M/s. Jasu Jewellers & Sons, Ahmedabad v. The ACIT(Inv.) Circle-8(2),, Ahmedabad

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A AHMEDABAD BEFORE SHRI MAHAVIR SINGH JUDICIAL MEMBER AND SHRI D. C. AGRAWAL ACCOUNTANT MEMBER ITA NO.2073-2076/AHD/2007 ASSESSMENT YEARS : 1990-91 TO 1992-93 DATE OF HEARING:3.5.10 DRAFTED:3.5.10 M/S. JASU JEWELLERS & SONS GOLD PALACE SWASTIK SHOPPING CENTRE NAVRANGPURA AHMEDABAD PAN NO.AAFFJ3295F V/S . ACIT (INV.) CIRCLE-8(2) AHMEDABAD (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI G.S. PATEL AR REVENUE BY:- SHRI ABHIJEET KUMAR NOBKHADH SR-DR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THESE FOUR APPEALS BY THE ASSESSEE ARE ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-XVI AHMEDABAD IN APPEAL NOS. CIT(A)- XVI/AC.CIR.10/89-92/06-07 DATED 19-03-2007. THE ASS ESSMENTS WERE FRAMED BY THE ACIT (INV) CIRCLE-8(2) AHMEDABAD U/S.143(3) R.W.S. 144 OF THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORD ERS DATED 15-03-91 30-03-1994 AND 31-03-1994 FOR ASSESSMENT YEARS 1990-91 TO 1992-93. THE PENALTY UNDER DISPUTE LEVIED BY ASSESSING OFFICER U/S.271(1)(C) OF THE AC T VIDE HIS ORDER DATED 30-09-1994. 2. THE ONLY COMMON ISSUE IN ALL 4 APPEALS OF THE AS SESSEE IS RAISED AGAINST THE ORDER OF CIT(A) REFUSING TO CONDONE THE DELAY IN FI LING THE APPEALS OF THE ASSESSEE. FOR THIS ASSESSEE HAS RAISED THE GROUND WHICH ARE COMMON IN ALL THE APPEALS AND ITA NO.2073-2076/AHD/2007 A.YS 90-91 TO 92-93 M/S. JASU JEWELLERS & SONS V. ACIT(INV) CIR-8(2) ABD PAGE 2 FOR THE SAKE OF CONVENIENCE AND CLARITY THE GROUND S FROM APPEAL NO.2073/AHD/2007 ARE BEING REPRODUCED AS IT IS:- 1. THE APPELLANTS SUBMIT THAT THE LD. CIT(A) HAS E RRED I REFUSING TO CONDONE THE DELAY IN FILING THE APPEAL WHICH WAS BONAFIDE. 1.1 THE APPELLANTS SUBMIT THAT THE DELAY BE CONDONE D AND THE LD. CIT(A) BE DIRECTED TO HEAR THE APPEALS ON MERITS AFTER GIVING THE OPPORTUNITY OF HEARING TO THE APPELLANTS. 3. THE BRIEF FACTS IN THE PRESENT APPEALS ARE THAT THE ASSESSMENT U/S.143(3) OF THE ACT FOR ASSESSMENT YEAR 1990-91 WAS COMPLETED O N 23-03-1993 FOR ASSESSMENT YEAR 1991-92 ON 30-03-1994 U/S.144 OF THE ACT FOR ASSESSMENT YEAR 1992-93 ON 31- 03-1994 U/S.144 OF THE ACT AND PENALTY U/S 271(1)( C) OF THE ACT VIDE ORDER DATED 30- 09-1994 FOR ASSESSMENT YEAR 1992-93. THE ASSESSEE F ILED APPEALS BEFORE CIT(A) ON 29-05-2006 WHICH IS ALMOST DELAYED BY MORE THAN 12 YEARS ALONG WITH THESE APPEALS THE ASSESSEE ALSO FILED CONDONATION PETITIO N FOR CONDONING THE DELAY IN FILING OF THESE APPEALS. THE CIT(A) REFUSED TO CONDONE THE DELAY IN PARA-4 OF HIS APPELLATE ORDER AS UNDER:- 4. I HAVE CAREFULLY CONSIDERED THE AFFIDAVIT FILED BY THE PARTNERS AND THE REASONS MENTIONED BY THEM FOR DELAY IN FILING THE A PPEALS. THE PARTNERS HAVE THEMSELVES MENTIONED THAT DUE TO SEARCH BY THE I.T. DEPTT. IN MARCH 1992 THEY LEFT AHMEDABAD AND WENT TO BOMABY AND OTHER PA LACES AND MOVED FROM ONE PLACE TO OTHER IN THE INTERVENING PERIOD. THE P ARTNERS HAVE ALSO ADMITTED THAT THE NOTICES WERE SERVED THROUGH AFFIXTURE. SIN CE THE PARTNERS OF THE APPELLANT-FIRM HAD VOLUNTARILY LEFT AHMEDABAD IN OR DER TO AVOID THE CONSEQUENCES OF THE SEARCH OPERATION UNDERTAKEN BY THE I.T. DEPTT. THE SERVICE OF THESE ORDERS THROUGH AFFIXTURE IS A VALI D SERVICE. THE AO WAS LEFT WITH NO OTHER ALTERNATIVE THAN TO SERVE THE ORDERS THROUGH AFFIXTURE. THE REASONS GIVEN BY THE PARTNERS OF THE APPELLANT-FIRM FOR FILING THE APPEALS LATE HAVE BEEN CAREFULLY CONSIDERED BY ME AND I FIND NO MERITS IN THE SAME SINCE THE PARTNERS OF THE APPELLANT-FIRM HAD LEFT AHMEDAB AD VOLUNTARILY TO AVOID THE CONSEQUENCES OF THE SEARCH OPERATION. THE DELAY IN FILING THE FOUR APPEALS MENTIONED ABOVE WHICH IS MORE THAN 12 YEARS IS NOT FOR GOOD AND SUFFICIENT REASON AND HENCE CANNOT BE CONDONED. THUS THE APP LICATIONS OF THE APPELLANT FOR CONDONATION OF DELAY ARE REJECTED. AGGRIEVED ASSESSEE CAME IN SECOND APPEAL BEFORE TR IBUNAL AGAINST THE ORDER OF CIT(A). 4. BEFORE US LD. COUNSEL FOR THE ASSESSEE SHRI G.S . PATEL SUBMITTED THE FACTS THAT SEARCH WAS CONDUCTED ON ASSESSEE ON 13-02-1992 & 14-02-1992 AND DURING ITA NO.2073-2076/AHD/2007 A.YS 90-91 TO 92-93 M/S. JASU JEWELLERS & SONS V. ACIT(INV) CIR-8(2) ABD PAGE 3 THE COURSE OF SEARCH STATEMENT OF PARTNER J.V. SON I RECORDED ON 13-2-92 U/S.132(4) WHO DISCLOSED INCOME OF RS.25 28 000/-. HE FURTHER STATED THAT PARTNERS OF THE FIRM LEFT AHMEDABAD AND RESIDED AT VARIOUS PLACES TO AVO ID CREDITORS AND THE ORDERS WERE SERVED BY AFFIXTURE ON THE SHOP WHICH WAS HANDED OV ER TO CREDITORS AGAINST THEIR DUES. ACCORDING TO HIM THE ASSESSEE FIRM WAS NOT AWARE OF THE AFFIXTURE OF THE ORDERS AS THEY WERE OUT OF AHMEDABAD HIDING FROM CR EDITORS HOWEVER WHEN THE PARTNERS OF THE FIRM REALIZED THAT THEY CAN COME TO AHMEDABAD THE ASSESSEE INSTRUCTED THE ADVOCATE TO LOOK AFTER INCOME TAX MA TTERS AS STATED IN THE APPLICATION DATED 12-2-07 FILED WITH CIT(A) FOR CONDONATION OF DELAY IN FILING APPEALS ON 29-5-06 AFTER ABOUT 12 YEARS AFTER OBTAINING COPIES OF ALL NECESSARY PAPER ON 4-5-06 FROM THE A.O. THE LD. COUNSEL FOR ASSESSEE CONTENDED THAT AS SESSEE-FIRM HAS RECEIVED THE COPY OF ORDER FOR THE RELEVANT ASSESSMENT YEARS IN CLUDING THE PENALTY ORDER FROM ACIT(INV.) CIRCLE-8(1) AHMEDABAD ON 04-05-2006 AND APPEALS WERE FILED IN DUE COURSE. LD. COUNSEL FOR ASSESSEE CONTENDED THAT TH E ASSESSMENT ORDERS ARE PRETTY OLD AND ORDER U/S.143(3) OF THE ACT AS WELL AS EX P ARTE ORDER U/S.144 OF THE ACT FOR ASSESSMENT YEAR 1991-92 AND 1992-93 AS WELL AS PENA LTY ORDER U/S.271(1) OF THE ACT EX PARTE FOR EARLIER YEARS IN DUE COURSE BY THE DEPARTMENT. HOWEVER AFTER SEARCH AND SEIZURE NONE OF THE PARTNERS WERE AVAILA BLE IN AHMEDABAD AND HAVE LEFT FOR VARIOUS PLACES FOR EARNING THEIR LIVELIHOOD. TH E LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THE DETAILS OF STAY OF ONE OF THE PARTNER OF THE FIRM AND URGED THAT THE SAME MAY BE CONSIDERED AS PART AND PARCEL OF SUBMISSION TO CONDONE THE DELAY IN FILING THE APPEAL AND ADMIT THE APPEAL ACCORDINGLY. SHRI D ILIPBHAI J SONI AND GITABEN D SONI WIFE OF DILIP SONI AFTER SEARCH AND SEIZURE I N THE PREMISES OF THE FIRM IN MARCH92 LEFT FOR BOMBAY AND HAVE STARTED TO STAY WITH HIS BROTHER-IN-LAW MR. BHARAT S SONI RESIDING AT 30/B BHARAT SOCIETY NEAR STATI ON KHAR (W) BOMABAY. HE STAYED THERE FOR TWO AND HALF YEARS APPROXIMATELY. AS THE SAID PREMISE WAS BELONGING TO HIS BROTHER-IN-LAW HE HAD NOT PAID ANY RENT AND THERE AFTER ASSESSEE HAS CHANGED RESIDENCE TO MILITARY CAMP G/254 KALINA SANTCRUZ ( EE) MUMBAI. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT HE WAS ONLY LIVING IN THE ABOVE SAID PREMISES WITHOUT FAMILY MEMBERS AND PAYING APPROXIMATELY RENT OF RS. 800/- PER MONTH WHERE HE STAYED FOR ABOUT TWO AND HALF YEARS. THEREAFTER AS SESSEE CHANGED RESIDENCE TO NHB COLONY PANDARAY PATIL MARK KALINA SANTACRUZ (E) AND ASSESSEE WAS PAYING RENT @ RS.1 200/- PER MONTH. THEREAFTER ASSESSEE CHANGED RESIDENCE AND STAYING AT 11 SURYA MANZIL OWNED BY AHMED HUSSAIN SHAIKH ONE ROOM BALCONY AND WAS ITA NO.2073-2076/AHD/2007 A.YS 90-91 TO 92-93 M/S. JASU JEWELLERS & SONS V. ACIT(INV) CIR-8(2) ABD PAGE 4 PAYING RENT @ RS.1 500/- PER MONTH THERE HE STAYED FOR APPROXIMATELY THREE YEARS. THEREAFTER ASSESSEE AGAIN CHANGED RESIDENCE TO 302 THAKOR COMPLEX B/H. SAI DHAM KANDIVALI (E) GANPATRO ROAD MUMBAI AND THIS IS ASSESSEES LAST ADDRESS WHERE HE WAS LIVING AND PAYING RENT @ 2 000/- P.M. SINCE LAST THREE YEARS. DURING THE ABOVE PERIOD WHEN ASSESSEE STAYING IN MUMBAI F ROM PLACE TO PLACE FOR EARNING HIS LIVELIHOOD WAS DOING BUSINESS OF PURCHASE AND S ALE OF IMITATION JEWELLERY AND SELLING IT FROM SHOP-TO-SHOP AND VARIOUS OTHER PLAC ES. THE ASSESSEE DID NOT OWN ANY SHOP FOR SELLING THE ABOVE ITEM. LD. COUNSEL FOR A SSESSEE STATED THAT THE TWO COPIES OF AFFIDAVITS FILED DATED 01-12-2006 NARRATING THE ABOVE CIRCUMSTANCES MAY BE CONSIDERED AS PART AND PARCEL OF THE ASSESSEES SUB MISSION. RELYING UPON THE ABOVE SAID FACTS THE LD. COUNSEL STATED THAT THE D ELAY IN FILING THE APPEALS MAY BE CONDONED AND CIT(A) BE DIRECTED TO DECIDE THE ISSUE S ON MERITS. 5. ON THE OTHER HAND LD. SR-DR FAIRLY STATED THAT THE ASSESSEE HAS NOT SUBMITTED HIS ADDRESS TO THE ASSESSING OFFICER WHER E HE WAS RESIDING AT THE APPROPRIATE TIMES. HE STATED THAT THE ASSESSING OF FICER HAS SERVED THE ASSESSMENT ORDERS AND OTHER NOTICES ON LAST KNOWN ADDRESS THRO UGH AFFIXTURE. HE STATED THAT THE ASSESSEE IS ASKING FOR CONDONATION OF DELAY FOR ALM OST OF 12 YEARS WITHOUT ANY REASONABLE CAUSE. HENCE HE URGED THE BENCH TO CON FIRM THE ORDER OF CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESS EE COULD NOT SHOW US ANY SINGLE INSTANCE WHICH PROVES THAT THE ASSESSEE WAS ACTING UNDER DUE DILIGENCE AND WAS NOT GUILTY OF NEGLIGENCE. THE ASSESSEE WAS AWARE TH AT SEARCH HAS ALREADY TAKEN PLACE AND ASSESSMENT YEAR PROCEEDINGS ARE GOING ON IN ITS CASES. THE PARTNER OF THE ASSESSEE-FIRM HAS CLEARLY ADMITTED THAT THE ORD ERS WERE AFFIXED ON THE BUSINESS PREMISES THE PROPERTY OF WHICH WAS NOT THE PROPERT Y BELONGING TO THE FIRM AT THE RELEVANT TIME SINCE THE SAME WAS HANDED OVER TO TH IRD PARTY FOR CARRYING ON THE BUSINESS OF THE ASSESSEE-FIRM. IT WAS THE CONTENTI ON OF THE ASSESSEE THAT ALL THE PARTNERS OF THE ASSESSEE-FIRM LEFT AHMEDABAD AND HE ADED FOR MUMBAI AND OTHER PLACES DUE TO SEARCH ONLY. THE ALTERNATIVE CONTENTI ON OF THE ASSESSEE WAS ALSO THAT THE DEBTORS OF THE ASSESSEE-FIRM FORCIBLY MADE THEM TO LEAVE AHMEDABAD BUT WITHOUT ANY EVIDENCE. ON ENQUIRY FROM THE BENCH THE LD. C OUNSEL COULD NOT REPLY THAT THEY HAVE FILED ANY POLICE COMPLAINT AGAINST THE HARASSM ENT OF THE PARTNERS OF THE FIRM BY ITA NO.2073-2076/AHD/2007 A.YS 90-91 TO 92-93 M/S. JASU JEWELLERS & SONS V. ACIT(INV) CIR-8(2) ABD PAGE 5 THE DEBTORS. RATHER THE LD. COUNSEL AGREED THAT N O SUCH ACTION I.E. FILING OF POLICE COMPLAINT WAS TAKEN. IN VIEW OF THESE FACTS WE A RE OF THE VIEW THAT THE PERIOD FOR FILING OF AN APPEAL CANNOT BE EXTENDED SIMPLY BECAU SE THE ASSESSEE CALLS FOR SYMPATHY OR MERELY OUT OF BENEVOLENCE TO THE PARTY SEEKING RELIEF AS IN THE PRESENT CASE. WE FIND NO DILIGENCE ON THE PART OF THE ASSE SSEE RATHER HE WAS GUILTY OF NEGLIGENCE AS EVEN FOR 12 YEARS HE WAS AWAY FROM AH MEDABAD DUE TO SEARCH PROCEEDINGS OF INCOME-TAX DEPARTMENT. FOR CONDONAT ION OF DELAY THE SUFFICIENT CAUSE WITHIN THE CONTEMPLATION OF THIS PROVISION MU ST BE A CAUSE WHICH IS BEYOND THE CONTROL OF THE PARTY INVOKING THE AID OF THE PR OVISIONS. THE CAUSE FOR DELAY IN FILING THE APPEAL WHICH BY DUE CARE AND ATTENTION COULD HAVE BEEN AVOIDED CANNOT BE A SUFFICIENT CAUSE WITHIN THE MEANINGS OF THIS P ROVISION. HERE THE ASSESSEE IS UNABLE TO GIVE ANY SUFFICIENT CAUSE OR REASONABLE E XPLANATION WHICH IS SATISFACTORY ACCORDINGLY WE HAVE NO REASON TO CONDONE THE DELAY . HENCE WE CONFIRM THE ORDER OF CIT(A) REFUSING TO CONDONE THE DELAY. 7. IN THE RESULT ASSESSEES APPEALS ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 14/05 /2010 SD/- SD/- (D.C.AGRAWAL) (MAHAVIR SINGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD DATED : 14/05/2010 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-XVI AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD