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Zakharia Mathew Versus I.T.O. Ward 21 (3) (2) , Mumbai

2015 (11) TMI 570 - ITAT MUMBAI

Reopening of assessment - Held that:- We deem it fit to send all the grounds back to the file of the AO. The AO shall provide copy of Reasons recorded by him, if any, to the assessee. The assessee shall file objections to the AO with regard to reopening of the case, if so desired by him. The AO shall follow the procedure, as laid down by the Hon’ble Supreme Court in the case of GKN Driveshafts (India) Ltd. vs. ITO. (2002 (11) TMI 7 - SUPREME Court). The AO shall dispose of the objections of the .....

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he file of AO. - Decided in favour of assessee for statistical purposes. - ITA NO.9187/Mum/2010, ITA NO.9188/Mum/2010, ITA NO.9189/Mum/2010 - Dated:- 30-9-2015 - Shri Amit Shukla, Judicial Member, and Shri Ashwani Taneja, Accountant Member For The Assessee : Shri Nishan Thakkar (AR) For The Revenue : Shri S. S. Kumaran (DR) ORDER Per Ashwani Taneja (Accountant Member): These appeals have been filed by the assessee against the common order of Ld. Commissioner of Income Tax (Appeals)-32, Mumbai ( .....

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#8377; 10,96,600/- on account of alleged unexplained cash credit. iii. The CIT(A) erred in confirming the addition of ₹ 10,000/- on account of alleged interest received but not offered to tax. (II) In ITA No.9188/Mum/2010 For A.Y. 2004-05: i. The CIT(A) erred in upholding the validity of the notice under section 148 of the Act and the proceedings pursuant thereto. ii The CIT(A) erred in confirming the addition of ₹ 3,73,000/- on account of alleged unexplained cash credit. iii. The CI .....

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ged interest received but not offered to tax. 3. Before we proceed to dispose this appeal on merits, it has been noted by us, that there is a delay of 288 days in filing of these appeals the Assessee before the Tribunal by. The Assessee has also filed a petition for condoning the delay, duly supported with a duly sworn affidavit from the Assessee, deposing detailed facts on oath. During the course of hearing, Ld counsel had made a request for condoning the delay and has made submissions in this .....

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sions there. The appeal of the Assessee was partly allowed by the Ld. CIT(A), by order dated 11.12.2009. It is claimed by the Assessee in the affidavit filed before us that the order of CIT(A) was received by the Assessee on 16.01.2010. Accordingly, the appeal before the Tribunal ought to have been filed as per law on or before 17th March 2010. Whereas, these appeals have been filed before the Tribunal on 30.12.2010, thus admittedly there is a delay of 288 days in filing these appeals. 3.2. It i .....

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r dates, it has been stated by the Assessee, on oath, that the delay is inadvertent and occurred as a result of compelling circumstances, as have been narrated in detail in the petition for condonation of delay filed by the Assessee. Further, these facts and circumstances have been narrated in the aforesaid affidavit filed by the Assessee. Relevant extracts from this affidavit, are reproduced below for the sake of ready reference: 4. I affirm that I, along with my wife, am in management and cont .....

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the Company passed on 15th March 2010 closing down the manufacturing activities of the Company with effect from 31st March, 2010. The application to the Labour Commissioner dated 25th November 2010 intimating for the closure of the manufacturing unit and seeking issuance of Labour NOC, is hereto annexed and marked EXHIBIT "C". The notice of the closure of the said unit was also given in the Lokmat and Pudhari newspaper at Thane issue dated 14th October, 2010, a copy of which is hereto .....

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ce of Labour NOC, is hereto annexed and marked EXHIBIT "G" the notice of the closure of Saino Engineering Pvt. ltd. was also given in the Lokmat and Pudhari newspaper at Thane issue dated 14th October 2010, a copy of which is hereto annexed and marked EXHIBIT "H" Colly. 5. I say that since about October 2009, I have been completely involved in the closing up of the affairs of the above two companies and have not been in a position to attend to my own affairs. I say that am no .....

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oner of Income-tax (Appeals) in my own case was still pending. I say that, I immediately rushed to my solicitors who have then taken the necessary steps in filing the appeal. 6. I say that as a result of the closure of the units and the reduction of the staff, the time for filing of the appeal was inadvertently missed and the filling of the appeal could not be done in time. 3.4. After hearing both the sides and having gone through the material placed before us for the purpose of ascertaining the .....

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y in filing these appeals was as a result of negligence on the part of the assessee, therefore, under these circumstances, the Assessee should not be given any special privilege, and there should not any liberal approach in granting condonation to the Assessee. 3.5. On the other hand, the Ld Counsel pleaded on behalf of the Assessee that the Assessee was heavily engrossed in certain matters, of serious nature, pertaining to closure of business of two companies, whose management and control was i .....

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roceedings. In these circumstances, the assessee was dependent on the advice given to him by his employees. Most of the senior and experienced employees/staff members had him left due to closure of these two companies. When situation came somewhat in control, in June 2010, then one of the employees of the Assessee informed him about delay occurred in filing of these appeals before the Tribunal. On getting this information, the Assessee came into action and made requisite arrangements for filing .....

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to examine the bonafide of claim and the averments made before us by the Assessee, and we have to also decide whether these facts constitute sufficient or reasonable cause in the eyes of law and deserve condonation of delay in filing of the present appeals. First of all, it is noted by us that the Ld DR has not been able to controvert or doubt, about the correctness of certain facts or averments made by the Assessee in his petition and affidavit. The Assessee is not well educated, therefore, it .....

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sessee cannot be presumed to be solely on account of his negligence or casual approach, as suggested by the Ld DR. Thus, contention of the Assessee that, apparently, there were compelling circumstances, due to which, delay occurred in filing of these appeals, can be accepted. Thus, the next issue to be decided now would be whether the aforesaid reasons, constraints and compelling circumstances etc. would form sufficient or reasonable cause, so as to enable the assessee to get condonation of dela .....

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d with a view to enable the courts to do substantial justice to litigants by disposing of the cases on merits. It was held by the Hon ble Supreme Court that liberal approach should be adopted, on principle, in these matters because: 1.Ordinarily, a litigant does not stand to benefit by lodging an appeal late. 2 Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highe .....

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annot claim to have vested right in injustice being done because of non-deliberate delay. 5. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant doe not stand to benefit by resorting to delay. In fact, he runs a serious risk. 6. It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expec .....

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itution of our country has attached great sanctity to the concept of finality of litigation. But in this case, we feel that refusing to deny delay may result in a meritorious matter being thrown out at the very threshold, and thereby causing injustice and irreparable damage to the taxpayers. Therefore, keeping in view all these facts and circumstances, we condone the delay in filing of these appeals by the Assessee before the Tribunal. The appeals are now taken up for disposal on merits. 4. It i .....

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ore the Ld. CIT(A), the Assessee had taken specific ground in this regard as Grounds No.1 & 2 along with appeal memo filed in Form No.35 before the Ld. CIT(A). These grounds are reproduced herein: 1.The Assessing Officer erred in assuming jurisdiction under section 148 read with section 147 of the Act. 2. The reassessment is unlawful, invalid and the order passed pursuant to the notice under section 148 is illegal and deserves to be quashed. 4.1. In addition to the above in the written submi .....

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een issued without recording of reasons. The Appellant prays that the Assessing Officer be called upon to show that reasons have been recorded by him before the issue of notice under section 148 of the Act. If indeed such reasons are recorded, the Appellant prays that an opportunity be afforded to him to challenge the legality of assuming jurisdiction under section 148 of the Act based on the reasons recorded, it any. 4.2. However, while deciding the appeals of the Assessee, Ld. CIT(A) did not a .....

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to at para 3 of this order. The reopening does not suffer from any technical defect such as being beyond time or the reasons not being recorded. Therefore, the action of the AO in reopening of the assessment is upheld and ground No.1&2 are dismissed. Thus, Ld CIT(A) has not decided these grounds properly for the reason that assessee has not pursued these jurisdictional grounds before the Ld. CIT(A). 4.3. In the hearing before us, Ld. Counsel has submitted that admittedly no objection was rai .....

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n to that, Ld counsel has drawn our attention upon the additional evidences filed by the assessee and requested that these evidences should be admitted in the interest of justice, as these are very crucial for adjudication of these appeals. The application for admission of additional evidences was read before us. On the other hand, Ld DR has argued that since Assessee has not properly taken up grounds with respect to reopening, these grounds cannot be decided here now. However, Ld. DR was fair e .....

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ing, as contained in sections 147 to 151 of the Income Tax Act r.w.s.143(2) and 143(3) of the Income Tax Act 1961. These Grounds are purely legal grounds, and can be raised at any stage. These can be raised even for the first time before the Tribunal as has been held by the Bombay High Court in the case of Inventors Industrial Corporation Ltd. vs. C I T, (1992) 194 ITR 548 (Bom), holding that the Assessee was entitled to challenge the jurisdiction of the AO to initiate the reassessment proceedin .....

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