ETA Star City Pvt Ltd, Chennai V. ACIT, Corp Cir -2(1), Chennai

ITA 1145/CHNY/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1719 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 22-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S SRINIRANJANI
• Keywords: Assessment record; Set aside
• Section: 251

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !, # !$ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.1145/CHNY/2019 & '& / ASSESSMENT YEAR : 2013-14 M/S ETA STAR TECH CITY PVT. LTD., NOS.10 7 11, 4 TH FLOOR, CHENNAI CITI CENTRE, DR. RADHAKRISHNAN SALAI, MYLAPORE, CHENNAI - 600 004. PAN : AABCE 6547 J V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 2(1), CHENNAI - 600 034. ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : MS. S. SRINIRANJANI, ADVOCATE +,)* - . / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT / - 0# / DATE OF HEARING : 21.11.2019 12' - 0# / DATE OF PRONOUNCEMENT : 06.12.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -5, CHENNA I, DATED 01.02.2019 AND PERTAINS TO ASSESSMENT YEAR 2013-14. 2. MS. S. SRINIRANJANI, THE LD.COUNSEL FOR THE ASSE SSEE, SUBMITTED THAT THE CIT(APPEALS) DISMISSED THE APPEA L FOR NON- 2 I.T.A. NO.1145/CHNY/19 PROSECUTION WITHOUT CONSIDERING THE GROUNDS RAISED BY THE ASSESSEE ON MERIT. REFERRING TO THE PROVISIONS OF SECTION 2 51 OF THE INCOME- TAX ACT, 1961 (IN SHORT 'THE ACT'), THE LD.COUNSEL SUBMITTED THAT THE PARLIAMENT IN ITS WISDOM CONFERRED A POWER TO ENHAN CE THE ASSESSMENT ON THE CIT(APPEALS). ACCORDING TO THE L D. COUNSEL, THIS POWER MAY BE EXERCISED PROVIDED THE CIT(APPEALS) DI SPOSES OF THE APPEAL ON MERIT, THEREFORE, THE CIT(APPEALS) HAS FA ILED TO EXERCISE THE STATUTORY DUTY CONFERRED ON HIM UNDER THE SCHEM E OF INCOME-TAX ACT. 3. WE HEARD SHRI AR.V. SREENIVASAN, THE LD. DEPARTM ENTAL REPRESENTATIVE ALSO. UNDER THE SCHEME OF INCOME-TA X ACT, THE CIT(APPEALS) IS THE FIRST APPELLATE AUTHORITY. THE POWER OF THE CIT(APPEALS) IS PROVIDED UNDER SECTION 251 OF THE A CT WHICH READS AS FOLLOWS:- (1) IN DISPOSING OF AN APPEAL, THE COMMISSIONER (AP PEALS) SHALL HAVE THE FOLLOWING POWERS-- (A) IN AN APPEAL AGAINST AN ORDER OF ASSESSMENT, HE MAY CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT ; (AA) IN AN APPEAL AGAINST THE ORDER OF ASSESSMENT I N RESPECT OF WHICH THE PROCEEDING BEFORE THE SETTLEMENT COMMI SSION ABATES UNDER SECTION 245HA, HE MAY, AFTER TAKING INTO CONSIDERATION ALL THE MATERIAL AND OTHER INFORMATIO N PRODUCED BY THE ASSESSEE BEFORE, OR THE RESULTS OF THE 3 I.T.A. NO.1145/CHNY/19 INQUIRY HELD OR EVIDENCE RECORDED BY, THE SETTLEMEN T COMMISSION, IN THE COURSE OF THE PROCEEDING BEFORE IT AND SUCH OTHER MATERIAL AS MAY BE BROUGHT ON HIS RECORD , CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT ; (B) IN AN APPEAL AGAINST AN ORDER IMPOSING A PENALT Y, HE MAY CONFIRM OR CANCEL SUCH ORDER OR VARY IT SO AS EITHE R TO ENHANCE OR TO REDUCE THE PENALTY; (C) IN ANY OTHER CASE, HE MAY PASS SUCH ORDERS IN T HE APPEAL AS HE THINKS FIT. (2) THE COMMISSIONER (APPEALS) SHALL NOT ENHANCE AN ASSESSMENT OR A PENALTY OR REDUCE THE AMOUNT OF REF UND UNLESS THE APPELLANT HAS HAD A REASONABLE OPPORTUNI TY OF SHOWING CAUSE AGAINST SUCH ENHANCEMENT OR REDUCTION . EXPLANATION IN DISPOSING OF AN APPEAL, THE COMMISSIONER (APPEALS) MAY CONSIDER AND DECIDE ANY MATTER ARISIN G OUT OF THE PROCEEDINGS IN WHICH THE ORDER APPEALED AGAINST WAS PASSED, NOTWITHSTANDING THAT SUCH MATTER WAS NOT RA ISED BEFORE THE COMMISSIONER (APPEALS) BY THE APPELLANT. 