Ms. Radhika R.Desai, V. The Dy.CIT., Cent.Circle-1,

ITSSA 24/AHD/2006

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 8883 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 16 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 11-02-2013
• Assessment Year: misc
• Appeal Filed On: 27-01-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G P MEHTA
• Keywords: Right to appeal

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER IT(SS)A. NO. 24/AHD/2006. BLOCK PERIOD : 01-04-1995 TO 19-12-2001. MS. RADHIKA R. DESAI, DY. COMMISSIONER OF C/O M/S G.P. MEHTA & CO., C.AS., VS. INCOME-TAX, 807, TULSIANI CHAMBERS, CENTRAL CIRCLE-1, 217, NARIMAN POINT, BARODA. MUMBAI 400 021. APPELLANT. RESPONDENT . APPELLANT BY : SHRI G.P. MEHTA. RESPONDENT BY : SHRI PAVAN VED. DATE OF HEARI NG : 11-02-2013 DATE OF PRONOUNCE MENT : 13 -02-2013 O R D E R PER I.P. BANSAL, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE WHICH IS DI RECTED AGAINST THE ORDER PASSED BY LEARNED CIT(APPEALS)-IV, AHMEDABAD DATED 23 RD DECEMBER, 2005. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN HER AP PEAL: 1. THAT LD. CIT(A)-IV, AHMEDABAD HAS ERRED IN LAW AND IN FACTS IN HOLDING THAT THE APPEAL ORDER DATED 13.02.2004 DISM ISSING THE APPEAL BY THE CIT(A) ON ACCOUNT OF NON-PAYMENT OF ADMITTED TAXES CAN BE RESTORED TO THE CIT(A) ONLY BY THE HONBLE TRIBUNAL AND THAT THE CIT(A) HAS NO POWER TO RECALL OWN ORDER DISMISSING THE APPEAL ON SUCH GROUNDS EVEN AFTER THE TAX IS PAID AND THE DEF ECT RESULTING INTO REJECTION OF APPEAL BEING CURED BY FILING ANOTHER A PPEAL. THE LD. CIT(A)-IV, AHMEDABAD OUGHT TO HAVE HELD THAT THE PO WERS OF CIT(A) IN THIS REGARD ARE NOT TO DEPRIVE THE APPELLANT OF HIS RIGHT TO APPEAL BUT 2 IT(SS)ANO.24/ADH/2006. TO SERVE THE OBJECT OF RIGHT TO APPEAL TO AN ASSESS EE AND, THEREFORE, THE LD. CIT(A)-IV, AHMEDABAD BE DIRECTED TO HOLD THAT O N SATISFACTION OF CONDITIONS PRESCRIBED IN SEC. 249(4)(A), THE APPEAL FILED ON 03.02.2005 WAS TO BE ADMITTED FOR ADJUDICATION. 2. THAT LD. CIT(A)-IV, AHMEDABAD HAS ERRED IN LAW AND IN FACTS IN TAKING VIEW THAT THE PROVISIONS OF SEC. 249(4) CAN BE INVOKED EVEN IN THE CASES WHERE THE LIABILITY ON ACCOUNT OF INCOME OFFERED IN THE RETURN OF INCOME ITSELF IS DISPUTED. THE LD. CIT(A)-IV, AH MEDABAD OUGHT TO HAVE HELD THAT THE PROVISIONS OF SEC. 249(4) DO NOT APPLY TO APPEALS WHERE THE INCOME RETURNED IS IN DISPUTE AND, THEREF ORE, THE APPEAL WAS TO BE ADMITTED. 3. THE LD. CIT(A)-IV, AHMEDABAD HAS ERRED IN LAW AND I N FACTS NIN REJECTING THE APPELLANTS PRAYER FOR ADMISSION OF A PPEAL FILED ON 03.02.2005 BY CONDONING THE DELAY WHICH AROSE OUT O F REASONABLE AND SUFFICIENT CAUSE. THE LD. CIT(A)-IV, AHMEDABAD OUGH T TO HAVE APPRECIATED THAT THE SEVERAL FINANCIAL POSITION ARI SING OUT OF ATTACHMENT AND SEIZURE OF ASSETS BELONGING TO THE A PPELLANT PREVENTED THE APPELLANT FROM PAYMENT OF ADMITTED TAX WHICH CO NSTITUTED A REASONABLE AND SUFFICIENT GROUND IN FILING THE APPE AL BELATEDLY AND THE DELAY ARISING THEREOF IN FILING THE APPEAL IS CONDO NABLE. THE LD. CIT(A)-IV, AHMEDABAD BE DIRECTED TO ADMIT THE APPEA L FILED ON 03.02.2005 BY CONDONING THE DELAY. 4. THE LD. CIT(A)-IV, AHMEDABAD BE DIRECTED TO ADJUDIC ATE THE VARIOUS GROUNDS OF APPEAL ARISING OUT OF THE ASSESSMENT ORD ER DATED 31.12.2003 MADE U/S. 158BC R.W.S. 158BG. 2. THE APPEAL FILED BY THE ASSESSEE ON 3 RD FEBRUARY, 2005 HAS BEEN DISMISSED BY CIT(APPEALS) ON ACCOUNT OF APPLICATION OF SECTIO N 249(4) OF INCOME-TAX ACT, 1961. ACCORDING TO SECTION 249(4), APPEAL CANNOT BE FILED TO THE COMMISSIONER OF INCOME-TAX (APPEALS) WHERE THE ASSESSEE HAS NOT PAI D TAX DUE ON THE INCOME RETURNED BY HIM. THE ASSESSEE HAD FILED HER RETURN OF INCOME AT RS.31,11,813/- AND WAS ASSESSED AT RS.71,35,129/- AGAINST WHICH THE AP PEAL WAS FILED BEFORE LEARNED 3 IT(SS)ANO.24/ADH/2006. CIT(APPEALS) ON 3 RD FEBRUARY, 2005. LEARNED CIT(APPEALS) HAS ISSUED VA RIOUS NOTICES BY SPEED POST WHICH ARE LISTED AT PAGE 2 OF THE IMPUGNED ORDER. LEARNED CIT(APPEALS) OBSERVED FROM THE APPEAL MEMO ALONG W ITH WHICH A LETTER DATED 31 ST JANUARY, 2005 WAS FILED IN WHICH THE ASSESSEE HAD R EQUESTED CIT(APPEALS) TO RESTORE THE APPEAL WHICH WAS EARLIER REJECTED BY OR DER DATED 13 TH FEBRUARY, 2004 FOR NON-PAYMENT OF THE AGREED TAX U/S 130A OF THE ACT. LEARNED CIT(APPEALS) IN THE IMPUGNED ORDER HAS OBSERVED THAT AT THE TIME OF DIS POSAL OF THE APPEAL THE REQUIRED PAYMENT OF TAXES WAS NOT PAID DUE TO BAD FINANCIAL POSITION AND IT WAS SUBSEQUENTLY PAID ON 25 TH JUNE, 2004 (DATE OF PAYMENT HAS WRONGLY BEEN MENTIONED AS 25 TH JUNE, 2004 BUT ACTUALLY IT IS 30 TH JUNE, 2004). IT WAS SUBMITTED THAT SINCE THE PAYMENT HAS BEEN MADE, THE REASON FO R REJECTION OF THE APPEAL NO LONGER SUSTAINED AND REFERENCE WAS MADE TO THE DECI SION OF ADHEDABAD ITAT IN THE CASE OF J.K. CHATURVEDI VS. ACIT 82 TTJ 284 (AH D) WHEREIN THE TRIBUNAL UNDER IDENTICAL CIRCUMSTANCES HAS HELD THAT DEFECT ARISING DUE TO NON-COMPLIANCE OF SECTION 249(4) IS CURABLE ONE AND IN A GIVEN CASE I F THE TRIBUNAL IS SATISFIED THAT THERE EXIST SUFFICIENT REASONS FOR CURING SUCH