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M/S R.B. Exports v. Income Tax Officer - I & Another - WRIT TAX No. 123 of 2004  RD-AH 167 (13 January 2005)
CIVIL MISC. WRIT PETITION NO.123 (TAX) OF 2004
M/s R.B. Exports, Mirzapur. ....Applicant
Income Tax Officer-I and another ....Opp.party
Hon'ble Rajes Kumar, J.
By way of this writ petition, the petitioner is challenging the order dated 04.12.2003 passed under section 264 of Income Tax Act, 1961 (hereinafter referred to as "Act"). The assessment year involved is 1998-99.
Petitioner is a partnership firm engaged in the business of manufacture and sale of hand made woolen carpets. It is claimed that 100% sales were made outside the Country in the course of export. It is claimed that for the claim of deduction under section 80 HHC of the Act, petitioner filed auditor's report in accordance with section 80 HHC (4) of the Act with Form No.10 CC AC alongwith return. It appears that since the return under section 139 (1) of the Act could not be filed, notice under section 148 of the Act was issued and in pursuance thereof, the return was filed on 31.03.2000 claiming the taxable income as NIL. It is alleged that alongwith the return the petitioner filed the copy of the information relevant to the business by attaching 18 documents as well as the audit report under section 80 HHC dated 25.10.1998 and the order dated 12.08.1999 annexing the balance sheet, profit & loss a/c etc. A copy of the acknowledgment slip has also been filed. It appears that during the course of the assessment proceedings various queries were made by the assessing authority from time to time. Counsel for the petitioner appeared on the date fixed by the assessing authority. Thereafter, for the non-compliance of the desired documents, the assessment order has been passed under section 148 read with section 144 of the Act on 27.03.2002. Against the assessment order, petitioner filed revision under section 264 before the respondent no.2 challenging the assessment order on the ground that the ex-parte order passed under section 144 was unjustified and the order was also challenged on merit. It has been alleged that the certificate under section 80 HHC of the Act, for the claim of exemption had already been filed alongwith return which has not been considered by the assessing authority while passing the order. Commissioner of Income Tax, Allahabad vide impugned order rejected the appeal. Respondent no.2 has observed as follows:
"Perusal of the assessment order shows that a notice dt.07.01.2002 asking for compliance on 11.1.2002 was served on the assessee and on that date an adjournment was sought for 23.1.2002. On 23.1.2002 certain details were called for which again adjournment was sought for 05.02.2002. On this date telephonic adjournment was sought for 07.03.2002. On 07.03.2002 the assessee stated that all the details required were filed with the return which was furnished in the department but he failed to produce any receipt thereof. Time was allowed for filing the receipt by 11.03.2002. On 11.03.2002 the return was traced and the assessee was required to furnish various details along with the books of accounts. On 18.03.2002 a written reply was submitted but the books of accounts were not produced. On 19.03.2002 the assessee changed his counsel and the Assessing Officer fixed the case for 21.03.2002 asking for compliance of earlier order sheet entries.
On 21.03.2002 the counsel appeared and filed written submissions.
However, books of accounts were not produced again. In his reply dated 21.03.2002 the assessee submitted that "so far as squared up a/cs are concerned, there is no squared up account and contra account relating to any loan or cash transaction pertaining to it. Copies of all squared up accounts, which are trade accounts in nature are enclosed as desired. They cover Sundry debtors as well as Sundry Creditors for the year under consideration and also for the preceding year. Square up account pertaining to even earlier (further) two years hence no relevancy and in the present circumstances it is not possible to furnish the same."
On 21.03.2002 the counsel signed the order sheet which read as follows:
"signed subject to at least 10 days time for compliance."
As the case was getting barred by limitation on 31.03.2002 and there was no direction from the Addl. CIT u/s 144A, the AO had no other option but to complete the assessment ex parte u/s 144."
Heard learned counsel for the parties.
Learned counsel for the petitioner submitted that at no stage, the certificate under section 80 HHC of the Act was asked by the assessing authority and in the order sheet demand of certificate has been subsequently added. He further submitted that it is wrong to say that the details as required time to time have not been filed and the books of account have not been produced. He submitted that on 21.03.2002 even the detailed reply was filed, still the order has been passed under section 144 of the Act. He further submitted that the Commissioner without going into the merit of the case has rejected the appeal mainly by saying that the sufficient opportunity was provided to the assessee but there was repeated non-compliance on his part and the books of account were never produced before the assessing authority. Learned Standing Counsel submitted that inspite of the repeated opportunity given to the petitioner the books of account were not produced and there was an non-compliance on the part of the petitioner.
I have perused the impugned order.
Copy of the order sheet has also been filed alongwith counter affidavit.
Perusal of the order sheet shows that the counsel appeared time to time Order sheet entries dated 11.03.2002, 18.03.2002 and 19.003.2002 shows that in all the three dates books of account and audit report under Rule 80-B AA (3) and report for exemption under section 80 HHC of the Act appears to have been added subsequently, it creates doubt. From the order sheet of 21.03.2002, it does not appear that the certificate for exemption under section 80 HHC of the Act was required, which were not filed. Order sheet entry of dated 21.03.2002 which is filed alongwith counter affidavit is incomplete and record shows that it is torned. Claim of the petitioner in para 4 and 6 that the audit report under section 80 HHC of the Act in Form-10 CC AC was filed alongwith return have not been specifically denied in the counter affidavit. Order sheet of 22.03.2002 says "no one attended from "a" side". It is not clear that whether any date was given for 22.03.2002 or not. Order sheet entry dated 27.03.2002 further shows that it is stated that "since cases is time barring and "A" is not cooperating and is conspicuously absence. Hence proceedings are being completed under section 144/148 of the I.T.Act and assessed accordingly." It is not clear from the order sheet that whether any date was given on 21.03.2002 for 22.03.2002 and on 22.03.2002 for 27.03.2002. In the circumstances, passing of the order under section 144 of the Act appears to be unjustified and in the interest of justice, I propose to remand back the case to the assessing authority to pass fresh assessment order in accordance to the law after giving proper opportunity to the petitioner.
In the circumstances, order under section 264 of the Act as well assessment order passed under section 148 read with section 144 of the Act are set aside. Assessing authority is directed to pass the assessment order afresh in accordance to the law.
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