M/s Star Agency, Purba Medinipur V. ITO, WARD-27(2), Purba Medinipur

MA 178/KOL/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1727 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 29-08-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: SUKUMAR MONDAL
• Keywords: Principle of natural justice
• Section: 250; 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH (SMC), KOLKATA [BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT] M.A. NO. 178/KOL/2019 (ARISING OUT OF ITA NO. 337/KOL/2016) ASSESSMENT YEAR: 2006-07 M/S. STAR AGENCY................................................................................................................APPELLANT ERSTWHILE PARTNER, DILIP KUMAR DAS, NETAJI SUBHASH ROAD, CONTAI, PURBA MEDINIPUR 721 401. [PAN: AAOFS 5724 M] ITO, WARD 27(2), HALDIA.....................................RESPONDENT (FORMERLY ITO WARD 2) HALDIA. APPEARANCES BY: SHRI SUKUMAR MONDAL, AR APPEARING ON BEHALF OF THE ASSESSEE. SMT. RANU BISWAS, ADDL. CIT APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : DECEMBER 06, 2019 DATE OF PRONOUNCING THE ORDER : DECEMBER 06, 2019 ORDER PER P.M. JAGTAP, VICE-PRESIDENT BY THIS MISCELLANEOUS APPLICATION, THE ASSESSEE IS SEEKING RECTIFICATION OF THE MISTAKES ALLEGED TO HAVE CREPT IN THE ORDER OF THE TRIBUNAL BEING ITA NO. 337/KOL/2016 READ WITH M.A. NO. 33/KOL/2017 DATED JULY 28, 2017. 2. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS SUBMITTED BY THE ASSESSEE IN THE PRESENT MISCELLANEOUS APPLICATION AND FURTHER REITERATED BY THE LEARNED COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE THE TRIBUNAL, THE APPEAL FILED BY THE ASSESSEE BEING ITA NO. 337/KOL/2016 WAS DISPOSED OF BY THE TRIBUNAL VIDE ITS ORDER DATED MAY 06, 2016 WITHOUT CONSIDERING THE WRITTEN SUBMISSION FILED BY THE ASSESSEE AND OVERLOOKING THE FOLLOWING FACTS: 2 MA NO. 178/KOL/2019 ASSESSMENT YEAR: 2006-07 M/S. STAR AGENCY (A) THE ASSESSMENT PROCEEDINGS CULMINATING TO PASSING THE ORIGINAL ASSESSMENT ORDER WAS BASED ON THE RETURN OF INCOME FILED BY THE ERSTWHILE PARTNER OF THE DISSOLVED FIRM, SHRI SOM PRAKASH DUTTA WHO WAS RESPONSIBLE FOR LOOKING INTO THE FINANCE AND TAX COMPLIANCE WITH DIFFERENT STATE AND CENTRAL GOVERNMENT TAXATION AUTHORITIES, WITH FABRICATED BOOKS WHILE THE ORIGINAL DOCUMENTS ARE STILL WITH THE APPELLANT WHICH WERE NEVER PRODUCED BEFORE THE ASSESSING OFFICER IN COURSE OF THE ASSESSMENT PROCEEDING OF THE CASE. (B) THE FACTS WERE ALSO BROUGHT BEFORE THE LD. CIT(A) & KOLKATA 7, KOLKATA IN COURSE OF APPELLATE PROCEEDINGS VIDE GROUNDS OF APPEALS, WHICH WAS ALSO IGNORED. (C) HOWEVER, LD. CIT(A) MADE RECORDS OF THE SUBMISSION IN HIS ORDER U/S 250 OF THE INCOME TAX ACT, 1961 DATED 09.12.2015 VIDE PARA 1.3 PAGE 4 OF THE ORDER. (D) LETTERS OF THE ASSESSING OFFICER IN COURSE OF REMAND PROCEEDING WAS NOT RECEIVED BY THE APPELLANT AS HE WAS NOT PRESENT IN THE BUSINESS PREMISES DUE TO HIS ILL HEALTH AND THE EMPLOYEES DID NOT UNDERSTOOD THE GRAVITY OF THE NOTICES AND ALSO DID NOT INTIMATED THE APPELLANT. (E) PRAYER OF THE APPELLANT VIDE HIS LETTER 30.12.2014 FILED BEFORE THE ASSESSING OFFICER TO ALLOW FURTHER OPPORTUNITY TO SUBMIT THE ORIGINAL BOOKS OF ACCOUNTS IN COURSE OF REMAND PROCEEDINGS WERE IGNORED BY THE ASSESSING OFFICER ALSO, WHICH IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. (F) LD. CIT(A) KOLKATA 7, KOLKATA HAS NOT GIVEN ANY OPPORTUNITY TO THE APPELLANT FOR PRODUCTION OF THE ORIGINAL BOOKS FOR VERIFICATION BUT PASSED ORDER REJECTING THE GROUNDS TAKEN BY THE APPELLANT. (G) MOST UNFORTUNATE IS THE FACT THAT THE AUTHORISED REPRESENTATIVE WHO WAS AUTHORISED TO FILED SECOND APPEAL BEFORE THE HONBLE BENCH ALSO NEITHER MADE THIS VITAL FACT AS GROUNDS OF APPEAL IN THE SECOND APPEAL FILED BEFORE THE HONBLE BENCH NOR BROUGHT THE MATTER TO YOUR ATTENTION IN COURSE OF HEARING OF THE CASE. THUS IT IS MISTAKE COMMITTED IN AN APPLICATION UNDER SECTION 256(1) RECTIFIABLE UNDER INHERENT POWERS. 3. IT IS HOWEVER OBSERVED THAT THE APPEAL OF THE ASSESSEE BEING ITA NO. 337/KOL/2016 WAS ARGUED BEFORE THE TRIBUNAL BY THE AUTHORISED 3 MA NO. 178/KOL/2019 ASSESSMENT YEAR: 2006-07 M/S. STAR AGENCY REPRESENTATIVE OF THE ASSESSEE AND AFTER CONSIDERING THE ARGUMENTS RAISED BY HIM AS WELL AS BY THE LD. DR AND PERUSING THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE APPEAL OF THE ASSESSEE WAS DECIDED BY THE TRIBUNAL VIDE PARA NO. 4 OF ITS ORDER DATED MAY 6, 2016 AS UNDER: 4. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS RIGHTLY SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, WHEN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE WERE REJECTED BY THE ASSESSING OFFICER UNDER SECTION 145(3), THERE WAS NO JUSTIFICATION ON HIS PART TO RELY ON THE PURCHASES SHOWN BY THE ASSESSEE IN THE SAID BOOKS TO WORK OUT THE DIFFERENCE AND MAKE ADDITION ON ACCOUNT OF SUCH DIFFERENCE. HAVING REJECTED THE BOOKS OF ACCOUNT, THE ASSESSING OFFICER, IN MY OPINION, SHOULD HAVE RESORTED TO THE ESTIMATION OF INCOME INDEPENDENT OF BOOKS OF ACCOUNT BY FOLLOWING THE GENERALLY ACCEPTED METHOD BY APPLYING GROSS PROFIT OR NET PROFIT RATE ON THE ESTIMATED TURNOVER AND THIS IS NOT DISPUTED EVEN BY THE LD. D.R. AT THE TIME OF HEARING BEFORE ME. IN THIS REGARD, IT IS OBSERVED THAT THE CASE OF INFLATION OF PURCHASES WAS INDEED MADE OUT BY THE ASSESSING OFFICER BY ESTABLISHING THAT THE PURCHASES SHOWN BY THE ASSESSEE WERE ACTUALLY MORE THAN THAT SHOWN BY THE CONCERNED SUPPLIERS THEREBY MAKING IT CLEAR THAT THE GROSS PROFIT RATE OF 1.90% DECLARED BY THE ASSESSEE WAS ON THE LOWER SIDE. SIMILARLY THE CASE OF UNDISCLOSED PURCHASES WAS ALSO ESTABLISHED BY THE ASSESSING OFFICER ON THE BASIS OF INQUIRY DIRECTLY MADE BY HIM WITH ONE OF THE SUPPLIERS OF THE ASSESSEE, NAMELY LIFE DRUG HOUSE PVT. LIMITED, WHICH IS SUFFICIENT TO SHOW THAT THE ASSESSEE WAS INDULGING IN SOME BUSINESS OUTSIDE THE BOOKS OF ACCOUNT. HAVING REGARD TO ALL THESE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT IT WOULD BE FAIR AND REASONABLE TO ESTIMATE THE TURNOVER OF THE ASSESSEES BUSINESS AT RS.2.50 CRORES AS AGAINST RS.2.28 CRORES AND APPLY HIGHER GROSS PROFIT RATE OF 3% INSTEAD OF 1.9% DECLARED BY THE ASSESSEE. THIS WOULD RESULT IN TRADING ADDITION OF ABOUT RS.3.20 LAKHS AS AGAINST THE ADDITIONS OF RS.9.45 LAKHS MADE BY THE ASSESSING OFFICER. THE ASSESSING OFFICER IS ACCORDINGLY DIRECTED TO RE-COMPUTE THE INCOME OF THE ASSESSEE. 4. AS IS EVIDENT FROM THE AFORESAID OPERATIVE PORTION OF THE ORDER OF THE TRIBUNAL, THE VARIOUS ISSUES NOW POINTED OUT BY THE ASSESSEE IN THE PRESENT MISCELLANEOUS APPLICATION WERE NEVER RAISED BEFORE THE 4 MA NO. 178/KOL/2019 ASSESSMENT YEAR: 2006-07 M/S. STAR AGENCY TRIBUNAL AND THE TRIBUNAL THEREFORE, HAD NO OCCASION TO CONSIDER THE SAME. IT IS ALSO PERTINENT NOTE HERE THAT THE SCOPE OF PROCEEDINGS U/S 254(2) IS LIMITED TO RECTIFY THE MISTAKES IN THE ORDER OF THE TRIBUNAL WHICH ARE APPARENT FROM RECORD AND THE NEW CONTENTIONS, WHICH WERE NOT RAISED DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE TRIBUNAL, CANNOT BE RAISED DURING THE COURSE OF RECTIFICATION PROCEEDINGS. THE NON-CONSIDERATION OF THE CONTENTIONS WHICH WERE NOT AT ALL RAISED DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE TRIBUNAL CANNOT, THEREFORE, BE SAID TO BE A MISTAKE APPARENT FROM RECORD IN THE ORDER OF THE TRIBUNAL. I, THEREFORE, FIND NO MERIT IN THIS MISCELLANEOUS APPLICATION FILED BY THE ASSESSEES AND DISMISS THE SAME. 5. IN THE RESULT, THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH DECEMBER, 2019. SD/- (P.M. JAGTAP) VICE PRESIDENT DATED: 06/12/2019 BISWAJIT, SR. PS COPY OF ORDER FORWARDED TO: 1. M/S. STAR AGENCY. 2. ITO, WARD 27(2), HALDIA. 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY, BY ORDER, ASSISTANT REGISTRAR / H.O.O. ITAT, KOLKATA