TECHNO CRAFT INDUSTRIES (INDIA) LTD, V. DCIT RG 8(30,

MA 433/MUM/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8810 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2004-2005
• Appeal Filed On: 19-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S SUNDER SINGH
• Keywords: Reasonable cause
• Section: 11A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, J, MUMBAI BEFORE S/SHRI DINESH KUMAR AGARWAL (JM) AND SHRI B. RAMAKOTAIAH (A.M ) M.A. NO. 433/MUM/2011 ARISING OUT OF M.A. NO. 319/MUM/2011 (ITA NO. 6376/M/2007) (ASSESSMENT YEAR 2004-05) M/S TECHNOCRAFT INDUSTRIES (INDIA) LTD., A-25 MIDC MAROL INDUSTRIAL AREA, STREET NO. 3, OPP. ESIS HOSPITAL, ANDHERI (E), MUMBAI. 400 093. PAN : AAACT 2724 P VS. DY. COMMISSIONER OF INCOME TAX, RANGE 8(3), AAYAKAR BHAWAN, MUMBAI- 400 020 (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI PANKAJ R. TOPRANI RESPONDENT BY : SHRI D.S. SUNDER SINGH DATE OF HEARING 29-06-2012 DATE OF PRONOUNCEMENT 11-07-2012 O R D E R PER DINESH KUMAR AGARWAL (JM) THIS MISC. APPLICATION FILED BY THE ASSESSEE IS DIR ECTED AGAINST THE ORDER PASSED BY THE TRIBUNAL IN M.A. NO. 319/MUM/2011 DTD . 22 ND JULY, 2011 ARISING OUT OF ITA NO. 6376/M/2007 FOR A.Y. 2004-05 . 2. IN THE MISC. APPLICATION DTD. NIL IT WAS INTER A LIA SUBMITTED THAT THE APPLICANTS ADVOCATE SHRI PANKAJ R. TOPRANI ENTERED THE DATE OF HEARING OF THE MISC. APPLICATION IN HIS DIARY AS 29 TH JULY, 2011 INSTEAD OF 22 ND JULY 2011 AS A RESULT OF WHICH HE COULD NOT REMAIN PRESENT AT TH E HEARING ON 22 ND JULY, 2011 RESULTING INTO DISMISSAL OF THE MISC. APPLICAT ION ON ACCOUNT OF NON- MA 433/MUM/2011 2 APPEARANCE. IN SUPPORT, THE AFFIDAVIT OF SHRI PANKA J R. TOPRANI, ADVOCATE WAS ALSO FILED. IT WAS, THEREFORE, PRAYED THAT THE ORD ER PASSED BY THE TRIBUNAL BE RECALLED. 3. AT THE TIME OF FINAL HEARING, THE LD. COUNSEL FO R THE ASSESSEE SUBMITS THAT DUE TO THE MISTAKE OF THE COUNSEL FOR THE ASSE SSEE, THE ASSESSEE SHOULD NOT SUFFER. HE FURTHER SUBMITS THAT IN THE CASE OF SHRI PADAM PRAKASH (HUF) VS. I.T.O. (2011) 131 ITD 121 (DEL) [SB], THE TRIBU NAL HAS DISPOSED OF THE MISC. APPLICATION FILED BY THE ASSESSEE BY A SPEAKING ORD ER U/S 254(2) OF THE ACT, THEREFORE, IT HAS BEEN HELD THAT SUBSEQUENT MISC. A PPLICATION IS NOT MAINTAINABLE. HE FURTHER SUBMITS THAT SINCE IN THI S CASE THE TRIBUNAL HAS DISMISSED THE MISC. APPLICATION FOR NON-PROSECUTION , THEREFORE, THE DECISION IN THE CASE OF SHRI PADAM PRAKASH (HUF) (SUPRA) IS NOT APPLICABLE. HE, THEREFORE, SUBMITS THAT THE ORDER PASSED BY THE TRIBUNAL BE RE CALLED. 4. ON THE OTHER HAND, THE LD. D.R. OPPOSED THE RECA LLING OF THE ORDER PASSED BY THE TRIBUNAL. 4. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THERE IS NO DISPUTE THAT IN THE MISC. APPLICATION DTD. 18 TH MAY, 2011, THE ASSESSEE INTER ALIA POINTED OUT THAT THE TRIBUNAL HAS OMITTED TO DEAL WITH GROU ND NO. 3 TO 7 TAKEN IN THE APPEAL FILED BY THE ASSESSEE. WE FURTHER FIND THAT THE SAID MISC. APPLICATION WAS LISTED FOR HEARING FOR 22 ND JULY, 2011. SINCE THERE WAS NO COMPLIANCE BY THE ASSESSEE ON THE DATE OF HEARING I.E. 22 ND JULY, 2011, THE TRIBUNAL HAS PASSED THE FOLLOWING ORDER:- MA 433/MUM/2011 3 ORDER PER T.R. SOOD, AM: IN THIS CASE NOTICE OF HEARING WAS ISSUED THROUGH R PAD WHICH HAS BEEN DULY SERVED ON THE ASSESSEE AND THE ACKNOWLEDGEMENT CARD DULY SIGNED BY THE ASSESSEE IS ON RECORD. DESPITE NOTICE, NONE APPEARE D THEREFORE WE ARE LEFT WITH NO OPTION BUT TO DISMISS THE APPLICATION FOR NON PR OSECUTION. ACCORDINGLY, MISCELLANEOUS APPLICATION IS DISMISSED. IN THE RESULT, MISCELLANEOUS APPLICATION IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 2/7/2011. SD/- SD/- (D.K. AGARWAL) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 22/7/2011 AGAINST THE SAID ORDER, THE ASSESSEE HAS FILED MIS C. APPLICATION DTD. 11 TH AUGUST, 2011 INTER ALIA STATING THAT DUE TO THE FA CT THAT APPLICANTS ADVOCATE, SHRI PANKAJ R. TOPRANI ENTERED THE DATE OF HEARING OF THE MISC. APPLICATION IN HIS DIARY AS 29 TH JULY, 2011 INSTEAD OF 22 ND JULY 2011 AS A RESULT OF WHICH HE COULD NOT REMAIN PRESENT AT THE HEARING ON 22 ND JULY, 2011 RESULTING INTO DISMISSAL OF THE MISC. APPLICATION ON ACCOUNT OF NO N-APPEARANCE. IN SUPPORT SHRI PANKAJ R. TOPRANI, ADVOCATE HAS ALSO FILED AN AFFIDAVIT DTD. 11 TH AUGUST, 2011 INTER ALIA STATING AS UNDER:- (PARA 3 & 4) 3. THE DATE OF HEARING WAS INDICATED TO ME BY THE A PPLICANTS ACCOUNTS EXECUTIVE, BUT THE SAME WAS NOTED BY ME IN MY DIARY AS 29 TH JULY, 2011 INSTEAD OF 22 ND JULY, 2011 RESULTING TO MY NON-APPEARANCE BEFORE T HE TRIBUNAL AND DISMISSAL OF THE MISCELLANEOUS APPLICATION ON A CCOUNT OF MY NON- APPEARANCE ON THE DATE OF HEARING ON 22 ND JULY, 2011. 4. I SAY THAT THE APPLICATION SHOULD NOT SUBJECTED TO SUFFER ON ACCOUNT OF MISTAKE ON MY PART. THEREFORE, IF THE ORDER OF DIS MISSAL IS NOT RECALLED, THE APPLICANT WOULD BE PUT TO GREAT FINANCIAL LOSS AND CONSIDERABLE HARDSHIPS. FROM THE READING OF THE ABOVE, WE OBSERVE THAT THER E IS NO DISPUTE THAT THE APPLICANT HAD ENGAGED A COUNSEL AND WAS, THEREFORE, JUSTIFIED IN PRESUMING THAT THE COUNSEL WOULD ATTEND THE CASE. HOWEVER, D UE TO CERTAIN MISTAKE IN NOTING THE DATE OF HEARING IN THE DIARY MAINTAINED BY THE ASSESSEES COUNSEL, MA 433/MUM/2011 4 HE COULD NOT ATTEND ON THE DATE OF HEARING. IN THE ABSENCE OF ANY CONTRARY MATERIAL PLACED ON RECORD BY THE REVENUE, WE ARE OF THE VIEW THAT THE LAPSE ON THE PART OF THE ASSESSEES COUNSEL APPEARS TO BE BO NAFIDE. 5. IN MAHAVEERPRASAD JAIN V. CIT (1988) 172 ITR 331 (M.P) IT HAS BEEN HELD (HEADNOTE): WHERE AN APPLICANT ENGAGES A COUNSEL, HE WOULD BE JUSTIFIED IN PRESUMING THAT THE COUNSEL WOULD ATTEND TO THE CASE. THE APPL ICANT CANNOT BE MADE TO SUFFER FOR THE NEGLIGENCE OF THE COUNSEL. AN APPEAL CANNOT BE DISMISSED BECAUSE THE COUNSEL FAILED TO APPEAR WHEN THE CASE WAS POSTED FOR HEARING. 6. IN THE ABOVE CASE, THEIR LORDSHIPS HAVE FOLLOWED THE DECISION OF THE HONBLE SUPREME COURT IN RAFIQ V. MUNSHILAL [1981] AIR 1981 SC 1400 WHEREIN THE HONBLE SUPREME OBSERVED AS UNDER (PAGE 331 & 332 OF (1988)172 ITR): THE DISTURBING FEATURE OF THE CASE IS THAT UNDER OUR PRESENT ADVERSARY LEGAL SYSTEM, WHERE THE PARTIES GENERALLY APPEAR THROUGH THEIR ADVOCATES, THE OBLIGATION OF THE PARTIES IS TO SELECT HIS ADVOCATE , BRIEF HIM, PAY THE FEES DEMANDED BY HIM AND THEN TRUST THE LEARNED ADVOCATE TO DO THE REST OF THE THINGS. THE PARTY MAY BE A VILLAGER OR MAY BELONG T O A RURAL AREA AND MAY HAVE NO KNOWLEDGE OF THE COURT'S PROCEDURE. AFTER ENGAG ING A LAWYER, THE PARTY MAY REMAIN SUPREMELY CONFIDENT THAT THE LAWYER WILL LO OK AFTER HIS INTEREST. AT THE TIME OF THE HEARING OF THE APPEAL, THE PERSONAL AP PEARANCE OF THE PARTY IS NOT ONLY NOT REQUIRED BUT HARDLY USEFUL. THEREFORE, THE PARTY HAVING DONE EVERYTHING IN HIS POWER TO EFFECTIVELY PARTICIPATE IN THE PROCEEDINGS CAN REST ASSURED THAT HE HAS NEITHER TO GO TO THE HIGH COUR T TO INQUIRE AS TO WHAT IS HAPPENING IN THE HIGH COURT WITH REGARD TO HIS APP EAL NOR IS HE TO ACT AS A WATCHDOG OF THE ADVOCATE THAT THE LATTER APPEARS IN THE MATTER WHEN IT IS LISTED. IT IS NO PART OF HIS JOB. MR. A. K. SANGHI STATED THAT A PRACTICE HAS GROWN UP IN THE HIGH COURT OF ALLAHABAD AMONGST THE LAWYE RS THAT THEY REMAIN ABSENT WHEN THEY DO NOT LIKE A PARTICULAR BENCH. MA Y BE WE DO NOT KNOW, HE IS BETTER INFORMED IN THIS MATTER. IGNORANCE IN THI S BEHALF IS OUR BLISS. EVEN IF WE DO NOT PUT OUR SEAL OF IMPRIMATUR ON THE ALLEGE D PRACTICE BY DISMISSING THIS MATTER, WHICH MAY DISCOURAGE SUCH A TENDENCY, WOULD IT NOT BRING JUSTICE DELIVERY SYSTEM INTO DISREPUTE ? WHAT IS THE FAULT OF THE PARTY WHO, HAVING DONE EVERYTHING IN HIS POWER AND EXPECTED OF HIM, HAS TO SUFFER BECAUSE OF THE DEFAULT OF HIS ADVOCATE ? IF WE REJECT THIS APPEAL , AS MR. A. K. SANGHI INVITED US TO DO, THE ONLY ONE WHO WOULD SUFFER WOULD NOT BE THE LAWYER WHO DID NOT APPEAR BUT THE PARTY WHOSE INTEREST HE REPRESENTED. THE PROBLEM THAT AGITATES US IS WHETHER IT IS PROPER THAT THE PARTY SHOULD SU FFER FOR THE INACTION, DELIBERATE OMISSION OR MISDEMEANOUR OF HIS AGENT. T HE ANSWER OBVIOUSLY IS IN THE NEGATIVE. MAY BE THAT THE LEARNED ADVOCATE ABSE NTED HIMSELF DELIBERATELY OR INTENTIONALLY. WE HAVE NO MATERIAL FOR ASCERTAININ G THAT ASPECT OF THE MATTER. WE SAY NOTHING MORE ON THAT ASPECT OF THE MATTER. HOWEVER, WE CANNOT BE A PARTY TO AN INNOCENT PARTY SUFFERING INJUSTICE MERE LY BECAUSE HIS CHOSEN MA 433/MUM/2011 5 ADVOCATE DEFAULTED. THEREFORE, WE ALLOW THIS APPEAL , SET ASIDE THE ORDER OF THE HIGH COURT, BOTH DISMISSING THE APPEAL AND REFUSING TO RECALL THAT ORDER. WE DIRECT THAT THE APPEAL BE RESTORED TO ITS ORIGINAL NUMBER IN THE HIGH COURT AND BE DISPOSED OF ACCORDING TO LAW.' 7. IN