M/s K.K. Apparels, Ludhiana V. ACIT, Solan

ITA 852/CHANDI/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5014 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 05-08-2019
• Assessment Year: 2005-2006
• Appeal Filed On: 23-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Keywords: Principle of natural justice; Period of limitation; Time period of passing order; Set aside
• Section: 80IB

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH . . , , BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 852/CHD/2017 ! / ASSESSMENT YEAR : 2005-06 M/S K.K. APPARELS, VILLAGE CHOWKIWALA, NALAGARH (H.P.) NOW: # 68, SARABHA NAGAR, LUDHIANA '# THE ACIT, CIRCLE, SOLAN $ % ./PAN NO. AADFK9883E $&/ APPELLANT ()$& /RESPONDENT *+ , - /ASSESSEE BY : SHRI TEJ MOHAN SINGH, ADVOCATE , - / REVENUE BY : SMT. CHANDRAKANTA, SR.DR . / , +0% /DATE OF HEARING : 05.08.2019 12! , +0% / DATE OF PRONOUNCEMENT : 20.08 .2019 / ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 18.09.2008 OF THE COMMISSIONER OF INCOM E TAX (APPEALS), SHIMLA [HEREINAFTER REFERRED TO AS CIT(A) ]. 2. THE ASSESSEE IN THIS APPEAL HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. COMMISSIONER OF INCOME TAX(APPEALS) HA S ERRED IN LAW IN DISMISSING THE APPEAL EX-PARTE WITH OUT ITA NO. 852-C-2017 M/S K.K. APPARELS,LUDHIANA 2 AFFORDING A PROPER OPPORTUNITY OF HEARING WHICH IS AGAINST THE PRINCIPALS OF NATURAL JUSTICE AND AS SU CH THE ORDER PASSED IS ILLEGAL, ARBITRARY, UNJUSTIFIED WHICH MERITS ANNULMENT. 2. WITHOUT PREJUDICE TO THE ABOVE, THE LD. COMMISSIONE R OF INCOME TAX(APPEALS) HAS ERRED IN UPHOLDING THE DISALLOWANCE OF DEDUCTION UNDER SECTION 80IB CLAIME D AT 100% RESULTING IN AN ADDITION OF RS. 1,28,89,273 /- WITHOUT ANY INDEPENDENT REASONING WHICH IS ARBITRAR Y AND UNJUSTIFIED. 3. THAT THE ORDER OF COMMISSIONER OF INCOME TAX(APPEAL S) IS ERRONEOUS, ARBITRARY, OPPOSED TO THE FACTS OF TH E CASE AND IS UNSUSTAINABLE IN LAW. 3. THE APPEAL IS BARRED BY LONG LIMITATION PERIOD O F 8 YEARS AND 228 DAYS. A SEPARATE APPLICATION FOR CONDONATION OF DEL AY HAS BEEN FILED, WHEREIN, IT HAS BEEN PLEADED THAT THE ORDER WAS PAS SED BY THE LD. CIT(A) ON 18.9.2008. THAT THE ASSESSEE FIRM WAS CLO SED IN APRIL, 2007 AND NO BUSINESS WAS CONDUCTED AFTER APRIL 2007. TH AT AFTER THE CLOSURE OF THE BUSINESS IN APRIL 2007, BANK OF INDIA, CHAND IGARH TOOK THE POSSESSION AND SOLD THE MACHINERY OF THE FIRM TO CO VER ITS OUTSTANDING DUES. THAT THE ASSESSEE HAD NEVER RECEIVED ANY COP Y OF THE IMPUGNED ORDER OF THE CIT(A). THAT IT WAS ONLY THAT THE ASSE SSEE FIRM RECEIVED THE DEMAND NOTICE ISSUED BY THE DCIT CIRCLE, PARWANOO D ATED 24.1.2017 AND THAT THE ASSESSEE FIRM CAME TO KNOW ABOUT THE P ASSING OF THE IMPUGNED ORDER OF THE CIT(A). THEREAFTER, THE ASSES SEE IMMEDIATELY MADE REQUEST TO THE OFFICE OF THE CIT(A), SHIMLA AT SOLAN VIDE LETTER ITA NO. 852-C-2017 M/S K.K. APPARELS,LUDHIANA 3 DATED 24.2.2017 FOR ISSUE OF COPY OF THE APPEAL ORD ER FOR ASSESSMENT YEAR 2005-06, WHICH WAS RECEIVED ON 24.4.2017. THE ASSESSEE THEREAFTER IMMEDIATELY FILED THE PRESENT APPEAL BEFORE THIS TR IBUNAL. THAT THE DELAY, IF ANY, IN FILING PRESENT APPEAL IS NOT ON A CCOUNT OF ANY INTENTIONAL NEGLIGENCE OR WILLFUL DEFAULT ON THE PA RT OF THE ASSESSEE. REITERATING THE ABOVE SUBMISSIONS, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE DELAY IN FILING THE PRESENT APPEAL BEFORE THIS TRIBUNAL MAY BE CONDONED. 4. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT FROM THE PERUSAL OF THE RECORD, IT IS REVEALED THAT THE COPY OF THE IMPUGNED ORDER OF THE CIT(A) DATED 18.9.2008 WAS DISPATCHED TO THE ASSESS EE BY REGISTERED POST ON 30.09.2018 AT THE ADDRESS KK APPARELS, VILLAGE CHOWKIWALA, NALAGARH, DISTT SOLAN (HP) . THAT FURTHER AS INFORMED BY THE LD. CIT(A) SHIMLA, THE ORDER WAS NEVER RETURNED BACK TO THEIR OFFICE UNDELIVERED. THAT EVEN THE ASSESSEE HAD SOUGHT AN ADJOURNMENT THROUGH APPLICATION AND ALSO A TELEGRAM RECEIVED IN THE OF FICE OF THE CIT(A) ON 16.09.2008, HOWEVER, THE LD. CIT(A) REJECTED THE SA ID APPLICATION FOR ADJOURNMENT AND AN INTIMATION THIS RESPECT WAS NOT SENT TO THE ASSESSEE VIDE LETTER DATED 18.9.2008. THAT, THEREAFTER, THE ASSESSEE NEVER ENQUIRED ABOUT THE STATUS OF ITS APPEAL FOR THE ASSESSMENT Y EAR UNDER CONSIDERATION DESPITE THE FACT THAT THE APPEALS OF THE ASSESSEE FOR ASSESSMENT YEARS 2002-03, 2003-04 AND 2004-05 WER E PENDING BEFORE ITA NO. 852-C-2017 M/S K.K. APPARELS,LUDHIANA 4 THE ITAT AND AS SUCH THE ASSESSEE WAS REASONABLY SU PPOSED TO MAKE ENQUIRIES FROM THE OFFICE OF THE CIT(A), SHIMLA REG ARDING THE STATUS OF ITS APPEAL CASE FOR THE ASSESSMENT YEAR UNDER CONSI DERATION. THE LD. DR, THEREFORE, HAS VEHEMENTLY OPPOSED THE APPLICATION OF THE ASSESSEE FOR CONDONATION OF DELAY. 5. IN REBUTTAL THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE LETTER DATED 29.3.2017 FROM THE OF FICE OF THE CIT(A) SHIMLA, WHEREIN, IT HAS BEEN MENTIONED THAT THE IM PUGNED ORDER DATED 18.09.2008 WAS SENT TO THE ASSESSEE AT THE FOLLOWIN G ADDRESS:- KK APPARELS, VILLAGE CHOWKIWALA, NALAGARH, DISTT SOLAN (HP) . THE LD. COUNSEL HAS FURTHER INVITED OUR ATTENTION T O FORM NO. 35, WHICH IS THE OPENING FORM OF THE APPEAL, WHEREIN, IN THE COLUMN MEANT FOR ADDRESS TO WHICH NOTICE MAY BE SENT TO THE APPELLA NT, THE ADDRESS OF THE ASSESSEE HAS BEEN MENTIONED AS UNDER:- M/S K.K. APPARELS, VILL: CHOWKIWALA, NALAGARH, C/O 68, SARABHA NAGAR, LUDHIANA. THE LD. COUNSEL, THEREFORE, HAS SUBMITTED THAT THE IMPUGNED ORDER WAS NEVER SENT AT THE ADDRESS MENTIONED IN FORM NO. 35. FURTHER, THAT THE IMPUGNED ORDER WAS ALLEGEDLY SENT AT THE FACTORY PR EMISE WHICH WAS ALREADY CLOSED DOWN AND POSSESSION WAS TAKEN OVER B Y THE BANK. ITA NO. 852-C-2017 M/S K.K. APPARELS,LUDHIANA 5 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE PL EA OF THE LD. DR HAS BEEN THAT DESPITE THE FACT THAT THAT