SPRING TECHNOLOGY ( PROP MR. ASHOK KUMAR TIWAR), MUMBAI v. ITO WD 20(3)(2), MUMBAI

ITA 3221/MUM/2009 | 2001-2002
Pronouncement Date: 22-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 322119914 RSA 2009
Assessee PAN AGZPK6563D
Bench Mumbai
Appeal Number ITA 3221/MUM/2009
Duration Of Justice 2 year(s) 2 month(s) 8 day(s)
Appellant SPRING TECHNOLOGY ( PROP MR. ASHOK KUMAR TIWAR), MUMBAI
Respondent ITO WD 20(3)(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted E
Tribunal Order Date 22-07-2011
Date Of Final Hearing 12-07-2011
Next Hearing Date 12-07-2011
Assessment Year 2001-2002
Appeal Filed On 14-05-2009
Judgment Text
1 ITA NO. 3221 & 3222/MUM/2009 (ASST YEAR 2001-02) IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH MUMBAI BENCHES MUMBAI BEFORE SHRI PRAMOD KUMAR AM & SHRI VIJAY PAL RAO JM ITA NO. 3221 & 3222/MUM/2009 (ASST YEAR 2001-02) M/S SPRING TECHNOLOGY PROF MR ASHOK KUMAR TIWARI GROUND FLOOR BUILDING NO.45 TILAK NAGAR CHEMBUR MUMBAI 89 VS THE INCOME TAX OFFICER WARD 20(3)(2) MUMBAI (APPELLANT) (RESPONDENT) PAN NO. AGZPK6563D ASSESSEE BY SHRI ASHOK KUMAR TIWARI REVENUE BY SHRI C G K NAIR PER VIJAY PAL RAO JM THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST TWO SEPARATE ORDERS BOTH DATED 29.8.2008 ONE ARISING FROM THE ASSESSMEN T ORDERS PASSED U/S 144/143(3) OF THE I T ACT AND ANOTHER ARISING FROM THE PENALTY ORDER PASSED U/ 271B OF THE RESPECTIVELY FOR AY 2001-02. 2 THE ASSESSEE FILED A LETTER FOR ADJOURNMENT. ON P ERUSAL OF THE ORDER SHEET OF THESE APPEALS WE NOTE THAT THE ASSESSEE HAS BEEN S EEKING ADJOURNMENT IN THESE CASES RIGHT FROM THE BEGINNING AND ALREADY THE CASE S HAVE BEEN ADJOURNED ON SIX OCCASIONS ON THE REQUEST OF THE ASSESSEE. THESE A PPEALS WERE FINALLY ADJOURNED ON 5.7.2011 ON THE REQUEST OF THE ASSESSEE TO 12 TH JULY 2011. ON 12 TH JULY THE ASSESSEE AGAIN REQUESTED FOR ADJOURNMENT OF THE CASE. KEEPI NG IN VIEW OF THE CONDUCT OF 2 ITA NO. 3221 & 3222/MUM/2009 (ASST YEAR 2001-02) THE ASSESSEE AND NUMBER OF ADJOURNMENTS ALREADY GRA NTED ON THE REQUEST OF THE ASSESSEE WE DECLINE TO ADJOURNMENT THE CASE AND TH E REQUEST OF THE ASSESSEE IS REJECTED. ITA NO. 3221/MUM/2009 3 IN THE QUANTUM APPEAL THE ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS: 1) THE CIT(A) ERRED IN REJECTING ACKNOWLEDGEMENT OF T HE COPY OF LETTER OF THE APPELLANT INTIMATING CHANGE OF ADDRESS INCLUDIN G AFFIDAVIT OF THE APPELLANT DENYING SERVICE OF NOTICE U/S 142(1) AND 1 42(2) OF THE ACT WHICH IS CONDITION PRECEDENT OF ASSESSMENT U/S 143(3) AND OR 1 44 AND THEREBY FURTHER ERRED IN REJECTING THE APPEAL BY CONFIRMING TH E EX-PARTE ORDER ASSED U/ 144 OF THE ACT. 2) HE FURTHER ERRED IN MAKING CERTAIN INCORRECT IRREL EVANT OBSERVATION INCLUDING IN PARTICULAR THE FOLLOWING: SO FAR AS THE LETTER DATED 21.12.2005 OF THE APPELLA NT INTIMATING THE CHANGE OF ADDRESS IS CONCERNED IT I EVIDENT THAT AM DID NOT REACH ASSESSING OFFICER TILL ASSESSMENT PROCEEDING WAS GOI NG ON. APPARENTLY IT IS AT THE TIME OF FINALIZATION OF ASSESSMENT ORDE R THAT ASSESSING OFFICER CAM TO KNOW THE SAID CHANGE ADDRESS. HOWEVER THE SA ID LETTER DATED 21.12.205 OF THE APPELLANT WAS STILL NOT RECEIVED BY HER (FROM CLERK OF WARD 20(3)(4) AS THE SAME WAS NOT AVAILABLE IN THE A SSESSMENT FOLDER. SHE MUST HAVE THEREFORE FOUND THE CORRECT ADDRESS OF THE APPELLANT THROUGH SOME OTHER SOURCE. 3. HE FAILED TO APPRECIATE AND OUGHT TO HAVE HELD T HAT (A) LETTER INTIMATING CHANGE OF ADDRESS WAS ADDRESSED WARD 20(3)(2) WHICH IS CORRECT ADDRESS OF THE LD ASSESSING OFFICER BUT WRONGLY ACCEPTED BY THE CLERK OF WARD 20(3)(4) IN THE SAME C HARGE UNDER THE SAME RANGE MUCH BEFORE ISSUE OF ANY NOTICE ETC ON O LD ADDRESS. THE LD ASSESSING OFFICER HAS KNOWLEDGE OF THE CHANGE D ADDRESS OF THE APPELLANT WHICH SHE HAS WRITTEN IN HER OWN HANDWRITIN G BEFORE PASSING OF THE ORDER BUT FAILED TO ISSUE ANY NOTICE ON THE CHAN GED ADDRESS. 4.THE APPELLANT PRAYS THAT THE ORDER OF THE ASSESSIN G OFFICER PASSED U/ 144 OF THE ACT EX-PARTE BE QUASHED AND DISALLOWANCE OF RS. 9.02 544/- BE DELETED . 4 WE HAVE HEARD THE ASSESSEE AS WELL AS THE LD DR A ND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF 3 ITA NO. 3221 & 3222/MUM/2009 (ASST YEAR 2001-02) RS. 1 20 600/- ON 18.10.2001. THE RETURN OF INCOME WAS PROCESSED U/S 143(1) AND SUBSEQUENTLY SELECTED FOR SCRUTINY. NOTICE U/S 143( 2) AND 142(1) WERE ISSUED AND SERVED ON THE ASSESSEE BY AFFIXATION. SINCE THERE WAS NO COMPLIANCE OF THE NOTICES ISSUED U/S 143(2) & 142(1) ON 18 TH JULY 2003 THE ASSESSING OFFICER ISSUED ANOTHER NOTICE DATED 5.2.2004 AND SERVED THROUGH AFFIXATIO N. SINCE THE ASSESSEE FAILED TO COMPLY WITH THE NOTICES ON THE DATES FIXED FOR HEAR ING THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE ON 23.2.2004 AS TO WHY THE ASSESS MENT SHOULD NOT BE COMPLETED U/S 144 OF THE I T ACT BY TAKING INTO ACCOUNT THE P ROPOSED DISALLOWANCE OF CERTAIN EXPENSES. THERE WAS NO RESPONSE FROM THE ASSESSEE AND ACCORDINGLY THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 144 OF THE I T ACT TO THE BEST OF HIS JUDGMENT WHEREBY MADE ADDITION ON ACCOUNT OF DISALLOWANCE OF CERTAIN EXPENSES OF RS. 9 02 544/- CONSEQUENTLY THE ASSESSING OFFICER AS SESSED THE TOTAL INCOME AT RS. 10 22 600/-. 5 THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSI NG OFFICER BEFORE THE CIT(A) AND RAISED THE MAIN CONTENTION BEFORE THE CIT(A) THAT THE EX-PARTE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS NOT VALID AS THE ASSESSEE WAS NOT SERVED WITH NOTICE U/S 143(2) & 142(1). THE CIT(A) AFTER SEEK ING COMMENTS OF THE ASSESSING OFFICER REJECTED THE OBJECTIONS RAISED BY THE ASS ESSEE VIDE THE IMPUGNED ORDER. 5.1 AS REGARDS THE SERVICE OF THE NOTICES ISSUED U/ S 143(2) AND 142(1). WE FIND THAT THE NOTICES WERE ISSUED AT THE CORRECT ADDRESS AS AVAILABLE ON THE RECORDS AND SERVED BY SUBSTITUTE MODE (AFFIXATION) AND CONTEN TION OF THE ASSESSEE THAT THE ASSESSEE HAS ALREADY FILED CHANGE OF ADDRESS WAS FO UND INCORRECT AS PER THE 4 ITA NO. 3221 & 3222/MUM/2009 (ASST YEAR 2001-02) ASSESSING OFFICERS REPORT AS WELL AS THE VERIFICAT ION MADE BY THE CIT(A). THE CIT(A FOUND THAT THE ASSESSEES CLAIM THAT HE HAS FILED THE CHANGED ADDRESS VIDE LETTER DATED 21.12.2001 AND STATED TO BE RECEIVED IN THE O FFICE OF THE ITO ON 24.12.2001 IS NOT CORRECT; BECAUSE THE SAID LETTER WAS FILED WITH THE ITO -20(3(4) AND NOT WITH THE CONCERNED ITO -20(3)(2. THUS THE CIT(A FOUND THA T THE ALLEGED LETTER FOR CHANGE OF ADDRESS WAS NOT FILED WITH THE CONCERNED ASSESSING OFFICER. IN THESE CIRCUMSTANCES WHEN THE ASSESSING OFFICER HAS TOOK ALL POSSIBLE ST EPS TO SERVE THE NOTICE ON THE ASSESSEE AS PER THE RULES THEN IN THE FACTS AND CI RCUMSTANCES OF CASE THE SERVICE OF NOTICE EFFECTED THROUGH AFFIXATION IS PROPER SERVIC E OF NOTICE AND THEREFORE WE DO NOT FIND ANY SUBSTANCE IN THE CONTENTION OF THE ASS ESSEE THAT STATUTORY NOTICE U/S 143(2) AND 142(1) OF THE I T ACT HAS NOT BEEN SERVE D ON THE ASSESSEE PRIOR TO THE PROCESS OF THE ASSESSMENT. IN THIS CASE THE ASSES SMENT HAS BEEN FRAMED U/S 144 OF THE I T ACT AND IN THE ABSENCE OF NECESSARY DETAILS AND EXPLANATION THE ASSESSING OFFICER MADE THE ADDITION ON ACCOUNT OF DISALLOWANC ES OF CERTAIN EXPENSES. 5.2 BEFORE THE CIT(A) THE ASSESSEE MAINLY STRESSED THE CONTENTION OF THE VALIDITY OF THE ASSESSMENT AND THE MATTER WAS NOT PROPERLY E XAMINED ON MERITS OF THE DISALLOWANCE/ADDITION. THROUGH THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO RESPONSE TO THE NOTICES AND TO FILE NECESSARY DETAI LS EXPLANATION AND RECORDS; HOWEVER HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE AND IN THE INTEREST OF JUSTICE WE ARE OF THE CONSIDERED OPINI ON THAT THE ASSESSEE BE GIVEN ONE MORE OPPORTUNITY TO FURNISH THE NECESSARY DETAILS EXPLANATION AND THE RELEVANT RECORDS WITH REGARD TO THE CLAIM OF EXPENSES. ACC ORDINGLY WE SET ASIDE THE ISSUE AND RESTORED THE SAME TO THE RECORD OF THE ASSESSIN G OFFICER FOR VERIFICATION AND 5 ITA NO. 3221 & 3222/MUM/2009 (ASST YEAR 2001-02) EXAMINATION OF THE EXPLANATIONS DETAILS AND RECOR DS TO BE FILED BY THE ASSESSEE. IF THE ASSESSEE FAILED TO FURNISH AND PRODUCE THE NECE SSARY DETAILS EXPLANATION AND RECORDS THEN THE OPPORTUNITY GRANTED BY US WILL ST AND WITHDRAWN. ITA NO. 3222/MUM/2009 6 THE ASSESSEE HAS RAISED VARIOUS GROUND IN THIS AP PEAL; BUT THE ONLY ISSUE RAISED IS WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CA SE THE CIT(A) IS JUSTIFIED IN CONFIRMING THE LEVY OF PENALTY U/S 271B OF THE I T ACT. 7 WE HAVE HEARD THE LD AR OF THE ASSESSEE AS WELL A S THE LD DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. SINCE NO TAX AUDI T REPORT U/S 44AB OF THE I T ACT HAS BEEN FILED BY THE ASSESSEE ALONG WITH THE RETURN OF INCOME THE ASSESSING OFFICER INITIATED PROCEEDINGS U/S 271B OF THE ACT AND LEVIE D PENALTY OF RS. 1 LAC 7.1 AT THE OUTSET WE FIND THAT THE ASSESSEE HAS NO T FILED THE COPY OF THE ORDER PASSED U/S 271B ALONG WITH THIS APPEAL MEMO. DESP ITE VARIOUS OPPORTUNITIES GIVEN TO THE ASSESSEE AND THE CASE HAS BEEN ADJOURNED FRO M TIME TO TIME THE ASSESSEE HAS NOT FILED THE ORDER PASSED U/S 271B OF THE I T ACT. SINCE THE PROCEEDINGS ARE ORIGINATED FROM THE SAID ORDER U/S 271B AND IN THE ABSENCE OF THE IMPUGNED ORDER THE APPEAL FILED BY THE ASSESSEE IS NOT A VALID INS TITUTED APPEAL; ACCORDINGLY THE SAME DESERVES TO BE DISMISSED IN LIMINI. 7.2 EVEN OTHERWISE DESPITE VARIOUS OPPORTUNITIES T HE ASSESSEE HAS NOT FURNISHED ANY EXPLANATION FOR NOT FILING OF TAX AUDIT REPORT U/S 44ABA OF THE ACT AND EVEN BEFORE US THE ASSESSEE HAS NOT COME OUT WITH ANY P LAUSIBLE AND COGENT 6 ITA NO. 3221 & 3222/MUM/2009 (ASST YEAR 2001-02) EXPLANATION AS TO WHY THE TAX AUDIT REPORT U/S 44A B HAS NOT BEEN FILED. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A); ACCORDINGLY THE SAME IS CONFIRMED. 8 IN THE RESULT THE APPEAL FILED BY THE ASSESSEE I N ITA NO.3221/MUM/2009 IS ALLOWED FOR STATISTICAL PURPOSE WHEREAS THE APPEAL IN ITA NO.3222/MUM/2009 IS DISMISSED. ORDER PRONOUNCED ON THE 22 ND DAY OF JULY 2011. SD/- SD/- ( PRAMOD KUMAR ) ACCOUNTANT MEMBER ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED:22 ND JULY 2011 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR ITAT MUMBAI