SAKARWADI TRADING CO OP LTD, V. ASST CIR 2(3),

MA 82/MUM/2012

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0618 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-07-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2000-2001
• Appeal Filed On: 09-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Assessee Lawyers: A H DALAL
• Keywords: Reasonable cause
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER MA NO. 82/MUM/2012 ARISING OUT OF ITA NO.1901/MUM/2004 ASSESSMENT YEAR : 2000-01 M/S. SAKARWADI TRADING CO.P . LTD. ROOM NO.20 YUSUF BLDG. 43-45, M.G. ROAD, FORT MUMBAI-400 023. PAN NO. AAACS 6687 A VS. ACIT, CIRCLE 2(3) AAYAKAR BHAVAN, M.K. ROAD MUMBAI-400 020. ( APPLICANT ) (RESPONDENT) ASSESSEE BY : SHRI A .H. DALAL REVENUE BY : SHRI O.P. MEENA DATE OF HEARING : 28.06.2013 DATE OF PRONOUNCEMENT : 05 .07.2013 O R D E R PER B. RAMAKOTAIAH, AM: THIS MISCELLANEOUS APPLICATION IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF ITAT IN ITA NO.1901/MUM/04 DECIDED BY THE B BENCH EX PARTE THE ASSESSEE, ON MERITS DUE TO THE FAILURE OF THE ASSESSEE TO APPEAR AND WAS SEEKING ADJOURNMENT CONTINUOUSLY ON ITS PAR T ALMOST 8 TIMES. THE ASSESSEE IN THE PRESENT MISCELLANEOUS APPLICATI ON SUBMITTED AS UNDER:- THE BRIEF FACTS LEADING TO THE DISMISSAL OF THE APP EAL ARE AS FOLLOWS: (A) BEFORE THE HONBLE TRIBUNAL, THE APPLICANT ON 14.01 .2009 FILED A PAPER BOOK CONTAINING 106 PAGES WHICH INCLUDED AL L THE MA NO. 82/M/12 A.Y.00-01 SAKARWADI TRADIN G CO. P. LTD. 2 DETAILS OF THE CAPITAL GAIN/LOSS INCURRED BY THE AP PLICANT ON SALE OF SHARES AND ALSO DETAILS OF DIVIDEND INCOME EARNED BY THE APPLICANT. (B) HOWEVER, THE APPEAL OF THE APPLICANT WAS ADJOURNED ON VARIOUS OCCASION EITHER AT THE REQUEST OF APPLICANT OR DEPARTMENTAL REPRESENTATIVE OR DUE TO ADMINISTRATIV E REASONS ON THE PART OF THE HONBLE TRIBUNAL. ON 02.12.2010 THE APPEAL OF THE APPLICANT WAS ADJOURNED AT THE REQUEST OF AP PLICANT TO 16.02.2011. HOWEVER, ON 16.02.2011, ID E MILAD HOLIDAY WAS DECLARED BY THE CENTRAL GOVERNMENT AND ALL THE CASES POSTED ON THAT DAY WERE ADJOURNED TO 08.03.2011 BY THE HONBLE TRIBUNAL BY GIVING NOTICE THROUGH NOTICE BO ARD. (C) AS THE CASE OF THE APPLICANT WAS ADJOURNED BY THE H ONBLE TRIBUNAL UNDER UNCERTAIN CIRCUMSTANCES, THE APPLICA NT WAS UNDER A BONA FIDE BUT MISTAKEN BELIEF THAT, A FRESH NOTICE FIXING THE HEARING WOULD BE ISSUED TO THE APPLICANT . IT WAS ONLY ON THE EVE OF 04.03.2011 (FRIDAY) WHEN THE BOA RD FIXING THE HEARING OF THE APPEAL WAS ISSUED BY THE HONBLE TRIBUNAL THAT THE ADVOCATE FOR THE APPLICANT WHO WAS APPEARI NG ALONG WITH THE SENIOR COUNSEL IN THE APPLICANTS CASE INF ORMED THE APPLICANT THAT THE MATTER OF THE APPLICANT WAS ON T HE BOARD OF THE HONBLE TRIBUNAL FOR HEARING ON 08.03.2011, ACC ORDINGLY, ON 07.03.2011. THE APPLICANT FILED AN ADJOURNMENT A PPLICATION REQUESTING THE HONBLE TRIBUNAL TO ADJOURN THE HEAR ING OF THE CASE AS THE ASSESSEE WAS NOT AWARE OF THE NEXT DATE WHICH WAS FIXED THROUGH NOTICE BOARD, AND DUE TO WHICH TH E APPLICANT WAS NOT ABLE TO COORDINATE AND BRIEF THE SENIOR COUNSEL FOR THE HEARING IN THE ABOVE APPEAL. (D) HOWEVER, THE BENCH OF THE HONBLE TRIBUNAL DECLINED TO GRANT ADJOURNMENT AND PROCEEDED WITH THE HEARING OF THE A PPEAL EX- PARTE AND CONFIRMED THE ACTION OF THE RESPONDENT IN DISALLOWING THE LOSS ON SALE OF SHARES OF SOMAIYA O RGANICS (INDIA) LTD. (SOIL). AS REGARDS THE DISALLOWANCE MADE BY THE RESPONDENT UNDER SECTION 14A OF THE ACT, THE HONBL E TRIBUNAL SET ASIDE THE ORDER OF THE RESPONDENT AND DIRECTED THE RESPONDENT TO RE-EXAMINE THE DISALLOWANCE KEEPING I N MIND THE PRINCIPLES LAID DOWN BY THE HONBLE JURISDICTIO NAL HIGH COURT IN THE CASE OF, GODREJ & BOYCE MANUFACTURING CO. LTD. V/S. DY. CIT [(2010) 328 ITR 81 (BOM)]. MA NO. 82/M/12 A.Y.00-01 SAKARWADI TRADIN G CO. P. LTD. 3 2. IT WAS SUBMITTED THAT NON ATTENDANCE ON THE DATE OF HEARING WAS NOT DUE TO ANY NEGLIGENCE NOR DUE TO ANY SELF DEFAU LT AND REQUEST WAS MADE FOR RESTORING THE APPEAL FOR HEARING ON MERITS . THE LD. COUNSEL, SHRI A.H. DALAL APPEARED ON BEHALF OF THE ASSESSEE AND REITERATED THE CONTENTIONS AND REASONS FOR NON-APPEARANCE ON THAT DAY AND RELIED ON THE PRINCIPLES LAID DOWN BY THE HON'BLE HIGH COURT OF MADYA PRADESH IN THE CASE OF BABULAL JAIN VS. ITO (298 ITR 269)(MP) IN SUPPORT OF THE CONTENTIONS. THE LD. DR IN REPLY HOWEVER SUBMITTED THAT THERE WAS NO REASONABLE CAUSE AND SINCE THE ORDER WAS DECIDED ON MERITS AND THERE IS NO NEED TO RECALL THE ORDER FOR REVIEW OF THE ORDER AND RELIED ON THE CO- ORDINATE BENCH DECISION IN THE CASE OF UMAKANT B. A GARWAL ARISING OUT ITA NO.4853/MUM/09 DATED 26.9.2012 FOR THE PROPOSIT ION THAT PRINCIPLES LAID DOWN BY THE HON'BLE BOMBAY HIGH COU RT IN THE CASE OF CIT VS. RAMESH ELECTRIC & TRADING COMPANY (203 ITR 497)(BOM.) ARE TO BE CONSIDERED. 3. WE HAVE CONSIDERED THE ISSUE. THE APPEAL BY THE ASSESSEE IN ITA NO.1901/MUM/2004 WAS HEARD ALONG WITH ITA NO.2591/M UM/06 AND THE APPEAL WAS HEARD EX PARTE ASSESSEE ON MERITS BY RECORDING THE FOLLOWING :- THESE APPEALS BY THE ASSESSEE ARE AGAINST THE ORDE R OF THE CIT(A) XXXII, MUMBAI WITH REFERENCE TO QUANTUM AND PENALTY UNDER SECTION 271(1)(C) RESPECTIVELY DATED 08.12.2003 AND 09.01.2006. THESE APPEALS WERE POSTED NUMBER OF TIMES AND THE H EARING WAS ADJOURNED AT THE REQUEST OF THE ASSESSEE ALMOST AT 8 TIMES APART FROM ADJOURNMENTS DUE TO ADMINISTRATIVE REASONS. WH EN THE CASE WAS POSTED LAST TIME ASSESSEE SOUGHT ADJOURNMENT IN WRITING AND WAS POSTED ON 08.03.2011 AGAIN ASSESSEE SOUGHT ADJ OURNMENT ON THAT DAY WHICH WAS REFUSED IN VIEW OF THE NUMBER OF ADJOURNMENTS ALREADY GRANTED. THIS APPEAL WAS HEARD ON MERITS EX -PARTE APPELLANT AFTER HEARING THE LEARNED. DR. MA NO. 82/M/12 A.Y.00-01 SAKARWADI TRADIN G CO. P. LTD. 4 3.1 THE ASSESSEE NOW SUBMITS THAT THE CASE WAS LAST POSTED ON 16.2.2011 WHICH WAS DECLARED AS HOLIDAY BY CENTRAL GOVT. AND ALL CASES POSTED ON THAT DATE WERE ADJOURNED TO 8.3.2011. IT WAS FURTHER SUBMITTED THAT VIDE PARA-3(C) THAT ASSESSEE WAS UNDER BONAFID E MISTAKEN BELIEF THAT THE FRESH NOTICE FIXING THE HEARING WOULD BE I SSUED TO THE APPELLANT AND MENTIONS THAT IT CAME TO KNOW ABOUT THE POSTING THROUGH THE NOTICE BOARD. HOWEVER, AS SEEN FROM THE RECORD THE ASSESSE E SOUGHT ADJOURNMENT ON THAT DATE BY STATING AS UNDER :- THE EARLIER HEARINGS OF CAPTIONED APPEALS WERE FIX ED BEFORE B BENCH ON 16.2.2011 ON WHICH DATE THE B BENCH HAD NOT FUNCTIONED (SIC). THEREAFTER NOTICE FOR RE-FIXING T HE HEARING ON 8.3.2011 WAS RECEIVED. HOWEVER WE COULD NOT CO-ORDI NATE WITH OUR ATTENDING SR. COUNSEL FOR THE MATTER. WE THEREF ORE HEREBY PRAY FOR ADJOURNMENT OF THE HEARING FOR THE ABOVE A PPEALS FOR WHICH WE WILL BE HIGHLY THANKFUL TO YOUR HONOURS. 3.2 AS CAN BE SEEN FROM THE ABOVE IT WAS ADMITTED B Y THE ASSESSEE THAT THEY HAVE RECEIVED NOTICE FOR RE-FIXING THE HEARING ON 8.3.2011. THE CONTENTIONS MADE IN THE MISCELLANEOUS APPLICATION, THEREFORE, ARE NOT CORRECT, OF HAVING COME TO KNOW THROUGH NOTICE BOAR D. MOREOVER, THE ACKNOWLEDGEMENT PLACED ON RECORD OF ISSUING NOTICE ADJOURNING TO 8.3.2011 WAS ISSUED ON 27.2.2011 AS PER OFFICE RECO RD AND ASSESSEE ACKNOWLEDGED THE RECEIPT OF THE NOTICE. 3.3 THE CONTENTION THAT THEY COULD NOT CO-ORDINA TE AND BRIEF THE SENIOR COUNSEL ALSO SEEMS TO BE NOT CORRECT. THE ASSESSEE FILED A CHART SHOWING HEARING OF THE APPEAL FROM 27.04.2007 TO 8.03.2011 ON 16 OCCASIONS, 8 ADJOURNMENTS ARE FOR ADMINISTRATIVE REASONS OF NOT FUNCTIONING BENCH OR BEING DECLARED HOLIDAY AND 8 OCCASIONS WHEN ASSESSE E SOUGHT ADJOURNMENTS. VIDE LETTER DATED 27.6.2009, ASSESSE E ENCLOSED ORIGINAL AUTHORITY LETTER IN FAVOUR OF SHRI SOLI DASTUR AND SOUGHT AN ADJOURNMENT AS SHRI DASTUR WAS BUSY IN SOME MATTER IN HIGH COUR T ON THAT DAY. THE MA NO. 82/M/12 A.Y.00-01 SAKARWADI TRADIN G CO. P. LTD. 5 AUTHORIZED SIGNATORY TO THE LETTER ALSO GAVE AN UND ERTAKING IN WRITING AS UNDER:- YOUR HONOUR IS REQUESTED TO GIVE US ADJOURNMENT AN D REFIX ON 31.7.2009. WE WILL NOT SEEK ANY FURTHER ADJOURNMENT IN THE MATTER. ORIGINAL AUTHORITY LETTE R IS FILED. THANKING YOU . SD/- B.K. SHAH 3.3 EVEN THOUGH THERE WAS A COMMITMENT FROM THE ASS ESSEE THAT THEY WILL NOT SEEK ANY FURTHER ADJOURNMENT, ASSESSEE SOU GHT ADJOURNMENTS ON 1.2.2010, 23.7.2010 ON THE REASON THAT THE APPEALS INVOLVING 14A ISSUE WERE BEING BLOCKED BY THE ITAT. ON 12.10.10 WHEN TH E CASE WAS POSTED AGAIN, ADJOURNMENT WAS SOUGHT CITING THE REASON THA T THE ASTT. GENERAL MANAGER (TECHNICAL) WAS UNDER MEDICAL TREATMENT AND WAS OPERATED ON 8.10.10 AND ON THAT REASON SOUGHT ADJOURNMENT, WHIC H WAS GRANTED. AGAIN ON 27.11.2010, THE ASSESSEE SOUGHT ADJOURNMEN T FOR THE POSTING ON 02.12.2010 STATING THAT SR.TAX MANAGER WAS SCHED ULED TO GO ON LEAVE FROM 25.11.2010 TO 15.12.2010 ON OCCASION OF HIS SO NS MARRIAGE. AT THE TIME IT WAS SPECIFICALLY STATED THAT ADJOURNMENT WA S GIVEN TO 16.02.2011 AS A FINAL CHANCE AND IT SO HAPPENED THAT 16.02.201 1 WAS DECLARED AS HOLIDAY BY CENTRAL GOVT. AND ALL CASES POSTED FOR 1 6.2.2011 STOOD ADJOURNED TO 08.03.2011. IN SPITE OF THAT, A SEPARA TE NOTICE WAS ISSUED, WHICH ASSESSEE ALSO ACKNOWLEDGED HAVING RECEIVED I T. SINCE ASSESSEES CASE WAS COMING UP FOR HEARING FROM APRIL 2007 ONWA RDS, THE ASSESSEES SUBMISSION ON 08-03-2011, THAT THEY COULD NOT CO-OR DINATE AND BRIEF THE MA NO. 82/M/12 A.Y.00-01 SAKARWADI TRADIN G CO. P. LTD. 6 COUNSEL, CANNOT BE ACCEPTED AS A BONAFIDE STATEMENT . COUNSEL WAS ALREADY AUTHORIZED ALMOST TWO YEARS BACK. THE CONT ENTION THAT THEY COULD NOT COORDINATE WITH COUNSEL IS NOT SUPPORTED BY ANY EVIDENCE ON RECORD. ACCORDINGLY, ADJOURNMENT SOUGHT ON THAT DAY WAS REJECTED. VIDE PARA-7 OF THE ORDER IT IS FURTHER STATED AS UNDER : - THE ABOVE CONTENTIONS OF THE REVENUE ARE UNCONTROV ERTED. THE FACTS THAT THE ASSESSEE WAS SEEKING REGULAR ADJOURN MENTS EVEN AFTER PLACING THE PAPER BOOK ON RECORD AND WRITTEN SUBMISSIONS BY THE DR DO INDICATE THAT THEY HAVE NOT MUCH TO SAY O N THE ISSUE. 3.4 CONSIDERING THAT REPEATED ADJOURNMENTS WERE SOU GHT ON VARIOUS REASONS AND THE FACT THAT THE ASSESSEE FILED THE PA PER BOOK AND WRITTEN SUBMISSIONS FILED BY THE LD. DR WERE NOT CONTROVERT ED, THE APPEALS WERE CONSIDERED ON MERITS AND DISPOSED OFF EX PARTE VIDE RULE-24 OF THE ITAT RULES WHICH IS AS UNDER :- HEARING OF APPEAL EX-PARTE FOR DEFAULT BY THE APPEL LANT 24. WHERE, ON THE DAY FIXED FOR HEARING OR ON ANY O THER DATE TO WHICH THE HEARING MAY BE ADJOURNED, THE APPELLANT D OES NOT APPEAR IN PERSON OR THROUGH AN AUTHORIZED REPRESENTATIVE W HEN THE APPEAL IS CALLED ON FOR HEARING, THE TRIBUNAL MAY DISPOSED OF THE APPEAL ON MERITS AFTER HEARING THE RESPONDENT: PROVIDED THAT WHERE AN APPEAL HAS BEEN DISPOSED OF AS PROVID ED ABOVE AND THE APPELLANT APPEARS AFTERWARDS AND SATI SFIED THE TRIBUNAL THAT THERE WAS SUFFICIENT CAUSE FOR NON-AP PEARANCE , WHEN THE APPEAL WAS CALLED ON FOR HEARING, THE TRIBUNAL SHALL MAKE AN ORDER SETTING ASIDE THE EX PARTE ORDER AND RESTORIN G THE APPEAL] 3.5 IN ORDER TO RESTORE THE APPEAL, THE ASSESSEE HA S TO SUBMIT THAT THERE IS SUFFICIENT CAUSE FOR NON-APPEARANCE ON TH E DATE OF HEARING AND ITAT SHOULD BE SATISFIED ABOUT THAT SUFFICIENT CAUS E. AS STATED ABOVE, THE AVERMENTS MADE IN THE APPLICATION ARE CONTRARY TO T HE FACTS. THEREFORE, MA NO. 82/M/12 A.Y.00-01 SAKARWADI TRADIN G CO. P. LTD. 7 WE ARE NOT SATISFIED THAT THERE WAS SUFFICIENT CAUS E FOR NON APPEARANCE AND IT WAS ONLY AN ATTEMPT TO ADJOURN THE CASE UN-N ECESSARILY. THEREFORE, THE ADJOURNMENT SOUGHT ON THE LAST OCCASION WAS VAL IDLY REJECTED AND APPEAL WAS HEARD EX PARTE ON MERITS. WE DO NOT SEE REASON TO RECALL AND RESTORE THE ORDER. 3.6 IN THE COURSE OF ARGUMENTS THE LD. COUNSEL RELI ED ON THE DECISION OF THE HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE OF BABULAL JAIN VS. INCOME TAX OFFICER & ANOTHER (298 ITR 369)(MP). THE FACTS AND CONCLUSION OF THE HON'BLE HIGH COURT ARE AS UNDER : - THE ORDER PASSED BY THE COMMISSIONER (APPEALS) FOR THE ASSESSMENT YEAR 1999-2000 WAS CHALLENGED BEFORE THE TRIBUNAL. THIS WAS DISMISSED ON THE GROUND OF LIMITATION. THE HIGH COURT SET ASIDE THE DISMISSAL AND REMANDED THE MATTER TO THE TRIBUNAL TO HEAR THE CAS E ON THE MERITS. THEREAFTER, THE CASE WAS TAKEN UP ON JU NE 7, 2007, AND THE ASSESSEES COUNSEL MADE AND APPLICATION FOR ADJOURNMENT ON JUNE 6, 2007, THAT I S, A DAY BEFORE THE DATE OF HEARING, WITH A SUBMISSION T HAT HE WAS LIKELY TO BE DETAINED IN THE HIGH COURT AND IT WOULD NOT BE POSSIBLE FOR HIM TO APPEAR IN THE COUR T AND THE MATTER BE ADJOURNED. THE TRIBUNAL REJECTED THE PRAYER FOR ADJOURNMENT AND PROCEEDED TO HEAR THE APPEAL EX-PARTE. ON APPEAL: HELD, ALLOWING THE APPEAL, THAT WHEN COUNSEL FOR THE ASSESSEE MADE A SUBMISSION THAT IT WOULD NOT BE POSSIBLE FOR HIM TO APPEAR BECAUSE HE WOULD OTHERWI SE BE PROFESSIONALLY BUSY IN SOME OTHER CURT, THEN SUC H COURT BEFORE WHOM THE ADJOURNMENT WAS PRAYED FOR, WAS ORDINARILY REQUIRED TO ACCOMMODATE COUNSEL, BECAUSE SUCH ACCOMMODATION WAS NOT ONLY TO ACCOMMODATE COUNSEL BUT ALSO AMOUNTED TO SHOWING RESPECT TO THE OTHER COURT BEFORE WHICH SUCH COUNSE L HAD TO APPEAR. ADJOURNING THE MATTER FOR TEN OR TWELVE DAYS WAS NOT GOING TO MAKE ANY DIFFERENCE NOR HAD THE TRIBUNAL GIVEN ANY GOOD OR VALID REASON NOT TO ADJO URN THE CASE. THE ADJOURNMENT WAS SOUGHT ON JUNE 7, 200 7, TILL JUNE 18, 2007. IF THE TRIBUNAL WAS IN SUCH A H URRY, MA NO. 82/M/12 A.Y.00-01 SAKARWADI TRADIN G CO. P. LTD. 8 THEN IT SHOULD HAVE DECIDED THE MATTER IMMEDIATELY INSTEAD OF DELIVERING THE JUDGMENT AFTER ALMOST ELE VEN WEEKS. THUS, THE TRIBUNAL WAS NOT JUSTIFIED IN NOT ADJOURNING THE CASE AND ITS ORDER WAS QUASHED. THE TRIBUNAL WAS TO GIVE A FIXED DATE TO THE PARTIES AN D HEAR THEM ON THE SAID DATE AND DECIDE THE MATTER IN ACCORDANCE WITH LAW. 4. AS CAN BE SEEN FROM THE ABOVE, THE REASON GIVEN FOR ADJOURNMENT WAS THAT THE ASSESSEES COUNSEL WAS APPEARING BEFOR E THE HON'BLE HIGH COURT AND IT WOULD NOT BE POSSIBLE FOR HIM TO APP EAR BEFORE THE ITAT. ON THOSE SET OF FACTS THE HON'BLE MADHYA PRADESH HI GH COURT ALLOWED THE APPEAL AND RESTORED THE MATTER TO THE ITAT FOR FRES H CONSIDERATION. HOWEVER, THE FACTS IN THIS CASE ARE ENTIRELY DIFFER ENT. IT IS NOT THE CASE WHERE THE LD. COUNSEL SOUGHT ADJOURNMENTS IN APPEAR ING BEFORE ITAT FOR ANY DIFFICULTY FACED BY HIM. IT WAS THE ASSESSEE WH O IS CONTINUOUSLY SEEKING ADJOURNMENT ALMOST FOR 4 YEARS, ON VARIOUS REASONS WHICH ARE DETAILED ABOVE BRIEFLY. WE ARE OF THE OPINION THAT THE PRINCIPLES LAID DOWN BY THE HON'BLE MADHYA PRADESH HIGH COURT IN TH E ABOVE REFERRED CASE DOES NOT APPLY TO THE FACTS OF THE CASE. 5. IN THE RESULT, THE MISCELLANEOUS APPLICATION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH JULY 2013. SD/- SD/- (D. MANMOHAN ) VICE PRESIDENT (B. RAMAKOTAIAH ) ACCOUNTANT MEMBER MUMBAI, DATED: 5 TH JULY 2013. JV. MA NO. 82/M/12 A.Y.00-01 SAKARWADI TRADIN G CO. P. LTD. 9 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.