M/s Bhandari Spinning Mills Ltd., Bangalore V. ITO, Bangalore

ITA 912/BANG/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51277 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2011
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 20-09-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 07-09-2009
• Court: TRIBUNAL
• Department Lawyers: PRATAP SINGH
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 69C

Judgement Text

ITA.912/BANG/2009 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'A', BANGALORE BEFORE SHRI. N. K. SAINI, ACCOUNTANT MEMBER AND SHRI. GEORGE GEORGE K. JUDICIAL MEMBER I.T.A NO.912/BANG/2009 (ASSESSMENT YEAR : 2001-02) M/S. BHANDARI SPINNING MILLS LTD., F-1, MANGALAM CHAMBER, NO.25, K. H. ROAD, BANGALORE .. APPELLANT PAN : AAACB9232C V. INCOME-TAX OFFICER, WARD -11(1), BANGALORE .. RESPONDENT APPLICANT BY : SMT. SHEETAL, ADVOCATE RESPONDENT BY : SHRI. PRATAP SINGH, ADDL.CIT DATE OF HEARING : 20.09.2011 DATE OF PRONOUNCEMENT : 20.09.2011 O R D E R PER N. K. SAINI, ACCOUNTANT MEMBER : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED.28.05.2009, OF THE COMMISSIONER OF INCOME-TAX (A)-I, BANGALORE. FOLLOWING GROUNDS HAVE BEEN RAISED IN T HIS APPEAL : '1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED COMMISSIONER OF INCOME-TAX(A) ERRED IN CONF IRMING THE ORDER OF THE ASSESSING OFFICER IN THE MANNER HE DID. ITA.912/BANG/2009 PAGE - 2 2. THE LEARNED COMMISSIONER OF INCOME-TAX(A) OUGHT TO HAVE APPRECIATED THAT THE ASSESSING OFFICER DID NOT GIVE ANY OPPORTUNITY TO THE APPELLANT AND THEREBY VIOLATED T HE PRINCIPLES OF NATURAL JUSTICE AND THEREFORE THE ORD ER PASSED GIVING EFFECT TO THE ORDER OF THE INCOME-TAX APPELL ATE TRIBUNAL IS BAD IN LAW. 3. THE LEARNED COMMISSIONER OF INCOME-TAX(A) OUGHT TO HAVE APPRECIATED THAT THE APPELLANT HAD FURNISHED D OCUMENTS IN SUPPORT OF ITS CLAIM AND IF THE ASSESSING OFFICE R WAS NOT SATISFIED, HE OUGHT TO HAVE PROVIDED AN OPPORTUNITY TO THE APPELLANT. 4. WITHOUT PREJUDICE, THE COMMISSIONER (A) OUGHT TO HAVE APPRECIATED THAT THE ASSESSING OFFICER HAVING NOT C OMPLIED WITH THE DIRECTIONS OF THE HON'BLE INCOME-TAX APPEL LATE TRIBUNAL, THE ORDER GIVING EFFECT AS PASSED BY THE ASSESSING OFFICER IS NOT SUSTAINABLE IN THE EYE OF LAW. 5. WITHOUT PREJUDICE, THE LEARNED COMMISSIONER (A) OUGHT TO HAVE APPRECIATED THAT THE ASSESSING OFFICE R HAS SERIOUSLY FELL IN ERROR WHEN HE NEITHER CONSIDERED THE EVIDENCE PLACED BY THE APPELLANT NOR DID HE APPOINT ANY COMM ISSION AS REQUIRED BY THE HON'BLE APPELLATE TRIBUNAL NOR DID HE CONSIDER THE TRADE PRACTICE AND THEREFORE THE ORDER GIVING EFFECT IS NOT SUSTAINABLE IN THE EYE OF LAW. 6. THE LEARNED COMMISSIONER (A) FAILED TO APPRECIAT E THAT THE PAYMENTS MADE TO M/S. RUKMINI MILLS LTD., WERE GENUINE ITA.912/BANG/2009 PAGE - 3 AND FULLY EXPLAINED AND OUGHT TO HAVE DIRECTED THE DELETION OF THE SAME AS THE PROVISIONS OF SECTION 69C WERE NOT APPLICABLE. 7. WITHOUT PREJUDICE, THE ADDITION AND DISALLOWANCE ARE EXCESSIVE, ARBITRARY AND UNREASONABLE AND OUT TO BE REDUCED SUBSTANTIALLY. 8. THE LEARNED COMMISSIONER (A) ERRED IN CONFIRMING THE INTEREST LEVIED BY THE ASSESSING OFFICER U/S.234C, 234D AND 220(2) OF THE ACT.' 02. FROM THE GROUND NOS.1 TO 7, IT WOULD BE CLEAR T HAT THE MAIN GRIEVANCE OF THE ASSESSEE IS THAT THE ASSESSING OFF ICER HAD NOT GIVEN PROPER OPPORTUNITY OF BEING HEARD AND HAD NOT COMPL IED WITH THE DIRECTIONS OF THE ITAT WHILE GIVING EFFECT TO THE O RDER PASSED BY THE ITAT AND THAT THE LEARNED COMMISSIONER OF INCOME-TA X(A) HAD NOT APPRECIATED THE AFORESAID CONTENTION OF THE ASSESSE E. 03. THE FACTS RELATED TO THIS CASE, IN BRIEF, ARE T HAT THE ASSESSEE FILED THE RETURN OF ITS INCOME ON 31.10.2001 DECLARING TO TAL INCOME OF ` .8,13,708/- WHICH WAS LATER ON REVISED TO AN INCOME OF ` .6,84,360/- ON 11.03.2002 AND AGAIN IT WAS REVISED TO AN INCOME OF ` .5,93,850/- ON 15.11.2002. THE ASSESSING OFFICER MADE ADDITION S TO AN EXTENT OF ` .20,91,012/- TO THE INCOME OF THE ASSESSEE WHILE F RAMING THE ITA.912/BANG/2009 PAGE - 4 ASSESSMENT U/S.143(3) ON 31.3.2004. BEING AGGRIEVE D, THE ASSESSEE CARRIED THE MATTER TO THE LEARNED COMMISSIONER OF I NCOME-TAX(A) WHO CONFIRMED THE ADDITIONS MADE BY THE ASSESSING OFFIC ER. THEREAFTER THE ASSESSEE APPROACHED THE ITAT IN ITA.1401/BANG/2 005, WHEREIN VIDE ORDER DATED.15.09.2006, THE ADDITIONS TO THE E XTENT OF ` .14,25,171/- WERE CONFIRMED AND THE ISSUES PERTAINI NG TO THE OTHER ADDITIONS WERE REMANDED BACK TO THE ASSESSING OFFIC ER FOR FRESH ADJUDICATION. THE ASSESSING OFFICER AGAIN MADE THE SAME ADDITIONS WHICH WERE EARLIER MADE AT THE TIME OF PASSING THE ORIGINAL ASSESSMENT ORDER VIDE ORDER DATED.31.12.2007. THE ASSESSEE PR EFERRED AN APPEAL TO THE LEARNED COMMISSIONER OF INCOME-TAX(A) AGAINS T THE ORDER OF THE ASSESSING OFFICER WHO CONFIRMED THE ADDITION. NOW, THE ASSESSEE IS IN APPEAL AGAINST THE ACTION OF THE LEARNED COMMISS IONER OF INCOME- TAX(A). 04. THE LEARNED COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THE MATTER AND STATED THAT THE LEARNED COMMISSIONER OF INCOME-TAX(A) WITHOUT CONSIDERING THE FACTS AS WELL AS THE MATERI ALS ON RECORD IN RIGHT PERSPECTIVE, HAD CONFIRMED THE ADDITIONS. IT WAS F URTHER STATED THAT THE LEARNED COMMISSIONER OF INCOME-TAX(A) HAD NOT DISCU SSED ABOUT THE DOCUMENTS FURNISHED AND THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE HIM WHILE CONFIRMING