M/S J.B. TRANSPORT, Sonebhadra V. ACIT RANGE 3, MIRZAPUR

ITA 92/ALLD/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3772 (ITAT-ALLAHABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 08-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Reasonable cause
• Section: 143(3); 145(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD (SMC) BENCH, ALLAHABAD (THROUGH VIRTUAL COURT) BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER I.T.A. NO.92/ALLD/2018 ASSESSMENT YEAR: 2009-10 M/S.J.B.TRANSPORT, SHIVA PARK, RENUKOOT, SONEBHADRA, UTTAR PRADESH [PAN: AAHFM0217E] VS ASST. COMMISSIONER OF INCOME TAX, RANGE-3, MIRZAPUR (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI PRAVEEN GODBOLE, ADVOCATE FOR REVENUE : SHRI A.K.SINGH, SR.DR DATE OF HEARING : 05-11-2020 DATE OF PRONOUNCEMENT : 06-11-2020 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 21-12-2017 OF THE COMMISSIONER OF INCOME TAX(APPEALS)-ALLAHABAD FOR THE AY.2009-10. IN THIS A PPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT IN ANY VIEW OF THE MATTER ASSESSMENT PASSED U/S 143(3) BY ORDER DATED 20.11.2012 ON INCOME OF RS. 28,25,710/- IS BAD BOTH ON THE FACTS AND IN LAW. 2. THAT IN ANY VIEW OF THE MATTER THE LEARNED CIT(A ) WAS WRONG IN DECIDING THE APPEAL EXPARTE WITHOUT PROVIDING REASO NABLE OPPORTUNITY TO THE ASSESSEE WHEN DURING APPELLATE PROCEEDING TH E ASSESSEE STATED THAT THE COUNSEL WAS ILL FOR LONG TIME AND T HEREFORE BOOKS OF ACCOUNTS COULD NOT BE PRODUCED. THUS THERE WAS REAS ONABLE CAUSE FOR NON-PRODUCTION OF BOOKS OTHERWISE THERE WAS NO BAD MOTIVE OF NOT PRODUCING BOOKS WHEN EARLIER RECORD OF ASSESSEE IS NEAT AND CLEAN ITA NO.92 /ALLD/2018 :- 2 -: HENCE BOTH THE TWO LOWER AUTHORITIES FAILED IN CONS IDERING THE ISSUE AND THEREFORE ADDITION MADE IS HIGHLY UNJUSTIFIED. 3. THAT IN ANY VIEW OF THE MATTER THE ASSESSING OFF ICER WAS NOT CORRECT IN MAKING EXTRA PROFIT ADDITION BY APPLYING NET RAT E OF 5% ON THE DECLARED RECEIPT WHEN THE BOOKS OF ACCOUNTS WERE AU DITED AND AUDIT REPORT DULY FILED BUT UNDER UNAVOIDABLE CIRCUMSTANC ES DURING ASSESSMENT PROCEEDING ACCOUNTS BOOKS WERE NOT PROD UCED HENCE APPLICATION OF NET RATE IS HIGHLY UNJUSTIFIED. 4. THAT IN ANY VIEW OF THE MATTER EXTRA PROFIT ADDI TION OF RS. 15,55,762/- BY APPLYING NET RATE OF 5% AS AGAINST 3 .2% AS DISCLOSED BY THE ASSESSEE ON THE BASIS OF CLOSED BOOKS OF ACC OUNTS IS HIGHLY UNJUSTIFIED AND THE ASSESSING OFFICER HAS NOT EVEN GIVEN ANY COMPARABLE CASE FOR APPLICATION OF HIGHER NET RATE HENCE THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY CIT( A) IS HIGHLY UNJUSTIFIED. 5. THAT IN ANY VIEW OF THE MATTER INTEREST CHARGED UNDER DIFFERENT SECTION IS HIGHLY UNJUSTIFIED. 6. THAT IN ANY VIEW OF THE MATTER THE ASSESSEE RESE RVES HIS RIGHTS TO TAKE ANY FRESH GROUND OF APPEAL BEFORE HEARING OF A PPEAL. 2. ASSESSEE IS A PARTNERSHIP FIRM AND ENGAGED IN THE TRANSPORT BUSINESS. THE ASSESSEE FILED ITS RETURN OF I NCOME ON 28-09-2009, DECLARING TOTAL INCOME OF RS.11,72,510/- . DURING THE COURSE OF SCRUTINY ASSESSMENT, THE ASSESSING OFFICE R ISSUED NOTICE U/S.142(1) OF THE INCOME TAX ACT [ACT], CALLING THE ASSESSEE TO EXPLAIN CERTAIN POINTS AND TO PRODUCE TH E BOOKS OF ACCOUNTS. SINCE THE ASSESSEE DID NOT PRODUCE THE BOOKS OF ACCOUNTS, THEREFORE, THE ASSESSING OFFICER R EJECTED THE BOOK RESULTS OF THE ASSESSEE AND ESTIMATED THE INCOME OF ASSESSEE BY ADOPTING NET PROFIT RATIO @5%. 3. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSING OFFICER BEFORE THE CIT(A) AND SUBMITTED THAT DUE TO ILL- HEALTH OF THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE, THE BOOKS OF ACCOUNTS COULD NOT BE PRODUCED BEFORE THE ASSESSING OF FICER. ITA NO.92 /ALLD/2018 :- 3 -: THE ASSESSEE PRODUCED AN AFFIDAVIT OF HIS COUNSEL AL ONG WITH THE MEDICAL CERTIFICATE AND ALSO SOUGHT TO PRODUCE THE B OOKS OF ACCOUNT AND OTHER DETAILS AS ADDITIONAL EVIDENCE. TH E CIT(A) DISMISSED THE APPEAL OF ASSESSEE ON THE GROUND THAT DE SPITE SUFFICIENT OPPORTUNITIES, THE ASSESSEE COULD NOT SUBSTA NTIATE ITS CLAIM. 4. BEFORE THE TRIBUNAL, THE LD.AR OF THE ASSESSEE HAS SUBMITTED THAT THE BOOKS OF ACCOUNT AND OTHER DETAILS COUL D NOT BE PRODUCED BEFORE THE ASSESSING OFFICER DUE TO THE REASON THAT SHRI B.M.DIXIT, THE COUNSEL OF THE ASSESSEE WAS NOT WELL AND WAS HOSPITALIZED IN THE MONTHS OF OCTOBER AND NOVEM BER, 2011. THIS FACT WAS BROUGHT TO THE KNOWLEDGE OF THE CI T(A) BY FILING AN AFFIDAVIT OF THE COUNSEL AS WELL AS THE MED ICAL CERTIFICATE. THE ASSESSEE ALSO SOUGHT TO FILE THE BOOKS OF ACCOUNTS AND OTHER DETAILS AS AN ADDITIONAL EVIDENCE B UT THE CIT(A) HAS NOT CONSIDERED THE SAME AND DISMISSED THE A PPEAL OF ASSESSEE. HE HAS REFERRED TO THE AFFIDAVIT FILED B Y THE COUNSEL OF THE ASSESSEE ALONG WITH MEDICAL CERTIFICATE . THE LD.AR HAS ALSO REFERRED TO THE AUDIT REPORT AND FINANCI ALS OF THE ASSESSEE IN SUPPORTS OF ITS CLAIM THAT THE ASSESSEE IS MAINTAINING REGULAR BOOKS OF ACCOUNTS AND RESULT DECL ARED BY THE ASSESSEE ARE THE CORRECT OUTCOME OF THE BUSINESS A FFAIRS OF THE ASSESSEE. THUS, THE LD.AR HAS PLEADED THAT THE ADDI TIONAL EVIDENCE SOUGHT TO BE PRODUCED BY THE ASSESSEE MAY BE ADMITTED IN SUPPORTS OF THE CLAIM OF THE ASSESSEE. 5. ON THE OTHER HAND, THE LD.DR HAS OPPOSED THE ADMISSION OF THE ADDITIONAL EVIDENCE AND SUBMITTED THAT ITA NO.92 /ALLD/2018 :- 4 -: DESPITE SUFFICIENT OPPORTUNITIES GRANTED BY THE ASSESSI NG OFFICER, THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF A CCOUNTS AND OTHER DETAILS, THEREFORE, SUBSEQUENT FILING OF THE ADDITIONAL EVIDENCE, WITHOUT EXPLAINING REASONABLE CAUSE CANNOT BE ACCEPTED. 6. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL A S THE RELEVANT MATERIAL ON RECORD, IT IS NOTED THAT THE ASSESSI NG OFFICER HAS REJECTED BOOKS OF ACCOUNTS OF THE ASSES SEE BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE ACT ON THE GROUND THAT DESPITE VARIOUS NOTICES ISSUED U/S.142(1 ) OF THE ACT, THE ASSESSEE DID NOT PRODUCE THE BOOKS OF ACCOUNTS AND OTHER DETAILS AS SOUGHT BY HIM. THERE IS NO DISPUTE THAT THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNTS BEFORE THE ASSESSING OFFICER AND CONSEQUENTLY, THE ASSESSING OF FICER HAS ESTIMATED INCOME OF THE ASSESSEE BY ADOPTING THE NET P ROFIT RATIO @5%. FURTHER, THE ASSESSEE SOUGHT TO FILE THE ADD ITIONAL EVIDENCE BEFORE THE CIT(A) AND ALSO EXPLAINED THE REA SONS FOR NON-PRODUCTION OF THE BOOKS OF ACCOUNTS BEFORE THE ASS ESSING OFFICER. THE ASSESSEE FILED THE AFFIDAVIT OF HIS COU NSEL ALONG WITH THE MEDICAL CERTIFICATE, SHOWING THE ILLNESS OF TH E COUNSEL OF THE ASSESSEE, WHO WAS HOSPITALIZED DURING THE RELE VANT PERIOD. THUS, IT IS EVIDENT FROM THE RECORD THAT ASSESS EE WAS HAVING A REASONABLE CAUSE FOR NON-PRODUCTION OF BOOK S OF ACCOUNTS BEFORE THE ASSESSING OFFICER AND THEREAFTER, THE ASSESSEE DULY EXPLAINED THE SAID CAUSE OF NON-PRODUC TION OF DETAILS BEFORE THE CIT(A). THE CIT(A) WITHOUT DISCUSSIN G ANYTHING ABOUT THE ADDITIONAL EVIDENCE SOUGHT TO BE PROD UCED BY THE ASSESSEE, HAS CONFIRMED THE ORDER OF ASSESSING OFFICER. ITA NO.92 /ALLD/2018 :- 5 -: HENCE IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE, THE ADDITIONAL EVIDENCE SOUGHT TO BE PRODUCED BY THE ASSESSEE, IS ADMITTED AND THE MATTER IS REMANDED TO THE RECORD OF ASSESSING OFFICER FOR RE- ADJUDICATION, AFTER CONSIDERING THE BOOKS OF ACCOUNTS AND OTHER DETAILS FILED BY THE ASSESSEE. NEEDLESS TO MEN TION THAT ASSESSEE SHOULD BE GIVEN A FAIR OPPORTUNITY OF HEAR ING. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH NOVEMBER, 2020 SD/- (VIJAY PAL RAO) JUDICIAL MEMBER ALLAHABAD, DATED: 06-11-2020 TNMM COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT 6. GUARD FILE TRUE COPY BY ORDER (ITAT, ALLAHABAD)