Kamlesh Roy, Malkanagiri V. ITO, Koraput

ITA 85/CTK/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81463 (ITAT-CUTTACK)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 13-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: P K MISHRA
• Keywords: Opportunity of being heard
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH , CUTTACK BEFORE S/SHRI S.V.MEHROTRA (AM) AND GEORGE MATHAN (JM) I.T.A. NO. 85/CTK/2014 ASSESSMENT YEAR: 2009-2010 SHRI KAMLESH ROY, S/O. SHRI PARESH ROY, AT-MV-72, NALAGHUNTHI, KALIMELA, MALKANGIRI, ODISHA PA NO.ADTPR 7216 H VS. ITO, WARD - 2, JEYPORE; DIST : KORAPUT APPELLANT RESPONDENT FOR THE APPELLANT: SHRI P.K.MISHRA FOR THE RESPONDENT: SHRI S.C.MOHANTY DATE OF HEARING: 16/10/.2014 DATE OF PRONOUNCEMENT: 22 /10/2014 ORDER PER S.V.MEHROTRA, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST ORDER DATED 27.1.2014 OF LD CIT(A), BERHAMPUR FOR THE ASSESSMENT YEAR 2009-2010. 2. GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. FOR THAT, THE IMPUGNED ORDERS PASSED BY THE FOR UMS BELOW ARE WITHOUT JURISDICTION AND WITHOUT ANY AUTHORITY OF LAW AND N OT JUST AND PROPER UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND HENC E IS LIABLE TO BE QUASHED IN THE INTEREST OF JUSTICE. 2. FOR THAT THE LEARNED A.O SHOULD NOT HAVE DETERMINED THE GROSS TURNOVER AT RS.1,79,56,769.00 BY ADDING RS.49,31,225.00 TREA TING THE SAME AS UNACCOUNTED TURNOVER, PARTICULARLY WHEN THE SAID AL LEGED AMOUNT DOES NOT BELONG TO THE APPELLANT/ASSESSEE. 3. FOR THAT THE LEARNED A.O. OUGHT TO HAVE ACCEPTED TH E TURNOVER DISCLOSED BY THE ASSESSEE AS THE SAID DISCLOSED TURNOVER IS A S PER THE BOOKS OF THE ACCOUNTS MAINTAINED TRULY AND CORRECTLY DURING THE COURSE OF BUSINESS. 4. FOR THAT, THE ESTIMATION OF NET PROFIT@8% BY THE LE ARNED A.O. IS 2 I.T.A. NO. 85/CTK/2014 ASSESSMENT YEAR: 2009-2010 EXCESSIVELY HIGH, ILLEGAL AND CONTRARY TO FACTS ON RECORD AND AS SUCH IS NOT SUSTAINABLE IN THE EYE OF LAW. 5. FOR THAT, THE DISALLOWANCE OF THE AGRICULTURAL INCO ME BY THE LEARNED A.O. IS ILLEGAL, ARBITRARY, ERRONEOUS AND IT SHOULD HAVE BE EN ALLOWED IN THE INTEREST OF JUSTICE. 6. FOR THAT, THE LEARNED A.O SHOULD NOT HAVE COMPLETED THE ASSESSMENT EX- PARTE BY INVOKING THE SECTION 144 OF THE I.T. ACT, 1961, WHEN IT WAS WELL WITHIN THE KNOWLEDGE OF A.O. THAT, THE NOTICE WAS S ERVED MUCH AFTER THE DATE FIXED FOR HEARING OF THE ASSESSMENT PROCEEDING . 7. FOR THAT, THE LEARNED A.O SHOULD NOT HAVE IGNORED T HE CLAIMS OF THE APPELLANT WHILE ESTIMATING THE NET PROFIT AT A HIGH ER PERCENTAGE. 8. FOR THAT SINCE THE IMPUGNED ADDITIONS ARE ILLEGAL A ND NOT SUSTAINABLE IN THE EYE OF LAW, HENCE IS LIABLE TO BE DELETED IN THE IN TEREST OF JUSTICE. 9. FOR THAT, THE LEARNED C.I.T(A), SHOULD HAVE ALLOWED REASONABLE OPPORTUNITY OF BEING HEARD, BEFORE PASSING THE EX-PARTE APPELLA TE ORDER BY CONFIRMING THE ORDER OF ASSESSMENT, AS IT IS KNOWN TO HIM THAT THE APPELLANT IS STAYING IN A NAXAL AFFECTED AREA AND THE COMMUNICATION SYST EM IS BADLY AFFECTED. 3. BRIEFLY STATED THE FACTS ARE THAT, IN THE RELEVA NT ASSESSMENT YEAR, THE ASSESSEE DERIVED INCOME FROM CONTRACT BUSINESS. HE FILED HIS RETURN OF INCOME DISCLOSING TOTAL INCOME OF RS.5,97,375/- AND AGRICULTURAL INCOME OF RS.3,87,50 0/-. THE CASE WAS REOPENED BY ISSUE OF NOTICE U/S. 148. THE ASSESSING OFFICER NOTICED THAT AS PER FORM NO.26A, THE TOTAL CONTRACT RECEIPTS WAS RS.1,79,56,769 AS AGAINST RS.1,30,25,5 49/- DISCLOSED IN THE PROFIT AND LOSS ACCOUNT. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS, DESPITE SEVERAL OPPORTUNITIES, ASSESSEE COULD NOT PRODUCE BOOKS OF ACCOUNT OR EVEN THE BANK ACCOUNT FOR EXAMINATION. ASSESSEE ALSO COULD NOT EXPLAIN THE DISCREPANCY POINTED OUT BY TH E AO. IT WAS IN THIS BACKDROP THAT THE AO REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED PROFIT @ 8% TAKING THE GROSS RECEIPT AT RS.1,79,56,769/-. HE ACCORDINGLY COMPUTED THE BUSI NESS PROFIT AT RS.14,36,542/-. THE AO NOTICED THAT ASSESSEE HAD SHOWN INCOME FROM AGRICUL TURAL AT RS.3,87,500/-. SINCE NO DETAILS WERE FURNISHED, THE AO TREATED THE ALLEGED AGRICULT URAL INCOME OF RS.3,87,500/- AS INCOME FROM OTHER SOURCES. THE AO DISALLOWED THE CLAIM OF DEDU CTION OF RS.1,00,000/- UNDER CHAPTER VIA FOR WANT OF EVIDENCE. 3 I.T.A. NO. 85/CTK/2014 ASSESSMENT YEAR: 2009-2010 4. IN THE FIRST APPEAL, LD CIT(A) CONFIRMED THE ACT ION OF THE ASSESSING OFFICER. BEING AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. 5. LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE A O HAD COMPLETED THE ASSESSMENT UNDER SECTION 144 OF THE ACT IGNORING THE FACT THAT THE N OTICE WAS SERVED MUCH AFTER THE DATE FIXED FOR HEARING OF THE ASSESSMENT PROCEEDINGS. HE SUBMITTE D THAT EVEN LD CIT(A) HAS NOT AFFORDED REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE AND PASSED THE IMPUGNED ORDER EXPARTE. HE SUBMITTED THAT THE ASSESSEE IS STAYING IN A NAXA L AFFECTED AREA AND THE COMMUNICATION SYSTEM IS BADLY AFFECTED. HE PRAYED THAT ONE MORE OPPORTUNITY MAY BE AFFORDED TO THE ASSESSEE TO SUBSTANTIATE HIS CLAIM. 6. WE HAVE HEARD SUBMISSIONS OF BOTH PARTIES AND PE RUSED THE RECORD OF THE CASE. IT IS NOT DISPUTED THAT THE AO HAS COMPLETED THE ASSESSMENT U NDER SECTION 144 OF THE ACT FOR WANT OF COMPLIANCE. LD CIT(A) HAS ALSO PASSED THE IMPUGNED ORDER EXPARTE. IT IS THE CONTENTION OF THE ASSESSEE THAT HE IS STAYING IN A NAXAL AFFECTED ARE A I.E. MALAKANAGIRI, WHICH IS NOT DISPUTED BY LD D.R. BEFORE US, LD COUNSEL FOR THE ASSESSEE HAS CO NTENDED THAT IF THE MATTER IS RESTORED TO THE FILE OF THE AO, ASSESSEE WILL FURNISH THE REQUIRED INFORMATION AS REQUIRED BY THE AO. CONSIDERING THE SUBMISSIONS OF LD REPRESENTATIVES OF PARTIES AN D ALSO THE SUBMISSION OF THE LD COUNSEL THAT ASSESSEE IS STAYING IN A NAXAL AFFECTED AREA, IT IS QUITE POSSIBLE THAT COMMUNICATION SYSTEM WOULD HAVE BADLY BEEN AFFECTED AND, THEREFORE, IN O RDER TO IMPART SUBSTANTIAL JUSTICE TO THE ASSESSEE, WE SET ASIDE THE ORDER OF LD CIT(A) AND R ESTORE THE MATTER TO THE FILE OF THE AO TO DO THE ASSESSMENT DENOVO. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 22 ND OCTOBER, 2014. SD/- SD/- ( GEORGE MATHAN) (S.V.MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, CUTTACK 22 /10/2014 4 I.T.A. NO. 85/CTK/2014 ASSESSMENT YEAR: 2009-2010 B.K.PARIDA, SR. PS COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT: SHRI KAMLESH ROY,S/O. SHRI PARESH R OY,AT-MV-72, NALAGHUNTHI, KALIMELA,MALKANGIRI, ODISHA 1. THE RESPONDENT: ITO, WARD -2, JEYPORE;DIST : KORAPU T 2. THE CIT, BHUBANESWAR 3. THE CIT(A), BERHAMPUR 4. DR, CUTTACK BENCH 5. GUARD FILE. TRUE COPY// BY ORDER ASST. REGISTRAR, ITAT, CUTTACK