Income Tax Appellate Tribunal - Mumbai
Thavar Asdhir & Co., Mumbai vs Assessee on 2 April, 2008
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH 'E' : MUMBAI
BEFORE SHRI D.K. AGARWAL, (JM) AND SHRI RAJENDRA SINGH ,(AM)
ITA No.4498/Mum/2008
Assessment Year : 2004-05
M/s. Thavar Asdhir & Co.
Noor Mohmad Chawl, Off LBS
Opp. Vikhroli Fire Brigade
Vikroli (W)
Mumbai-400 079. .....(Appellant)
P.A. No.(AAAFT 4090 K)
Vs.
Income tax Officer
Ward-23(1)(1)
Mumbai. .....(Respondent)
Appellant by : Shri Madan Dedhia
Respondent by : Shri Hemant Lal
ORDER
Per D.K. AGARWAL (JM).
This appeal preferred by the assessee is directed against the order dated 2nd April, 2008, passed by the ld. CIT(A) for the Assessment Year 2004-05.
2. Briefly stated facts of the case are that the assessee firm is engaged in the business as wholesale dealer in foodgrains. The return was filed declaring total income at Rs.8,547/-. According to the 2 ITA No.4498/M/08 A.Y: 04-05 Assessing Officer there was no compliance by the assessee despite the fact that sufficient opportunity was provided to the assessee inasmuch as for non-compliance a penalty of Rs.10,000/- u/s.271(1)(b) of the I.T. Act, 1961 (the Act)was also imposed, therefore, he completed exparte assessment u/s.144 of the Act at an income of Rs.9,24,420/- vide order dated 30.11.2006 . On appeal, the ld. CIT(A) while upholding the action of the AO in completing the exparte assessment , confirmed the additions made by the AO and deleted the disallowance out of car expenses Rs.10541/-, car depreciation-Rs.5,017/- and out of sundry and staff welfare expenses Rs.11,523/- and accordingly partly allowed the appeal.
3. Being aggrieved by the order of the ld. CIT(A), the assessee is in appeal before us challenging in all the grounds the validity of the exparte order passed by the AO u/s.144, sustenance of addition of net profit Rs.1.00 lacs, unsecured loans Rs.2,64,000/-, capital introduced by the partners Rs.4,75,000/- and estimated rent of godown Rs.2.00 lacs.
4. At the time of hearing the ld. Counsel for the assessee submits that the ld. CIT(A) has upheld the completion of exparte assessment order on the ground that the AO for non-compliance had even imposed 3 ITA No.4498/M/08 A.Y: 04-05 a penalty of Rs.10,000/- u/s.271(1)(b). However, the said penalty has been deleted by the ld. CIT(A) vide order dt.25th Sept.' 2008 on the ground of reasonable cause as his main partner Mr. Thavar Asdhir was seriously ill and he expired in January 2007 and the other two partners who happened to be his sons were very busy looking after their father. He therefore submits that in the interest of justice, the assessee may be allowed one more opportunity to represent his case before the AO and hence the order passed by the ld. CIT(A) may be set aside to the file of the AO.
5. On the other hand the ld. DR. while relying on the order of the ld. CIT(A) submits that he has no objection if the matter is restored back to the file of the AO.
6. We have carefully considered the submissions of the rival parties and perused the material available on record. We find that there is no dispute that the AO has allowed various opportunities to the assessee to attend date of hearing and to furnish various details. Since there was no compliance the case was finally fixed for 27.11.2006. Again there was no compliance. The AO while observing that even after imposing penalty of Rs.10,000/- u/s. 271(1)(b) for non-compliance, the assessee could not care to co-operate with the Department and in 4 ITA No.4498/M/08 A.Y: 04-05 the absence of any other alternative, completed exparte assessment u/s.144 of the Act at an income of Rs.9,24,420/-. On appeal, the ld. CIT(A) upheld the action of the AO in passing exparte assessment order. We further find that on an appeal filed against the imposition of penalty u/s.271(1)(b) it was observed and held by the ld. CIT(A) vide order dated 25.9.08 as under :
"3. The appellant submitted that there was no intention of not attending during the appointed dates. The main partner Mr. Thavar Asdhir was seriously ill and he had expired in January, 2007. The other two partners who happened to be his sons were busy looking after their father. They also had to call for the computer experts to verify the computer system affected by the virus. In the circumstances non-attendance was not willful and hence, the penalty imposed ought to be deleted.
4. The appellants' submission have been considered. In the facts and circumstances, the penalty levied is deleted."
From the reading of the above and in the absence of any contrary material placed on record by the revenue we hold that there was reasonable cause with the assessee for not attending the last date of hearing before the AO. Therefore, in the interest of justice we are of the view that the matter should go back to the file of the AO and accordingly we set aside the order passed by the revenue authorities on this account and send back the matter to the file of the AO who shall decide the same afresh and according to law after providing reasonable opportunity of being heard to the assessee. The grounds 5 ITA No.4498/M/08 A.Y: 04-05 taken by the assessee are therefore partly allowed for statistical purposes.
7. In the result, the assessee's appeal is partly allowed for statistical purposes.
Order pronounced in the open court on 01.02.2010.
Sd/- Sd/-
(RAJENDRA SINGH) ( D.K. AGARWAL )
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated:01.02.2010.
Jv.
Copy to: The Appellant
The Respondent
The CIT, Concerned, Mumbai
The CIT(A) Concerned, Mumbai
The DR "E" Bench
True Copy
By Order
Dy/Asstt. Registrar, ITAT, Mumbai.
6 ITA No.4498/M/08
A.Y: 04-05
Details Date Initials Designation
1 Draft dictated on 11.1.10 Sr.PS/PS
2 Draft Placed before author 11.1.10 Sr.PS/PS
3 Draft proposed & placed before the JM/AM
Second Member
4 Draft discussed/approved by JM/AM
Second Member
5. Approved Draft comes to the Sr.PS/PS
Sr.PS/PS
6. Kept for pronouncement on 01.02.10 Sr.PS/PS
7. File sent to the Bench Clerk 03.02.10 Sr.PS/PS
8 Date on which the file goes to the
Head clerk
9 Date of Dispatch of order