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TMI Blog2013 (12) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the fact that the case was adjourned seven times, to reject the appeal - The issue was set aside for fresh adjudication. - Tax Case Appeal No. 749 of 2013 - - - Dated:- 3-12-2013 - Chitra Venkataraman And S. Sivagnanam,JJ. For the Appellant : Mrs. (Dr.) Anita Sumanth For the Respondent : Mr. Arun Kurian Joseph JUDGMENT (Judgment of the Court was delivered by T. S. Sivagnanam,J.) This appeal by the assessee is directed against the order passed by the Income Tax Appellate Tribunal, Bench "A", Chennai in I.T.A.No.1359/MDS/2013 dated 8.10.2013, for the assessment year 2008-2009. 2. The assessee is a 100% Export Oriented Unit, which was granted approval by the Development Commissioner, MEPZ-SEZ, Chennai vide approval dated 16.5.2004. The assessee is carrying on manufacturing and export of table, kitchen and other household articles made from stainless steel. The assessee claimed deduction under Section 10B of the Income Tax Act (Act) in respect of the income derived from the manufacturing and export activities carried on by it. The assessee made a claim for the assessment year 2005-2006 and though certain claims made by it, were disallowed, the eligibility o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer could not extend time beyond 31.12.2020 and hence the order was passed denying the Assessee an opportunity to further substantiate its claim for deduction u/s 10B. (c).The Assessee sold scrap/rejects for Rs.32,45,802/- and had not collected Tax at source. The sale of scrap has been included in the income in the Profit and Loss account and also is part of the profit disallowed by the Assessing Officer. The Assessing Officer has overlooked this fact and added the amount u/s 40(a)(ia), a section meant for disallowance of expenses. (d).The Assessee had filed the necessary TDS certificates and details for tax deduction at source in respect of job work and clearing agent charges. The Assessing Officer has not perused the same and has disallowed the expenses totaling Rs.1,34,09,399/- under section 40(a)(ia). (e).The Assessing Officer further disallowed a sum of Rs.7,28,910 being duties and taxes payable u/s 43B without examining the details of the duties and taxes and the payment details. (f).It is the contention of the Assessee that the Assessing Officer had passed the Assessment Order without examining the documents filed and also without affording sufficient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en adjourned seven times and in spite of those opportunities given, the assessee did not appear before the Assessing Officer. Therefore, the First Appellate Authority concluded that equity comes to the aid of the vigilant and not the slumberer and dismissed the appeal. In so doing, reliance was placed by the Commissioner on the decision in the case of CIT V. MULTIPLAN (INDIA) PVT. LTD. reported in 38 ITD 320 (DELHI). 6. Aggrieved by the above order, the assessee preferred appeal to the Tribunal reiterating the grounds raised before the First Appellate Authority on the merits of their claim, and submitted that the remand report relied on by the Commissioner was not furnished to the assessee, and therefore, the assessee contended that the order of the First Appellate Authority is wholly erroneous. 7. The Tribunal after hearing both sides, pointed out that the order of assessment was passed on 27.12.2010, and between the issuance of notice under Section 143(2) and the assessment order, there was a time gap of one year and four months for the assessee to file necessary confirmations, verifications or other documents and since there was no evidence forthcoming, the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we have extracted above, submitted that the Tribunal erred in not adjudicating upon the issues raised in the appeal notwithstanding that detailed grounds of appeal on additional evidence as well as on merits had been raised. Further, it is submitted that the proceedings for assessment had been effectively taken up only in November, 2010, viz. at the fag-end of the period of limitation and furthermore, the remand report of the Assessing Officer dated 22.4.2013, was not furnished to the assessee and the contents thereon, were unilaterally accepted by the first appellate authority and that too, without any opportunity of hearing to the assessee. Further, the learned Counsel submitted that there was a strained relationship among the Directors, which was ultimately resolved by the Company Law Board by passing an order dated 4.3.2011. Further, it is contended that the Commissioner of Income Tax (Appeals) at the hearing on 19.4.2013, adjourned the case to 16.5.2013, and however, passed an order on 29.4.2013 itself, even prior to the original date of hearing, which was already fixed. The learned Counsel further submitted that the fact that the eligibility of the assessee to claim exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the realization of export receipts etc. Hence no allowance u/s.10B is extended to the assessee. Addition : Rs.72,60,802/- 4. As per clause 27 of Form 3CD filed, it was mentioned that TDS not collected u/s.206 in respect of scrap sales of Rs.32,45,802/- made during the year. Since the assessee had not added back the same in the computation, the same is disallowed u/s.40(a)(ia) for the reason that there is no compliance to Chapter XVIIB. Addition : Rs.32,45,802/- 5. The assessee had debited a sum of Rs.96,61,194/- towards job work charges and Rs.37,48,205/- towards clearing agent charges. However, the assessee could not furnish any proof for its compliance to provisions u/s.40(a)(ia) and hence the same is disallowed. Addition : Rs.1,34,09,399/- 6. Duties and taxes payable: The assessee had accounted a sum of Rs.7,28,910/- as opening balance in the schedule 10 of Balance Sheet under Liabilities and Provisions. Since the assessee had not discharged the duties and taxes, the said sum is disallowed u/s.43B. Addition : Rs.7,28,910/-" 12. For the above said reasons, the Assessing Authority disallowed the claims under Sections 10B, 40(a)(ia) and 43B of the Act. In the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter on merits, but appears to have taken a very hyper-technical view that the assessee having not been vigilant, is not entitled for any remedy and opined that they were in fact, careless and dismissed the appeal on such a technical ground. It is to be noted that in the remand report dated 22.4.2013, the Assessing Officer had stated only about the various adjournments taken by the assessee in the course of hearing of the assessment proceedings. Curiously enough the remand report as extracted by the First Appellate Authority in paragraph No.8 of its order, does not refer about the merits of the assessee's claim as regards the documents, which were filed by it along with the return, and as raised by the assessee in the memorandum of grounds of appeal before the First Appellate Authority. When the assessee took up the matter to the Tribunal, the Tribunal also did not make any endeavour to consider the claim of the assessee on merits, but proceeded to confirm the order of the First Appellate Authority purely on technical ground. 14. We have noticed from the grounds raised before the First Appellate Authority, that the assessee had filed the TDS Certificates and details of tax d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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