Kumar Jayantilal Mehta, Mumbai vs Assessee

आयकर अपीलीय अिधकरण, अिधकरण मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES 'A' MUMBAI सव ौी आय.पी. बंसल, याियक सदःय एवं ौी चं पुजारी, लेखा सदःय के सम । BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER

ITA NO. 3686/Mum/2013 (A.Y.2009-10)

Shri Kumar Jayantilal Mehta The Income tax Officer C/o., Japen P. Shah & Co. Chartered Ward 24(2)(1), C-13, Accountants, 2, Laxmi Villa, 1st Floor, Vs. Pratyakshakar Bhavan, Bandra Near HDFC Bank, Akurli Road, Ashok Kurla Complex, Bandra (E) Nagar, Kandivali (E) Mumbai-400 050. Mumbai-400 101. (Respondent) GIR No./PAN : AAVPM 5570 C (Appellant )

Appellant by : Shri Kiran Mehta and Shri Japen P. Shah Respondent by : Shri Asghar Zain

Date of hearing : 16/02/2015 Date of pronouncement : 25/02/2015

ORDER

PER CHANDRA POOJARI, A.M:

This appeal by the assessee is directed against the order dated 4/03/2013 passed by CIT(A) for the assessment year 2009-10. The assessee has raised the following grounds :-

" 1.The Learned CIT (A) gravely erred in "dismissing" the appeal.

2. The Learned CIT (A) erred in dismissing the appeal without considering the written submissions filed by the appellant.

3. It is respectfully submitted that the date of appeal order as "4/3/2013" is apparently erroneous in that in the order itself, the learned CIT (A) has referred to a letter dated 11 /3/2013. It is respectfully submitted that the appellant had already filed detailed written submissions with exhaustive evidence in support on 4/3/2013 and on 8/3/2013 and the assuming that the appeal order was passed on or after 2 ITA No.3686/Mum/13

11/3/2013, the learned CIT (A) gravely erred in not considering the written submissions and in simply "dismissing" the appeal, more so, as the written submissions were filed as instructed and discussed.

4.The Learned CIT (A) erred in sustaining massive addition of Rs. 1,07,06,725/- in respect of the alleged "unexplained creditors".

5.The Learned CIT (A) erred in sustaining addition of Rs. 705,590/- in respect of alleged unexplained cash credit made u/s 68.

6. The Learned C1T (A) erred in sustaining disallowance of expenses of Rs. 77,848/- made on ad- hoc basis.

7. The Learned CIT (A) erred in not appreciating that even in an ex-parte assessment made u/s 144 such massive additions were not justified having regard to the material on record.

8. Without prejudice to the above the assessment made and sustained is very much on the higher side and not at all tenable having regard to the material on record."

2. The facts of the issue are that assessment in this case was completed under section 144 of the Act on 5/12/2011. The case was selected for scrutiny and the assessee was issued notice under section 143(2)/142(1) on several occasions. The AO had tabulated the details of opportunities given to the assessee in para-1 of the assessment order. The AO levied penalty of Rs.10,000/- each on two occasions i.e. on 23/8/2011 and 2/11/2011 under section 271(1)(b) of the Income tax Act, 1961 for the non compliance of the notice issued. The conduct of the assessee during the course of assessment proceedings by not complying to the notices issued under section 142(1) on four occasions has been tabulated in para-2 of the impugned assessment order. In the last opportunity given on 11/11/2011, the AO had made known his intention clear that in case of non-compliance, the assessment would be completed ex-parte under section 44 of the Income tax Act and failure to comply even to this has resulted in completion of the same under section 44 of the Income tax Act.

2.1 In the assessment order the AO made the following additions.

i) Sundry creditors Rs.1,07,06,725/- ii) Unsecured loan Rs. 7,05,590/- iii) Disallowance of expenditure Rs. 77,848/- Total Rs.1,14,90,163/- 3 ITA No.3686/Mum/13

Against this the assessee is in appeal before us.

3. At the outset the ld. AR objected to the exparte order passed by the ld. CIT(A) and he pleaded that one more opportunity of hearing may be given to the assessee in the interest of natural justice. On the other hand the ld. DR submitted that following opportunities have been given to the assessee and no further opportunities to be given to the assessee.

S.No. Date of issue Date of Remarks of notice hearing 1. 04/10/2012 12/10/2012 Notice was served on the appellant 2. 26/12/2012 09/01/2012 In response to the notice appellant filed letter dated 08/01/2013 received in this office on 10/01/2013 seeking adjournment. Adjournment granted. The case was posted on 14/01/2013. 3. 24/01/2013 24/01/2013 None appeared 4. 04/02/2013 14/02/2013 Adjournment letter dated 13/12/2013 was filed by A/R of the appellant J.M. Mehta & Co. CAs . request considered. The case was adjourned to 25/02/2013 5. --- 25/02/2013 Shri Jaysukh Mehta, CA was present and requested sometime for making final submission. He was also informed that being High Demand Case final adjournment is granted and the case was posted on 01/03/2013. 6. .... 01/02/2013 None appeared. A letter dated 11/03/2013 was filed seeking further adjournment.

4. We have heard both the parties and perused the material available on record. In this case the assessee filed return of income for the assessment year 2009-10 on 4 ITA No.3686/Mum/13

30/09/2009 declaring income of Rs.3,86,930/-. The assessment was completed under section 144 of the Income tax Act determining the income at Rs.1,19,84,960/-. The assessee filed appeal against this order before CIT(A) on 2/1/2012. The assessee had hired one CA, Mr. Jaysukh Mehta to represent his case before CIT(A).

4.1 The date of first hearing was fixed on 09/01/2003. On this date, adjournment was sought vide letter dated 08/1/2003 by the ld. Counsel for the assessee and the matter was adjourned to 24/01/2013. This date was communicated to Shri Jaysukh Mehta, but due to some personal family issues he could not attend the hearing on the said date. Again a fresh hearing was fixed on 14/2/2013. On this date also when the matter was called up for hearing Shri Jaysukh Mehta filed a letter dated 13/2/2013 seeking another date of adjournment. On 14/2/2013 the ld. Counsel's request for adjournment was considered and the matter was adjourned to 25/2/2013. On 25/2/2013 Shri Jaysukh Mehta attended the proceedings but again requested some time for making final submissions and the matter was adjourned to 1/3/2013 as a final chance to the assessee. On 1/3/2013 when the matter came up for hearing the ld. Counsel for the assessee sought adjournment of the case on the plea that he was not keeping well. However, CIT(A) did not grant any further adjournment and passed exparte order . At that time Shri Jaysukh Mehta assured the assessee that he had a telephonic talk with the CIT and the ld. CIT had asked Shri Jaysukh Mehta to file submissions and all the relevant details in the next week i.e. after 01/3/2013. Accordingly, the submissions were filed on 04/3/2013. However, to the assessee's surprise he received appellate order dated 4/3/2013 on 6/4/2013.

4.2 It is also submitted before us that assessee's counsel Shri Jaysukh Mehta filed submissions before CIT(A) on 4/3/2013 and 5/3/2013. These submissions of the assessee were not dealt with by the ld. CIT(A) as he had already passed the appellate order on 4/3/2013. In the meanwhile the assessee brought to our notice that there was a re-opening of the very same assessment under section 148 of the Act vide notice dated 24/3/2014 and the reassessment is pending before the AO. As seen from the 5 ITA No.3686/Mum/13

facts of the case it is observed that the assessee has made all necessary arrangements to represent his case before CIT(A). The CAs who had taken the assignment of the assessee failed to represent the case properly before CIT(A).Whatever the assessee could do was done by this assessee. The non-representation of the case before the ld. CIT(A) by the assessee's counsel/CAs cannot be attributable to the assessee. Admittedly this is a mistake of the assessee's counsel and the assessee is having bonafide belief that the assessee's case is being properly represented by his CA before CIT(A). Thus, assessee showed sufficient cause for non appearance on his part which is beyond the control of the assessee . In our considered view the assessee explained the reasons for not appearing before the CIT(A) and it was found to be bonafide, accordingly, in the interest of justice we remit the entire issue to the file of CIT(A) with the direction to give one more opportunity to the assessee to present its case. At the present stage, we refrain from going into the adjudication of the issue on merit.

5. In the result, appeal of the assessee is partly allowed.

Order pronounced in the open court on 25th Feb.'2015 आदे श क घोषणा खुले यायालय म# $दनांकः 25th Feb.'2015 को क गई ।

Sd/- Sd/- (आय.पी. बंसल / I.P. BANSAL) (चं पुजारी /CHANDRA POOJARI ) याियक सदःय / JUDICIAL MEMBER लेखा सदःय / ACCOUNTANT MEMBER मुंबई Mumbai; $दनांक Dated 25/ 02/ 2015 व.िन.स./Jv, Sr. PS 6 ITA No.3686/Mum/13

आदे श क ूितिल*प अमे*षत/Copy षत of the Order forwarded to : 1. अपीलाथ- / The Appellant 2. ू.यथ- / The Respondent. 3. आयकर आयु/(अपील) / The CIT(A)- 4. आयकर आयु/ / CIT

5. *वभागीय ूितिनिध, आयकर अपीलीय अिधकरण, मुंबई / DR, ITAT, Mumbai

6. गाड फाईल / Guard file.

आदे शानुसार/ ार BY ORDER, स.या*पत ूित //True Copy//

उप/सहायक उप सहायक पंजीकार ीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अिधकरण मुंबई / ITAT, Mumbai