Income Tax Appellate Tribunal - Ahmedabad
H N Indigos Pvt.Ltd.,, Surat vs Assessee on 7 August, 2015
IN THE INCOME TAX APPELLATE TRIBUNAL " A " BENCH, AHMEDABAD BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND S.S. GODARA JUDICIAL MEMBER I.T.A. NO.1302/AHD/2013 (ASSTT. YEAR 2009-10) H.N. INDIGOS PRIVATE VS JOINT COMMISSISONER OF LTD., INCOME TAX, SY.NO.60/1, NAVSARI RANGE, GROUND FLOOR, NAVSARI.
PLOT NO.1 & 2, NR. SHUKANBUNGALOWS, OPP. MAHESHWARI BHAVAN, CITY LIGHT, SURAT-395 007.
PAN AABCH 2638 F
(Appellant) (Respondent)
Assessee by Shri S.N. Soparkar,Sr.Adv.
Revenue by Shri D.C.Mishra, Sr. D.R
सन
ु वाई क तार ख/Date of Hearing : 31-07-2015
घोषणा क तार ख /Date of Pronouncement: 7/8/2015
आदे श/O R D E R
PER ANIL CHATURVEDI ACCOUNTANT MEMBER:
This appeal is filed by the assessee against the order of CIT (A), Valsad dated 22-02-2013 for Assessment Year 2009-10.
2. The relevant facts as culled out from the material on record are as under.
ITA No1302/Ahd/2013 Assessment Year 2009-10 H.N. Indigos Pvt. Ltd.
23. The assessee is a company stated to be engaged in the business of cultivating prawns from shrimps. Assessee electronically filed its return of income for assessment Year 2009-10 on 30-9-2009 declaring total loss of Rs.28,16,274/-.The case was selected for scrutiny and thereafter assessment was framed u/s. 143(3) of the Income Tax Act,1961 vide order dated 28-12-2011 and the total income was determined at Rs.59,59,910/-. Aggrieved by the order of the Assessing Officer assessee carried the matter before the CIT (A), who dismissed the appeal of the assessee. Aggrieved by the order of CIT(A) assessee is now in appeal before us and has raised following grounds:-
"1. The Ld. CIT (A) has erred in law and on facts in deciding the appeal of the appellant filed before him ex-parte without affording the appellant an opportunity of being heard and represented.
It is, therefore, prayed that the impugned appellate order passed by the Ld. CIT (A) be quashed as bad-in-law and invalid since passed in defiance of principles of natural justice, equity and fairness.
2. The Ld. CIT (A) has erred in law and on facts in deciding the appeal of the appellant ex-parte on the ground of non attendance on the date of hearing being 25/09/2012, since the appellant filed an adjournment application dated 21/9/2012 before the Id. CIT(A) requesting for adjournment of hearing fixed on 25/02/2012,which has not been rejected by the said CIT(A).
It is, therefore, prayed that the impugned appellate order passed by the Id. CIT (A) be quashed as bad-in-law and invalid since passed in defiance of principles of natural justice, equity and fairness.
3) The Id. CIT (A) has erred in law and on facts in confirming the rejection of the books of accounts U/s 145(3) of the Act by the Id. A.O. without issuing show cause notice for the same.
It is, therefore, prayed that the action of the Id. CIT (A) of confirming the rejection of books of accounts made by the Id. A.O. ITA No1302/Ahd/2013 Assessment Year 2009-10 H.N. Indigos Pvt. Ltd.
3in defiance of principles of natural justice, equity and fairness be quashed.
4. The Id. A.O. has erred in law and on facts in rejecting the books of accounts and book results u/s 145 of the Act.
5. The Id. CIT (A) has erred in law and on facts in confirming the addition the tune of Rs.9,07,599/- and Rs.49,36,1697- made by the Id. A.O. on the ground of estimation of net profit and on the ground of alleged unaccounted stock of raw material respectively without issuing show cause notice for the same.
It is, therefore, prayed that the action of Id. CIT (A) of confirming the impugned additions made by the Id. A.O. in defiance of principles of natural justice, equity, and fairness be quashed.
6. The Id. CIT (A) has erred in law and on facts in confirming an addition to the tune of Rs. 9,07,5997- on the ground of estimation of net profit.
7. The Id. CIT (A) has erred in law and on facts in confirming an addition to the tune of Rs.49,36,1697- on the ground of alleged unaccounted investments made in the alleged unaccounted stock of raw material.
8. The Id. CIT (A) erred in law and on facts in confirming disallowance to the tune of Rs.1,16,1397- made by the Id. A.O. u/sec. 14A of the Act.
9. It is, therefore, prayed that the above additions/disallowances confirmed by the learned Commissioner of Income Tax (Appeal) may please be deleted.
10. The Ld. CIT (A) has erred in law and on facts in not deciding the ground no.7 of the grounds of appeal praying for allowing of the set off of various additions against each other to the extent possible to avoid double taxation of same income.
It is, therefore, prayed that the Id. A.O. be directed to allow the set off of additions against each other to the extent possible to avoid double taxation of same income.
11. The Appellant prays for granting such other relief as may be deemed just and proper by your Honours considering the factual and legal aspects of the case of the appellant.
ITA No1302/Ahd/2013 Assessment Year 2009-10 H.N. Indigos Pvt. Ltd.
412. The Appellant craves leave to add, amend, alter, delete, substitute or modify any or all of the Grounds of Grounds of Appeal."
4. Before us at the outset, the Ld. A.R. submitted that the matter was decided by the Ld. CIT (A) ex-parte without giving an opportunity of hearing to the assessee. He therefore, prayed that the appeal be restored to the file of Ld. CIT (A) for re-adjudication so that assessee can present its case before CIT (A). He further submitted that the issues raised in the present appeal are identical to the cases of other sister concerns and in those cases, issue has been remitted back to the file Assessing Officer by Hon'ble Tribunal. He also placed on record the copy of the decision in the case of Yashshavi Rasayan Pvt. Ltd., & H.L. Equipments, its sister concerns dated 24-4-2015 in ITA No.1301 & ITA 1303/Ahd/2013. He therefore, submitted that since the facts of the case in the year under appeal are identical to that of the case of the sister- concerns, the present appeal may also be set aside to the file of CIT (A). The Ld. D.R. did not seriously object to the submission of the Ld. A.R. of remitting the issue back to the file of A.O.
5. We have heard the rival submissions and perused the material on record. In the present case, on perusal of the order of Ld. CIT(A) it is seen that the matter was decided ex-parte by CIT (A). We also find that in the case of assessee's sister concerns namely, Yashshavi Rasayan Pvt. Ltd., & H.L. Equipments the appeal was decided ex-parte by Ld. CIT (A). Before us it is the submission of Ld. A.R. that the issues in the present case are identical to that of its sister concern. Before us, Revenue has not controverted the aforesaid submission of Ld. A.R. we find that in the cases HL Equipments & Yashshavi Rasayan Pvt. Ltd., the sister concerns of assessee, the co-ordinate bench of Tribunal had set aside the issue to the file of A.O. by holding as under:-
ITA No1302/Ahd/2013 Assessment Year 2009-10 H.N. Indigos Pvt. Ltd.5
"5. Ld. Counsel of the assessee at the very outset submitted that assessee has applied for adjournment but Ld. Commissioner rejected the application for adjournment and decided the appeals on merit. He prayed that impugned order be set aside and the issues be restored to the file of Ld. CIT (A) for re-adjudication after providing opportunity of hearing to the assessee."
6. Ld. D.R. on the other hand took us through the observations of Ld. Commissioner in paa-2 on page 2. He pointed out that Ld. Commissioner has provided due opportunity of hearing to the assessee. The representative of the assessee, Shri Hiren Diwan sought adjournment. Ld. CIT (A) has observed that representative of the assessee is a habitual absentee. Merely by filing adjournment application does not mean that hearing will be automatically adjourned on the asking of the assessee. According to the D.R., there is no justification in setting aside the order of the Ld. CIT (A) in both the appeals.
7. We have duly considered the rival contention and gone through the record carefully. Before we embark upon an inquiry, whether proper opportunity of hearing was granted or not, and order of CIT (A) on this issue could be upheld or not. We deem it proper to take note of the provisions contemplating the manner, an appeal is to be disposed of by the Ld. CIT (A). I this respect, it is pertinent to take note of section 250 sub-section 6 wich reads as under:-
"(1) The Commissioner (Appeals) shall fix a day and place for the hearing of the appeal, and shall give notice of the same to the appellant and to the Assessing Officer against whose order the appeal is preferred.
(2) xxx xxx xxx
(3) xxx xxx xxx
(4) xxx xxx xxx
(5) xxx xxx xxx
(6) The order of the Commissioner (Appeals) disposing of the appeal shall be n writing and shall state the points for determination, the decision thereon and the reason for the decision.
ITA No1302/Ahd/2013 Assessment Year 2009-10 H.N. Indigos Pvt. Ltd.
6(6A) xxx xxx xxx
8. A bare perusal of this section would indicate that Ld. Commissioner has to state the points for determination I an appeal and thereafter he has to assign the reasons in support of his conclusion. We find that on every issue the finding of the Ld. First Appellate Authority is verbatim. For example, in ground no.1 in the case of H.L. Equipment, Assessee has challenged rejection of books of accounts by the A.O. u/s. 145 (3) of the Income Tax Act.
9. In the case of Yashshvi Rasayan Pvt. Ltd., verbatim similar observation has been made. In the first ground of appeal, assessee has challenged rejection of books of accounts u/s. 145 (3) and the Ld. Commissioner has recorded the finding in para 5.2. The finding recorded by Ld. CIT (A) reads as under:-
"5.2. Decision:- I have spared my thoughtful consideration to the observation of the A.O. in the assessment order. No submission was made before me inspite of several opportunities given to the appellant. In the absence of any rebuttal from the appellant in this matter, I am constrained to agree with the finding of the A.O. This ground is accordingly dismissed."
It is to be noted that the returns were filed in September, 2009. Notice u/s. 143(2) was issued on 25th August, 2010. The proceeding appears to have remained dormant. The notice u/s. 142(1) requiring the assessee to submit detail was issued on 9- 11-2011 fixing the hearing on 22nd November, 2011. The case was re-fixed on 29-11-2011. It appears that there was a survey in the case of Yashshvi Rasayan Pvt. Ltd., on 29-9-2008 and the A.O. confronted the assessee with the outcome of the survey material. But he has granted less than one month time to collect the information and produce them before him. Effectively, he has started the assessment proceedings at the end of November, 2011 and passed the assessment order at the end of November, 2011 in both the cases. The setting of all these factors as a whole goad us to observe that proper and effective opportunity of hearing has not been granted to the assessee. Ld. First Appellate Authority has not re-appreciated the material already available on record. In appellate proceedings, it is not the case that something new is to be produced. Because without leave of the appellate authority, no additional evidence can be found. The material ITA No1302/Ahd/2013 Assessment Year 2009-10 H.N. Indigos Pvt. Ltd.
7already available on record has to be re-appreciated, from the finding of CIT (A) extracted (supra), it is not discernable that he has appreciated the material. To some extent, we agree with Ld. DR also that assessee failed to properly take care of its income tax proceeding. The adjournment cannot be granted merely at the asking of the assessee but when we weigh the alleged negligent conduct of the assessee vis-à-vis punishment in the shape of tax liability then the scale would tilt in favour of the assessee because the negligence at the end of assessee is not of that magnitude which would entail the tax liability of this magnitude. Therefore, taking into consideration overall facts and circumstances, we deem it appropriate to set aside the impugned orders of the Ld. CIT (A) in both the appeals and restore all these issues to the file of First Appellate Authority for re-adjudication. We direct the assessee also to co-operate with the Ld. CIT (A) and not to seek unwarranted adjournments. It is needless to say that observation made y us will not impair or injure the case and A.O. will not cause any prejudice to the explanation of the assessee. Ld. First Appellate Authority shall provide due opportunity of hearing to the assessee."
6. In view of the fact that the issue in the present case being identical to that of sister concerns. We therefore following the same reasoning as given by the co-ordinate bench of the Tribunal and with similar directions remit the issue to the file of CIT (A). Needless to state that CIT (A) shall grant adequate opportunity of hearing to the assessee and assessee shall also co-operate by furnishing promptly all the required details called for by the Ld. CIT (A). Since we are restoring the matter to CIT (A) on preliminary issue as discussed above, we refrain from commenting on the merits of the issue on hand.
7. In the result, the appeal of the assessee is allowed for statistical purposes.
ITA No1302/Ahd/2013 Assessment Year 2009-10 H.N. Indigos Pvt. Ltd.
8In the result, the appeal of the Assessee is allowed for statistical purposes.
Order pronounced in the Court on Friday, the 7th August,2015 at Ahmedabad.
Sd/- Sd/-
(S.S. GODARA) (ANIL CHATURVEDI)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedaad.
Date : 07 -08-2015
आदे श क
त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. संबं धत आयकर आयु!त / Concerned CIT
4. आयकर आय! ु त(अपील) / The CIT(A), Ahmedabad
5. $वभागीय 'त'न ध, आयकर अपील य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड- फाईल / Guard file.
ु ार/ BY ORDER, आदे शानस उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील!य अ"धकरण, अहमदाबाद / ITAT, Ahmedabad
1. Date of dictation- 31-7-2015
2. Date on which the typed draft is placed before the Dictating Member 3-8-2015 :
3. Date on which the approved draft comes to the Sr.P.S./P.S. 4-8-2015/5-8-2015
4. Date on which the fair order is placed before the Dictating Member for Pronouncement 7-8-2015
5. Date on which the file goes to the Bench Clerk10-8-2015:
6. Date on which the file goes to the Head Clerk..................................
7. The date on which the file goes to the Assistant Registrar for signature on the order..........................
8. Date of Despatch of the Order...