MESERS S.B GLOBAL, AMRITSAR V. INCOME TAX OFFIER WARD 4 (5), AMRITSAR

ITA 197/ASR/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6692 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-02-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 10-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Set aside
• Section: 142(1); 250; 251; 143(2); 246A

Judgement Text

P A G E | 1 ITA NO. 197/ASR./2018 A.Y. 2014-15 S. B. GLOBAL VS. ITO IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SHRI L. P. SAHU, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO. 197/ASR./2018 (ASSESSMENT YEAR: 2014-15) M/S . S. B. GLOBAL H. NO. 44, GALI NO. 11, GOPAL NAGAR, MAJITHA ROAD, AMRITSAR VS. INCOME TAX OFFICER WARD 4(5), AMRITSAR PAN ABOFS 6622B (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ASHWANI KALIA (C.A.) RESPONDENT BY: SHRI CHARAN DASS, (D.R.) DATE OF HEARING: 04.02.2020 DATE OF PRONOUNCEMENT: 06.02.2020 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER PASSED BY THE CIT(A)-2, AMRITSAR, DATED 3 0.01.2018, WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE ASSESSI NG OFFICER U/S 271(1)(B) OF THE INCOME TAX ACT, 1961 (FOR SHORT I T ACT), DATED 07.11.2016 FOR A.Y. 2014-15. 2. THE ASSESSEE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLOWING GROUNDS OF APPEAL BEFORE US: P A G E | 2 ITA NO. 197/ASR./2018 A.Y. 2014-15 S. B. GLOBAL VS. ITO 1. THAT THE LD. CIT(A)-2, AMRITSAR HAS ERRED IN DISMIS SING THE APPEAL OF THE ASSESSEE EX-PARTE ON THE GROUND THAT NOTICE DATED 0 9.01.2018 FIXING THE DATE FOR 22.01.2018 REMAINED UNCOMPLIED. 2. THAT THE LD. CIT(A)-2, AMRITSAR HAS ERRED IN LAW IN CONFIRMING THE PENALTY U/S 271(1)(B) OF THE INCOME TAX ACT, 1961. 3. THAT THE ORDER IS BAD IN LAW AND ON FACTS. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUND OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 3. BRIEFLY STATED, THE CASE OF THE ASSESSEE FIRM WAS S ELECTED FOR SCRUTINY ASSESSMENT FOR THE YEAR UNDER CONSIDERATIO N. NOTICE U/S 143(2) WAS ISSUED AND SERVED UPON THE ASSESSEE ON 1 8.09.2015. THEREAFTER, NOTICE U/S 142(1) OF THE ACT ALONG WITH A QUESTIONNAIRE WAS ISSUED BY THE AO FIXING THE CASE FOR 22.08.2016. AS THE ASSESSEE FAILED TO COMPLY WITH THE AFORESAID NOTICE AND DID NOT PUT UP ANY APPEARANCE BEFORE THE AO, THEREFORE, ANOTHER NOTICE U/S 142(1) WAS ISSUED TO THE ASSESSEE CALLING UPON IT TO FURNISH T HE REQUISITE REPLY TO THE QUESTIONNAIRE THAT WAS ISSUED TO IT. ALSO, THE ASSESSEE WAS CALLED UPON TO SHOW CAUSE AS TO WHY PENALTY MAY NOT BE I MPOSED UPON IT U/S 271(1)(B) OF THE ACT. AS THE ASSESSEE FAILED TO FURNISH ANY REPLY, THEREFORE, THE AO IMPOSED A PENALTY OF RS.10,000/- U/S 271(1)(B) OF THE ACT. 4. AGGRIEVED, THE ASSESSEE ASSAILED THE PENALTY IMP OSED BY THE AO U/S 271(1)(B) BEFORE THE CIT(A). AS THE ASSESSEE FA ILED TO PUT UP AN APPEARANCE IN THE COURSE OF THE HEARING OF APPEAL, THEREFORE, THE CIT(A) DISMISSED THE SAME FOR WANT OF PROSECUTION. 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF T HE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. AS OBSERVED HEREINABOVE, THE APPEAL WAS DISMISSED BY THE CIT(A) FOR THE REASON T HAT THE ASSESSEE P A G E | 3 ITA NO. 197/ASR./2018 A.Y. 2014-15 S. B. GLOBAL VS. ITO HAD FAILED TO PUT UP AN APPEARANCE IN THE COURSE OF HEARING OF THE APPEAL. IN FACT, AS IS DISCERNIBLE FROM THE ORDER O F THE CIT(A), THE APPEAL FILED BY THE ASSESSEE WAS DISMISSED BY HIM B Y DRAWING SUPPORT FROM THE ORDER OF THE ITAT, DELHI BENCH IN THE CASE OF CIT V. MULTIPLAN INDIA LTD. 38 ITD 320. APART FROM THAT, WE FIND THAT THE CIT( A) HAD OBSERVED THAT AS THE ASSESSEE HAD FAILED TO COMPLY WITH THE NOTICES ISSUED U/S 142(1), THEREFORE, THE AO WAS JUSTIFIED IN LEVYING PENALTY U/S 271(1)(B) OF THE ACT. 6. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIE S AND THE MATERIAL AVAILABLE ON RECORD. ON A PERUSAL OF THE ORDER OF T HE CIT(A), WE FIND, THAT HE HAD SUMMARILY DISMISSED THE APPEAL OF THE A SSESSEE FOR NON- PROSECUTION. AS A MATTER OF FACT, THE CIT(A) HAD FA ILED TO APPLY HIS MIND TO THE ISSUE WHICH DID ARISE FROM THE IMPUGNED ORDER AND WAS ASSAILED BY THE ASSESSEE BEFORE HIM. WE ARE UNABLE TO PERSUADE OURSELVES TO ACCEPT THE MANNER IN WHICH THE APPEAL OF THE ASSESSEE HAD BEEN DISPOSED OFF BY THE CIT(A). IN OUR CONSIDE RED VIEW, ONCE AN APPEAL IS PREFERRED BEFORE THE CIT(A), IT IS OBLIGA TORY ON HIS PART TO DISPOSE OFF THE SAME ON MERITS. WE ARE OF A STRONG CONVICTION THAT IT IS NOT OPEN FOR THE CIT(A) TO SUMMARILY DISMISS THE AP PEAL ON ACCOUNT OF NON-PROSECUTION OF THE SAME BY THE ASSESSEE. RATHER , A PERUSAL OF SEC.251(1)(A) AND (B), AS WELL AS THE EXPLANATION TO SEC. 251(2) REVEALS THAT THE CIT(A) REMAINS UNDER A STATUTORY OBLIGATIO N TO APPLY HIS MIND TO ALL THE ISSUES WHICH ARISES FROM THE IMPUGNED OR DER BEFORE HIM. AS PER THE MANDATE OF LAW, THE CIT(A) IS NOT VESTED WI TH ANY POWER TO SUMMARILY DISMISS THE APPEAL FOR NON-PROSECUTION. O UR AFORESAID VIEW IS FORTIFIED BY THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. PREM KUMAR ARJUNDAS LUTHRA (HUF) (2017) 297 P A G E | 4 ITA NO. 197/ASR./2018 A.Y. 2014-15 S. B. GLOBAL VS. ITO CTR 614 (BOM) . IN THE AFOREMENTIONED CASE THE HONBLE JURISDICTI ONAL HIGH COURT HAD OBSERVED AS UNDER: 8. FROM THE AFORESAID PROVISIONS, IT IS VERY CLEAR ONCE AN APPEAL IS PREFERRED BEFORE THE CIT(A), THEN IN DISP OSING OF THE APPEAL, HE IS OBLIGED TO MAKE SUCH FURTHER INQUIRY THAT HE THINKS FIT OR DIRECT THE AO TO MAKE FURTHER INQUIRY AND REPORT T HE RESULT OF THE SAME TO HIM AS FOUND IN SEC. 250 OF THE ACT. FURTHER, SE C. 250(6) OF THE ACT OBLIGES THE CIT(A) TO DISPOSE OF