Sh. Rajesh Dhalla, New Delhi V. ACIT, New Delhi

ITA 1175/DEL/2014

• Counselvise Citation: 117520114 RSA 2014
• Duration Of Justice: 1 year(s) 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 02-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 03-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAGAN SOOD
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC - I NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NOS.-1170 TO 1175/DEL/2014 (ASSESSMENT YEARS- 2004-05 TO 2009-10) RAJESH DHALLA, 3174/33, BEADONPURA KAROL BAGH, NEW DELHI. AAGPD5743D VS ACIT, CIRCLE 33(1), NEW DELHI. APPELLANT BY NONE RESPONDENT BY SH. GAGAN SOOD, SR. DR DATE OF HEARING: 02.07.2015 DATE OF PRONOUNCEMENT: 08.07.2015 ORDER THESE ARE SIX APPEALS FILED BY THE ASSESSEE AGAINST THE CONSOLIDATED ORDER DATED 19/01/2012 OF CIT(APPEALS)-XXVI, NEW DE LHI PERTAINING TO 2004-05 TO 2009-10 ASSESSMENT YEARS. 2. AT THE TME OF HEARING NO ONE WAS PRESENT ON BEHA LF OF THE ASSESSEE DESPITE ISSUANCE OF NOTICE. CONSIDERING THE MATERI AL AVAILABLE ON RECORD AND AFTER HEARING THE LD. SR. DR IT WAS CONSIDERED APPROPRIATE, TO DECIDE THE APPEALS EX-PARTE QUA THE ASSESSEE APPELLANT ON MERITS. 3. A PERUSAL OF THE RECORD SHOWS THAT THE IMPUGNED ORDER HAS BEEN PASSED EX-PARTE THOUGH TAKING INTO CONSIDERATION TH E WRITTEN SUBMISSIONS FILED BY THE ASSESSEE. CONSIDERING THE FACT THAT TH E RIGHT TO BE HEARD IS AN IMPORTANT RIGHT TO WHICH A PERSON IS ENTITLED TO, A ND NOTING THAT THE LD. SR. DR WHO HAD NO OBJECTION IF THE ISSUE IS RESTORED TO THE FILE OF THE CIT(A) IN ORDER TO AFFORD THE ASSESSEE A REASONABLE OPPORTUNI TY OF BEING HEARD; ACCORDINGLY IN THE INTEREST OF SUBSTANTIAL JUSTICE IT IS CONSIDERED APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER, DIRECTING THE LD. CIT(A) TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER AFFORDING THE AS SESSEE A REASONABLE 2 I.T.A .NOS. 1170 TO 1175/DEL/2014 OPPORTUNITY OF BEING HEARD. THE DECISION SO TAKEN IN THE INTEREST OF SUBSTANTIAL JUSTICE IS GUIDED BY THE FACT THAT THE ASSESSEE MAY HAVE BELIEVED FOR WANT OF LEGAL ADVICE THAT WRITTEN SUBM ISSIONS MAY ADEQUATELY ADDRESS THE ISSUES. THE SAID BELIEF ON FACTS APPEA RS TO HAVE BEEN MISPLACED AND IN VIEW OF THE FACT THAT THE GRIEVANC E STILL SUBSISTS IT IS DEEMED APPROPRIATE TO GIVE THE OPPORTUNITY TO THE A SSESSEE TO REPRESENT ITS CASE BEFORE LD. CIT(A). BEING OF THE VIEW THAT THE RIGHT TO BE HEARD IS AN IMPORTANT RIGHT VESTED IN A PERSON TO WHICH HE IS E NTITLED TO IN THE EVENTUALITY AN ADVERSE VIEW IS CONTEMPLATED AS THE ASSESSEE UNDER RULE OF LAW SHOULD NOT SUFFER DUE TO LACK OF PROPER ADVICE. 4. IN THE FACTS OF THE PRESENT CASE IT IS SEEN THAT ADDITION IN THE SIX YEARS HAVE BEEN MADE IN THE CASE OF THE ASSESSEE WHO IS A N INDIVIDUAL EARNING INCOME FROM BUSINESS AND PROFESSION ALONG WITH THE INCOME FROM OTHER SOURCES. IN THE FACTS OF THE PRESENT CASE THE PROC EEDINGS WERE INITIATED U/S 153A AS A RESULT AND ON ACCOUNT OF RECOMMENDATION M ADE BY THE DDIT(INV.) JAMMU AS REQUISITION WAS MADE U/S 132A D ATED 06/08/2009. ACCORDINGLY, AFTER ISSUANCE OF NOTICE IN ALL THE YE ARS BY NOTICE U/S 153A THE ASSESSEE WAS REQUIRED TO FILE ITS RETURN OF INCOME. THE RELEVANT FACTS AS RECORDED IN ITA 1170/DEL/2014 ARE EXTRACTED HEREUND ER FOR READY REFERENCE: THE ASSESSEE HAD FILED HIS RETURN OF INCOME ON 20. 02.2005 DECLARING INCOME OF RS. 1,05,490/-. IN THIS CASE PROCEEDINGS U/S 153A WAS INITIATED ON THE BASIS OF RECOMMENDATION MADE BY DEPUTY DIRECTOR OF INCOME TAX (INV.) JAMMU AS THE REQUISITION WAS MADE U/S 132A ON DATED 06.08.20 09. NOTICE U/S 153A DATED 16.08.2010 ISSUED AND SERVED ON THE ASSESSEE. THE ASSESSEE FILED THE RETURN OF INCOME IN RESPONSE TO THE NOTICE ON 08.09.2010 AT T HE SAME INCOME. NOTICE U/S 143(2) WAS ISSUED ON 11.08.2011 AND 11.10.2011. SH RI S.K. JAIN, CA ATTENDED THE CASE. 2. SIU OF THE COMMERCIAL TAXES DEPARTMENT SEIZED JEWELLERY ESTIMATED AT RS. 1.20 CRORES U/S 67(5), 67(10)(6) OF THE JAMMU & KAS HMIR VAT ACT, 2005. AT THE TIME OF SEIZURE OF JEWELLERY, THE CONSIGNMENT WAS N OT ACCOMPANIED BY ANY DOCUMENT AS ENVISAGED U/S 67(2) OF THE J&K VAT ACT, 2005. W ARRANT U/S 132A DATED 06.08.2009 WAS SERVED UPON THE ADDL. COMMISSIONER O F COMMERCIAL TAXES (ADMN.), JAMMU ON 07.08.2009, THE DEPUTY COMMISSION ER OF COMMERCIAL TAXES 3 I.T.A .NOS. 1170 TO 1175/DEL/2014 (RECOVERY) HANDED OVER THE JEWELLERY WORTH RS. 1,11 ,89,825/- TO THE DEPARTMENT ON 03.05.2010 AND JEWELLERY WORTH RS. 37,06,106/- HAS BEEN RETAINED BY THE COMMERCIAL TAX DEPARTMENT AS AMOUNT OF SECURITY U/S 67(10) OF THE J&K VAT ACT, 2005. 5. IN VIEW OF THE FACT THAT THE ASSESSEE DID NOT PR ODUCE THE BOOKS OF ACCOUNTS ALONG WITH BILLS, VOUCHERS FOR EXAMINATION . THE AO MADE AN ADDITION OF 25% OF THE EXPENSES EXCLUDING DEPRECIAT ION AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. APART FROM THA T QUA THE CLAIM OF DEDUCTION U/S 88 THE ADDITION WAS MADE IN PART FOR WANT OF SUPPORTING VOUCHERS. THESE ADDITIONS WERE CHALLENGED BEFORE TH E CIT(A) IN EACH OF THE YEARS. A PERUSAL OF THE IMPUGNED ORDER BRINGS OUT THE FACT THAT QUA THE OPPORTUNITY OF BEING HEARD THERE IS A SLIGHT CONTRA DICTION. WHEREAS PARA 5 MAKES A REFERENCE TO OPPORTUNITY OF HEARING BEING A WARDED TO THE ASSESSEE, HOWEVER, WHETHER IT IS ASSESSEE IN PERSON OR SOMEONE ON BEHALF OF THE ASSESSEE IS NOT CLEAR FROM THE ORDER. MOREO VER IN PAGE ONE OF THE IMPUGNED ORDER IN THE COLUMN WHERE REFERENCE IS TO BE GIVEN QUA THE DATE OF HEARING THE FOLLOWING NOTE HAS BEEN GIVEN BY THE CIT(A): DATE OF HEARING : NOT AVAILED. WRITTEN SUBMISSIO N FILED 6. AGGRIEVED BY WHICH THE ASSESSEE CAME IN APPEAL B EFORE THE CIT(A). 6.1 THUS, WHETHER THE RIGHT TO BE HEARD WAS WAIVED BY THE ASSESSEE OR BY SOMEONE ON ASSESSEES BEHALF IS NOT CLEAR FROM T HE ORDER. 7. IN THIS BACKGROUND CONSIDERING THE ARGUMENTS OF LD. SR. DR AND THE JUDICIAL PRECEDENT I AM OF THE VIEW THAT IN THE INT ERESTS OF SUBSTANTIAL JUSTICE THE OPPORTUNITY OF BEING HEARD SHOULD BE GRANTED TO THE ASSESSEE. RIGHT TO BE HEARD IS AN IMPORTANT RIGHT TO WHICH A PARTY WHO IS FACED WITH AN ADVERSE VIEW IS ENTITLED TO AUDI ALTERAM PARTEM IS ONE OF THE MOST FAMOUS AND CELEBRATED RULES OF NATURAL JUSTICE. THE PRINCIPLE S OF NATURAL JUSTICE ARE THOSE WHICH HAVE BEEN LAID OUT BY THE COURTS AS BEI NG THE MINIMUM PROTECTION OF THE RIGHTS OF AN INDIVIDUAL AGAINST T HE ARBITRARY PROCEDURE THAT MAY BE ADOPTED BY A JUDICIAL, QUASI-JUDICIAL AND AD MINISTRATIVE AUTHORITY 4 I.T.A .NOS. 1170 TO 1175/DEL/2014 WHILE MAKING AN ORDER AFFECTING THOSE RIGHTS. A CA REFUL PERUSAL OF THE CONSISTENT JUDGEMENTS OF THE APEX COURT WOULD SHOW THAT IT HAS CONSISTENTLY BEEN HELD THAT THE RULES OF NATURAL JU STICE ARE NOT EMBODIED RULES AND THE SAID PHRASE IS NOT AND CANNOT BE CAPA BLE OF A PRECISE DEFINITION. THE UNDERLYING PRINCIPLE OF NATURAL JU STICE EVOLVED UNDER THE COMMON LAW IS TO CHECK ARBITRARY EXERCISE OF POWER BY THE STATE OR ITS FUNCTIONARIES. ACCORDINGLY, THE PRINCIPLE BY ITS V ERY 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. 8. IN THE CELEBRATED JUDGEMENT OF THE APEX COURT IN THE CASE OF A.K.KRAIPAK VS- UNION OF INDIA (1969) 2 SCC 262, I T IS OBSERVED THAT THE AIM OF RULES OF NATURAL JUSTICE IS TO SECURE JUSTIC E OR TO PUT IT NEGATIVELY TO PREVENT MISCARRIAGE OF JUSTICE. THE SAID RULES ARE MEANS TO AN END AND NOT AN END IN THEMSELVES AND THOUGH IT IS NOT POSSIBLE TO MAKE AN EXHAUSTIVE CATALOGUE OF SUCH RULES HOWEVER IT CAN BE READILY S AID THAT THERE ARE TWO BASIC MAXIMS OF NATURAL JUSTICE NAMELY AUDI ALTERA M 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 MAN Y FACETS TWO OF THEM (A) NOTICE OF THE CASE TO BE MET; AND (B) OPPO RTUNITY TO EXPLAIN. THEIR LORDSHIPS HAVE CAUTIONED THAT THESE RULES CANNOT BE SACRIFICED AT THE ALTAR OF THE ADMINISTRATIVE CONVENIENCE OR CELEBRITY. TH OUGH THE ASSESSEE HAS NOT SPECIFICALLY SOUGHT AN OPPORTUNITY OF BEING HEA RD, HOWEVER, CONSIDERING THE FACT THAT THE ASSESSEE MAY NOT HAVE HAD THE BEN EFIT OF PROPER LEGAL ADVICE IN THE INTERESTS OF SUBSTANTIAL JUSTICE THE CONSOLIDATED IMPUGNED ORDER FOR THE SIX YEARS UNDER CONSIDERATION IS BEIN G SET ASIDE AND THE ISSUE IS BEING RESTORED IN EACH OF THE YEARS BACK BACK TO THE FILE OF THE CIT(A) WITH THE DIRECTION TO PASS A SPEAKING ORDER IN ACCO RDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEI NG HEARD. 5 I.T.A .NOS. 1170 TO 1175/DEL/2014 9. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE A LLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 8 TH OF JULY 2015. SD/- (DIVA SINGH) JUDICIAL MEMBER DATED: 08/07/2015 *KAVITA, P.S. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 6 I.T.A .NOS. 1170 TO 1175/DEL/2014 SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 02/07/2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 07/07/ 2015 3. DRAFT PLACED BEFORE THE SECOND MEMBER 08/07/2015 4. DRAFT APPROVED BY THE SECOND MEMBER 08/07/2015 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 08/07 /2015 6. DATE OF PRONOUNCEMENT OF ORDER 08/07/2015 7. DATE OF FILE SENT TO THE BENCH CLERK 08/07/2015 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER