M/s. S.C. Thakur & Encee Rail Linkers (JV), Panvel V. Addl. CIT, Panvel Range, Panvel

ITA 892/PUN/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72362 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 23-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Keywords: Principle of natural justice
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 892 / P N/ 20 13 ASSESSMENT YEAR : 2006 - 07 M/S. S.C. THAKUR & ENCEE RAIL LINKER S (JV), OM SADANIKA, PANVEL URAN ROAD, PANVEL - 410206 VS. ADDL. COMMISSIONER OF INCOME TAX, PANVEL RANGE, PANVEL (APPELLANT) (RESPONDENT) PAN NO. ABCFS5314G APPELLANT BY: SHRI M.K. KULKARNI RESPONDENT BY: SHRI P.L. PATHADE DATE OF HEARING : 28 - 1 1 - 2013 DATE OF PRONOUNCEMENT : 28 - 11 - 2013 ORDER P ER R.S. PADVEKAR , JM : - IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER OF THE LD. CIT(A) - I, THANE DATED 29 - 10 - 2012 FOR THE A.Y. 2006 - 07. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN DECIDING THE APPEAL EXPARTE ON THE PLEA THAT NONE ATTENDED THE PROCEEDINGS. THE RECORD OF THE APPELLANT - ASSESSEE SHOWS THAT THE ADJOURNMENT APPLICATION WAS DULY SE NT FROM PANVEL TO THANE OFFICE AS FAR AS APPOINTMENT FIXED ON 25 - 10 - 2012. IN VIEW OF THIS FACTUAL POSITION THE MATTER BE RESTORED TO THE FILE OF LD. CIT(A) FOR FRESH ADJUDICATION IN THE MATTER. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW AND IN T HE ABSENCE OF ANY CONTRACT WITH THE LORRY OWNERS FOR TRANSPORTATION THE PROVISIONS OF S. 194C(2) R.W.S. 40(A)(I - A) BECOME INAPPLICABLE. AS SUCH THE DISA LLOWANCE MADE BY A. 0. OF RS. 7,56,274/ - AND CONFIRMED BY LD. CIT(A) IS BAD IN LAW AND WITHOUT JURISDICT ION. THE DISALLOWANCE BE DELETED. 2 ITA NO. 892/PN/2013, M/S. S.C. THAKUR & ENCEE RAIL LINKERS (JV), PANVEL 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE FILING OF THIS APPEAL IS DELAYED FOR REASONS BEYOND THE CONTROL OF THE APPELLANT - ASSES S EE (JV). THE DETAILED AFFIDAVIT EXPLAINING THE REASONS FOR SUCH DELAY IS BEIN G FILED SEPARATELY. THE APPELLANT THEREFORE, EARNESTLY REQUESTS TO CONDONE THE DELAY AND ADMIT THE APPEAL FOR ADJUDICATION TO DO JUSTICE TO THE APPELLANT. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEVY OF INTEREST U/S 234A, 234B AND 234C IS NOT JUSTIFIED. THE LEVY OF INTEREST BE QUASHED. 2. THE FACTS WHICH ARE REVEALED FROM THE RECORD AS UNDER. IN THIS CASE, THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 31 - 10 - 2006 DECLARING INCOME OF RS. 40,52,500/ - . THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD DEBITED AN AMOUNT OF RS. 15,12,548/ - AS MACHINERY HIRE CHARGES. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF THE MACHINERIES WHICH WERE HIRED DURING THE YEAR AND FURNISH THE BILLS AND VOUCHERS FOR THESE EXPENSES. THE ASSESSEE SUBMITTED COPY OF LEDGER ACCOUNT OF HIRE CHARGES AND ADMITTED THAT TDS WAS NOT DEDUCTED ON THESE PAYMENTS AS NO TDS DEDUCTED ON MH CHARGES / OR RENTAL AND ALSO RELIED ON CERTAIN CASE LAWS. ACCORDING TO THE ASSESSING OFFICER, OUT OF THE TOTAL PAYMENT OF RS. 15.12 LAKHS MADE FOR MACHINERY HIRING, EXCEPT ONE PAYMENT OF RS. 33,300/ - , ALL OTHER PAYMENTS ARE MORE THAN RS.50,000/ - TO THE PA RTIES FROM WHOM THE VEHICLES WERE HIRED FOR TRANSPORTATION OF GOODS. ACCORDING TO ASSESSING OFFICER, DESPITE NUMBER OF OPPORTUNITIES GIVEN, THE ASSESSEE DID NOT PRODUCE THE BILLS AND VOUCHERS TO SUPPORT ITS CLAIM FOR NON - DEDUCTION OF TAX ON THE PAYMENTS, F OR HIRING OF MACHINERY. FROM THE PERUSAL OF LEDGER ACCOUNT, THE ASSESSING OFFICER, F OUND THAT THE EXPENSES DEBITED UNDER MACHINERY HIRE CHARGES INCLUDE HIRING OF CONSTRUCTION MACHINERY AS WELL AS CHARGES FOR CARRIAGE OF GOODS. IN THE ABSENCE OF ANY SPECIFI C DETAILS 3 ITA NO. 892/PN/2013, M/S. S.C. THAKUR & ENCEE RAIL LINKERS (JV), PANVEL SUBMITTED, THE ASSESSING OFFICER, TREATED 50% OF THE TOTAL AMOUNT AS SPENT ON CARRIAGE OF GOODS AND MATERIAL AND THE PAYMENTS WHICH WERE COVERED AS PER THE PROVISIONS OF SECTION 194 C ON WHICH THE ASSESSEE WAS REQUIRED TO DEDUCT TDS. AS THE PAYME NTS WERE MADE BY CHEQUE AND NO TAX DEDUCTED AT SOURCE, THE ASSESSING OFFICER, DISALLOWED AN AMOUNT OF RS. 7,56,274/ - U/S. 40 (A)(IA) OUT OF THESE PAYMENTS MADE AND ADDED BACK THIS AMOUNT TO THE INCOME OF THE ASSESSEE FOR THE PERIOD UNDER CONSIDERATION. 4. T HE ASSESSEE HAS ALSO DEBITED AN AMOUNT OF RS.3,46,407/ - AS LABOUR CHARGES AND NO T DS WAS DEDUCTED. ON VERIFICATION OF THE LEDGER ACCOUNT, THE ASSESSING OFFICER, NOTICED THAT THE MAJOR PAYMENTS ARE MADE IN CASH. THE ASSESSEE DID NOT PRODUCE THE VOUCHERS DES PITE THE OPPORTUNITIES GIVEN. THE AR OF THE ASSESSEE STATED THAT AS THE PAYMENTS ARE BELOW RS.20,000 / - N O TDS WAS DEDUCTED. AS THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THE PAYMENTS, THE ASSESSING OFFICER, DISALLOWED 50% OF THE SAME AND ADDED BACK AN AMOUNT OF RS.1,73,203 / - T O THE INCOME OF THE ASSESSEE FOR THE PERIOD UNDER CONSIDERATION. 5. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSING OFFICER BEFORE THE LD. CIT(A). THE LD. CIT(A) DISPOSED THE APPEAL FILED BY THE ASSESSEE EX - PARTE DISMISSING THE SAME. THE REASONS GIVEN BY THE LD. CIT(A) FOR DECIDING THE EX - PARTE ARE AS UNDER: 2. AFTER THE APPEAL WAS FILED BY THE APPELLANT, THE CASE WAS FIRST FIXED VIDE NOTICE DATED 15 . 09 . 2010 AND POSTED FOR HEARING ON 07 . 10 . 2010 BUT ON THE APPOINTED DATE FOR HEARING I.E. 07 . 10 . 2010 NONE ATTENDED THE APPELLATE PROCEEDINGS NOR WAS ANY APPLICATION FOR ADJOURNMENT FILED. ANOTHER NOTICE DATED 24 . 10 . 2011 WAS ISSUED FIXING THE HEARING ON 28 . 11 . 2011 AND DULY SERVED ON THE APPELLANT ON 14 . 11 . 2011 BUT ON THE DATE OF HE ARING I.E. 28 . 11 . 2011 NONE ATTENDED THE APPELLATE PROCEEDINGS NOR WAS ANY APPLICATION FOR ADJOURNMENT FILED. THE CASE WAS AGAIN FIXED FOR HEARING ON 13 . 12 . 2011 VIDE NOTICE DATED 29 . 11 . 2011. HOWEVER, ON 02 . 12 . 2011 THE APPELLANT HAD FILED A LETTER FOR ADJOUR NMENT, WHICH WAS GRANTED. A FINAL OPPORTUNITY WAS AFFORDED TO THE APPELLANT VIDE NOTICE DATED 4 ITA NO. 892/PN/2013, M/S. S.C. THAKUR & ENCEE RAIL LINKERS (JV), PANVEL 14 . 12 . 2011 FIXING THE CASE FOR HEARING ON 03 . 01 . 2012 BUT ON THE DATE OF HEARING I.E. 03. 01 . 2012 NONE ATTENDED THE APPELLATE PROCEEDINGS NOR WAS ANY APPLICATION FO R ADJOURNMENT FILED. THE CASE WA S AGAIN FIXED FOR HEARING ON 30. 01 . 2012 VIDE NOTICE DATED 04 . 01 . 2012 BUT THE APPELLANT REPEATED THE SAME CONDUCT OF NON - COMPLIANCE ONCE AGAIN. FURTHER OPPORTUNITY WAS AFFORDED VIDE NOTICE DATED 13 . 04 . 2012 FIXING THE HEARING ON 01 . 05 . 2012 BUT AGAIN ON THE APPOINTED DATE FOR HEARING I.E. 01 . 05 . 2012, NONE ATTENDED THE APPELLATE PROCEEDINGS NOR WAS ANY APPLICATION FOR ADJOURNMENT FILED. ANOTHER NOTICE DATED 09. 10 . 2012 WAS ISSUED FIXING THE HEARING ON 25 . 10 . 2012 BUT ON THE DATE OF HEARING I.E. 25 . 10 . 2012 NONE ATTENDED THE APPELLATE PROCEEDINGS NOR WAS ANY APPLICATION FOR ADJOURNMENT FILED. THE NOTICES WERE SENT ON THE ADDRESS GIVEN ON THE APPEAL MEMO FILED. THERE IS NO FURTHER INFORMATION REGARDING THE CHANGE OF ADDRESS BY THE APPE LLANT . 6. IN SUM AND SUBSTANCE THE LD. CIT(A) HELD THAT THE ASSESSEE WAS NOT INTERESTED IN PROSECUTING THE APPEAL. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD THE PARTIES. THE LEARNED COUNSEL SUBMITS THAT IT IS NOT CORRECT THAT THE ASSE SSEE WAS NOT INTERESTED IN PROSECUTING THE APPEAL BEFORE THE LD. CIT(A). HE SUBMITS THAT THE ASSESSEE S ITP SENT THE APPLICATION FOR ADJOURNMENT BY FAX AS HE WAS SUFFERING FROM FEVER WHEN THE APPEAL WAS LASTLY FIXED FOR HEARING ON 25 - 10 - 2012 AND PROBABLY THERE IS A COMMUNICATION GAP AS THE APPLICATION SENT BY THE ASSESSEE S ITP WAS NOT ON RECORD OF THE LD. CIT(A). HE SUBMITS THAT ONE MORE OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE IN THE INTEREST OF NATURAL JUSTICE TO REPRESENT HIS CASE BEFORE THE LD. CIT(A ). WE HAVE ALSO HEARD THE LD. DR. 8. WE FIND THAT AS PER THE DETAILS GIVEN IN THE IMPUGNED ORDER, THE ASSESSEES APPEAL WAS FIXED ON MANY DATES BY THE LD. CIT(A) BUT REASONED BEST KNOWN TO HIM EITHER THE ASSESSEE DID NOT ATTEND OR RESPONDED. THE LEARN ED COUNSEL HAS FILED THE COPY OF THE APPLICATION FOR THE ADJOURNMENT SENT BY ASSESSEE ITP SHRI RAMANLAL OSWAL OF PANVEL 5 ITA NO. 892/PN/2013, M/S. S.C. THAKUR & ENCEE RAIL LINKERS (JV), PANVEL W HEN THE MATTER WAS LASTLY FIXED FOR HEARING ON 25 - 10 - 2012 . I T APPEARS THAT THERE IS A COMMUNICATION GAP AND THE SAID APPLICATION WAS N OT BEFORE THE LD. CIT(A). IN OUR OPINION, IN THE INTEREST OF JUSTICE ONE MORE OPPORTUNITY NEEDS TO BE GIVEN TO THE ASSESSEE. WE, ACCORDINGLY, SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER BACK TO THE FILE TO DECIDE THE SAME DE NOVO AFTER G IVING ONE MORE OPPORTUNITY TO THE ASSESSEE TO APPEAR AND REPRESENT HIS CASE. THE ASSESSEE IS ALSO DIRECTED TO CO - OPERATE THE LD. CIT(A) FOR DISPOSAL OF THE APPEAL BY ATTENDING HEARING BEFORE HIM . 9. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 - 11 - 2013 AFTER CONCLUSION OF HEARING. SD/ - SD/ - ( R.K. PANDA ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 28 TH NO VEMBER, 20 1 3 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - I, THANE 4 THE CIT - I, THANE 5 THE DR, ITAT, A BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE