E.M. BROTHERS, MUMBAI v. DCIT CEN CIR 9, MUMBAI

ITA 8305/MUM/2010 | 2001-2002
Pronouncement Date: 11-11-2011 | Result: Partly Allowed

Appeal Details

RSA Number 830519914 RSA 2010
Assessee PAN AAAFE1839P
Bench Mumbai
Appeal Number ITA 8305/MUM/2010
Duration Of Justice 11 month(s) 11 day(s)
Appellant E.M. BROTHERS, MUMBAI
Respondent DCIT CEN CIR 9, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 11-11-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted E
Tribunal Order Date 11-11-2011
Date Of Final Hearing 28-10-2011
Next Hearing Date 28-10-2011
Assessment Year 2001-2002
Appeal Filed On 30-11-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI BEFORE HONBLE PRESIDENT SHRI G.E.VEERABHADRAPPA AND SHRI D.K.AGARWAL (JM) ITA NO.8303/MUM/2010 (ASSESSMENT YEAR: 1996-97) AND ITA NO.8304 AND 8305/MUM/2010 (ASSESSMENT YEARS: 2000-01 AND 2001-02) M/S E.M.BROTHERS PLOT NO.112 2 ND FLOOR 6 TH ROAD KHAR-WEST MUMBAI-400052 PAN : AAAFE1839P DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-9 CGO M K ROAD MUMBAI-400020. APPELLANT V/S RESPONDENT STAY APPLICATION NO.216/MUM/2011 ARISING OUT OF ITA NO.8303/MUM/2010 (ASSESSMENT YEAR: 1996-97) AND STAY APPLICATION NOS.217 & 218/MUM/2011 ARISING OUT OF ITA NOS.8304 & 8305/MUM/2010 (ASSESSMENT YEARS: 2000-01 & 2001-02) M/S E.M.BROTHERS 638 GORI HOUSE TPS-III 8 TH ROAD KHAR-WEST MUMBAI-400052 PAN : AAAFE1839P DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-9 CGO M K ROAD MUMBAI-400020 APPLICANT V/S RESPONDENT DATE OF HEARING : 28.10.2011 DATE OF PRONOUNCEMENT : 11.11.2011 ITA NO.8303 TO 8305/MUM/2010 AND SA NOS.216 TO 218/MUM/2011 AYS 1996-97 2000-01 AND 2001-02 2 ASSESSEE BY : SHRI VIJAY M EHTA REVENUE BY : SHRI P.C.MAU RYA O R D E R PER D.K.AGARWAL (JM) THESE THREE APPEALS PREFERRED BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER DATED 27.8.2010 P ASSED BY THE LD.CIT(A) FOR THE ASSESSMENT YEARS 1996-97 2000-01 AND 2001-02 2. THE ASSESSEE HAS ALSO FILED SEPARATE APPLICATI ONS DATED 20.10.2011 SEEKING STAY OF DEMAND OF RS.1 75 68 100/- RS.54 02 590/- AND RS.16 08 120/- INCLUDING INTEREST FOR THE ABOVE ASSESSMENT YEARS I .E. 1996- 97 2000-01 AND 2001-02 RESPECTIVELY. 3. SINCE FACTS ARE IDENTICAL AND ISSUE INVOLVED IS COMMON WITH THE CONSENT OF THE PARTIES IT WAS DEC IDED TO HEAR STAY APPLICATIONS ALONG WITH APPEALS AND ACC ORDINGLY THE SAME WERE HEARD TOGETHER AND ARE BEING DISPOS ED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 4. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE IS A FIRM AND ENGAGED IN THE BUSINESS AS A GOVERNM ENT CONTRACTOR FOR CIVIL WORKS. THE AO ON EXAMINATION OF THE DETAILS FILED WITH THE RETURNS OF INCOME FOR THE A SSESSMENT ITA NO.8303 TO 8305/MUM/2010 AND SA NOS.216 TO 218/MUM/2011 AYS 1996-97 2000-01 AND 2001-02 3 YEAR 1996-97 ASKED THE ASSESSEE TO EXPLAIN THE DIS CREPANCY IN THE AMOUNT SHOWN IN THE TDS CERTIFICATES AND TO JUSTIFY THE LIABILITY PAYABLE TO PIECE MEAL WORKERS. APART FROM THIS THE ASSESSEE WAS ALSO ASKED TO JUSTIFY VARIOUS EXPE NSES CLAIMED WITH SUPPORTING EVIDENCE FOR THE ABOVE ASSE SSMENT YEARS. IN THE ABSENCE OF ANY PROPER EXPLANATION WI TH SUPPORTING EVIDENCE SUBMITTED BY THE ASSESSEE THE AO VIDE SEPARATE ASSESSMENT ORDERS DATED 30.3.2004 COMPLETED THE ASSESSMENTS AFTER MAKING FOLLOWING ADDITIONS/DISALLOWANCES:- PARTICULARS AY-1996-97 IN RS. AY 2000-01 IN RS. AY-2001-02 IN RS. INCOME RETURNED ADDITIONS MADE:- I) LIABILITY OF PIECE MEAL WORKERS II) DISALLOWANCE ON ACCOUNT OF UNDER DECLARATION OF TDS RECEIPTS III) DISALLOWANCE OUT OF OTHER EXPENSES IV) DISALLOWANCE OUT OF OFFICE MAINTENANCE 6 63 550 18 056 869 1 45 124 3 03 768 28 300 8 84 318 - - 87 35 947 1 98 750 2 27 440 28 69 697 - - - INCOME ASSESSED TAX DEMANDED 1 91 78 325 1 75 68 100 98 19 010 54 02 590 30 97 137 16 08 120 ITA NO.8303 TO 8305/MUM/2010 AND SA NOS.216 TO 218/MUM/2011 AYS 1996-97 2000-01 AND 2001-02 4 5. ON APPEAL THE LD. CIT(A) OBSERVED THAT THE ASS ESSEE HAS FILED APPLICATION BEFORE THE INCOME TAX SETTLEM ENT COMMISSION ADDITIONAL BENCH MUMBAI VIDE SETTLEME NT APPLICATION NO.6/C-I/030/2004-2005/IT ON 8.11.2004. THE SAID APPLICATION FOR THE IMPUGNED ASSESSMENT YEARS 1996-97 2000-01 AND 2001-02 HAS BEEN ADMITTED BY THE HONBL E SETTLEMENT COMMISSION AS COMMUNICATED VIDE S.A.NO.6 /C- I/030/2004-05/IT/1003 DATED 14.12.2007. ACCORDING TO THE LD. CIT(A) SECTION 245F(2) PROVIDES THAT WHERE AN APPLICATION HAS BEEN ALLOWED TO BE PROCESSED WITH U /S 245D THE SETTLEMENT COMMISSION SHALL UNTIL AN ORDER I S PASSED UNDER SUB-SECTION (4) OF SECTION 245D HAVE SUBJEC T TO THE PROVISIONS OF SUB-SECTION (3) OF SECTION 245D EXCL USIVE JURISDICTION TO EXERCISE POWERS AND PERFORM THE FUN CTION OF AN IT AUTHORITY UNDER THIS ACT IN RELATION TO THE CASE . IN THE LIGHT OF THE SAID PROVISIONS OF SECTION 245F(2) THE LD. CIT(A) HELD THAT THE APPEALS FILED BY THE APPELLANT PENDING SIN CE 25 TH MAY 2004 HAVE BECOME INFRUCTUOUS AND REDUNDANT AN D ACCORDINGLY DISMISSED ALL THE APPEALS AS INFRUCTUO US. 6. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US TAKING FOLLOWING C OMMON GROUNDS OF APPEAL: ITA NO.8303 TO 8305/MUM/2010 AND SA NOS.216 TO 218/MUM/2011 AYS 1996-97 2000-01 AND 2001-02 5 1. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DISMISSING THE APPEAL A S INFRUCTUOUS HOLDING THAT SINCE THE APPELLANTS SETT LEMENT APPLICATION FOR THE RELEVANT YEAR HAS BEEN PROCEEDE D WITH UNDER SECTION 245D(2A) AND 245D(2C) THE APPELL ANT PROCEEDINGS IS REDUNDANT; 2. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN NOT DECIDING THE G ROUNDS OF APPEAL ON MERITS 7. AT THE TIME OF HEARING THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITS THAT IN THIS CASE THE AO HAS PASSED CRYPTIC ORDER MAKING HUGE DISALLOWANCES/ ADDITIONS. HE FURTHER SUBMITS THAT THE LD. CIT(A) H AS DISMISSED THE ASSESSEES APPEALS ON THE GROUND THA T SINCE THE SETTLEMENT COMMISSION HAD ADMITTED THE ASSESSE ES APPLICATIONS THE APPEALS FILED BY THE ASSESSEE HAV E BECOME INFRUCTUOUS AND REDUNDANT. HE FURTHER SUBMITS THAT SUBSEQUENTLY THE SETTLEMENT COMMISSION VIDE ORDER DATED 21.10.2010 PASSED AN ORDER U/S 154 R.W.S. 245D(1)/245D(2A)/245D(2C) AND RECTIFIED ITS EARLIER ORDER BY REJECTING THE APPLICATION AS NOT MAINTAINABLE HAVIN G BEEN FILED IN VIOLATION OF SUB-CLAUSE(B) OF PROVISO TO SECTION 245(C)(1) OF THE ACT. IN THE LIGHT OF THE ABOVE HE SUBMITS THAT THE ORDER PASSED BY THE LD. CIT(A) IN DISMISSI NG THE ASSESSEES APPEAL IS BAD IN LAW AND LIABLE TO BE SE T ASIDE. HE FURTHER SUBMITS THAT SINCE THE AO HAS MADE DISALLOWANCE/ADDITIONS WITHOUT ANY BASIS AND WITHOU T GIVING ITA NO.8303 TO 8305/MUM/2010 AND SA NOS.216 TO 218/MUM/2011 AYS 1996-97 2000-01 AND 2001-02 6 PROPER OPPORTUNITY TO THE ASSESSEE THEREFORE IN T HE INTERESTS OF JUSTICE THE ISSUE MAY BE SET ASIDE TO THE FILE O F THE AO. HE FURTHER SUBMITS THAT SINCE THERE IS NO DEFAULT O N THE PART OF THE ASSESSEE THEREFORE THE AMOUNT COLLECTED BY THE AO THROUGH CHEQUES MAY BE RETURNED/REFUNDED TO THE ASS ESSEE. HE THEREFORE SUBMITS THAT THE ASSESSEES APPEALS AND STAY APPLICATIONS BE ALLOWED. 8. ON THE OTHER HAND THE LD. DR WHILE RELYING ON THE ORDER OF THE AO AND LD. CIT(A) SUBMITS THAT IN VIEW OF THE SUBSEQUENT ORDER PASSED BY THE SETTLEMENT COMMISS ION U/S 154 R.W.S. 245D(1)/245D(2A)/245D(2C) DATED 21.10.20 10 (SUPRA) HE HAS NO OBJECTION IF THE APPEALS ARE RE STORED BACK TO THE FILE OF THE LD. CIT(A). HE FURTHER SUBMITS THAT SINCE THE AO HAS GIVEN DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THE ASSESSEE HAS FAILED TO MAKE PROPER COMPLIA NCE THEREFORE THE AO WAS FULLY JUSTIFIED IN MAKING THE ADDITIONS/DISALLOWANCES IN THE RESPECTIVE ASSESSMEN T YEARS AND THEREFORE THE ASSESSMENTS MAY NOT BE SET ASI DE TO THE FILE OF THE AO. 9. WE HAVE CAREFULLY HEARD THE SUBMISSIONS OF THE R IVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECOR D. WE FIND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUTE THAT THE SETTLEMENT COMMISSION VIDE ITA NO.8303 TO 8305/MUM/2010 AND SA NOS.216 TO 218/MUM/2011 AYS 1996-97 2000-01 AND 2001-02 7 SUBSEQUENT ORDER DATED 21.10.2010 (SUPRA) HAS RECT IFIED ITS EARLIER ORDER REJECTING THE ASSESSEES APPLICATION AS NOT MAINTAINABLE HAVING BEEN FILED IN VIOLATION OF SU B-CLAUSE (B) OF PROVISO TO SECTION 245C(1) OF THE ACT. IN THE ABSENCE OF ANY MATERIAL TO SHOW THAT NO PROPER AND DUE OPPORTU NITY OF BEING HEARD WAS PROVIDED BY THE AO BEFORE MAKING TH E ABOVE DISALLOWANCES/ADDITIONS WE ARE NOT CONVINCED WITH THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSE SSMENT SHOULD BE SET ASIDE TO THE FILE OF THE AO TO DECID E THE SAME AFRESH. SINCE THE SAID RECTIFICATION ORDER OF THE SETTLEMENT COMMISSION WAS PASSED SUBSEQUENT TO THE ORDER PASSE D BY THE LD. CIT(A) AND KEEPING IN VIEW THAT THE LD. CIT (A) HAS NOT DECIDED THE ISSUE ON MERITS THEREFORE IN THE INT ERESTS OF JUSTICE WE CONSIDER IT FAIR AND REASONABLE THAT TH E MATTER SHOULD GO BACK TO THE FILE OF THE LD. CIT(A) AND A CCORDINGLY WE SET ASIDE THE ORDERS PASSED BY THE LD. CIT(A) AN D RESTORE THE ISSUE TO HIS FILE TO DECIDE THE SAME AFRESH ON MERITS AND ACCORDING TO LAW AFTER PROVIDING REASONABLE OPPORT UNITY OF BEING HEARD TO THE PARTIES. ACCORDINGLY THE COMMON GROUNDS TAKEN BY THE ASSESSEE IN ALL THE THREE ASSESSMENT Y EARS ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.8303 TO 8305/MUM/2010 AND SA NOS.216 TO 218/MUM/2011 AYS 1996-97 2000-01 AND 2001-02 8 SA NOS.216 TO 218/MUM/2011 10. SINCE WE HAVE RESTORED BACK THE ISSUE TO THE FI LE OF THE LD. CIT(A) TO DECIDE THE SAME AFRESH ON MERITS TH E STAY APPLICATIONS FILED BY THE ASSESSEE FOR THE ABOVE AS SESSMENT YEARS BECOME INFRUCTUOUS AND ACCORDINGLY THE SAME A RE REJECTED. 11. IN THE RESULT THE ASSESSEES APPEALS STAND PAR TLY ALLOWED FOR STATISTICAL PURPOSES AND STAY APPLICATI ONS FILED BY THE ASSESSEE ARE REJECTED. ORDER PRONOUNCED IN THE OPEN COURT ON 11TH NOV. 2011. SD/- SD/- ( G.E.VEERABHADRAPPA ) (D.K.AGARWAL) PRESIDENT JUDICIAL MEMBER MUMBAI DATED 11TH NOVEMBER 2011 SRL: COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH 6. GUARD FILE. BY ORDER ASSTT. REGISTRAR ITAT MUMBAI ITA NO.8303 TO 8305/MUM/2010 AND SA NOS.216 TO 218/MUM/2011 AYS 1996-97 2000-01 AND 2001-02 9 DATE INITIALS 1. DRAFT DICTATED ON 28.10.2011 31.10.2011 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 31.10.2011 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM 5. APPROVED DRAFT COMES TO THE SR. PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO AR 10. DATE OF DISPATCH OF ORDER