KAUSHIK BUILDERS P. LTD, MUMBAI v. ITO WD 5(2)(2), MUMBAI

ITA 9129/MUM/2010 | 2006-2007
Pronouncement Date: 15-07-2013 | Result: Allowed

Appeal Details

RSA Number 912919914 RSA 2010
Assessee PAN AABCK7058C
Bench Mumbai
Appeal Number ITA 9129/MUM/2010
Duration Of Justice 2 year(s) 6 month(s) 16 day(s)
Appellant KAUSHIK BUILDERS P. LTD, MUMBAI
Respondent ITO WD 5(2)(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 15-07-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 15-07-2013
Date Of Final Hearing 15-07-2013
Next Hearing Date 15-07-2013
Assessment Year 2006-2007
Appeal Filed On 29-12-2010
Judgment Text
A IN THE INCOME TAX APPELLATE TRIBUNAL A BENC H MUMBAI . . . ! '#$ ' BEFORE SHRI H.L. KARWA PRESIDENT AND SHRI D. KARUNAKARA RAO AM ' ./I.T.A. NO.9129/M/2010 ( %& ' / ASSESSMENT YEAR :2006-2007) M/S. KAUSHIK BUILDERS P. LTD . 7 RANG BAHADUR PANDEY CHAWL PANDEY NAGAR DAHISAR (E) MUMBAI 400 068. & / VS. ITO - WARD - 5(2)(2) MUMBAI. $( ! ' ./PAN : AABCK 7058 C ( () /APPELLANT) .. ( *+() / RESPONDENT) () - ' / APPELLANT BY : SHRI DILIP S. KAMPANI *+() - ' / RESPONDENT BY : MS. DIVYA BAJPAI ' & .! /DATE OF HEARING : 15.07.2013 /0' .! /DATE OF PRONOUNCEMENT : 15.07.2013 #1 #1 #1 #1 / O R D E R PER D. KARUNAKARA RAO AM: THIS APPEAL FILED BY THE ASSESSEE ON 29.12.2010 IS AGAINST THE ORDER OF CIT (A)-9 MUMBAI DATED 26.8.2010 FOR THE ASSESSMENT YE AR 2006-2007. 2. IN THIS APPEAL ASSESSEE RAISED THE FOLLOWING GRO UNDS WHICH READ AS UNDER: 1. THE LD CIT (A) HAS ERRED IN DISMISSING THE APPEA L ON THE BASIS OF FORM NO.35 FILED BY THE EX-DIRECTOR WHO WAS NOT AUTHORIZED TO FILE AND SIGN FORM NO.35. 2. APPELLANT WAS GENUINELY HAMPERED BY NOT GETTING DETAILS OF ASSESSMENT ORDER NOTICES AND OTHER CORRESPONDENCE RELATED TO PROCEEDINGS. APPELLANT PRAY TO GIVE FURTHER OPPORTUNITY TO PRESEN T ITS CASE AND FILE NECESSARY DETAILS. 3. DUE TO NON-RECEIPT OF ASSESSMENT ORDER NOTICES AND OTHER CORRESPONDENCE APPELLANT PRAY TO CONDONE THE DELAY FOR FILING THE APPEAL. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE TH AT THE ASSESSEE IS ENGAGED IN THE CONSTRUCTION ACTIVITY AND FILED THE RETURN OF I NCOME DECLARING THE LOSS OF RS. 7 07 454/-. AO ISSUED NOTICE U/S 143(2) AND U/S 14 2(1) ON 20.7.2007 AND 27.6.2008 RESPECTIVELY. FURTHER AO ISSUED A QUESTIONNAIRE A LONG WITH THE LETTER DATED 2 24.9.2008 CALLING FOR DETAILS. REMINDER LETTER DAT ED 24.9.2008 WAS ALSO ISSUED BY THE AO REQUESTING THE ASSESSEE TO ATTEND ON 23.10.2 008. FOR ENFORCING THE ATTENDANCE AO INITIATED PENALTY PROCEEDINGS U/S 27 1(1)(B) OF THE ACT VIDE PROCEEDINGS DATED 15.10.2008. FURTHER OPPORTUNITY WAS GIVEN TO THE ASSESSEE FOR FURNISHING CERTAIN INFORMATION. LETTERS DATED 8.12. 2008 AND 15.12.2008 ARE RELEVANT HERE. FINALLY ASSESSEE REQUESTED FOR ADJOURNMENT VIDE HIS LETTER DATED 8.12.2008. FINAL OPPORTUNITY WAS GRANTED BY THE AO TO ATTEND THE OFFICE ON 22.12.2008. NONE APPEARED FOR THE ASSESSEE. FINALL Y ASSESSMENT WAS COMPLETED ON 15.12.2008 WITHOUT WAITING FOR THE FINAL DUE DATE OF 22.12.2008. IN THE ASSESSMENT AO MADE A COUPLE OF ADDITIONS IE (I) DISALLOWANCE O F EXPENSES AMOUNTING TO RS. 7 07 454/- AND (II) ADDITION OF RS. 67 70 000/- U/S 68 ON ACC OUNT OF UNEXPLAINED CASH CREDIT. AGGRIEVED WITH THE SAME ASSESSEE FIL ED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY BY RAISING THE GROUNDS AGAINST THE SAID ADDITIONS OF RS. 7 07 454/- AND RS. 67 70 000/-. 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLAT E AUTHORITY OPPORTUNITIES WERE GRANTED AT TEN OCCASIONS IE 15/3/2010; 9/4/2010; 2 4/8/2010 ARE SOME OF THE DATES OF MENTIONED IN THE ORDER OF THE CIT (A). FURTHER ASSESSEE FILED A PAPER BOOK DATED 4.12.2009 GIVING SOME DETAILS RELATING TO PER MISSION FROM BMC FOR DEVELOPMENT COMPLAINT TO POLICE COMMISSIONER ANTI CIPATORY BAIL APPLICATION FILED BY SHRI DILIP S. KAMPANI A COPY OF THE APPLICATION M ADE TO THE HONBLE HIGH COURT. BUT ASSESSEE DID NOT FURNISH RELEVANT DETAILS WITH REGARD TO THE SAID ADDITION OF RS. 7 07 454/- AND UNEXPLAINED CASH CREDITS OF RS. 67 7 0 000/-. ASSESSEE DID NOT FILE CONFIRMATION LETTERS TOO. ON CONSIDERING THE EXIST ENCE OF CERTAIN DISPUTES THAT THE ASSESSEE HAD WITH OTHERS THE EXPENDITURE AND ALSO ON FINDING THAT THE ASSESSEE WAS NOT COOPERATED WITH THE DEPARTMENTAL PROCEEDINGS CIT (A) CONFIRMED THE ADDITIONS MADE BY THE AO AND DISMISSED THE APPEAL. 5. DURING THE PROCEEDINGS BEFORE US SHRI DILIP S. KAMPANI CHAIRMAN OF THE ASSESSEE-COMPANY SUBMITTED THAT THE IMPUGNED ORDER MAY BE SET ASIDE AND REMAND THE MATTER TO CIT (A) FOR A FRESH ADJUDICATION ON T HE GROUND THAT THE AO MADE ASSESSMENT U/S 144 OF THE ACT AND THE CIT (A) CONF IRMED THE ADDITIONS WITHOUT PRESENCE OF THE ASSESSEE. AS REGARDS NON-APPEARAN CE BEFORE THE LOWER AUTHORITIES 3 HE MENTIONED THAT THERE ARE MANY DISPUTES AMONG THE COMPANYS DIRECTORS WHICH IS THE REASON FOR THE DEFAULTS RELATING TO TH E ATTENDANCE. IN THIS REGARD HE BROUGHT OUR ATTENTION TO THE STATEMENT OF FACTS (S OF). AS PER THE SOF THE ASSESSEE-COMPANY WAS TAKEN OVER BY SHRI DILIP S. KA MPANI AND THE EARLIER DIRECTORS DID NOT COMMUNICATE THE CHANGE OF ADDRESS FOR THE C ORRESPONDENCE WITH THE LOWER AUTHORITIES. THEREFORE THERE WAS COMMUNICATION GAP BETWEEN THE DEPARTMENT AND THE ASSESSEE DURING THE ASSESSMENT AND FIRST APPELL ATE PROCEEDINGS. IT IS SUBMITTED THAT ON TAKING OVER THE COMPANY SHRI DILIP S. KAMP ANI HAS STARTED ATTENDING TO PROBLEMS ONE BY ONE AND ALSO MONITORING THE LITIGAT ION RELATING TO THE INCOME TAX MATTERS. HE ALSO MENTIONED THAT THERE ARE FINANCIAL PROBLEMS WITH THE COMPANY AND HE SHALL ATTEND TO THE LITIGATION PERSONALLY. IN FA CT HE MADE A STATEMENT AT THE BAR STATING THAT HE SHALL COMPLY WITH THE PROCEEDINGS B EFORE THE DEPARTMENT PERSONALLY IF AN OPPORTUNITY IS GRANTED BEFORE THE LOWER AUTHO RITIES. IT IS A FACT THAT NOBODY APPEARED BEFORE THE LOWER AUTHORITIES AND TO THAT E XTENT THE PRINCIPLE OF NATURAL JUSTICE WAS NOT FULLY MET BY THE AO. 6. ON THE OTHER HAND LD DR ATTEMPTED TO UNDERLINE THE ASSESSEES FAILURE TO COMPLY WITH THE NUMBER OF NOTICES ISSUED BY THE AO AS WELL THE CIT (A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS OF THE REVENUE AUTHORITIES AND THE MATERIAL PLACED BEFORE US. WE FIND ISSUE OF NUMBER OF NOTICES TO THE ASSESSEE AND THERE IS NO RESPONSE FROM THE ASSE SSEES SIDE. IT IS A FACT THAT ORDER OF ASSESSMENT WAS COMPLETED EX-PARTE U/S 144 OF THE ACT. THE ADDITIONS MADE IN THE ASSESSMENT ARE ALSO ON AD-HOC BASIS AS WELL AS FOR WANT OF DETAILS OR CERTAIN CONFIRMATION LETTERS AS THE CASE MAY BE. SIMILARLY PROCEEDINGS BEFORE THE CIT (A) WERE ALSO COMPLETED WITHOUT PRESENCE OF THE ASSESSEE AND THE RELEVANT PAPERS. BEFORE US ASSESSEE SUBMITTED THAT THERE A RE REASONS FOR SUCH NON- ATTENDANCE OF THE ASSESSEE AND THEY REVOLVE AROUND THE DISPUTE AMONG THE DIRECTORS OF THE COMPANY. IT IS AN ADMITTED FACT TH AT SRI MR. DILIP S. KAMPANI HAS TAKEN OVER THE COMPANY NOW AND HE HAS STARTED ATTEN DING TO THE DISPUTE WITH THE DEPARTMENT. THE FACT HE APPEARED BEFORE US EVIDENCE S THE CHANGE OF EVENTS WITH THE ASSESSEE. LD DR HAS NOT BROUGHT ANYTHING ON REC ORD TO CONTROVERT THE ABOVE CLAIMS OF THE ASSESSEE. CONSIDERING THE REASONS NAR RATED BY MR. DILIP S. KAMPANI 4 WE ARE OF THE OPINION THAT THE ASSESSEE DESERVES ON E MORE OPPORTUNITY IN THE INTEREST OF JUSTICE. THE EX-PARTE ORDER PASSED BY THE CIT (A) IS CERTAINLY A CASE OF ADJUDICATION OF APPEAL WITHOUT HEARING THE ASSESSEE ADEQUATELY. THIS ISSUE FOR GRANTING OF AN OPPORTUNITY OF BEING HEARD TO THE A SSESSEE WAS EXAMINED THOROUGHLY BY THE VARIOUS HIGH COURTS AND JUDGMENT IN THE CASE OF RADHIKA CHARAN BANERJEE VS. SAMBALPUR MUNICIPALITY AIR 1979 (ORI) 69 IS RELEVANT. THE RIGHT TO BE HE ARD CONSTITUTES VERY IMPORTANT RIGHT TO THE TAXPAYER AN D RELEVANT DISCUSSION ON THIS TOPIC IS AVAILABLE AT PAGE 7639 OF CHATURVEDI & PITHISARIAS INCOME TAX LAW FIFTH EDITION AND THE SAME READ AS UNDER: RIGHT TO BE HEARD:- A RIGHT OF APPEAL WHEREVER CONFERRED INCLUDES A RI GHT OF BEING AFFORDED AN OPPORTUNITY OF BEING HEARD IRRES PECTIVE OF THE LANGUAGE CONFERRING SUCH RIGHT. THAT IS A PART AND PARCEL O F THE PRINCIPLE OF NATURAL JUSTICE. WHERE AN AUTHORITY IS REQUIRED TO ACT IN A QUASI-JU DICIAL CAPACITY IT IS IMPERATIVE TO GIVE THE APPELLANT AN ADEQUATE OPPORTUNITY OF BEING HEARD BEFORE DECIDING THE APPEAL. 8. THUS IN THE INSTANT CASE ALSO THE CIT (A) TOOK AN ADVERSE VIEW AGAINST THE ASSESSEE WITHOUT KNOWING THE FACT THAT THERE WAS CH ANGE IN THE MANAGEMENT AND THE ADDRESS FOR COMMUNICATION. THE FACT IS THAT THE NOTICES SENT BY HIM HAVE NEVER REACHED THE ASSESSEE. THE TAKEOVER OF THE COMPANY B Y THE PRESENT MANAGEMENT IS UNDISPUTED. FACT IS THAT THE CIT(A) COULD NOT SERVE THE NOTICE MEANINGFULLY ON THE ASSESSEE AND THE APPEAL IS EVENTUALLY ADJUDICATED D ISMISSING THE SAME. IN FACT THE REQUIREMENT OF PRINCIPLE OF NATURAL JUSTICE IS NOT MET BY THE CIT (A) IN THEIR TRUE SENSE. CONSIDERING THE ABOVE WE ARE OF THE OPINIO N THAT THE IMPUGNED ORDER DESERVES TO BE SET ASIDE AND THE ISSUES RAISED BEFO RE US ARE REMANDED TO THE CIT (A) FOR FRESH ADJUDICATION AS PER LAW AFTER GRANTIN G A REASONABLE AND ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15.07.2013. SD/- SD/- (H.L. KARWA) (D. KARUNAKARA RAO ) / PRESIDENT ! '#$ / ACCOUNTANT MEMBER MUMBAI; 2#& DATED 15/07/2013 . %& . ' ./ OKK SR. PS 5 #1 #1 #1 #1 *%.34 *%.34 *%.34 *%.34 54'. 54'. 54'. 54'. / COPY OF THE ORDER FORWARDED TO : 1. () / THE APPELLANT 2. *+() / THE RESPONDENT. 3. 6 ( ) / THE CIT(A)- 4. 6 / CIT 5. 478 *%.%& / DR ITAT MUMBAI 6. 8 9 / GUARD FILE. '+4. *%. //TRUE COPY// #1& ' #1& ' #1& ' #1& ' / BY ORDER : :: : / '; '; '; '; < < < < (DY./ASSTT. REGISTRAR) / ITAT MUMBAI