CIT VS. KHEMRAJ LAXMICHAND (1978) 114 ITR 75 (M.P) IT HAS BEEN HELD THAT (HEADNOTES): HELD, THAT THE QUESTION WHETHER THE MISTAKE OF THE COUNSEL WAS BONA FIDE BEING ONE OF FACT AND THE TRIBUNAL HAVING COME TO T HE CONCLUSION THAT THE LAPSE ON THE PART OF THE COUNSEL WAS BONA FIDE, THE TRIBUNAL WAS JUSTIFIED IN CONDONING THE DELAY AND UPHOLDING THE REGISTRATION OF THE FIRM. 8. IN SUBHKARAN & SONS V. N.A. KAZI, 5 TH ITO AND OTHERS (1985) 152 ITR 231 (BOM) IT HAS BEEN HELD THAT (PAGE 232): HELD, (I) THAT THE RECORD SHOWED, AND IT WAS ALSO ADMITTED BY THE CHARTERED ACCOUNTANTS, THAT FORM NO. 11A HAD BEEN DULY SIGNED BY ALL THE PARTNERS IN TIME AND HAD BEEN HANDED OVER TO THEM FOR FILING TH E SAME WITH THE I.T. DEPARTMENT BUT IT WAS NOT FILED IN TIME DUE TO OVER SIGHT; (II) THAT THE ORIGINAL FIRM HAD BEEN GRANTED REGIST RATION FOR THE EARLIER YEARS AND THIS FIRM HAD BEEN GRANTED REGISTRATION FOR SUBSEQU ENT YEARS EXCEPT FOR THE DISPUTED ASSESSMENT YEAR; (III) THAT IT WAS NOT THE CASE OF THE DEPARTMENT TH AT THE FIRM WAS EITHER BOGUS OR HAD IN FACT NO LEGAL EXISTENCE; (IV) THAT THE FIRM HAD PRODUCED BEFORE THE I.T. AUT HORITIES A LETTER FROM A BANK THAT ONE OF THE PERSONS WHO BECAME A PARTNER UNDER THE PARTNERSHIP DEED DATED SEPTEMBER, 1975, WAS OPERATING THE ACCOUNT OF THE FIRM SINCE MAY 17, 1976, COVERING THE PERIOD FALLING WITHIN THE DISPUT ED ASSESSMENT YEAR; (V) THAT THE FIRM'S LETTER DATED AUGUST 27, 1976, C OVERING THE DISPUTED ASSESSMENT YEAR, ADDRESSED TO THE REGIONAL TRANSPOR T OFFICER ALSO INDICATED THAT ONE OF THE PERSONS, WHO BECAME A PARTNER UNDER THE PARTNERSHIP DEED OF SEPTEMBER, 1975, WAS ADMITTED AS A PARTNER AND ALSO ACTED AS A PARTNER DURING THE RELEVANT ACCOUNT YEAR; (VI) THAT THE FIRM'S CHARTERED ACCOUNTANTS HAD BEEN THEIR STANDING CHARTERED ACCOUNTANTS FOR SEVERAL YEARS; (VII) THAT NEITHER THE FIRM NOR THE CHARTERED ACCOU NTANTS HAD AT ANY TIME SINCE AFTER THE DISPUTED ASSESSMENT YEAR AND TILL NOW COM MITTED ANY DEFAULT IN THIS RESPECT; (VIII) THAT THE FIRM AND ITS PARTNERS HAD ALL ALONG REMAINED UNDER A BONA FIDE IMPRESSION THAT FORM NO. 11A MUST HAVE BEEN FILED I N TIME WITH THE I.T. DEPARTMENT; (IX) THAT THE MISTAKE HAD BEEN ADMITTED BY THE CHAR TERED ACCOUNTANTS AND THEY HAD ALSO REQUESTED THAT THE ASSESSEE SHOULD NOT SUF FER FOR NO FAULT OF THEIRS MA 433/MUM/2011 6 AND FOR A SHEER MISTAKE ARISING OUT OF OVERSIGHT ON THE PART OF THE CHARTERED ACCOUNTANTS. THEREFORE, THE CASE WAS A FIT ONE FOR CONDONATION O F THE DELAY IN FILING FORM NO. 11A AND THE FIRM WAS ENTITLED TO REGISTRATION FOR T HE ASSESSMENT YEAR 1977-78. 9. IN SHRI PADAM PRAKASH (HUF) (SUPRA) THE SPECIAL BENCH OF THE TRIBUNAL HAS REJECTED THE MISC. APPLICATION FILED BY THE ASS ESSEE ON THE GROUND THAT THE TRIBUNAL HAS ALREADY PASSED AN ORDER U/S 254(2) OF THE ACT IN THE MISC. APPLICATION FILED BY THE ASSESSEE, THEREFORE, SUBSE QUENT MISC. APPLICATION FILED BY THE ASSESSEE IS NOT MAINTAINABLE. HOWEVER, IN T HE PENULTIMATE PARA THE TRIBUNAL HAS ALSO CONSIDERED THE REASONABLE CAUSE F OR NON-APPEARANCE OF THE ASSESSEE AND REJECTED THE SAME ON THE GROUND THAT T HERE IS NO COOPERATION FROM THE ASSESSEES SIDE AND HENCE IT CANNOT CONSTI TUTE ANY CAUSE TO RECALL THE ORDER. 10. HOWEVER, IN THE CASE BEFORE US, THERE IS NO DIS PUTE THAT THE TRIBUNAL WHILE DISMISSING THE MISC. APPLICATION FILED BY THE ASSESSEE HAS NOT PASSED ANY SPEAKING ORDER AND HAS DISMISSED THE ASSESSEES MISC. APPLICATION ON THE GROUND FOR NON-PROSECUTION ONLY. THUS THERE IS NO S PEAKING ORDER PASSED BY THE TRIBUNAL. NOW THE ASSESSEE HAS PROVED THAT LAP SE ON THE PART OF THE COUNSEL FOR THE ASSESSEE WAS BONAFIDE INASMUCH AS I T HAS BEEN ADMITTED BY THE ASSESSEES COUNSEL THAT ASSESSEE SHOULD NOT SUF FER ON ACCOUNT OF MISTAKE ON THE PART OF THE ASSESSEES COUNSEL. THEREFORE, T HE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IS DISTINGUISHABLE AND NOT AP PLICABLE TO THE FACTS OF THE PRESENT CASE. 11. IN CIT VS. KESHAV FRUIT MART (1993) 199 ITR 771 (ALL), CIT VS. K.M. SUGAR MILLS (P) LTD. (2005) 275 ITR 247 (ALL), BRIJ LAL VS. ACIT (1997) 59 ITD 1 (DEL)[TM] & RAHUL KUMAR BAJAJ VS. ITO (1999) 64 TTJ (NAG)(SB) 200, THE MA 433/MUM/2011 7 ASSESSEE FILED MISC. APPLICATION U/S 254(2) OF THE ACT AGAINST THE ORDER PASSED U/S 254(1) IT HAS BEEN HELD THAT THE TRIBUNAL WAS J USTIFIED IN RECALLING ITS ORDER IN EXERCISE OF POWER U/S 254(2). IN THE CASE BEFORE US, THE ASSESSEE HAS FILED SECOND MISC. APPLICATION U/S 254(2) AGAINST T HE ORDER PASSED U/S 254(2), THEREFORE, THE DECISIONS RELIED ON BY THE LD. COUNS EL FOR THE ASSESSEE ARE DISTINGUISHABLE AND ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. THE OTHER DECISION IN CIT VS. DR. T.K. JAIRAJ (2002) 25 6 ITR 252 (KER.) IS ALSO NOT APPLICABLE AS THE SAME IS RELATING TO THE PROVISION S OF SECTION 256(1) OF THE ACT. 12. FOR THE REASONS AS DISCUSSED ABOVE, WE RESPECTF ULLY FOLLOWING THE RATIO OF THE ABOVE DECISIONS, HOLD THAT THERE WAS A REASO NABLE CAUSE, THE MISTAKE OF THE COUNSEL WAS BONAFIDE AND THE APPLICANT CANNOT B E MADE TO SUFFER FOR THE MISTAKE OF THE ASSESSEES COUNSEL AND ACCORDINGLY T HE EX PARTE ORDER DTD. 22 ND JULY, 2011 (SUPRA) FOR NON-PROSECUTION PASSED BY T HE TRIBUNAL IS RECALLED. PARTIES ARE TO APPEAR WITHOUT WAITING FO R ANY NOTICE ON 5 TH SEPTEMBER, 2012. THE MISC. APPLICATION FILED BY TH E ASSESSEE IS, THEREFORE, ALLOWED. 13. IN THE RESULT, THE MISC. APPLICATION FILED BY T HE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH JULY, 2012. SD/- SD/- (B. RAMAKOTAIAH) (DINESH KUMAR AGARW AL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 11 TH JULY, 2012 RK.: MA 433/MUM/2011 8 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT - IX, MUMBAI 4. CIT(A) IX, MUMBAI 5. DR C BENCH 6. GUARD FILE. BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI