M/s R. S. Chemicals, Kolkata V. ITO, WD-36(1), KOLKATA, Kolkata

ITA 918/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9300 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 22-11-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 02-05-2016
• Court: TRIBUNAL
• Department Lawyers: MANISH TIWARI
• Assessee Lawyers: MD GHAYAS UDDIN
• Keywords: Principle of natural justice; Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENC H KOLKATA BEFORE SHRI S.S.VISWANETHRA RAVI, JM, & DR. A.L.SA INI, AM ./ ITA NO.918/KOL/2016 ( / ASSESSMENT YEAR :2011-2012) M/S R.S.CHEMICALS, NARAYANI BUILDING, 27, BRABOURNE ROAD, KOLKATA-700001 VS. ITO, WARD-36(1), AAYAKAR BHAWAN POORVA, 110, SHANTIPALLY, KOLKATA-700107 ./ ./PAN/GIR NO. : AAFFR 3325 Q ( /APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI MANISH TIWARI, FCA /ASSESSEE BY : MD. GHAYAS UDDIN, JCIT / DATE OF HEARING : 15/02/2017 /DATE OF PRONOUNCEMENT 03/03/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAIN ING TO THE ASSESSMENT YEAR 2011-2012, IS DIRECTED AGAINST THE ORDER PASSE D BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-10, KOLKATA, I N APPEAL NO.264/CIT(A)-10/WD.36(1)/13-14, DATED 07.02.2016, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE AO U/S.143(3) OF THE INCOME TAX ACT 1961, (HEREINAFTER REFERRED TO AS THE ACT), DATED 25.02.2014. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE ASSESSEE FIRM FILED ITS RETURN OF INCOME FOR A.Y.2011-12 O 30-3- 2012 DECLARING LOSS AT RS.17,450/-. THE RETURN OF INCOME WAS PROCESSED U/S .143(1) ON 11-05- 2012. LATER ON ASSESSEES CASE WAS SELECTED FOR SCR UTINY U/S.143(3) OF THE ACT AND THE AO HAS COMPLETED THE ASSESSMENT BY MAKING ADDITION ON ACCOUNT OF UNDISCLOSED COMMISSION INCOME AND INTERE ST PAID BY THE ASSESSEE. THE AO ALSO DISALLOWED BAD DEBTS CLAIMED BY THE ASSESSEE. ITA NO.918/KOL/2016 M/S R.S.CHEMICALS 2 3. NOT BEING SATISFIED WITH THE ORDER PASSED BY TH E AO, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A), WHO HAS CONFIRME D THE ADDITIONS MADE BY THE AO OBSERVING THE FOLLOWINGS :- 02. ON A PERUSAL OF THE ASSESSMENT ORDER, IT IS SE EN THAT THE AO HAS, AFTER GIVING SUFFICIENT OPPORTUNITY TO THE ASS ESSEE, MADE CERTAIN ADDITIONS, AS ARE REFLECTED IN THE GROUNDS OF APPEAL. FOR EACH ADDITION, THE ELABORATE FACTS HAVE BEEN RECORD ED, AND REASONS FOR THE DISALLOWANCE MENTIONED. DURING APPEAL, NOTH ING HAS BEEN BROUGHT ON RECORD BY THE APPELLANT TO CONTROVERT TH E FINDINGS OF THE ASSESSING OFFICER. NOT A SINGLE DOCUMENT HAS BEEN S UBMITTED, OR AN IOTA OF ARGUMENT ADVANCED BY THE APPELLANT OR TH E PERSON APPEARING ON BEHALF OF HIM. THIS IS TRUE FOR THE PO INTS RAISED BY THE APPELLANT AT GROUNDS 1 TO 4. IN THE CIRCUMSTANCES, I FIND NO REASON TO INTERFERE WITH THE FINDING OF THE ASSESSING OFFI CER IN MAKING THE ADDITIONS RELATING TO THESE GROUNDS. 03. THEREFORE, IN THE ABSENCE OF ANYTHING SAID OR E VIDENCED CONTRARY TO THE FINDINGS AND ADDITIONS OF THE AO, T HE ACTION OF THE AO IS CONFIRMED, AND THE GROUNDS TAKEN BY THE APPEL LANT STAND DISMISSED. 04. GROUNDS NO.5 THIS GROUND IS IN RELATION TO ADMI SSION OF ADDITIONAL GROUND ETC. AS THE APPELLANT HAS NOT PRA YED FOR ANY ADDITIONAL GROUNDS OR ALTERNATIONS IN ANY GROUNDS O F APPEALS, THE SAME IS NOT REQUIRED TO BE ADJUDICATED-ASSESSEE. IN THE FINAL RESULT, APPEAL FILED BY THE APPELLANT IS TREATED AS 'DISMISSED.' 4. NOT BEING SATISFIED WITH THE ORDER OF LD. CIT(A) , THE ASSESSEE IS IN FURTHER APPEAL BEFORE US AND HAS TAKEN THE FOLLOWIN G GROUNDS OF APPEAL :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, LD. CIT(A) IS WRONG IN DRAWING ADVERSE INFERENCE DUE TO NON- COMPLIANCE ON 20.01.2016 & 04.02.2016 AND THEREBY DISMISSING ASSESSEE'S APPEAL AND CONFIRMING ADDITIO NS / DISALLOWANCES MADE BY A.O. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, NON- COMPLIANCES ON 20.01.2016 & 04.02.2016 WAS, NOT INT ENTIONAL BUT DUE TO COMPELLING CIRCUMSTANCES. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, LD. CIT(A) IS NOT JUSTIFIED IN DISMISSING ASSESSEE'S AP PEAL WITHOUT DEALING ON MERIT OF ADDITION & DISALLOWANCES MADE B Y ASSESSING OFFICER AND CONTESTED UNDER GROUND NO. 1 TO 4 ITA NO.918/KOL/2016 M/S R.S.CHEMICALS 3 4. THAT THE APPELLANT CRAVES LEAVE, TO ADD, ALTER, ADDUCE OR AMEND ANY GROUND OR GROUNDS ON OR BEFORE THE DATE OF HEAR ING OF THE APPEAL. 5. ALTHOUGH IN THIS APPEAL, THE ASSESSEE HAS RAISED FOUR GROUNDS OF APPEAL BUT THE SOLITARY GRIEVANCE OF THE ASSESSEE I S THAT THE LD. CIT(A) HAS PASSED THE ORDER WITHOUT GIVING AN OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. 6. LD AR FOR THE ASSESSE HAS SUBMITTED BEFORE US T HAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, NON-COMPLIANCES OF N OTICES ON DATED 20.01.2016 & 04.02.2016 WAS NOT INTENTIONAL BUT DUE TO COMPEL LING CIRCUMSTANCES BECAUSE PARTNERSHIP FIRM (ASSESSEE) WAS SHUTTING DOWN ITS B USINESS. THE LD. AR FOR THE ASSESSEE HAS SUBMITTED BEFORE US THAT THE ASSESSEE UNDER CONSIDERATION IS A PARTNERSHIP FIRM. THE PARTNERSHIP FIRM (ASSESS EE) HAS CLOSED ITS BUSINESS BUT PARTNERSHIP FIRM IS YET TO DISSOLVE. T HE NECESSARY FORMALITIES TO DISSOLVE THE PARTNERSHIP FORM WAS GOING ON WHEN THE PROCEEDINGS WAS GOING ON BEFORE THE LD. CIT(A). THEREFORE, THE OFFI CE OF THE PARTNERSHIP FIRM WERE NOT OPENED FOR ALL THE TIMES. SINCE THE P ARTNERSHIP FIRM WAS IN THE CLOSING PROCESS, THEREFORE, IT USED TO OPEN ITS OFFICE OFF AND ON, THEREFORE, LETTERS SENT BY THE CIT(A) MIGHT BE RETU RNED BACK AND THIS WAY, THE ASSESSEE DID NOT GET THE NOTICE OF HEARING. THE REFORE, IN THE INTEREST OF JUSTICE, THE LD. AR FOR THE ASSESSE, REQUESTED THE BENCH TO SEND THE CASE BACK TO THE FILE OF LD. CIT(A) TO RE-ADJUDICATE THE SAME. THE LD. AR FOR THE ASSESSEE ALSO ARGUED THAT SINCE THE RIGHTS AND LIAB ILITIES OF THE ASSESSEE HAS NOT BEEN DETERMINED BY THE LD. CIT(A) BECAUSE T HE NOTICE OF HEARING WERE RETURNED BACK ( BECAUSE OF CLOSURE OF THE PART NERSHIP FIRM) , AS THE PARTNERSHIP FIRM`S OFFICE USED TO OPEN OFF AND ON O NLY. ITA NO.918/KOL/2016 M/S R.S.CHEMICALS 4 7. ON THE OTHER HAND, LD. DR FOR THE REVENUE HAS PR IMARILY RELIED ON THE STAND TAKEN BY THE LD. CIT(A), BUT EVEN HE HAS AGREED WITH THE PROPOSITION CANVASSED BY LD. AR FOR THE ASSESSEE TO SEND THE MATTER BACK TO THE FILE OF CIT(A) TO RE-ADJUDICATE THE ISSUE AF RESH. 8. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMI SSIONS OF THE ASSESSEE, AS THE PROPOSITION CANVASSED BY LD. AR FOR THE ASSE SSEE ARE SUPPORTED BY THE FACTS NARRATED BY HIM ABOVE. AS LD. AR FOR THE ASSESSEE HAS POINTED OUT THAT THE ASSESSEE IS A PARTNERSHIP FIRM WHO HAS CLOSED ITS BUSINESS. THE PROCEEDINGS OF DISSOLUTION OF PARTNERSHIP FIRM WAS GOING ON, THEREFORE, THE OFFICE OF THE PARTNERSHIP FIRM USED TO OPEN ONLY OFF AND ON AND, HENCE, THE NOTICE OF HEARING SENT BY LD. CIT(A ) COULD NOT RECEIVED BY THE ASSESSEE. SINCE THE RIGHTS AND LIABILITIES OF T HE ASSESSEE FIRM HAS NOT BEEN DETERMINED BY LD. CIT(A), THEREFORE, CONSIDERI NG THE PRINCIPLE OF NATURAL JUSTICE, WE REMIT THE CASE BACK TO THE FILE OF LD. CIT(A) TO RE- ADJUDICATE THE ISSUE AFRESH AFTER GIVING PROPER OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 03/03 /2017. S D/ - (S.S.VISWANETHRA RAVI) S D/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; $% DATED 03/03/2017 & ()* /PRAKASH MISHRA ,SR.PS. / COPY OF THE ORDER FORWARDED TO : ITA NO.918/KOL/2016 M/S R.S.CHEMICALS 5 / BY ORDER, / ( ASSTT. REGISTRAR) & ' , / ITAT, KOLKATA 1. / THE APPELLANT-M/S R.S.CHEMICALS 2. / THE RESPONDENT.-ITO WARD-36(1), KOLKATA 3. 4 ( ) / THE CIT(A), KOLKATA. 4. 4 / CIT 5. 56 7 8 , 8 , / DR, ITAT, KOLKATA 6. 7 9 / GUARD FILE. 5 //TRUE COPY//