISSIONS AND EVIDENCE TO SUBSTANTIATE THE GROUNDS OF APPEAL RAISED BEFORE THE LD. CIT(A) WITHOUT ANY FURTHER DELAY . IN THE RESULT THE GROUNDS NO.1 &2 ARE ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PUR POSE. ORDER PRONOUNCED ON 12 - 08 - 2021 BY PLACING RESULT ON NOTICE BOARD. S D/ - SD/ - (PRADIP KUMAR KEDIA) ( PAWAN SINGH ) ACCOUNTANT MEMBER JUDICIAL MEMBER VR S PS DATED: 12 TH AUGUST, 2021 COPY TO: 1. THE ASSESSEE - M/S. BHILAI CEMENT, PROP. SHRI SUDHIR KUMAR BANSAL, 8 CIVIC CENTRE, BHILAI (CG) . 2. THE REVENUE ACIT - 1 (1), BHILAI . 3. LD. CIT(A - II ) , RAIPUR . 4. PR. CIT - II , RAIPUR . 5. THE D.R., RAIPUR. 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY, ITAT, RAIPUR (ON TOUR).