LALIT POLYESTER P.LTD,THANE vs. ITO 3(2)(2), MUMBAI

This appeal, filed by the assessee company, being 20th January, 2011 passed by learned Commissioner of Income Tax (Appeals)- 7, Mumbai (hereinafter called “the CIT(A)”), for the assessment year 2006-07, the appellate proceedings before the learned CIT(A) arising from the assessment order dated 29th December, 2008 passed by the learned Assessing Officer (hereinafter called “the AO”) u/s 144(1)(b) and (c) of the Income Tax Act,1961 (Hereinafter called “the Act”).

Without prejudice to the above, the appellant submits that the appellant was prevented by reasonable and sufficient cause for not being able to appear and furnish the details before learned C.I.T. (Appeals) for which separate application and Affidavits are being file. It is submitted that these details and submissions be considered and C.I.T. (Appeals) be directed to hear the appeal of the appellant afresh.

The Order passed by the learned C.I.T. (Appeals) is bad in law and contrary to the provisions of law and facts. It is submitted that the same be held so now.”

The brief facts of the case are that the assessee in its return of income filed on 23-11-2006 declared total taxable income of Rs. 27,98,330/- which was processed u/s 143(1) of the Act on 22-11-2007 raising demand of Rs.11,77,865/- . The assessee did not deposit any taxes by way of TDS, TCS, Advance Tax or self assessment tax while filing the return of income filed by the assessee despite the fact that assessee returned income of Rs. 27,98,330/-.

Before the ld. CIT(A) the assessee filed an application under Rule 46A of Income Tax Rules, 1962 along with paper book which was forwarded by the ld. CIT(A) to the A.O. for his comments. The A.O. submitted his remand report requesting the ld. CIT(A) to reject the application under Rule 46A of the Income Tax Rules, 1962. Fresh notice were issued by the ld. CIT(A) fixing the ITA 4343/Mum/2012 4 hearing on 13th September, 2010 which was returned with the remark “unclaimed”. The ld.CIT(A) again issued notice whereby the assessee sought adjournment from time to time which were granted by learned CIT(A) and ultimately on 11-1-2011 wherein the assessee’s counsel was asked to appear along with Director of the assessee company, none appeared on 11-1-2011 and the learned CIT(A) then decided the appeal based on the material available on record. The ld. CIT(A) confirmed the additions made by the AO by holding that the assessee has not cooperated in the assessment and as also during the appellate proceedings . It was also observed by learned CIT(A) that the assessee did not co-operated before the AO and the CIT(A) in proceedings for immediately preceding assessment year . The ld. CIT(A) held that the assessee might have benefited by not attending the proceedings by non-appearing before the A.O. as well as ld. CIT(A) and additions made by the AO were confirmed/sustained by learned CIT(A) vide appellate order dated 20- 1-2011.

Aggrieved by the appellate order dated 20-1-2011 passed by the ld. CIT(A), the assessee filed its second appeal before the Tribunal.

The ld. Counsel for the assessee at the outset submitted that the Chartered Accountants(CA), Sh Shankarlal Jain who had handled the case of the assessee failed to appear before the A.O. and the ld. CIT(A). The ld. Counsel submitted that all the details were handed over to the CA but he failed to appear before the A.O. as well as the ld. CIT(A) to present the case of the assessee and serious prejudice is caused to the assessee due to failure of the said CA to represent the case of the assessee before the authorities below. The assessee has filed an affidavit dated 21-06-2012 duly signed by the Director of the company Shri Manoj Shah wherein it is stated that the earlier C.A. Shri Shankarlal Jain who was assigned the job of presenting the case before AO as well CIT(A) as authorized representative of the assessee neither ITA 4343/Mum/2012 5 attended the hearing before the A.O. nor before the ld. CIT(A) despite being paid huge fee by the assessee. The said C.A. refused to return back the details and documents in his possession to the assessee or to the new C.A. Sh R R Mandali appointed by the assessee despite hefty fee paid to the said old CA. The affidavit dated 11-06-2012 of new CA namely Mr R R Mandali is also filed to this effect confirming the non co-operative attitude and behavior of old CA , Sh Shankarlal Jain. In nutshell, the assessee prayed that if opportunity is granted, the assessee will be able to explain the complete details with respect to each and every addition and present the case before the authorities below.The assessee has also filed appeal late by 458 days for which application for condonation is filed by the assessee along with affidavit for condoning the delay is filed explaining the afore-stated reasons for delay in filing the appeal before the Tribunal.

The ld DR rely on the orders of the learned CIT(A).

We have considered the rival contentions and also perused the material available on record including the affidavit dated 21-06-2012 filed by the assessee’s Director , Sh Manoj Shah and affidavit filed by new CA Sh R R Mandali dated 11-06-2012 of the assessee which are placed on record in file. We have observed that the assessee was prevented by sufficient cause for not presenting appeal in time before the Tribunal as the CA of the assessee , Mr Shankarlal Jain of M/s Shankarlal Jain and Associates at 12, Engineer Building, 265, Princess Street, Mumbai-400002 has not co-operated with the assessee and retained the possession of the relevant documents disabling the assessee to take appropriate action in this matter despite the assessee paying hefty fees to the said CA which has led to delay in filing appeal before the Tribunal which is supported by an affidavit of Director, Mr Manoj Shah of the assessee and also affidavit of new CA, Mr. R R Mandali and hence keeping in view peculiar facts and circumstances of the case we are inclined to condone ITA 4343/Mum/2012 6 the delay of 458 days in filing the appeal by the assessee before the Tribunal. We would at the same time like to place on record our un-happiness in the manner in which CA Sh Shankarlal Jain conducted himself professionally with the assessee company which led to the serious prejudice to the assessee as detailed in the affidavits of the Director of the assessee and new CA of the assessee , which professional conduct is not healthy for growth and development of profession of CA.

In the result, appeal filed by the assessee in 2006-07 is allowed for statistical purposes.