AN APPEAL IN W RITING AFTER STATING THE POINTS FOR DETERMINATION AND THEN RENDE R A DECISION ON EACH OF THE POINTS WHICH ARISE FOR CONSIDERATION WI TH REASONS IN SUPPORT. SEC. 251(1)(A) AND (H) OF THE ACT PROVIDE THAT WHILE DISPOSING OF APPEAL THE CIT(A) WOULD HAVE THE POWER TO CONFIRM, REDUCE, ENHANCE OR ANNUL AN ASSESSMENT AND/OR PENALTY. BESIDES EXPL ANATION TO SUB-S. (2) OF S. 251 OF THE ACT ALSO MAKES IT CLEAR THAT WHILE CONSIDERING THE APPEAL, THE CIT(A) WOULD BE ENTITLE D TO CONSIDER AND DECIDE ANY ISSUE ARISING IN THE PROCEEDINGS BEFORE HIM IN APPEAL FILED FOR ITS CONSIDERATION, EVEN IF THE ISSUE IS N OT RAISED BY THE APPELLANT IN ITS APPEAL BEFORE THE CIT(A). THUS ONC E AN ASSESSEE FILES AN APPEAL UNDER S. 246A OF THE ACT, IT IS NOT OPEN TO HIM AS OF RIGHT TO WITHDRAW OR NOT PRESS THE APPEAL. IN FACT THE CI T(A) IS OBLIGED TO DISPOSE OF THE APPEAL ON MERITS. IN FACT W.E.F. 1ST JUNE, 2001 THE POWER OF THE CIT(A) TO SET ASIDE THE ORDER OF THE A O AND RESTORE IT TO THE AO FOR PASSING A FRESH ORDER STANDS WITHDRAWN. THER EFORE, IT WOULD BE NOTICED THAT THE POWERS OF THE CIT(A) ARE CO-TER MINUS WITH THAT OF THE AO I.E. HE CAN DO ALL THAT A.O COULD DO. THEREF ORE, JUST AS IT IS NOT OPEN TO THE AO TO NOT COMPLETE THE ASSESSMENT B Y ALLOWING THE ASSESSEE TO WITHDRAW ITS RETURN OF INCOME, IT I S NOT OPEN TO THE ASSESSEE IN APPEAL TO WITHDRAW AND/OR THE CIT(A) TO DISMISS THE APPEAL ON ACCOUNT OF NON-PROSECUTION OF THE APPEAL BY THE ASSESSEE. THIS IS AMPLY CLEAR FROM THE S. 251(1)(A) AND (B) A ND EXPLANATION TO SEC. 251(2) OF THE ACT WHICH REQUIRES THE CIT(A) TO APPLY HIS MIND TO ALL THE ISSUES WHICH ARISE FROM THE IMPUGNED ORDER BEFO RE HIM WHETHER OR NOT THE SAME HAS BEEN RAISED BY THE APPELLANT BEFOR E HIM. ACCORDINGLY, THE LAW DOES NOT EMPOWER THE CIT(A) TO DISMISS THE APPEAL FOR NON- PROSECUTION AS IS EVIDENT FROM THE PROVISIONS OF TH E ACT. 7. WE THUS NOT BEING PERSUADED TO SUBSCRIBE TO THE DISMISSAL OF THE APPEAL BY THE CIT(A) FOR NON-PROSECUTION, THEREFORE , SET ASIDE THE SAME TO HIS FILE WITH A DIRECTION TO DISPOSE OFF TH E SAME ON MERITS. NEEDLESS TO SAY, THE CIT(A) SHALL AFFORD A REASONAB LE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE COURSE OF THE DE NOVO APPELLATE P A G E | 5 ITA NO. 197/ASR./2018 A.Y. 2014-15 S. B. GLOBAL VS. ITO PROCEEDINGS. THE GROUNDS OF APPEAL RAISED BY THE AS SESSEE ARE DISPOSED OFF IN TERMS OF OUR AFORESAID OBSERVATIONS . 8. THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06/02/2020 SD/- SD/- ( L. P. SAHU) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : AMRITSAR; DATED 06.02.2020 GP/SR PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. DR, ITAT, AMRITSAR BENCH, AMRITSR 6. / GUARD FILE. //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) & ' /ITAT, AMRITSAR. BENCH, AMRITSAR