Chandralon Texturisers Pvt.Ltd.,, Surat v. The Income tax Officer,Ward-1(1),, Surat

ITA 4576/AHD/2007 | 2005-2006
Pronouncement Date: 21-01-2011 | Result: Allowed

Appeal Details

RSA Number 457620514 RSA 2007
Assessee PAN AAACC9484B
Bench Ahmedabad
Appeal Number ITA 4576/AHD/2007
Duration Of Justice 3 year(s) 23 day(s)
Appellant Chandralon Texturisers Pvt.Ltd.,, Surat
Respondent The Income tax Officer,Ward-1(1),, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 21-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 21-01-2011
Date Of Final Hearing 19-01-2011
Next Hearing Date 19-01-2011
Assessment Year 2005-2006
Appeal Filed On 28-12-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA J.M. & HON' BLE SHRI N.S. SAINI A.M. ) I.T.A. NOS. 4576 & 4577/AHD./2007 ASSESSMENT YEAR : 2005-2006 CHANDRALON TEXTURISERS PVT. LTD. SURAT -VS.- INCOME TAX OFFICER WARD-1(1) SURAT (PAN : AAACC 9484 B) (APPELLANT) (RESPONDENT) & I.T. A. NO. 63/AHD/2008 ASSESSMENT YEAR : 2005-2006 INCOME TAX OFFICER WARD-1(1) SURAT -VS.- CHANDRALON TEXTURISERS PVT. LTD. SURAT (APPELLANT) (RESPONDENT) ASSESSEE BY : SMT. URVASHI SHODHAN A.R. DEPARTMENT BY : SHRI SANJAY RAI D.R. O R D E R PER BENCH : ALL THESE THREE APPEALS WERE HEARD ON THE SAME DAT E ARGUED BY COMMON LD. REPRESENTATIVE THEREFORE THESE ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. WE FIRST TAKE UP THE ASSESSEES APPEAL BEING ITA NO. 4577/AHD/2007 . THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER DATED 16.10.2007 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-1 SURAT FOR TH E ASSESSMENT YEAR 2005-06.THE VARIOUS GROUNDS RAISED BY THE ASSESSEE IN ITS APPEAL ARE AS UNDER :- (1) THE LEARNED CIT(A.) HAS ERRED IN REFUSING TO CO NDONE THE DELAY & DISMISSING THE APPEAL AS LATE IGNORING ALTOGETHER THE CAUSE O F JUSTICE. (2) THE LEARNED A.O. HAS ERRED IN DISALLOWING THE E XCISE PAYMENT OF RS.5 90 000/- TO THE EXCISE DEPT. IGNORING THE FACT OF INVOCATIO N OF BANK GUARANTEE BY THE EXCISE DEPT. & DIRECT PAYMENT BY THE BANK ITSELF TO THE EXCISE DEPT. (3) THE LEARNED A.O. HAS ALSO ERRED IN TAKING THE A DVANTAGE OF THE APPELLANTS IGNORANCE BY NOT ALLOWING DEPRECIATION OF RS.7 63 598/- IGNORING THE FACT OF TEMPORARY & COMPULSORY CLOSURE OF FACTORY DUE TO SE AL BY THE EXCISE DEPT. 2 ITA NOS . 4576 4577-AHD-2007 & 63-AHD-2008 (4) THE LEARNED A.O. HAS ALSO ERRED IN MAKING THE A DDITION OF RS.36 67 828/- U/S. 41(1) OF THE ACT ON ACCOUNT OF THE SO-CALLED CESSAT ION OF LIABILITY. 3. AT THE TIME OF HEARING BEFORE US ON BEHALF OF A SSESSEE SMT. URVASHI SHODHAN LD. COUNSEL APPEARED AND CONTENDED THAT THERE WAS A DELAY IN FI LING THE APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). THE LEARNED C OMMISSIONER OF INCOME TAX (APPEALS) IN THE IMPUGNED ORDER REFUSED TO CONDONE THE DELAY. HE SUBMITTED THAT THERE WAS SMALL DELAY AND KEEPING IN VIEW THE JUDGMENT OF THE HON'BLE ALLAHAB AD HIGH COURT IN THE CASE OF GANGA SAHAI RAM SWARUP & ANOTHER VS.- INCOME TAX APPELLATE TRI BUNAL & OTHERS REPORTED IN 271 ITR 512 (ALL.) THE LEARNED COMMISSIONER OF INCOME TAX(APPE ALS) OUGHT TO HAVE CONDONED THE SMALL DELAY. SHE ACCORDINGLY CONTENDED THAT LEARNED COMMI SSIONER OF INCOME TAX (APPEALS) BE DIRECTED TO CONDONE THE DELAY AND ADMIT THE APPEAL OF THE ASSESSEE. 4. ON THE OTHER HAND SHRI SANJAY RAI LD. D.R. APP EARING ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF LEARNED COMMISSIO NER OF INCOME TAX (APPEALS). HE POINTED OUT THAT SINCE THERE WAS NO SUFFICIENT CAUSE THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS) RIGHTLY REFUSED TO CONDONE THE DELAY. 5. HAVING HEARD BOTH THE SIDES WE HAVE CAREFULLY G ONE THROUGH THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS). BEFORE THE LE ARNED COMMISSIONER OF INCOME TAX (APPEALS) THE ASSESSEE FILED AN AFFIDAVIT WHICH RE ADS AS UNDER :- (1)THAT I AM ONE OF THE DIRECTORS OF M/S. CHANDRAB EN TEXTURISING PVT. LTD. (2) THAT THE SAID COMPANY WAS ENGAGED IN TEXTURISIN G OF YARN BUSINESS AND HAD INCURRED HUGE LOSSES DUE TO RECESSIONARY TREND IN T HE TEXTILE INDUSTRY. (3) THAT THE CONTINUED LOSSES HAD CAUSED SERIOUS PR OBLEMS OF LIQUIDITY AND THE UNIT HAD TO BE CLOSED DOWN FOR GOOD. (4) I HAVE BEEN SUFFERING FROM VARIOUS DISEASES AND HAVE PROBLEMS IN WALKING DUE TO FRACTURE IN DEC. 2004. BESIDE MY WIFE HAD ALSO B EEN SUFFERING FROM BREAST CANCER. (5) THAT THERE WAS NONE TO LOOK AFTER THE AFFAIRS O F THE COMPANY AS ALL THE EMPLOYEES HAD ALSO BEEN RELIEVED DUE TO PRECARIOUS POSITION OF THE COMPANY. 3 ITA NOS . 4576 4577-AHD-2007 & 63-AHD-2008 (6) THAT AN RECEIPT OF THE ASSESSMENT ORDER FOR AY 2005-06 WE COULD NOT CONCEIVE AN Y SERIOUSNESS OF THE MATTER DUE TO ABSOLUTELY NI L DEMAND OF TAX. THIS WAS ALSO DUE TO OUR VERY DISTURBED STATE OF MIND BECAUSE OF UNBEARABLE FINANCIAL LIABILITIES AND ALSO BECAUSE OF OUR MENTAL SET UP TO AVOID AND REFRAIN FROM LITIGATION AND INCURRING EXPENSES UNLESS SOME FINANCIAL STAKE WAS INVOLVED. (7) THAT IT WAS ON RECEIPT OF THE SHOW CAUSE NOTICE FOR LEVYING PENALTY U/S. 271(1)(C) OF THE ACT WE COULD VISUALIZE CONTINGENT FINANCIAL LIABILITIES OF PENALTY BECAUSE OF THE ADDITIONS MADE IN THE ASSESSMENT ORD ER AND THEREFORE WE TOOK URGENT AND IMMEDIATE STEPS TO CHALLENGE THE ASSESSM ENT ORDER. (8) THAT THERE WAS NO MALAFIDE INTENTION OF ANY ILL ICIT MOTIVE ON OR PART TO MAKE OUT ANY UNDUE GAIN BY DELAYED SUBMISSION OF THE APP EAL. NOR THE DEPARTMENT HAS INCURRED ANY LOSS DISADVANTAGE DUE TO OUR DELAYED S UBMISSION OF THE APPEAL. (9) THAT WE HAVE BEEN THE VICTIM OF CIRCUMSTANCES O NLY RESULTING INTO SUCH INTENDED LAPSES. (10) THAT WE HAVE HUMBLY BEG TO RELY ON THE UNDER M ENTIONED DECISIONS :- (A) COLLECTOR LAND ACQUISITION VS.- MS. KATIJI & ORS. (1987) 167 ITR 471 (SC); (B) SHREENIVAS CHARITABLE TRUST VS.- DCIT (2006) 250 ITR 357 (MAD.); (C) AUTO CENTRE VS.- SUTE OF U.P. & ORS. (2005) 2 78 ITR 291 (AHD). 11. THAT THE DELAY IN SUBMISSION OF APPEAL IS UNINT ENTIONAL AND BONAFIDE ONLY AND THEREFORE IN OUR HUMBLE VIEW THE DELAY IS ELIGIBLE TO BE CONDONED IN THE INTEREST OF JUSTICE. 5.1. FROM THE PERUSAL OF THE AFORESAID REASONS WE ARE CONVINCED THAT INITIALLY THE ASSESSEE WAS OF THE OPINION THAT THERE WAS NO NECESSITY OF FILIN G THE APPEAL. HOWEVER AS SOON AS SHE CAME TO KNOW THAT IT SHOULD FILE AN APPEAL THE APPEALS WER E FILED. SINCE NO DEMAND WAS CREATED ON ASSESSMENT IT APPEARS THAT THE ASSESSEE WAS OF THE BONAFIDE BELIEF THAT NO APPEAL IS REQUIRED TO BE FILED. THIS BONAFIDE BELIEF LOOKING TO THE FACTS O F THE CASE IN OUR OPINION CONSTITUTES A REASONABLE CAUSE. CONSIDERING THE SMALL PERIOD OF D ELAY WE ARE OF THE VIEW THAT IT WILL MEET THE END OF JUSTICE IF SMALL DELAY IS CONDONED. WE ACCOR DINGLY DIRECT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) TO CONDONE THE DELAY AND ADMIT THE APPEAL FILED BY THE ASSESSEE AND RE- ADJUDICATE THE SAME IN ACCORDANCE WITH LAW AFTER GI VING OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. 4 ITA NOS . 4576 4577-AHD-2007 & 63-AHD-2008 6. ITA NOS. 63/AHD/2008 & 4576/AHD/2007 THESE CROSS APPEALS ARE AGAINST THE ORDER DATED 16 .10.2007 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I SURAT PARTLY CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) FOR THE ASSESSMENT YEAR 200 5-06. 7. WE HAVE HEARD BOTH THE SIDES. IT IS PERTINENT TO NOTE THAT FOR THE ASSESSMENT YEAR UNDER APPEALS THE ASSESSING OFFICER FRAMED THE ASSESSMEN T UNDER SECTION 143(3) ON 21.09.2006 DETERMINING TOTAL INCOME AT NIL. IN THIS ASSESSMENT ORDER THE ASSESSING OFFICER MADE THE FOLLOWING ADDITIONS :- (I) ON ACCOUNT OF DISALLOWANCE OF EXPENSES DEBITED/ CLAIMED IN THE P&L A/C. UNDER THE HEAD EX CISE - RS.5 90 000/-; (II) ON ACCOUNT OF DISALLOWANCE OF CLAIM OF DEPRECI ATION - RS.7 63 598/-; (III) ON ACCOUNT OF CESSATION OF LIABILITY IN RESPE CT OF SUNDRY CREDITORS OUTSTANDING FOR MORE THAN THREE YE ARS - RS.36 67 828/- IN QUANTUM APPEAL THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS) DID NOT ACCEPT THE PLEA OF THE ASSESSEE TO CONDONE THE DELAY AND DISMISSED THE APPEAL OF THE ASSESSEE AS BEING LATE. THEREAFTER THE ASSESSING OFFICER LEVIED THE PENALTY OF RS.18 39 504/- IN RESPECT OF ALL THE AFORESAID THREE ADDITIONS VIDE PENALTY ORDER DATED 19.03.2007. 8. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN APPEAL AGAINST THE PENALTY ORDER CONFIRMED THE PENALTY IN RESPECT OF THE ADDITIONS M ENTIONED AT 1 & 2 ABOVE. HOWEVER HE CANCELLED THE PENALTY WITH REFERENCE TO THE ADDITIO N AT 3 I.E. IN RESPECT OF ADDITION OF RS.20 05 388/- ON ACCOUNT OF CESSATION OF LIABILITY PERTAINING TO JAYLON AGENCIES PVT. LTD. AND THE PENALTY RELATING TO THE ADDITION OF RS.16 62 44 1/- ON ACCOUNT OF CESSATION OF LIABILITY PERTAINING TO BHAGAT EXPORT (RS.7 72 385/-) AND AAS U EXIM PVT. LTD. (RS.8 90 056/-) HAS BEEN DELETED BY THE LEARNED COMMISSIONER OF INCOME TAX(A PPEALS) BY OBSERVING THAT THE ASSESSING OFFICER HAS NOT COME TO ANY CONCLUSION AND THE ASSE SSING OFFICER HAS MADE A GUESSWORK THAT SINCE THE PARTIES HAVE NOT REPLIED THEREFORE THE L IABILITIES ARE CEASED. 5 ITA NOS . 4576 4577-AHD-2007 & 63-AHD-2008 9. IN ITA NO. 4577/AHD/2007 (SUPRA) WE HAVE SET ASI DE THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN QUANTUM APP EAL AND DIRECTED HIM TO CONDONE THE DELAY AND DECIDE THE APPEAL AFRESH IN ACCORDANCE WI TH LAW. THEREFORE IN THE INTEREST OF JUSTICE THE IMPUGNED ORDER OF LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) PARTLY CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTI ON 271(1)(C) IS ALSO SET ASIDE WITH THE DIRECTION THAT HE WILL RE-DECIDE THIS APPEAL AFRESH AFTER DECIDING THE QUANTUM APPEAL OF THE ASSESSEE AS DIRECTED IN ITA NO. 4577/AHD/2007 (SUPR A). 10. IN THE RESULT FOR STATISTICAL PURPOSES ALL TH E THREE APPEALS ARE TREATED AS ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 21.01.20 11 SD/- SD/- (N.S. SAINI) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21/ 01 / 2011 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A.) CONCERNED (4) CIT CONCERNED (5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGI STRAR ITAT AHMEDABAD LAHA/SR.P.S.