ITO, Krishnagiri v. M/s. The Golden Granites, Krishnagiri

ITA 1221/CHNY/2010 | 1990-1991
Pronouncement Date: 16-03-2011 | Result: Allowed

Appeal Details

RSA Number 122121714 RSA 2010
Bench Chennai
Appeal Number ITA 1221/CHNY/2010
Duration Of Justice 7 month(s) 20 day(s)
Appellant ITO, Krishnagiri
Respondent M/s. The Golden Granites, Krishnagiri
Appeal Type Income Tax Appeal
Pronouncement Date 16-03-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted D
Tribunal Order Date 16-03-2011
Date Of Final Hearing 16-03-2011
Next Hearing Date 16-03-2011
Assessment Year 1990-1991
Appeal Filed On 27-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENNAI BEFORE SHRI HARI OM MARATHA JM AND SHRI ABRAHAM P. GEORGE AM .. I.T.A. NOS. 1215 TO 1221/MDS/2010 [ASSESSMENT YEARS 1984-85 TO 1990-91] INCOME-TAX OFFICER WARD 1(1) KRISHNAGIRI VS. M/S THE GOLDEN GRANITES NO. 252 PANAGAL STREET KAVERIPATTINAM KRISHNAGIRI 635 112. PAN/GIR NO. :T417 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. MEENATCHI SUNDRAM DEPARTMENT BY : SHRI K.E.B. RENGARAJAN O R D E R PER BENCH : THESE ARE ALL APPEALS FILED BY THE REVENUE AGAINST THE ORDER DATED 19.5.2010 OF THE LD. CIT(A) SALEM FOR THE AS SESSMENT YEARS 1984-85 TO 1990-91. PAGE 2 OF 9 I.T.A. NOS 121 5 TO 1221/MDS/2010 2. GROUNDS RAISED BY THE REVENUE CAN BE SUMMARIZED INTO TWO. FIRST GRIEVANCE IS THAT THE LD. CIT(A) CONDONED THE DELAY IN FILING THE APPEALS. SECOND GRIEVANCE IS THAT THE ASSESSING OF FICER HAD WORKED OUT SUPPRESSION OF SALES BASED ON ADMISSION OF THE ASSESSEE AND ADDITION MADE ON THIS REGARD WAS UNJUSTLY DELETED B Y THE LD. CIT(A). 3. SHORT FACTS APROPOS ARE THAT ASSESSEE ENGAGED I N THE BUSINESS OF MINING GRANITES WAS SUBJECTED TO SEARCH ACTION ON 6.9.1990. IT SEEMS A STATEMENT WAS TAKEN FROM SHRI K.V. NARAYANA SWAMY THE MANAGING PARTNER OF THE ASSESSEE FIRM DURING THE TI ME OF SEARCH. AS PER THE ASSESSING OFFICER IN SUCH SWORN STATEMENT THE MANAGING PARTNER HAD STATED THAT THERE WERE SUPPRESSION OF S ALES BY COLLECTING AMOUNTS FROM CUSTOMERS OVER AND ABOVE TH E INVOICE VALUE IN CASH. ASSESSMENTS FOR ALL ASSESSMENT YEA RS WERE REOPENED AND REOPENED ASSESSMENTS WERE COMPLETED ON 27.3.199 7 U/S 144 OF THE INCOME-TAX ACT 1961 [IN SHORT THE ACT] AND AD DITIONS WERE MADE FOR SUPPRESSION OF SALES FOR EXCESS AMOUNT REC EIVED OVER AND ABOVE THE INVOICE PRICE. ASSESSEE MOVED IN APPEAL BEFORE THE LD. CIT(A) WHEREUPON THE LD. CIT(A) DELETED THE ENTIRE ADDITIONS. REVENUE THEREAFTER MOVED IN APPEAL BEFORE THIS TR IBUNAL AND THIS PAGE 3 OF 9 I.T.A. NOS 121 5 TO 1221/MDS/2010 TRIBUNAL VIDE ORDER DATED 23.12.2005 IN ITA NOS. 18 02 TO 1808/MDS/98 DATED 23.12.2005 REMANDED THE ISSUES BA CK TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO REDO T HE ASSESSMENT AFTER GIVING OPPORTUNITY TO THE ASSESSEE AND CORREL ATING THE SUPPRESSION OF SALES AND ACQUISITION OF ASSETS WITH THE MATERIAL FOUND DURING SEARCH. ASSESSING OFFICER PURSUANT T O SUCH DIRECTIONS OF THE TRIBUNAL ISSUED NOTICE TO THE ASSESSEE ON 1 6.10.2006. THIS NOTICE WAS RETURNED UNSERVED. A FRESH NOTICE WAS I SSUED WHICH WAS SERVED ON THE MANAGING PARTNER OF THE FIRM SHRI K.V . NARAYANASWAMY ON 10.11.2006 POSTING THE CASE FOR HE ARING ON 17.11.2006. VIDE HIS LETTER DATED 14.11.2006 THE SAID SHRI K.V. NARAYANASWAMY REQUESTED FOUR WEEKS TIME AND MEDICAL CERTIFICATE WAS ALSO APPENDED WHICH MENTIONED THAT HE HAD UNDER GONE A SURGERY. THEREAFTER THE CASE WAS POSTED FOR HEARI NG ON 28.11.2006 VIDE LETTER DATED 20.11.2006. THIS LETTER WAS RETU RNED UNSERVED. LD. ASSESSING OFFICER THEREAFTER POSTED THE CASE FOR 15.12.2006 AND THERE BEING NO ATTENDANCE BY ASSESSEE OR HIS RE PRESENTATIVE COMPLETED ASSESSMENT ON 29.12.2006 OBSERVING THAT A SSESSMENTS WERE GETTING TIME BARRED BY 31.12.2006. SHRI K.V. NARAYANASWAMY DID FILE A LETTER ON RECEIVING THE NOTICE OF HEARIN G ON 15.12.2006 PAGE 4 OF 9 I.T.A. NOS 121 5 TO 1221/MDS/2010 THAT HE WAS STILL UNDER MEDICATION AND MEDICAL ADVI CE. BUT AS PER THE ASSESSING OFFICER HE HAD NO ALTERNATIVE EXCEPT TO COMPLETE ASSESSMENT EX PARTE. 4. AS MENTIONED ABOVE ASSESSEE CARRYING ON THE BUS INESS OF MINING OF GRANITES AND BASED ON SEIGNERAGE FEES PAI D FOR THE QUANTUM OF GRANITE QUARRIED ASSESSING OFFICER WORK ED OUT THE QUANTITY OF GRANITE PRODUCED BY THE ASSESSEE. DETA ILS OF SEIGNERAGE FEES WAS COLLECTED FROM THE FOREST DEPARTMENT AND T HEREAFTER RELYING ON THE STATEMENT OF SHRI K.V. NARAYANASWAMY GIVEN DURING THE COURSE OF SEARCH WHEREIN IT SEEMS THAT HE HAD ADMITTED TO RECEIPT IN CASH OVER AND ABOVE INVOICE PRICE OF SU MS RANGING RS. 1000 TO 1500 PER CUBIC METRE ASSESSING OFFICER COM PLETED ASSESSMENT. ASSESSING OFFICER ALSO NOTICED THAT IN AN AFFIDAVIT FILED BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT ON A CONTEMPT APPLICATION FILED BY THE BROTHER OF SHRI K.V. NARAY ANASWAMY RECEIPT OF EXCESS PAYMENT OVER AND ABOVE INVOICE PR ICE WAS ADMITTED. BASED ON THIS ASSESSING OFFICER ONCE AG AIN WORKED OUT THE SUPPRESSION OF SALES FOR ALL THE IMPUGNED ASSES SMENT YEARS BY PAGE 5 OF 9 I.T.A. NOS 121 5 TO 1221/MDS/2010 CONSIDERING 30% OF THE INVOICE RATE PER CUBIC METER AS EXCESS AMOUNTS RECEIVED. 5. APPEAL WAS FILED BY THE ASSESSEE BEFORE THE LD. CIT(A) ABOUT 33 MONTHS LATE. WHILE PLEADING FOR CONDONATION OF DELAY SUBMISSION OF THE ASSESSEE WAS THAT NATURAL JUSTICE WAS DENIED SINCE IT WAS NOT GIVEN PROPER OPPORTUNITY TO EXPLAIN ITS CASE TO THE ASSESSING OFFICER. ACCORDING TO THE ASSESSEE THER E WAS SERIOUS HEALTH DISORDER SUFFERED BY ITS MANAGING PARTNER WH ICH EFFECTIVELY DISABLED IT FROM APPEARING BEFORE THE ASSESSING OFF ICER AND FILING THE APPEAL WITHIN THE TIME ALLOWED UNDER STATUTE. AS PER THE ASSESSEE ALL DOCUMENTARY EVIDENCE RELATING TO DOCT ORS REPORT LAB INVESTIGATION REPORT AND OTHER HOSPITAL RECORDS LI KE DISCHARGE SUMMARY WERE AVAILABLE. LD. CIT(A) APPRECIATED THI S CONTENTION AND WAS OF THE OPINION THAT FOR CONDONATION OF DELA Y A LIBERAL AND PRAGMATIC APPROACH HAD TO BE ADOPTED AND CERTIFICAT ES FILED BY THE ASSESSEE CLEARLY DEMONSTRATED THAT ITS MANAGING PAR TNER COULD NOT ENTER APPEARANCE. ACCORDING TO THE LD. CIT(A) PLE A OF THE MANAGING PARTNER SHRI K.V. NARAYANASWAMY WAS TRUE A ND HE THEREFORE ADMITTED THE APPEALS BY CONDONING THE DE LAY. PAGE 6 OF 9 I.T.A. NOS 121 5 TO 1221/MDS/2010 6. ON MERITS PLEADING OF THE ASSESSEE BEFORE THE LD . CIT(A) WAS THAT THE ASSESSING OFFICER HAD NOT FOLLOWED THE EAR LIER TRIBUNAL DIRECTIONS FOR CORRELATING THE ADDITIONS WITH SEIZ ED MATERIAL. FURTHER AS PER THE ASSESSEE THE ASSESSING OFFICER HAD GONE BY CERTAIN ASSUMPTIONS REGARDING QUANTITY OF GRANITE E XCAVATED AND QUANTITY OF GRANITE SOLD WITHOUT CONSIDERING WASTAG E IN THE PRODUCTION PROCESS. AGAIN AS PER THE ASSESSEE IT S MANAGING PARTNER HAD RETRACTED THE STATEMENT GIVEN DURING TH E COURSE OF SEARCH AND THE ASSESSING OFFICER DESPITE SUCH RETRA CTION MADE ADDITION WITHOUT ANY CORROBORATION WITH ANY SEARCHE D MATERIAL. LD. CIT(A) BASED ON THE SUBMISSIONS OF THE ASSESSEE C AME TO A CONCLUSION THAT THE ADDITIONS WERE NOT MADE WITH AN Y MATERIALS IN SUPPORT AND NO EFFORT WAS TAKEN BY THE ASSESSING OF FICER TO REDO THE ASSESSMENT AS DIRECTED BY THE TRIBUNAL. HE THEREF ORE DELETED THE ADDITIONS FOR ALL THE YEARS. 7. NOW BEFORE US THE LD. D.R. STRONGLY ASSAILING T HE ORDER OF THE ASSESSING OFFICER SUBMITTED THAT THE ASSESSEE WAS GIVEN ADEQUATE OPPORTUNITIES BY THE ASSESSING OFFICER BUT IT DID N OT AVAIL SUCH PAGE 7 OF 9 I.T.A. NOS 121 5 TO 1221/MDS/2010 OPPORTUNITIES. FURTHER ACCORDING TO HIM LD. CIT( A) CONDONED THE DELAY WITHOUT PROPER REASONS. LD. D.R. SUBMITTED T HAT THE ASSESSING OFFICER WAS CONSTRAINED TO COMPLETE ASSES SMENT IN THE SAME LINES AS EARLIER DONE DUE TO NON COOPERATION OF THE ASSESSEE. ACCORDING TO THE LD. D.R. THE ASSESSING OFFICER HA D FOLLOWED THE DIRECTIONS OF THE TRIBUNAL IN THIS REGARD. 8. PER CONTRA THE LD. A.R. SUPPORTING THE ORDER OF THE LD. CIT(A) SUBMITTED THAT PROPER OPPORTUNITY WAS NOT GIVEN TO THE ASSESSEE AND THE ASSESSING OFFICER HAVING NOT FOLLOWED THE D IRECTIONS OF THE TRIBUNAL LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITIONS. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS. ORIGINAL ASSESSMENTS WERE COMPLETED U/S 144 OF THE ACT. ASSESSEES MANAGING PARTNER SHRI K.V. NARAYANASWAMY HAD AT TH E TIME OF ORIGINAL ASSESSMENT PROCEEDINGS ITSELF SUBMITTED TH AT HE WAS UNABLE TO ENTER APPEARANCE DUE TO ILLNESS AND MEDICAL CERT IFICATES WERE PRODUCED IN THIS REGARD. ASSESSING OFFICER WENT BY THE STATEMENT GIVEN BY SHRI K.V. NARAYANASWAMY AT THE TIME OF SEA RCH AND PROCEEDED TO MAKE ADDITIONS FOR SUPPRESSED SALES. LD. CIT(A) HAD PAGE 8 OF 9 I.T.A. NOS 121 5 TO 1221/MDS/2010 CONDONED THE DELAY AFTER GOING THROUGH VARIOUS MEDI CAL CERTIFICATES PERTAINING TO SHRI K.V. NARAYANASWAMY AND SUCH MEDI CAL RECORDS WERE NOT FOUND TO BE UNTRUE OR FABRICATED. WHEN TH E MANAGING PARTNER OF THE ASSESSEE FIRM WAS SUFFERING FROM SER IOUS ILLNESS WHICH DISABLED HIM FROM APPEARING INTEREST OF JUSTICE RE QUIRED ADMISSION OF THE APPEAL. THIS WAS RIGHTLY DONE BY THE LD. CI T(A) AND WE FIND NO LACUNAE IN THIS REGARD. 10. IN SO FAR AS DELETION OF ADDITION IS CONCERNED ASSESSEE WAS ADMITTEDLY NOT REPRESENTED BEFORE THE ASSESSING OFF ICER. THEREFORE ASSESSING OFFICER HAD NO OPPORTUNITY TO OBTAIN THE EXPLANATION OF THE ASSESSEE NOR CONSIDER THE RETRAC TION OF THE STATEMENT EARLIER GIVEN BY ITS MANAGING PARTNER . TRIBUNAL IN ITS EARLIER ORDER CLEARLY DIRECTED THE ASSESSING OFFIC ER TO CORRELATE THE ADDITIONS MADE WITH THE SEIZED MATERIALS. WE CAN U NDERSTAND THE DIFFICULTIES FACED BY LD. ASSESSING OFFICER WHEN TH E ASSESSEE DID NOT ENTER APPEARANCE. NEVERTHELESS ASSESSEES FAILURE T O ENTER APPEARANCE WAS NOT WITH ANY MALAFIDE INTENTION BUT ONLY ON ACCOUNT OF ILLNESS OF ITS MANAGING PARTNER. WE ARE OF THE OPINION THAT THE MATTER REQUIRES RECONSIDERATION AT THE LEV EL OF THE PAGE 9 OF 9 I.T.A. NOS 121 5 TO 1221/MDS/2010 ASSESSING OFFICER IN THE INTEREST OF JUSTICE. WE THEREFORE SET ASIDE THE ORDERS OF THE ASSESSING OFFICER AND LD. C IT(A) AND REMIT THE ISSUES BACK TO THE FILE OF THE ASSESSING OFFICE R FOR CONSIDERATION AFRESH FOR ALL THE YEARS DE NOVO. ASSESSEE HAS TO BE GIVEN PROPER OPPORTUNITY TO REPRESENT ITS CASE. ASSESSEE SHALL COOPERATE WITH THE ASSESSING OFFICER AND THE ASSESSING OFFICER SHALL A LSO KEEP IN MIND THE DIRECTIONS GIVEN BY THE TRIBUNAL EARLIER. 11. IN THE RESULT APPEALS OF THE REVENUE ARE ALLOW ED FOR STATISTICAL PURPOSES FOR ALL THE YEARS. ORDER PRONOUNCED IN THE OPEN COU RT ON 16.3.2011. SD/- SD/- ( HARI OM MARATHA ] ] ( ABRAHAM P. GEORGE ) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 16 TH MARCH 2011. VL COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE