Pricewaterhouse Coopers L.L. P., Kolkata V. ADIT (International Taxation)-II, Kolkata, Kolkata

ITA 1314/KOL/2006

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54711 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2011
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 13-07-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 04-07-2006
• Court: TRIBUNAL
• Department Lawyers: S K MALAKAR
• Assessee Lawyers: R N BAJORIA; KAPIL BASU
• Keywords: Opportunity of being heard; Principle of natural justice; Reasonable cause
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE . . , !' # # # # /AND $# , !' ) [BEFORE SHRI S. V. MEHROTRA, AM & SRI MAHAVIR SINGH , JM] #% #% #% #% / I.T.A NO. 1314/KOL/2006 $&' () $&' () $&' () $&' ()/ // / ASSESSMENT YEAR: 2002-03 PRICEWATERHOUSECOOPERS LLP VS. ASSISTANT DIRECTO R OF INCOME-TAX, (PAN:AAAAP 4377 J) (INTERNATIONAL TAXATION)-II, KOLKATA. (+, /APPELLANT ) (-.+,/ RESPONDENT ) DATE OF HEARING: 11.11.2011 DATE OF PRONOUNCEMENT: 25.11.2011 FOR THE APPELLANT: S/SHRI R. N. BAJORIA & KAPIL BASU FOR THE RESPONDENT: SHRI S. K. MALAKAR !/ / ORDER PER MAHAVIR SINGH, JM ( $# $# $# $#, , , , !' !' !' !' ) THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XL, KOLKATA IN APPEAL NO.CIT(A)-XL/KOL/0031/05-06 VIDE DATED 16.03.2006. ASSESSMENT WAS FRAMED BY ADIT, INTERNATIONAL TAXATION-II, KOLKATA U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2002- 03 VIDE HIS ORDER DATED 30.03.2005. 2. THIS APPEAL OF THE ASSESSEE IS DELAYED BY ONE DA Y AND CONDONATION PETITION HAS BEEN FILED BY ASSESSEE STATING THAT ASSESSEE BEING A RES IDENT OF USA, DOES NOT HAVE AN ESTABLISHMENT IN INDIA, OR ANY PERSON HAVING AUTHORITY TO SIGN AN Y DOCUMENTS. IN THE INSTANT CASE THE ORDER AGAINST WHICH THE ASSESSEE PREFERRED APPEAL DATED 1 6 TH MARCH, 2006 WAS SERVED ON THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE ON 4 TH MAY, 2006. ON RECEIPT OF THE SAID ORDER, FORM 36 AND NECESSARY GROUNDS WERE COMPILED AND SENT TO CONCERNED PARTNER IN USA. THE CONCERNED PARTNER SIGNED APPEAL PAPERS IN USA AFTER EVALUATING THE MERITS OF THE CASE AND THEREAFTER SENT THE SIGNED COPY OF APPEAL PAPERS TO THE AR OF THE ASSESSEE IN INDIA BY COURIER. REQUISITE FEES WERE ALSO SENT TO THEM. THE LD. AR OF THE ASSESSEE ARRANGED TO DEPOSIT FEES FOR AND ON BEHALF OF THE ASSESSEE. THE COURIER CONTAINI NG THE SIGNED APPEAL PAPERS REACHED LD. AR OF THE ASSESSEE FROM USA ONLY ON 3 RD JULY, 2006 (EVENING), BY THEN THE OFFICE OF THE IT AT WAS CLOSED FOR THE DAY AND HENCE THE SAME COULD NOT BE FILED ON 3 RD JULY, 2007. THEREAFTER HE 2 ITA 1314/K/2006 PRICEWATERHOUSECOOPERS LLP . A.Y.0 2-03 PROMPTLY FILED THE APPEAL ON THE VERY NEXT DAY I.E. 4 TH JULY. HENCE, HE SUBMIT THAT THE DELAY IN RECEIVING THE SAID APPEAL THROUGH COURIER BY FEW HO URS LEAD TO THE RESULTANT DELAY IN FILING OF THE APPEAL BY ONE DAY. HE, THEREFORE, URGED BEFORE THE BENCH TO CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. LD. DR ALSO DID NOT RAISE ANY OBJECTION TO THE PRAYER OF THE ASSESSEE. CONSIDERING THE CONDONATION PETITION OF THE ASSESSE E, WE FIND THAT THERE IS REASONABLE CAUSE FOR ONE DAYS DELAY AND WE CONDONE THE SAME AND ADMIT T HE APPEAL FOR HEARING. 3. AT THE OUTSET, LD. SENIOR COUNSEL FOR THE ASSESS EE SHRI R. N. BAJORIA STATED THAT THE CIT(A) HAS DISPOSED OF THE APPEAL WITHOUT GRANTING REASONABLE OPPORTUNITY OF BEING HEARD TO ASSESSEE THEREBY VIOLATED THE PRINCIPLES OF NATURAL JUSTICE AND FOR THIS HE STATED THAT ASSESSEE HAS TAKEN UP THIS ADDITIONAL GROUND, WHICH READS AS UND ER: THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THAT THE PAYMENT OF RS.40,43,012/- RECEI VED BY THE APPELLANT FOR TAX ADVISORY SERVICES IS LIABLE TO TAX IN INDIA AT 15%. 4. FOR RAISING THIS GROUND THE LD. COUNSEL DREW OUR ATTENTION TO LETTER NOCIT(A)- VI/KOL/ITAT/2010-11/317 DATED 01.11.2010 OF CIT(A)- VI, KOLKATA EXPLAINING THE POSITION THAT APPEAL ORDER IN THIS CASE WAS PASSED BY THEN C IT(A)-XL AND THAT CHARGE HAS NOW BEEN ABOLISHED. CIT(A) FURTHER STATED IN THE LETTER THA T AFTER ABOLITION OF THAT CHARGE W.E.F. 25.2.2009, THE JURISDICTION OF APPEALS RELATES TO D. I. (INTER NATIONAL TAXATION) WAS ASSIGNED TO CIT(A)-VI. ACCORDING TO HIM, HIS OFFICE RECEIVED NINE FILES ON LY FROM THE OFFICE OF CIT(A)-XL, THAT ALSO THE FILES PENDING ADJUDICATION. ACCORDING TO HIM, THE DISPOSED OF APPEAL FILE OF ASSESSEE COMPANY FOR AY 2002-03 WAS NOT RECEIVED BY HIS OFFI CE AND DESPITE LOT OF EFFORTS OLD FILES OF CIT(A)-XL CHARGE COULD NOT BE TRACED. HE CATEGORIC ALLY STATED IN THE LETTER THAT THE APPEAL FILES IN THIS CASE IS NOT AVAILABLE WITH OFFICE AND AS SU CH IT IS NOT POSSIBLE FOR HIM TO FILE ANY COUNTER AFFIDAVIT IN RESPECT OF AFFIDAVIT FILED BY AR OF TH E ASSESSEE BEFORE ITAT. 5. THE LD. SR. COUNSEL SHRI R. N. BAJORIA REFERRED TO THE AFFIDAVIT FILED BY ASSESSEE COMPANY DATED 15.11.2009, WHICH READS AS UNDER: I, BISHAN KUMAR SEAL, SON OF LATE BIMAL KRISHNA SE AL, AGED ABOUT 41 YEARS, WORKING FOR GAIN WITH M/S PRICEWATERHOUSECOOPERS PVT LIMITE D, HAVING OFFICE AT SOUTH CITY PINNACLE, 4TH FLOOR,PLOT- X1/1; BLOCK EP, SECTOR V, SALT LAKE ELECTRONIC COMPLEX; KOLKATA 700091, DO HEREBY SOLEMNLY AFFIRM AND STATE THAT 1. THE APPELLANT M/S PRICEWATERHOUSECOOPERS LLP US, HAD FILED AN APPEAL BEFORE THE HONBLE TRIBUNAL BEARING ITA NO 1314/KOI/06 FOR ASS ESSMENT YEAR 2002-03. IN THE SAID APPEAL THE APPELLANT HAD FILED AN ADDITIONAL GROUND THAT NO REASONABLE OPPORTUNITY BY WAY OF A PERSONAL HEARING WAS GIVEN BY THE LD CIT(A ) PRIOR TO CONCLUSION OF THE APPEAL. 3 ITA 1314/K/2006 PRICEWATERHOUSECOOPERS LLP . A.Y.0 2-03 2. WITH RESPECT TO THE AFORESAID GROUND, I WOULD LI KE TO SUBMIT THAT I WAS THE AUTHORIZED REPRESENTATIVE BEFORE THE LD CIT(A). I HAD FILED TH E WRITTEN SUBMISSION AND PAPER BOOK ON 25TH AUGUST 2005. AFTER RECEIPT OF THE REMAND RE PORT FROM THE LD CIT(A) ON THE 24TH OF AUGUST 2005, I HAD PREPARED A DETAILED SUBMISSIO N REBUTTING THE FINDINGS OF THE ASSESSING OFFICER AS CONTAINED IN THE SAID REPORT A ND SUBMITTED THE SAME UNDER COVER OF LETTER DATED 27TH FEBRUARY 2006, PRIMARILY ON THE F ACT THAT THE ENTIRE DOCUMENTS AND SUBMISSIONS WERE NOT EVEN CONSIDERED BY THE AO WHIL E PREPARING THE SAID REPORT. SINCE THE DATE OF HEARING WAS SCHEDULED ON 28TH OF FEBRUA RY 2006, WHICH WAS THE DAY FOR PLACING OF FINANCE BILL, I HAD, PRE-PONED MY APPEAR ANCE BY FILING THE REBUTTAL SUBMISSIONS AND SOUGHT FOR A PERSONAL HEARING AT A LATER DATE. 3. I WOULD LIKE TO STATE THAT TO THE BEST OF MY REC OLLECTION NEITHER ANY OPPORTUNITY FOR PERSONAL HEARING WAS GRANTED NOR I HAD ATTENDED ANY SUCH HEARING BEFORE THE LD CIT(A) AFTER 27TH FEBRUARY 2006 IN ORDER TO DISCUSS THE CA SE. TO THE BEST OF MY RECOLLECTION AND BELIEF THE ENTIRE APPEAL WAS DISPOSED BASED ON THE WRITTEN SUBMISSIONS AND OTHER DOCUMENTS AVAILABLE ON RECORD. 4. THUS THE STATEMENT NOTED BY THE LD CIT(A) IN HIS ORDER DATED 16TH MARCH 2006 AT PAGE 4 PARA 4 THAT IN THE COURSE OF THE HEARING OF THE APPEAL ON 13 TH MARCH 2006 APPELLANT A/R APPEARED AND REFERRED TO THE WRITTEN SUBMISSI ONS DATED 27-2-06 SUBMITTED ALONG WITH COPIES OF CERTAIN DOCUMENT IS, TO THE BEST OF MY RECOLLECTION, NOT FACTUALLY CORRECT. I HEREBY SUBMIT THAT THE FACTS STATED HEREINABOVE A RE TRUE TO THE BEST OF MY KNOWLEDGE AND BELIEF. IN VIEW OF THE ABOVE AFFIDAVIT THE LD. COUNSEL STAT ED THAT THE ASSESSEE AFTER RECEIPT OF REMAND REPORT OF AO FROM CIT(A) ON 24.08.2005 PREPARED A D ETAILED SUBMISSIONS REBUTTING THE FINDINGS OF AO AND FILED ON 27.02.2006. THE HEARIN G WAS SCHEDULED BEFORE CIT(A) ON 28.02.2006, WHICH ON THE REQUEST OF THE ASSESSEE PR EPONED FOR THE REASONS THAT ON THAT DAY FINANCE BILL WAS TO BE PRESENTED BEFORE PARLIAMENT. BUT CIT(A) NEITHER GRANTED ANY OPPORTUNITY OF PERSONAL HEARING NOR CONSIDERED THE WRITTEN SUBM ISSIONS OR DOCUMENTS FILED ON 27.02.2006. HE FURTHER STATED THAT CIT(A) IN HIS ORDER DATED 16 .03.2006 AT PAGE 4 PARA 4 STATED IN THE COURSE OF THE HEARING OF THE APPEAL ON 13 TH MARCH, 2006, APPELLANT A/R APPEARED AND REFERRED T O THE WRITTEN SUBMISSIONS DATED 27.02.2006 SUBMITTED ALONG WITH COPIES OF CERTAIN DOCUMENTS BUT STATED THAT THIS IS FACTUALLY INCORRECT AND HEN CE, EFFECTIVELY THERE WAS NO HEARING GRANTED BY CIT(A) AND HENCE, THE CIT(A) HAS VIOLATED THE PRINC IPLES OF NATURAL JUSTICE. 6. AFTER HEARING LD. SR. COUNSEL SHRI R. N. BAJORIA AND GOING THROUGH THE FACTS, THE BENCH REQUIRED LD. SR. D.R. SHRI S. K. MALAKAR TO REPLY T HE ABOVE FACTS. HE FAIRLY CONCEDED THAT IN THE GIVEN FACTS THE APPEAL CAN BE SET ASIDE TO THE FILE OF CIT(A) FOR ADJUDICATION DE NOVO. 7. WE AFTER GOING THROUGH THE FACTS AND CIRCUMSTANC ES, HEARING BOTH THE SIDES, ARE OF THE VIEW THAT THE ASSESSEE WAS NOT PROVIDED REASONABLE OPPORTUNITY OF BEING HEARD BY CIT(A) BEFORE ADJUDICATING THE APPEAL, HENCE, VIOLATED THE PRINCIPLES OF NATURAL JUSTICE. IN THE INTEREST OF JUSTICE, WE SET ASIDE THIS APPEAL OF ASSESSEE TO THE FILE OF CIT(A) FOR ADJUDICATION DE NOVO. 4 ITA 1314/K/2006 PRICEWATERHOUSECOOPERS LLP . A.Y.0 2-03 NEEDLESS TO SAY THAT CIT(A) WILL PROVIDE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSES. 8 IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 9. ORDER PRONOUNCED IN OPEN COURT ON 25.11.2011. SD/- SD/- . . , !' $# $# $# $# , !' (S. V. MEHROTRA) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( 0 0 0 0 ) )) ) DATED : 25 TH NOVEMBER, 2011 12 $&34 $5 JD.(SR.P.S.) !/ 6 -$$ 7(8- COPY OF THE ORDER FORWARDED TO: 1 . +, / APPELLANT PRICEWATERHOUSECOOPERS LLP, C/O PRICESA TERHOUSE COOPERS PVT. LTD., Y-14, BLOCK-EP, SECTOR-V, KOLKAT A-700 091, WEST BENGAL 2 -.+, / RESPONDENT, ADIT (INTERNATIONAL TAXATION)-II, KOL KATA. 3 . $/& ( )/ THE CIT(A)-XL, KOLKATA. 4. $/& / CIT, KOLKATA 5 . $> -$& / DR, KOLKATA BENCHES, KOLKATA . -$/ TRUE COPY, !/&?/ BY ORDER, #4 /ASSTT. REGISTRAR .