THOUGH THE ORDER MIGHT HAVE BEEN SENT AT THE FACTORY PREMISES OF THE ASSESSEE, HOWEV ER, THERE WAS A NEGLIGENCE ON THE PART OF THE ASSESSEE AS IT DID NO T ENQUIRE ABOUT THE FATE OF ITS APPEAL FOR THE ASSESSMENT YEAR UNDER CO NSIDERATION ESPECIALLY WHEN THE APPEALS OF THE ASSESSEE FOR OTHER ASSESSME NT YEARS WERE PENDING BEFORE THE TRIBUNAL. THAT UNDER THE CIRCUMS TANCES, THERE WAS NO JUSTIFICATION FOR CONDONING THE LONG DELAY OF 8 YEA RS AND 228 DAYS IN FILING THE PRESENT APPEAL. HOWEVER, CONSIDERING TH E ENTIRE FACTS AND CIRCUMSTANCES, WE ARE CONVINCED WITH THE SUBMISSION S OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ORDER WAS NOT SEN T BY THE OFFICE OF THE CIT(A) AT THE CORRECT ADDRESS OF THE ASSESSEE. FURT HER THAT SINCE THE ASSESSEE FIRM HAD ALREADY CLOSED DOWN AND THE ASSE TS TAKEN WERE OVER BY THE BANK AND THE STAFF ALREADY RETRENCHED, THE RE WAS NO PROPER PERSON TO LOOK AFTER THE AFFAIRS OF THE ASSESSEE FI RM. FURTHER IT HAS ALSO BEEN SUBMITTED THAT THE ADVOCATE WHO WAS LOOKING AF TER THE MATTER NAMELY SHRI S.S. RIKHI HAD ALREADY EXPIRED AND THE FIRM HAD NO INFORMATION OF THE STATUS OF THE APPEAL AFTER HIS D EATH. HENCE, CONSIDERING THE ABOVE FACTUAL ASPECT AND ALSO CONSI DERING THE INTEREST OF JUSTICE, WE DEEM IT FIT TO CONDONE THE LONG DELAY I N FILING THE PRESENT APPEAL. WE ORDER ACCORDINGLY. ITA NO. 852-C-2017 M/S K.K. APPARELS,LUDHIANA 6 7. NOW COMING TO THE MERITS OF THE CASE. THE LD. CO UNSEL FOR THE ASSESSEE, AT THE OUTSET, HAS INVITED OUR ATTENTION TO THE IMPUGNED ORDER OF THE CIT(A) TO SUBMIT THAT THE SAME IS AN EX-PART E ORDER. AS STATED ABOVE, THE LD. COUNSEL FOR THE ASSESSEE HAD MOVED A N APPLICATION FOR ADJOURNMENT OF THE CASE FOR THE SAID DATE WHICH WAS ALSO FOLLOWED BY A TELEGRAM, HOWEVER, THE LD. CIT(A) REJECTED THE APPL ICATION AND PASSED THE IMPUGNED ORDER ON THE SAME DATE. IN OUR VIEW, THE ASSESSEE HAS NOT BEEN GIVEN A REASONABLE OPPORTUNITY TO PRESENT ITS CASE BEFORE THE CIT(A). 8. IN VIEW OF THIS, THE IMPUGNED ORDER OF THE CIT( A) IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE CIT(A) FO R DECISION AFRESH IN ACCORDANCE WITH LAW. NEEDLESS TO SAY THAT THE LD. C IT(A) WILL GIVE PROPER OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS C ASE. AT THE SAME TIME, WE DIRECT THE ASSESSEE TO PROMPTLY APPEAR BEFORE TH E LD. CIT(A), AS AND WHEN CALLED FOR, AND NOT TO SEEK UNNECESSARY ADJOU RNMENTS. WITH THE ABOVE OBSERVATIONS, THE APPEAL OF THE ASSE SSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20.08.2019. SD/- SD/- ( . . / N.K. SAINI) ( ! ' / SANJAY GARG) #$% / VICE PRESIDENT &' / JUDICIAL MEMBER DATED : 20.08. 2019 .. ITA NO. 852-C-2017 M/S K.K. APPARELS,LUDHIANA 7 3 , (+45 65!+ / COPY OF THE ORDER FORWARDED TO : 1. $& / THE APPELLANT 2. ()$& / THE RESPONDENT 3. . 7+ / CIT 4. . 7+ ( )/ THE CIT(A) 5. 58 (+9 , 0 9 , :;<= / DR, ITAT, CHANDIGARH 6. < >/ / GUARD FILE 3 . / BY ORDER, ? / ASSISTANT REGISTRAR