COLLINS & CO., GOA V. ACIT CEN CIR-47, MUMBAI

ITSSA 81/MUM/2009

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 8777 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-11-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-11-2010
• Assessment Year: misc
• Appeal Filed On: 07-10-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AJIT KUMAR SINHA
• Keywords: Period of limitation; Assessment record; Time period of passing order; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: MUMBAI BEFORE SHRI R. S. PADVEKAR, JUDICIAL MEMBER AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER IT(SS) NOS.80 AND 81/MUM/2009 BLOCK PERIOD 1/4/1996 TO 18/2/2003 M/S. COLLINS AND CO., C/O. CLUB CUBANA, ARPORA, BARBEZ, GOA . ASSESSEE VS ACIT CENTRAL CIRCLE 47, MUMBAI REVENUE PAN: AABFC 8965 B ASSESSEE BY : NONE REVENUE BY: SHRI AJIT KUMAR SINHA O R D E R PER R. S. PADVEKAR, JM THESE TWO APPEALS ARE FILED BY THE ASSESSEE CHALLEN GING THE IMPUGNED ORDERS OF LD. CIT (A)S CENTRAL-III MUMBAI DATED 7.08.2009. NONE WAS PRESENT FOR THE ASSESSEE. IT IS SEEN THAT THE ORIGINAL NOTICE OF HEARING HAS BEEN SERVED ON THE ASSESSEE BY RPAD AND THE ACKNOWLEDGMENT OF THE SAME IS PLACED ON RECORD. WH EN THIS APPEAL IS CALLED FOR THE HEARING, NONE WAS PRESENT FOR THE AS SESSEE AND LD. D.R. WAS PRESENT FOR THE REVENUE, WE ARE, THEREFORE, OF THE OPINION THAT THE IT(SS) 80 AND 81/MUM/2009 M/S. COLLINS AND CO. 2 ASSESSEE IS NOT INTERESTED IN PROSECUTING THE APPEA LS. WE, THEREFORE, DECIDE THESE APPEALS AS PER RECORD AVAILABLE BEFORE US. 2. WE FIRST TAKE THE ASSESSEES APPEAL IN IT(SS) NO .80/MUM/2009 FOR DISPOSAL. 3. THE FIRST GROUND OF APPEAL IS IN RESPECT OF REFU SAL OF THE LD. CIT (A) TO CONDONE THE DELAY IN FILING THE APPEAL. 4. THE BRIEF FACTS WHICH REVEAL FROM THE RECORD ARE AS UNDER. A SEARCH ACTION U/S.132(1) OF THE ACT WAS CONDUCTED IN THE C ASE OF SUNJEET ADVERTISING PVT. LTD. (IN SHORT SAPL) ON 18.2.2003 FROM WHICH IT WAS REVEALED THAT ASSESSEE-COMPANY ISSUED BOGUS ACCOMMO DATION BILLS ON COMMISSION BASIS TO ENABLE PARTIES TO CLAIM BOGUS A DVERTISEMENT EXPENSES. THE A.O., THEREFORE, INITIATED THE PROCE EDINGS AGAINST ASSESSEE U/S.158BD OF THE ACT AND BASED THE ASSESSMENT ORDER DETERMINING THE UNDISCLOSED INCOME OF RS 35,34,300/-. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT (A) BY FILING T HE APPEAL. IT APPEARS THAT THERE WAS INORDINATE DELAY OF THREE YEARS AND 18 DAYS IN FILING THE APPEAL BEFORE THE LD. CIT (A) AND AS PER RECORD BEF ORE US THERE IS NO DISPUTE ON THIS ISSUE. THE ASSESSEE FILED THE PETI TION FOR CONDONATION OF THE DELAY BEFORE THE LD. CIT (A) EXPLAINING THE DEL AY IN FILING THE SAID APPEAL. IT WAS CONTENDED THAT THE BUSINESS OPERATI ON OF THE COMPANY WAS DISCONTINUED SINCE 2003 DUE TO CONTINUED LOSSES AND THE UNIT WAS CLOSED. MOREOVER, THE PARTNERS OF THE FIRM WERE NO T STAND AT ONE PLACE. IT WAS ALSO CONTENDED THAT AS THE PARTNERS WERE RES IDING AT GOA AND CASE WAS FIXED FOR HEARING IN MUMBAI AND HENCE EVEN IF T HE ORDER WAS SERVED AT THE MUMBAI ADDRESS BUT THE ASSESSEE CAME TO KNOW SUCH SERVICES OF NOTICE/ORDER MUCH LATER. EXCEPT THESE GENERAL EXPL ANATIONS, NO FURTHER EXPLANATION WAS GIVEN. THE LD. CIT (A) WAS NOT IMP RESSED WITH THE IT(SS) 80 AND 81/MUM/2009 M/S. COLLINS AND CO. 3 EXPLANATION OF THE ASSESSEE AND HE REFUSED TO CONDO NE THE DELAY AND OPERATIVE PARTS OF THE REASONS ARE AS UNDER:- 'THE ORDER U/S.158BD WAS PASSED ON 21.04.2006 (WITH IN A PERIOD OF ABOUT TWO MONTHS FROM THE ISSUE OF LETTER OF AUT HORISATION ON 10.02.2006) AND STOOD SERVED ON MR. JITENDRA BHAGDE V, AR AND ACCOUNTANT OF THE APPELLANT FIRM ON 24.04.2006. ON PERUSAL OF THE ORDER SHEET ENTRIES, IT IS FURTHER SENT HAT MR. JIT ENDRA BHAGDEV AR HAD REGULARLY APPEARED AND PROCEEDINGS U/S.158BD FO R THE BLOCK PERIOD. THEREFORE, THE FACTS STATED BY THE APPELLA NT IN THE APPLICATION FOR THE CONDONATION OF DELAY ARE NOT CO RRECT. ONCE THE AUTHORISED REPRESENTATIVE WHO HAD REGULARLY ATTENDE D THE PROCEEDINGS BEFORE THE AO WAS SERVE WITH THE ASSESS MENT ORDER, IT IS UNBELIEVABLE THAT THE FATE OF ORDER AND THE DEMA ND RAISED WAS NOT INTIMATED TO THE PARTNERS AND THE APPELLANT FIR M AND DIRECTORS OF THE PARTNER COMPANY REMAINED UNAWARE OF THE ORDER F OR SUCH A LONG TIME. THE PLEA OF BOAFIDE BELIEF THAT ASSESSMENT M UST HAVE BEEN COMPLETED IN FAVOUR OF THE APPELLANT ALSO IS TOTALL Y FALSE. IT SEEMS THAT AFTER SERVICE OF THE ORDER ON MR. JITENDRA BHA GDEV, THE APPELLANT FIRM AND PARTNERS CAME TO KNOW ABOUT THE ORDER BUT TOOK A CONSCIOUS DECISION OF NOT FILING THE APPEAL BEFORE THE DEPARTMENT. THE PLEA THAT DUE TO DISTANCE, THE APPELLANT COMPAN Y COULD NOT CO- ORDINATE WITH THE CA DOES NOT SOUND CONVINCING AS I N MODERN TIMES, ADVANCED TELECOMMUNICATION FACILITIES ARE AVAILABLE AND THE APPELLANTS ACCOUNTANT /AR, MR. JITENDRA BHAGDEV WA S AVAILABLE AT MUMBAI TO CO-ORDINATE WITH THE C.A. AFTER LAPSE OF CONSIDERABLE PERIOD OF THREE YEARS AND EIGHTEEN DAYS, THE APPELL ANT COMPANY SEEMS TO HAVE CHANGED ITS MIND FOR FILING THE APPEA L TO REVIVE THE ISSUE BY APPLYING FOR CONDONATION OF DELAY. PROVIS IONS OF SECTION 249(3) LAY DOWN THAT CIT (A) MAY ADMIT AN APPEAL AF TER THE IT(SS) 80 AND 81/MUM/2009 M/S. COLLINS AND CO. 4 EXPIRATION OF THE LIMITATION PERIOD IF HE IS SATISF IED THAT APPELLANT HAS SUFFICIENT CAUSE FOR CONDONATION OF DELAY. IN VIEW OF THE SERVICE OF THE ORDER ON THE AUTHORISED REPRESENTATIVE AND ACCO UNTANT, MR. JITENDRA BHAGDEV, THE FACTS STATED IN THE PETITION ARE FALSE AND THERE IS NO SUFFICIENT CAUSE FOR CONDONATION OF DELAY. C ONDONATION OF DELAY IN SUCH A CASE WOULD BE AGAINST THE SPIRIT OF PROVISIONS CONTAINED U/S.249(3) OF I.T. ACT. ACCORDINGLY, THE REQUEST FOR THE CONDONATION OF DELAY IS REJECTED AND THE APPEAL IS DISMISSED IN LIMINI. 5. NOW, THE ASSESSEE IS IN APPEAL BEFORE US. WE HA VE PERUSED THE REASONS GIVEN BY THE ASSESSEE TO THE LD. CIT (A). ADMITTEDLY, THE ASSESSEE WAS REPRESENTED BY THE AUTHORISED REPRESEN TATIVE BEFORE THE A.O. IT IS NOT BELIEVABLE THAT EVEN THE ASSESSMENT ORDER WAS SERVED ON THE ASSESSEES OFFICE IN MUMBAI BUT THE PARTNERS W ERE NOT AWARE OF SAME FOR MORE THAN 3 YEARS. WE AGREE WITH THE FINDINGS OF THE LD. CIT (A) THAT THIS IS NOT FIT CASE WHERE INORDINATE DELAY SHOULD BE CONDONED. WE, ACCORDINGLY, CONFIRMED THE ORDER OF THE LD. CIT (A) FOR REFUSING TO CONDONE THE DELAY. ACCORDINGLY, GROUND NO.1 IS DIS MISSED. AS THE APPEAL IS DISMISSED ON THE ISSUE OF THE DELAY ITSEL F, THE GROUND ON THE MERIT DOES NOT SURVIVE. 6. NOW, WE TAKE APPEAL IN IT(SS) NO.81 OF 2009. 7. THE FIRST GROUND OF ASSESSEES APPEAL IS IN RESP ECT OF THE REFUSAL OF THE LD. CIT (A) TO CONDONE THE DELAY OF TWO YEARS A ND FOUR MONTHS IN FILING THE APPEAL. THE FACTS, WHICH REVEALED FROM THE RECORD, ARE AS UNDER. THE ASSESSMENT WAS FRAMED U/S.158BD. THE A .O. INITIATED THE PENALTY PROCEEDINGS U/S.158BD. THE A.O. INITIATED THE PENALTY PROCEEDINGS U/S.158BFA(2) OF THE ACT VIDE ORDER DAT ES 31.10.2206 LEVIED THE PENALTY OF RS 30 LAKHS. THE ASSESSEE CHALLENGE D THE PENALTY ORDER BY IT(SS) 80 AND 81/MUM/2009 M/S. COLLINS AND CO. 5 FILING THE APPEAL BEFORE THE LD. CIT (A) AND THERE WAS DELAY OF TWO YEARS AND FOUR MONTHS IN FILING THE SAID APPEAL. THE ASS ESSEE FILED THE PETITION FOR CONDONATION OF THE DELAY. IN THE SAID PETITION THE ASSESSEE GAVE THE GENERAL REASONS AS GIVEN IN THE CASE OF QUANTUM APP EAL, WHICH WAS REJECTED BY THE LD. CIT (A). THE LD. CIT (A) REJEC TED THE PLEA OF THE ASSESSEE FOR CONDONING THE INORDINATE DELAY AND OPE RATIVE PARTS OF THE REASONS OF THE LD. CIT (A) ARE AS UNDER: I HAVE CONSIDERED THE FACTS AND DO NOT FIND ANY SU BSTANCE IN THE APPELLANTS REQUEST FOR CONDONATION OF DELAY. ON P ERUSAL OF THE ASSESSMENT ORDER, IT SEEN THAT THE ORDER U/S.158BFA (2) STOOD SENT BY POST TO THE APPELLANT AT MUMBAI ADDRESS AS WELL AS TO MR. RAHUL SHAH, MR. DANIEL SHAH AND MR. CHRISTOPHORE SHAH AT GOA ADDRESS. THE ORDER SENT AT GOA ADDRESS STOOD DULY SERVED ON 6.11.2006 AND THE ACKNOWLEDGEMENT SLIPS FORM THE POSTAL DEPARTMEN T ARE AVAILABLE ON ASSESSMENT RECORD. THEREFORE, IT IS INCORRECT S O SAY THAT THE PARTNERS WERE NOT AWARE OF THE ORDER U/S.158BFA(2). THUS THERE REMAINS NO DOUBT THAT ORDER U/S.158BFA(2) STOOD DUL Y SERVED ON THE PARTNERS ON 6.11.2006. AFTER SERVICE OF ORDER ON 6 .11.2006 AT GOA ADDRESS, THE PARTNERS FOR THE REASONS BEST KNOWN TO THE THEM SEEM TO HAVE TAKEN A CONSCIOUS DECISION OF NOT FILING TH E APPEAL AGAINST THE SAID ORDER. NOW, AFTER SUCH AN INORDINATE DELA Y OF MORE THAN TWO YEARS, THE APPELLANT SEEMS TO HAVE CHANGED ITS MIND BY FILING APPEAL ALONG WITH PETITION FOR CONDONATION OF DELAY . PROVISIONS OF SECTION 249(3) LAY DOWN THAT CIT (A) MAY ADMIT AN A PPEAL AFTER THE EXPIRATION OF THE LIMITATION PERIOD IF HE IS SATISF IED THAT APPELLANT HAS SUFFICIENT CAUSE FOR NOT PRESENTING IT WITHIN THAT PERIOD. THUS, THERE HAS TO BE A SUFFICIENT CAUSE FOR CONDONATION OF DEL AY. THE APPELLANT HAS NOT BEEN ABLE TO ADDUCE ANY SOUND REASON FOR DE LAY. THUS, THERE IS NO SUFFICIENT CAUSE FOR CONDONATION OF DEL AY. CONDONATION OF DELAY IN SUCH A CASE WOULD BE AGAINST THE SPIRIT OF PROVISIONS IT(SS) 80 AND 81/MUM/2009 M/S. COLLINS AND CO. 6 CONTAINED U/S.249(3) OF I T ACT. ACCORDINGLY, THE REQUEST FOR THE CONDONATION OF DELAY IS REJECTED AND THE APPEAL IS DISMISSED IN LIMINI. 8. NOW, THE ASSESSEE IS IN APPEAL RAISING THE GRIEV ANCE AGAINST THE ORDER OF LD. CIT (A). WE HAVE HEARD THE LD. D.R. A ND ALSO PERUSED THE REASONS GIVEN BY THE LD. CIT (A) FOR DECLINING TO C ONDONE THE INORDINATE DELAY OF TWO YEARS AND FOUR MONTHS IN FILING THE AP PEAL. IN THIS CASE, THE ORDER PASSED U/S.158BFA(2) WAS SENT BY THE A.O. TO THE ASSESSEE AT THEIR MUMBAI OFFICE ADDRESS AND ALSO TO THE PARTNERS AT T HEIR GOA ADDRESS. THE LD. CIT (A) HAS NOTED THAT AS PER THE ASSESSMEN T RECORD, THE ORDER SENT AT GOA ADDRESS STOOD DULY SERVED ON 6.11.2006 AND ACKNOWLEDGMENT SLIPS FROM THE POSTAL DEPARTMENT ARE AVAILABLE ON THE ASSESSMENT RECORD. AFTER GIVING OUR SERIOUS CONSID ERATION TO THE FINDINGS GIVEN BY THE LD. CIT (A), WE AGREE WITH HIS OPINION THAT NO SUFFICIENT CAUSE IS SHOWN BY THE ASSESSEE FOR THE CONDONATION OF THE INORDINATE DELAY IN FILING THE PRESENT APPEAL. IN OUR OPINION , NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD. CIT (A) ON THE I SSUE OF THE DELAY IN CONDONATION. ACCORDINGLY, GROUND NO.1 IS DISMISSED . THE ISSUE OF DELAY IN CONDONATION IS DECIDED AGAINST THE ASSESSEE HENC E THE GROUND TAKEN ON MERIT DOES NOT SURVIVE FOR ADJUDICATION. 9. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19TH DAY OF N OVEMBER, 2010. SD/- SD/- (RAJENDRA SINGH) ACCOUNTANT MEMBER (R. S. PADVEKAR) JUDICIAL MEMBER MUMBAI, DATE: 19TH NOVEMBER 2010 IT(SS) 80 AND 81/MUM/2009 M/S. COLLINS AND CO. 7 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) II, MUMBAI. 4) THE CIT- MUMBAI CITY-II, MUMBAI. 5) THE D.R. C BENCH, ITAT, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR *CHAVAN I.T.A.T., MUMBAI SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 04.11.2010 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 05.11.2010 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS SR.PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS 7 FILE SENT TO THE BENCH CLERK SR.PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER