ARCHANA IMPEX, MUMBAI V. ASST CIT CEN CIR 34, MUMBAI

ITA 906/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84102 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-11-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 04-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHIDANAND DUBE
• Keywords: Opportunity of being heard
• Section: 133A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A , MUMBAI BEFORE SHRI H.L. KARWA, PRESIDENT AND SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER I.T.A.NO. 906/M/2013 (AY: 2005 - 2006 ) M/S. ARCHANA IMPEX, 412, SWASTIK DISHA, BUSINESS PARK, BEHIND VADHANI INDL ESTATE, LBS MARG, GHATKOPAR (W), MUMB A I 400 087. PAN: AAAFA 1766 H VS. ASST. CIT, CENTRAL CIRCLE - 34, AAYAKAR BHAVAN, MUMBAI 400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. VASANTI PATEL RESPONDENT BY : SHRI SACHIDANAND DUBE DATE OF HEARING: 3.11.2014 DATE OF OR DER: 1 2 .11.2014 O R D E R PER D. KARUNAKARA RAO, AM : THIS APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT (A) - 39, MUMBAI DATED 3.12.2012FOR THE ASSESSMENT YEAR 2005 - 2006 IN CONNECTION WITH THE PROCEEDINGS U/S 271(1)(C) OF THE ACT. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. THE AO HAS ERRED IN INITIATING PENALTY PROCEEDINGS AND SUBSEQUENTLY LEVIED THE PENALTY U/S 271(1)( C) OF THE ACT WITHOUT APPLICATION OF MIND IN A MECHANICAL MANNER WHICH IS UPHELD BY CIT (A). 2. THE AO HAS NOT APPRECIATED THE DISCLOSURES MADE B Y THE APPELLANT AT THE TIME OF SURVEY ACTION. 3. THE AO HAS ERRED IN REJECTING THE SUBMISSIONS MADE BY THE APP ELLANT AT THE TIME OF PENALTY PROCEEDINGS AND PASSED THE ORDER HURRIEDLY WITHOUT GIVING ANY SHOW CAUSE NOTICE OR ANY REASONABLE OPPORTUNITY OF BEING HEARD. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE BELONGS TO THE SHAH GROUP OF CO MPANIES. THERE WAS A SEARCH ACTION ON THE GROUP AND ACTION U/S 133A OF THE ACT ON THE BUSINESS PREMISES OF THE ASSESSEE. ASSESSEE DECLARED AN UNDISCLOSED INCOME. ASSESSMENT WAS COMPLETED AND THE ASSESSED INCOME WAS 2 DETERMINED AT RS. 43,67,630/ - . PENALT Y PROCEEDINGS WERE INITIATED IN CONNECTION WITH T HE INCOME OF RS. 34,60,109/ - DECLARED AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE AY UNDER CONSIDERATION AND LEVIED PENALTY OF RS. 12,66,140 / - ON THE SAID UNDISCLOSED INCOME VIDE ORDER DATED 31.5.2010. AGGRIEVED WITH THE SAME, THE PENALTY ORDER OF THE AO WAS QUESTIONED BEFORE THE CIT (A). CIT (A) CONFIRMED THE ADDITION MADE BY THE AO AND DISMISSED THE APPEAL OF THE ASSESSEE. THIS IS AN UNDISPUTED FACT THAT NONE WAS PRESENT FOR THE ASSESSEE BEFORE THE C IT (A), WHO ADJUDICATED THE APPEAL BASED ON THE WRITTEN SUBMISSIONS OF THE ASSESSEE. HOWEVER, IT IS AN UNDISPUTED FACT THAT THE CIT (A) POSTED THE CASE ON 31.10.2012; 19.11.2012 AND 3.12.2012. CIT (A) PASSED AN ORDER AS PER THE DISCUSSION GIVEN IN PARAS 5.1 AND 5.2 OF THE IMPUGNED ORDER. AGGRIEVED WITH THE ABOVE ORDER OF THE CIT (A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 4. BEFORE US, AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE , WITHOUT GOING INTO THE MERITS OF THE CASE, BROUGHT OUR ATTENTION TO THE ABOVE EXTRACTED GROUND AND MENTIONED THAT THE AO IMPOSED THE PENALTY U/S 271(1)(C) OF THE ACT WITHOUT APPLICATION OF MIND AND IN A MECHANICAL MANNER AND THE SAID ORDER WAS CONFIRMED BY THE CIT (A) BY AN EXPARTE ORDER . FURTHER, LD COUNSEL FOR THE ASSESSEE READ OUT THE GROUND NO.3 AND ARGUED THAT THE WRITTEN SUBMISSIONS OF THE ASSESSEE WERE REJECTED AND PASSED THE ORDER HURRIEDLY WITHOUT GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. FURTHER, LD COUNSE L SUBMITTED THAT ALL THE GROUNDS RAISED IN THIS APPEAL MAY BE REMANDED TO THE FILE OF THE AO FOR FRESH ADJUDICATION AFTER GRANTING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. PER CONTRA, LD DR DUTIFULLY RELIED ON THE ORDERS OF THE AO AND TH E CIT (A). 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES. IT IS A FACT THAT NONE APPEARED TO REPRESENT THE ASSESSEES CASE BEFORE CIT (A), WHO CONFIRMED THE PENALTY ORDER OF THE AO. WE FIND THAT THERE IS NO CLARITY I N THE ORDER AS TO WHETHER THE NOTICES ISSUED BY THE CIT (A) HAVE SUCCESSFULLY REACHED THE ASSESSEE OR NOT. THE CONTENTS OF THE SAID PARAS 5.1 AND 5.2 OF THE IMPUGNED ORDER DO NOT INDICATE THAT THE ASSESSEE IS HEARD WITH THE EXPLANATION LEADING TO THE ADDI TIONAL DISCLOSURE OF INCOME WHICH IS THE SUBJECT MATTER OF PENALTY. CIT (A) MERELY RELIED ON CERTAIN DECISIONS BEFORE CONFIRMING THE PENALTY ORDER OF THE AO . IN SUCH CIRCUMSTANCES, WE ARE OF THE OPINION THAT THERE IS DENT CAUSED TO THE 3 PRINCIPLES OF NATU RAL JUSTICE IN MATTERS OF ADEQUATE OPPORTUNITY OF BEING HEARD GIVEN TO THE ASSESSEE. CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF OPINION THAT THE ASSESSEES REQUEST FOR REMANDING THE GROUNDS SHOULD BE ACCEPTED . T HEREFORE, ALL THE GROUNDS RAISED BY THE ASSESSEE ARE REMANDED TO THE FILE OF THE CIT (A) FOR FRESH ADJUDICATION AFTER HEARING THE ASSESSEE . ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE A SSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUN CED IN THE OPEN COURT ON 1 2 T H NOVEMBER, 2014. S D / - S D / - (H.L. KARWA) (D. KARUNAKARA RAO) PRESIDENT ACCOUNTANT MEMBER DATE: 1 2 .11.2014. AT :MUMBAI OKK COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR A, BENCH, ITAT, MUMBAI. 6. GUARD FILE. // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI