Income Tax Appellate Tribunal - Ahmedabad
Prathana Construction Pvt.Ltd.,, ... vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "B" BENCH AHMADABAD
Before Shri Mukul Kr. Shrawat, Judicial Member and
Shri T.R. Meena, Accountant Member
ITA No. 3126/Ahd/2011
Assessm ent Year :1996-97
Prarthana Construction Pvt. V/s. The Income-Tax Officer
Ltd. W ard - 5(2),
Sanidhya - A, Anandnagar Pratyaksh Kar Bhavan,
Bus Stop, Nr. Shivranjani Nr. Polytechnic,
Cross Road, Prahladnagar Ambawadi,
Road, Ahmadabad - 380015 Ahmadabad - 380 015.
P AN No. AADCP3934A
(Appellant) .. (Respondent)
अपीलाथȸ कȧ ओर से Shri G. C. Pipara, A.R.
By Appellant
ू×यथȸ कȧ ओर से/By Respondent Mrs. Ronee Agrawal, CIT. D.R.
सुनवाई कȧ तारȣख/Date of Hearing
05.04.2013
घोषणा कȧ तारȣख/Date of Pronouncement 12.04.2013
ORDER
PER : T.R.Meena, Accountant Member
This is an appeal at the behest of the assessee which has emanated from the order of CIT(A)-XI, Ahmedabad, dated 21.09.2011 for A.Y. 1996-97. The effective grounds of appeal are as under:
"1. The learned CIT(A) has erred in law and on facts in dismissing the appeal against assessment order u/s. 143(3) of the Act dated 26/02/1999 treating it as infructuous on the ground that the appeal filed earlier against the same order had been disposed off on technical grounds and hence the appellant is I T A No . 3 12 6 /A h d/ 1 1 A. Y. 96- 9 7 Page 2 not entitled to file an appeal second time against the same order. In view of judgment of Hon'ble ITAT, Mumbai Bench in the the case of Bhumiraj Constructions vs. Addl. CIT (2011) the learned CIT(AJ ought to have revived the original appeal and decided the same on merits of the issues in dispute while treating the original appeal as a valid appeal.
2. The learned CIT(A) has further erred in law in holding that since the assessment order was revised by the Hon'ble CIT-
III, Ahmedabad vide order u/s.264 dated 22/01/2002, appeal against that order does not lie before the CIT(A). In view of decision of Hon'ble ITAT, Mumbai Bench cited supra, since the original appeal is a valid appeal, the order u/s.264 of the Act passed by the Id. CIT-III subsequent to decision of the said appeal on technical grounds, in respect of the same issues which were subject matter of the appeal, the order u/s. 264 of the Act ought to have been treated as invalid and without jurisdiction since the CIT(A)'s order cannot be held to have merged with the said order u/s.264 of the Act.
3. The learned C.TT(A) has erred in not deciding the ground of appeal disputing the action of the AO in treating NTC's/societies as benami of the appellant company and assessing their income at Rs. Nil subject to adjustment u/s. 154.
4. The learned CIT(A) has erred in not deciding the ground of appeal disputing the addition of Rs.6,87,000/- made by the AO on account of income receivable from 'Elegance'. In view of the facts and circumstances of the case, the same requires to be deleted.
5. The learned CIT(A) has erred in not deciding the ground of appeal disputing the addition of Rs.1,40,000/- made by the AO on account of disallowance of consultancy expenses paid to I T A No . 3 12 6 /A h d/ 1 1 A. Y. 96- 9 7 Page 3 Aum Corporation. In view of the facts, circumstances and nature of payment, the said expenses be allowed.
6. The learned CIT(A) has erred in not deciding the ground of appeal disputing the addition of Rs.5,26,415/- made by the AO on account of disallowance of legal and professional fees. In view of the facts, circumstances and nature of payment, the said expenses be allowed.
7. The learned CIT(A) has erred in not deciding the ground of appeal disputing the addition of Rs.58,035/-, made by the AO on account of disallowance of entertainment expenditure. In view of the facts, circumstances and nature of payment, the said expenses be allowed.
8. The learned CIT(A) has erred in not deciding the ground of appeal disputing the addition of Rs.4,43,423/-, made by the AO on account of disallowance of compensation expenses. In view of the facts, circumstances and nature of payment, the said expenses be allowed.
9. The learned CIT(A) has erred in not deciding the ground of appeal disputing the addition of Rs.58,176/-, made by the AO on account of disallowance of hire charges paid on plant and machinery, without consequently allowing depreciation on these machineries.
10. The learned CIT(A) has erred in not deciding the ground of appeal disputing the addition of Rs.82,922/-, made by the AO on account of disallowance out of car expenses and addition of Rs.72,401/- on account of disallowance out of depreciation on vehicles. In view of the facts of the case, the impugned addition requires to be deleted or in the alternative restricted to a reasonable extent."
I T A No . 3 12 6 /A h d/ 1 1 A. Y. 96- 9 7 Page 4
2. The appellant filed return on 07.04.1997 at Rs. 1,20,19,826/-. This case was scrutinized u/s. 143(3) of the IT Act and was passed on 26.02.1999. The brief facts of the case is that in this case, in assessment years 1993- 94 to 1995-96, it was held that the assessee Company had carried out its business of construction and sale of residential flats/ commercial complexes in the name of various NTC/Co.Op. Housing Societies as mentioned in detail in those orders alongwith the corresponding products/schemes. It was seen that the assessee Company had itself floated various NTCs/societies in the name of its friends, relatives or its employees etc. funds were arranged by the assessee Company for the purchase of land by the NTCs/societies. The construction of the schemes, books of accounts and finance alongwith the day-to-day control was also exercised by the assessee company. Even, the Directors of the assessee Company themselves had made foreign travelling to Egypt, Rome and Ethens for the purpose of making the replica of the monuments construction in the Prarthana Upran Scheme. It was further noted that the activities of the NTCs/societies were not based on the concept of mutuality and they were engaged in the business for profitable purpose and therefore, their incomes were not exempt from Income Tax. In view of these facts, it was held that the NTCs/societies were benamdar of the assessee Company and their incomes had to be determined and brought to tax on substantive basis in the case of the assessee company without prejudice to the decision being taken in the case of the societies themselves. During the current year also, the facts were I T A No . 3 12 6 /A h d/ 1 1 A. Y. 96- 9 7 Page 5 remained the same. Though the assessee Company had objected in respect of such averment and finding of the earlier years assessment order. It was seen that the objections raised were the same which had been discussed adequately in the earlier year's assessment order. The schemes in operation are also the same and no new projects have been started in this year. Except in the case of the project "Elegance" which was not in the name of any NTC/society, in respect of others, the same decision has taken in the earlier, was being taken by the A.O. Therefore, the incomes of NTCs/societies which were benamidar and front of the assessee Company had been determined and taxed on substantive basis in the case of the assessee Company after rectifying this assessment order as per law. Further observed that in the earlier year's assessment order, the addition was made on account of income of the various schemes in respect of whom the profit or remuneration of a particular year was not mentioned in the agreement with the NTCs/societies. The assessee Company as a developer of the scheme was entitled to remuneration/development charges as prescribed in the agreement entered for this purpose with NTC/society. However, it was observed that in the case of some of the schemes, no rate of recovery every year of development charges/remuneration was mentioned whereas the scheme had been carried out during the year alongwith construction activity and also members' collection having been received. Therefore, income was added on estimated basis adopting the average rate which was modified in accordance with the rate of recovery for the development charges during the year for the other I T A No . 3 12 6 /A h d/ 1 1 A. Y. 96- 9 7 Page 6 schemes. During the assessment year under consideration, the assessee Company had shown the following development receipts as against the members contribution and expenses from various schemes:-
Schemes Members Expenses on Development
Contribution Const. etc. charges recd.
Prarthana Vihar 178.44 lacs 206.17 lacs 75.00 lacs
Sanfransisco 225.00 lacs 260.00 lacs 50.00 lacs
Association
Elegance 100.50 lacs 45.80 lacs --
Prarthana Upvan 1083.34 lacs 831.10 lacs 80.00 lacs
Sky Reach Tower Asso. 214.86 lacs 75.64 lacs 27.50 lacs
Therefore, it was observed by the A.O. that in respect of Elegance scheme, no profit was disclosed during this year. The assessee was, therefore, asked to explain as to why no remuneration had been received from the project "Elegance" this year. The ld. A.O. raised the query vide letter dated 17.02.1999, which was replied by the appellant and also considered by the A.O. The appellant claimed before the A.O. that the cost of the project was more than the booking amount. The appellant had carried out the construction activity, but no remuneration had been shown during the year, which was contradictory with Accounting Policy. Therefore, the A.O. rejected the book result u/s. 145 of the IT Act. He calculated the profit @ 15% on construction cost of the case of Elegance and added to the income of the assessee Company, which was worked out at Rs. 6,87,000/-. In this case, the following additions made by the A.O.:
i. Disallowance of consultancy charges Rs. 1,40,000/- ii. Disallowance of legal and professional fees Rs. 5,26,415/- iii. Disallowance out of depreciation Rs. 59,912/-
I T A No . 3 12 6 /A h d/ 1 1 A. Y. 96- 9 7 Page 7 iv. Disallowance out of Compensation paid Rs. 4,43,423/- v. Disallowance out of Entertainment Expenses Rs. 58,035/- vi. Disallowance out of hire charges Rs. 3,50,943/- vii. Disallowance out of Car expenses Rs. 82,922/-
viii. Disallowance out of depreciation on car expenses Rs. 72,401/-
The appellant challenged the following additions by making following grounds of appeal before the CIT(A) vide Form No. 35 dated 31/05/2011:-
"1. The learned A.O. has erred in treating NTC's/societies as benami of the appellant company and assessing their income at Rs. Nil subject to adjustment u/s. 154.
2. The learned A.O. has erred in making an addition of Rs.6,87,000/- by way of income receivable from 'Elegance'. In view of the facts and circumstances of the case, the same may be deleted.
3. The learned A.O. has erred in making an addition of Rs.
1,40,000/-, being consultancy expenses paid to Aum Corporation. In view of the facts, circumstances and nature of payment, the same be allowed.
4. The learned A.O. has erred in making an addition of Rs.5,26,415/- being legal and professional fees. In view of the facts, circumstances and nature of payment, the same may be allowed.
5. The learned A.O. has erred in making an addition of Rs.
58,035/- being entertainment expenditure. In view of the facts and circumstances of the case, the same may be deleted.
6. The learned A.O. has erred in disallowing Rs.4,43,423/-, being compensation expenses. The same should be allowed looking to the facts and circumstances of the case.
7. The learned A.O. has erred in making an addition of Rs.58,176/- being hire charges paid on plant machinery, I T A No . 3 12 6 /A h d/ 1 1 A. Y. 96- 9 7 Page 8 without consequently allowing depreciation on these machineries.
8. The learned A.O. has erred in disallowing Rs.82,922/- out of car expenses and Rs.72,401/- out of depreciation on vehicles. The same should be deleted or restricted to a reasonable extent."
3. The CIT(A) has dismissed the appeal on the ground that no tax u/s. 140A had been paid on the return income vide order dated 14.03.2000 by the CIT(A)-V, Ahmadabad. Thereafter, the appellant made a petition u/s. 264 of the IT Act before CIT-III, Ahmadabad, in which the company had not waived its rights of appeal and the ld. CIT in the order u/s.264 had also clearly held as under:
"2. It may be seen that the assessee's appeal for this year was decided by the CIT(A), Ahmadabad by not admitting the same on the ground that due taxes as per the provision of section 140A were not paid. Further, as per the provision of Section 264(4)(C) of the Act if the assessment order has been made the subject matter of appeal to the CIT(A), the said order can not be revised by the Commissioner u/s. 264 of the I.T. Act."
But as per Section 264(4)(a) the CIT can entertain those petitions where the right of appeal has been waived. On the basis of Revision Petition filed by the Company on 05.07.2000, who has rejected the petition u/s. 264(4)(C) of the IT Act as the subject matter of the appeal to the CIT(A) had been made by the appellant. The appellant's submission dated 01.03.2001 was considered by the CIT-III, Ahmadabad, who has confirmed the order of the A.O. in regarding addition made on account of development charges project, namely, I T A No . 3 12 6 /A h d/ 1 1 A. Y. 96- 9 7 Page 9 "Elegance", consultancy charges, disallowance of legal and professional expenses, compensation expenses, disallowance of hire charges, paper copier and water cooler and motor car expenses, vide order dated 22.01.2002. The appellant had paid tax and A.O. had given credit of tax vide rectification order dated 02.03.2012 ( page no.6 of paper book), passed by the I.T.O., Ward 5(2), Ahmadabad and had given credit of Rs.23,43,868/- against demand of Rs. 91,93,558/-. The rectification order shows that the appellant had started payment from F.Y. 1997-98, 98-99, 99-00 & 05-06. The appellant further paid Rs. 10 lacs on 25.03.2011, Rs. 10 lacs on 31.03.2011 & Rs. 15,18,617/- on 25.05.2011 as self assessment tax. After paying this tax, the appellant filed appeal before the CIT(A) on 02.06.2011 to condone the delay on filing of appeal as appellant had not paid self assessment tax due to financial position of the Company. The ld. Commissioner vide his order dated 21.09.2011, had dismissed the appeal treating it as infructuous on the ground that appeal filed earlier against the same order had been disposed of on technical ground and hence the appellant is not entitled to file the appeal second time against the same order. The ld. CIT(A) also held that since the assessment order was revised by the CIT-III, Ahmadabad, vide order u/s. 264, dated 22.01.2001, the appeal against that order does not lie before the CIT(A). When ld. CIT(A) dismissed the appeal, the appellant carried the matter before us on 08.12.2011, wherein above ten grounds of appeal have been made.
I T A No . 3 12 6 /A h d/ 1 1 A. Y. 96- 9 7 Page 10
4. Ld. Counsel for the appellant vehemently argued that various Courts have interpreted the Section 249(4)(1) of the IT Act liberally that the appellant had right to appeal as held in case of T. Govindappa Setty v. ITO, (1998) 231 ITR 893, 898-99. He further referred the Hon'ble Apex Court decision in case of Jute Corporation of India Ltd. v. CIT 186 ITR 689, wherein the change of circumstances or law, the appellant can raise the additional ground before the CIT(A). He further relied upon in case of Bhumiraj Constructions v. ACIT [(2011) 131 ITD 406 (Mum.)], wherein it was held as under:
"The objective behind section 249(4) is to ensure the payment of tax on income returned before the admission of appeal and if such payment after the filing of appeal but before it is taken up for disposal validates the defective appeal, then there is no reason as to why the doors of justice be closed on a poor assessee who could manage to make the payment of tax at a later date. The stipulation as to the payment of such tax and the filing of first appeal is only directory and not mandatory. Whereas the payment of such tax is mandatory but the requirement of paying such tax before filing appeal is only directory. When the defect in the appeal, being the non payment of such tax is removed, the earlier defective appeal becomes valid. Once we call an appeal as valid, it is implicit that it is not time-barred. It implies that all the consequences which follow on the removal of defect are that the validity is attached to the appeal from the date when it was originally filed and not when the defect is removed."
The Hon'ble Karnataka High Court in case of D. Komalakshi v. Dy. Commissioner of Income Tax - [2007] 162 Taxman 16 (Kar), had allowed four weeks time to the appellant to pay the tax where ITAT dismissed the appeal I T A No . 3 12 6 /A h d/ 1 1 A. Y. 96- 9 7 Page 11 for non payment of tax. He further relied in case of M.L. Kurian v. Kunnamkulam Municipality, AIR 1998 Ker 5, 6; M. Madhvan Nair Jayasree v. Manjerri Municipality, AIR 1999 Ker. 322, 323, wherein it was held that if the appeal is decided non maintainable either on the ground of limitation or on the ground of non-deposit of tax, should give the notice of being heard to explain his case. He further drawn our attention in case of CIT v. D. Laxminarayanapathi, 250 ITR 187, (Madras High Court), it was held as under:
"Held, that the assessee, notwithstanding his unsuccessful effort, at having the order revised under section 264 of the Income Tax Act, 1961, could still file an appeal under section 246 as invoking the revisional jurisdiction could not constitute a bar to the filing of an appeal."
He further argued that in case of Melaram v CIT 29 ITR 607 and Rajpal & Co. v. CIT, 250 ITR 832, wherein Hon'ble Apex Court held that refusing to admit, or rejecting after hearing, an appeal as time-barred, is the order appealable u/s. 250 of the IT Act. These views already confirmed by the Hon'ble Apex Court in case of CIT v Dalmia 117 ITR 930, 236 ITR 46 & CIT v Bhikaji 42 ITR 123 (SC). In such cases of refusal to admit an appeal or rejection of an appeal on the ground of limitation, irregularity, incompetence or any other preliminary ground, the CIT(A)'s order amounts to a confirmation of the A.O's. order appealed against, and a second appeal lies to the Tribunal held in case of Gopilal v CIT 65 ITR 477. The appellant submitted written argument which is summarized as under:
I T A No . 3 12 6 /A h d/ 1 1 A. Y. 96- 9 7 Page 12
"(a) From the above law position it is very clear that powers under
section 264 vested in the Commissioner is subject to the provisions of the Act.
(b) As per the provisions of the Act, the appellant's case does not fall within the ambit of section 264.
(c) The appellant has not waived its right of appeal even in petition under section 264.
(d) Madras High Court in the case of D. Laxminarayanapathi (Supra) has held that unsuccessful efforts of revision under section 264 does not constitute a bar to the filing of the appeal.
(e) The Pune Bench of the ITAT in the case of Mayfair Builders and Developers [(2008) 114 ITD 147], in the similar set of facts has held as under:
"Thus, a revision petition under section 264 did not lie before the Commissioner at the stage when the appeal had been dismissed by the Commissioner (Appeals) on 5-2-2002 on the ground that the assessee had not complied with the provisions of section 249(4)(a). Therefore, the second petition filed by the assessee before the Commissioner under section 264 on 28-2-2002 was merely an infructuous exercise, as the Commissioner was barred, under sub-section (4) of section 264, from acting on that petition".
(f) The Pune Bench of the ITAT in the case of Mayfair Builders and Developers [(2008) 114 ITD 147], further held as under:
"In the meantime, the assessee paid the taxes on the undisclosed income shown in the return and filed an appeal before the Commissioner (Appeals), for the second time, on 9- 2-2004 with an application for condonation of delay, but the Commissioner (Appeals) refused to condone the delay and dismissed the appeal, vide his order dated 31-8-2004. That order of the Commissioner (Appeals) could not be sustained I T A No . 3 12 6 /A h d/ 1 1 A. Y. 96- 9 7 Page 13 because when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred".
He further relied in case of Manmala Exhibitors vs. CIT & Others, 257 ITR 563, CIT vs. D. Laksminarayanapathi, 250 ITR 187, Kadri Mills (Coimbatore) Ltd. vs. CIT, 243 ITR 861, Radhe Shyam vs. CIT, 146 ITR 374 (All.), Chiranjilal Daga vs. CIT, 113 ITR 363 (Mad.), Krishna Flour Mills Ltd. vs. CIT, 55 ITR 259 (Mysore) & A.V. Sreenivasalu Naidu vs. CIT, 16 ITR 341 (Mad.). He further relied on Co-ordinate Bench, Ahmadabad decision in case of J.K. Chaturvedi v. ACIT [2004] 3 SOT 456 (Ahd.), wherein non compliance of Section 249(4) is held curable one and which can be cured after expiry of limitation and ITAT had discretion to restore such matters to file of Commissioner (Appeals) for deciding controversy on merit because sub- section (1) of Section 254 provides wide powers to Tribunal for passing such orders thereon as it thinks fit in interest of justice. He further relied in case of ITO, Ahmadabad Wd-1(2) v. Ankush Finstock Ltd. in ITA No. 1989/Ahd/2003, wherein CIT(A) had dismissed the appeal on default of non payment of tax but on removal of defects on non payment of tax of appeal deserved to be admitted and there is no time limit prescribed u/s. 249(4) on return income for filing of appeal. Therefore, ld. A.R. of the appellant requested to send the matter to the CIT(A) and directing him to condone the delay and decide the case on merit.
5. At the outset, ld. CIT D.R. relied upon the Hon'ble Apex Court decision in case of Union of India v. British India Corpn. Ltd. [2004] 140 Taxman 357 I T A No . 3 12 6 /A h d/ 1 1 A. Y. 96- 9 7 Page 14 (SC), wherein refund of tax has been claimed by the appellant, was found by the Hon'ble Apex Court barred by limitation. He further relied in case Hon'ble Karnataka High Court decision in case of D. Komalakshi v. DCIT (Supra) and argued that the appellant had failed to pay the tax on self assessment which is mandatory requirement of Section 249(4) of the IT Act, there was no legal error existed in order of Commissioner (Appeals). He further relied in case of Bharatkumar Sekhsaria v. DCIT [2002] 82 ITD 512 (Mum.), wherein the appeal before the CIT(A) is not maintainable in case of no self assessment tax paid. He further argued that delay in filing appeal was not on genuine ground as held by the Hon'ble Apex Court in case of Vedabai alias Vaijayanatabai Baburao patil v. Shantaram Baburao Patil [2002] 122 Taxman 114 (SC). The Co-ordinate 'B' Bench, Ahmadabad, decision in C.O. No. 95/Ahd/2009, had rejected the C.O., which was filed after 1555 days late on the ground of non sufficient causes. He further relied upon in case of S. Alagarswamy v. Income Tax Officer, [2008] 296 ITR 43 (MAD.), Dr. C.M.K. Reddy v. Settlement Commission [2008] 172 taxman 34 9MAD) & GuficPharma Ltd. v. J.G. Arora [1999] 238 ITR 835 (Guj.). Thus, he requested to confirm the order of the CIT(A).
6. We have heard the rival contentions of the both sides and perused the material on record. The Ground no.1 of Appeal relates to the action of the CIT(A) wherein the appeal of the assessee has been dismissed considering the same as infructuous, wherein the ground of appeal itself the Appellant Company has relied upon the judgment of Mumbai Bench of ITAT in case of I T A No . 3 12 6 /A h d/ 1 1 A. Y. 96- 9 7 Page 15 Bhumiraj Construction (Supra) and claimed that in view of the facts of the case, CIT(A) ought to have revived the original appeal and decided the same on merits. In view of the facts of the case as well as the legal position having paid the tax due as per the return of income, the appeal of the Appellant Company requires to be revived. The Appellant Company has preferred appeal before the CIT(A) under section 249. It is an undisputed fact that when appeals before CTT(A) was filed on 5/4/1999 against assessment under section. 143(3) dated 26/2/1999, the tax as per return of income was not paid. But self assessment tax of Rs.58,87,848/- had been paid by 25.05.2011 as per evidences relating to payment of tax placed on page Nos. 8 to 10 of the Paper Book filed by the Appellant Company and further as per order under section 154 dated 2/3/2012 passed by the A.O. giving the credit for the payment of various instalments which has been paid against the tax due for the said self assessment tax. From the perusal of the details of payment made Rs. 23,68,867/- as available in the order under section 154 dated 2/3/12 passed by the AO, it is clear that appellant company has started making payment of tax due as per the return of income from 25/10/1997, after filing of return of income on 7/4/1997. Thus, even before assessment is completed the appellant Company has paid partial tax of Rs.22,58,957/- due as per the return of income on 21 different dates starting from 25/10/1997 to 29/12/1998, as per the order under section 154 dated 2/3/12 passed by the A.O. Further, even after the assessment was completed on 26/2/1999 appellant has paid further amount of Rs. 25,000/- on 28/4/1999 which is even after appeal filed I T A No . 3 12 6 /A h d/ 1 1 A. Y. 96- 9 7 Page 16 before CIT(A) on 5/4/1999. This clearly indicates the intention of the appellant to make the payment as per the taxes due, even after the appeal is filed before the CIT(A). The ld. A.R. has relied heavily on the judgment of Mumbai Bench of ITAT in case of Bhumiraj Construction (supra) and stated that in the identical set of facts, the said judgment is in their favour. We have carefully gone through the said judgment wherein the facts involved are more or less similar to the facts involved in the present appeal. The Id. CIT D.R. has relied upon the judgment of Mumbai Bench of ITAT in the case of Bharatkumar Sekhsaria vs. Dy. CIT (supra). It has already been considered by the Hon'ble ITAT, Bench 'F', Mumbai, in the case of Bhumiraj Construction. Further reliance is placed on the judgment of S. Alagarswamy v. Income Tax Officer (supra) is on a different set of facts; and reliance placed by the CIT D.R. in the case of Dr. C.M.K. Reddy v. Settlement Commission (supra), is pertaining to the Settlement Commission; and reliance placed by the Gujarat High Court in the case of GuficPharma Ltd. v. J.G. Arora (supra) wherein it is clearly stated that - Revising Authority has to determine the maintainability or otherwise of the revision petition. Further the judgment in case of D. Komalakshi v. DCIT - 292 ITR 99 (Kar.) - has already been considered by the Mumbai Bench of ITAT in the case of Bhumiraj Construction.
The Id. A.R. has also thereafter heavily relied on the judgment of Mayfair Builders and Developers v. DCIT of Pune Bench of ITAT, 114 ITD 147, wherein the following dates are very important:
I T A No . 3 12 6 /A h d/ 1 1 A. Y. 96- 9 7 Page 17
30/6/2000 Return of income filed
31/7/2000 Appeal before CIT(A)
2/8/2000 Petition under section 264
2/2/2001 264 rejected by CIT
5/2/2002 CIT(A) passed order considering the appeal as
infructuous under section 249(4)(a)
28/2/2002 Another petition under section 264 filed
25/3/2003 CIT rejected petition under section 264
9/2/2004 Tax on declared income has been paid
9/2/2004 Fresh appeal filed before CIT(A)
31/8/2004 CIT(A) rejected the appeal.
Against said rejection of the order of CIT(A) on 31/8/2004, the matter was carried before the Pune Bench of ITAT wherein it has been held as under:
"To conclude the petition filed by the assessee under section 264 on 2-8-2000 could not be acted upon by the Commissioner because of the bar imposed by section 264(4), as an appeal filed by the assessee before Commissioner (Appeals) on 31-7-2000 was pending. The appeal pending before the Commissioner (Appeals) was dismissed because of non-compliance with section 249(4)(a). The assessee filed before the Commissioner another petition under section 264 on 28/2/2002 which was nothing but an infructuous exercise. The assessee, later, complied with section 249(4)(a) and filed a fresh appeal before the Commissioner (Appeals) on 9-2-2004 with a request for condonation of delay, but the Commissioner (Appeals) refused to condone the delay and dismissed the appeal on 31-9-2004. It was found that the Commissioner (Appeals), in his order dated 31-8-2004, failed to examine whether there existed sufficient reasons on the part of the assessee for non-compliance with the provisions of section 249(4)(a). The Commissioner (Appeals) was thus, not justified in refusing to condone the delay without examining that aspect of the matter [Para 22]".
I T A No . 3 12 6 /A h d/ 1 1 A. Y. 96- 9 7 Page 18 "In view of the facts and circumstances of the case and the position in law, the matter was to be remitted back to the file of the Commissioner (Appeals). He would examine, after bringing the relevant material on record, whether there existed sufficient reasons for failure on the part of the assessee to comply with the provisions of section 249(4)(a). If it was found that there existed sufficient reasons for failure on the part of the assessee to comply with the provisions of section 249(4)(a), in that case the Commissioner (Appeals) would condone the delay and would hear and decide the appeal on merits."
Accordingly, in view of above legal position, the petition u/s.264 is infructuous exercise which has admitted by the CIT in para 2 order u/s. 264 of the IT Act. The assessee had also not waived the right of appeal before him. Further, the Id. A.R. has also drawn our attention to the judgment passed by the very same bench of Ahmedabad ITAT, Bench 'C in the case of ITO vs. Ankush Finstock Ltd. (supra). In view of the above facts, legal position as well as sequence of events and having paid the entire taxes as per return of income, the application dated 31/5/2011 filed before CIT(A) requesting for the condonation of delay or the revival of the appeal in view of the judgment of the ITAT, Mumbai in case of Bhumiraj Construction (supra), is required to be considered and accordingly, the CIT(A) is directed to verify whether the entire admitted tax has been paid or not and if so, he shall consider the case on merit in accordance with law, on the various grounds raised by the appellant Company.
I T A No . 3 12 6 /A h d/ 1 1 A. Y. 96- 9 7 Page 19
7. Since the ld. CIT(A) has dismissed the appeal in limine on technical ground without adjudicating on the merits of the case, therefore, rest of the grounds raised before us are restored back to be decided de novo as per law.
8. In the result, the assessee's appeal is allowed for statistical purpose only.
This Order pronounced in open Court on 12.04.2013 Sd/- Sd/-
(Mukul Kr. Shrawat) (T.R. Meena)
Judicial Member Accountant Member
True Copy
S.K.Sinha
आदे श कȧ ूितिलǒप अमेǒषत / Copy of Order Forwarded to:-
1. अपीलाथȸ / Appellant
2. ू×यथȸ / Respondent
3. संबंिधत आयकर आयुƠ / Concerned CIT
4. आयकर आयुƠ- अपील / CIT (A)
5. ǒवभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड[ फाइल / Guard file.
By order/आदे श से, उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, अहमदाबाद ।