Case Number: ITA 613/DEL/2019
Appellant: Taj Exim International Ltd, New Delhi
Respondent: ACIT, Circle-25(1), New Delhi
Assessment Year: 2001-02
Result: 2001-02
Case Filed On: 2019-01-29
Order Type: Final Tribunal Order
Date of Order: 2020-02-14
Pronounced On: 2020-02-14
The case of Taj Exim International Ltd. vs ACIT in the Income Tax Appellate Tribunal (ITAT) for the assessment year 2001-02 highlights the impact of financial distress and personal tragedies on tax disputes. This article explores the details of the case, the proceedings, and the final judgment that addresses the challenges faced by Taj Exim International Ltd., a company engaged in the business of stitched and ultrasonic welding apparel and consumer packs in the international market.
Taj Exim International Ltd. faced significant financial difficulties due to the attachment of its properties by the Bank of Baroda for debt realization. The situation was further exacerbated by the death of its Managing Director, Mr. JBS Bakshi, on 17.03.2009, and the mental incapacity of another shareholder, Mr. Jeet Bahadur Singh Bakshi, who passed away on 09.03.2016. The business of the company came to a standstill, and the only source of income was rental receipts from M/s. JEUS, which were also attached by the department.
Due to these financial and personal challenges, Mrs. J.K. Bakshi, the surviving director, aged 75 years, was unable to manage the company’s affairs, resulting in the non-prosecution of the appellate proceedings.
The primary issue in this case was the company’s inability to diligently prosecute the assessment and appellate proceedings due to the financial distress and personal tragedies faced by its directors. The assessments for the assessment years 2005-06, 2007-08, and 2009-10 were completed under Section 144 of the Income Tax Act, 1961, corroborating the company’s claim that the non-prosecution was not willful but due to forced circumstances.
The case was brought before the ITAT, with appeals for multiple assessment years, including 2001-02, 2002-03, 2003-04, 2005-06, 2007-08, and 2009-10. The appellant’s representative, Sh. D.C. Agarwal, argued that due to the attachment of the company’s assets and the personal tragedies, Mrs. J.K. Bakshi was not in a fit mental condition to manage the appellate proceedings.
The Revenue, represented by Ms. Rakhi Vimal, Sr. DR, acknowledged the circumstances and the forced non-prosecution of the case by the company.
After considering the submissions from both parties, the ITAT bench, comprising Shri G.S. Pannu, Vice-President, and Shri K. Narasimha Chary, Judicial Member, decided to set aside the impugned orders and remand the matters to the file of the Assessing Officer. The Tribunal emphasized the need for a lenient view on humanitarian grounds, considering the financial and personal hardships faced by the company.
The Tribunal directed the Assessing Officer to afford an opportunity to the assessee to present their case and conclude the assessments afresh. The penalty appeals were also sent back to align with the assessment orders for the relevant years.
In conclusion, the ITAT’s decision in the case of Taj Exim International Ltd. vs ACIT for the assessment year 2001-02 underscores the importance of considering humanitarian grounds in tax disputes. The Tribunal’s decision to remand the case for fresh assessments provides the company with an opportunity to present its case, taking into account the severe financial and personal challenges it faced.
This case highlights the need for a compassionate approach in handling tax disputes, especially when the assessee is facing significant hardships. It also emphasizes the importance of thorough representation and the ability to present comprehensive arguments that consider the unique circumstances of each case.
Order pronounced in the open court on 14.02.2020 by the Vice-President Shri G.S. Pannu and the Judicial Member Shri K. Narasimha Chary.
Source: Income Tax Appellate Tribunal Delhi Bench ‘Friday-A’, New Delhi
Disclaimer: This article provides a general overview of the case and is not a substitute for professional legal advice. For detailed information, readers are encouraged to refer to the official case documents and consult with a qualified legal professional.
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