DEFE CT AFTER THE EXPIRY OF LIMITATION, IT WOULD BE IN THE REALM OF TRIBUNALS DISCRETION TO R ESTORE SUCH MATTER TO THE CIT(APPEALS) FOR DECIDING THE CONTROVERSY ON MERITS . IT WAS HELD THAT APPEAL IN VIOLATION OF 249(4) WOULD BE TERMED AS DEFECTIVE ON E AND THE MOMENT DEFECT IS CURED THEN THIS CAN BE DISPOSED OF ON MERIT SUBJEC T TO LIMITATION. HOWEVER, LEARNED CIT(APPEALS) DID NOT ACCEPT SUCH SUBMISSION OF THE ASSESSEE ON THE GROUND THAT THE CASE LAW RELIED UPON BY ASSESSEE IS DISTINGUISHABLE AND CIT(APPEALS) HAS NO POWER TO RECALL HIS OR HER OWN ORDER. IN THIS MANNE R, LEARNED CIT(APPEALS) HAS CONSIDERED THE APPEAL FILED BY THE ASSESSEE AS NON- MAINTAINABLE. 3. AFTER NARRATING THE FACTS IT WAS SUBMITTED BY TH E LEARNED A.R. THAT AS THE DEFECT OF NON-PAYMENT WAS REMOVED, CIT(APPEALS), IN THE INTEREST OF JUSTICE, 4 IT(SS)ANO.24/ADH/2006. SHOULD HAVE ADMITTED THE APPEAL TO DECIDE THE SAME ON MERITS. HE ALSO RELIED UPON THE DECISION OF TRIBUNAL IN THE CASE OF BHUMIRAJ C ONSTRUCTION VS. ADDL.CIT 131 ITD 406 WHEREIN ALSO SIMILAR PROPOSITION HAS BEEN L AID DOWN AND IT WAS HELD THAT IF THE APPEAL IS FILED WITHOUT PAYMENT OF TAX ON RETUR NED INCOME BUT SUBSEQUENTLY THE REQUIRED AMOUNT OF TAX IS PAID, THE APPEAL SHALL BE ADMITTED ON PAYMENT OF TAX AND TAKEN UP FOR HEARING. IN THE SAID CASE, IT WAS FOUN D THAT ASSESSEE HAD PAID THE TAX DUE ON THE INCOME RETURNED ALBEIT AFTER THE DISPOS AL OF THE APPEAL BY CIT(APPEALS). ON SUCH PAYMENT, THE DEFECT IN THE AP PEAL DUE TO NON-COMPLIANCE OF DIRECTORY REQUIREMENT OF PAYING SUCH TAX BEFORE FIL ING OF THE APPEAL, STOOD REMOVED. EX.CONSEQUENTI THE APPEAL SHOULD HAVE BEE N REVIVED BY THE FIRST APPELLATE AUTHORITY AND IN THE SAID CIRCUMSTANCES, THE ORDER OF CIT(APPEALS) WAS SET ASIDE AND THE MATTER WAS RESTORED TO THE FILE O F CIT(APPEALS) FOR DISPOSAL OF APPEAL ON MERITS. THUS IT WAS CONTENDED BY LEARNED A.R. THAT AS THE ASSESSEE HAS REMOVED THE DEFICIENCY, LEARNED CIT(APPEALS) SHOULD HAVE ADMITTED THE APPEAL OF THE ASSESSEE AND DECISION WAS REQUIRED TO BE PASSED ON MERITS. 4. ON THE OTHER HAND, LEARNED DR STRONGLY CONTESTED TO THE SUBMISSIONS MADE BY LEARNED A.R. HE SUBMITTED THAT THE ASSESSEE DID NOT APPEAR BEFORE CIT(APPEALS) IN RESPONSE TO SEVERAL NOTICES ISSUED BY HIM AND, THEREFORE, LEARNED CIT(APPEALS) WAS RIGHT IN DISMISSING THE APPEAL FIL ED BY THE ASSESSEE. 5. IN THE REJOINDER, IT WAS SUBMITTED BY LEARNED A. R. THAT DUE TO CHANGE OF ADDRESS, ASSESSEE COULD NOT COMPLY WITH THE NOTICES ISSUED BY LEARNED CIT(APPEALS). IT WAS SUBMITTED THAT NEW ADDRESS WAS INFORMED AND ASSESSEE UNDERTAKES THAT SHE WILL EXTEND FULL COOPERATION TO THE APPELLATE PROCEEDINGS IF THE MATTER IS RESTORED BACK TO THE FILE OF CIT(APPEALS) . 5 IT(SS)ANO.24/ADH/2006. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. THE APPEAL FILED BY THE ASSESSEE WAS EAR LIER DISPOSED OF BY CIT(APPEALS) VIDE HIS ORDER DATED 13 TH FEBRUARY, 2004 ON THE GROUND OF APPLICATION OF SECTION 249(4)(A). THE ASSESSEE PLEA DED FINANCIAL CONTINGENCY TO MAKE THE PAYMENT OF TAX ON RETURNED INCOME. HOWEVER , SUBSEQUENT OF PASSING THE ORDER DATED 13 TH FEBRUARY, 2004, ASSESSEE HAS MADE THE PAYMENT OF T AX ON RETURNED INCOME WHICH IS AMOUNTED TO RS.6,78,456/- ON 30 TH JUNE, 2004, COPY FOR SUCH RECEIPT HAS ALREADY BEEN FILED. THE ASSESSEE REQUES TED THE LEARNED CIT(APPEALS) FOR RECALLING OF THE ORDER AS THE DEFECT OF NON-PAYMENT OF TAX ON RETURNED INCOME WAS REMOVED. HOWEVER, LEARNED CIT(APPEALS) AFTER DISTIN GUISHING AFOREMENTIONED DECISION OF AHMEDABAD ITAT HAS AGAIN DISMISSED THE APPEAL FILED BY THE ASSESSEE ON GROUND OF APPLICATION OF SECTION 249(4). IN THE SECOND DECISION WHICH IS RENDERED BY COORDINATE BENCHE OF MUMBAI ITAT, A PR OPOSITION HAS BEEN LAID DOWN THAT CIT(APPEALS) SHOULD REVIVE THE APPEAL EA RLIER DISMISSED ON ACCOUNT OF APPLICATION OF SECTION 249(4), IF ASSESSEE HAS REM OVED THE DEFECT OF PAYMENT OF TAX ON RETURNED INCOME. NO CONTRARY DECISION HAS BEEN B ROUGHT TO OUR NOTICE. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF C OORDINATE BENCH IN THE CASE OF BHUMIRAJ CONSTRUCTIONS VS. ADDL CIT (SUPRA), WE SET ASIDE THE IMPUGNED ORDERS OF LEARNED CIT(APPEALS) VIDE WHICH THE APPEAL FILED BY THE ASSESSEE HAS BEEN DISMISSED ON ACCOUNT OF APPLICATION OF SECTION 249( 4) AND THE MATTER IS RESTORED BACK TO THE FILE OF LEARNED CIT(APPEALS) FOR DISPOS AL OF THE APPEAL ON MERITS AS THE ASSESSEE HAS ALREADY MADE THE PAYMENT OF TAXES ON RETURNED INCOME. WITH THESE OBSERVATIONS, WE ALLOW THE APPEAL FILED BY THE ASSE SSEE AND DIRECT THE LEARNED CIT(APPEALS) TO DECIDE THE APPEAL FILED BY THE ASSE SSEE ON MERITS AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF HEARING. 6 IT(SS)ANO.24/ADH/2006. 7. ACCORDINGLY, APPEAL FILED BY THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED ON THIS 13 TH DAY OF FEBRUARY, 2013. SD/- SD/- (RAJENDRA SINGH) (I.P. BANSAL) ACCOUNTANT MEMBER JUDIC IAL MEMBER MUMBAI, DATED: 13 TH FEBRUARY, 2013. WAKODE COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, G-BENCH. (TRUE COPY) BY ORDER ASSTT. REGIST RAR, ITAT, MUMBAI BENCHES, MUMBAI.