M/S LAUREL TRADECOM PVT. LTD.,KOLKATA vs. ITO, WD-6(2), KOLKATA, KOLKATA

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ITA 1826/KOL/2016Status: DisposedITAT Kolkata22 March 2017AY 2011-128 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that both parties agreed that the stay petition could be rejected and early hearing granted. The assessee's stay petition was dismissed as infructuous. However, the Tribunal, after hearing both parties and perusing the materials, found that the lower authorities had passed ex-parte orders. In the interest of justice, the Tribunal was inclined to restore the issue to the file of the AO for fresh adjudication in accordance with the law. The assessee was directed to cooperate in the assessment proceedings, and a hearing date of April 15, 2017, was fixed before the AO, with no separate notice to be issued. The appeal of the assessee was allowed for statistical purposes. The Tribunal also dealt with other stay applications (S.A. No. 07/Kol/2017 to S.A. No. 13/Kol/2017) concerning AYs 2008-09 to 2014-15, where the assessee challenged penalty orders under Section 271(1)(c). In these cases, the Tribunal granted stay and fixed the appeals for hearing on April 3, 2017.

What were the facts?

The assessee, M/s. Laurel Tradecom Pvt. Ltd., filed a stay petition (S.A. No. 14/Kol/2017) seeking a stay on an outstanding demand of Rs. 3,56,91,890/- arising from an appeal (ITA No. 1826/Kol/2016) for Assessment Year 2011-12. The assessee contended that the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)] passed ex-parte orders because the assessee did not receive hearing notices due to a change in its registered address. The assessee had communicated this change to the AO and CIT(A) with supporting documentation (Form No. INC 22). The CIT(A)'s notice was returned unserved. The AO continued to issue notices to the old address despite being aware of the new one. The assessee requested a fresh adjudication by the AO. The Revenue did not object to restoring the matter.

What were the issues?

1. Whether the Tribunal should grant a stay of the outstanding demand of Rs. 3,56,91,890/- for AY 2011-12, considering the ex-parte orders passed by the lower authorities due to non-receipt of notices by the assessee. Assessee's Contention: The assessee argued that the ex-parte orders were passed because it did not receive hearing notices due to a change in its registered address, which was duly communicated. The assessee sought restoration of the matter for fresh adjudication. Revenue's Contention: The Revenue raised no objection if the matter was restored back to the AO.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 271(1)(c),Section 274

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, : ‘B’ BENCH

Before: Shri Waseem Ahmed & Shri S.S.Viswanethra Ravi

For Appellant: Shri Sunil Surana, FCA, Id.AR for the, Shri Saurav Kumar, Addl.CIT, Id.DR for the
For Respondent: Shri Saurav Kumar, Addl.CIT, Id.DR for the

Heard together (3 matters)

S.A No. 14/Kol/2017
ITA No. 1826/Kol/2020
ITA No. 1826/Kol/2016

Read from the judgment's own cause title. This page is filed under one of them.

Shri S.S.Viswanethra Ravi, JM:

By way of this Stay Petition the assessee has requested for granting of stay of outstanding of Rs. 3,56,91,890/- in SA 14/Kol/2017 is arising out of appeal in ITA No. 1826//Kol/2016.

2.

Sri. Sunil Surana, FCA, Ld. AR appeared on behalf of assessee and Sri Saurav Kumar, Ld. Departmental Representative appeared on behalf of Revenue.

3.

At the outset the ld. AR for the assessee brought to our notice that the AO & the CIT-A has passed the ex-parte order. The assessee before the CIT- A failed to attend the hearing because it could not receive the notice issued

S.P No. 14/Kol/2017 & M/s. Laurel Tradecom Pvt.Ltd for hearing. The ld. AR submitted that there was a change in the registered address of the assessee and the same was communicated to the AO ward- 3(2) and the CIT-(A)5 having jurisdiction over the assessee by two separate letter dated vide dated 15.5.2015. The new address of the assessee was changed to 112, Jaigirhat Road, Thakurpukar, Near Kailashpal Vidyalay/ Dargaha Club, Kolkata-700063 w.e.f. 31.12.2014. In this connection the ld. AR has produced before us Form No. INC 22 issued by the Registrar of Companies and placed on record.

4. The CIT-A in his order has given the finding that the notice of hearing was sent at 7, Grant Lane, 3rd Floor, Kolkata-700012 dated 7.1.2016 to the assessee which was returned as unserved with the remark “insufficient address”. Besides the CIT-A has issued several notices to the AO in connection with issue of notice to the assessee for hearing dated 20.1.2016, 26.2.2016, & 27.06.2016 and the AO in turn issued the notice & deputed inspector for the service of notice at the old address despite of having the information of the new address of the assessee. Thus the appeal of the assessee has not been heard on merit. In view of above the ld. AR requested to restore the matter to the AO for fresh adjudication to the AO. On the other hand the ld. DR raised no objection if the matter is restored back to the AO.

5.

We have heard the rival contentions of both the parties and perused the materials available on record. We at the time of hearing find that both parties conceded that stay petition can be rejected and early hearing can be granted. Accordingly, in terms of above, we dismiss the stay petition filed by assessee, however, Ld. AR before us requested to hear the matter of assessee’s appeal on merit. Ld. DR raised no objection if the appeal is heard on merit. After having consent of both the parties we proceed to hear the appeal on merit. Thus assessee’s Stay Petition stands dismissed as infructuous.

S.P No. 14/Kol/2017 & M/s. Laurel Tradecom Pvt.Ltd Coming to appeal in for A.Y 08-09.

6. This appeal by the assessee is against the order DT: 18-07-2016 of Commissioner of Income Tax (Appeals)-6 of Kolkata for AY 2011-12

7.

At the outset, we find that the lower authorities have passed the ex-parte order. The reasons for the ex-parte order have already been explained in earlier paragraph and the same is not repeated for the sake of brevity. In view of above & in the interest of justice, we are inclined to restore this issue to the file of AO for fresh adjudication in accordance with the law. It is also important to note that the assessee shall co-operate in the assessment proceedings to the AO. We are also inclined to fix the date of hearing on 15-4-2017 before the AO and no separate notice shall be issued upon the assessee. Thus the appeal of the assessee is allowed for statistical purposes.

8.

In the result, Stay Application filed by the assessee is dismissed and appeal of assessee stands allowed for statistical purposes. Order pronounced in the open Court as dictated on 22-03-2017

Sd/- Sd/- Waseem Ahmed S.S.Viswanethra Ravi Accountant Member Judicial Member

Dated 22-03-2017 Copy of the order forwarded to:

1. 1. Applicant/Appellant : M/s. Laurel Tradecom Pvt. Ltd, Omer Mansion, 29A, Weston Street, 3rd floor, R.No.C-5, Kolkata-12. 2 Respondent /Department: The I T O, W 6(2), Aaykar Bhawan, P-7 Chowringhee Square, Kolkata-69.

3. CIT, 4. CIT(A), 5. DR, Kolkata Benches, Kolkata **PP/SPS True Copy] By order, Asstt Registrar.

S.P No. 14/Kol/2017 & M/s. Laurel Tradecom Pvt.Ltd

All these seven Stay Applications by the assessee against the demand of arrear dated 18-01-2017 seeking stay of realization of disputed outstanding demand for the A.Ys 2008-09 to 2014-15.

S.P No. 14/Kol/2017 & M/s. Laurel Tradecom Pvt.Ltd 2. Since the assessee and the issues raised therein are same in all the stay applications except to the variations in calculations, therefore, all the stay applications clubbed and heard together and a consolidated order is being passed. In order to avoid repetition and for the sake of convenience, the facts as arrayed in S.A No.7 of 2017 [ for the AY 2008-09 by the assessee] are read and discussed herein below.

SA No. 07/KoL/2017 in for AY 2008-2009

3. At the time of hearing before us, it is noticed that none appeared on behalf of the revenue. However, Shri Rajat Subhra Biswas, CIT/DR(ITAT), filed an application seeking adjournment stating that the Sr. DR to whom the present appeal was assigned unavailable and he was on medical leave, and urged to adjourn the said case to another date. The ld.AR of the assessee has vehemently objected to the same and pleaded urgency and referred to page no. 2A of the paper book and submitted that the Petitioner/Assessee filed an application dt. 03-02-2017 before the ACIT, Cir-34, Kolkata to keep the said demand for the A.Ys 2008-09 to 2014-15 in abeyance as it has fair chances of getting substantial relief in main appeal before the Tribunal and argued that the said authority instead of granting the stay made an endorsement to pay the outstanding demand by 10-02-2017 i.e. incidentally today. The ld.AR further submits before us that he is ready to prosecute the said appeals filed by the assessee challenging the orders of the CIT-A in confirming the penalty imposed by the AO before this Tribunal at any date as and when fixed by the Tribunal. He further argued that the assessee has fair chances in succeeding in all the appeals. Taking into consideration the submissions of Ld.AR and the endorsement made by the ACIT, which is placed on record at page no. 2A of the paper book, we proceed to hear the Stay Applications by rejecting the said

S.P No. 14/Kol/2017 & M/s. Laurel Tradecom Pvt.Ltd adjournment application dated 10-02-2017 placed on record by the revenue.

4.

The brief facts of the case are that the Assessee is a firm and engaged in the business of growing, manufacturing and sale of tea. The assessee filed its return of income on 25-09-2008 declaring a total income of Rs.25,88,157/-. Under scrutiny, notices u/s. 143(2) and 142(1) of the Act were issued. In response to which, the ld. AR of the assessee appeared before the AO. In the said proceedings the AO treated the income derived from manufacturing and processing of tea leaves as business income and rejected the claim of assessee in treating the same as agricultural income. Thus, the AO added an amount of Rs.7,46,794/- to the total income of the assessee and to that effect an order u/s. 147/143(3) of the Act was passed on 27-08-2015. It is pertinent to note that the assessee did not prefer any appeal challenging the said order of the AO before the 1st appellate authority. Thereby, the order passed by the AO U/Sec 143(3) of the Act has become final.

5. Thereafter, the AO initiated the penalty proceedings u/s. 271(1) (c) of the Act by issuing a notice u/sec 274 of the Act in respect of addition made as discussed above. In response to the notice as issued by the AO under penalty proceedings the assessee contended that penalty proceedings cannot be initiated on the basis of making wrong claim, as it does not contain malafide intention. However, the AO not satisfied with the explanation imposed the penalty of Rs. 2,30,759/- u/s. 271(1) (c) for A.Y 2008-09 and Rs.14,00,677/-, Rs.37,84,201/-, Rs.65,87,490/-, Rs.48,24,850/-,Rs.68,24,700/- and 79,47,350/- for AY’s 2009-10 to 2014- 15 respectively.

6.

The same was challenged before the CIT-A, wherein the CIT-A dismissed the all the appeals of assessee and confirmed the impugned penalty as imposed by the AO. Against which the assessee filed seven

S.P No. 14/Kol/2017 & M/s. Laurel Tradecom Pvt.Ltd appeals before this Tribunal on 25-01-2017 in ITA No’s. 129 to 135/Kol/2017 for the AYs. 2008-09 to 2014-15. As matter stood thus, the AO issued a demand of arrear dt:18-01-2017 to pay the outstanding demand within seven days at page no- 43.

7. It is noted from the stay petition at para no-5 as filed by the Assessee that the seven appeals challenging the order of CIT-A were filed on 25-01-2017 before this Tribunal in to 135/Kol/2017 ( by the assessee) for the AYs. 2008-09 to 2014-15 and we find they are yet to be fixed for hearing and pending for adjudication. Further, we also find from the stay petition that the AO initiated the penalty proceedings for claim of deduction under Rule 8(1) of the I.T Rules 1962 in respect of purchase of green leaf from the market. The AO found that the income derived thereon from manufacturing of tea does not fall within the ambit of Rule 8(1) of the I.T Rules and thereby he imposed the penalty and confirmed by the CIT-A. Under these circumstances, we deem it fit and appropriate to fix the said appeals of assessee on 03-04-2017 and grant stay in SA 07/Kol/2017 in ITA 129/Kol/2017 for AY.2008-09 restraining the Respondent Revenue authority from realization of outstanding demand as raised by the ACIT, Cir-34, Kolkata dated 18-01-2017 till the disposal of the said appeals.

8. In view of the discussion above and decision rendered therein, all the stay petitions in SA no’s 08/Kol/2017 to 13/Kol/2017 arising from ITA no’s 130/Kol/2017 to 135/Kol/2017 for AY’s 2009-10 to 2014-2015 filed by the assessee are allowed.

9.

In the result, all the seven stay petitions filed by the assessee are allowed. Order pronounced in the open Court as dictated on 15-02-2017

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