THE ACTION OF THE ASSESSING OF FICER. IT WAS ITA.912/BANG/2009 PAGE - 5 FURTHER STATED THAT THE ASSESSEE PRODUCED THE EVIDE NCES AND DOCUMENTS IN ACCORDANCE WITH THE DIRECTIONS OF THE ITAT. HOW EVER, THE ASSESSING OFFICER WITHOUT GIVING DUE AND PROPER OPP ORTUNITY OF BEING HEARD REPEATED THE ADDITIONS WHICH WERE MADE IN THE ORIGINAL ASSESSMENT. IT WAS ACCORDINGLY SUBMITTED THAT THE LEARNED COMMISSIONER OF INCOME-TAX(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITIONS MADE BY THE ASSESSING OFFICER. 05. IN HIS RIVAL SUBMISSION, THE LEARNED DR STRONGL Y SUPPORTED THE IMPUGNED ORDER PASSED BY THE COMMISSIONER OF INCOME -TAX(A) AND SUBMITTED THAT THE ASSESSING OFFICER GAVE ABUNDANT OPPORTUNITIES TO THE ASSESSEE AND MADE THE ADDITIONS ONLY WHEN THE A SSESSEE WAS UNABLE TO PRODUCE THE EVIDENCES IN SUPPORT OF ITS C LAIM. 06. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE ITAT WHILE PASSING THE ORDER DATED.15.09.2006 IN ITA.1401/BANG/2005, DIRECTED TH E ASSESSING OFFICER TO DECIDE THE ISSUE RELATING TO COMMISSION OF ` .80,115/- TO M/S. S. S. BROTHERS, INDORE; PAYMENT OF ` .3,40,000/- MADE TO M/S. RUKMINI MILLS LTD.; ` .4,50,000/- BROKERAGE PAID TO M/S.SRI VISHNUGOPAL SRINIVAS & M/S. SRINIVAS COTTON COMPANY . ANOTHER ITA.912/BANG/2009 PAGE - 6 ISSUE WAS RELATING TO THE BROKERAGE OF ` .40,405/- PAID TO SHRI. VENKATESH COTTON CORPORATION, ADILABAD. THE ASSESS ING OFFICER ON THE DIRECTION OF THE ITAT WHICH WERE GIVEN IN THE O RDER DATED.15.09.2006 FRAMED THE ASSESSMENT VIDE ORDER D ATED.31.12.2007. THE ASSESSING OFFICER WITH REGARD TO THE BROKERAGE PAID TO M/S. S. S. BROTHERS STATED IN PARA 4 OF THE ASSESSMENT ORDER D ATED.31.12.2007 THAT THE PURCHASE BILLS PRODUCED BY THE ASSESSEE WERE VE RIFIED AND ON VERIFICATION IT WAS FOUND THAT BROKERAGE WAS NOT IN CLUDED IN THE PURCHASE BILLS. HE, THEREFORE, DISALLOWED THE BROK ERAGE OF ` .80,115/- AND MADE THE ADDITION. THE ASSESSING OFFICER ALSO TREATED THE PAYMENT OF ` .4,50,000/- ON ACCOUNT OF BROKERAGE PAID TO M/S. VISHNUGOPAL SRINIVAS AND M/S. SRINIVAS COTTON COMPA NY AS AN ACCOMMODATION ENTRY AND NON-GENUINE CLAIM. HOWEVER , WHILE DOING SO, THE ASSESSING OFFICER HAD NOT MENTIONED ABOUT T HE SUBMISSIONS OF THE ASSESSEE. SIMILAR WAS THE POSITION WITH REGARD TO BROKERAGE PAID TO M/S. VENKATESH COTTON CORPORATION, ADILABAD AMOUNTI NG TO ` .40,405/-. WITH REGARD TO THE PAYMENT OF ` .3,40,000/- TO M/S. RUKMINI MILLS LTD., THE ASSESSING OFFICER MENTIONED AT PAGE NO.9 OF THE ASSESSMENT ORDER DATED.31.12.2007 THAT THE ASSE SSEE HAD REPLIED VIDE LETTERS DATED.27.09.2007 AND DATED.18.12.2007. HOWEVER, IT WAS NOT MENTIONED IN THE BODY OF THE SAID ASSESSMENT OR DER THAT WHAT WERE THE CONTENTS OF THOSE LETTERS FURNISHED BY THE ASSE SSEE. FROM THE ABOVE ITA.912/BANG/2009 PAGE - 7 NARRATED FACTS IT APPEARS THAT THE ASSESSING OFFICE R HAD NOT GIVEN THE PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT IS ALSO NOTICED THAT IN THE IMPUGNED ORDER THE LEARNED COMMISSIONER OF INCOME- TAX(A) MENTIONED THE FACTS IN PARA 2 AND 2.1. IN P ARA 3 THE LEARNED COMMISSIONER OF INCOME-TAX(A) REPRODUCED THE FINDIN GS GIVEN BY THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT ORDER DATED.31.03.2004. IN PARA 3.1, THE LEARNED COMMISSIONER OF INCOME-TAX (A) REPEATED THE FINDINGS GIVEN BY THE THEN LEARNED COMMISSIONER OF INCOME-TAX(A)-I, BANGALORE IN HIS ORDER DATED.08.08.2005. IN PARA 3 .3, THE LEARNED COMMISSIONER OF INCOME-TAX(A) HAS MENTIONED THE OBS ERVATIONS OF THE ITAT IN ITS ORDER DATED.15.09.2006 IN ITA.1401/ BANG/2005. IN PARA 5 AND 5.1 OF THE IMPUGNED ORDER, THE LEARNED C OMMISSIONER OF INCOME-TAX(A) HAS DISCUSSED THE OBSERVATIONS OF THE ASSESSING OFFICER AS WELL AS OF THE ITAT WITH REGARD TO THE CASH PAYM ENT OF ` .3,40,000/- WHILE IN PARA 4, THE LEARNED COMMISSIONER OF INCOME -TAX(A) DISCUSSED THE OBSERVATIONS OF THE ASSESSING OFFICER WITH REGARD TO THE BROKERAGE. FROM THE ABOVE DISCUSSED FACTS, IT IS C LEAR THAT THE LEARNED COMMISSIONER OF INCOME-TAX(A) IN THE IMPUGNED ORDER NO WHERE MENTIONED ABOUT THE SUBMISSIONS AND EXPLANATION OF THE ASSESSEE. SHE SIMPLY SUSTAINED THE ADDITIONS MADE BY THE ASSESSIN G OFFICER IN SLIP- SHOD MANNER. ITA.912/BANG/2009 PAGE - 8 07. CONSIDERING THE FACTS OF THE PRESENT CASE AS DI SCUSSED HEREINABOVE, WE ARE OF THE VIEW THAT THE ASSESSING OFFICER HAS NOT GIVEN DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WHILE FRAMING THE ASSESSMENT ON THE DIRECTION OF TH E ITAT AND THE LEARNED COMMISSIONER OF INCOME-TAX(A) WITHOUT DISCU SSING THE SUBMISSIONS OF THE ASSESSEE AS WELL AS THE DOCUMENT S FURNISHED BY THE ASSESSEE CONFIRMED THE ACTION OF THE ASSESSING OFFI CER. IT IS WELL SETTLED THAT NOBODY SHOULD BE CONDEMNED UNHEARD AS PER THE MAXIM AUDI ALTERAM PARTEM . WE, THEREFORE, DEEM IT APPROPRIATE TO SET ASIDE THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICE R TO ADJUDICATE AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REAS ONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND ALSO BY CONSIDER ING THE EARLIER DIRECTION AS GIVEN BY ITAT IN ITS ORDER DATED.15.09 .2006. 08. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICA L PURPOSES. ORDER PRONOUNCED IN OPEN COURT AT THE TIME OF HEARI NG ON 20TH SEPTEMBER, 2011. SD/- SD/- (GEORGE GEORGE K) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : BANGALORE DATED : 20TH SEPTEMBER, 2011 ITA.912/BANG/2009 PAGE - 9