WEST END HOTELS P.LTD, MUMBAI V. DCIT 1(3), MUMBAI

ITA 1385/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83649 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 28-08-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 17-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARMINDER
• Assessee Lawyers: PRAKASH K JOTWANI
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 1385/MUM/2011 ASSESSMENT YEAR: 2005-06 WEST END HOTELS P. LTD. 45 NEW MARINE LINES, MUMBAI PAN:AAACW 0047 J VS. DCIT 1(3) AAYAKAR BHAVAN MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PRAKASH K. JOTWANI REVENUE BY : SMT. PARMINDER DATE OF HEARING : 28.08.2014 DATE OF PRONOUNCEMENT : 28.08.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD.CIT(A) -02, MUMBAI DATED 16.11.2010 FOR THE ASSE SSMENT YEAR 2005-06. 2. IN THIS APPEAL, THE ASSESSEE, AMONG OTHER THINGS , HAS AGITATED THE EX PARTE DECISION OF THE LD.CIT(A) ON THE REASON THAT THE AS SESSEE HAS NOT BEEN AFFORDED OPPORTUNITY OF BEING HEARD. 3. BRIEFLY STATED, THE ASSESEE COMPANY, IN ITS RETU RN OF INCOME, HAD DECLARED A TOTAL INCOME OF RS.1,67,44,543/- DURING THE YEAR UN DER CONSIDERATION. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS FRAMED U/S 143 (3), THE ASSESSEE HAD FILED VARIOUS PAPERS BEFORE THE AO AND AFTER OBTAINING TH E DETAILS, THE AO HAD MADE THE DISALLOWANCES OF SUM OF RS.40,550/- BEING SALES TAX AND RS.630/- BEING PROFESSIONAL TAX U/S 43B OF THE ACT, RS.13,48,032/- BEING EXPENS ES INCURRED TOWARDS REPAIRS AND MAINTENANCE OF BATHROOM FITTINGS AND PIPES AND ELEC TRICAL FITTINGS AND RS.25,000/- BEING CONVEYANCE AND SEMINAR EXPENSES INCURRED FOR THE PURPOSE OF BUSINESS. ON APPEAL, THE LD.CIT(A) CONFIRMED THE SAID DISALLOWAN CES BY AN EX PARTE ORDER DATED 16.11.2010. AGGRIEVED BY THE IMPUGNED ORDER, THE AS SESSEE IS IN APPEAL BEFORE US. ITA NO. 1385/MUM/2011 WEST END HOTELS P. LTD. ASSESSMENT YEAR: 2005-06 2 4. BEFORE US, IT IS THE CONTENTION OF THE LD.COUNSE L FOR THE ASSESSEE THAT THE LD.CIT(A) HAS PASSED THE IMPUGNED EX PARTE ORDER WI THOUT GIVING SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WHICH IS IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. IN THE AFFIDAVIT SWORN BY THE MANA GING DIRECTOR OF THE ASSESSEE COMPANY, FILED DURING THE COURSE OF THE HEARING, TH E SEQUENCE IN WHICH THE HEARING TOOK PLACE BEFORE THE LD.CIT(A) IS NARRATED AND THE SAME IS EXTRACTED HEREUNDER: PAGE NOS. DATE PARTICULARS EVENT PARA 2 OF THE CIT(A) ORDER 18.01.2008 - APPEAL WAS FILED PARA 2 OF THE CIT(A) ORDER 03.08.2010 ISSUE OF FIRST NOTICE FIXING DATE OF HEA RING AS 18.08.2010 PARA 2 OF THE CIT(A) ORDER 18.08.2010 FIRST HEARING ADJOURNMENT WAS TAKEN BY THE APPELLANT ON THE GROUND THAT THE CHIEF ACCOUNTANT OF THE APPELLANT CO. WAS ON LEAVE. PARA 2 OF THE CIT(A) ORDER 09.09.2010 SECOND NOTICE WAS ISSUED FIXING DATE OF HEARING AS 30.09.2010 PARA 2 OF THE CIT(A) ORDER 30.09.2010 SECOND HEARING AS PER APPELLANTS RECORDS:- CIT(A) WAS ABSENT AND HENCE HEARING DID NOT TAKE PLACE. HOWEVER, AS PER THE CIT(A) ORDER, NO ONE FROM THE APPELLANT COMPANY APPEARED FOR THE CASE. 26 TO 29 19.10.2010 THIRD NOTICE FIXING DATE OF HEARING AS 16.10.2010. NO HEARING TOOK PLACE SINCE THE APPELLANT HAD NOT RECEIVED THE NOTICE TILL 21.10.2010. 28 28.10.2010 APPLICATION FOR FRESH NOTICE DUE TO THE INCONSISTENCY IN THE DATE OF HEARING AS MENTIONED ABOVE WAS FOUND IN THE NOTICE AND ALSO BECAUSE OF THE DELAY OCCURRED IN THE RECEIPT OF SUCH NOTICE, THE APPLICATION FOR FRESH NOTICE WAS MADE BY THE APPELLANT. 16.11.2010 DATE OF CIT(A) ORDER PASSING ORDER EX PARTE. ITA NO. 1385/MUM/2011 WEST END HOTELS P. LTD. ASSESSMENT YEAR: 2005-06 3 IN VIEW OF THE AFOREMENTIONED SEQUENCE OF EVENTS, T HE LD.COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT NO OPPORTUNITY HAS BEEN PROVIDED BY THE LD.CIT(A) DURING THE FIRST APPELLATE PROCEEDINGS AND SINCE THE ASSESSEE WOULD SUFFER GRAVE INJUSTICE, THE ORDER OF THE LD.CIT(A) BE SET ASIDE AND HEARD DO NO VO BY THE LD.CIT(A). ON THE OTHER HAND, THE LD.DR HAS ARGUED THAT THE ORDER OF THE LD.CIT(A) DESERVES TO BE CONFIRMED. 5. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL ON RECORD. THE PERUSAL OF THE SEQUENCE OF EVENTS HAPPENED DURING T HE FIRST APPELLATE PROCEEDINGS AS NARRATED BY THE ASSESSEE, WHICH IS EXTRACTED IN THE TABLE AFOREMENTIONED, SUGGESTS THAT THE LD.CIT(A) HAS NOT AFFORDED REASON ABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND PASSED THE EX PARTE ORDER WHICH HAS RESULTED IN THE CONFIRMATION OF CERTAIN ADDITIONS MADE BY THE AO. H AVING DUE REGARD TO THE PRINCIPLES OF NATURAL JUSTICE, WE SET ASIDE THE IMP UGNED EX PARTE ORDER AND RESTORE THE MATTER BACK TO THE FILE OF THE LD.CIT(A) FOR RE -ADJUDICATION OF THE APPEAL AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF AUGUST, 2014. SD/- SD/- (N.K. BILLAIYA) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 01.09.2014 *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR G BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.