Gorakh Motiram Pawar, Malegaon V. Income-tax Officer,

ITA 946/PUN/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9462 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-04-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 06-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDHERSHAN SHEKHAR
• Keywords: Principle of natural justice
• Section: 143(3)

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 946 /P U N/201 6 / ASSESSM ENT YEAR : 20 11 - 12 GORAKH MOTIRAM PAWAR, A/P SOUDANE (SADAK), TALUKA MALEGAON - 422203 . / APPELLANT PAN: AGYPP6314N VS. THE INCOME TAX OFFICER , WARD 3 ( 3 ), MALEGAON . / RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / RESPONDENT BY : S HRI SUDHERSHAN SHEKHAR , JCIT / DATE OF HEARING : 2 4 . 0 5 .201 7 / DATE OF PRONOUNCEMENT: 26 . 0 5 .201 7 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILE D BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - 1 , NASHIK , DATED 0 7 . 0 3 .20 1 6 RELATING TO ASSESSMENT YEAR 20 11 - 12 AGAINST ORDER PASSED UNDER SECTION 1 4 3(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE A SSESSEE FILED AN ADDITIONAL GROUND OF APPEAL REQUESTING FOR SET ASIDE OF THE ISSUE FOR RE - ADJUDICATION TO THE CIT(A) OR THE ASSESSING OFFICER AS THE NECESSARY EVIDENCE ITA NO. 946 /P U N/20 1 6 S HRI GORAKH MOTIRAM PAWAR 2 COULD NOT BE FILED BEFORE THE AUTHORITIES BELOW BECAUSE OF CHANGE IN CA AND NON - HANDING OVER OF THE RECORD. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO THE AFFIDAVIT FILED BY THE ASSESSEE IN THIS REGARD AND POINTED OUT THAT HE WAS PREVENTED BY SUFFICIENT CAUSE FOR NON - APPEARANCE BEFORE THE AUTHORITIES BELOW AND REQUEST WAS MADE TO GRANT AN OPPORTUNITY TO APPEAR BEFORE THE LOWER AUTHORITIES FOR DECIDING VARIOUS ISSUES RAISED IN THE PRESENT APPEAL. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, STRONGLY OBJECTED TO THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE. 4. THE ASSESSEE HAS RAISED THE FOLLOWING ADDITIONAL GROUND OF APPEAL: - ON THE BASIS OF FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF THE PRINCIPLE OF NATURAL JUSTICE, AS THE ASSESSEE WAS RESTRAINED FROM APPEARING BEFORE LEARNED CIT(A), DUE TO NON AVAILABILITY OF RECORD FROM THE PREVIOUS CONSULTANTS, THE APPEAL MAY BE SET ASIDE TO THE FILE OF CIT(A) / AO FOR RE - ADJUDICATION. 5. THE PLEA OF ASSESSEE BEFORE THE TRIBUNAL IS THAT BECAUSE OF NON - APPEARANCE B EFORE THE CIT(A), THE APPEAL WAS DECIDED AGAINST THE ASSESSEE. THE ASSESSEE CLAIMS THAT THERE WERE CERTAIN DIFFERENCES WITH THE CA WHO WAS APPEARING IN HIS CASE AND A NEW COUNSEL WAS APPOINTED TO APPEAR BEFORE THE ASSESSING OFFICER. HOWEVER, COMPLETE EVI DENCES COULD NOT BE PRODUCED SINCE COMPLETE DOCUMENTS WERE NOT HANDED OVER. BEFORE THE CIT(A), THERE WAS NON - COMPLIANCE BECAUSE OF THIS REASON. THE ASSESSEE HAS FILED AN AFFIDAVIT IN THIS REGARD , WHICH READS AS UNDER: - A F F I D A V I T I, GORAKH MOTIRAM PAWAR S/O SHRI MOTIRAM PAWAR, AGED ABOUT 51 YEARS RESPECTIVELY, RESIDENT AT SAUNDANE (SADAK), TALUKA MALEGAON 422203 OCCUPATION : RESELLER OF FERTILIZERS AND SEEDS AND PESTICIDES DO HEREBY STATE ON OATH AS UNDER - ITA NO. 946 /P U N/20 1 6 S HRI GORAKH MOTIRAM PAWAR 3 I HAVE FILED RETURN OF INCOME FO R THE A.Y. 2011 - 12 ON 25/09/2011 DECLARING TOTAL INCOME AT RS. 3,16,000/ - . I AM NOT MUCH EDUCATED AND DOES NOT KNOW INTRINSIC PROVISIONS OF THE INCOME - TAX ACT AS WELL AS ACCOUNTS. THEREFORE, I WAS COMPLETELY DEPENDENT ON CA B. G. JADHAV FOR ALL THE WORK RE LATED TO INCOME TAX INCLUDING REPRESENTATION. THE SCRUTINY ASSESSMENT FOR A.Y. 2011 - 12 WAS THE FIRST ASSESSMENT PROCEEDING IN MY LIFETIME. THEREFORE, I WAS NOT AWARE OF ANY PROCEDURAL ASPECTS OF THE ASSESSMENT PROCEEDINGS. I HAVE REGULARLY MAINTAINED TWO SETS OF BOOKS OF ACCOUNTS I.E. ONE OF MY PROPRIETARY BUSINESS M/S. PAWAR AGRO SERVICES AND ANOTHER OF MY PERSONAL INVESTMENTS, ETC. AND ACCORDINGLY I HAVE PREPARED TWO BALANCE SHEETS. THE SEPARATE FINANCIAL STATEMENTS WERE MAINTAINED FOR BUSINESS M/S. PAWA R AGRO SERVICES AS WELL AS OF INDIVIDUAL FOR THE REASON THAT THE FINANCIAL STATEMENTS ARE REQUIRED TO BE SUBMITTED TO VARIOUS AUTHORITIES I.E. BANK FOR LOAN PURPOSE OR DIFFERENT COMPANIES FOR AGENCY PURPOSE OR AS GUARANTOR TO THIRD PARTIES, ETC. HENCE, TO AVOID THE EXPOSURE OF PERSONAL ASSETS/INVESTMENTS/TRANSACTIONS, ETC. TO THIRD PARTIES AND ALSO FOR LOAN PURPOSES, SEP ARATE FINANCIAL STA TEMEN TS ARE MAINTAINED. THE FINANCIAL STATEMENTS FOR THE YEAR UNDER REVIEW CONSISTED OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF MY PROPRIETARY CONCERN M/S. PAWAR AGRO SERVICES AND THE STATEMENT OF AFFAIRS OF INDIVIDUAL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ASSESSING OFFICER ASKED TO FURNISH THE BANK ACCOUNT STATEMENTS AND BALANCE SHEET FOR THE YEAR UNDER REVIEW. MY COUNSEL CA B. G. JADHAV SUBMITTED ALL THE AVAILABLE BANK ACCOUNT STATEMENTS THAT WERE SHOWN IN THE BALANCE SHEET AS WELL AS THE INDIVIDUAL STATEMENT OF AFFAIRS. HE ALSO SUBMITTED THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF MY PROPRIETARY C ONCERN I.E. M/S. PAWAR AGRO SERVICES. HOWEVER, HE DID NOT SUBMIT THE INDIVIDUAL STATEMENT OF AFFAIRS AS HE THOUGHT THAT ONLY BALANCE SHEET WAS REQUIRED TO BE SUBMITTED. THE ASSESSING OFFICER VERIFIED THE BANK STATEMENTS WITH THE BALANCE SHEET OF M/S. PAWAR AGRO SERVICES AND FOUND THAT SOME OF THE BANK ACCOUNTS ARE NOT DISCLOSED BY THE APPELLANT. CA B. G. JADHAV IS A PRACTICING CHARTERED ACCOUNTANT FROM NASHIK. THE ASSESSMENT PROCEEDINGS IN MY CASE WERE CARRIED OUT AT MALEGAON. CA B. G. JADHAV HAD TO TRAVEL TO MALEGAON FROM NASHIK SPECIALLY TO REPRESENT MY CASE. THUS, HE USED TO CHARGE ME FOR THE SERVICE OF THE ENTIRE DAY INCLUDING TRAVELLING AND OTHER COSTS. I WAS UNABLE TO PAY SUCH HIGH CHARGES AS PROFESSIONAL FEES AND OTHER INCIDENTAL EXPENSES. HENCE, THER E WERE DIFFERENCES BETWEEN ME AND CA B. G. JADHAV. THEREFORE, AROUND THE PERIOD OF JANUARY - FEBRUARY, 2014 I.E. AT THE FAR END OF THE TIME BARRING PERIOD OF ASSESSMENT PROCEEDINGS I HAD APPOINTED MR. C. C. MUTHA, ITP, MALEGAON AS MY NEW CONSULTANT IN PLACE OF CA B. G. JADHAV. AS THERE WERE DIFFERENCES WITH CA B. G. JADHAV, HE DID NOT CO - OPERATE WITH ME AND MY NEW COUNSEL MR. C. C. MUTHA, ITP. MR. C. C. MUTHA AND HIS SON MR. SUNY MUTHA WERE UNAWARE OF EXISTENCE OF THE INDIVIDUAL STATEMENT OF AFFAIRS OF THE A PPELLANT AND THE ACTUAL FACTS OF THE CASE AS ALL THE NECESSARY INFORMATION AND DOCUMENTS REQUIRED FOR REPRESENTING THE CASE WERE NOT AVAILABLE WITH THEM AT THE TIME OF THE ASSESSMENT PROCEEDINGS. THEY HAVE PARTICIPATED IN THE ASSESSMENT PROCEEDINGS JUST TO COOPERATE ME AT THEIR LEVEL BEST. THEREFORE, DUE TO LACK OF KNOWLEDGE OF THE FINANCIAL STATEMENTS, MR. C. C. MUTHA AND MR. SUNY MUTHA WERE UNABLE TO PRODUCE SOME OF THE EVIDENCES AT THE TIME OF ASSESSMENT PROCEEDINGS. MR. MUTHA, ITP ACCEPTED THE ADDITIONS ON THE BASIS OF INCORRECT FACTS AS HE WAS UNAWARE OF THE FACTS THAT THE BANK ACCOUNT STATEMENTS, ETC. IN RESPECT OF WHICH ADDITION IS MADE FOR THE REASON THAT NOT DISCLOSED IN BALANCE SHEET, WHICH IN FACT WELL DISCLOSED IN THE PERSONAL STATEMENT OF AFFAIR S. I ALSO ACCEPTED THE SAME, BECAUSE I DON'T HAVE KNOWLEDGE OF ACCOUNTS AS WELL AS INCOME - TAX PROCEEDINGS AND I HAVE ACCEPTED THE SAME UNDER MISTAKEN BELIEF AS MENTIONED ABOVE. DUE TO THIS, MY ASSESSMENT U/S. 143(3) OF THE ACT WAS COMPLETED ON 06/03/2014 A SSESSING INCOME AT RS.37,48,850/ - BY MAKING FOLLOWING ADDITIONS/ DISALLOWANCES - ITA NO. 946 /P U N/20 1 6 S HRI GORAKH MOTIRAM PAWAR 4 1. ADDITION OF RS.28,19,433/ - ON ACCOUNT OF CREDIT BALANCE IN THE BANK OF MAHARASHTRA, SAUNDANE BRANCH IN CURRENT AND SAVINGS ACCOUNTS. 2. ADDITION OF RS.48,231/ - ON AC COUNT OF DIFFERENCE IN THE BALANCE IN CURRENT ACCOUNT WITH BANK OF MAHARASHTRA, LAKHMAPUR 3. ADDITION OF RS.62,950/ - ON ACCOUNT OF GROSS PROFIT ON CREDIT IN THE BANK OF MAHARASHTRA, SAUNDANE BRANCH IN CURRENT AND SAVINGS ACCOUNTS 4. ADDITION OF RS.4,45,1 36/ - ON ACCOUNT OF DIFFERENCE IN BALANCE OF SUNDRY CREDITORS 5. DISALLOWANCE OF RS.15,000/ - OUT OF MOTOR CYCLE PETROL EXPENSES, TELEPHONE & MOBILE EXPENSES , TRAVELLING EXPENSES. 6. ADDITION OF RS.40,000/ - ON ACCOUNT OF HOUSEHOLD EXPENSES 7. DISALLOWANCE OF CLAIM OF RS.2,100/ - ON ACCOUNT OF DONATION PAID. AGGRIEVED BY THE SAID DISALLOWANCES/ADDITIONS, I FILED AN APPEAL BEFORE CIT(A) - I, NASHIK AGAINST THE ORDER OF ASSESSING OFFICER AND APPOINTED NEW COUNSEL TO REPRESENT MY CASE BEFORE CIT (A). HOWEVER, THE ALL DOCUMENTS AND EVIDENCES OF THE CASE WERE WITH MR. B. G. JADHAV. AFTER THE FREQUENT FOLLOW UPS AND SERIOUS EFFORTS TO MAKE OUT THE DIFFERENCES WITH MR. B. G. JADHAV, I HAVE MANAGED TO GET ALL THE RECORD FROM HIM. HOWEVER, BY THE SAID TIME SOME NOTIC ES OF HEARING WERE ALREADY ISSUED BY THE CIT (A) - 1, NASHIK. I IMMEDIATELY HANDED OVER THE DOCUMENTS TO MY NEWLY APPOINTED COUNSEL. I AM RESIDING AT MALEGAON AND MY COUNSEL WAS SITUATED AT NASHIK, THEREFORE, AS PER TELEPHONIC DISCUSSION WITH ME, THE NEW C OUNSEL HAS ALSO FILED AN APPLICATION FOR ADJOURNMENT TO CIT (A) - 1, NASHIK AS HE WAS REQUIRING SOME TIME TO STUDY THE FACTS OF THE CASE. HOWEVER, THE HONOURABLE COMMISSIONER OF INCOME TAX (APPEALS) - I, NASHIK HAS PASSED THE ORDER APPEALED AGAINST EX - PART Y. THEREFORE, THE NEW COUNSEL COULD NOT PRODUCE ANY DOCUMENTS BEFORE THE HON'BLE COMMISSIONER OF INCOME TAX (APPEALS) - I , NASHIK. SD/ - (GORAKH MOTIRAM PAWAR) DEPONENT VERIFICATION I, GORAKH MOTIRAM PAWAR, DO HEREBY STATE THAT I AM MAJOR AND COMPETENT TO MAKE THIS AFFIDAVIT AND I FURTHER STATE THAT WHATEVER STATED HEREINABOVE IS TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE AND BELIEF. SD/ - (GORAKH MOTIRAM PAWAR) 6. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WHERE THE ASSESSEE HAS EXPLAINED HIS INABILITY TO APPEAR BEFORE THE CIT(A) AND FILE D NECESSARY DETAILS, THERE IS MERIT IN THE PLEA OF ASSESSEE. ACCORDINGLY, THE ADDITIONAL GROUND OF APPEAL AFTER BEING ADMITTED, IS DECIDED IN FAVOUR OF THE ITA NO. 946 /P U N/20 1 6 S HRI GORAKH MOTIRAM PAWAR 5 ASSESSEE AND THE MATTER IS RESTORED BAC K TO THE FILE OF CIT(A) TO DECIDE THE ISSUE ON MERITS IN RESPECT OF EACH OF THE ADDITIONS. THE ASSESSEE IS DIRECTED TO FILE NECESSARY EVIDENCES BEFORE THE CIT(A) IN ORDER TO ENABLE HIM TO ADJUDICATE THE ISSUES ON MERITS. THE ADDITIONAL GROUND OF APPEAL R AISED BY THE ASSESSEE IS THUS, ALLOWED FOR STATISTICAL PURPOSES. SINCE THE MATTER IS BEING SET ASIDE TO THE FILE OF CIT(A), THE GROUNDS OF APPEAL RAISED ON MERITS BECOME ACADEMIC AND THE SAME ARE DISMISSED. 7 . IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 26 TH DAY OF MAY , 201 7 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 26 TH MAY , 201 7 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 1 , NASHIK ; 4. / THE PR. CIT - 1 , NASHIK ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COP Y // / ASSISTANT REGISTRAR, , / ITAT, PUNE