Mehta Steel Corporation, Surat v. The ACIT.,Circle-2,, Surat

ITA 4397/AHD/2007 | 2004-2005
Pronouncement Date: 06-08-2010 | Result: Allowed

Appeal Details

RSA Number 439720514 RSA 2007
Bench Ahmedabad
Appeal Number ITA 4397/AHD/2007
Duration Of Justice 2 year(s) 7 month(s) 24 day(s)
Appellant Mehta Steel Corporation, Surat
Respondent The ACIT.,Circle-2,, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 06-08-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 06-08-2010
Date Of Final Hearing 26-07-2010
Next Hearing Date 26-07-2010
Assessment Year 2004-2005
Appeal Filed On 12-12-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI N.S.SAINI ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH JUDICIAL MEMBER ITA NO.4397-4400/AHD/2007 ASSESSMENT YEAR:2004-05 DATE OF HEARING:26.7.10 DRAFTED:26.7.10 M/S. MEHTA STEEL CORPORATION PROP. HARESH JAGMOHANDAS MEHTA PLOT NO.7-D JAWAHAR ROAD NO.1 UDHNA UDHYOGNAGAR UDHNA SURAT PAN NO.ABXPM7550P M/S. STANDARD STEEL SALES PROP. MEHTA HARESH JAGMOHANDAS (HUF) PLOT NO.7-D JAWAHAR ROAD NO.1 UDHNA UDHYOGNAGAR UDHNA SURAT PAN NO.AAEHM7872E M/S. ZENITH STEEL TRADERS PROP. MEHTA JAGMOHANDAS DAYALJI (HUF) PLOT NO.5417 NR. WATER TANBK GIDC SACHIN SURAT PAN NO.AABHJ3060Q M/S. SHREEJI STEELS PROP. VIJAY JAGMOHANDAS MEHTA PLOT NO.5419 NR. WATER TANK GIDC SACHIN SURAT PAN NO.ADHPM1690A V/S . V/S . V/S . V/S . ASSTT. COMMISSIONER OF INCOME-TAX CIRCLE-2 AAYAKAR BHAVAN MAJURAGATE SURAT ASSTT. COMMISSIONER OF INCOME-TAX CIRCLE-2 AAYAKAR BHAVAN MAJURAGATE SURAT ASSTT. COMMISSIONER OF INCOME-TAX CIRCLE-2 AAYAKAR BHAVAN MAJURAGATE SURAT ASSTT. COMMISSIONER OF INCOME-TAX CIRCLE-2 AAYAKAR BHAVAN MAJURAGATE SURAT (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI MITISH S MODI AR REVENUE BY:- SHRI SUDHANSHU S JHA DR ITA NO.4397-4400/AHD/2007 A.Y. 2004-05 M/S. MEHTA STEEL CORPN & 3 GROUP V. ACIT CIR-1 SRT PAGE 2 O R D E R PER BENCH:- THESE FOUR APPEALS BY DIFFERENT ASSESSEE ARISING O UT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-II SURAT IN A PPEAL NOS. CAS/II/532-533 & 540-541/06-07 BY DIFFERENT DATE 28-09-2007 03-10-2 007. THE ASSESSMENTS WERE FRAMED BY ACIT CIRCLE-2 SURAT U/S 143(3) R.W.S. 1 44 OF THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE ORDERS OF EVEN DATE 22-12-2006 FOR THE ASSESSMENT YEAR 2004-05. 2. SINCE ALL THESE APPEALS CONTAINS COMMON ISSUES HENCE THESE ARE CLUBBED TOGETHER HEARD TOGETHER AND ARE BEING DECIDED BY T HIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. THE FIRST ISSUE IN THESE APPEALS IS AGAINST THE CONFIRMATION OF ASSESSMENT COMPLETED U/S 143(3) R.W .S 144 OF THE ACT AND FOR THE SAKE OF BREVITY WE WILL TAKE THE GROUND RAISED IN ITA NO.4400/AHD/2007 IN THE CASE OF M/S. SHREEJI STEELS . THE RELEVANT GROUND IN REGARD TO THIS ISSUE AS UN DER:- (1) THE LEARNED CIT(APPEALS)-II SURAT HAS ERRED I N LAW AS WELL AS ON THE FACTS WHILE CONFIRMING THE ORDER U/S.143(3) R.W.S. 144 OF THE ACT PASSED BY THE ACIT CIRCLE-2 SURAT MAKING VARIOUS ADDITIONS/DISA LLOWANCES TO THE EXTENT OF RS.39 41 200/- IN AGGREGATE AND HENCE LIABLE TO BE QUASHED. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE BOTH THE LOWER AUTHORITIES HAVE ERRED IN NOT CONSIDERING THE MATER IAL AVAILABLE ON RECORDS OF THE DEPARTMENT AS WELL AS THE VARIOUS SUBMISSIONS M ADE BEFORE THEM AND THEREFORE THE ORDER OF THE AO CONFIRMED BY THE CIT (APPEALS) WITHOUT CONSIDERING IN THE RIGHT PERSPECTIVES THE BONAFID E HONEST GENUINE BELIEVABLE AND REASONABLE CAUSE SUPPORTED BY COGENT AND AUTHENTIC EVIDENCES FURNISHED IS BAD IN LAW VOID AB INITIO WITHOUT JURISDICTION AND HENCE DESERVES TO BE NULLIFIED OR ANNULLED IN TOTO . SIMILAR ARE THE GROUNDS IN OTHER APPEALS OF THESE A SSESSEES. 3. THE BRIEF FACTS NOTED BY THE ASSESSING OFFICER A RE THAT THE RETURNS WERE FILED BY THESE ASSESSEES ACCOMPANIED BY AUDIT REPORT U/S. 44AB OF THE ACT IN FORM NO.3B AND 3CD AND RETURNS WERE PROCESSED U/S.143(1). SUBS EQUENTLY THE CASES WERE PICKED UP FOR SCRUTINY BY ISSUING NOTICE U/S.143(2) OF THE ACT. THESE ASSESSEES ARE ENGAGED IN THE BUSINESS OF TRADING IN MS STEEL AND ITS PRODUCTS. THE ASSESSING ITA NO.4397-4400/AHD/2007 A.Y. 2004-05 M/S. MEHTA STEEL CORPN & 3 GROUP V. ACIT CIR-1 SRT PAGE 3 OFFICER NOTED THAT A SHOW CAUSE NOTICE WAS ISSUED A S TO WHY ASSESSMENT SHOULD NOT BE COMPLETED TO THE BEST OF JUDGMENT AS PROVIDED IN SECTION 144 OF THE ACT. FOR THIS THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE WHI CH ARE SIMILARLY WORDED IN ALL THE CASES AND THE RELEVANT SHOW CAUSE NOTICE READS AS UNDER:- IN CONNECTION WITH THE ASSESSMENT YEAR 2004-05 YO U HAVE SUBMITTED YOURE YOUR BOOKS HAVE BEEN WASHED AWAY BY THE FLOOD IN TH E MONTH OF AUGUST 2006. HOWEVER THERE ARE MANY OTHER QUERIES IN THE QUESTIONNAIRE ISSUED U/S.142(1) WHICH COULD BE ANSWERED EVEN IN THE ABSE NCE OF BOOKS. IT IS SEEN THAT YOU HAVE TAKEN ANY SERIOUS ATTEMPT TO COLLECT INFORMATION/DOCUMENTS/CONFIRMATIONS WHICH COULD BE HELPFUL IN THE ASSESSMENT PROCEEDINGS. HENCE YOU ARE ASKED TO SHOW CAUSE WHY NOT THE ASSE SSMENT SHOULD BE DONE U/S.144 OF THE INCOME TAX ACT 19621. AS NO PROPER REPLY WAS GIVEN BY THE ASSESSEE AGAIN NOTICE U/S.142(1) WAS ISSUED. ACCORDINGLY ASSESSING OFFICER PROCEEDED TO FRAME A SSESSMENT FOR NON-COMPLIANCE UNDER SUB-SECTION (B) OF SECTION 144 IN TERMS OF FA ILURE TO COMPLY WITH TERMS OF NOTICE ISSUE U/S.142(1). THE AO COMPLETED THE ASSESSMENT P ROCEEDINGS IN THE ABSENCE OF FULL AND PROPER COMPLIANCE TO THE VARIOUS STATUTORY NOTICE ISSUED ON VARIOUS DATES. THE AO HIMSELF NOTED THAT HE CANNOT ARRIVE AT A TRU E AND CORRECT INCOME OF THE ASSESSEE WITHOUT THE SUPPORT OF CRITICAL DETAILS AN D DOCUMENTS WHICH ARE TO BE SUPPLIED BY THE ASSESSEE. BUT THE AO IN THE ABSENCE OF THESE THINGS MADE ADDITION IN ALL THESE CASES ON ACCOUNT OF LOW GROSS PROFITS AD HOC ADDITION OF UNEXPLAINED CASH CREDIT I.E. BY APPLYING FORMULA OF 1% AND ALSO AD HOC DISALLOWANCE OF SELLING AND ADMINISTRATIVE EXPENSES. WHEN CONFRONTED WITH T HESE FACTS THE LD. COUNSEL FOR THE ASSESSEE ARGUED THAT THIS IS ONLY REASON THAT H E HAS CHALLENGED THE ASSESSMENT FRAMED U/S.144 OF THE ACT IN THESE APPEALS. THE LD. COUNSEL FOR THE ASSESSEE FURTHER NARRATED THE FACT THAT EVEN THE CIT(A) HAS NOT CONS IDERED THE FACTS IN PROPER PERSPECTIVE THAT THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE WAS DESTROYED IN THE FLOOD DURING THE PERIOD 6 TH AUG. 06 TO 12 TH AUG.06. IT HAS BEEN CONTENDED THAT ALL THE RECORDS OF THE ASSESSEE HAD BEEN DESTROYED IN T HE FLOODS AND THE SAME WAS INTIMATED TO THE ASSESSING OFFICER VIDE LETTER DATE D 26-09-2006. WE FIND FROM THE APPELLATE ORDERS IN THESE APPEALS THAT THE CIT(A) H AS RECORDED A FINDING THAT THE ASSESSEES BUSINESS PREMISES WAS NOT FALLING IN THE AREA IN WHICH FLOOD HAD EFFECTED SURAT AREAS. IN ANY CASE BEFORE COMPLETING ASSESSM ENT THE AO SHOULD HAVE ITA NO.4397-4400/AHD/2007 A.Y. 2004-05 M/S. MEHTA STEEL CORPN & 3 GROUP V. ACIT CIR-1 SRT PAGE 4 ALLOWED OPPORTUNITY TO CONFRONT THE PROPOSED ASSESS MENT AND THAT OPPORTUNITY WAS NOT PROVIDED ON THESE CONTESTED ISSUES. ACCORDINGLY WE ARE OF THE VIEW THAT IN ALL THESE APPEALS THESE ASSESSEES SHOULD BE PROVIDED F RESH OPPORTUNITY TO ADDRESS THEIR GRIEVANCES ACCORDING TO LAW. ACCORDINGLY THE SE APPEALS ARE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR FRAMING FRESH ASSESSME NT AS PER LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THESE ASSE SSEES ON THE ISSUES RAISED BEFORE US. THE ORDERS OF THE LOWER AUTHORITIES ARE REVERSED AND SET ASIDE TO THE FILE OF ASSESSING OFFICER. 4. IN THE RESULT ASSESSEES APPEALS ARE ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 06/08/2010 SD/- SD/- (N.S.SAINI) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD DATED : 06/08/2010 *DKP COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-II SURAT 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD