Shri Chhagan Lal Mali, JODHPUR V. ITO, SIROHI

ITA 109/JODH/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9635 (ITAT-JODHPUR)
• Duration Of Justice: 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 21-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MEENA J
• Keywords: Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER ITA NO.109/JODH/2017 ASSESSMENT YEAR 2012-13 SHRI CHHAGAN LAL MALI, TOWER GALI, VILLAGE MOHABBAT NAGAR, POST- KALINDARI, DISTRICT-SIROHI. PAN: ANPPM0407K VS ITO, SIROHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI GOUTAM CHAND BAID, C.A. RESPONDENT BY : SHRI S.K. MEENA, JCIT-DR. / DATE OF HEARING : 02/03/2017 / DATE OF PRONOUNCEMENT: 03/03/2017 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 24.10.2016 BY CIT(A) -I, JODHPUR PERTAINING TO 2010-11 ASSESSMENT YEAR ON FOLLOWING GROUNDS OF APP EAL. 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) ERRED IN SUSTAINING THE PENALTY AMOUNTING TO RS.1,01,626 /- IMPOSED U/S. 271(1)(C) BY INCOME TAX OFFICER, SIROHI. THE PENALTY SO IMPOSED IS CONTRARY TO THE PROVISIONS OF INCOME TAX ACT MAY KINDLY BE DELETED. 2. HOWEVER AT THE TIME OF HEARING LEARNED AR SUBMIT TED THAT THE IMPUGNED ORDER IS AN EX-PARTE ORDER AS ON THE FOUR OPPORTUNITIES GIVEN BY THE CIT(A) THE ASSESSEE REMAINED UNREPRESENTED. IT WAS HIS SUBMISSION THAT THE ASSESSEE HAD APPOINTED AN ITP TO REPRESENT HIM BEFO RE THE ASSESSING OFFICER. ON ACCOUNT OF HIS LACK OF AWARENESS ABOUT THE PROCE DURES HE DID NOT ITA NO.109-JODH-2017 A.Y. 2013-14 2 REPRESENT THE ASSESSEE. AS A RESULT OF THIS THE ASS ESSEE CHANGED HIS COUNSEL BEFORE THE CIT(A). IN VIEW OF THE FACT THAT THE COM PLETE RECORD WAS NOT PASSED OVER BY THE ITP TO THE COUNSEL EVEN THE SAID COUNSEL DID NOT PARTICIPATE IN THE APPELLATE PROCEEDINGS. IT WAS HI S SUBMISSION THAT THE ASSESSEE IS A SMALL TIME SUPPLIER OF FRUITS (PAPITA ) FROM FARMERS AS WOULD BE EVIDENT FROM THE ASSESSMENT ORDER AND THUS DID NOT HAVE THE BENEFIT OF A PROPER SOUND LEGAL ADVISE AND REMAINED UNREPRESENTE D FOR NO FAULT OF HIS OWN. IN THE FACTS, IT WAS HIS LIMITED PRAYER THAT I N THE INTERESTS OF JUSTICE THE OPPORTUNITY OF BEING HEARD MAY BE GRANTED TO THE AS SESSEE BY SETTING ASIDE THE IMPUGNED ORDER ON HIS ORAL UNDERTAKING THAT THE ASSESSEE SHALL PARTICIPATE IN THE PROCEEDINGS BEFORE THE CIT(A) IN THE EVENTUA LITY IT IS REMANDED BACK. 3. LEARNED SR.D.R. CONSIDERING THE MATERIAL AVAILAB LE ON RECORD STATED THAT HE HAS NO OBJECTION IF THE IMPUGNED ORDER IS S ET ASIDE. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. THE EXPLANATION OFFERED BY THE ASSESSEE EXPLAINING WHY THE ASSESSEE REMAINED UNREPRESENTED BEFORE THE CIT(A), CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CASE I FIND ON FACTS DESERVES TO BE ACCEPTED. ACCORDINGLY ACCEPTING THE ORAL UNDERTAKIN G GIVEN BY THE LEARNED AR THE IMPUGNED ORDER IS SET ASIDE. RIGHT TO BE HEA RD IS AN IMPORTANT RIGHT TO WHICH A PARTY WHO IS FACED WITH AN ADVERSE VIEW IS ENTITLED TO AUDI OLTERAM PARTEM IS ONE OF THE MOST FAMOUS AND CELEBRATED RULE OF N ATURAL JUSTICE. THE PRINCIPLES OF NATURAL JUSTICE ARE THOS E WHICH HAVE BEEN LAID OUT BY THE COURTS AS BEING THE MINIMUM PROTECTION OF TH E RIGHTS OF AN INDIVIDUAL AGAINST THE ARBITRARY PROCEDURE THAT MAY BE ADOPTED BY A JUDICIAL, QUASI- JUDICIAL AND ADMINISTRATIVE AUTHORITY WHILE MAKING AN ORDER AFFECTING THOSE ITA NO.109-JODH-2017 A.Y. 2013-14 3 RIGHTS. A CAREFUL PERUSAL OF THE CONSISTENT JUDGEME NTS OF THE APEX COURT WOULD SHOW THAT IT HAS CONSISTENTLY BEEN HELD THAT THE RULES OF NATURAL JUSTICE ARE NOT EMBODIED RULES AND THE SAID PHRASE IS NOT A N CANNOT BE CAPABLE OF A PRECISE DEFINITION. THE UNDERLYING PRINCIPLE OF NAT URAL JUSTICE EVOLVED UNDER THE COMMON LAW IS TO CHECK ARBITRARY EXERCISE OF PO WER BY THE STATE OR ITS FUNCTIONARIES. ACCORDINGLY, THE PRINCIPLE BY ITS VE RY NATURE IMPLIES THE DUTY TO ACT FAIRLY I.E. FAIR PLAY IN ACTION MUST BE EVID ENT AT EVERY STAGE. FAIR PLAY DEMANDS THAT NOBODY SHALL BE CONDEMNED UNHEARD. IN THE CELEBRATED JUDGEMENT OF THE APEX COURT IN THE CASE OF A.K. KRA IPAK-VS-UNION OF INDIA (1969)2SCC 262, IT IS OBSERVED THAT THE AIM OF RULE S OF NATURAL JUSTICE IS TO SECURE JUSTICE OR TO PUT IT NEGATIVELY TO PREVENT M ISCARRIAGE OF JUSTICE. THE SAID RULES ARE MEANS TO AN END AND NOT AN END IN TH EMSELVES AND THOUGH IT IS NOT POSSIBLE TO MAKE AN EXHAUSTIVE CATALOGUE OF SUC H RULES HOWEVER IT CAN BE READILY SAID THAT THERE ARE TWO BASIC MAXIMS OF NAT URAL JUSTICE NAMELY AUDI ALTERAM PARTEM' AND NEMO JUDEX IN RE SUA'. IN THE PRESENT FACTS OF THE CASE WE ARE CONCERNED WITH THE MAXIM AUDI ALTERM PARTEM WHICH AGAIN MAY HAVE MANY FACETS TWO OF THEM (A) NOTICE OF THE CASE TO BE MET; AND (B) OPPORTUNITY TO EXPLAIN. THEIR LORDSHIPS HAVE CAUTIO NED THAT THESE RULES CANNOT BE SACRIFICED AT THE ALTAR OF THE ADMINISTRA TIVE CONVENIENCE OR CELEBRITY. THUS, CONSIDERING THE AFORE-MENTIONED ST ATUTORY PROVISION AND THE PRINCIPLES OF NATURAL JUSTICE, THE ISSUE IS RESTORE D BACK TO THE FILE OF THE CIT(A) WITH A DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. THE OPPORTUNITY SO PROVIDED TO THE ASSESSEE IT IS HOPED IS USED FULLY AND FAIRLY BY MAKING PROPER COMPLIANCE BEFORE THE LD. CIT(A). IN THE EVENTUALITY OF ABUSE IT IS MADE CLEAR THE LD. CIT(A) WOULD BE AT L IBERTY TO PASS AN ORDER ON ITA NO.109-JODH-2017 A.Y. 2013-14 4 THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE ASSE SSEE IN ITS OWN BEST INTERESTS IS ADVISED TO MAKE A PROPER COMPLIANCE BE FORE THE LD. CIT(A). 5. BEFORE PARTING IT IS APPROPRIATE TO MENTION THAT THE REGISTRY HAS POINTED OUT A DEFECT IN THE TRIBUNAL FEE. ON BEHALF OF THE ASSESSEE IT HAS BEEN SUBMITTED THAT THE APPEAL FILED BY THE ASSESSEE IS AGAINST SUSTAINING THE PENALTY IMPOSED U/S.271(1)(C) AND NOT AGAINST ASSES SMENT ORDER IN WHICH THE INCOME OF THE ASSESSEE IS ASSESSED. THUS RELYING UP ON THE DECISION OF HON'BLE PATNA HIGH COURT IN THE CASE OF DR. AJIT KU MAR PANDEY VS. ITAT REPORTED IN 310 ITR 195 (PAT) IT WAS HIS PRAYER THA T THE DEFECT MAY BE DEEMED TO HAVE BEEN ADDRESSED AS IN TERMS OF THE JU DICIAL PRECEDENT SINCE THE SUBJECT MATTER OF APPEAL PREFERRED BY THE ASSES SEE IS NOT THE TOTAL INCOME COMPUTED BY THE ASSESSEE THEREFORE FEES REQUIRED TO BE PAID WOULD BE AS PER CLAUSE (D) OF SUB SECTION (2) OF SECTION 253 WHEREI N THE HON'BLE HIGH COURT HAS HELD AS UNDER. 3. A LOOK AT THE SUB-SECTION WOULD MAKE IT ABUNDAN TLY CLEAR THAT IN THE CASE AN APPEAL IS FILED ON OR AFTER OCTOBER 1, 1998, THE APPEAL MUST BE ACCOMPANIED BY A FEE OF WHAT HAS BEEN PROVIDED IN CLAUSES (A), (B) , (C) AND (D) OF THE SAID SUB- SECTION. CLAUSES (A), (B) AND (C) PROVIDES THAT FEE S AS MENTIONED THEREIN SHOULD BE DETERMINED ON THE BASIS OF TOTAL INCOME OF THE ASSE SSEE AS MENTIONED IN THOSE CLAUSES. THEREFORE, IN THE CASE OF AN APPEAL WHERE THE TOTAL INCOME OF THE ASSESSEE IS ASCERTAINABLE FROM THE APPEAL ITSELF, I.E., WHEN THE APPELLANT IS SEEKING TO CHALLENGE THE ASSESSMENT OF HIS TOTAL INCOME, FEES AS MENTIONED IN CLAUSES (A), (B) AND (C) WOULD BE REQUIRED TO BE PAID. CLAUSE (D) OF THE SUB-SECTION DEALS WITH OTHER APPEALS. IMPOSITION OF PENALTY UNDER SECTION 271 OF THE INCOME TAX ACT, 1961, HAS NO CONNECTION OR BEARING WITH THE TOTAL I NCOME OF THE ASSESSEE. A PERSON AGGRIEVED BY AN ORDER IMPOSING PENALTY, IF A PPROACHES THE TRIBUNAL BY PREFERRING AN APPEAL, IMPOSITION OF PENALTY, HAVING NO NEXUS WITH THE TOTAL INCOME OF THE ASSESSEE, IT WOULD NOT BE DISCERNIBLE WHAT I S THE TOTAL INCOME OF THE APPELLANT AND, ACCORDINGLY, SUCH AN APPEAL WILL BE COVERED BY CLAUSE (D). FURTHERMORE, THE IMPORTANT WORDS USED IN CLAUSES (A ), (B) AND (C) OF THE SUB- SECTION ARE TOTAL INCOME OF THE ASSESSEE. THEREFO RE, THE APPELLANT MUST BE AN ASSESSEE AND THE APPEAL MUST DEMONSTRATE WHAT IS HI S TOTAL INCOME. IN THE CASE OF IMPOSITION OF PENALTY THAT MAY NOT BE DISCERNIBLE. ITA NO.109-JODH-2017 A.Y. 2013-14 5 4. WE, THEREFORE, HOLD THAT THE ORDER PASSED BY THE SPECIAL BENCH OF INCOME TAX APPELLATE TRIBUNAL, KOLKATA, REFERRED TO ABOVE, IS CONVINCING AND, ACCORDINGLY, THE TRIBUNAL ERRED IN FOLLOWING THE RA TIO CONTAINED THEREIN. THE ORDER OF THE TRIBUNAL IS ACCORDINGLY, SET ASIDE AND THE MATTER IS REMITTED BACK TO THE TRIBUNAL WITH A DIRECTION UPON IT TO CONSIDER T HE APPEAL OF THE PETITIONER ON THE MERITS PROCEEDING ON THE BASIS THAT APPROPRIATE COURT FEES HAVE BEEN PAID THEREFORE. 5.1 ACCORDINGLY THE DEFECT POINTED OUT BY THE REGIS TRY MAY BE DEEMED TO BE ADDRESSED. 5.2 CONSIDERING THE PECULIAR FACTS OF THE CASE AND THE JUDICIAL PRECEDENT THE DEFECT POINTED OUT BY THE REGISTRY STOOD ADDRES SED. THE SAID ORDER WAS ANNOUNCED INTEREST THE OPEN COURT ITSELF. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 03.03.2017. SD/- (SMT. DIVA SINGH) JUDICIAL MEMBER PRABHAT KUMAR KESARWANI, SR.P.S. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT AS SISTANT REGISTRAR