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TMI Blog2024 (11) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... ) in the second round of litigation and their act is deprecated. The assessee should not be allowed to take benefit of its own wrong as it acted in complete defiance of law on both the counts. Assessee has now filed paper book before the ITAT and has raised challenge to the additions both on merits as well on law. It is equally true that the ld. CIT(A) passed an ex-parte appellate order based on material on record including SOF. The assessee did not comply with any of the eight notices issued by ld. CIT(A). It is also equally true that the Act of the Court should not prejudice anybody. The mandate of the 1961 Act is to compute and collect correct taxes from correct assessee and for the correct assessment year. The assessee has now come forward to argue against the additions as were made by authorities below, and paper book containing as many as 225 pages are filed before ITAT. The assessee has also stated the reasons for its non compliances before ld. CIT(A), which have been cited by us in the preceding part of this order. The true, complete and correct facts are to be brought on record and the onus is on the assessee to bring the same on record. Even before us contradictory statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails, documents/evidences etc, unawareness about the IT Portal details and notices uploaded on portal etc. Thus, there was a sufficient cause for failure to comply with the notices claimed to be issued by both the lower authorities. 2.2 The ld. NFAC has failed to appreciate that there was a sufficient cause for failure to respond to the notices of hearing and produce necessary details/documents. 3.1 The ld. NFAC has grievously erred in law and or on facts in upholding the disallowance of freight expenses of Rs. 8,29,90,450/0 u/s 40(a)(ia) made by A.O.. 3.2 That the in facts and circumstances of the ld. NFAC ought not to have upheld the disallowance of freight expenses of Rs. 8,29,90,590/- u/s 40(a)(ia) made by A.O.. 3.3 Without prejudice to above, the disallowance confirmed by both the lower authorities was highly excessive and calls for reduction. It is, therefore, prayed that the disallowance upheld by the CIT(A) may kindly be deleted. 3. At the outset, the ld. Counsel for the assessee, Shri S. N. Divatia submitted that this appeal is filed belatedly by the assessee with ITAT by 83 days beyond the time prescribed u/s 253(3) of the 1961 Act. The ld. Counsel Shri S. N Divatia, dre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench, although the department has objection to the aforesaid delay. One of the reasons for the delay as averred by the assessee in its application for delay in filing this appeal was that the appellate order was posted on ITBA on 25.09.2023 but it was downloaded by the assessee on 04.01.2024(appeal filed with ITAT on 15.02.2024) when the SMS alert was received on the mobile of former accountant on 04.01.2024 asking assessee to submit online response to notice issued by the department which notice was in context of recovery of tax demand outstanding against the assessee, and at this stage the assessee came to know that an ex-parte appellate order was passed by ld. CIT(A), in our considered view, the aforesaid reason cited by the assessee is in the realm of plausible and possible reasons more especially that this is a period of switch over phase wherein the Revenue is moving towards effective utilisation of latest and advanced technologies while handling tax matters and processes at various levels and stages including filing and processing of returns of income, filing and processing of various applications under various provisions of the statute, faceless assessments faceless adjudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes Tribunal s decision in Rajeev Kumar Agarwal vs. Addl. CIT-ITA No. 331/Agra/2013 decided on 29.05.2013 holding above stated proviso to be curative in nature with retrospective effect from 01.04.2005. He further quote Hon ble Delhi High Court s decision in the case of IT vs. Ansal land mark Township (P) Ltd in Tax Appeal No. 2160/2015 decided on 26.08.2015 upholding above stated Tribunal s decision. 5. Learned departmental Representative fails to rebut this legal position. We thus accept assessee s legal contention and direct the Assessing Officer to pass a fresh order after conducting necessary verification as to whether qua freight payment in question or not. Needless to say the assessee shall be afforded adequate opportunity of hearing. It is made clear that we have not adjudicated upon assessee s other contentions of non- applicability of section 194C of the Act as well on various legal and factual pleas. It would be at liberty to re-agitate all such factual and legal plea in the course of consequential proceedings . 5. In second round, the AO framed the denovo assessment vide order dated 18.12.2018 passed u/s 254 read with Section 143(3) reiterating the additions made in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm is dissolved or business discontinued, every person who has at the time of such discontinuance or dissolution a partner of the firm, and the legal representative of any such person who is deceased shall be jointly and severally liable for the amount of tax, penalty or other sum payable and all the provisions of this Act, so far as may be shall apply to any such assessment or imposition of penalty or other sum. Further reference is also drawn to provisions of Section 189(4), which stipulates that where such discontinuance or dissolution takes place after any proceedings in respect of an assessment year have commenced, the proceedings may be continued against the person referred to in sub-section (3)(i.e partners of the firm and the legal representative of any such person who is deceased) from the stage at which the proceedings stood at the time of such discontinuance or dissolution and all the provisions of this Act shall, so far as may be apply accordingly. Provisions of Section 176(3) and Section 189 are reproduced hereunder: L. Discontinuance of business, or dissolution 176. Discontinued business. *** *** (3) Any person discontinuing any business or profession shall give to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... listed at page 79-109,128-169 and 177-225 before ld. CIT(A). In any case it is a disputed fact. However, the assessee did not mention about closure of its business in the statement of fact (SOF) filed before ld. CIT(A). This is a new fact brought by the assessee on record before the ITAT, w.r.t. discontinuance of its business many years back, in the statement of fact (SOF) filed along with its appeal before ITAT, as well in the application for condonation of delay filed with the ITAT. These are especial facts which are within the knowledge of the assessee and the same were withheld by the assessee from the Revenue. It was the duty of the assessee to have brought complete, true and correct facts on record before the authorities, as to whether the assessee firm stood dissolved or the business stood discontinued. The assessee has filed appeal in its own name, which indicate that the assessee firm was not stood dissolved, but at certain places, the partners are referred to as Ex-partners. Making general/bald statements in statement of facts and in application for condonation that the business stood discontinued shall not suffice and discharge the onus cast on the assessee. Further, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no scope to deviate from the finding of the AO and accordingly, the order of the AO is confirmed. 6. Regarding applicability of section 194C of the Act, the CIT(A) in earlier proceedings has discussed in detail wherein he has observed that the entire facts of the case, it is noted that the claim of the appellant that it was acting as a commission agent is not supported by facts. All the freight received by it has been recorded in the books of accounts on the receipt and subsequently the payment has also been recorded on the payment side. Secondly, the transporters are fixed and they are being employed on regular basis which is apparent from the sizable payments made to those transporters. The contract need not be written but it can be oral also. All these facts clearly shows that provisions of Section 194C are clearly attracted in the case. Thus, no question of deviating from the findings of the earlier CIT(A) on the issue of applicability of provisions of section 194C of the Act. Accordingly, it is held that the provisions of section 194C of the Act are applicable in the present case. 7. In the result, the appeal is dismissed. 6.2 As could be seen that ld. CIT(A) dismissed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld. CIT(A), for the reasons cited in SOF. This is second round of litigation. Huge additions were made by the AO even in second round of litigation and huge demand of tax and interest was raised by Revenue against the assessee. The assessee filed its appeal before ld. CIT(A) challenging the additions as were made by the AO in second round of litigation, and it is for the assessee to have remained vigilant once the appeal was filed by it before ld. CIT(A). The assessee and its partners were fully aware of the huge additions to the tune of Rs. 8,29,90,590/- made by the AO, and consequential demand outstanding against it. Moreover, this is second round of litigation and still the assessee acted negligently by not complying with the notices issued by ld CIT(A). It could not be accepted that the assessee and/or its partners(or legal representatives) were not aware of the proceedings conducted by ld. CIT(A). Moreover, the assessee did not intimate department about the discontinuance of its business, and it is for the first time before ITAT in SOF it is stated that the business was discontinued many years back. The assessee and/or its partners (or legal representative) acted negligent d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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