4. THE CIT(APPEALS) HAS POWER TO ENHANCE THE ASSESS MENT APART FROM REDUCE OR ANNUL THE ASSESSMENT. HE MAY ALSO CONFIRM OR CANCEL THE ASSESSMENT AND PENALTY ORDERS. HOWEVER, THERE CANNOT BE ANY ENHANCEMENT OF ASSESSMENT OR PENALTY PROVIDE D A REASONABLE OPPORTUNITY WAS GIVEN TO THE TAX PAYER. BY WAY OF EXPLANATION, THE PARLIAMENT EMPOWERED THE CIT(APPEA LS) TO CONSIDER AND DECIDE ANY MATTER ARISING OUT OF PROCE EDINGS IN WHICH THE ORDER APPEALED AGAINST WAS PASSED, NOTWITHSTAND ING THAT SUCH MATTER WAS RAISED BEFORE HIM BY THE ASSESSEE / THE APPELLANT. 4 I.T.A. NO.1145/CHNY/19 5. THIS TRIBUNAL REPEATEDLY OBSERVED THAT THIS RESP ONSIBILITY TO ENHANCE THE ASSESSMENT AND TO CONSIDER AND DECIDE T HE MATTER ARISING OUT OF THE ASSESSMENT ORDER NOTWITHSTANDING THAT SUCH MATTER WAS NOT RAISED BEFORE HIM, IS A ONEROUS RESP ONSIBILITY TO SAFEGUARD THE INTEREST OF REVENUE. THEREFORE, THE CIT(APPEALS) IS UNDER THE STATUTORY OBLIGATION TO CONSIDER THE GROU NDS OF APPEAL ON MERIT IRRESPECTIVE OF THE FACT WHETHER THE ASSESSEE APPEARED BEFORE HIM OR NOT. EVEN THOUGH THIS TRIBUNAL IS REPEATEDL Y POINTING OUT THAT THE CIT(APPEALS) HAS NO POWER TO DISMISS THE APPEAL FOR NON- PROSECUTION, THE PRESENT TENDENCY OF THE COMMISSION ERS(APPEALS) IS TO CONTINUE TO DISMISS THE APPEAL FOR NON-PROSEC UTION. THIS TRIBUNAL MAY NOT BE ABLE TO APPRECIATE THIS KIND OF ATTITUDE ANY FURTHER. BY DISMISSING THE APPEAL FOR NON-PROSECUT ION AND FORCING THE ASSESSEE TO APPROACH THIS TRIBUNAL BY WAY OF AP PEAL IS NOT ONLY PREJUDICIAL TO THE INTERESTS OF REVENUE BUT ALSO A FINANCIAL BURDEN CAUSED ON THE ASSESSEE BY WAY OF FILING APPEAL BEFO RE THIS TRIBUNAL AND APART FROM THE FEES TO THE COUNSEL. THIS CAN B E AVOIDED IF THE CIT(APPEALS) DISCHARGES THE STATUTORY RESPONSIBILIT Y AS PER LAW. THEREFORE, IF THE COMMISSIONERS (APPEALS) CONTINUED TO DISMISS THE APPEAL FOR NON-PROSECUTION, THIS TRIBUNAL MAY NOT H AVE ANY OPTION 5 I.T.A. NO.1145/CHNY/19 EXCEPT TO LEVY COST AS PER LAW. EVEN THOUGH THIS C ASE IS A FIT CASE FOR LEVY OF COST, WE ARE NOT DOING SO IN EXERCISE O F OUR DISCRETION HOPING THAT THE COMMISSIONERS(APPEALS) MAY NOT DISM ISS THE APPEAL IN FUTURE FOR NON-PROSECUTION. 6. WITH THE ABOVE OBSERVATION, THE ORDER OF THE CIT (APPEALS) IS SET ASIDE AND THE APPEAL STANDS RESTORED ON HIS FIL E. THE CIT(APPEALS) IS DIRECTED TO DISPOSE THE APPEAL ON M ERIT AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. IF FOR A NY REASON, THE ASSESSEE FAILS TO APPEAR BEFORE THE CIT(APPEALS) AF TER RECEIPT OF NOTICE OF HEARING, IT IS OPEN TO THE CIT(APPEALS) T O DISPOSE THE APPEAL ON MERIT AFTER RE-APPRECIATING THE MATERIAL AVAILABLE ON RECORD, INCLUDING THE ASSESSMENT RECORD. 7. WITH THE ABOVE OBSERVATION, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 6 TH DECEMBER, 2019 AT CHENNAI. SD/- SD/- (. !) ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) # / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 6 TH DECEMBER, 2019. KRI. 6 I.T.A. NO.1145/CHNY/19 - +056 76'0 /COPY TO: 1. )*/ APPELLANT 2. +,)*/ RESPONDENT 3. / 80 () /CIT(A)-5, CHENNAI-34 4. PRINCIPAL CIT-2, CHENNAI 5. 69 +0 /DR 6. :& ; /GF.