Income-tax Officer, V. Shri Bhairavnath Nagari Sahakari Patsanstha Ltd., Nashik

MA 44/PUN/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1917 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-05-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 22-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Keywords: Principle of natural justice; Bad and doubtful debts
• Section: 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHE A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER MA NO.44/PN/2014 (ARISING OUT OF ITA NO.1288/PN/2011) (ASSESSMENT YEAR : 2008-09) INCOME TAX OFFICER, WARD 1(3), NASHIK. . APPELLANT VS. SHRI BHAIRAVNATH NAGARI SAHAKARI PATSANSTHA LTD., KRISHNAI COMPLEX, GANESH PETH, SINNAR, DIST. NASHIK. PAN : AAAAS6679L . RESPONDENT DEPARTMENT BY : MR. P. L. PATHADE ASSESSEE BY : MR. SANKET JOSHI DATE OF HEARING : 25-04-2014 DATE OF PRONOUNCEMENT : 08-05-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED MISCELLANEOUS APPLICATION HAS BEEN PR EFERRED BY THE REVENUE WITH RESPECT TO THE ORDER OF THE TRIBUNAL I N ITA NO.1288/PN/2011 DATED 04.02.2013 WHERE THE APPEAL OF THE REVENUE HA D BEEN DISMISSED ON THE GROUND THAT THE REVENUE COULD NOT EFFECT NOTICE OF HEARING ON THE ASSESSEE AT THE ADDRESS PROVIDED BY THE REVENUE. I N ITS ORDER DATED 04.02.2013 (SUPRA), THE TRIBUNAL GRANTED LIBERTY TO THE REVENUE TO MOVE APPLICATION FOR RECALLING OF THE SAID ORDER AFTER S HOWING THAT THE REVENUE HAS TRACED THE ADDRESS OF THE ASSESSEE AND SERVED THE N OTICE OF HEARING TO THE ASSESSEE. 2. BY WAY OF THE PRESENT PETITION, THE LEARNED DEPA RTMENTAL REPRESENTATIVE SUBMITTED THE FOLLOWING REASONS FOR RESTORING THE REVENUES APPEAL VIDE ITA NO.1288/PN/2011 FOR ASSESSMENT YEAR 2008-09 :- 1. THE HON'BLE ITAT, PUNE BENCH, PUNE IN ITS ORDER DATED 04/02/2013 IN ITA NO.1288/PN/2011 FOR A.Y. 2008-09 IN THE CASE OF SHRI BHAIRAVNATH NAGARI SAHAKARI PATSANSTHA LTD., NASHIK HAS DISMISSED THE APPEAL OF THE REVENUE STATING THAT THE ASSESSEE HAD NOT ATTENDED ON THE D ATE OF HEARING NOR THERE MA NO.44/PN/2014 WAS ANY REQUEST FOR ADJOURNMENT. FURTHER, THE NOTIC ES OF HEARING SENT TO THE ASSESSEE AT THE ADDRESSES GIVEN IN FORM NO.36 WERE RECEIVED BACK UNSERVED. THEREFORE, NOTICE OF HEARING WAS GIVEN TO THE DEPARTMENTAL REPRESENTATIVE FOR EFFECTIVE SERVICE ON THE RESPOND ENT-ASSESSEE. HOWEVER, ON THE DATE OF HEARING THE LD. DR HAD FAILED WITH R EGARD TO EFFECTIVE SERVICE ON THE RESPONDENT ASSESSEE AND THEREBY HE HAS FAILED T O INTIMATE THE SERVICE OF THE NOTICE GIVEN. 2. IT IS SUBMITTED THAT, THE NOTICE, FIXING THE NEX T DATE OF HEARING ON 04/02/2013 WAS DULY SERVED THROUGH DEPARTMENTAL REP RESENTATIVE ON 17/01/2013 ON WHICH ASSESSEE'S SIGNATURE WITH DATE AND ROUND SEAL WAS OBTAINED AND KEPT ON RECORD. AFTER 17/01/2013 THE S ERVICE OF ABOVE NOTICE SERVED AND ITS ACKNOWLEDGEMENT ALONG WITH COVERING LETTER COMMUNICATED TO THE DR. ITAT, PUNE FROM THIS OFFICE WAS UNFORTUNATE LY NOT MADE AND ITS PROOF IS ALSO NOT TRACEABLE BY THIS OFFICE. THEREFORE, AT THE SAME TIME IN NOVEMBER, 2013 THIS OFFICE PERSONALLY CONTACTED WITH A.R. OF THE SAID ASSESSEE AND ACCORDING TO THE ASSESSEE'S LETTER DATED 26/11/2013 HAS STATED THAT, ACTUALLY THE ABOVE CITED NOTICE OF THE ITAT, PUNE IN ORIGINA L WAS DULY RECEIVED AND SERVED IN ASSESSEE'S OFFICE ON 17/01/2013, BUT DUE TO OTHER WORKLOAD OF THE SAID ASSESSEE PATSANSTHA COULD NOT ACTUALLY ATTEND THE SCHEDULED HEARING ON 04/02/2013 IN THE IT AT, PUNE. 3. THE ASSESSEE WAS AGGRIEVED WITH THE ORDER OF THE AO AND FILED APPEAL BEFORE CIT (A)-L, NASHIK. THE LD CIT(A) VIDE HIS OR DER DATED 04/08/2011 HAS DELETED THE DISALLOWANCE MADE OF RS.22,01,145/- ON ACCOUNT OF PROVISIONING FOR BAD AND DOUBTFUL DEBTS, AS WELL AS DIRECTED THE ASSESSING OFFICER TO GIVE SET-OFF OF THE BUSINESS LOSS AGAINST THE INCOME UND ER THE OTHER HEADS OF INCOME WHICH WAS BROUGHT TO TAX. THE LD. CIT(A)-I, NASHIK REGARDING THE DEDUCTION OF RS. 22,01,145/- ON ACCOUNT OF PROVISIO NING FOR BAD AND DOUBTFUL DEBTS HELD THAT THE PROVISIONS HAD BEEN MADE BY ASS ESSEE KEEPING IN VIEW THE GUIDELINES ISSUED UNDER THE MAHARASHTRA CO-OPER ATIVE SOCIETIES ACT, BY THE REGISTRAR OF CO-OPERATIVE SOCIETIES, MAHARASHTR A WHICH OVERRIDES THE PROVISION OF THE INCOME TAX ACT 1961. RELIANCE HAD BEEN PLACED ON THE DECISION IN THE CASE OF CIT VS. NAINITAL BANK LTD. (2009) 309ITR 335 (UTTARANCHAL). 4. REGARDING GRANT OF SET-OFF OF THE BUSINESS LOSS AGAINST THE INCOME UNDER THE OTHER HEADS, THE LD. CIT (A) HAS QUOTED T HAT THE PROVISIONS OF SEC. 71 AND GRANTED THE RELIEF. THE CIT(A) STATED THAT I NCOME OF THE ASSESSEE WAS NOT EXEMPT U/S 10 THEREFORE THE SAME FORMS PART OF THE GROSS TOTAL INCOME. 5. BEING AGGRIEVED BY THE ORDER PASSED BY THE CIT ( A)-L, NASHIK THE REVENUE PREFERRED APPEAL BEFORE ITAT, PUNE. THE HON BLE ITAT, PUNE DISMISSED THE APPEAL ON 04/02/2013 WITHOUT APPRECIA TING THE FACT THAT THE ABOVE ADDITIONS WERE MADE ON CONCRETE FOOTING AND A S PER THE PROVISIONS OF THE INCOME TAX ACT, 1961. THE PLEA OF THE ITAT WITH REGARD TO THE FACT THAT THE INCOME TAX AUTHORITY HAS FAILED TO SERVE THE NOTI CE ON THE ASSESSEE WELL WITHIN TIME IS NOT ACCEPTED AS THE ACKNOWLEDGEMENT SLIP OF SERVICE OF NOTICE DATED 13/10/2011 FIXING DATE OF HEARING ON 04/02/20 13, IS CLEARLY BROUGHT ON RECORD. THE SAID NOTICE WAS SERVED TO THE ASSESSEE BY THE NOTICE SERVER OF THIS OFFICE ON 17/01/2013 AND SIGNATURE WITH DATE A ND THE ROUND SEAL OF THE SAID ASSESSEE WAS OBTAINED. UNFORTUNATELY THE LETTE R COMMUNICATED TO THE DR AT ITAT, PUNE REGARDING SERVICING OF NOTICE FIXING DATE OF HEARING ON 04/02/2013 IS NOT TRACEABLE TO THIS OFFICE THEREFOR E, THIS OFFICE PERSONALLY CONTACTED WITH A.R. OF THE SAID ASSESSEE AND AS PER THE ASSESSEE'S LETTER DATED 26/11/2013 SUBMITTED AND STATED THAT ACTUALLY THE ABOVE CITED NOTICE IN ORIGINAL OF THE ITAT, PUNE WAS DULY RECEIVED TO ASS ESSEE'S OFFICE ON 17/01/2013 BUT DUE TO OTHER WORKLOAD OF THE SAID AS SESSEE PATSANSTHA, COULD NOT ACTUALLY ATTEND THE FIXED DATE 04/02/2013 FOR A BOVE APPEAL HEARING IN THE ITAT, PUNE. THE DECISION GRANTED BY THE ITAT, PUNE IN FAVOUR OF THE ASSESSEE MA NO.44/PN/2014 IS THEREFORE, NOT ACCEPTABLE. THE ADDITIONS MADE AB OVE THEREFORE, DESERVE TO BE SUSTAINED. 6. AS PER THE DIRECTIONS ISSUED IN ABOVE APPEAL IN IT A NO.1288/PN/2011 DATED 04/02/2013 AND IN ORDER TO PROTECT THE INTERE ST OF REVENUE, THE PRESENT MISCELLANEOUS APPLICATION IS FILED WITH THE HON'BLE ITAT, PUNE BENCH, PUNE FOR RECONSIDERING THE MATTER AFRESH BY RECALLING THE SA ID APPEAL SO THAT THE DEPARTMENT CAN GET NATURAL JUSTICE IN THIS APPEAL. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE FURTHER SUBMITTED THAT THE ORDER PASSED BY THE TRIBUNAL DATED 04.02.2013 (SUPR A) BE RECALLED AND THE SAME BE POSTED FOR FRESH HEARING. 4. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE R ESPONDENT-ASSESSEE HAS APPEARED AND NOT DISPUTED THE FACTUAL POSITION. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE MATERIAL ON RECORD, WE ARE OF THE OPINION THAT THER E IS A REASONABLE AND SUFFICIENT CAUSE WITH THE REVENUE TO SEEK RESTORATI ON OF THE CAPTIONED APPEAL. ACCORDINGLY, THE ORDER OF THE TRIBUNAL DATED 04.02. 2013 (SUPRA) IS RECALLED AND CAPTIONED APPEAL OF THE REVENUE IS DIRECTED TO BE L ISTED FOR HEARING BEFORE THE REGULAR BENCH ON 17.07.2014 TO BE ADJUDICATED ON ME RITS AS PER LAW. 6. SINCE THE ABOVE DATE OF HEARING HAS BEEN ANNOUNC ED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES, THE REQUIREMEN T OF ISSUANCE OF A FORMAL NOTICE OF HEARING IS HEREBY DISPENSED WITH. 7. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE REVENUE IS ALLOWED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH MAY, 2014. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 08 TH MAY, 2014. SUJEET MA NO.44/PN/2014 COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, NASHIK; 4) THE CIT-I, NASHIK; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE