DCIT, Circle - 11, Kolkata, Kolkata V. M/s. Senbo Engineering Ltd., Kolkata

ITA 1601/KOL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78399 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 23-11-2011
• Court: TRIBUNAL
• Department Lawyers: AJOY KUMAR SINGH
• Assessee Lawyers: N K PODDAR SENIOR
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [BEFORE HONBLE SRI P.K.BANSAL, AM & HONBLE SRI GEORGE MATHAN, JM] ITA NO.1601/KOL/2011 : ASSESSMENT YEAR : 2004-05 ITA NO.135/KOL./2010 : ASSESSMENT YEAR : 2006-07 ITA NO.1522/KOL/2011 : ASSESSMENT YEAR : 2005-06 ITA NO.1523/KOL/2011 : ASSESSMENT YEAR: 2008-09 ITA NO.1726/KOL2010 : ASSESSMENT YEAR: 2007-08 ( APPELLANT ) - (RESPONDENT) D.C.I.T., CIRCLE-11, M/S.SENBO ENGINEERING LTD . KOLKATA -VERSUS- KOLKATA (PAN:AADCS 6138 B) FOR THE APPELLANT: SHRI AJOY KUMAR SINGH, CIT(DR) FOR THE RESPONDENT: SHRI N.K.PODDAR, SENIOR ADVOCATE DATE OF HEARING : 22.07.2014 DATE OF PRONOUNCEMENT : 25.07.2014. / ORDER PER SHRI P.K.BANSAL, AM SINCE ALL THESE APPEALS FILED BY THE REVENUE AGAINS T THE RESPECTIVE ORDERS OF THE LD. CIT(A)-XII, KOLKATA DATED 26.09.2011,30.10.2009 ,19.09.2011, 26.09.2011 & 30.06.2010 INVOLVE A COMMON ISSUE, THEREFORE ALL TH ESE APPEALS FOR THE SAKE OF CONVENIENCE HAD BEEN DISPOSED OF BY THIS COMMON ORD ER. 2. IN THE ORIGINAL GROUND OF APPEAL THE REVENUE HAD TAKEN IN EACH OF THE YEAR A COMMON GROUND AGAINST THE DIRECTION OF THE CIT(A) F OR ALLOWING THE DEDUCTION U/S 80IA OF THE ACT. IN ADDITION TO THIS GROUND IN A.YR .2008-09 ONE MORE GROUND IS TAKEN WHICH RELATES TO ALLOWING THE PENALTY FOR LATE SAFE TY ARRANGEMENT AMOUNTING TO RS.22,49,233/- BY THE CIT(A). THE LD. DR ON 18.07.2 014 FILED THE REVISED GROUND OF APPEAL FOR A.YRS.2004-05, 2006-07 AND 2007-08 BEING GROUND NOS. 1 TO 4. ALL THESE GROUNDS ALSO RELATE TO THE CLAIM OF THE ASSESSEE U/ S 80IA OF THE ACT ALLOWED BY THE CIT(A) BUT DISALLOWED BY THE AO. IN A.YR.2006-07 TH E REVENUE HAS TAKEN ONE MORE ADDITIONAL GROUND WHICH READS AS UNDER :- ITA NOS.1601,135,1522,1523&1726/KO L/2011 M/S. SENBO ENGINEERING LTD. A.YRS.2004-05, 2006-07,2005-06,2008-09&2007 -08 2 THAT THE LD. CIT(A) BY NOT SENDING NOTICE IN FORM NO.ITNS-51 TO THE ASSESSING OFFICER HAS VIOLATED THE PRINCIPLES OF NATURAL JUST ICE. 3. THE LD. DR ON THE ADMISSION OF THIS ADDITIONAL G ROUND VEHEMENTLY CONTENDED THAT IT IS A LEGAL GROUND. U/S 250 OF THE IT ACT, T HE CIT(A) IS BOUND TO GIVE THE HEARING TO THE ASSESSING OFFICER AT THE TIME OF HEARING OF THE APPEAL. THIS IS A LEGAL GROUND AND HAS TO BE ADMITTED IN VIEW OF THE DECISION OF THE H ONBLE SUPREME COURT IN THE CASE OF NTPC VS CIT 229 ITR 383 (SC) 4. THE LD. SENIOR ADVOCATE FOR THE ASSESSEE OBJECTE D TO THE ADMISSION OF THE ADDITIONAL GROUND. 5. AFTER HEARING THE RIVAL SUBMISSIONS, WE ADMIT TH E AFORESAID ADDITIONAL GROUND. AS, IN OUR OPINION, IT IS A LEGAL GROUND AND THE LE GAL GROUND CAN BE TAKEN BY THE PARTY AT ANY TIME EVEN IF IT HAS NOT BEEN TAKEN BEFORE TH E AUTHORITIES BELOW FOR THE FIRST TIME. OUR AFORESAID VIEW IS DULY SUPPORTED BY THE DECISIO N OF THE HONBLE SUPREME COURT IN THE CASE OF NTPC VS CIT (SUPRA). 6. SINCE THE ADDITIONAL GROUND TAKEN IN A.YR. 2006- 07 IS A LEGAL GROUND WE DECIDED TO ADJUDICATE THIS GROUND FIRST. THE. LD. D R BEFORE US VEHEMENTLY CONTENDED THAT THE ASSESSEE HAS CLAIMED DEDUCTION FOR THE FIR ST TIME IN A.YR.2004-05 BEFORE THE AO U/S 80IA OF THE ACT WHICH WAS DENIED BY THE AO. THE ASSESSEE WENT IN APPEAL BEFORE LD.CIT(A). SIMILARLY DEDUCTION U/S 80IA OF T HE ACT WAS DISALLOWED TO THE ASSESSEE FOR A.YR.2005-06 TO 2008-09. IN EACH OF TH ESE ASSESSMENT YEARS THE ASSESSEE WENT IN APPEAL BEFORE THE LD. CIT(A). CIT(A) EXAMIN ED THE CLAIM OF THE ASSESSEE FOR A.Y.2006-07 ABOUT THE ELIGIBILITY OF DEDUCTION U/S 80IA OF THE ACT VIS--VIS WITH THE CONDITIONS STIPULATED THEREIN AND DECIDED IN FAVOUR OF THE ASSESSEE AND DIRECTED THE AO TO ALLOW DEDUCTION U/S 80IA AS PER THE ASSESSEE S CLAIM MADE IN THE RETURN. THIS ORDER WAS PASSED BY CIT(A) ON 30.10.2009, SUBSEQUEN T TO THAT RELIEF, U/S 80IA OF THE ACT WAS ALLOWED IN A.YR. 2004-05 VIDE ORDER DATED 2 6.09.2011, A.YR. 2005-06 VIDE ORDER DATED 19.09.2011, A.YR. 2007-08 VIDE ORDER DA TED 30.06.2010, A.YR.2008-09 VIDE ORDER DATED 26.09.201 FOLLOWING THE ORDER FOR A.YR.2006-07. IT WAS CONTENDED THAT AS PER THE PROVISION OF SECTION 250 OF THE ACT CIT(A) WAS BOUND TO SERVE THE NOTICE OF THE HEARING TO THE AO ALSO IN ITNS 51. NO SUCH NOTICE FOR A.YR.2006-07 WAS ISSUED AND SERVED BY CIT(A) TO THE AO. IN THIS REGA RD, HE FILED THE COPY OF THE ORDER ITA NOS.1601,135,1522,1523&1726/KO L/2011 M/S. SENBO ENGINEERING LTD. A.YRS.2004-05, 2006-07,2005-06,2008-09&2007 -08 3 SHEET FROM THE FILE OF CIT(A). HE ALSO PLACED RELIA NCE ON THE DECISION OF ITAT, MUMBAI BENCH IN THE CASE OF ACIT VS HIMANSHU GANDH I DATED 15.06.2012 IN WHICH IT WAS HELD WHERE THE CIT(A) HAS PASSED THE ORDER GIVING RELIEF TO THE ASSESSEE IN VIOLATION OF SECTION 250 OF THE ACT, THIS IS A VIOL ATION OF PRINCIPLES OF NATURAL JUSTICE AND SO THE MATTER IS REMITTED TO THE FILE OF THE LD . CIT(A) TO DECIDE THE ISSUE AFRESH. CIT(A) PRODUCED THE ORIGINAL FILE FOR A.YR.2006-07M AINTAINED IN THE OFFICE OF LD.CIT(A). 7. THE LD. AR, ON THE OTHER HAND, VEHEMENTLY CONTEN DED THAT NO AFFIDAVIT FILED BY THE LD. DR THAT ITNS 51 WAS NOT SERVED BY CIT(A). T HE APPEAL HAD BEEN FIXED ON PRIORITY BASIS BY THE CIT(A) ON THE REQUEST OF C.I. T. THE ASSESSEE CLAIMED DEDUCTION U/S 80IA OF THE ACT FOR THE FIRST TIME IN A.Y.2004- 05. THE GROUND HAS BEEN TAKEN BY THE REVENUE FOR THE FIRST TIME. THE ASSESSEE DOES N OT HAVE ANY MEANS TO VERIFY THE SAME. 8. THE BENCH HANDED OVER THE ORIGINAL FILE OF LD. C IT(A) TO THE LD. AR. THE LD.AR DREW OUR ATTENTION TOWARDS THE NOTICE WHICH WAS ADD RESSED TO THE ASSESSEE AND AFTER THAT ADDRESS OF THE ITO WAS MENTIONED SUBSEQUENTLY. THE NOTICE WAS DATED 25 TH OCTOBER, 2009 AND HE POINTED OUT THAT ON THE SERVIC E SLIP ON THE LEFT SIDE THERE ARE SOME SIGNATURES DATED 25.10.2009 WHILE ON THE RIGHT SIDE THERE ARE SIGNATURES ON BEHALF OF THE ASSESSEE DATED 28.10.2009. ACCORDING TO HIM THIS NOTICE WOULD HAVE BEEN ISSUED TO THE AO. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE SAME ALONG WITH THE ORDER OF THE TAX AUTHORITIES BELOW AS WELL AS THE RELEVANT PROVISION OF SECTION 250 OF THE IT ACT. SECTION 250 OF THE IT ACT DEALS WITH THE PROCEDURES FOR DISPOSING OF THE APPEAL. SUB-SECTION (1) OF SECTION 250 OF THE A CT HAS LAID DOWN THAT THE COMMISSIONER OF APPEAL FIXES THE DATE AND PLACE FOR HEARING OF THE ASSESSEE AND SHALL GIVE NOTICE OF THE SAME TO THE ASSESSEE AND TO THE AO AGAINST THE ORDER OF CIT(A). SUB-SECTION (2) OF SECTION 250 OF THE ACT THEREIN S TATES THAT THE AO HAS THE RIGHT TO BE HEARD EITHER IN PERSON OR BY AR ON THE DATE FIXED F OR HEARING. IT IS A SETTLED LAW THAT THE PROCEEDINGS BEFORE CIT(A) IS A QUASI JUDICIAL P ROCEEDING AND THEREFORE HE IS UNDER AN OBLIGATION TO PASS AN ORDER IN CONFORMITY WITH T HE RULES OF NATURAL JUSTICE. ITNS 51 HAS BEEN PRESCRIBED FOR SERVICING OF NOTICE OF HEAR ING TO THE AO. WE NOTED THAT WHILE ITA NOS.1601,135,1522,1523&1726/KO L/2011 M/S. SENBO ENGINEERING LTD. A.YRS.2004-05, 2006-07,2005-06,2008-09&2007 -08 4 DISPOSING OF THE APPEAL FOR A.YR.2004-05, 2005-06 A ND 2008-09 IT HAS BEEN SPECIFICALLY MENTIONED BY CIT(A) THAT ITNS 51 DATED 7.7.2011, DATED 8.9.2011 AND DATED 2.9.2011 RESPECTIVELY WERE SERVED ALONG WITH THE NOTICE U/S 250 OF THE IT ACT TO THE AO. EVEN THE DATE OF THE SERVICE OF THE NOTICE HAS ALSO BEEN MENTIONED IN EACH OF THE APPELLATE ORDER. FOR A.YR.2006-07, WE NOTED THA T CIT(A) HAS NOT MENTIONED ABOUT THE SERVICE OF ITNS 51 ALONG WITH THE NOTICE U/S 25 0 OF THE ACT TO THE AO. WE HAVE LOOKED INTO THE FILE OF THE CIT(A) AS WELL AS THE O RDER SHEET. WE NOTED THAT IN THE ORDER SHEET CIT(A) NOWHERE HAS MENTIONED ABOUT THE ISSUE OF NOTICE TO THE AO EVEN THERE IS NO NOTING IN RESPECT OF THE ISSUANCE OF ITNS 51 WHA T TO TALK OF THE SERVICE OF THE NOTICE ON THE AO. WE FOUND THAT THERE ARE THREE NOT ICES. THERE ARE NOTICES OF DATE ON THEM. NOTICES ARE ADDRESSED TO THE ASSESSEE AND NON E OF THE NOTICES IS ADDRESSED TO THE AO. WE HAVE ALSO EXAMINED AND VERIFIED THE COPY OF THE NOTICES AS AVAILABLE ON WHICH THE LD. SR.ADVOCATE HAS RELIED ON. THESE NOTICES, W E FOUND THAT NONE OF THE NOTICE IS ADDRESSED TO THE AO BUT ADDRESSED TO THE ASSESSEE. THE ACKNOWLEDGEMENT SLIP DOES NOT INDICATE THAT NOTICE HAD BEEN RECEIVED BY THE AO EVEN THOUGH THE ACKNOWLEDGEMENT PROVES THAT THE NOTICE HAS BEEN REC EIVED BY THE ASSESSEE ON 28.10.2009. IT IS ALSO A FACT THAT THE HEARING HAS TAKEN PLACE ON 30.10.2009. THERE CANNOT BE COMBINED ACKNOWLEDGEMENT FOR THE ASSESSEE AS WELL AS FOR THE AO. ACKNOWLEDGEMENT FOR THE SERVICE OF THE NOTICE FOR B OTH THE PARTIES HAVE TO BE SEPARATELY TAKEN. WE THEREFORE DISMISS THIS PLEA OF THE LD. SENIOR COUNSEL. IN OUR OPINION THERE IS NO NECESSITY OF FILING AN AFFIDAVI T BY THE LD.DR AS THE LD. DR HAS PRODUCED BEFORE US THE ORIGINAL FILE OF THE CIT(A) WHICH CONTAINS THE COPY OF THE NOTICES ISSUED, SERVED AND NOTING ON THE ORDER SHEE T. WE HAVE VERIFIED THE FILE. IF WE HAD RELIED ON THE SUBMISSIONS OF THE LD. DR WITHOUT VERIFYING THE ORIGINAL RECORD, WE HAVE TO ASK FOR AN AFFIDAVIT. THIS IS AN UNDISPUTED FACT THAT THE ASSESSEE MADE A CLAIM U/S 80IA OF THE ACT FOR THE FIRST TIME IN A.YR.2004 -05 WHICH WAS DISALLOWED BY THE AO. BEFORE THE LD. CIT(A) THE ASSESSEE HAS FILED AN APPEAL FOR A.YR.2004-05 BUT THE LD.CIT(A) HAS FOR THE FIRST TIME ALLOWED THE ELIGIB ILITY OF THE CLAIM OF THE ASSESSEE U/S 80IA OF THE ACT DURING A.YR.2006-07 AS THAT APPEAL WAS HEARD FIRST. IN THE APPELLATE ORDER FOR A.YR.2006-07, THE CIT(A) AFTER EXAMINING THE CLAIM OF THE ASSESEE TOOK A VIEW THAT THE ASSESSEE IS ELIGIBLE FOR THE CLAIM OF DEDUCTION U/S 80IA OF THE ACT. THE ITA NOS.1601,135,1522,1523&1726/KO L/2011 M/S. SENBO ENGINEERING LTD. A.YRS.2004-05, 2006-07,2005-06,2008-09&2007 -08 5 ORDER FOR A.YR.2006-07 HAD BEEN FOLLOWED IN A.YR.20 04-05, 2005-06, 2007-08 AND 2008-09 BY THE CIT(A). IN VIEW OF THIS FACT IN A.YR .2006-07 IN WHICH THE CLAIM OF THE ASSESSEE U/S 80IA WAS EXAMINED ON MERIT FOR THE FIR ST TIME BY THE CIT(A). THE CIT(A) NOT SERVING THE NOTICE TO THE AO HAS VIOLATED THE P ROVISION OF SUB-SECTIONS (1) AND (2) OF SECTION 250 OF THE IT ACT AND THUS DENIED THE NA TURAL JUSTICE TO THE REVENUE SO THAT THE REVENUE COULD HAVE PLACED ITS CASE BEFORE THE L D. CIT(A). THEREFORE WE HOLD THAT THE ORDER PASSED BY THE LD. CIT(A) IS IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND WE THEREFORE SET ASIDE THE MATTER TO THE FILE OF TH E LD. CIT(A) WITH THE DIRECTION TO THE LD.CIT(A) TO GIVE THE AO PROPER AND SUFFICIENT OPPO RTUNITY OF BEING HEARD AND TO DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. 10. SINCE WE HAVE SET ASIDE THE ORDER OF THE LD. CI T(A) FOR A.YR.2006-07 IN WHICH THE CIT(A) FOR THE FIRST TIME ALLOWED THE CLAIM OF THE ASSESSE U/S 80IA OF THE ACT AND IN SUBSEQUENT YEAR CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE U/S 80IA OF THE ACT BY FOLLOWING THE ORDER FOR A.YR.2006-07. WE, THEREFORE , SET ASIDE THE ORDER OF THE LD. CIT(A) FOR A.YR.2004-05, 2005-06, 2007-08 AND 2008- 09 ALSO AND RESTORE THE ISSUE INVOLVED TO THE FILE OF THE LD. CIT(A) WITH THE DI RECTION THAT THE LD. CIT(A) SHALL RE- DECIDE THE APPEAL FOR ALL THESE ASSESSMENT YEARS AF RESH AFTER DECIDING THE APPEAL FOR THE A.YR.2006-07. 11. IN THE RESULT ALL THE APPEALS FILED BY THE REVE NUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 25.07.2014. SD/- SD/- [GEORGE MATHAN] [P.K.BANSAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 25.07.2014. R.G.(.P.S.) ITA NOS.1601,135,1522,1523&1726/KO L/2011 M/S. SENBO ENGINEERING LTD. A.YRS.2004-05, 2006-07,2005-06,2008-09&2007 -08 6 COPY OF THE ORDER FORWARDED TO: 1. M/S.SENBO ENGINEERING LTD., 87, LENIN SARANI, KOLKA TA-700013. 2 D.C.I.T., CIRCLE-11, KOLKATA. 3 . CIT KOLKATA 4 . CIT(A)-XII, KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES