Shreeji Packaging, Nai Daman v. The Income tax Officer, Ward-4,, Daman

ITA 687/AHD/2007 | 1997-1998
Pronouncement Date: 31-08-2010 | Result: Allowed

Appeal Details

RSA Number 68720514 RSA 2007
Assessee PAN AAJFS8632B
Bench Ahmedabad
Appeal Number ITA 687/AHD/2007
Duration Of Justice 3 year(s) 6 month(s) 16 day(s)
Appellant Shreeji Packaging, Nai Daman
Respondent The Income tax Officer, Ward-4,, Daman
Appeal Type Income Tax Appeal
Pronouncement Date 31-08-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 31-08-2010
Date Of Final Hearing 31-08-2010
Next Hearing Date 31-08-2010
Assessment Year 1997-1998
Appeal Filed On 13-02-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER AND SHRI D.C. AGRAWAL ACCOUNTANT MEMBER DATE OF HEARING : 31/08/2010 DRAFTED ON: 31/08 /2010 1. ITA NO.687/AHD/2007 A.Y. 1997-98 2. ITA NO.688/AHD/2007 A.Y. 2001-02 SHRI M.N. DHANANI SHREEJI PACKAGING SHREEJI KRUPA NR. JILL HILL BAR WAD CHOKI NANI DAMAN 396 210 VS. THE INCOME TAX OFFICER WARD-4 DAMAN PAN/GIR NO. : AAJFS 8632 B ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI S.N. DIVATIA A.R. RESPONDENT BY: SHRI R.K. DHANESTA D.R. O R D E R PER SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER : BOTH THESE APPEALS FILED BY THE ASSESSEE ARE DIRE CTED AGAINST THE SEPARATE ORDERS OF THE LEARNED CIT(APPEALS)-VALSAD DATED 03/08/2006 AND 16/10/2006 RESPECTIVELY FOR ASSESSMENT YEARS 1 997-98 & 2001-02. 2. AT THE OUTSET IT HAS BEEN INFORMED THAT THESE T WO APPEALS HAVE BELATEDLY BEEN FILED. FOR ASSESSMENT YEAR 1997-98 THE DELAY OF 85 (EIGHTY FIVE) DAYS AND FOR ASSESSMENT YEAR 2001-02 THE DELAY OF 3 (THREE) DAYS WAS INFORMED BY THE REGISTRY. NOW BE FORE US AN AFFIDAVIT HAS BEEN FURNISHED EXPLAINING THE REASONS OF DELAY PRIMARILY IT WAS DEPOSED ON OATH THAT THE FACTORY WAS UNDER CLOSURE AND THE ORDER WAS ITA NO.687 & 688/ AHD/2007 SH.M.N.DHANANI (SHREEJI PACKAGING) VS. ITO ASST.YEARS - 1997-98 & 2001-02 - 2 - FOUND IN AN ENVELOP WHEN IT WAS VISITED AND THEREUP ON THE DUE ACTION WAS TAKEN. CONSIDERING THE REASONS GIVEN IN THE AFFID AVIT WE HEREBY CONDONE THE DELAY AND PROCEED HEREINBELOW TO ADJUDI CATE THESE TWO APPEALS. (A) ASSESSMENT YEAR 1997-98; ITA NO.687/AHD/2007 3. DURING THE ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 1997-98 WHEREIN VIDE AN ORDER PASSED U/S.143(3) R.W.S. 147 DATED 27/06/2002 IT WAS OBSERVED BY THE ASSESSING OFFICER THAT AS PER T HE BALANCE-SHEET DRAWN AS ON 31/03/1996 THERE WAS NO MENTION OF SUN DRY CREDITORS ACCOUNT OF RS.59 000/- AS REFLECTED IN THE BALANCE- SHEET DRAWN AS ON 31/03/1997 RELEVANT FOR THE YEAR UNDER CONSIDERATI ON. IT HAS ALSO BEEN OBSERVED THAT THERE WAS CERTAIN DISCREPANCIES IN TH E PARTNERS CAPITAL ACCOUNT. BECAUSE OF THESE TWO REASONS THE ADDITIO NS WERE MADE. WHEN THE MATTER HAD GONE IN APPEAL THE RESPECTED CO-ORD INATE BENCH (ITAT AHMEDABAD) VIDE AN ORDER DATED 07/03/2005 IN ITA NO .1324/AHD/2004 DELETED THE ADDITION OF RS.2 75 000/-. CONSEQUENT LY THE FIRST APPELLATE AUTHORITY HAS REDUCED THE LEVY OF PENALTY TO THAT E XTENT HOWEVER CONFIRMED THE PENALTY ONLY IN RESPECT OF THE ADDITI ON OF RS.59 000/-. THIS IS THE SUBJECT MATTER OF THE PRESENT DISPUTE OF LEV Y OF PENALTY. 4. ON HEARING THE SUBMISSIONS OF BOTH THE SIDES WE ARE NOT CONVINCED THE MANNER IN WHICH THE PENALTY WAS LEVIED BECAUSE THE FACTS PERTAINING TO THE AMOUNT OF RS.59 000/- UNDER THE HEAD SUNDRY CREDITORS WAS VERY MUCH IN THE KNOWLEDGE OF THE REVENUE DEPARTMEN T. IT WAS ALSO IN THE KNOWLEDGE OF REVENUE DEPARTMENT THAT ON RETIREM ENT OF ONE OF THE ITA NO.687 & 688/ AHD/2007 SH.M.N.DHANANI (SHREEJI PACKAGING) VS. ITO ASST.YEARS - 1997-98 & 2001-02 - 3 - PARTNERS MR. K.V. PATEL HIS LIABILITY WAS REVERSE D IN THE BOOKS OF ACCOUNT AND THAT LIABILITY HAD REFLECTED IN THE BAL ANCE-SHEET AS ON 31/03/1997. IT IS ALTOGETHER DIFFERENT WHILE COMPL ETING THE ASSESSMENT THAT THE ASSESSEE WAS UNABLE TO EXPLAIN THE SAID OU TSTANDING BALANCE BUT AS FAR AS THE QUESTION OF LEVY OF PENALTY IS CONCER NED THE ASSESSEE HAD OFFERED AN EXPLANATION ALONG WITH THE PREVAILING CI RCUMSTANCES FOR PASSING SUCH AN ENTRY WHICH WAS NOT ALTOGETHER FOUN D FALSE OR UNTRUE. BECAUSE OF THESE REASONS WE HEREBY HOLD THAT IN TH E LIGHT OF EXPLANATION- 1(A) ANNEXED TO SECTION 271(1)(C) OF THE I.T.ACT 1961 THE ASSESSEE HAS OFFERED AN EXPLANATION IN RESPECT OF FACTS MATERIAL TO THE COMPUTATION OF THE INCOME AND THAT WAS NOT ALTOGETHER A FALSE EXPL ANATION AND DULY SUBSTANTIATED BY THE SURROUNDING CIRCUMSTANCES THE REFORE THE PENALTY AS PARTLY CONFIRMED BY THE LEARNED CIT(APPEALS) DESERV ES TO BE DELETED. WE ORDER ACCORDINGLY. AS A RESULT APPEAL FOR ASSE SSMENT YEAR 1997-98 IS ALLOWED. (B) ASSESSMENT YEAR 2001-02; ITA NO.688/AHD/2007 4. BEFORE GOING INTO THE FACTS ON THE BASIS OF WHIC H PENALTY WAS LEVIED IT IS WORTH TO MENTION THAT WHILE DECIDING THE QUANTUM IN APPELLANTS CASE THE RESPECTED CO-ORDINATE BENCH A ITAT AHMEDABAD IN APPEAL BEARING NO.3132/AHD/2004 FOR AS SESSMENT YEAR 2001-02 VIDE AN ORDER DATED 03/10/2008 HAS RESTORED THE ISSUE BACK TO THE STAGE OF LEARNED CIT(APPEALS) VIDE PARAGRAPH NOS.4 5 & 6; REPRODUCED BELOW:- ITA NO.687 & 688/ AHD/2007 SH.M.N.DHANANI (SHREEJI PACKAGING) VS. ITO ASST.YEARS - 1997-98 & 2001-02 - 4 - 4. BEFORE US NONE APPEARED ON BEHALF OF THE TAXP AYER WHILE THE LD. LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED T HE FINDINGS OF THE ORDER OF THE LOWER AUTHORITIES. IN THE GROUND OF APPEAL THE TAXPAYER CONTENDED THAT THE LD. CIT(A) WAS NOT JUST IFIED IN CONCLUDING THAT THE TAXPAYER DID NOT WANT TO PRESS THE GROUNDS OF APPEAL SINCE THE CA COULD NOT FILE THE LETTER OF AU THORITY OR POWER OF ATTORNEY AT THE FIRST ATTENDANCE ON 18.06.04. IN FACT THE CORRECT DATE OF HEARING IS 19.08.04 WHILE THE ADJOURNED DAT E OF HEARING IS 23.08.04. AS REGARDS ADDITION OF RS.74 595/- IT IS MENTIONED IN THE GROUNDS THAT THERE WAS INCREASE IN FIXED ASSETS ON ACCOUNT OF PURCHASE OF COMPUTER SYSTEM THROUGH PAYMENT BY CHEQ UES WHILE THE LD. LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF RS.1 80 013/- OUT OF TOTAL INDIRECT EXPENSES OF RS.1 80 302/-. SIMILARLY THE DISALLOWANCE OF CLAIM UNDER SECTION 80IA/80IB HAS BEEN MADE ON THE GROUND THAT THE AUDIT REPORT IN FO RM NO.10CCB WAS NOT FILED DURING THE COURSE OF ASSESSMENT PROCE EDINGS AND THE LD. CIT(A) UPHELD THE FINDINGS OF THE AO WITHOUT G IVING SUFFICIENT OPPORTUNITY TO THE TAXPAYER. 5. AS IS EVIDENT FROM THE IMPUGNED ORDER THE LD. CIT(A) FIXED THE APPEAL FOR HEARING ON 19.8.2004 AND DUE TO NON-RECE IPT OF POWER OF ATTORNEY FROM THE CONCERNED CA BY 23.8.2004 PAS SED THE IMPUGNED ORDER ON 24.8.2008 ITSELF WITHOUT ALLOWIN G ANY FURTHER OPPORTUNITY TO THE TAXPAYER. WE ARE OF THE OPINION THAT SUFFICIENT OPPORTUNITY HAS NOT BEEN ALLOWED BY THE LD. CIT(A) BEFORE DISPOSING OF THE APPEAL. THE RULES OF NATURAL JUST ICE ARE NOT CODIFIED NOR ARE THEY UNVARYING IN ALL SITUATIONS RATHER THEY ARE FLEXIBLE. THEY MAY HOWEVER BE SUMMARIZED IN ONE WORD FAIRNESS. IN OTHER WORDS WHAT THEY REQUIRE IS FAIRNESS BY TH E AUTHORITY CONCERNED. OF COURSE WHAT IS FAIR WOULD DEPEND ON THE SITUATION AND THE CONTEXT. LORD ESHER M.R. IN VOINET VS. BA RRETT (1885) 55 L.J. OB 39 39 OBSERVED: NATURAL JUSTICE IS THE NATURAL SENSE OF WHAT IS RIGHT AND WRONG. 6. IN VIEW OF THE FOREGOING AND IN THE LIGHT OF PEC ULIAR FACTS OF THE CASE ESPECIALLY WHEN SUFFICIENT OPPORTUNITY HAS NOT BEEN ALLOWED BY THE LD. CIT(A) TO THE TAXPAYER IN THE I NTEREST OF SUBSTANTIAL JUSTICE THE MATTE IS RESTORED TO THE FI LE OF THE LD. CIT(A) ITA NO.687 & 688/ AHD/2007 SH.M.N.DHANANI (SHREEJI PACKAGING) VS. ITO ASST.YEARS - 1997-98 & 2001-02 - 5 - WITH THE DIRECTIONS TO PROVIDE SUFFICIENT OPPORTUNI TY TO THE TAXPAYER BEFORE ADJUDICATING THE ISSUES ON MERITS. 5. ONCE THE MATTER HAD GONE FOR RE-ADJUDICATION AT THE STAGE OF THE FIRST APPELLATE AUTHORITY THEREFORE THE CONSEQUEN CE IS THAT THE PENALTY NOW IN QUESTION SHOULD ALSO BE REDECIDED AS PER TH E FATE OF THE QUANTUM APPEAL BY LEARNED CIT(APPEALS). WITH THE RESULT T HE GROUNDS RAISED BY THE ASSESSEE ARE TO BE TREATED AS ALLOWED ONLY FOR STATISTICAL PURPOSES. 6. IN THE RESULT APPEAL FOR ASSESSMENT YEAR 1997-9 8 IS ALLOWED WHEREAS APPEAL FOR ASSESSMENT YEAR 2001-02 IS ALLOW ED ONLY FOR STATISTICAL PURPOSES. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 31/ 08 /2010. SD/- SD/- ( D.C. AGRAWAL) ( MUKUL KR. SH RAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD; DATED 31 / 08 /2010 T.C. NAIR SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED. 4. THE L D. CIT(APPEALS)-VALSAD 5. THE DR AHMEDABAD BENCH. 6. THE GUARD FI LE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD