Mayfair Builders & Developers,, Pune v. ACIT,Cir.-2,, Pune

ITA 342/PUN/2010 | misc
Pronouncement Date: 27-07-2012 | Result: Allowed

Appeal Details

RSA Number 34224514 RSA 2010
Assessee PAN AACFM1312R
Bench Pune
Appeal Number ITA 342/PUN/2010
Duration Of Justice 2 year(s) 4 month(s) 25 day(s)
Appellant Mayfair Builders & Developers,, Pune
Respondent ACIT,Cir.-2,, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 27-07-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 27-07-2012
Date Of Final Hearing 25-07-2012
Next Hearing Date 25-07-2012
Assessment Year misc
Appeal Filed On 04-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI R.S. PADVEKAR JUDICIAL MEMBER AND SHRI R.K. PANDA ACCOUNTANT MEMBER ITA NO. 342 & 343/PN/2010 ( BLOCK ASSTT. YEAR : 1.4.1988 TO 25.06.1998) M/S. MAYFAIR BUILDERS AND DEVELOPE RS APPELLANT 1027 NEW NANA PETH PUNE 411 011 PAN : AACFM1312R V. ACIT CIR. 2 PUNE RESPONDENT APPELLANT BY : SHRI. K. SHRINIWASAN RESPONDENT BY : SHRI S.K. SINGH DATE OF HEARING : 25/7/12 DATE OF PRONOUNCEMENT : 27-7-12 ORDER PER R.S. PADVEKAR JM THESE TWO APPEALS ARE FILED BY SAME ASSESSEE CHALLENGIN G THE RESPECTIVE IMPUGNED ORDERS OF THE LD CIT(A) II PUNE. ONE APPEAL IS ARISING OUT OF BLOCK ASSESSMENT PASSED IN CONSEQUENCE OF SEARCH AND SEIZURE OPERATION AGAINST THE ASSESSEE U/S. 132 AND SAID BLOCK ASSESSMENT WAS CARRIED TO THE TRIBUNAL BY WAY OF APPEAL AND ENTIRE MATTER WAS SET ASIDE TO THE FILE OF THE LD CIT(A) ON THE ISSUE OF DELAY IN FILING OF THE APPEAL AS WELL AS NON-PAYMENT OF THE TAXES AS REQUIRED U/S. 249(4)(A) OF THE ACT. THE ANOTHER APPEAL BEING ITA NO. 342/PN/2010 IS ARISING OUT OF THE PENALTY LEVIED BY THE A.O U/S. 158BFA(2) OF THE ACT. THIS IS ALSO SECOND ROUND OF APPEAL SO FAR AS THE BOTH APPEALS ARE CONCERNED. 2. WE FIRST TAKE THE QUANTUM APPEAL BEING ITA NO. 343/PN /2010 FOR DISPOSAL. 3. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND OF APPEAL : 1] THE LEARNED CIT(A) ERRED IN NOT ADMITTING THE APPEA L ALTHOUGH THE ASSESSEE HAD PAID THE ADMITTED TAX ON THE RETURNED I NCOME. IN THE INTEREST OF JUSTICE HE OUGHT TO HAVE ADMITTED THE APPEAL AS A VALI D APPEAL. ITA . NOS.342 & 343//PN/2010 M/S. MAYFAIR BUILDERS AND DEVELOPERS BLOCK PERIOD 1.4.88 TO 25.6.98 PAGE OF 6 2 2] THE LEARNED CIT(A) ERRED IN NOT CONDONING THE DELA Y IN FILING THE APPEAL ON THE GROUND THAT THERE WAS NO SUFFICIENT CA USE FOR THE DELAY IN FILING THE APPEAL. 3] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT ULTIMATE LY THE ASSESSEE HAD PAID THE TAXES ON THE RETURNED INCOME AND THERE FORE A LIBERAL VIEW OUGHT TO HAVE BEEN TAKEN AND THE RIGHT OF THE ASSES SEE IN FILING THE APPEAL SHOULD NOT HAVE BEEN CURTAILED ON TECHNICAL ISSUES. 4] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THERE WAS SUFFICIENT CAUSE ON THE PART OF THE ASSESSEE IN NOT MAKING THE PAYMENT OF TAXES AS REQUIRED U/S 249(4)(A) AND HENCE THE DELAY IN FILING THE APPEAL OUGHT TO HAVE BEEN CONDONED. 5] THE APPELLANT SUBMITS THAT BECAUSE OF THE BAD FINA NCIAL CONDITION THE APPELLANT COULD NOT PAY THE TAXES ON THE RETURNED IN COME AND THE APPELLANT MAY NOT BE MADE TO SUFFER BY TREATING THE APPEAL AS INVALID AND THE DELAY IN PAYMENT OF TAX MAY KINDLY BE CONDONED. 6] THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT T HE ASSESSEE FIRM HAD FINANCIAL AND BUSINESS PROBLEMS BECAUSE OF WHICH THERE WAS DELAY IN PAYMENT OF TAXES AND ACCORDINGLY HE OUGHT TO HAVE C ONDONED THE DELAY IN FILING THE APPEAL. 7] THE LEARNED CIT(A) ERRED IN HOLDING THAT THERE WAS NO SUFFICIENT CAUSE ON THE PART OF THE ASSESSEE IN MAKING THE PAYMENT O F TAXES AS REQUIRED U/S 249(4)(A) WITHOUT APPRECIATING THE CORRECT FACTS OF THE C ASE. 8] THE APPELLANT SUBMITS THAT THE LEARNED A.O. ERRED IN ASSESSING THE TOTAL INCOME AT RS. 4 34 64 022/- AS AGAINST THE RETURNED INCOME OF RS. 97 70 000/- AND THE ADDITIONS MADE ARE NOT JUSTIFIED AN D BE DELETED. 9] ALTERNATIVELY THE LEARNED CIT(A) BE DIRECTED TO DE CIDE THE APPEAL ON MERITS AFTER TREATING THE APPEAL AS A VALID APPEAL. 4. THE FACTS REVEAL FROM THE RECORD ARE AS UNDER. THER E WAS SEARCH AND SEIZURE OPERATION AGAINST THE ASSESSEE U/S. 132 OF THE A CT ON 25.06.1998. THE ASSESSEE FILED THE RETURN FOR THE BLOCK PERIOD ON 9.11.1998 DECLARING TOTAL INCOME OF RS.97 70 000/-. THE ASSESSEE DID NOT PAY ANY T AX ON THE RETURNED INCOME AT THE TIME OF FILING OF THE RETURN BUT PAID RS. 10 00 0 00/- ON 20.12.1999. THE A.O COMPLED THE BLOCK ASSESSMENT OF THE A SSESSEE ON 30.2.2000 DETERMINING UNDISCLOSED INCOME AT RS. 4 34 62 022/-. IT WAS STATED THAT AS ASSESSEE COULD NOT MAKE THE PAYMENT OF THE A DMITTED TAX DUE TO ITA . NOS.342 & 343//PN/2010 M/S. MAYFAIR BUILDERS AND DEVELOPERS BLOCK PERIOD 1.4.88 TO 25.6.98 PAGE OF 6 3 FINANCIAL DIFFICULTIES. THE ASSESSEE PREFERRED TO PURSUE THE A LTERNATE REMEDY SIMULTANEOUSLY BY FILING THE REVISION PETITION U/S. 264 BEFORE THE LD CIT PUNE ON 2 ND AUGUST 2000 WHICH WAS REJECTED ON 20 TH FEBRUARY 2011. THE APPEAL FILED BY THE ASSESSEE WAS ALSO DISMISSED BY THE CIT(A) ON 5 TH FEBRUARY 2002. THE ASSESSEE FILED THE FRESH PETITION U/S. 264 ON 20 TH FEBRUARY 2002 BEFORE LD. CIT BUT WITHOUT SUCCESS AS THE ASSESSEES PETITION WAS DISM ISSED BY THE LD CIT VIDE HIS ORDER DATED 25.3.2003. IN THE FIRST ROUND OF THE APP EAL THE LD CIT(A) HAS DISMISSED THE ASSESSEES APPEAL ON THE REASON THAT THE ASSESSEE HAD NOT PAID FULL TAXES ON THE UNDISCLOSED INCOME DECLARED IN THE RETURN FOR THE BLOCK PERIOD WHICH WAS FILED IN RESPONSE TO NOTICE U/S. 158BC. IN SUM AND SUBSTANCE THE LD CIT(A) SHUT THE DOORS OF THE ASSESSEE FROM SEEKING JUSTIC E APPLYING THE PROVISIONS OF SEC. 249(4)(A) OF THE ACT. SUBSEQUENTLY THE ASS ESSEE PAID THE TAXES ON THE UNDISCLOSED INCOME DECLARING THE RETURN FOR THE B LOCK PERIOD AND THEREAFTER FILED A FRESH APPEAL BEFORE CIT(A) ON 9.2.2004 ALO NG WITH A APPLICATION REQUEST FOR CONDONATION OF DELAY IN FILING FRESH APPEAL. IN SUM AND SUBSTANCE THE ASSESSEE PLEADED BEFORE THE LD CIT(A) THA T HE HAS MADE THE COMPLIANCE ON SEC. 249(4)(A) OF THE ACT AND DELAY IN FILING THE APPEAL WAS REQUESTED TO BE CONDONED. 5. THE FRESH APPEAL FILED BY THE ASSESSEE WAS ALSO DISMISSE D BY THE LD CIT(A) VIDE HIS ORDER DATED 31.8.2004 ON THE TWO REASONS THAT THE ORDER OF THE LD CIT ON THE PETITION OF THE ASSESSEE U/S. 264 DT. 25.3.2003 WAS NOT CHALLENGED BY THE ASSESSEE AS THE MATTER WAS DECIDED BY THE LD CIT(A) AN D (2) INORDINATE DELAY OF MORE THAN 3 YEARS & 6 MONTHS WAS NOT SATISFACTORILY EX PLAINED AND THERE WAS NO SUFFICIENT CAUSE. THE ORDER OF THE LD CIT(A) DATED 31.8.2004 WAS CHALLENGED BY THE ASSESSEE BEFORE THE TRIBUNAL. THE TRIBUNAL HELD THAT SO FAR AS THE FIRST REASON OF THE REVISION PETITION FILED BY THE ASSESSEE U/S . 264 OF THE ACT IS CONCERNED THE SAME DID NOT LIE BEFORE THE CIT AT THE S TAGE WHEN THE APPEAL HAS BEEN DISMISSED BY THE LD CIT(A) ON 5.2.2002 ON THE GROUND THAT THE ASSESSEE HAS NOT COMPLIED WITH THE PROVISIONS OF SEC. 294(4)(A) OF THE A CT AND THE SECOND REVISION PETITION FILED BY THE ASSESSEE U/S. 264 ON 8.2.200 2 WAS MERELY ITA . NOS.342 & 343//PN/2010 M/S. MAYFAIR BUILDERS AND DEVELOPERS BLOCK PERIOD 1.4.88 TO 25.6.98 PAGE OF 6 4 INFRUCTUOUS EXERCISES. SO FAR AS THE NON-PAYMENT OF TAX ON THE UNDISCLOSED INCOME DECLARED IN THE BLOCK RETURN IS CONCERNED THE ISSU E WAS RESTORED TO THE FILE OF THE LD CIT(A) THE TRIBUNAL DIRECTED AS UNDER : 22. TO CONCLUDE THE PETITION FILED BY THE ASSESSEE U/S 264 ON 02.08.2000 COULD NOT BE ACTED UPON BY THE CIT BECAUSE OF THE BAN IMPOSED BY SUB SECTION (4) OF SECTION 264 AS AN APPEAL FILED BY THE ASSESSEE BEFORE CIT(A) ON 31.07.2000 WAS PENDING THE APPEAL PENDING BEFORE THE CIT(A) WAS DISMISSED BECAUSE OF NON COMPLIANCE WITH SECTION 249(4)(A); THE ASSESSEE FILED BEFORE THE CIT ANOTHER PETITION U/S 264 ON 2 8.02.2002 WHICH WAS NOTHING BUT AN INFRUCTUOUS EXERCISE; THE ASSES SEE LATER COMPLIED WITH SECTION 249(4)(A) AND FILED A FRESH APPEAL BEFORE CIT (A) ON 09.02.2004 WITH A REQUEST FOR CONDONATION OF DELAY BUT THE CIT(A) RE FUSED TO CONDONE THE DELAY AND DISMISSED THE APPEAL ON 31.08.2004. WE FI ND THAT THE CIT(A) IN HIS ORDER DATED 31.08.2004 FAILED TO EXAMINE WHETHE R THERE EXISTED SUFFICIENT REASONS ON THE PART OF THE ASSESSEE FOR NON-COMPLIANCE WITH THE PROVISIONS OF SECTION 249(4)(A) OF THE ACT. IN OUR O PINION THE CIT(A) WAS NOT JUSTIFIED IN REFUSING TO CONDONE THE DELAY WITHOUT E XAMINING THIS ASPECT OF THE MATTER. 23. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE C ASE AND THE POSITION IN LAW AS DISCUSSED IN THE ABOVE PARAGRAPHS WE CONSIDE R IT APPROPRIATE TO REMIT THIS MATTER BACK TO THE FILE OF THE CIT(A). HE I S DIRECTED TO EXAMINE AFTER BRINGING THE RELEVANT MATERIAL ON RECORD WHETHER THERE EXISTED SUFFICIENT REASONS FOR FAILURE ON THE PART OF THE AS SESSEE TO COMPLY WITH THE PROVISIONS OF SECTION 249(4)(A) OF THE ACT. IF THE C IT(A) FINDS THAT THERE EXISTED SUFFICIENT REASONS FOR FAILURE ON THE PART O F THE ASSESSEE TO COMPLY WITH THE PROVISIONS OF SECTION 249(4)(A) OF THE ACT IN THAT CASE HE SHALL CONDONE THE DELAY AND SHALL HEAR AND DECIDE THE APPEA L ON MERITS. WHILE DOING SO THE CIT(A) SHALL KEEP IN MIND THE RATIO LAID DOWN BY THE SUPREME COURT IN THIS REGARD IN THE CASE OF MST. KATIJI AND OTHERS (SUPRA) THAT WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATION ARE P ITTED AGAINST EACH OTHER THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFE RRED. THE CIT(A) SHALL COMPLY WITH THE ABOVE DIRECTIONS AND SHALL ACCORDINGLY PASS A FRESH ORDER AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. THE LD CIT(A) PASSED THE ORDER DATED 29.12.2009 AND SET ASIDE MATTER TO LD. CIT(A). THE LD CIT(A) DISMISSED THE APPEAL OF THE ASSESS EE REFUSING TO CONDONE THE DELAY FOR FILING THE APPEAL WHICH WAS MORE T HAN 3 YEARS & 6 ITA . NOS.342 & 343//PN/2010 M/S. MAYFAIR BUILDERS AND DEVELOPERS BLOCK PERIOD 1.4.88 TO 25.6.98 PAGE OF 6 5 MONTHS AS WELL AS NON-PAYMENT OF THE TAX DUE ON THE AD MITTED UNDISCLOSED INCOME DECLARED IN THE RETURN FOR THE BLOCK PERIOD. NOW T HE ASSESSEE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORD. ADMITTEDLY IN THIS CASE THE TOTAL UNDISCLOSED INC OME HAS BEEN DETERMINED AT RS.4 34 62 022/- AS AGAINST RS. 97 70 000/- DE CLARED BY THE ASSESSEE IN THE BLOCK RETURN OF INCOME. THE CONTENTION O F THE ASSESSEE IS THAT WHEN THE SECOND APPEAL WAS FILED BEFORE THE LD CIT(A) THE ASSESSEE HAS MADE THE ENTIRE PAYMENT ON THE ADMITTED UNDISCLOSED INCOME D ECLARED IN THE RETURN OF INCOME. THIS FACT IS ALSO CLEAR FROM THE RECORD AVAILABLE B EFORE US. SO AT LEAST WHEN THE FRESH APPEAL WAS FILED BEFORE THE A.O. AND TH E LD CIT(A) AT THAT TIME THE ASSESSEE HAS MADE THE COMPLIANCE OF SEC. 249(4)(A ) OF THE ACT. ANOTHER REASON IS THE EXTRA ORDINARY DELAY IN FILING THE FRESH APPEAL. 8. CONSIDERING THE SERIES OF THE EVENT WE FIND THAT AGA IN IN THE BLOCK ASSESSMENT ASSESSEE FILED THE APPEAL BEFORE THE LD CIT(A) AND SIMULTANEOUSLY FILED REVISION PETITION U/S. 264 OF THE ACT. BOTH REVISION PET ITION AS WELL AS APPEAL WERE DISMISSED BY BOTH THE AUTHORITIES. THE LD CI T(A) DISMISSED THE APPEAL ON THE REASON THAT ASSESSEE FAILED TO PAY THE TA X ON THE ADMITTED UNDISCLOSED INCOME AS REQUIRED U/S. 249(4)(A) OF THE ACT. THE LD CIT PUNE DISMISSED THE REVISION PETITION AS THE ASSESSEES APPEAL W AS PENDING BEFORE THE LD.CIT(A). 9. AFTER GIVING OUR ANXIOUS CONSIDERATION TO THE TOTALITY OF THE FACTS IT CANNOT BE SAID THAT IT IS A LETHARGY OR INACTIVENESS OF THE ASSES SEE TO PURSUE THE REMEDY. WHEN THE FIRST APPEAL WAS FILED THE ASSESSEE COUL D NOT PAY THE TAXES AND WHEN THE FRESH SECOND APPEAL WAS FILED THE ASSESSEE COULD PAY THE TAXES BUT THERE WAS A DELAY. THOUGH THE LD CIT(A) HAS GIVEN THE ANALYSIS OF THE ASSESSEES BALANCE SHEET THEN THE QUESTION COMES WHY THE DEPARTMENT COULD NOT RECOVER ANY SUBSTANTIVE AMOUNT FROM THE ASSESSEE. IN OUR OPINION THERE IS A REASONABLE CAUSE FOR NON-PAYMENT OF THE TAXES ON TH E ADMITTED UNDISCLOSED INCOME AND DELAY IS CONSEQUENTIAL TO THE SAME. WE ACCORD INGLY CONDONE THE ITA . NOS.342 & 343//PN/2010 M/S. MAYFAIR BUILDERS AND DEVELOPERS BLOCK PERIOD 1.4.88 TO 25.6.98 PAGE OF 6 6 DELAY IN FILING OF THE PRESENT APPEAL. THE LD CIT(A) HAS NOT DECIDED THE APPEAL ON MERIT. WE ACCORDINGLY SET ASIDE THE ENTIRE MATTER TO THE FILE OF THE LD CIT(A) TO DECIDE THE SAME ON MERIT AFTER GIVING REASONABLE OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE AS PER THE PRINCIPLES OF NATURAL JUSTICE. 10. NOW WE TAKE UP ANOTHER APPEAL OF THE ASSESSEE I.E. IT A NO. 342/PN/2000. THIS APPEAL IS ARISING OUT OF THE PENALTY LEVIED BY THE A.O U/S. 158 BFA(2). IN THE FIRST ROUND OF APPEAL THE ORDER OF THE CIT(A) WAS SET ASIDE AND THE MATTER WAS RESTORED TO THE FILE OF THE LD CIT(A) WITH DIRECTION T O DECIDE THE SAME AFRESH AFTER THE DECISION IN QUANTUM APPEAL. THE LD CIT(A) AGAIN CO NFIRMED THE PENALTY AFTER DISMISSING THE ASSESSEES APPEAL IN QUANTUM. AS WE HAVE RESTORED ISSUES ON QUANTUM TO THE CIT(A) PUNE TO DECIDE SAME ON MERIT WE ACCORDINGLY RESTORE THIS APPEAL I.E. PENALTY U/S. 158BFA(2) ALSO TO THE FILE OF THE LD CIT(A) WITH DIRECTION TO DECIDE THE SAME AFRESH AFTER THE DECISION IN THE QUANTUM A PPEAL. 11. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 27TH J ULY 2012 SD/- SD/- (R.K. PANDA) ACCOUNTANT MEMBER (R.S. PADVEKAR ) JUDICIAL MEMBER PUNE DATED THE 27TH JULY 2012 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT II PUNE 4. THE CIT(A)-II PUNE 4. THE D.R. B BENCH PUNE 5. GUARD FILE /-TRUE COPY-/ BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE