Bay Container Terminal Private Limited,Old v. The Deputy Commissioner Of Income Tax,Corporate Circle 1(2)Chennai 600 034

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 5.12.2016 Coram:THE HONOURABLE MR. JUSTICE HULUVADI G. RAMESHAND THE HONOURABLE DR. JUSTICE ANITA SUMANTH TAX CASE (APPEAL) Nos.785 to 787 of 2016 Bay Container Terminal Private Limited,Old No.18,New No.21, Swami Sivananda Salai,Chepauk, Chennai 600 005 .. Appellant in all appeals Vs The Deputy Commissioner of Income Tax,Corporate Circle 1(2)Chennai 600 034 .. Respondent in all appeals Prayer in T.C.A.No.785 of 2016: Tax Case Appeal filed underSection 260A of the Income Tax Act, 1961 against the order ofthe Income Tax Appellate Tribunal “D” Bench, dated 25.5.2016served on the appellant on 15.6.2016 in IT (SS) A.No.11/Mds/2015for the Assessment Years 1990-91 to 1999-2000 and 2000-01 . TCA.No.785/2016:Appeal against the order of the Commissioner ofIncome Tax Appeals dated 28/1/2015 in ITA NO 621/07-08-A/1 onthe file of Commissioner of Income Tax, chennai-34 against theorder of 1(2) dated 31.12.2007 for the Assessment year 1990-91to 91 to 1999-2000 and 2000-2001 against the order of JointCommissioner of Income Tax Special Range IV Chennai-34 inGIR.NO.PAN GO-B/AAACB 3622L for Assessment year 90-91 to 99-2000& 2000-2001 dated 28.06.2001. Prayer in T.C.A.No.786 of 2016: Tax Case Appeal filed underSection 260A of the Income Tax Act, 1961 against the order ofthe Income Tax Appellate Tribunal “D” Bench, dated 25.5.2016served on the appellant on 15.6.2016 in IT A.No.1260/Mds/2015for the Assessment Year 2010-11. TCA.No.786/16: Appeal against the order of the Commissioner ofIncome Tax(Appeals) in OLD ITA.No.462/13-14/A-1 dated 28.01.2015in PAN.No.AAACB 3622L for the Assessment year 2010-2011 againstthe order of Assistant Commissioner of Income Tax in GIR PANAAACB 3622L dated 28.03.2013 for the Assessment year -2010 -2011. Prayer in T.C.A.No.787 of 2016: Tax Case Appeal filed underSection 260A of the Income Tax Act, 1961 against the orders ofthe Income Tax Appellate Tribunal “D” Bench, dated 25.5.2016served on the appellant on 15.6.2016 in ITA.No.1214/Mds/2015 forthe Assessment Year 2010-11. TCA.No.787/16: Appeal against the order of Deputy Commissionerof Income Tax Corprate Circle 1(2) dated 28.01.2015 made in OLDITA.No.462/13-14/A-1 in PAN.No.AAACB 3622L for the Assessmentyear 2010-2011 against the order of Assistant Commissioner ofIncome Tax dated 28.03.2013 for the Assessment year 2010-2011. For Appellant in all appeals : Mr. S. SankaranarayananFor Respondent in all appeals: Mr. T. Ravikumar, Senior Standing Counsel. COMMON JUDGMENT (Judgment of this Court was delivered by Huluvadi G.Ramesh, J.) The above appeals have been preferred by the assesseeagainst the order of the Income Tax Appellate Tribunal. 2. Heard Mr.S.Sankaranarayanan appearing for the appellantand Mr.T.Ravikumar, Senior Standing counsel appearing for therespondent. TCA.No.785 of 2016 3. Pursuant to a search and seizure made on the officepremises of the assessee as per the Warrant of authorisation on30.6.99, a notice under section 158 BC(1) was issued to theassessee requesting to file its return in form 2B indicatingthe undisclosed income in respect of assessment year 1990-91 to99-2000 and 2000-2001 and thereafter the assessing officer, onnoticing various discrepancies towards undisclosed incomepertaining to 1996-97 to 1999-2000, passed an assessment orderunder section 158BC demanding a sum of Rs.1.47 crores on28.6.2001. On filing of rectification petition by theassessee, the demand was reduced to Rs.1.33 crores vide orderdated 18.2.2002 by the Deputy Commissioner of Income Tax. Inappeal before the Commissioner of Income Tax (Appeals) by theassessee, the order dated 28.6.2001 was set aside on the groundthat the assessing officer without making any independentinvestigation to verify the genuineness and correctness of the claim made, has computed the undisclosed income of theappellant and thereby allowed the appeal. Aggrieved against theorder passed by the Commissioner of Income Tax (Appeals) theDepartment preferred appeal before the Income Tax AppellateAuthority by contending that the onus lies on the assessee toprove that the accounts contained in the seized documents doesnot relate to the actuals and it is for him to reconcile thedifference and once that has not been done by the assessee, theassessing officer is empowered to make the additions undersection 132(4A) of the I.T.Act. 4. The Income Tax Appellate Authority, by order dated20.10.2006, restored back the matter to the file of AssessingOfficer to decide it de novo in accordance with law afterproviding an opportunity of personal hearing to the assesseeand sets aside the order impugned before it. The assessementofficer, after giving an opportunity of personal hearing to theassessee, passed an order dated 31.12.2007, computed the totalundisclosed income as Rs.1,32,87,523/-. The above said order wasagain challenged by the assessee before the Commissioner ofIncome Tax (Appeals) who confirmed the order passed by theassessment officer, vide order dated 28.1.2015, which order wasassailed by the assessee before the Income Tax AppellateTribunal. The Income Tax Appellate Tribunal, on being found thatthe appeal was filed 58 days belatedly and the assessee hasnot filed any petition to condone the delay in filing theappeal, came to the conclusion that the appeal filed by theassessee is not maintainable being defective and dismissed thesame. 5. The tribunal rejected the appeal on the ground that thesame is time barred, however, the assessee has tendered anexplanation to the effect that the date of service of the orderis not 28.1.2015 as inadvertently pointed out in Form 36, butit is 28.3.2015 and, hence, the appeal was on time and notbarred. This has been proved vide letter filed by the assesseedated 15.7.2015 in response to the notice dated 6.7.2005issued by the Registrar of the Income Tax Appellate Tribunal.However, the explanation has not been considered in properperspective by the tribunal which decided that the appeal is,infact time barred. Considering the materials as noted above,we are of the opinion that the onus lies on the assessee toestablish that the service of the impugned order was in fact on28.3.2015 and not on 28.1.2015. Hence, T.C.A.No.785 of 2016stands remanded back to the Department to hear the appeal onmerits, on the question of the explanation offered by theassessee with regard to delay . No costs. 6. The assessee company who is engaged in the business ofstorage, handling and repairs of marine containers filed itsreturn of income for the assessment year 2010-2011. Theassessing officer, who processed the same under section 143(3)disallowed the expenses of plot maintenance and developmentpurchases vide order dated 28.3.2013. The said order wasassailed before the Commissioner of Income Tax (appeals),whovide order dated 28.1.2015 partly allowed the appeal on theground that the disallowance made by the assessing officerwill become unlawful for want of independent evidence anddirected the assessing officer to withdraw the disallowance.Aggrieved against the order of Commissioner of Income Tax(Appeals), the Revenue and assessee preferred appeals in AppealNo.1214/mds/2015 and Appeal No.1260/Mds/2015 respectively beforethe Income Tax Appellate Tribunal. The Income Tax AppellateTribunal, after considering the contentions on both sides,dismissed the ground raised by the assessee and allowed theappeal filed by the revenue by confirming the order passed bythe Commissioner of Income Tax (Appeals). The order passed bythe Iower appellate authority in Appeal No.1214/mds/2015 andAppeal No.1260/Mds/2015 is assailed before this Court by theassessee in TCA.Nos.787 and 786 of 2016 respectively. 7. Sofar as TCA.No.786 of 2016 is concerned, the issueinvolved is whether the ledger extracts relating to leaseholdland and the contractors bill relating to own land constitutessufficient reason for treating the two expenditures differently. 8. Certain of the grounds raised by the appellant in theform of question of laws could have been answered easily bythe tribunal itself. instead of straight away dismissing theappeal . The nature of expenses being incurred could beconsidered in detail only after looking into the details ofaccounts maintained by the assessee. In such circumstances, weare of the view that unless the details furnished by theassessee has been considered in its proper perspective and areasoned order is passed by the tribunal thereupon, thegrievance of the assessee that the order has been passedmechanically without application of mind cannot be brushedaside. In that view of the matter, we opine that no prejudicewould be caused if one more opportunity is given to theappellant to submit all the explanation which could beconsidered by the Tribunal. Accordingly, the matter is remanded back to theIncome Tax Appellate Tribunal*for freshconsideration. The Department shall offer a reasonableopportunity of personal hearing to the appellant/assessee andlook into all the details of the account furnished by it andpass orders in accordance with law, including the aspect ofmaintainability etc., and to arrive at a conclusion on merits.T.C.A.Nos.786 of 2016 stand disposed of by way of remand. Nocosts. 9. The substantial questions of law in T.C.A.No.787 of 2016have in fact been answered by the tribunal by way of remand tothe assessing officer. Both parties agreed that the order of theremand to the Assessing Officer is sufficient and that theparties will have the issue redressed before the AssessingOfficer. In view of the above stand of the parties,T.C.A.No.787 of 2016 is disposed of in terms of the order ofremand passed by the tribunal. 10. Accordingly, all the appeals stand disposed of. Nocosts. Consequently, connected Miscellaneous Petitions areclosed.-s/d-Assistant Registrar dated 06/02/2017 Corrected as per order dated 23.2.2017 and made in TC(Appeals) Nos.785 to 787/16 Sd/-Assistant Registrardated 06.03.2017 True Copy Sub-Assistant Registrar To1.The Assistant commissioner of Income TaxCorporate Circle 1(2)Chennai-60 034 2.The Commissioner of Income TaxChennai-1 3.The Joint Commissioner of IncomeSpecial Range IV Chennai-34 10. Accordingly, all the appeals stand disposed of. Nocosts. Consequently, connected Miscellaneous Petitions areclosed.-s/d-Assistant Registrar dated 06/02/2017 Corrected as per order dated 23.2.2017 and made in TC(Appeals) Nos.785 to 787/16 Sd/-Assistant Registrardated 06.03.2017 True Copy Sub-Assistant Registrar To1.The Assistant commissioner of Income TaxCorporate Circle 1(2)Chennai-60 034 2.The Commissioner of Income TaxChennai-1 3.The Joint Commissioner of IncomeSpecial Range IV Chennai-34 To be substituted tothe order already despatched on 23.2.17 4.The Deputy Commissioner of Income TaxCorporate Circle 1(2)Chennai-600 034. +2 ccs to Mr.R.Shankaranarayanan Advocate sr 71847 +3 ccs to Mr.T.Ravikumar Advocate sr 71636,71637,71638 TAX CASE (APPEAL) Nos.785 to 787 of 2016 aa08/02/2017 EU 07.03.17